Greenhouse gas emissions from international shipping are an increasing concern. The paper evaluates whether vessel speed reduction can be a potentially cost-effective CO_2 mitigation option for ships calling on US ports. By applying a profit-maximizing equation to estimate route-specific, economically-efficient speeds, we explore policy impacts of a fuel tax and a speed reduction mandate on CO_2 emissions. The profit-maximizing function incorporates opportunity costs associated with speed reduction that go unobserved in more traditional marginal abatement cost analyses. We find that a fuel tax of about $150/ton fuel will lead to average speed-related CO_2 reductions of about 20-30. Moreover, a speed reduction mandate targeted to achieve 20 CO_2 reduction in the container fleet costs between $30 and $200 per ton CO_2 abated, depending on how the fleet responds to a speed reduction mandate.
展开▼
