Not What it Seems: Pacific Trade Data Quality Limits the Understanding of Maritime Decarbonization’s Economic Impacts on the World’s Most Climate-Vulnerable States

New research highlights shortcomings in the availability and quality of datasets across Pacific states in terms of their ability to accurately baseline and monitor economic impacts resulting from the IMO’s midterm decarbonisation measures. The research compares five alternative data sources characterising merchandise trade values and transport cost rates associated with Kiribati and Vanuatu between the years 2016-23. Inclusive of data sources utilised extensively across the IMO-led Comprehensive Impact Assessment (CIA) process, the results demonstrate significant discrepancies in the trade value and transport costs associated with imports and exports of the two nations between those years. The paper discusses implications of the poor quality of data in terms of availability, coherence and aggregation, concluding that implementation of improved data collection and maintenance systems across the region, in combination with identification of an impact modelling framework sensitive to these limitations, will be essential should an effective modelling architecture for the tracking of midterm measures impact be in-place by the scheduled introduction date of 2027.

The International Maritime Organisation (IMO) is negotiating a basket of measures to eliminate greenhouse gases (GHG) from the international shipping sector by 2050, representing the most ambitious decarbonisation program of any large emitting sector globally. In 2024, the IMO conducted a Comprehensive Impact Assessment (CIA) of the potential impacts of these measures on states. Given the significant capital and operational expenditures required to transition the sector away from fossil fuel technologies, Task 2 of the CIA projected the cost intensity of shipping to increase substantially between 2027 and 2050, whilst Task 3 of the CIA demonstrated that SIDS in particular are expected to suffer the greatest negative economic impact.

However, the findings of this study cast uncertainty on the validity of results from such global economic analyses for the most isolated and data-deprived states. Where comparison across data sources has been possible, pronounced discrepancies equivalent to 25% of national GDP have been identified in merchandise trade statistics for the two Pacific economies studied, whilst transport cost rates, manipulation of which has been central to the CIA’s modelling of economic impacts across policy scenarios, have been found to deviate by 100% or more. Moreover, the study raises doubts as to the degree to which global economic modelling architectures provide a fair and accurate evaluation of economic impacts for the smallest Pacific nations given their typical inclusion into regional aggregations.

The findings presented in this paper are now of considerable urgency given that the IMO’s midterm measures are scheduled to take effect from 2027. Pacific states are likely to suffer the greatest negative economic impacts resulting from the implementation of IMO 2023 Strategy objectives, however this will only be possible to verify in real-time with timely access to relevant datasets of sufficient quality. Whilst this initial work by Micronesian Center for Sustainable Transport and University College London experts is intended to provide a starting point for discussion on this critical issue, additional research and direct support for national data agencies across the Pacific must now be of the highest priority for the IMO and associated UN agencies (e.g. UNCTAD and ESCAP).

Download working paper here.