War & Climate Change: Suez & Panama Canals’ Trade At Risk

By Sophie Lam 22 February, 2024

All eyes on the US & UK as they swoop in to put an end to the Ansar Allah attacks on ships in the Red Sea. But where are the efforts to battle climate change over at the Panama Canal where drought is also disrupting trade? Is war really the best strategy? CWR's Lam shares 3 thoughts

War = more emissions = “Hothouse Earth”; Shipping is already carbon-intensive, plus not using Suez & Panama Canals = longer routes & more $$$ oil use = even more emissions
Vicious emissions cycle puts global trade at risk! Panama & Suez Canals are already vulnerable to climate change; so extra emissions will only increase risks & $$$ losses
At 1.52°C of warming today, we must adapt these canals to protect trade; Unleashed ice will also cause multi-meter SLR, stranding low-lying ports; Fight climate change like war!

It’s all over the news now – vessels are diverting from the Suez Canal due to Ansar Allah attacks on Israel-bound ships in the Red Sea. According to the UNCTAD, this has affected 42% of maritime traffic causing the US and UK to deploy warships and aircrafts to launch counter-attacks. Their message is clear: they “will not hesitate” to attack and are demanding an “immediate end” to the conflict.

Meanwhile, over at the Panama Canal, traffic was also cut by more than a third earlier this year due to a severe drought. Not only has this crisis received far less media attention, but where’s the same “will not hesitate” efforts from the US, UK, and their allies to battle climate change?

If anything, war will only exacerbate climate change and increase the vulnerability of stranding both the Panama & Suez Canals, which will be disastrous for world trade. Are we not shooting ourselves in the foot? Is going to war the best strategy to protect trade?

Here are three thoughts:

1. War = more emissions = “Hothouse Earth”

When we look at the impacts of war, we look at casualties and destruction, but did you know that emissions from war are just as bad.

According to the Guardian, just the first two months of the Israel-Gaza war alone produced the annual emissions equivalent to more than 20 climate-vulnerable nations. And that doesn’t consider the embodied carbon that comes with rebuilding infrastructure post-war which adds to more emissions.

First 2 months of Israel-Gaza war = emissions of 20+ climate-vulnerable nations …

… worse still, war emissions aren’t accounted for in a country’s emissions

Right now, the US and UK are sending warships and aircrafts to counterattack the Ansar Allah = even more emissions. According to the Ground Report, for every 100 nautical miles flown by a US F-35 fighter jet, it emits the equivalent emissions of an average UK petrol car in a year.

Worse still, all these war emissions are flying under the radar because they are not accounted for in a country’s emissions.

So, continuing down this path will only mean we will be tracking IPCC SSP3 “Regional Rivalry Scenario” of 3.6°C of warming by 2100, which will exacerbate all physical climate risks – see our prediction on this in our “5 Trends for the Year of the Dragon”.

2. Not using Suez & Panama = longer routes = more $$$ oil use = more emissions

Whether or not it’s a war or drought blocking the Suez or Panama Canals, emissions are increasing as ships use more fuel to take lengthier detours.

A ship detouring the Suez emits 10,360 tons of CO2 = burning 13.9 extra rail cars’ of coal

According to a TIME article, a cargo ship travelling from the Port of Rotterdam to China would normally produce 7,841 metric tons of CO2 going through the Suez Canal. However, if the ship detoured around the tip of Africa (Cape of Good Hope), emissions jump to 10,360 tons of CO2 – the equivalent of burning 13.9 extra rail cars’ worth of coal. And that’s just one ship – hundreds of ships are now paying an extra US$1mn (per vessel) to take this longer route.

A ship transiting the Panama saves ~1,206 tons of CO2 = emissions from a car driving around the Earth 100x

Similarly, another article revealed that a ship transiting the Panama Canal can save ~1,206 tons of CO2 emissions – roughly the equivalent emissions a car would produce driving the circumference of the Earth 100x. In 2021, transits through the Canal saved shippers from producing a million tons of CO2. However, as a result of the drought, ships are now forced to go around the tip of South America (Cape Horn) – adding an extra 9,500 miles or 25 days to the voyage.

Shipping is already carbon-intensive, yet with emissions coming from warship/aircraft attacks plus ships taking lengthier detours, surely this is shooting ourselves in the foot… bringing us onto the next point.

3. Trade at risk! Panama & Suez are already vulnerable to climate change; more emissions increase risks & $$$ losses

Let’s face it, the Panama and Suez Canals are already vulnerable to climate change.

10-month Panama drought got so bad, traffic was cut by more than 1/3rd last month

The Panama Canal has been facing a 10-month drought – even though it’s responsible for moving US$270bn worth of cargo annually. The drought got so bad earlier this year that traffic was forced to cut down by more than a third. In November last year, large oil tankers were prohibited from using the waterway altogether. Now, ships that want to transit the Canal have to wait in line for several days; some are even paying millions of dollars to jump the line.

Over in Suez back in 2021, windstorms wedged the Ever Given in the canal for 6 days, stranding ~US$10bn of trade per day

Over in the Suez, let’s remember that back in 2021, hot windstorms blew the Ever Given off course and wedged it between the narrow waterway. This was one of the largest container ships, and it blocked the waterway for 6 days, stranding ~US$10bn worth of trade per day.

In addition to stronger winds, could the Suez like the Panama Canal be affected by a drought? Maybe this is not too farfetched as there’s now a massive drought ravaging the Horn of Africa for the last 50 years with total losses estimated at US$70bn. Even Egypt is facing an annual water deficit that’s so bad it could run out of water completely by next year…

Could the Suez also be affected by a drought?

Already Egypt is on track to run out of water completely by 2025 …

Clearly, trade is disrupted and can be costly when both canals are choked. Plus, lengthier detours only mean more emissions, further increasing the vulnerability of these chokepoints. So surely, we must fight climate change to avoid rising risks?

Since these chokepoints are already feeling the impacts, we must adapt these canals to preserve trade routes. According to Bloomberg, it would cost ~US$2bn and 6 years to resolve chronic water shortages on the Panama canal. However, the proposed solution is facing a lot of local backlash, plus the real question is who will pay for this?

Winning a battle but losing the war…

The side with the largest arsenal always wins in war. While the US, UK and their allies have more firepower to dominate the Ansar Allah… Surely, this may not be the best strategy to protect trade, especially since fighting battles/wars will lead to more emissions and more trade at risk from climate impacts. And if we can’t find the money to ensure these canals are adapted to function in a hotter world, perhaps we should allocate some funds from the US$2.2trn global military spending towards financing adaptation to ensure trade is not disrupted.

At 1.52°C of warming today, unleashed ice will also cause multi-meter SLR, stranding low-lying ports …

… so fight climate change like war with all our arsenal

Moreover, shouldn’t we be pushing for peace and uniting to fight climate change? After all, global mean temperatures have already reached 1.52°C of warming above pre-industrial levels (from Feb 2023 – Jan 2024). At this 11th hour, ice is already in the danger zone and once unleashed it could cause devastating multi-meter sea level rise. Then, it will not just be these 2 chokepoints at risk, all ports around the world which are low-lying will be stranded by rising seas. This will clearly disrupt trade even more.

So, is it worth winning the battle but losing the war? We need to start fighting climate change like we’re fighting a war, with all our arsenal.

 

Further readings

  • Rivers are Running Dry Today – Rivers are our lifelines; they support cities, food & economies for centuries. This summer they were tested with severe drought/floods – will they fail? CWR’s Tan & Lam dive into challenges facing 5 major river basins that are the industrial/agricultural heartlands for China, Pakistan, US and Europe.
  • No River, No Power – are we energy secure when rivers run dry? – CWR’s new report revealed 16 Asian countries’ power generation assets with installed capacity greater than the G7 ex-US face sizable trifecta exposure from escalating climate risks and rivers running dry. There are clear national energy security implications unpack this reliance on 10 climate-sensitive rivers now!
  • No Water, No Growth – Does Asia Have Enough Water To Develop? – CWR’s new report highlights the importance of the Hindu Kush Himalayas for the future of the Asia’s economy
  • All quiet on the ESG Front as Oil Back-Pedals on Net Zero — Greenwashing Alert! So-called climate activist shareholders are loud when oil is waning but silent when profits soar. Are investors just riding the green wave? CWR’s Lam breaks it down

More on Latest

Author: Sophie Lam
At CWR, Sophie works on projects related to coastal threats and helps manage CWR’s newsletter by writing her own articles, interviewing industry experts, and supervising CWR’s media campaign to a global network. She was the research analyst facilitating the geospatial mapping and data analysis on the report “Crude Awakening! Fast rising seas threaten seaborne oil & energy security – Spotlight: Japan & South Korea”. The report was recently cited by the UN Secretary-General at the World Economic Forum. Sophie’s work around coastal threats was inspired by her internship at CWR when she worked on Re-IMAGINE HK, an initiative that kickstarted a conversation to safeguard HK from rising seas. Sophie hails from a Geography Honours degree from the University of Exeter and outside of work enjoys giving career talks to university students also aspiring to pursue an ‘unconventional’ career the evolving climate space.
Read more from Sophie Lam →
«
»
Related Posts