Environmental Defense Fund publishes its new report revealing that the global shipping and port industry is vulnerable to billions of dollars in infrastructure damage and trade disruption resulting from from climate change consequences.
The report “Act Now or Pay Later: The Costs of Climate Inaction for Ports and Shipping” explores data on climate-related disasters and projects the cost of future damages to the industry. According to the report, climate change impacts could cost the shipping industry up to $25 billion every year by the end of the century.
In the last 25 years, international shipping has grown enormously. Also, it is true that the shipping industry relies heavily on polluting fuels. The industry’s growth has resulted in shipping industry becoming a large emitter of greenhouse gases, currently accounting for roughly 20% of global emissions from transportation. At the same time, from sea level rise to increased storm activity to inland flooding, climate change threatens shipping infrastructure and operations.
Just as the COVID-19 pandemic threw our ports and the global supply chain into crisis mode, the climate emergency will have major consequences for international shipping. In the face of climate breakdown, however, the shipping industry has an early warning bell and an opportunity to act
…said Marie Hubatova, senior manager for EDF’s Global Transport team and continued saying that: “By stepping up to reduce emissions and invest in zero-carbon fuels, shipping leaders could help avoid these costly consequences and build a more sustainable future for the industry.”
The report projects that the additional annual damages to port infrastructure could reach nearly US$ 18 billion by 2100. Storm-related port disruptions could add another US$ 7.5 billion each year, reflecting the economic losses incurred by ports, shippers, and carriers due to port closures and the costs to shipping customers. Together, these added future costs due to climate change are roughly equivalent to the total annual net earnings for the container port sector in 2019.
Additionally, along with the volume of goods transported by sea, global trade is expected to grow in the next years. On the other hand, negative effects through shipping and port networks can have significant global economic consequences and the report estimates that climate change impacts can reduce maritime trade volume. Assuming a steady growth rate, global trade is expected to grow to reach 120 billion tons in 2100 – but under the worst-case climate scenario, that growth could be stunted by up to nearly 10%.
This report summarizes existing evidence and estimates of the impacts and costs of climate-related hazards. At the same time, it finds that data on this topic is not very adequate or is completely lacking for many areas. The lack of data shows that the shipping industry does not have a clear picture of future circumstances and future costs could be far higher than estimated here.
While our report uses the best information available to paint a picture of the true economic cost of climate change on international shipping, the reality is that these figures are likely underestimating the total scale of the consequences
…said George Van Houtven from RTI and continued: “Considering the unpredictable volatility of climate change and the immense complexity of the shipping sector, we simply need more data to show the full picture. However, the available evidence strongly indicates that the costs will be great.”
The industry can at the moment take several steps to advance and accelerate the transition to green shipping and reduce future climate change impacts. For example:
- commit to full decarbonization by 2050, in line with the Paris Agreement.
- support a market-based mechanism to reduce shipping emissions at the International Maritime Organization.
- invest in zero-emission fuels and technology.
- support an equitable transition for the shipping industry to ensure the brunt of damages and adaptation costs do not disproportionately fall on developing nations.
Several leaders coming from the shipping industry have already endorsed a Call to Action through the Getting to Zero Coalition, which aims for the development and deployment of commercially viable deep sea zero-emission vessels by 2030.
Many in the maritime sector are already committed to climate action and the need for a full decarbonization of the shipping industry by 2050
…said Project Director Ingrid Sidenvall Jegou from the Global Maritime Forum.
This report only reinforces the business case for shipping decarbonization to begin now, emphasizing that a just and equitable energy transition is an opportunity for the private sector and developing countries alike
…he concluded.
