Developing countries, especially small island developing states (SIDS) and least developed countries (LDCs), need support to adjust to global efforts to cut climate-warming emissions from international shipping, says UNCTAD in a new report assessing the potential impacts of IMO short-term measures on GHG emissions.
he report underscores that achieving the decarbonization targets is “crucial for sustainable development in an increasingly fragile, interlinked and complex global ecosystem,” at a time when navigating through the energy transition away from combustion systems that depend on fossil fuels is still a major challenge for the industry and poorer nations.
SIDS and LDCs, in particular, will require technical and financial support to mitigate the costs of adjusting to low-carbon shipping. These vulnerable countries already face relatively higher transport and logistics costs, with most of their trade depending almost exclusively on maritime transport to access regional and global markets,
…said Shamika N. Sirimanne, director of UNCTAD’s technology and logistics division, which prepared the report.
UNCTAD’s research on transport costs shows that SIDS pay double the global average for the transportation of their trade, in part due to their remoteness and lower maritime transport connectivity. These factors enhance their vulnerability to disruptions and increased trading costs.
Given the resource constraints facing SIDS and LDCs, the report says some of these countries will require more support to mitigate the increased maritime logistics costs and alleviate the negative impact on their income, trade and sustainable development aspirations.
Meanwhile, the report shows that the impact of the IMO short-term measures, on average, will be relatively higher on SIDS compared to advanced economies, leading to a potential shift in logistics and trade patterns, “including potentially trading more with less-distant markets and some regionalization,” the report says.
It notes that impacts affecting countries’ trade and GDP depend on factors such as trade openness, the modal share of trade flows, the price and the value of time of traded products and commodities, and the types of ships and distances traveled.
Aware of the resource constraints of some developing countries, including SIDS and LDCs, UNCTAD expects that some countries will likely require support to mitigate the increased maritime logistics costs and alleviate the consequent negative impact on their respective real income and trade flows,
As such, the report calls on policymakers to aim at high-ambition reductions of greenhouse gas emissions from shipping and to assist weaker economies in adjusting to the transition. Developing countries that may be disproportionally affected will require support, including through technical and financial assistance. Such assistance can include, among other things, measures to reduce transport costs and to provide support to trade facilitation reforms, modernization of ports, and climate adaptation action in maritime transport.