GLOBAL TRADE DISRUPTIONS AND RISING TEMPERATURES

Source:

IndianExpress

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Context

• The United Nations Conference on Trade and Development (UNCTAD) has highlighted significant global trade disruptions, leading to increased greenhouse gas emissions and rising temperatures.
• This is particularly pertinent as India experiences severe heat waves, with the national capital, New Delhi, recording its highest-ever temperature of 49.9°C.

Details

• Heat Waves in India:Major cities like Mumbai, Chennai, Bengaluru, Kolkata, and Hyderabad are facing extreme heat stress, with temperatures exceeding 50°C.
• Shipping Crisis:Attacks by Yemen's Houthi rebel forces on the Suez Canal since October last year have led to substantial rerouting of ships via the Cape of Good Hope, significantly increasing voyage times and emissions.

Impacts of Trade Disruptions

• Increased Emissions:The diversion of ships around Africa, instead of through the Suez Canal, has led to a 38% increase in carbon dioxide emissions. A journey from China to Germany, for instance, now emits an additional 4.32 million kilograms of CO2.
• Longer Voyages:Ships are spending more days at sea due to rerouting, contributing to higher fuel consumption and greenhouse gas emissions.
• Decreased Suez Canal Transits:By February 2024, transits through the Suez Canal had decreased by 42%, with container tonnage crossing the canal falling by 82%.

Broader Implications

• Multiple Trade Disruptions:The world is simultaneously facing disruptions in the Red Sea, Black Sea, and Panama Canal, affecting inflation, and food and energy security.
• Climate Change:The ongoing crisis underscores the impact of climate-induced events, such as the drought affecting the Panama Canal, on global trade and emissions.

UNCTAD's Recommendations

• Sustainable Networks:There is an urgent need to make global production and distribution networks more inclusive, sustainable, and resilient.
• Reducing Reliance on Major Waterways:Diversifying trade routes and reducing dependency on critical chokepoints like the Suez Canal can help mitigate future disruptions.

Sources:

IndianExpress