Potential impacts of ballast water regulations on international trade, shipping patterns, and the global economy: An integrated transportation and economic modeling assessment

TL;DR

This study assesses how ballast water regulations influence global trade, shipping routes, and economies using integrated economic and transportation models, highlighting modest overall impacts but significant effects on specific trade flows under stricter U.S. port regulations.

Contribution

It introduces an integrated modeling approach to evaluate the economic and trade impacts of ballast water management regulations, including regional policy scenarios.

Findings

Modest negative impacts on global trade and economies overall.

Stricter U.S. port regulations significantly affect bilateral trade of certain commodities.

Trade diversion results in decreased U.S. imports and minor welfare losses.

Abstract

Global ballast water management regulations aiming to decrease aquatic species invasion require actions that can increase shipping costs. We employ an integrated shipping cost and global economic modeling approach to investigate the impacts of ballast water regulations on bilateral trade, national economies, and shipping patterns. Given the potential need for more stringent regulation at regional hotspots of species invasions, this work considers two ballast water treatment policy scenarios: implementation of current international regulations, and a possible stricter regional regulation that targets ships traveling to and from the United States while other vessels continue to face current standards. We find that ballast water management compliance costs under both scenarios lead to modest negative impacts on international trade and national economies overall. However, stricter regulations applied to U.S. ports are expected to have large negative impacts on bilateral trade of several specific commodities for a few countries. Trade diversion causes decreased U.S. imports of some products, leading to minor economic welfare losses.