title: Costs and benefits of low-sulphur fuel standard for Baltic Sea shipping.
abstract: The maximum allowable fuel sulphur content for shipping in the Baltic Sea dropped from 1%S to 0.1%S in 1 January 2015. We provide a cost-benefit analysis of the sulphur reduction policy in the Baltic Sea Sulphur Emission Control Area (SECA). We calculated the abatement costs based on shipowners' optimal decision-making in choosing between low-sulphur fuel and a sulphur scrubber, and the benefits were modelled through a high-resolution impact pathway analysis, which took into account the formation and dispersion of the emissions, and considered the positive health impacts resulting from lowered ambient PM2.5concentrations. Our basic result indicates that for the Baltic Sea only, the latest sulphur regulation is not cost-effective. The expected annual cost is roughly €465 M and benefit 2200 saved Disability Adjusted Life-Years (DALYs) or monetized €105 M. Based on our sensitivity analysis, the benefits yet have a potential to exceed the costs. The analysis neither takes into account the acidifying impact of sulphur nor the impact North Sea shipping has on the cost-benefit ratio. Lastly, a similar approach is found highly recommendable to study the implications of the upcoming Tier III NOxstandard for shipping.
authors.affiliation: University of Helsinki, Department of Economics and Management, Latokartanonkaari 7, P.O. Box 27, FI-00014, Finland.
authors.forename: Jim
authors.initials: J
authors.lastname: Antturi
authors.affiliation: National Institute for Health and Welfare, THL Health Protection, P.O. Box 95, FI-70701 Kuopio, Finland.
authors.forename: Otto
authors.initials: O
authors.lastname: Hänninen
authors.affiliation: Finnish Meteorological Institute, Erik Palmenin aukio 1, P.O. Box 503, FI-00101 Helsinki, Finland.
authors.forename: Jukka-Pekka
authors.initials: JP
authors.lastname: Jalkanen
authors.affiliation: Finnish Meteorological Institute, Erik Palmenin aukio 1, P.O. Box 503, FI-00101 Helsinki, Finland.
authors.forename: Lasse
authors.initials: L
authors.lastname: Johansson
authors.affiliation: Finnish Meteorological Institute, Erik Palmenin aukio 1, 00560, Helsinki, Finland.
authors.forename: Marje
authors.initials: M
authors.lastname: Prank
authors.affiliation: Finnish Meteorological Institute, Erik Palmenin aukio 1, 00560, Helsinki, Finland.
authors.forename: Mikhail
authors.initials: M
authors.lastname: Sofiev
authors.affiliation: University of Helsinki, Department of Economics and Management, Latokartanonkaari 7, P.O. Box 27, FI-00014, Finland. Electronic address: markku.ollikainen@helsinki.fi.
authors.forename: Markku
authors.initials: M
authors.lastname: Ollikainen
mesh_terms: D000397:Air Pollution / Q000517:prevention & control; D001454:Baltic States; D003362:Cost-Benefit Analysis; D004777:Environment; D006801:Humans; D008962:Models, Theoretical; D059206:Natural Gas; D010578:Petroleum / Q000592:standards; D011634:Public Health; D012767:Ships / Q000191:economics* / Q000592:standards*; D013455:Sulfur
chemical_list: D059206:Natural Gas; D010578:Petroleum; D013455:Sulfur
keywords: Cost-benefit analysis; Health impacts; Particulate matter; Shipping; Sulphur Directive