Global shipping lanes imperiled by climate change

Climate change-associated risks could hamper the vitality of some of the most important global shipping lanes as well as sea-facing ports and other infrastructure, according to a report from Marsh.

The report, which uses the Suez Canal as an example, found that rising sea levels are connected to coastal inundation, which could undermine the integrity of infrastructure and slow operations at ports.

“The Suez and Panama Canals, the Straits of Hormuz, the Bab-el-Mandeb, and the Straits of Malacca rank among the world’s most important waterways, and represent a significant source of national income for countries that support trade along these routes,” Nick Faull, head of climate and sustainability risk at Marsh, said in a release. “Climate-related events, such as the high winds that played a role in the grounding of Ever Given in 2021, could impair their long-term viability.”

Marsh reported that the hot windstorms that played a role in the Ever Given event are likely to increase in intensity and frequency as the overall temperature in Egypt has increased, while annual precipitation has fallen by more than 20% during the past three decades.

Further, an increase in extreme heat and sandstorms will hurt visibility levels for ships navigating through the canal. This could result in restricted port operations or the need to dredge more as sand deposition increases.

Additionally, extreme heat could result in a decline in productivity at ports. High temps can also drive changes to seawater salinity and density, which can affect engine cooling ability and efficiency.

“While reaching a 1.5 degree Celsius Paris-aligned climate scenario will reduce the impact of the physical climate risks on these routes, greater resilience to these threats should be embedded into future infrastructure planning to limit critical dependencies and preserve critical supply chains in the long term,” Faull said.

In order to mitigate these risks, Marsh suggests the following three risk mitigation measures:

1. Physical resilience: Resilience to physical climate risks, including coastal inundation, should be considered further and invested in to enable the long-term reliability of the Suez Canal, including adapting port infrastructure and lock considerations along the canal within the Canal’s adaption window.
2. Financial enablers: Finance mechanisms, such as (re)insurance-backed public-private schemes, enable de-risking of resilience adaptation. Mechanisms could be developed further to enable resilience adaptation development offsetting for those that rely on and operate the canal.
3. Resilience strategies: Physical resilience and financial mechanisms must be underpinned by a consistent and structured approach. The UN Principles for Disaster Resilient Infrastructure can facilitate consistency in developing a resilience strategy.

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