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Win–Win and the “Push-Down, Pop-Up” Principle

“Win–win” is a nice set of words. The only problem is that finding win–win solutions may not always be easy. More often than not, the “push-down, pop-up” principle applies: if you push a certain button down, at least another one will pop up somewhere else. Speed reduction in maritime transportation is a prime example: if ones make the world fleet go slower, one will reduce emissions, will reduce fuel costs, and will take care of vessel overcapacity, which is important when the market is depressed. That seems like killing three birds in one stone, so it looks pretty good, or in fact a win–win–win proposition. But is that really the case?

The answer is, it depends. Reducing ship speed may have other ramifications, which may not be beneficial. For instance, more ships will be needed to produce the same transportation throughput. But this will entail some costs. Also, cargo in-transit inventory costs will generally increase. This is due to the delay in the arrival of the cargo. The inventory costs are proportional to the value of the cargo, so if you really have high-value goods, hauling them at a lower speed may entail significant costs.

Another push-down, pop-up effect is that in the short run, freight rates will go up once the overall transportation supply is reduced because of slower speeds. At a minimum, the rates will not go down as much, and this may help the market, but shippers will foot the bill. This fact is seldom mentioned in any of the discussions on green maritime policies. The extent of the rate increase would depend on the particular scenario.

Yet another push-down, pop-up effect concerns effects that reduction in ship speeds may have on other modes of transportation, to the extent these are alternatives to sea transportation. This is the situation as regards many intra-European destinations, but may also be true in North America, if coastal shipping is contemplated to relieve highways from congestion. If ships are made to go slower, shippers may be induced to prefer land-based alternatives, mostly road, and that may increase overall GHG production. Road is certainly worse than maritime in terms of GHG emissions per tonne-km.

A similar “push-down, pop-up effect” may very well occur because of another green policy initiative is followed. The use of lower sulphur fuel within designated sulphur emissions control areas (also known as SOx ECAs, or SECAs) as of 1 January 2015 may have a reverse impact on the stated European Transport policy goal to shift cargo from land to sea, by making short-sea shipping less favorable to road transportation, something that might ultimately lead to more CO2 pollution. Currently in Europe the Baltic Sea, the North Sea, and the English Channel are designated SOx ECAs, and so is the entire North American and US Caribbean coast, which also includes restrictions on nitrogen oxides (NOx).

In the search for environmentally friendly policies, it is clear that a holistic approach is necessary, one that looks into and optimizes the overall supply chain instead of its individual components. Otherwise, the solutions are likely to be suboptimal, both cost-wise and environment-wise.

Another example that comes to mind concerns the push for the widespread use of electric power for surface transportation vehicles, whether these are passenger cars, buses, railway locomotives, or even trucks and bicycles. The EU goal to achieve essentially CO2-free city logistics in major urban centers by 2030 depends critically on the successful use of electric technologies in urban vehicles. Yet, a basic premise that does not usually appear in public discussion is that the extra energy necessary to power these electric vehicles should produce less emissions than the emissions of the conventionally fueled vehicles that are replaced. This is true if this extra energy is produced by nuclear, hydro, or solar power, but not necessarily true if it is produced by a coal plant or a plant using fossil fuels.

The same is true for “cold ironing,” that is, the provision of electricity to a ship by plugging into a port's electricity supply system so as to switch off the ship's auxiliary engines at port. This is an idea that originated in the ports of Los Angeles and Long Beach (California, USA) and is likely to be the norm for many world ports in the future. The rationale is minimizing in-port emissions. But again, the question is what emissions will be produced by the generation of the extra shore electricity, and if that is less than the emissions saved by switching off the ship's auxiliary power at port.

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