Modelling of economic impacts on Canada resulting from measures to reduce emissions from international shipping

ESMIA was selected by Transport Canada to model the economic impacts on Canada resulting from measures to reduce emissions from international shipping. Over the past decade, these emissions have increased by 20%, prompting the International Maritime Organization (IMO) to adopt various strategies, including the 2018 initial GHG strategy and the revised 2023 strategy, targeting net-zero emissions by 2050. In 2022, Canada’s marine trade was valued at CAD 345 billion, involving 55 major partners. Certain provinces, such as Newfoundland and Labrador, New Brunswick, and Saskatchewan, heavily depend on maritime transport, making this study crucial for understanding regional economic impacts.

ESMIA conducted sophisticated modelling to assess the impact of midterm measures on the Canadian economy, labor markets, marine shipping costs, and seaborne trade values and flows. Utilizing proprietary models such as the North American TIMES Energy Model (NATEM) and the North American General Equilibrium Model (NAGEM), ESMIA derived optimal decarbonization strategies and evaluated their economic implications. The Gravity Model of Trade was used to estimate trade impacts by value and quantity of commodities with major partners. The study highlights the importance of transitioning to cleaner fuels and improving energy efficiency in international marine shipping, aligning with Canada’s commitments under the Paris Agreement and the Clydebank Declaration.