The quest for sustainable trade

TradeJack Simpson, North East England Chamber of Commerce policy adviser, calls for more green trade policies as he considers the impact of international trade on climate change, highlighting many initiatives which show steps in the right direction for a reduction in environmental impact

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Jack Simpson
jack.simpson@neechamber.co.uk
@NEEChamberJack

In what was billed as the “Brexit election” the word climate appeared just as much as the word Brexit across the Conservative, Labour and Liberal Democrat manifestos: 61 times each.

Stated wisdom asserts that global trade aids sustainable development. The World Trade Organisation declaring “Trade growth enhances a country’s income generating capacity”, improving jobs, innovations and quality of life. However, international trade has major environmental impacts – when we think of big cargo ships and long-haul flights across the world. The reality is that transport contributes 18 per cent to the total sum of man-made emissions.

Not only will we be trading more as productivity rises, but emerging economies will rapidly enter global trade, opening more markets and opportunities, meaning we will be sending more goods further. The International Transport Forum estimates that by 2050 cargo journeys will lengthen on average by 12 per cent and CO2 emissions will increase by 290 per cent.

If this continues unchecked, climate change will have the added consequences of extreme weather, such as storms and hurricanes, which will more severely disrupt global trade and supply chains, with logical consequences for coastal communities and ports.

It is clear that these figures don’t fit with the conventional wisdom that global trade enhances “sustainable development”. While I
am not disputing the economic advantages of international trade, something must change to fit the shift towards a sustainable, but prosperous, global economy.

To hit the target of halving global transport emissions by 2050, the International Maritime Organisation (IMO) estimates that ships will need to be emission-free by 2030. However, we don’t have to go back to the age of sail and scurvy to create a more sustainable transport model.

Research suggests slowing ships and zero-carbon power will be instrumental in this pursuit and innovations are beginning to take shape across the world. New technologies and logistical processes are already paving the way to a cleaner method of international trade.

Ports will be hotbeds of sustainable innovation, and the North East could be potential trailblazers. In December, the Port of Tyne announced the “Tyne 2050” strategy with sustainability at its core.

It aims to be carbon neutral by 2030 by completely electrifying the port and using the UK’s first Maritime Innovation Hub to develop new technology in collaboration with global businesses.

The groundwork was set in the Tees Valley, as a PUBLIC report outlined
the huge potential for AI and digital technology in maritime. PUBLIC reports a Dutch start-up has cut shipping wait times by 20 per cent. This may sound small, but it means that ships can sail slower, burn less fuel, resulting in a reduction of 135 tonnes of CO2 emission.

One of the biggest challenges lies in aviation, and when you think of the amount of energy required to get 60,000kg off the ground, going for net-zero might seem daunting.

EasyJet became the first airline in November to announce offsetting plans of its carbon emissions. This means that easyJet will be investing in community projects and schemes that reduce emissions, to compensate for the amount of emissions it produces. While this may barely scratch the surface of reducing global emissions, it is at least a step in the right direction.

One of the themes that has underpinned all this rationale has been utility: how we use current processes, and how can we utilise them more efficiently. The case to improve and expand the rail network exemplifies this.

All too often when we talk about improving rail it is dealing with passenger numbers, and how quickly we can get to Edinburgh, London, or Manchester.

But freight needs to be part of the discussion, both in a business and green sense. Rail’s use of dedicated travel lines and the general step to electrify the lines makes it a much more sustainable model for transport. Finally, being smarter about storage (fitting more goods in less space) will cut down traffic volumes, and will mean we’re moving less, while carrying more.

These are short-term fixes that we’ll see more of through 2020, in the longer-term viable alternatives to carbon fuel will be needed. Electrification is rapidly developing, with hauliers and ports researching the viability of electric alternatives, currently within clusters or port zones, but could be the direction of travel for supply chain logistics. The transition to renewable power sources will further support new green supply chains.

On a recent visit from Chennai, an Indian entrepreneur outlined his plan for an electric vehicle supply chain, powered by mobile battery packs that drivers and haulers can pick up from depots, clients or designated points.

An emerging class of carbon-neutral fuel is being developed to replace classic fossil fuels, known as electrofuels. These fuels are produced from water or CO2 with help from renewable energy sources like solar or wind. However, we’re some way off that becoming commercially and logistically viable.

All major parties promised to prioritise the environment in their new budgets, with new investment in research and development, transitional funding for energy-intensive industries and carbon capture and tax schemes to ensure a greener and more sustainable economy by 2050.

Businesses have been at the forefront of this climate innovation, but government must also play its part in pushing and supporting the transition to a greener global economy.

With a new Conservative majority set to pursue an independent trade policy, away from the EU it would be wise
to put sustainability at the heart of its trade policy. Incentivising sustainable development, sharing of new technologies and skills for market access could spread the green revolution.

It would be frustrating to put such effort into a green transition to be undone by developing nations using old energy intensive strategies to compete.

A green trade policy that supports and develops sustainable technology
in developing markets will be vital in protecting us from taking two steps forward, but one step back, in our quest for sustainable trade.

We are currently standing at the foot of a new era, how we respond to this climate crisis and innovate sustainably will define our future.