In my article today on environmentalists wanting to slow down cargo ships to reduce carbon emissions, I quoted Marc Levinson, who said that slow steaming is the “only way” for ocean carriers to hit the U.N. climate goals for the industry. That’s true as the industry currently stands. As I mentioned in the piece, bunker fuel, which powers cargo ships, is thick, dirty fuel, and there’s really no way to make it burn cleaner.
Of course, things can change over the next 28 years (the U.N. climate goals have a 2050 deadline). Maybe ocean carriers could use a different fuel source that burns cleaner.
Carriers are looking to use liquefied natural gas (LNG) to power ships instead. According to a 2021 blog post from Mitsui O.S.K. Lines, a large Japan-based ocean carrier, LNG has
a low environmental impact because it removes sulfur in the pre-liquefaction process, so it emits almost no Sulfur Oxides (SOx) or Particulate Matter (PM) when burned and emits less NOx (nitrogen oxides) and CO2 than other fossil fuels. It is also relatively safe because its specific gravity is lighter than that of air and it is easy to diffuse, so there is less risk of explosion. In addition, its proven reserves surpass that of oil and its ability to provide a stable long-term supply for more than 50 years is a key advantage.
There are downsides as well, since installing LNG-compatible engines is expensive, and ships would need to have larger fuel tanks, the post says. But those are technological problems that can be worked out over time through investment and innovation in the decades to come.
The problem with the LNG approach to reducing carbon emissions for ocean carriers is that environmentalists would still pitch a fit because it would require more natural-gas production and exploration. LNG burns cleaner, but it’s still a fossil fuel, which environmentalists oppose because it isn’t renewable. It’s commonly extracted through fracking, which environmentalists want to ban. Additionally, LNG must be transported — by large oceangoing ships. If environmental regulations make shipping more expensive and service less frequent, it only becomes harder to move LNG and facilitate the transition to a cleaner fuel source.
If environmental regulations increase transportation costs around the globe, then it may become cost-effective for businesses to move production closer to home to avoid higher shipping costs. Hooray, we’re bringing jobs back to America! Well, not so fast.
First, just because it’s cheaper in our hypothetical world of permanently sky-high shipping costs to make things domestically than internationally, that doesn’t make them cheaper than the status quo. Others may point to different advantages of domestic production, but if it were cheaper to make everything in America, businesses would be doing it already. They aren’t, so prices on most consumer goods would be higher than they currently are if everything were made here. (This is a very simple point that President Biden does not seem to understand when he claims that more domestic production will reduce inflation.) Making everything more expensive to satisfy U.N. climate goals is not worthwhile.
Second, even if it were worthwhile, the environmentalists would still pitch a fit. To make more things domestically and avoid ocean shipping, companies would have to build more factories in the U.S., which environmentalists would oppose with all their might. As Jim Pethokoukis and Alan Cole recently discussed, since the 1970s, environmentalists have used state and federal laws and regulations to block construction projects for just about everything, including green energy. There’s no chance they’re going to support a huge boom in industrial construction to accommodate domestic production of more of the things currently made abroad.
The short-term “fix” of slow steaming to meet U.N. climate goals would be economically harmful, and possibly environmentally harmful too when the substitution effects are taken into account. Environmentalists are standing in the way of producing more LNG, making that path to reducing emissions more challenging. In the worst-case scenario of permanently higher prices where transportation costs force more things to be produced domestically, environmentalists would oppose new construction. It becomes clear pretty quickly that the radical environmentalist movement’s ultimate enemy is economic growth.