Worried About the Climate? Skip That Cruise.
(Bloomberg Opinion) -- Cruise ships are big business for port cities around the world. But starting next year, Cannes, one of the world's most famous ports-of-call, will no longer welcome them unless they comply with strict pollution controls. Passengers who choose to sail on dirty vessels will have to disembark elsewhere.
So far, the industry doesn't seem worried. It should be. Increasingly, consumers are voicing concerns about the environmental effects of their travel and pressuring companies that don't meet their heightened standards. In Europe, "flight shaming" has dented airlines’ earnings as travelers look for low-carbon alternatives. The cruise industry, far less necessary to the global economy than air travel, is vulnerable to a similar change in consumer sentiment – and may not be prepared for it.
For now, the cruise business has reason to feel confident. It occupies a small niche of the travel industry – about 2% of the global market – but its popularity is on a decadal upswing. Passengers increased from 17.8 million in 2009 to 28.5 million last year, generating about $45 billion in revenue. In China, passenger growth has exceeded 40% annually since 2006.
Remarkably, all that growth has come despite decades of bad headlines about the industry's environmental impact. As far back as the 1990s, stories circulated about illegal waste dumping from cruise ships, including some 100 "instances of illegally discharging oil, garbage, and other harmful substances into U.S. coastal waters." In 2016, Princess Cruise Lines pleaded guilty to seven felony charges and agreed to pay a $40 million fine for illegally dumping waste. This year, its parent company was fined an additional $20 million for discharging plastic, falsifying records and otherwise violating the terms of the 2016 conviction.
Meanwhile, the list of environmental problems associated with cruise ships has expanded. One problem is that, until recently, most of these ships were built to run on a thick, sulfur-rich byproduct of the fuel-refining process. According to one analysis, ships docking in Barcelona emitted five times more sulfur oxides than did the city's 560,000 cars. That should soon start to improve, thanks to a global agreement capping sulfur emissions. But even good environmental news for the cruise business often comes with caveats. Among the cheapest and most popular means of reducing sulfur emissions – so-called scrubbing technology – is banned at a growing number of ports because it entails significant waste-water discharge.
Although there’s little hard data on the industry’s carbon footprint, climate-conscious consumers have no doubt noticed that newer ships resemble giant floating cities. Royal Caribbean’s famous Symphony of the Seas has enough room for nearly 7,000 passengers. By one estimate, each of those passengers will have a carbon footprint at sea that’s about three times what it would be on land. Carnival Corp., the world’s biggest cruise company, reports that its greenhouse-gas emissions ticked up by more than 3% between 2015 and 2018, to 10.6 million metric tons.
Few industries could expect to thrive with reputational risks like these. And the cruise industry shouldn't expect its free ride to continue. Although ocean pollution might’ve been a minor issue even five years ago, these days it risks the kind of wrath that plastic-straw manufacturers have recently faced. Climate change is also a mainstream issue that – thanks in part to "flight shaming" – consumers now feel empowered to confront head-on. And travelers worldwide are increasingly willing to pay for sustainability; in China, for instance, 78% of consumers say they’re willing to pay more for environmentally responsible travel companies.
Governments aren't oblivious to these developments. Increasingly, like Cannes, they're showing a willingness to enforce what's becoming a public demand. For the cruise industry, that should serve as a warning. Global travelers may not yet be ready for a "cruise shaming" movement, but they're close.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Adam Minter is a Bloomberg Opinion columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade” and the forthcoming "Secondhand: Travels in the New Global Garage Sale."
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