As we gather in Cali, Colombia, for the UN Biodiversity Conference (COP 16), the challenge ahead is clear: we must transform the commitments of COP 15 into action. The ocean, central to many of these discussions, is linked to all 23 targets of the Kunming-Montreal Global Biodiversity Framework. Achieving the marine targets will depend heavily on the sustainable transition of the shipping industry.
The previous coalition formed to address invasive species transported by the shipping industry sets a precedent for us to build a new alliance – this time tackling the far more complex issue of emissions and the equitable greening of the entire industry.
The maritime shipping industry is the backbone of global trade, moving about 90% of the world’s goods, driving economies, and reducing poverty. However, it also accounts for nearly 3% of global greenhouse gas emissions, in addition to a range of other environmental impacts. These include the spread of viruses and invasive species from ballast water discharge, oil spills from Alaska to the Red Sea, seabed and coastal disturbances from ports and shipping channels, collisions with marine ecosystems and wildlife, and increasing levels of noise pollution.
“Studies show that noise from shipping affects the behavior, psychology, and in some cases, the survival of marine animals”
Addressing these challenges requires a systems-level transformation of the shipping industry. This includes greening fleets, cutting emissions, managing ballast water, reducing and recycling wastewater, rethinking supply chains, upgrading port infrastructure, and promoting more eco-friendly ship designs.
The International Maritime Organization (IMO) has made progress in advocating for greener fleets and regulating ballast water, but given the urgency of the crisis, much more needs to be done – and quickly. We have united before: the agreement on ballast water and invasive species exemplifies international cooperation and sets a model for future agreements. Transforming the shipping industry is a complex challenge that demands a systems approach, addressing both supply and demand through innovative financial solutions.
However, any progress will fall short if we don’t address the underlying issue: the lack of resources and access to capital needed to power the green-blue transition to a more sustainable ocean economy. The ocean generates trillions of dollars in goods and services annually, supporting industries like pharmaceuticals, fisheries and aquaculture, telecommunications, and tourism. Yet, funding for its preservation falls short by at least US$150 billion per year, threatening to undermine its projected economic value, which is expected to reach US$3 trillion annually by 2030.
Improving port infrastructure is critical, particularly in the Global South, as most shipping routes connect the South to the North. Addressing this challenge requires collaboration between multilateral development banks (MDBs), development finance institutions (DFIs), the UN, and governments to deliver last-mile solutions. Jobs and livelihoods in the shipping industry often exist in markets unsuitable for traditional finance, making it essential to engage partners who can absorb risks others cannot. Switching to alternative fuels will also require careful management of the entire supply chain, from storage and distribution to ensuring safety.
The sustainability of the shipping industry is inextricably linked to ocean health – making investments in this area critical to the industry’s future. The evidence on emissions and carbon sequestration is undeniable: without immediate action, everyone loses.
A Just Transition
A revamped global coalition is needed – building on the work of existing alliances – to ensure the benefits of a sustainable shipping industry are shared equitably, and the burdens are not disproportionately borne by those least able to manage them. Developing countries, which provide the raw materials fueling global supply chains, will face the greatest burden from the disruption and additional costs associated with greening the industry, while benefiting less from global trade.
The United Nations Capital Development Fund (UNCDF) works to ensure the equitable distribution of benefits by attracting private investment in developing and Least Developed Countries (LDCs). As a hybrid development and finance institution, UNCDF mitigates high risks, making sustainable capital accessible and filling a crucial gap in the international financial system by deploying catalytic investment capital in high-risk markets.
We have successfully derisked projects through innovative financing mechanisms and coalitions, such as the Global Fund for Coral Reefs (GFCR). By offering grants, guarantees, and loans to the private sector, UNCDF reduces risks for private investors, making commercial investments viable in high-risk, neglected markets. These principles can be scaled to support the green-blue transition, particularly in the Global South, where access to capital is a significant constraint to systems-level change.
A model like the GFCR, which advances a blended finance approach to catalyze private investment while protecting coral reefs, unites over 50 global partners and can serve as a model for UN-led collaboration in addressing environmental challenges across industries. Building on this success, UNCDF, with UN and global partners, stands ready to support the IMO in mobilizing a coalition of North-South states, private sector actors, financial institutions, philanthropies, and other non-state actors to support a green-blue shipping transition – including the upgrading of ports and infrastructure – from patchwork solutions to a holistic financial systems approach.
Opening new pathways to raise capital for a sustainable ocean economy can be achieved through diverse financial mechanisms, including debt, equity, insurance, and grants. This approach aims to unite a passionate, yet fragmented, group and leverage official development assistance to incentivize private investment.
Greening the shipping industry is not just a technical challenge; it also involves political, social, and equity issues that must be addressed. The ongoing debate over market-based measures, such as bunker fuel fees within the IMO, highlights how complex the transition will be. However, the shift toward a more sustainable shipping industry offers an opportunity to redefine South-South-North relations, moving from conflict to cooperation and emphasizing collaboration.
Without urgent action, the risk of failing to meet climate goals and biodiversity targets – and pushing critical Earth systems to the brink of collapse – is higher than ever before.
About the author: Pradeep Kurukulasuriya is the Executive Secretary of the United Nations Capital Development Fund (UNCDF). He is a Sri Lankan economist with a PhD from Yale University.
