Local Standards, Behavioral Adjustments, and Welfare: Evaluating California's Ocean-Going Vessel Fuel Rule

Richard Klotz and Julia Berazneva

No 2020-02, Working Papers from Department of Economics, Colgate University

Abstract: We examine how behavioral adjustments by regulated vessels affect welfare outcomes of a local fuel sulfur standard targeting particulate matter pollution from maritime transport. Our analysis combines one-minute scale data of vessel locations with location-specific marginal damages to obtain voyage-level measures of welfare outcomes. Exploiting the introduction of California's Ocean-Going Vessel Fuel Rule, we find sharp reductions in fuel consumption in the regulated area and a considerable emission spillover in unregulated waters. Despite these adjustments, the rule generates net benefits of close to $1 billion over 29 months because the emission spillovers occur in low marginal damage areas.

Keywords: local environmental policy; behavioral adjustments; local air pollution; emission control areas (search for similar items in EconPapers)
JEL-codes: D62 L51 Q51 Q52 Q53 Q58 R41 (search for similar items in EconPapers)
Date: 2020-06-16, Revised 2020-06-15
New Economics Papers: this item is included in nep-ene, nep-env and nep-tre
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Journal Article: Local Standards, Behavioral Adjustments, and Welfare: Evaluating California’s Ocean-Going Vessel Fuel Rule (2022)
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