Maritime traffic in the Gulf of Finland has grown remarkably during the 2000s. This increase has an impact on the environment and exposes it to risks. These problems should be controlled to guarantee sustainable development and the welfare of inhabitants in the area. A method for estimating the impact of ship-originated air emissions on the environment is to calculate their environmental externalities which are a part of the total marginal social costs of shipping. The internalization of externalities as a control method of transport would comply with the polluter pays principle and act as a fair traffic control method between transport modes. In this paper, we present the results of CO2, NOx, SOx and PM emissions originating from ships and their externalities in the Gulf of Finland up to 2015. The calculation algorithm developed for this study produces emission estimates per annum and converts them into externalities. We focus on passenger, tanker, general cargo, Ro-Ro, container and bulk vessel ship types representing almost 90% of the total NOx emissions of shipping in the area. Scenario modelling is a method for estimating the effects of forthcoming or planned regulations and helps with targeting emission abatement actions to maximize their profit. The results of the calculation algorithm show that externalities can be used as a consultative tool for transport-related decision-making. The costs are given at the price levels of the year 2000. The total external cost of ship-originated CO2, NOx, SOx and PM emissions in the Gulf of Finland was almost €175 million in 2007. Due to increased traffic volumes, these costs will increase to nearly €214 million in 2015. The majority of externalities are produced by CO2 emissions. If we deduct CO2 externalities from the results, we get total externalities of €57 million in 2007. Following eight years (2015), externalities would be 28% or €41 million lower. This would be as a result of regulation reducing the sulphur content of marine fuels. Regulating SOx and PM emissions will slow down the increasing trend of shipborne externalities in the Gulf of Finland; however, the externalities are still growing. In order to achieve a downward trend, the two major compounds resulting in externalities must be reduced, which requires strict actions to lower shipborne CO2 and NOx emissions. First Published Online: 30 Mar 2012
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