The costs and benefits of a nitrogen emission control area in the Baltic and North Seas

Journal article, 2018

The main purpose of this paper is to analyse the socio-economic justification of implementing a Nitrogen Emission Control Area (NECA), starting 2021, for ships in the Baltic Sea and/or the North Sea and English Channel. We analyse the potential for emission reduction, emission control costs, and monetised benefits following the introduction of a NECA. Costs and benefits are compared for 2030. We compile new data on emission control costs for shipping, use the GAINS model for calculations of emission dispersion, and the Alpha-RiskPoll model for estimating monetary values of health impacts. The model results show that costs to conform to the NOX regulations of a NECA in the Baltic Sea, North Sea or both sea regions would be 111 (100–123), 181 (157–209), and 230 (195–273) million € per year, respectively. Corresponding benefits from reduced emissions are estimated to be 139 (56–294), 869 (335–1882), and 1007 (392–2177) million € per year, respectively. Calculated benefits surpass costs for most scenarios, but less convincingly for a Baltic Sea NECA. Conforming to the NECA regulations by using Liquefied Natural Gas (LNG) propulsion engines is estimated to give the highest net benefits but also the largest variation (costs: 153 (88–238), benefits: 1556 (49–3795) million €/year). The variations are mainly due to uncertainties in the valuation of avoided fatalities and climate impacts. It is concluded that the NECAs for the Baltic and North Seas can be justified using CBA under all but extreme assumptions.