Impact of Sulphur Emission Control Areas on port state control’s inspection outcome

With the rapid development of international shipping, ship source pollution is increasingly non-negligible. To control emissions of sulphur oxides from ships, many Sulphur Emission Control Areas (SECAs) have been established, in which stricter emission restriction policies were implemented. Because there are some genuine connections between SECA and PSC (Port State Control), it is natural to ask whether will the SECA policy make a difference on PSC’s inspection outcome? Therefore, this study investigates the effect of the SECA establishment, reflected by changes in the deficiency rate in PSC inspections, on the PSC’s inspection result. The deficiency rate in PSC inspections represents the percentage of deficiencies in the ship inspected, which can embody the overall outcome of the PSC inspections. It employs the difference-in-differences (DID) model to evaluate the effect as which is a common and mature tool for evaluating policy effectiveness. Robustness tests of parallel trend and Placebo tests both confirm the appropriateness of the DID model. The empirical results find that after the implementation of the SECA emission control policies, PSC inspections become stricter, thus changing the rate of deficiencies recorded during those inspections. A more stringent SECA policy is beneficial to identify more deficiencies and further ensure ships’ compliance.