Ingrid Irigoyen, Director of the Aspen Institute Shipping Decarbonization Initiative, discusses the importance of decarbonizing global maritime shipping, and the opportunities and challenges associated with doing so.

Aspen launched the Cargo Owners for Zero Emission Vessels (coZEV) in 2021 to enable multinational companies including Amazon, IKEA, Unilever, and Michelin to collaborate to accelerate the decarbonization of maritime shipping. The group published the coZEV 2040 Ambition Statement, committing to ship all ocean cargo using zero-carbon technologies by 2040, sending a strong demand signal to encourage shipping companies and ports to deploy the necessary technologies.

Maritime shipping is responsible for about three percent of global emissions, and faces a myriad of regulations at the local, national, and international levels. A wide range of decarbonization technologies are emerging, from electrification to fuels like hydrogen and ammonia produced using renewable energy. Ingrid discusses how the Aspen Institute is working with companies to accelerate these efforts. Ingrid also talks about how her background in mediation has helped her convene and collaborate with diverse stakeholders, and she reflects on why a career in climate mitigation is a rewarding long-term strategy.

Resources

• Aspen Institute Shipping Decarbonization Initiative
• Cargo Owners for Zero Emission Vessels (coZEV)
• Shipping emissions data: Fourth Greenhouse Gas Study 2020 (IMO)
• Breakdown of freight transportation emissions by source: Global Transport and Climate Change
• Green corridors: A lane for zero-carbon shipping
• Alternative fuels: A review of cleaner fuels for maritime transport
• COP26: Clydebank Declaration for green shipping corridors

Guests

Climate Rising Host: Professor Mike Toffel, Faculty Chair, Business & Environment Initiative

Guest: Ingrid Irigoyen, Associate Director, Ocean and Climate, for the Aspen Institute Energy and Environment Program and Director, Aspen Institute Shipping Decarbonization Initiative

Transcript

Editor’s Note: The following was prepared by a machine algorithm, and may not perfectly reflect the audio file of the interview.

Mike Toffel:
This is Climate Rising, a podcast from Harvard Business School, and I’m your host, Mike Toffel, a professor here at HBS.

In today’s episode, we’ll hear from Ingrid Irigoyen, Director of the Aspen Institute Shipping Decarbonization Initiative, an effort to engage businesses and U.S. policy makers to accelerate the decarbonization of maritime shipping.

Maritime shipping is responsible for about three percent of global greenhouse gas emissions. The industry has begun facing more pressure to decarbonize, and there are significant opportunities to develop new technologies to reduce, or even eliminate, carbon emissions associated with ocean-crossing cargo vessels.

Today, we’ll hear Ingrid describe the opportunities and challenges of decarbonizing this industry, which faces multi-layered regulations and many budding technology approaches, from electrification to fuels like hydrogen and ammonia that could be generated from renewable electricity. She’ll talk about how the Aspen Institute is working with companies like Amazon, IKEA, and Unilever to tackle these issues through a new collaboration called coZEV, or the Cargo Owners Zero Emission Vessel Initiative, which formed to harness the buying power of these major cargo owners to accelerate the pace of decarbonizing container shipping.

Ingrid also talks about how her background in mediation led her to a career working with diverse stakeholders on complex topics like maritime shipping, and she offers her thoughts on why a career addressing climate change is a rewarding long-term strategy.

Here’s my interview with the Aspen Institute’s Ingrid Irigoyen.

Mike Toffel:
Well, Ingrid, thank you so much for joining us today on Climate Rising. I wonder if we can start by just asking you to introduce yourself and your role at Aspen.

Ingrid Irigoyen:
Absolutely. Thank you so much for having me here today. I am Ingrid Irigoyen. I am the Director of our Aspen Institute Shipping Decarbonization Initiative. I'm also the associate director for our ocean and climate work at our energy and environment program.

Mike Toffel:
Terrific. So when we think about transporting goods, we think about trucks or rail or aircraft and ships, ocean liners, maritime shipping. Can you lay out how large those sectors are in terms of their commercial volume and the amount of emissions they contribute to climate change?

Ingrid Irigoyen:
Absolutely. Yeah. Shipping is one of these incredible industries that actually affect all of our daily lives, and we hardly ever think about it. Maritime trade moves upwards of 90% of global trade. If you look around your house, you're looking at all of the objects and the vast majority of those actually came to you via ship.

Shipping produces about 3% of global emissions, which doesn't sound like much, but it's actually about the national emissions of a large G7 economy. So, quite significant, analogous to Germany or Japan, for example, in terms of emissions. And it's about a gigaton of CO2, which is around what we see from aviation. That's certainly less emissions than from road freight or passenger transportation, but still quite significant.

Mike Toffel:
And this comes about primarily through the combustion of fossil fuels that transport these large vessels around the world.

Ingrid Irigoyen:
Absolutely. Fossil fuels are the only game in town at the moment, for transoceanic shipping. Those fossil fuels take a few different forms, but the vast majority of is what we call, heavy fuel oil, which is basically the sludge at the bottom of a barrel of oil. Which someone cleverly figured out you can burn in a ship engine and make good economic use of. But it's actually quite terrible for the environment.

Mike Toffel:
Before we jump into the program that you're helping to lead, I wonder if we can just talk about some of the major ways shipping companies are trying to reduce their carbon intensity?

Ingrid Irigoyen:
Yeah, so right now, there is a lot of discussion about efficiency, so more efficient use of those fossil fuels so that we're burning less for every nautical mile that we're moving our cargo. And so, there are a number of measures that companies can take. There are some technologies, there are some of maintenance activities that they can do. Things like making sure your propeller is very clean, some sort of simple things like that. And there are also some operational measures. And so, a lot of people are talking about, if we only worked cross the ocean a little more slowly, that we would use actually significantly less fossil fuels.

A lot of that then actually boils down to the way that business is managed. And the way that freight contracting works right now is that often you have ships sort of racing across the ocean to satisfy some contractual provisions. And then parked offshore, spewing more emission while they're waiting to get into port. And we sort of have the classic scenario that your viewers are probably reading about in their newspapers every day of, all these ships, a hundred or more, waiting off of the port of Los Angeles. And many of those have raced across the ocean and then are just sitting there. So a lot of it is operational methods as well, changing the way that we actually time the journeys, the way that the journeys are routed and so on. So there are a lot of measures along those lines.

The challenge is that both these technical and operational efficiency measures can't get us anywhere near where we need to be on greenhouse gas emissions from shipping. We really need to be essentially, at zero emissions by 2050. And with fossil fuels, we can only reduce that to about 50%. So what we need to do is, have a transition to new fuels and technologies that actually have the potential to get us to zero lifecycle emissions.

Mike Toffel:
And can you talk a little bit about those new fuels? I imagine we're talking about battery use and perhaps hydrogen?

Ingrid Irigoyen:
That's right. So this is the big topic in maritime decarbonization right now, is, which will be the fuels of the future? Electrification is fantastic for many modes of transport. The challenge in shipping is that at the moment with current battery technology, you would essentially need a battery the size of the vessel in order to get a vessel across the ocean. So, it's clearly nonsensical for long journeys. There is a lot of potential in electrification for shorter sea shipping and for a lot of the smaller vessels that sort of service ports and service the larger vessels.

To do transoceanic shipping though, what we mostly are talking about in this space now, is hydrogen-derived fuels. And so hydrogen can take many different forms. The one that a lot of folks are talking about is ammonia. It has its pros and cons, but among the pros is that it's predicted to be relatively much more affordable than other alternatives. It also has less of a technological burden in terms of the fuel. Doesn't have to be as cold, for example, if you use liquid hydrogen. And so there are a number of sort of operational advantages. And we already move ammonia all over the world and it's used as an input to fertilizer. So we know how to handle it, we know how to ship it, we know how to distribute it. It's a matter of sort of tweaking those systems and creating appropriate standards for its safe use on board.

We also need to do a little more testing of ammonia to make sure that it's not going to create other unintended environmental impacts. So ensuring that we truly are, not only zero carbon, but zero on all greenhouse gases. That's going to be very important. And then of course, safety for port communities and safety for crew. But that's what a lot of folks are talking about right now. That doesn't mean that there couldn't be incredible innovation. Some people are talking about molten salt, mini nuclear reactors, and things like that. So, there are other possible technology pathways, but the one that I think most sort of analysts and experts in the space are most interested in, are those hydrogen-derived fuels. Among them also, methanol is another option that you'll sometimes see discussed.

Mike Toffel:
And so, how do you create ammonia or hydrogen in a carbon-free manner?

Ingrid Irigoyen:
So really in order for it to be zero lifecycle emission, and that's the important, the lifecycle part of that is really important. If we're creating a fuel that emits nothing from the tail pipe or the equivalent in a ship, it doesn't do your whole lot of good, if you're creating lots of upstream emissions. So in order for this hydrogen to really be zero lifecycle emission, it needs to be what we're now terming sort of green hydrogen, which simply means, produced with renewable energy.

Mike Toffel:
... In a high level, you can go from renewable electricity production, say solar or wind, or nuclear, and use that type of electricity. You can use electricity, generate it from those sources in order to create fuels like hydrogen or ammonia, that then has a high enough energy concentration or energy density to be able to propel ships across the ocean. Is that roughly right?

Ingrid Irigoyen:
That's exactly right. Yeah.

And the energy density is actually a really important factor here. And so, When analysts are looking at the different fuel options, if you have to have a tank so big that you are removing cargo capacity, that also has an economic impact. And so we like to look at these fuels from the perspective of the total cost of ownership. What will it take to retrofit or build a new vessel? How much space does the tank need to take up? What does that imply for the amount of cargo that you're able to move? And so, that's why the hydrogen-derived fuels and particularly ammonia, seem to be the most cost effective, is when you factor in all of those different parameters, it sort of rises to the top as, if we can show its safety and its environmental cleanliness, broadly speaking, then it seems to have great potential.

Mike Toffel:
So current ships could be retrofit to accommodate ammonia, for example?

Ingrid Irigoyen:
That is the idea. There are engine manufacturers who think that they will have engines tailored specifically to ammonia by the middle of this decade, And then also, to have retrofit kits so that you can use existing internal combustion engines in certain ways that enable you to be able to use ammonia. And so, that would really open up a whole new avenue of a solution that could be deployed on the water.

Mike Toffel:
Got it. And who are the main drivers of decarbonizing ocean shipping? Is that coming from the shipping companies themselves or is it coming from those who hire them to ship their goods? Where's the impetus of these efforts?

Ingrid Irigoyen:
It's coming from a variety of different places. Some of the carriers are motivated to be first movers in this space. I think they see that this transition is inevitable, that we will decarbonize shipping. And it can either be to their advantage because they were first movers and they helped define that space. They helped define the technology and they were able to create a special role for themselves as being the pioneers and really knowing how to do zero emission shipping. So I think for some of them, they see a long term business advantage.

I think others are also worried about regulatory pressure. And there's more and more discussion now, in various jurisdictions, globally and domestically and regionally, about regulating this industry more. And so, there's a tension on that. Companies don't want to be forced into abrupt transitions. Ideally, you have gradual transitions where technologies are phased in and where there are appropriate incentives and regulatory drivers that enable that transition to happen in sort of a rational way.

So I think there's some motivation to help shape this transition from the carriers themselves. Certainly for the customers of the shipping industry, particularly public-facing companies, there's a lot of motivation coming from shareholders, from their own customers who are climate-minded customers. We use the term cargo owners. And these are sort of the major multinational companies that are selling you all the products that you see around your house. But they choose to ship with certain carriers versus others. And to the extent that sustainability can be an important criterion for who they do business with, we see increasingly that they're willing to do that.

Regulators, policy makers. Policy makers are looking for all the different ways that they can allow our global economy to reach Paris Agreement goals. And shipping simply has to be on the agenda for that.

Mike Toffel:
So, let's talk about the Cargo Owners for Zero Emission Vessels Initiative, the coZEV initiative for which you're centrally involved, as is the Aspen Institute. What is that initiative and how did it come about?

Ingrid Irigoyen:
So, this is a new project of ours. It's a platform for cargo owner companies, so typically, public facing brands that use maritime shipping and want to reduce the climate and social impact of that shipping activity. It's a platform for them to come together, to work on specific initiatives, to take action, to accelerate the adoption of zero emission fuels.

What it's not is an initiative that provides all of the different sort of tools for efficiency gains. So, we are very focused on sort of the long term solution, recognizing what I said earlier about, you can't get below 50% reduction with fossil fuels. There are plenty of other initiatives that are focused on, how do we get efficiency gains with current technology? We are focused on what is that long term solution? And we recognize that there's going to be limited willingness for cargo owners to pay more for shipping.

And so the other big thorny issue in shipping right now is that potential for a cost premium at a time right now when shipping rates are at record highs. So, we need to bring cargo owners together, give them opportunities to help stimulate this transition in a way that is going to minimize the cost to them. The way you do that is by having folks come together and sort of bringing that demand together, finding economies of scale. Coming together to advocate for policies that will enable this transition to happen in a way that doesn't put them at a competitive disadvantage, because they're paying more for shipping and their competitors aren't, and give them an opportunity to really shape what the landscape for this future industry is going to look like. We are keeping our eyes on that long term, zero emission goal, and what are the new fuels and technologies? And how can cargo owners support it?

Mike Toffel:
So this is the Amazons of the world, the Michelins, Patagonias. These are some of the members of coZEV. From their perspective, these are part of their scope 3 emissions, the emissions in their supply chains, not just associated with the production of the goods, but in this case with the transportation of the goods. And many of them are making efforts to pursue net zero and eventually at perhaps absolute zero 2020, 2030, 2050.

And so when we hear about scope 3 here, we're really thinking about the transportation.

And as we think about that, the transportation by ship, I've always thought, is actually quite low cost. When you think about how much for a Nike shoe made, perhaps in Vietnam. By the time it gets to your foot, how much of that price or that cost actually was accounted for from the ocean line portion of that journey. I've heard it's like a few cents. And so I imagine, even if that price doubled, which sounds scary, you might go from a few cents to a few more cents. So, how cost sensitive or price sensitive are these cargo owners, what we're calling them, the brands, in the sense about say even if their costs of shipping doubled, due to the need to decarbonize, at least in the medium term?

Ingrid Irigoyen:
Yeah. Well, their costs have doubled. And in fact, in some cases, even more than that. I know that along some roots, the cost of a box, as they say, of shipping a container across the ocean is as much as 10 times more than what it was a few years ago. And that's because of all of the supply chain disruption that we're seeing because of COVID-19. But the truth is, that even though, in normal times, the shipping cost is a relatively tiny bit of the total cost of the good at the end, the consumer might pay, right now, the fact that freight rates are so astronomical, it actually really is affecting businesses.

And so, it's in some ways, a challenge for us to have these conversations with them right now. The silver lining, I think, is that the public is much more aware of the maritime element of supply chains for the climate conscious consumer. They're much more aware of that now, which is important for companies then, to see that there's a need to address that issue. the other silver lining is that because freight rates are so incredibly high... And you've seen some carriers–Maersk has said this publicly–that what they anticipate is that freight rates will come back down, but they won't go all the way back down because there will need to be accounting for the cost of decarbonization. And so, then what we'll see in the coming years, is freight rates will drop significantly. They'll just settle into a new normal that accounts for that increased cost.

So, I don't even like to think of it as a green premium. That's not helpful. No one likes to pay green premium. That's not a great strategy for sustainability in general. What we need to do is find the right system to have the fuels actually reach price parity. But in terms of them addressing their scope 3 emissions, that I think, is sort of the way that we can come together and address some of those cost issues, is by taking that bigger picture view and seeing, and not as an added cost, but actually as we settle back down and we settle into a new normal.

Mike Toffel:
Yeah, this reminds me of the little bit about the heightened gas prices we've seen after Middle Eastern turbulence. And where all of a sudden gasoline prices double. And then here were advocates saying, "Well, now might be an interesting time to think about a carbon tax so when the crisis is over instead of it going back to business as usual, we actually go to a new equilibrium that's somewhere between the old and the new. And settle it down in a way that actually slowly discourages the use of fossil fuels." And it sounds like that pattern that was advocated for, and then generally not pursued, at least not in the U.S., is being called for here in the global shipping industry.

Ingrid Irigoyen:
Yeah. And it would be a highly rational approach. The challenge is, that humans is... you economists out there know are not the rational actors that we all thought we were back when a lot of the economic theories were developed. So, that would be the most responsible and least disruptive way to handle it. The problem is, having conversations right now about a method of shipping that will cost more than fossil. It's just, it's hard to talk to other human beings about that right now, when they are struggling to get their boxes across the ocean. And they are paying a lot more. So, it's a challenge that we face, but we hope that our constituents can see the longer term view.

And for a lot of them, it's not just about the scope 3 emissions and meeting their corporate commitments. It's also... Some of them have done analyses that show that the cost of delayed action is going to be much higher than if we act now and we act smart and we act collaboratively, that the cost will actually be lower if we start this transition as soon as possible. So, for the really savvy companies out there who have that longer term view, I think that they can see that it's worth making an investment of time and effort and potentially money earlier on than waiting for sort of the regulatory hammer to come down a decade or so from now. And have it actually be quite disruptive and have the cost actually be higher.

Mike Toffel:
I see. Coming back to coZEV, so it's a group of cargo owners that, again, a bunch of branded companies that are heavily engaged in international shipping of their goods to their warehouses and to their customers. What do they actually do together with coZEV? What are some of the projects or some of the efforts you're taking on?

Ingrid Irigoyen:
What's interesting about the way that we've set this project up, is that we haven't asked those companies to be members in sort of the classic sense, where we make all the decisions together. We do everything together. We have to reach consensus, otherwise we do nothing. That structure can have a lot of benefit, and there are great reasons why you would look for consensus on certain activities. But we've decided to structure this in a way that's a little bit more flexible that allows the platform to create initiatives. And then companies who are ready to take that next step in their journey, are able to sign up to that specific component of our work.

So for example, the first thing that we did, we sort of went public in late October, so we're a fairly new project. The first thing that we did was had companies come out with a, what we call our 2040 Ambition Statement, where they've essentially set a target for themselves to only use zero emission shipping by 2040, which is actually a really big deal. For folks who know this industry, it's going to take a lot of work in a long time to transition out technologies that are often on the water for upwards of 30 years. So, this transition needs to start right away for them to meet that 2040 commitment.

But even just by sending that initial demand signal, we've seen a total change of narrative in the way that the media covers this issue. Cargo owners are now demanding action in a way that's much more concrete and have put some accountability on themselves for being part of that transition in a way they haven't before. That statement also included a call for policy action, because we do need that policy support very much. So, that's one initiative that those companies have signed onto. They've put out this public statement. We welcome additional cargo owners to sign onto that statement as well. And the more we have, the more cargo we represent, and the stronger that demand signal is.

But those are still just words on paper. So our next initiatives are going to focus very much on, how can we actually aggregate some of that demand? And use it in new and innovative ways with new contracting structures and new procurement systems to actually activate that demand, to do something catalytic that no one company could do by itself we have a few very large companies, Amazon and Ikea and Unilever and others. Even those large movers of freight cannot do this transition alone. So, how can we kind of band them together through some new kind of clever approaches? That's what we're working on now.

We're also working on policy advocacy, putting together a strategy for them collaboratively that they can then choose, again, sort of meet them where they are. Some of them will have certain sort of political leanings or certain ways that they engage in the policy sphere. We can give a series of options. "You can take this activity. We'll join with that. We'll produce materials for you to do this.", so that we're really trying to meet them where they are.

Mike Toffel:
So Ingrid, I understand there's this new concept of green corridors. Can you tell us a little bit about what that means?

Ingrid Irigoyen:
Yeah, absolutely. So, green corridors is a new term that we're using in the maritime space, and the way that we define it is, between two ports you have enabled zero emission shipping to happen. And so, there are a lot of enabling conditions that are required for that to happen. But essentially, we will have gotten there once we have service offerings available between two port cities that are truly zero emission solutions. That's how we would define it.

There are hundreds of different steps that can be taken toward the greening process. In my mind, we will have achieved it once we actually get those zero emission service offerings, commercially viable, on the water, between two port cities.

Mike Toffel:
And the reason to do these as corridors, is that because you're trying to aggregate demand as well as ensure the infrastructure at the port level has enough folks willing to engage with whatever it is, the hydrogen or the ammonium refilling of the ships? Is that what's going on here.

Ingrid Irigoyen:
That's exactly it. So in order for this transition to be successful in any specific place, you really need full value chain participation. So, we need the ports to do their decarbonization activities. Different ports have different management structures, but you know, the terminals need to be able to provide bunkering capacity for those new, different kinds of fuels.

And then of course, on the water, we need cargo owners to want to put their cargo on zero emission vessels. We need carriers to provide those service offerings. We need freight forwarders to enable the purchasing of those services. We need fuel producers to produce the fuels in sufficient quantities and to the right standards. So all across this value chain, there needs to be a collaborative process to get one of these green corridors going.

Mike Toffel:
I see. And let me come back to the organization of coZEV. So we talked a bit about the projects and a bit about the firms, the brands. What are the role of environmental NGOs, and in particular Aspen Institute, but others as well that might be involved?

Ingrid Irigoyen:
Yeah. This is such a good question, and one that I think about a lot. Not for profit organizations in the environmental space can fall along a spectrum of both ambition level and then also sort of tactics and tools that they use to advance their agendas. And at the Aspen Institute, our sort of special role in that ecosystem is, as conveners, we try to be very open-minded. We try to understand the interests and perspectives of all the different stakeholders that are engaged in solving a problem.

And so, that's the special role that we play. And that's what enables us to be able to bring businesses together, bring them together with environmental groups sometimes, to do projects together, and also serve as a little bit of a liaison between those camps,

And then you have sort of more classic environmental advocacy groups. They're doing a lot of campaigning, they're doing a lot of sort of hard advocacy. Maybe they're organizing direct actions like protests. And so, there is this spectrum and they all play an important role. It's important to bring attention to the issues. It's important to make sure the media knows about them, that policy makers know about them. And then it's also important to have some groups that have a deeper understanding of, what are the challenges for business here? And how can we work creatively to find some pathways that are going to both work for addressing the fundamental environmental or societal issue? And also enable businesses to do what they do, which is producing products and services and making a profit?

And so being able to achieve all of those objectives is really hard. And I think companies often are looking for good advice and good collaboration and good faith. And so, that's the role that we play in that broader ecosystem. But we rely on a lot of NGOs for technical knowledge and a lot of expertise that they've built up over the years. And so making sure that there's a good partnership with them as well, is really important to us.

Mike Toffel:
Are other ENGOs involved in the effort or are they just consulted on an ad hoc basis?

Ingrid Irigoyen:
Yeah. So we have a group of NGOs that really helped us create this idea in the first place. We had an idea, they had some similar ideas, and we came together. And those include the Environmental Defense Fund, Clean Air Task Force, the Ocean Conservancy. These are groups that have been engaged in this space, looking at it from different angles, and with differing expertise. But we have been consulting with them all along to say, "Do we have the right level of ambition? What are your concerns about certain fuel types, certain societal impacts of different kinds of fuels and technologies?" And so we do, we keep that chain of communication very open with them. They represent a constituency. They represent the public that is worried about these issues. And so, we want to make sure that we are including those perspectives and benefiting from their wisdom wherever we can.

Mike Toffel:
I see. And we've talked a bit about policy makers and the role of government, as earlier, you mentioned making sure that there's a level playing field so that those who are engaging in decarbonization, don't pay a price penalty compared to others. So is coZEV engaging with policymakers and who? Because I imagine there's such a variety of policymakers, you must have folks at the port level and then national targets. And then the international seas is a whole different world. What's sort of a thumbnail sketch of who are the policy players involved here?

Ingrid Irigoyen:
It's such a complex policy landscape. Any of these very large global industries that operate on the high seas, and the other very analogous one is, of course, the international fishing fleet. So we've seen a lot of attention lately, on sustainable seafood, and how do you increase transparency among the fishing fleet of the world? And a lot of those same challenges apply here. 45% of planet earth is the high seas. It's essentially the wild west. You do have some regulatory bodies, but they often don't have a perfect view on what's happening out there. And so, it's a real challenge.

So we have, in the shipping space, we have the International Maritime Organization, or IMO. It's a UN body. It's composed of the nations of the world. And it means that any progress that they make requires a political agreement, which all of us who are observing global level political agreements, know how challenging that can be and how time consuming those efforts can be. But the IMO, in spite of those flaws, has an absolutely essential role. A global industry requires a global regulator that is up to the challenges of the day. And so, the IMO is focusing a lot of effort now, on improving its ability, the tools that it has, the goals that it sets for addressing the climate impact of this industry.

But the domestic governments also play an important role. We, for example, here in the United States, we have a very large exclusive economic zone, or EEZ, as they call it. We have a big ocean and we are the number one importer of goods in the world. And we can play a really important role when all of those international ships come into our ports, they come into our waters, we have the ability to influence how clean that technology is, what they do when they're in port. Are they plugging into shore-side power and reducing their emissions while they're at port? There are all kinds of ways that we can play more of a role in the United States. That's very much of interest to us.

And then the European Union is contemplating a number of very important measures that could be a really big deal in shipping. And they're considering right now, through some policy measures that are under debate, adding shipping to their emissions trading scheme, and additional measures and support for zero emission fuels and so on.

So, there's a lot that domestic and regional governments can do. And there's a lot that needs to happen at the global level. And then we also have to remember that while we often think of shipping as sort of traversing the big oceans, which is really important, there's also a lot of shipping activity in domestic waters. Especially for large nations like our own. And so, there's a lot that we can be doing also for our domestic shipping fleet to facilitate and enable faster decarbonization.

Mike Toffel:
So what are the types of policy positions that coZEV is advocating for, or perhaps, the cargo owners on their own?

Ingrid Irigoyen:
So because we're still young, we haven't developed a set of very specific policy positions in terms of measures yet. But one thing that our 2040 Ambition Statement does make clear, is that these cargo owners want to see this industry fully decarbonized by 2050, which is aligned with the Paris Agreement goals. They want sufficient support for the new fuels through things like market-based measures, which what that means is essentially either raising the price of high greenhouse gas fuels and lowering the price of the clean fuels. Also, interested in regulatory measures. But the key here is that we've come out in support of a certain level of ambition that must be met.

Now, bringing that down to supporting very specific policy measures, that becomes a little bit trickier. And that's what we're working through with our companies right now, is developing some options. You could get involved this way. You can get involved that way. Once they start to make their voice heard, it'll be really the first time that they've done that. Shipping is one of these spaces that has been sort of in the shadows for a hundred years. And a lot of the sort of ways that things are done in the shipping industry are... you can see their age. It's sort of an old-fashioned paper-based contracts and things like that.

So, there's a lot out of modernization going on right now. But the cargo owner's voice hasn't really been involved in those policy debates quite yet. So, that's what we are getting organized to have happen this year, is to start to see more visibility. A lot of these companies, they’re up on Capitol Hill talking about climate change. Let's get a shipping-related bill to point into those talking points. Some of that can be easy lifts. Some of it might be sort of more dramatic interventions. But that's what we'll have to see, as the coming months unfold. So, stay tuned.

Mike Toffel:
Right. Right. Okay, good. We will. So you recently attended the COP26, the annual UN Climate Change Conference. Is shipping a topic of interest there, because I haven't really heard much about it?

Ingrid Irigoyen:
So this year, that was actually, I think, an exciting development for the shipping decarbonization community, was that it was much more on the agenda than it had been previously. And so, there was an old myth that shipping had sort of been excluded from the Paris Agreement. And that's not actually true. We do need to meet our shipping commitments, both as nations and globally in order to meet our Paris Agreement targets.

And so for a long time, shipping had just sort of flown under the radar. And this past year, I think we saw a real surge in attention on the issue. A lot was happening in the civil society space in terms of events and presentations and announcements. And we did have a few bright spots from the government side. We did see a declaration by a number of governments in support of full sector decarbonization by 2050. Again, that would be Paris aligned.

And then we also saw an announcement called the Clydebank Declaration, where I think it was about 20 original signatories to that declaration. These are governments saying that they wanted to work together to establish green shipping corridors, which of course, is an important role that they can play. So, I would call this a surging issue. It's one that's sort of growing and it's coming out of the shadows and into the light. And that comes with some fits and starts. And it's not always comfortable when you come into the light for the first time. But I think there's a lot of call for optimism.

And even though the COP26 talks weren't everything that we dreamed they would be in terms of the government outcomes for shipping, I think it was an important milestone in terms of getting this issue to have more attention. And to change the tune from, shipping is impossible to decarbonize, to, we're going to decarbonize it, but how?

Mike Toffel:
And now coZEV, we've been talking, because of its purpose, we've been talking about mitigation and decarbonization. Are there conversations with the shipping companies and with the cargo owners around resilience and what they need to do differently in shipping, given the changes we're seeing from climate change with storms and potentially port damage and things like that?

Ingrid Irigoyen:
Resilience is sort of always a thread, I think, in climate conversations now. And certainly a lot of ports are thinking very hard about this. Talk about sea level rise impacting an industry, there it is coming right up into your infrastructure. So yeah, resiliency is absolutely really important.

And I think as we're talking about a major energy transition in this space, we need to not just be thinking about sort of the climate resiliency, but also the resiliency of this industry. The transition needs to happen in a way that's going to be smooth, that's not going to reduce capacity. That's the last thing we need right now, is less capacity. Right? Unless consumers change their behavior and start buying more local. And some of those movements could be very successful. We might see actually less of a need for shipping in the future. That's a possibility.

But if we look at current trends, we are in a globalized economy. And we need to be really thoughtful about this transition, make sure that happens quickly. But that the businesses and their supply chains are able to be resilient as well, in addition to the climate resiliency, that we're all trying to foster in terms of port communities and other things that you've mentioned.

Mike Toffel:
Right. Is there discussions amongst the shipping community about the transition that other transportation modes are going through? For example, noting that at least in the U.S., the rise of EVs has come about really with a huge influx of new entry, in particular Tesla. And despite these a hundred year old incumbent auto companies they've been testing for decades, different technologies, that really, it was Tesla, not Ford or GM that has really jump started the EV community. And now of course, we see lots of incumbents saying, "We're going to make that transition as well." But is that a topic of discussion among shipping companies as well?

Ingrid Irigoyen:
I think so. I mean, you see that some of them are leaning really hard into sustainability and making concrete plans and investing and participating in lots of collaborative processes. And then you see others kind of hanging back and saying, "Well, let's see how that goes for our friend." So, I think, yeah, there is sort of a similar dynamic there.

Shipping is a, what's called, a hard-to-abate sector. And there are some reasons for that. Another hard-to-abate sector is aviation. And so, we're starting to see some exchange of lessons learned. How do you aggregate demand? How do you deal with the fuels conundrum? How do you deal with the safety questions? How do you kind of enable a difficult transition in a globalized space? So, that sort of the exchange of information and lessons learned and sort of methodologies across those transport sectors, I think there's a lot of that.

But on the first... on the new entrance point, the other thing I would say is, it's really important that we have a competitive industry. So zero emission shipping should be a new competitive marketplace. That's how we're going to get decent prices and decent options for the cargo owners that we work with. So there may be some first entrants, but we hope that quickly, the rest of the space jumps in so that we can have good options and not emerge with some monopolistic or oligopolistic landscape that I think doesn't help anybody, including consumers.

Mike Toffel:
So, let me turn the conversation a little more toward you and toward your journey. So, how did you end up at Aspen Institute and in particular into this project? What's your background? You have a background in mediation and collaboration. And I imagine that, that might be quite helpful.

Ingrid Irigoyen:
Yeah, absolutely. So, I started off with a degree in environmental management, which is sort of your equivalent of an MBA in the environmental space, and really focused on oceans. And so everything related to ocean sustainability and conservation, whether that was fisheries policy or seafood markets, offshore energy, ocean planning. I worked a lot on that for some time. Coastal resilience, all of these different topics that relate to oceans and coasts.

And the beautiful challenge of working in that space, is that the ocean doesn't belong to anybody. And the rights and responsibilities for the ocean ecosystem are often shared. So it was a really great environment in which to learn all about fostering collaboration among parties, really understanding the interests that lie behind the positions that organizations put out publicly, and creating initiatives that enable groups to do more than they otherwise could.

I started working a lot with helping agencies, government agencies coordinate with one another. Worked a lot getting NGOs to work with one another. There's a lot of inconsistency within that space, and a need to sort of resolve differences and develop shared strategies. And then I did a lot of work through sort of multi-stakeholder, where it had some private sector engagement, some public sector engagement, academics, and otherwise.

And so, I learned to be able to sort of speak all those languages. When the Marine biologists talk, I can more or less understand what they're saying, and the lawyers and the business people. You can kind of understand the lingo and you can follow the conversation and help them find a path forward together. And so, this space felt really right for that.

And as I came into the Aspen Institute a few years ago, we started looking at shipping and, and thought, "Gosh, the customers of the shipping industry aren't really being engaged in a high ambition way. Maybe there's a value that we can add." And so that's what really set us off on this path, was to start to talk to businesses. And say, "Hey, what are you doing on maritime? Would you like to do something high impact together?" And so over the course of those conversations, the idea of coZEV emerged, of course, with some great advice from our NGO partners as well. And then looking at the lessons learned in other sectors like seafood, like aviation, what's worked, what hasn't. Do we want to do something like that in shipping? And it sort of led us to this point.

And one thing I've learned is that all large organizations are essentially motivated by the same things, reputation, credit for having done good work, revenues, whether those are in the form of getting your part of the federal budget or whether you're a business and you're looking at profitability, keeping employees happy and engaged. And whoever your constituency is, ensuring that they feel that they're heard and their needs are met. All large organizations, in all sectors of society, have similar motivations. And they struggle with things like internal coordination. And so, I think that the skills that I learned early on working with government agencies were then very applicable to these other spaces.

Mike Toffel:
Super interesting. So, final question, some of our listeners are considering entering a career somewhere in the space of business and climate change, and wonder what advice you might have for them.

Ingrid Irigoyen:
Oh, gosh. I would say, definitely do it. Working to achieve multiple objectives is so interesting. And they're so challenging and there's so much room for improvement that being at that intersection of business and climate, I think, is probably the most important place that you could be in your career, at this particular moment in time. And that's because the private sector can make such a tremendous contribution, and is, in many ways. But there's so much more that could be done. And finding that right way of kind of hitting the double bottom line or the triple bottom line, that requires creativity and patience combined with a good amount of impatience as well, deployed in just the right ways. So I think that would be a fantastic career choice for any smart, ambitious individual.

And my advice to them would be, live your values. You are the corporate leaders of the future. And you may start your career with just a little bit of power, but the youngest generation has more power than any young generation I think has probably had before. And if you're smart and you can frame your ideas about reducing climate impact in terms of benefits for long-term business strategy, risk reduction, opportunity, you can make a really big difference and have your business be successful. And be able to sleep at night because you know that you helped solve, what I think, is probably the biggest challenge of our generation.

Mike Toffel:
Well, Ingrid, those are great parting words. Thank you so much for spending time with us on Climate Rising. It's been a great pleasure to get to know you and hear about your work.

Ingrid Irigoyen:
It was absolutely my pleasure. Thank you so much.

Mike Toffel:
That was Ingrid Irigoyen, Director of the Aspen Institute Shipping Decarbonization Initiative.

Thank you for listening. If you like what you hear, please subscribe wherever you get your podcasts, share with your friends, and don’t forget to rate and review.

For show notes, head over to climaterising.org or click on the link in the podcast episode.

You’ve been listening to Climate Rising. I’m your host, Mike Toffel. Kate Zerrenner is our producer, and Craig McDonald is our audio engineer.

We’ll be back in two weeks with another episode of Climate Rising. See you then.