We are in the middle of a global health crisis that will have severe lasting consequences for people around the world. What this pandemic has shown us in such a terrifying way is that we need to rebuild our economies, so they provide us with jobs and a society that is secure, resilient and safe. But how can we minimise the harmful effects on the fight against climate change?

Ironically, Covid-19 has infused a renewed confidence in science and an appreciation of how vulnerable our economies and societies are.

People do not want to be back here in another systemic crisis in 10 years' time — whether the cause is a pandemic, climate change, biodiversity loss or inequality. People want society to be transformed in a way that is more secure, more resilient and safe.

Johannah Christensen, managing director and head of projects and programmes at Global Maritime Forum. Photo: Ty Stange
Anthony Hobley, executive director of the Mission Possible Platform of the World Economic Forum. Photo: Carbon Tracker

We are calling it the Great Transformation. That means building back better; stimulating sustainable growth, not decline; stimulating resilience, not vulnerability.

Encouraging signs

The fight against climate change will be an important part of what it means to build back better. Governments around the world have demonstrated their ability to respond decisively to the immediate health and economic consequences of the virus.

This represents an encouraging sign that climate change can be tackled by the global community.

Now, as policymakers formulate policies and stimulus measures to kick-start the world's economy, they have a unique opportunity to rebuild a better, more sustainable and resilient economy by taking the long-term impacts of investments on the climate into consideration.

Lessons from the coronavirus tell us that there is a need for a resilient and future-proof strategy to shape a sustainable future to avoid another global emergency.

International shipping is a critical infrastructure, yet the industry has been hesitant to call for economic support. It is not possible for the industry to struggle through the greatest drop in trade the world has ever seen while also investing in the future of decarbonised shipping.

Vital incentives

Governments can and must play an important role in incentivising large-scale demonstration projects required to drive down costs and accelerate the development of technology solutions supporting zero-carbon vessels.

Supporting the replacement of domestic vessels with zero-carbon alternatives would be one way to create sustainable jobs by both reducing domestic emissions and preparing shipyards for future demand for zero-emission deepsea vessels once demand starts picking up post-coronavirus.

Leaders can find inspiration in a study by the Energy Transitions Commission and University Marine Advisory Services for the Getting to Zero Coalition. It looks at the cumulative infrastructure investment that is needed for shipping to make a radical shift to zero-carbon energy sources required to halve the industry’s greenhouse gas emissions by 2050.

Depending on the production method, the infrastructure investment needed between 2030 and 2050 to halve shipping’s global emissions amounts to about $1trn to $1.4trn, or an average of $50bn to $70bn annually for 20 years. This amounts to just 2.7% to 3.7% of the 2018 global investment in energy of $1.85trn.

The study also reveals that shipping’s decarbonisation to a large extent will take place on land. The biggest share of investment is needed in land-based infrastructure and production facilities for low-carbon fuels. That makes up around 87% of the total investment with only 13% related to the ships themselves.

Public investment targeted at the land-based infrastructure that can boost shipping’s green transition will lead to positive effects that go beyond the maritime industry.

Industrial benefit

Public investment targeted at land-based infrastructure that can boost shipping’s green transition will lead to positive effects that go beyond the maritime industry.

Lessons from the coronavirus tell us that there is a need for a resilient and future-proof strategy to shape a sustainable future

Shipping’s decarbonisation has the scale to unlock a global energy transition. The falling costs of zero-carbon energy technologies will make alternative fuels increasingly competitive. The price of costly electrolytes that are used to turn renewable electricity from wind, sun and water into low-carbon fuels will fall by six times if only 2.5% of the global fleet converts to these new "electrofuels", McKinsey & Co calculates.

Shipping’s consumption of fuels is estimated to be around 250m to 300m tonnes every year — about 4% of the global oil demand. This means that shipping has the potential to increase confidence among suppliers of future fuels and, thus, be a catalyst that brings scale to the deployment of low-carbon fuels for the broader energy transition, unlocking the market for these fuels across a range of industries and other hard-to-abate sectors.

Shipping’s decarbonisation should leave no country behind. Investment in land-based energy infrastructure could also bring substantial development gains. If shipping becomes a reliable source of demand for low-carbon fuels, it has the potential to drive investment in energy projects in developing any middle-income countries with access to abundant, untapped renewable resources.

This is what people are asking for. They have realised we have built a society on sand and they want it to be constructed on firmer foundations.

Historic choices

Governments are at a crossroads. They have a historic opportunity for a great reset, by building back better from the current crisis and steering the world in a more sustainable direction.

The ambition of the Getting to Zero Coalition resolutely supports this vision: to have commercially viable zero-emission vessels operating on deepsea trades by 2030, supported by the necessary infrastructure for scalable zero-carbon energy sources including production, distribution, storage and bunkering.

The big mistake made before the 2009 financial crash was that governments and businesses generally rebuilt back in the same way as before — they did not take the opportunity for a great transformation, to build back better. Let’s not make that mistake this time.

That is why we need the Great Transformation in the maritime sector. Join us in the Getting to Zero Carbon Coalition to accelerate shipping’s green transition.

Johannah Christensen is managing director of the Global Maritime Forum and Anthony Hobley is executive director of the Mission Possible Platform of the World Economic Forum. Both organisations are founders of The Getting to Zero Coalition, which has been endorsed by governments in 14 countries.