Correlated Pollutants, Avoidance, and Local Environmental Policy

We study the impact of local fuel standards targeting sulfur-related air pollution from maritime transport off the U.S. west coast on damages from greenhouse gases (GHGs) and other local air pollutants. By avoiding the regulated area, ocean-going vessels increase fuel use and emissions, shift fuel consumption away from population centers, and forgo emission-lowering speed reductions within the regulated area. These adjustments increase damages from GHGs but reduce damages from local pollution, leading to a shift in the distribution of the environmental burden of shipping. Behavioral adjustments, and correlated pollutant responses, depend on policy design and shipping patterns. JEL Classification: D62, L51, Q51, Q52, Q53, Q58, R41