16 Feb 2012

Ports and climate change: Acting ahead of regulation

by David Hodgkinson

As international port experience reveals, there are opportunities in acting ahead of regulation and virtues in anticipating climate change regulation

A recent report produced for the Commonwealth Government, "The Role of Regulation in Facilitating or Constraining Adaptation to Climate Change for Australian Infrastructure", sets out some of the possible impacts of climate change on Australian ports. After a brief summary of the climate change problem and the Commonwealth's report, this article outlines the advantages for ports in taking early action to address the climate problem and gives consideration to a port carbon accreditation program.

Climate change

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 Intergovernmental Panel on Climate Change (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.

Ports and climate change

The Commonwealth report makes clear that climate change is likely to pose significant challenges for owners, managers and users of Australia's transport infrastructure, including ports. Risks include damage from storms and sea level rise, extreme rainfall events, extreme wind intensity, flooding and erosion. At a minimum, the report states, "the effects of climate change may require additional maintenance and repair. At worst, some types of infrastructure may become permanently unusable and will need to be replaced."

The report also states that

"the collective consequences of a climate change event could wreak havoc for the logistics supply chain if one or more types of infrastructure along the supply chain are concurrently affected… It may also lead to liability if the risks of climate change are foreseeable but have not been addressed and a climate change event leads to injury, loss or damage."

"Environment management plans, and the compliance framework which supports them", the report suggests,

"could be an effective mechanism through which the effects of climate change could be addressed. The monitoring and auditing regime will help to ensure that the plans are updated regularly so that they respond to the changing physical environment."

The report also finds that "more generic port management plans could… be used to ensure that account is taken of the impact of climate change on port infrastructure.'

Acting ahead of regulation

"Most of the regulations for Australian infrastructure were designed without climate change in mind," Senator Evans said in commenting on the report. As a result, 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 reporting threshold comes down – indeed, Gladstone Ports Corporation and Port of Brisbane are already listed on the NGER register.

However, businesses and entities not caught by the NGER Act can voluntarily 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 not presently required to report. There is a good business case for voluntary reporting; it demonstrates an awareness of risk and the importance of sustainability and environmental responsibility.

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

As the International Association of Ports and Harbors says, ports can through early action avoid regulations "that create more burdensome, inappropriate, or costly mandates." Further, in developing regulations that may affect ports, 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."

In the view of the IAPH, 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.

"Port carbon accreditation": Adaptation and mitigation

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 could take to address the climate change problem involve both mitigation and adaptation.

Consideration could be given by Australian ports to a ports-driven but independent assessment and recognition of ports’ efforts to manage and reduce emissions. Such a program (reflecting those in place at some airports) 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;
  • port resolutions (perhaps under the aegis of Ports Australia) 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;
  • carbon footprints independently verified in accordance with ISO 14064 (the Greenhouse Gas Accounting Standard); and
  • collaborative engagement with stakeholders – vessels, port customers/users, stevedores, lessees, local businesses – to help guide or influence port activities to lower emissions.

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

David Hodgkinson is Special Counsel in the transport and logistics group of national Australian law firm Clayton Utz. He is the co-author of the book “Global Climate Change: Australian Law and Policy” (2008) and editor of the online service “Climate Change Law and Policy in Australia” (2010).


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