The global shipping industry is increasingly recognizing its responsibility to help tackle climate change. But, while private-sector collaboration can have a powerful impact, achieving the progress that is needed requires supportive public policies.
COPENHAGEN – With 80% of global trade transported by sea, maritime shipping is the lifeblood of today’s highly integrated global economy. Yet this vital industry is under intensifying pressure from a phenomenon to which it is also a major contributor: climate change.
Maritime shipping is particularly vulnerable to adverse weather conditions. Just this year, the Panama Canal – the main nexus of trade between the Atlantic and Pacific – has suffered the worst drought in its 115-year history. Water levels were so low that some ships had to unload part of their cargo to gain enough flotation to pass through the waterway.
Similarly, last year, a five-month drought in Germany sent water levels on the Rhine, Europe’s main inland shipping route, to their lowest point in over a century. Ships carrying critical goods were unable to get through, disrupting supply chains for car manufacturing and other industries, and causing diesel prices to spike.
And drought is far from the only risk. Typhoons and hurricanes require vessels to be rerouted. Extreme flooding can shut down shipping channels, while runoff debris can reduce the accessibility of others. Coastal storms may force the closure of ports.
Scientists overwhelmingly agree that climate change will cause such extreme weather events and disasters to proliferate. Along with the risks to human health and political stability, it is clearly unwise to accelerate a mechanism that already is disrupting the physical infrastructure and supply chains underpinning the operation of the global economy.
Yet the shipping industry is doing just that. According to the United Nations International Maritime Organization (IMO), maritime shipping accounts for 2-3% of global greenhouse-gas (GHG) emissions each year, putting it roughly on par with Germany. In a business-as-usual scenario, continued economic development – and, thus, growth in trade – will cause GHG emissions from shipping to continue to rise.
Project Syndicate is returning to Climate Week NYC with an even more expansive program. Join us live on September 22 as we welcome speakers from around the world at our studio in Manhattan to address critical dimensions of the climate debate.
Register Now
Clearly, then, a business-as-usual scenario is not an option. That is why the IMO has set the ambitious goal of cutting GHG emissions from shipping by at least 50% (relative to 2008 levels) by 2050. Achieving it will require concerted action from shipping companies and governments alike.
At Maersk – the world’s largest shipping company, which moves nearly 20% of all containerized trade each year – we know that we don’t have the luxury of pretending climate change isn’t happening. Already, we have led the way in adopting more sustainable ways of doing business, including, for example, reducing overlapping service and port coverage by deploying fewer larger vessels, and sailing at more fuel-efficient speeds.
Moreover, last December, Maersk committed to making our entire company carbon-neutral by 2050, without the use of offsets. This will be no small feat: it will require our ships to adopt new propulsion technologies. But we will achieve it, through radical but necessary changes in our own business model, as well as through collaborative initiatives with other actors in our sector.
One such initiative is the Poseidon Principles, the first global framework for assessing and disclosing the climate alignment of shipping investment portfolios. The framework’s initial signatories – representing $100 billion of ship finance – have committed to begin aligning their lending with the IMO’s emissions-reduction goal.
The Poseidon Principles provide a useful model for other sectors seeking to advance decarbonization, while signaling to governments that the business community is ready for ambitious climate action. After all, while private-sector collaboration can have a powerful impact, achieving the progress that is needed requires supportive public policies.
In particular, governments must introduce measures that apply to all of the world’s commercial ships, not just newly built vessels, which are designed to emit less and will drive long-term progress in propulsion technologies. And they must support rapid technological innovation and green industrial development.
Decarbonizing long-distance shipping and other heavy transport demands not only the continued acceleration of renewable-energy deployment, but also the transformation of the energy sector, so that alternative fuels can be accessed at competitive prices. For example, “electrofuels” – an emerging class of carbon-neutral drop-in replacement fuels – require large electrolysis plants, most likely located in existing port industrial clusters.
If done right, changes in the shipping industry can help to support broader progress toward a low-carbon economy. One can imagine power-to-liquid or power-to-gas technology – which generates a synthetic fuel using renewable electricity, carbon dioxide, or water – eventually helping to balance the electricity grid, as renewables take on a greater share of power generation. Excess renewable energy during peak hours would be converted into, say, a liquid, which shipping companies could then transport to wherever it is needed to offset seasonal shortages.
The global shipping industry is increasingly recognizing its responsibility to help tackle climate change. But we cannot do it alone. At this September’s climate action summit, hosted by UN Secretary-General António Guterres, governments must commit to adopting policies that keep maritime shipping relevant in the low-carbon economy of the future.
To have unlimited access to our content including in-depth commentaries, book reviews, exclusive interviews, PS OnPoint and PS The Big Picture, please subscribe
COPENHAGEN – With 80% of global trade transported by sea, maritime shipping is the lifeblood of today’s highly integrated global economy. Yet this vital industry is under intensifying pressure from a phenomenon to which it is also a major contributor: climate change.
Maritime shipping is particularly vulnerable to adverse weather conditions. Just this year, the Panama Canal – the main nexus of trade between the Atlantic and Pacific – has suffered the worst drought in its 115-year history. Water levels were so low that some ships had to unload part of their cargo to gain enough flotation to pass through the waterway.
Similarly, last year, a five-month drought in Germany sent water levels on the Rhine, Europe’s main inland shipping route, to their lowest point in over a century. Ships carrying critical goods were unable to get through, disrupting supply chains for car manufacturing and other industries, and causing diesel prices to spike.
And drought is far from the only risk. Typhoons and hurricanes require vessels to be rerouted. Extreme flooding can shut down shipping channels, while runoff debris can reduce the accessibility of others. Coastal storms may force the closure of ports.
Scientists overwhelmingly agree that climate change will cause such extreme weather events and disasters to proliferate. Along with the risks to human health and political stability, it is clearly unwise to accelerate a mechanism that already is disrupting the physical infrastructure and supply chains underpinning the operation of the global economy.
Yet the shipping industry is doing just that. According to the United Nations International Maritime Organization (IMO), maritime shipping accounts for 2-3% of global greenhouse-gas (GHG) emissions each year, putting it roughly on par with Germany. In a business-as-usual scenario, continued economic development – and, thus, growth in trade – will cause GHG emissions from shipping to continue to rise.
PS Events: Climate Week NYC 2024
Project Syndicate is returning to Climate Week NYC with an even more expansive program. Join us live on September 22 as we welcome speakers from around the world at our studio in Manhattan to address critical dimensions of the climate debate.
Register Now
Clearly, then, a business-as-usual scenario is not an option. That is why the IMO has set the ambitious goal of cutting GHG emissions from shipping by at least 50% (relative to 2008 levels) by 2050. Achieving it will require concerted action from shipping companies and governments alike.
At Maersk – the world’s largest shipping company, which moves nearly 20% of all containerized trade each year – we know that we don’t have the luxury of pretending climate change isn’t happening. Already, we have led the way in adopting more sustainable ways of doing business, including, for example, reducing overlapping service and port coverage by deploying fewer larger vessels, and sailing at more fuel-efficient speeds.
Moreover, last December, Maersk committed to making our entire company carbon-neutral by 2050, without the use of offsets. This will be no small feat: it will require our ships to adopt new propulsion technologies. But we will achieve it, through radical but necessary changes in our own business model, as well as through collaborative initiatives with other actors in our sector.
One such initiative is the Poseidon Principles, the first global framework for assessing and disclosing the climate alignment of shipping investment portfolios. The framework’s initial signatories – representing $100 billion of ship finance – have committed to begin aligning their lending with the IMO’s emissions-reduction goal.
The Poseidon Principles provide a useful model for other sectors seeking to advance decarbonization, while signaling to governments that the business community is ready for ambitious climate action. After all, while private-sector collaboration can have a powerful impact, achieving the progress that is needed requires supportive public policies.
In particular, governments must introduce measures that apply to all of the world’s commercial ships, not just newly built vessels, which are designed to emit less and will drive long-term progress in propulsion technologies. And they must support rapid technological innovation and green industrial development.
Decarbonizing long-distance shipping and other heavy transport demands not only the continued acceleration of renewable-energy deployment, but also the transformation of the energy sector, so that alternative fuels can be accessed at competitive prices. For example, “electrofuels” – an emerging class of carbon-neutral drop-in replacement fuels – require large electrolysis plants, most likely located in existing port industrial clusters.
If done right, changes in the shipping industry can help to support broader progress toward a low-carbon economy. One can imagine power-to-liquid or power-to-gas technology – which generates a synthetic fuel using renewable electricity, carbon dioxide, or water – eventually helping to balance the electricity grid, as renewables take on a greater share of power generation. Excess renewable energy during peak hours would be converted into, say, a liquid, which shipping companies could then transport to wherever it is needed to offset seasonal shortages.
The global shipping industry is increasingly recognizing its responsibility to help tackle climate change. But we cannot do it alone. At this September’s climate action summit, hosted by UN Secretary-General António Guterres, governments must commit to adopting policies that keep maritime shipping relevant in the low-carbon economy of the future.