18 Mar 2011

Ports, climate change and the virtues of anticipation

by David Hodgkinson

Ports around the world are moving ahead of government on climate change mitigation and adaptation

While there is no international consensus on what levels of climate change might be defined as "dangerous", there is widespread support for containing the rise in global temperature to 2°C above pre-industrial levels. But even with temperature rises of less than 2°C, impacts can be significant, and beyond 2°C, as the IPCC notes, "the possibilities for adaptation of society and ecosystems rapidly decline". And on a business as usual path, there’s some agreement that global temperature levels will rise by just under 5°C by 2100.

Climate change projections from the Australian Bureau of Meteorology include increased intensity of cyclones, an overall increase in the intensity of extreme weather events, and sea-level rise which threatens coastal regions and cities. It is possible that by 2100 global sea-level rise may well exceed 1 metre.

This article reviews action which ports together are taking around the world to address the likely impacts of climate change. And such port action has been the result of voluntary action taken because of perceived benefits in acting prior to regulation, in getting out ahead of governments. There is no binding international agreement on climate change in place for the period after 2012, and no Australian legislation in place (and not for the immediate future) to address the climate change problem.

Implications for Australian ports and the virtues of taking action ahead of regulation will also be examined. Action to quantify emissions from port facilities and operations and manage climate change risk obviously goes to port environmental management. And such risk takes many forms – physical and structural risk, for example, and reputational risk.

Action which ports are taking to address the climate change problem

Many of the impacts of climate change, the IPCC states, can be “reduced or delayed by mitigation ... A portfolio of adaptation and mitigation measures can diminish the risks associated with climate change.”

Climate change mitigation involves reducing greenhouse gas emissions, reducing the rate and magnitude of global warming. Adaptation means coping with (or adjusting to) climate change. With mitigation, adaptation becomes easier. Actions which ports co-operatively are taking around the world to address the climate change problem involve both mitigation and adaptation.

World Ports Climate Initiative

The World Ports Climate Initiative (WPCI) was launched in November 2008 by the International Association of Ports and Harbors (IAPH). It involves 55 of the world’s key ports (including Sydney Ports and the Port of Melbourne). Its World Ports Climate Declaration states that:

  • transport through ports, port operations, and industrial activities at ports contribute to greenhouse gas emissions; and
  • ports have many opportunities and the responsibility to contribute to the reduction of emissions.

Current WPCI projects include development of a lease agreement template which includes a sustainability approach in leases for port tenants, and an agreement to retrofit cargo-handling equipment with emissions control systems and replace older equipment with newer, cleaner equipment.

With regard to initiatives to reduce emissions from port operations and development, ports agree to promote and enable generation of renewable energy and to use renewable energy, where possible, for port authority operations.

WPCI also provides guidance on carbon foot-printing to be used to establish emissions sources, track emission trends, and provide information needed to determine where ports can focus efforts to reduce their emissions.


Another initiative – Climeport – proposes the assessment of different methodologies in order to combat climate change. The project involves a group of the largest Mediterranean ports, and aims to develop and implement solutions regarding climate change by means of action in maritime and inland transport, energy saving and efficiency and designing an environmental indicators system. It seeks to develop:

  • a diagnosis of port influence on climate change and action plans for reducing the impact of port activities on the environment; and
  • tools and best practices that can be widely used to mitigate the contribution of Mediterranean ports to climate change, including environmental risks.

Participating ports plan to disseminate the results “as they are obtained among other ports from the Mediterranean and the rest of the world, thus making up a network of harbours sharing a common goal of preserving our environment.”

Mitigation and adaptation – possible costs

Implementing port initiatives such as the WPCI and Climeport will require careful planning and continual feedback on the impacts of mitigation and adaptation policies for government, industry, and society. Mitigation and adaptation, however, come at a cost. A major 2009 climate change report cites a study which shows that

"while it will cost up to … 1 billion euro … to secure Japanese harbors against stronger winds and more frequent storms, failure to do so could result in the loss of 1.5 to 3.4 percent of Japan's GDP by 2085 … This is due to an increased number of days where harbors will be forced to close. "

As a result,

"port planners should factor this in when designing port capacities. Their designs must be able to prevent delays and increased downtime due to winds and rain. Similarly, they must plan for sea defenses that can limit damage caused by waves. Failure to do so could lead to bottlenecks in the shipments of products and constrain Japanese economic growth."

Implications for Australian ports: Virtues in taking action ahead of regulation

Climate change regulation is coming. At some point, Australian ports may be required to report emissions under the National Greenhouse Energy Reporting (NGER) Act as the threshold comes down (and may be caught by a prospective carbon tax or emissions trading scheme). However, businesses and entities not caught by the NGER Act can choose to register and report, or at least use the reporting and measuring mechanisms under the NGER Act. This may have strategic and other advantages for ports. There is a good business case for voluntary reporting; it demonstrates an awareness of risk and the importance of sustainability and environmental responsibility.

Regulation has arrived in other jurisdictions. In the UK, for example, under the Climate Change Act 2008, certain large ports must report to governments on risks from climate change, and mitigation actions being taken. The journal Ports and Harbors reports that port managers must now “take the natural environment into account in all that they do".

So, why act now? Taking early action to address climate change is cost-effective and strategic, as global port experience reveals. As the IAPH says, through early action ports can avoid regulations “that create more burdensome, inappropriate, or costly mandates.”

Further, in developing regulations that may affect a port, regulators will often investigate what programs are already in place to manage the subject of regulation. Well conceived and implemented measures and strategies are much more likely to be incorporated into regulatory policies.

Finally, as the IAPH states, with a strategic plan in place to manage emissions reductions, a port can begin to adjust its infrastructure development program to ensure the implementation of appropriate systems. Retrofitting terminals and infrastructure after the fact can incur far greater costs.

Proposal – "Port Carbon Accreditation"

After a review of global policy responses to climate change, including those taken by ports, and based on a similar program formulated by European airports, consideration could be given in Australia to a ports-driven but independent assessment and recognition of ports’ efforts to manage and reduce emissions. Such a program, based substantially on the Airport Carbon Accreditation program, could include:

  • accreditation and verification criteria for ports on a biannual basis;
  • assessment and recognition of efforts of ports to manage and reduce their carbon emissions with four stages – assessment, reduction, optimisation and neutrality;
  • ports resolutions to (a) pursue a clear policy reconciling growth with climate change objectives; (b) commit to reduce emissions from port operations; and (c) commit to establishing an Australia-wide scheme allowing ports to follow a common framework for the measurement, reporting and reduction of emissions; and
  • collaborative engagement with stakeholders.

As international port experience reveals, there are opportunities in acting ahead of regulation, virtues in anticipating regulation. A port carbon accreditation scheme could be such an opportunity, and one with long-lasting benefits.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.