How to recognize and measure the economic impacts of environmental regulation: The Sulphur Emission Control Area case

How does environmental regulation impact the performance of economies? Scientific literature on impact assessments on environmental regulation are analysed in this article, focusing on the ex-ante studies on the Sulphur Emission Control Area (SECA) in the Baltic Sea and North Sea. The SECA regulations on shipping exhaust gases are an example that may appear to be straightforward, but on closer inspection, this is a multifaceted issue that has several aspects that are difficult to measure and balance against each other. As such, it offers a good case example to categorize and conceptualize the questions of impact assessment. The SECA regulations are aimed at creating environmental and health benefits, and presumed to incur compliance costs. Other benefits and costs have not received much attention. Macro-economic effects and the issues of international distribution of costs and benefits are often neglected. The relevant impact categories for the SECA regulations are identified and discussed systematically. We propose a comprehensive regulation impact framework for socio-economic effects that can be extended to other environmental regulation to support the needs of consistent and reliable evidence-based maritime policy.