Study Puts Global Cost of Shipping Emissions at $963 Billion

A new study by Zero Carbon Analytics (ZCA) found that carbon dioxide emissions from international shipping between 1990 and 2020 are associated with about $963 billion in global economic damages, a figure that Marine Insight and Trade News Arg round to $963 billion and that Safety4Sea specifies as $962.7 billion. The report warns that these impacts would worsen if emissions continue to grow under a business-as-usual scenario, and that they could exceed the cost of implementing emission-reduction measures in the sector.

According to the study, the United States suffered the greatest absolute economic damage attributable to shipping emissions, at $280.7 billion, followed by China with $113.5 billion and Japan with $66.8 billion. Safety4Sea adds that India and Brazil round out the list, with estimated damages of $49.2 billion and $31.1 billion respectively. In terms of impact relative to GDP, the toll is greater in low-income and Middle Eastern countries: emissions reduced the 2020 GDP of the United Arab Emirates by 0.35%, Saudi Arabia's by 0.34%, Mali's by 0.32% and Burkina Faso's by 0.3%.

The findings were released days before governments at the International Maritime Organization (IMO) resume, on November 23, negotiations on the adoption of the Net-Zero Framework (NZF), a policy aimed at cutting emissions from ships. According to the study, opposition from some member states has focused on the implementation costs of the NZF, without accounting for the growing negative impacts of emissions on economies. The United States and oil-producing countries in the Middle East are leading that opposition, citing trade concerns, despite bearing some of the highest costs from inaction on shipping emissions. The IMO will continue negotiations within the ISWG-GHG-23 technical group from November 23 to 27, before discussing its adoption during the MEPC 85 policy negotiations, from November 30 to December 4.

Safety4Sea reports that, according to ZCA, international shipping emitted approximately 19.03 billion tonnes of CO2 between 1990 and 2020, and that the calculation used data from Climate Action Tracker together with a climate damage model developed by researchers at Stanford University, linking emissions to rising temperatures and temperatures to economic damage, applying a 2% discount rate. The outlet also notes that, according to the IMO's 2024 comprehensive impact assessment, the scenario used as a proxy for the NZF would entail around $13.78 trillion in aggregate costs for the maritime sector between 2023 and 2050, compared with $9.62 trillion under a business-as-usual scenario, a difference of $4.16 trillion.

The report argues that implementing the NZF could avoid around 14.2 billion tonnes of CO2 equivalent between 2026 and 2050 compared with a business-as-usual scenario, and that in terms of human impact it could prevent 1.5 million additional heat-related deaths by 2100. International shipping accounts for roughly 2% of annual global carbon dioxide emissions, which IMO member states have agreed to bring to net zero by or around 2050, in line with the Paris Agreement. Victoria Kalyvas, senior research associate at ZCA, said improved methods help reveal the "hidden" costs that countries pay for their emissions, a missing piece that will allow IMO regulators to agree on the best possible policy, though she warned that the real costs of future climate damages could be much higher than projected.