Thankfully, lawyers are rarely given the opportunity to invest $1bn for a profitable and sustainable return — probably for good reason.
This article is part of a series written by people across shipping in response to this question about how to deploy a hypothetical TradeWinds Sustainable Shipping Fund:
How, where and why would you invest $1bn for the best return in sustainable shipping, as the industry grapples with the need to cut carbon emissions, improve efficiency and keep cargoes moving in a world facing multiple economic and political challenges? The investment will be made now and ideally held for the next seven years to the end of the decade. As an added bonus, give one policy or regulation you would like to implement from 1 January 2023 to benefit shipping?
On a small scale, a spare $1bn could side-step the difficult issue of funding the cost of environmental improvements.
To kickstart a spending spree, a $400m investment in fleet regeneration and a focused green-fuel newbuilding programme would be one starting point.
This would include wholesale improvements and retrofitting to improve fuel and energy efficiencies, together with scrubbers and alternative-fuel testing for existing vessels; responsible scrapping and recycling of ageing and polluting vessels combined with a significant focus on super-eco, alternative-fuel newbuilding orders.
A second $400m amount could head towards investment in clean fuels themselves, as well as infrastructure and public/private partnerships geared to such projects.
Investing in green fuels could provide a competitive advantage and attacks a root cause — carbon itself and the most polluting of fossil fuels.
Perhaps most importantly, $100m would be allocated to research, development, education/up-skilling, operational modernisation and public relations.
Unravelling, deciphering, understanding and deciding on the best course of action is a minefield. Making the right choice, without the correct technology, operational expertise, know-how and legal/regulatory advice — of course — could be catastrophic.
Unfortunately for shipping, an element of public relations will also be needed to address an often unfair association with pollution and environmental disasters. Changing the public perception and consumer views of shipping may well be key if and when the consumer picks up the final tab for implementing cleaner policies and regulations.
Just-in-case fund
Finally, as many ancient philosophers would profess: the only certainty is that nothing is certain. The sad reality is that force majeure or extraordinary events have become far more par for the course. For that reason, perhaps saving $100m as a ‘just-in-case’ fund might come in handy at some stage.
With a shipping sector overburdened with international legal and regulatory frameworks — and a dictionary of new abbreviations — there remains a need for improved coordination and organisation on how and when mandatory environmental and decarbonisation regulations will apply to different stakeholders internationally.
One regulation or policy that regulates the actual implementation of all policies for the benefit of all international stakeholders could make a difference — one regulation to rule them all so to speak. Sadly, that option is even less realistic than allowing a lawyer to decide what to do with $1bn.
