Global Overview on Development of Maritime Transport

and Emission Standards

by
Dr. B. Swaminathan*

Abstract

Overview

Shipping is truly the most multinational face of all industries in the world, carrying up to 90% of
global trade cost efficiently. There is no doubt that shipping is a clean, eco-friendly, energy-
efficient and safe mode of transport. Around 50,000 merchant ships navigate through the world’s
oceans and seas. Even though shipping is the least carbon-intensive method of moving goods
from one place to another, ships have massive engines that burn lots of fossil fuels. According to
the International Maritime Organization (IMO), over 1.1 billion tons of CO 2 was emitted in total
by the ships, in 2009, i.e., about 4 percent of global CO 2 emissions, leaving a carbon gigantic
footprint. Most of these emissions cough up from cargo vessels and oil tankers, the backbone of
the global economy. Overall, it is only a small contributor to the total volume of atmospheric
emissions. Modern engines and propellers, and streamlined hull designs have improved fuel
efficiency by up to 30 percent. Improving fuel-efficiency will be crucial to avoid rapidly rising
greenhouse gas emissions. But the need for timely delivery has led many shipping companies to
use these advances to increase speed and capacity rather than reducing carbon emissions.
According to the OECD, increasing a ship’s speed by about 4 percent entails a 13 percent
increase in CO2 emissions. Since 1950, world trade has grown more than twenty-seven fold in
volume terms. By way of comparison, the level of world GDP rose eight-fold during the same
period. As a consequence, the share of international trade in world GDP has risen from 5.5 per
cent in 1950 to over 21 per cent in 2009 due to technological change, containerization and
information technology revolution.

The impact of trade opening on climate change

Globalization and the ensuing demand for transport by sea of ever-increasing volumes of goods
necessitate a balance between freedom of navigation on the one hand, and sustainable protection
of the marine environment on the other. The development of maritime infrastructure, including
sea ports, aids to navigation, pilot services and fairways, has been an important factor in the
country's progress as a maritime nation. The “scale” effect refers to the impact on greenhouse gas
emissions from the increased output or economic activity resulting from freer trade. The
“composition” effect refers to the way that trade liberalization changes the mix of a country’s
production towards those products where it has a comparative advantage. This re-allocation of
resources within a country is how trade improves economic efficiency. The effect on greenhouse
gas emissions will depend on the sectors in which a country has comparative advantage. The
composition effect will result in less greenhouse gas emissions if the expanding sectors are less
energy intensive than the contracting sectors. Whether the composition effect results in higher or
lower greenhouse gas emissions is therefore difficult to predict in advance.
Finally, trade opening can lead to improvements in energy efficiency - the “technique” effect so
that the production of goods and services generates less greenhouse gas emissions. This decline
in emission intensity can come about in two ways. First, freer trade will increase the availability
and lower the cost of environmental-friendly goods, services and technologies. This is
particularly important for countries that do not have access to these goods, services and
technologies or whose domestic industries do not produce them in sufficient scale and at
affordable prices. For exporters, additional market access can provide incentives to develop new
products, services and technologies to mitigate climate change. Second, the increase in income
that trade brings about can lead society to demand better environmental quality — in other
words, less greenhouse gas emissions.

Since the scale and technique effects tend to work in opposite directions and the composition
effect depends on the comparative advantage of countries, the overall impact of trade on
greenhouse gas emissions cannot be determined in advance. It will depend on the magnitude or
strength of each of the three effects. The technique effect reflects the principal avenue through
which trade opening can help mitigate climate change, hence the importance of the current Doha
Round and in particular the negotiations to liberalize environmental goods and services. By
increasing the availability of goods, services and technologies that are likely to be important in
improving energy efficiency, trade can help to meet the challenge of global warming. 

Trade and transport

One concern about trade's role in greenhouse gas emissions is its link to transportation services.
International trade involves countries specializing in and exporting goods in which they have a
comparative advantage and importing other goods from their trade partners. This process of
international exchange requires that goods be transported from the country of production to the
country of consumption. Therefore international trade expansion is likely to increase in the use
of transportation services. 

Adequate funding was paramount for successful climate action in maritime transport and the
wider supply chain, in particular for adaptation purposes. In that context, it was important to
explore ways in which financial resources could be generated as part of mitigation efforts in
relation to maritime transport and ensure that any proceeds were reinvested within the industry
for climate change action, in particular for the purposes of effective adaptation, especially in
developing countries.Taking advantage of existing technology and development of new
technologies would go a long way in helping address the climate change challenge in maritime
transport. For developing countries, being able to access and benefit from such technologies and
advances would be crucial.

The international shipping and port industries were already active in addressing the climate
change challenge and were committed to stepping up their efforts to ensure that broader climate
change implications for maritime transport were taken into account. In that respect, indications
by representatives of the global port industry of their willingness to explore the possibility of
including considerations on impacts and adaptation in work under the World Ports Climate
Initiative constituted an important step in the right direction.
Conclusion – Integration

Greenhouse gas (GHG) emissions from international shipping are increasingly drawing attention
and possible mitigation measures are being considered, both at the regulatory and industrial
levels. At the same time, the effects of climate change and their implications for maritime
transport as well as access to cost-efficient and sustainable international transport services need
to be properly understood to ensure that appropriate adaptation measures are taken. Finally,
experts are invited to consider a number of issues that may enable effective climate action in
maritime transport and support efficient maritime transport services, in order to sustain the
development and enhance trade competitiveness of developing countries.

*****
Dr Swaminathan is a Sr. Faculty and Course Coordinator, School of Maritime Management, Indian
Maritime University-Cochin Campus, Willingdon Island Cochin -682003.