NBER WORKING PAPER SERIES UNCHARTED WATERS: EFFECTS OF MARITIME EMISSION REGULATION

Maritime shipping emits as much fine particulate matter as half of global road traffic. We are the first to measure the consequences of US maritime emissions standards on air quality, human health, racial exposure disparities, and behavior. The introduction of US maritime emissions control areas significantly decreased fine particulate matter, low birth weight, and infant mortality. Yet, only about half of the forecasted fine particulate matter abatement was achieved by the policy. We show evidence consistent with behavioral responses among ship operators, other polluters, and individuals that muted the policy's impact, but were not incorporated in exante models. Jamie Hansen-Lewis Department of Agricultural and Resource Economics University of California Davis One Shields Ave Davis, CA 95616 jhansenlewis@ucdavis.edu Michelle M. Marcus Department of Economics Vanderbilt University 310 Calhoun Hall Nashville, TN 37240 and NBER michelle.marcus@vanderbilt.edu A data appendix is available at http://www.nber. org/data-appendix/w30181 Roughly 90 percent of global trade is conducted via ship, yet historical international standards for ship exhaust are strikingly weak in comparison to standards for other forms of transport that occur close to populated areas. For example, in 2008, the maximum allowable sulfur content of marine fuel along US coastlines was 3,500 times higher than that allowed in vehicles. Pollution from ship exhaust is a main component of poor air quality, not only at ports, but also in coastal communities near ship routes.1 Since half of the US population lives within 200 km of heavy ship traffic and ship traffic continues to increase, maritime emissions represent a significant threat to human and ecosystem health (U.S. EPA, 2009b,a, 2016). Yet, we lack a comprehensive understanding of the exposed population demographics and health effects of maritime emission regulation. Because ships are mobile and emissions occur off-shore, the health benefits from regulation are likely to be different than the effects of regulating land-based pollution sources. Efficient design of maritime emission regulations is difficult for several reasons. First, the benefits to human health are uncertain. The health effects are likely to differ from regulation of other pollution sources because of the especially high sulfur content of ship fuel, the distinct coastal population exposed to ship traffic, and the degree to which individuals can avoid ship exhaust relative to other sources. Second, uniform regulation of maritime emissions along the coast will have heterogeneous effects due to the non-uniform population distribution and location of ships. The mobile nature of ship traffic makes it difficult to predict how ship routes and emissions may respond to regulation. Moreover, efficient regulation of maritime emissions must balance competing environmental objectives. Specifically, requirements to remove the sulfur content in ship exhaust may exacerbate climate change because the aerosols in traditional ship exhaust provide radiative cooling that counteracts the consequences of climate change in the short term (Sofiev et al., 2018; Liu et al., 2016). Without comprehensive evidence accounting for spatial heterogeneity in the effects of maritime emission regulations on coastal population health, uniform regulation of maritime fuel risks both abating too little of emissions near coastal populations and too much of emissions far from coastal populations. 1Roughly 70 percent of maritime emissions occur within 400 km of coasts, and maritime emissions elevate ambient fine particulate matter as much as 2 micrograms per cubic meter (Corbett et al., 2007). Maritime emissions account for roughly 38 percent of sulfur dioxide emissions on the US East Coast and 20 percent on the US West Coast (Wang et al., 2007). In areas adjacent to busy ports, they may equal or exceed those of land-based sources (Capaldo et al., 1999). Eyring et al. (2005) show maritime emissions are comparable to other transport modes. Smith et al. (2015) provide an emissions inventory.