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The effects of fuel content regulation at ports on regional pollution and shipping industry

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  • Zhu, Junming
  • Wang, Jiali

Abstract

To reduce pollution and health damages from maritime transportation, fuel content regulation has been enforced in emission control areas and globally. But its effectiveness depends on regulatory differences, which are not reflected in prevailing ex-ante evidence. We evaluate the actual effect and its spatial distribution of fuel content regulation at four Chinese ports, based on regulatory implementation, wind pattern, and pollutants’ residence time. The regulation caused immediate mitigation effects from the Shanghai Port, but not other ports that faced no penalty or were subject to earlier, more stringent regulations. Pollution mitigation from the Shanghai Port extended to more than 200 km away, far beyond the empirical focus of local externalities from transportation. We estimate a regulatory cost of 0.77–1.6 billion US dollars, considering causal effects of the regulation on shipping price and throughput. The cost is larger than the price difference from fuel switch, but much smaller than estimated health benefits.

Suggested Citation

  • Zhu, Junming & Wang, Jiali, 2021. "The effects of fuel content regulation at ports on regional pollution and shipping industry," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:jeeman:v:106:y:2021:i:c:s0095069621000073
    DOI: 10.1016/j.jeem.2021.102424
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    2. Hongshan Ai & Xiaoqing Tan, 2021. "A Literature Review of the Effects of Energy on Pollution and Health," Energy RESEARCH LETTERS, Asia-Pacific Applied Economics Association, vol. 2(4), pages 1-5.
    3. Boqiang Lin & Kai Wei, 2022. "Does Use of Solid Cooking Fuels Increase Family Medical Expenses in China?," IJERPH, MDPI, vol. 19(3), pages 1-17, January.
    4. Hongshan Ai & Xiaoqing Tan & Zhen Xia, 2022. "RETRACTED: The Effects of Environmental Regulations on Medical Expenses: Evidence from China," IJERPH, MDPI, vol. 19(13), pages 1-17, June.

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    More about this item

    Keywords

    Maritime pollution; Pollution spillover; Regression discontinuity; Wind pattern; Regulatory cost;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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