Sustainable and resilient transport amidst rising uncertainty, disruptions and climate risks

SDG indicators
SDG target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all
SDG indicator 9.1.2: Passenger and freight volumes, by mode of transport (Tier I)

Infrastructure, including transport infrastructure, directly and indirectly influences the attainment of all the SDGs, including 92 per cent of the 169 individual targets -—
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. With transport infrastructure being the lifeline linking global economies and societies, the sustainability and resilience of transport are critical for a sustainable development path.

Transport enables trade, supports global supply chains, propels growth and promotes social progress. While the continuity of freight movements and trade flows requires the use of multimodal transport networks including rail, road and inland waterways, maritime transport remains the backbone of globalization, handling over an estimated 80 per cent of global trade by volume and more than 70 per cent of its value -—
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. Apart from supporting globalized and production networks, maritime transport is an economic sector in its own right that generates economic and social gains -—
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Increased transport activity exerts pressure on the sector’s sustainability and heightens its exposure to global risks and disruptive shocks that dislocate transport networks and supply chains, including pandemics such as the COVID-19 and, the six-day blockage of the Suez Canal in March 2021 after the grounding of the 20 000 TEU container ship, the ‘Ever Given’. Other major risks include inward-looking trade policies, geopolitical threats, unsustainable energy use, environmental degradation and climate change -—
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The COVID-19 disruption underscored the importance of transport, in particular maritime transport infrastructure as an essential sector for the continued delivery of critical supplies and global trade in time of crises, during the recovery stage and when resuming normality. The sector is now facing not only immediate concerns resulting from the pandemic but also longer-term wide-ranging considerations. These include shifts in supply chain design and globalization patterns, new consumption and spending habits, a growing focus on risk assessment, adaptation, resilience-building, and digital transformation, as well as a heightened global sustainability and low-carbon agenda -—
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Given the strategic role of the sector as a catalyst for growth and development, a full consideration of these challenges and risks is required to devise policies that promote sustainable and inclusive long-term growth -—
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. While access to affordable, reliable and cost-effective transport systems remains a challenge for many developing countries, especially for LLDCs and SIDS, mainstreaming sustainability and resilience, in particular climate criteria, into transport designs, development plans and management, is an imperative -—
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. In the wake of COVID-19, integrating criteria such as risks assessment and management, event and risk forecasting and business continuity plans has also become critical. As part of UN action in response to the COVID-19 pandemic, UNCTAD and the United Nations Regional Commissions are currently implementing a joint technical assistance project on “Transport and trade connectivity in the age of pandemics: Contactless, seamless and collaborative UN solutions” -—
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. Relevant outputs include, among others, advice and guidance on some of the complex commercial law issues that arise in the context of the pandemic and its aftermath for contracting parties to commercial contracts throughout the supply chain -—
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. It also includes global and regional impact assessment reports and webinars disseminating information about the impact of COVID-19 on the maritime supply chain, response measures introduced to mitigate these impacts, and good practices in future proofing the maritime supply chain -—
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Bearing in mind the important role of transport for international trade and development, and its exposure to global risks, SDG target 9.1 seeks to improve infrastructure that supports economic activity and human well-being while promoting sustainability. Specific to transport infrastructure, SDG indicator 9.1.2 measures progress towards sustainable and resilient transportation and measures trends in “passenger and freight transport.” Freight transportation is of direct relevance to UNCTAD’s mandate on transport and trade logistics. This chapter highlights trends in critical maritime transport infrastructure and services that underpin trade, supply chain linkages and economic integration.

Maritime transport amidst heightened uncertainty and challenges ahead

Maritime transport remains the backbone of globalized trade and manufacturing supply chains as it is estimated that more than four fifths of world merchandise trade volumes are carried by sea -—
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. However, according to UNCTAD -—
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, growth in international maritime trade further weakened in 2019, owing to the lingering trade tensions and heightened uncertainty. Volumes reached 11.08 billion tons in 2019, reflecting a marginal increase of 0.5 per cent, after an annual growth of 2.8 per cent registered in 2018. In 2019, dry bulk commodities, such as coal and iron ore, together with containerised trade, continued to account for the largest share of total maritime trade. As shown in figure 1, this reflects the ongoing structural shift in maritime trade observed since 1980.

In 2020, maritime trade patterns were significantly impacted by the pandemic. Global port calls by all ship types fell by about 10 per cent compared with the previous year. The impact across maritime sectors was uneven. Container vessel port calls showed more resilience than port calls on average, with a drop of only 3.2 per cent (figure 2). UNCTAD expects maritime trade volumes to fall by 4.1 per cent in 2020, before recovering in 2021 -—
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Figure 1. Volume of international maritime trade by cargo type
(Billions of tons loaded)
Source: -—
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Note: Calculations based on AIS weekly data on ship arrivals in ports provided by MarineTraffic.
Figure 2. Vessel port calls, change from 2019 to 2020
(Percentage)
Source: UNCTADStat -—
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Note: Calculations based on weekly AIS data provided by MarineTraffic. Aggregated figures are derived from the combination of AIS data and port mapping intelligence by MarineTraffic, covering ships of 5 000 GT and above. Only arrivals have been taken into account to measure the number of port calls.

In 2019, global containerised trade expanded at a slower rate than in the previous year, rising by 1.1 per cent, down from 3.8 per cent in 2018, and bringing the total to 152 million TEUs. Much of the growth was driven by activity on non-mainland East–West, South–South and intraregional trade routes, involving mainly trade among developing countries. The prominence of Asia as the world’s ‘factory’ continued boosting intra-Asian container trade, with a growing contribution from South-East Asia.

As shown in figure 3, developing economies account for most of global maritime trade flows, both in terms of goods loaded and goods unloaded. These economies loaded 58 per cent and unloaded 65 per cent of the total in 2019.

Figure 3. Participation of developing countries in global maritime trade
(Percentage share of global maritime trade volumes)
Source: UNCTADStat -—
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Since 2000, the contribution of developing countries to maritime trade has shifted, reflecting their growing role as major exporters of raw materials, as well as large exporters and importers of finished and semi-finished goods. Participation in containerised trade, however, has been concentrated in Asia, notably in China and neighbouring countries. Capitalizing on the fragmentation of globalized production processes, Asia has become a maritime hub that concentrates over 50 per cent of global maritime freight. Other developing regions do not contribute equally, reflecting their varying degrees of integration into global value chains and manufacturing networks.

The leading influence of Asia in maritime transport is also reflected in figure 4. In 2019, this region shipped 41 per cent and received 62 per cent of world maritime cargo. Corresponding figures for the Americas were 22 and 13 per cent, respectively, while 16 per cent of global goods were loaded and 19 per cent of global goods unloaded at European ports. The other regions were responsible for smaller shares of worldwide maritime cargo flows.

Figure 4. International maritime trade by region, 2019
(Percentage share of global maritime trade volume)
Source: UNCTADStat -—
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Logistical bottlenecks and insufficient infrastructure investment undermine maritime transport. They raise costs, extend delays, reduce access, constrain connectivity, and hinder effective participation in supply chains and transport networks. Beyond ports, road and rail networks are necessary for door-to-door transport of goods and to connect countries, especially LLDCs, overland. Infrastructural gaps and bottlenecks affecting inland networks can render transportation costly for these countries. Figure 5 shows that exports from LLDCs are inflicted with transport costs amounting to 15 cents per US dollar of the exported goods’ value, a rate one half higher than for exports from other developing economies. Transporting goods from SIDS to their destination countries is almost equally expensive, estimated to cost on average 14 cents per US dollar. LDCs, by contrast, do not show significantly higher unit transport costs for their exports than developing and developed countries.

Figure 5. Estimates of transport and insurance costs of international trade, 2016
(Percentage value of exports)
Source: Global Transport Costs Dataset of International Trade -—
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Note: FOB. Transport cost estimates measure the costs of transport from border to border, including insurance. Country coverage will be improved gradually and more recent data on transport costs will be made available in the database.

As trade volumes expand, the importance of port efficiency also increases

Ports are important and strategic nodes in the transport networks. Port performance indicators, such as port connectivity and waiting time at port, are useful measures of trade efficiency and competitiveness. Every hour of ship-time saved in a port saves money on port infrastructure investments, capital expenditure on ships and inventory holding costs. Port performance varies across ship segments and sizes, with vessels calling at ports in developing countries and LDCs recording relatively higher turnaround times. -—
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In ports receiving the highest number of vessel calls, the median turnaround time is seldom more than one hour. In ports with fewer calls, this time can often reach two to four hours. The causality goes both ways: shorter turnaround time means that the same number of berths can accommodate a larger number of port calls. At the same time, ports in countries with larger trade volumes and vessel port calls will generate higher income levels, thereby enabling more investment in efficient port operations. Reflecting the region’s significant contribution to containerised trade, ports in Asia receive a large number of port calls (see map 1).

Productivity levels and efficient cargo handling operations explain some of the observed differences in port calls and connectivity across regions. There are, however, other factors at play such as geography. This is exemplified by ports in countries such as Egypt, Morocco, South Africa and Djibouti that are located on major East-West trade lanes).

Map 1. Container ship port calls and time in port, 2020
(Number of arrivals and median number of days in port)
Source: UNCTADStat -—
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Note: Ships of 1 000 gross tons and above. For port arrivals, data refer to 2019 for Anguilla, Bermuda, Hungary, Montserrat, Slovakia and Tuvalu. For time spent in port, data refer to 2019 for Anguilla, Bermuda, Montserrat and Tuvalu. These figures are based on AIS data. The variable “median time in port” provide an estimation of overall time in port; however, it should not be considered as a precise measurement of efficiency in port since it does not distinguish between waiting time, berth time, and working and idle time.

Investing in transport efficiency, sustainability and resilience

The COVID-19 disruption and the pressing need for sustainability require scaling up investment in smart, green and resilient transport infrastructure and services. As infrastructure is set to play a key role in the global economic recovery, there is, therefore, an opportunity to advance objectives such as efficiency and resilience-building. Investing in risk assessment and preparedness will be crucial in a post COVID-19 world. Such measures include control towers and tools to effectively predict and analyse transport system disruptions and business continuity plans for different stages of a crisis. In the face of disruptions, it is also important to collect and share information on potential concentration and bottlenecks and accelerate greater uptake of technology as a proven mitigating tool. All in all, lessons learned from the pandemic should serve as guidance for informing preparedness and future-proofing of maritime transport.

Available estimates specific to the transport sector also reveal high investment needs over the coming decades.1 Around US$95 trillion of investments, or US$6.3 trillion per year, not considering climate change concerns, are estimated to be required over the period from 2016 to 2030 in infrastructure (energy, transport, water and telecommunications). Transport accounts for 43 per cent, or US$41 trillion, of the required investments, with much of the needs concentrated in developing regions -—
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Investing in resilient and sustainable transport infrastructure generates important co-benefits. For example, decarbonizing and climate proofing transport infrastructure against increased risks such as climate-related shocks and natural disasters are found to be both sound and profitable. In addition to ensuring more reliable infrastructure with reduced impact on environment and climate, these investments generate financial gains. For example, net benefits of investing in climate resilient infrastructure in developing countries could amount to US$4.2 trillion over the lifetime of new infrastructure, meaning US$4 benefit for each dollar invested in resilience -—
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. In this context, and bearing in mind the prevailing sustainable transport infrastructure investment gap, it is crucial that traditional public funding be supplemented by additional and innovative sources of financing to scale up investment levels.

Alleviating the persistent transport infrastructure gap and ensuring proper service delivery require further mobilization of domestic resources, and taping into other financing sources and arrangements, including blended finance, FDI, green and climate finance, as well as private sector participation in the form of public-private partnerships, among others. However, in many countries, investing in transport infrastructure competes for public funds with other high-priority areas, while opportunities and capabilities for domestic resource mobilization and international borrowing are often constrained and limited.

Transport-sector investment in infrastructure commitments with private participation totalled US$47.8 billion across 123 projects in 2019, 11 per cent less than 2018 levels, but consistent with the five-year average. In 2020, a total of 122 projects were recorded, the second highest number seen over the past decade. China received the largest transport-sector investment commitments (US$28.4 billion), followed by India (US$6.7 billion) and the Russian Federation (US$3.4 billion). Road investments made up the lion’s share, accounting for 59 per cent of the sector’s investments (US$28.4 billion across 90 projects). The remaining 33 transport projects included seven airport projects (US$3.9 billion), nine railroad investments (US$10.6 billion) and 17 port projects worth US$4.9 billion. -—
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Adapting transport infrastructure in times of climate change

UNCTAD has worked on the implications of climate change for maritime transportation since 2008, with an increasing focus on climate change adaptation and resilience building for seaports and other key coastal transport infrastructure -—
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. These are strategic nodes in the network of closely interconnected global supply chains. In keeping up with the global momentum of the 2030 Agenda for Sustainable Development, the Paris Agreement on Climate Change and the 2019 Climate Action Summit convened by the Secretary-General of the United Nations, UNCTAD is intensifying its efforts to promote sustainable and climate-resilient freight transport infrastructure and services.2

Transport infrastructure is affected directly and indirectly by climate change, with far-reaching consequences for international trade and the development prospects of the most vulnerable nations.3 Seaports are key nodes in the network of global supply chains and critical for access to global markets. With global mean sea level continuously rising -—
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, climate resilience and adaptation for critical coastal transport infrastructure, such as ports, is a matter of strategic socio-economic importance -—
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. This is the case for all countries, but particularly for SIDS, which depend on their coastal transport infrastructure as lifelines for external trade, food and energy security, and tourism, as well as in the context of disaster risk reduction -—
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Climate-related extreme events and disasters can result in significant damage, disruption and delay, giving rise to extensive economic costs -—
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. In light of recent climate projections and the urgency to act -—
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, they are considered the top global economic risks, with implications for additional infrastructure investment needs and climate adaptation -—
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Figure 6 illustrates the share of disasters over the past 20 years that have had an impact on infrastructure. The figure suggests that transport is the sector that is most vulnerable to disasters. On average, transport facilities have an 18 to 26 per cent probability to be impacted by geophysical, hydrological and meteorological events. Some of these events are expected to increase in frequency and intensity as a result of climate change, with severe consequences for infrastructure. Indeed, a recent study estimated that global damages due to sea-level rise and related extreme events might amount to US$10.8 trillion per year, about 1.8 per cent of global GDP, for a scenario of 1.5°C warming by 2100. For a scenario of 2°C or more, the costs could reach considerably higher levels -—
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. Despite a brief dip in carbon dioxide emissions caused by the COVID-19 pandemic, the world is still heading for a temperature rise in excess of 3°C this century – far beyond the Paris Agreement goals of limiting global warming to well below 2°C and pursuing 1.5°C -—
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(see Green economy). Therefore, accelerated action both on mitigation and adaptation will be key.

Figure 6. Share of disasters that had an impact on infrastructure, by sector, 2000-2019
(Percentage)
Source: UNCTAD calculations based on data from -—
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Notes: The share shown in this chart is calculated as the number of disasters that damaged infrastructure, divided by the total number of disasters. It is calculated for each infrastructure sector and type of disasters. The category “other” includes multi-hazard events. The source database provides an inventory of disasters and their effects for 155 economies during the period 2000-2019; however, given data gaps and coverage issues, it should be considered as indicative only. For more information on the database, including the classification of disasters, see -—
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Adaptation and resilience measures are not only essential to reducing the negative impacts of climate change on critical transport infrastructure; they are also key to achieving progress on several SDG targets. In view of the long service life of transport infrastructure and the potentially major consequences of inaction, effective adaptation and resilience requires an early re-thinking of established approaches and practices -—
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. However, a recent UNCTAD port-industry survey on climate change impacts and adaptation for ports shows important gaps in data on resilience and preparedness among seaports worldwide -—
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. Relevant data are urgently needed for effective climate risk assessment and adaptation planning of coastal transport infrastructure, especially for ports in developing countries -—
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. As noted in UNCTAD -—
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, legal and regulatory approaches as well as policies and plans are key in facilitating effective risk and vulnerability assessments and providing a supportive framework for adaptation action. Guidance, standards, best practices, methodologies -—
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and other tools in support of adaptation -—
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are urgently required, especially for the most vulnerable countries.

Climate change adaptation is a particularly urgent imperative for SIDS -—
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. These countries are often particularly exposed and vulnerable to the impacts of climate change while, at the same time, they are highly dependent on coastal transport infrastructure for external trade, food, energy and tourism. SIDS therefore suffer from a “double exposure” to external economic and environmental shocks -—
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. Climate-related extreme events, which are expected to increase in frequency and severity, may cause major disruptions to the connectivity of SIDS to international markets with broad ramifications for sectors such as tourism -—
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UNCTAD has recently conducted vulnerability assessments for eight seaports and coastal airports in two SIDS in the Caribbean: Saint Lucia and Jamaica -—
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, as part of a technical assistance project on climate change adaptation for coastal transport infrastructure in SIDS -—
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. The results of the assessment, which focused on operational disruptions and marine inundation risk under different climate scenarios, suggest severe climate change impacts on coastal transport infrastructure and operations from as early as the 2030s unless further climate change adaptation is undertaken -—
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. Because of SIDS’ heavy reliance on maritime and air transport infrastructure, climate-change driven impacts on transport assets (or transportation demand) have significant impacts on livelihoods, economic, social, and environmental assets, and adversely affect the overall sustainable development prospects of these countries -—
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Priority actions to strengthen adaptation and resilience building include inspection and maintenance, monitoring systems and effective data management, as well as risk assessments, contingency plans and warning systems. In addition, flexible and adaptive infrastructure, systems and operations, and engineered redundancy to improve resilience are needed -—
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. With regard to climate change adaptation and resilience-building for seaports, the latest UNFCCC Global Climate Action ‘Transport’ pathway action table includes a distinct impact area for adaptation with a focus on resilient transport systems, infrastructure and vehicles, setting out milestones towards 2050 (for 2020, 2030 and 2040) -—
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. Inter alia, these milestones, which have also been integrated into the cross-sectoral ‘Resilience and Adaptation' pathway action table -—
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, envisage that, by 2030, policymakers must ”ensure policies, governance, legal and institutional frameworks are in place to support the climate-resilience of all critical (transport, energy and other) infrastructure to (at least) 2050”; and, by 2040, “ensure the climate-resilience of all critical transport, energy and other infrastructure to at least 2100.” A major acceleration of efforts will be required to put relevant measures in place to reach these targets.

Without timely planning and implementation of appropriate adaptation measures, the projected impacts on critical transport infrastructure may have broad economic and trade-related repercussions, and could severely compromise the sustainable development prospects of the most vulnerable nations -—
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. However, important knowledge gaps remain concerning vulnerabilities and the specific nature and extent of the exposure that individual coastal transport facilities may be facing.

The potentially severe economic impacts of the global COVID-19 public health crisis might challenge the adaptation efforts of the transport sector in the short term – through a shift in budget allocations resulting in a decrease of infrastructure financing, for example. However, this pandemic underlines the critical importance of preparedness, risk assessment and resiliency building. Lessons learnt could provide renewed impetus to climate risk and vulnerability assessments of critical transport infrastructure and foster long-term planning essential to enhancing resiliency. Changing circumstances arising from the impacts of the pandemic, e.g., the need for health and safety measures at ports of entry; changes to tourism markets; greater reliance on local and national resources and supplies, will need to be taken into account in any strategy for infrastructure adaptation and resilience building. Addressing the impacts of climate change remains a major challenge, in particular for the most vulnerable groups of countries, such as SIDS which depend on their critical coastal transport infrastructure but face a high and growing risk of coastal flooding -—
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.

While central to development, transport can also have detrimental effects on the environment through air pollution, GHG emissions, soil contamination, waste, noise, threats to land and water ecosystems and biodiversity, and others. Each mode of transport may entail a different combination of negative impacts on the environment -—
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. While maritime transport is the most CO2-efficient mode of freight transport, the large volumes handled by this sector and its projected expansion in the coming decades make climate change efforts of the sector a priority. For instance, according to different scenarios, CO2 emissions from maritime transport are expected to increase by 50 to 250 per cent until 2050 -—
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The sector is making progress towards achieving the levels of ambition set out in the initial IMO strategy on reduction of GHG emissions from ships, including on ship energy efficiency, alternative fuels and the development of national action plans, to address GHG emissions from international shipping -—
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. However much more remains to be done. From the perspective of developing countries including SIDS, it is important that their legitimate interests be taken into account in the quest to reduce emissions from international shipping. UNCTAD is collaborating with IMO by providing an expert view about the potential impact of the proposed short-term IMO measures on GHG emission reduction across three 2030 scenarios. UNCTAD assessed the impact of the proposed measure on countries’ trade, transport costs -—
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, connectivity and economic growth, in particular the economies of SIDS and LDCs -—
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Promoting sustainable transport involves balancing the economic, social and environmental dimensions of the sector. More specifically, it involves ensuring that transport infrastructure, services and operations be safe, socially acceptable, universally accessible, reliable, affordable, fuel-efficient, environmentally friendly, low-carbon and climate-resilient -—
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.4 Given the potential for a broad range of climate-change induced impacts and the multi-dimensional nature of the sector, collaboration and participation of all relevant stakeholders, including public and private actors and academia, will be crucial to drive more systemic approaches to resiliency building -—
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Notes

  1. For example, OECD -—
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    forecasts global investment needs for airports, ports, rails and energy transportation of US$585 billion per year from 2015 to 2030. PwC and Oxford Economics -—
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    estimate that investment requirements in transport infrastructure will increase from US$557 billion in 2014 to US$900 billion in 2025 globally. Finally, Woetzel et al. -—
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    project cumulative investment needs in the sector over the period from 2016 to 2030 to amount to US$18.7 trillion.
  2. For additional information, see -—
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  3. For some recent studies on these topics, see -—
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  4. For more information on UNCTAD's current work on sustainable and climate resilient freight transport, see -—
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    .

References

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