A study by MTBS for IAPH estimates US$ 55-83 trillion is needed for energy-efficient, climate-resilient port infrastructure in developing countries.
A recent study from Maritime & Transport Business Solutions (MTBS), commissioned by the International Association of Ports and Harbors (IAPH), shows that total investment needs in terms of the transition to energy-efficient and climate-resilient infrastructure for ports in developing countries lie between US$ 55 and 83 trillion.
The study explores significant investment gaps, and the current state of port adaptation and decarbonisation infrastructure in Brazil, India, Indonesia, Kenya, and the Solomon Islands.
As discussions on a mid-term market-based measure continue at this week’s intersessional meeting of the IMO Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 17), the document has been submitted by IAPH to the IMO presenting the findings of a study.
The study highlighted that port infrastructure financing is already challenging today, with most bankable projects requiring a combination of positive socio-economic impacts for the region and a bankable business case.
Furthermore, green energy from solar and wind offers several developing nations new opportunities to produce, use, or export green energy to high-demand nations. Green hydrogen, generated from renewable energy, is earmarked as a key energy source to replace fossil fuel dependency.
According to the study, the sector must reach a consensus on the regulatory framework and GHG mitigation measures of the future as soon as possible to avoid risk aversion in investing in technologies that may not become widely adopted.
The study also found that 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 focus on climate change vulnerability
- A region’s dependency on maritime transport
- Cargo value and type (economic benefits of increased investments)
- Increases in transport costs due to the charging scheme
- Food security
- Adaptation relative to required mitigation investments
- Cost-effectiveness (such as adapting to rebuild)
- The overall related socio-economic impact and development.
The examples in the study show that investments in port adaptation (resilient infrastructure) and decarbonisation infrastructure vary widely depending on port size, location, existing infrastructure, activities, and prior adaptation and mitigation plans.
The study also found that the costs of climate adaptation are significantly higher than those associated with mitigation.
Based on estimations, it is predicted that aggregate total investment needs for ports in developing nations lie between US$ 55 and 83 trillion.
Download the Study on Investment Requirements of Developing Countries for Port Decarbonisation and Adaptation to Climate Change HERE.
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