Report highlights need for port infrastructure investment in developing countries

Finally, any share of funds generated from a market-based measure will require decisions based on: level of dissemination (country, port, project); a sound methodology for gauging viable investments with a minimum of climate change vulnerability; a region’s dependency on maritime transport; cargo value and type (economic benefit of increased investments); increase of transport costs due to the charging scheme; food security; adaptation relative to required mitigation investments; cost-effectiveness (such as adapting to rebuild); and the overall related socio-economic impact and development.

The examples in the study demonstrate investments in port adaptation and decarbonisation infrastructure vary widely depending on port size, location, existing infrastructure, activities, and prior adaptation and mitigation plans. That said, based on estimations, it is predicted the aggregate total investment needs for ports in developing nations lies between US$55 and US$83Trn.

IAPH managing director Patrick Verhoeven commented, “As was mentioned in our submission of this report from MTBS, tackling climate change in the maritime industry means adopting both adaptation and mitigation measures in ports. Adaptation is focused on keeping the ports trading and making sure they are protected against the onslaught of extreme weather disruptions. Mitigation entails investing in infrastructure improvements to reach net-zero GHG emissions as soon as possible. Only through a combination of both actions can ports build resilience and secure their future.”

With the current proposals for mid and long-term measures on the table at this week’s ISWG-GHG 17 meeting, IAPH remains neutral as to the choice of instrument. However, it is supportive of a carbon-pricing mechanism that will provide a strong incentive to invest in the necessary port infrastructure to enable both the commercial viability of low- and zero-carbon fuels and to support a just and equitable transition.

Mr Verhoeven concluded, “The risk of a market-based measure increasing transport costs, which places added pressure on countries with lower efficiency infrastructure and less connectivity to the global trade network, could be offset by the potential revenues allocated to them for port-related adaptation and mitigation measures to kick-start the energy transition. Never has the need been greater from shipping and ports to unify with the energy sector to motivate sovereign funds to provide the necessary stimulus to off-takers. They, in turn, will attract the private investment partners necessary to reach final investment decisions for energy transition infrastructure in and around ports.”

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