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Transportation research part D

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Greenhouse gas emissions from international shipping are an increasing concern. The paper evaluates whether vessel speed reduction can be a potentially cost-effective CO2mitigation 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 CO2 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 CO2 reductions of about 20–30%. Moreover, a speed reduction mandate targeted to achieve 20% CO2 reduction in the container fleet costs between $30 and $200 per ton CO2 abated, depending on how the fleet responds to a speed reduction mandate.