Climate change could cause damage and disruption worth billions of dollars to the Shipping Industry and Ports

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(Commonwealth) _ Over the past 25 years, the amount of international commerce has increased dramatically, more than tripling every year. The shipping sector has developed into a significant emitter of greenhouse gases as a result of this development and its reliance on highly polluting fuels, presently accounting for 20% of all transportation-related emissions worldwide. Climate change also poses a hazard to the infrastructure and operations of the maritime industry, including sea level rise, increasing storm activity, and inland floods.

According to the analysis, extra yearly losses to port infrastructure might total up to US$ 18 billion by 2100, based on historical impacts and projected climate change scenarios. Storm-related port closures may cost shipping customers an additional US$ 7.5 billion annually in lost revenue for ports, shippers, and carriers. The entire future expenses resulting from climate change are nearly equal to the 2019 container port industry’s yearly net earnings.

Future predictions indicate that both global trade and the amount of cargo sent by sea will increase. However, adverse ripple effects via port and shipping networks may have large worldwide economic repercussions, and the paper predicts that the effects of climate change may result in a decline in the volume of marine commerce. Global commerce is anticipated to reach 120 billion tons in 2100, assuming continuous development, but under the worst-case climatic scenario, that growth might be slowed by up to roughly 10%.

The data on this issue is scarce or nonexistent in many locations, according to this paper, which summarizes the information already available and estimates of the consequences and costs of climate-related risks. Due to a lack of data, the shipping sector cannot accurately predict future conditions, and thus, actual prices may be far higher than those now projected.

According to George Van Houtven, director of ecosystems services research at RTI, “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 probably underestimating the total scale of consequences.” “We just need more data to present the complete picture because of the unexpected volatility of climate change and the enormous complexity of the maritime industry. But the research that is now available clearly suggests that there will be significant costs.

By committing to complete decarbonization by 2050 in accordance with the Paris Agreement, supporting a market-based mechanism to reduce shipping emissions at the International Maritime Organization, investing in zero-emission fuels and technology, and supporting an equitable transition for the shipping industry to ensure the brunt of the cost savings, the industry can avoid this. By 2030, commercially feasible deep sea zero-emission boats should be developed and deployed, a goal that many maritime professionals have already approved through the Getting to Zero Coalition. We just require more data to provide a complete picture given the unexpected volatility of climate change and the enormous complexity of the maritime industry. But the research that is now available clearly suggests that there will be high expenses. Although the current focus of the decarbonization debate is on the price of new fuels and technologies, it is crucial to take into account the costs of delaying that transition in terms of delays, disruption, and damage from climate change impacts, which can amount to tens of billions of dollars every year. We may anticipate supply chain crises similar to last year’s to become a recurrent occurrence if shipping and all transport sectors do not take steps to reduce emissions.

The data that is now available, since there are currently many unknowns, can only be used to forecast what the financial implications of climate change will be. Climate consequences could be more than currently anticipated if global emissions don’t go down. On the other hand, if swift and dramatic climate mitigation measures are implemented, the costs of climate consequences may be less than anticipated.

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