Climate change is the defining crisis of our time and it is happening even more quickly than we feared. The power is in our hands to make a difference to this planet. Nowhere across the globe is immune from the consequences of climate change. Rising temperatures due to fossil fuel burning, heavy traffic, urbanizing of rural areas to name a few are having a massive impact.
Sea levels are rising, the Artic is melting, coral reefs dying, oceans becoming acidic and forests are burning. Surely these are indicators to start making a difference across business and our human activity? The main reference most environmentalists use is reducing greenhouse gas emissions.
One area that is proving difficult, is a substantial reduction or complete decarbonization of maritime transport. In order to achieve or get close to a move away from traditional fuelling means there will be a significant cost increase. There is a need to decarbonize the maritime industry but until technology improves and production costs reduce it won’t be cheap. There has already been a surcharge on inbound containers to Southampton to cover the cost difference of moving from fossil-fuelled to electric straddle carriers in the port.
Many firms have committed to a sustainability strategy of sorts realising that the world we live on is the future for our children and generations beyond and climate change will have such a negative impact on it. They have committed and are making significant progress to reduce carbon emissions through maximizing efficiency, using renewable energy and displacing fossil fuels.
Across the maritime sector, the cost of decarbonisation and who pays for it are subject to considerable debate. The cost increase across the board is likely to be significant.
Where the interesting debate is, is how these changes would be applied. For example, if a flat rate of $194 a ton was to be imposed is would give certainty to making an impact on decarbonization. If a phased approach were to be introduced the initial rate might be $11 per ton, but could be increased to $360 a ton to achieve 100% reduction in greenhouse emissions.
The situation is extremely complex and more than a single technology will be needed to achieve decarbonization of the maritime industry. The money generated by the surcharge will then be recycled back into the decarbonizing costs.
Effectively business and the consumer will be asked to pay for this project. What is clear is that there will be a significant cost increase on goods. From this, businesses will look at how to minimise these cost impacts, which could change the type of products available, location they are manufactured and how they are shipped. All in the effort to help with climate change.