Controlling exotic species introductions: traderelated policies and exposure

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Controlling exotic species introductions
trade-related policies and exposure

• (Summary of research)
• Christopher Costello
• Carol McAusland
• ERS August 19-20
• University of California, Santa Barbara

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Introduction

• Most unintentional introductions occur via trade
• Large literature on the problem, small literature
  on what to do about it
• Policy instruments to control them
• Some argue to block (or slow) trade altogether
• Others suggest more thorough inspections
• Both are costly
• Empirically, which trade partners are most
  infectious?
• Basis for differential treatment?

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2 Projects

• 1. Tariffs vs. Inspections
• Under what conditions would we favor tariffs vs.
  port inspections?
• How does optimal policy respond to
  characteristics of trade partner or magnitude of
  damage?

• 2. Accumulation Curves
• Can we estimate species introductions as a
  function of trade volume?
• Disentangle discoveries from introductions.
• Estimate marginal contribution from each trade
  partner.

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Tariffs vs. Inspections

• Model of trade in contaminated goods.
• Foreign exports the good (and species) to Home,
  where inspections can take place.
• Key Questions
• Optimal tariff, inspections at Home?
• Cease trade altogether?
• If Foreign can clean up?
• Multiple trade partners?
• Dynamics of species populations post-introduction?

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Model sketch

• 2 countries (Home and Foreign)
• Proportion q of goods is contaminated.
• Inspections effort (I), cost is kI, proportion
  intercepted r(I). Tariff (t) on all trade.
• Some evade inspection, damage linear in number
  that get through.
• Trade model of production in Foreign and Demand
  in Home (for traded product)

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Homes objective

• Components of Homes Welfare
• Consumer Surplus
• Tax Revenue from Tariff, inspection cost
• Damage from undetected species
• 2 Decision Variables
• Tariff and Inspections Intensity
• Objective
• Maximize Home Welfare

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Some results

• Optimal tariff always positive
• Set at Pigouvian level (expected damages plus
  cost of inspections)
• Increases in infectedness of Foreign.
• Inspections should balance
• Cost of inspections, rejection of some traded
  product, damage from undetected infections.
• May be zero
• Are highest at intermediate infectedness of
  Foreign.

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Conclusions

• Strong theoretical evidence for partner-specific
  policies
• May offer guidance for trade policy (tariffs
  inspections) that that are contingent on
  characteristics of trade partner.
• McAusland and Costello. 2004. Avoiding invasives
  trade-related policies for controlling
  unintentional exotic species introductions.
  Journal of Environmental Economics and
  Management. In Press.

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Empirical accumulation curves

• Previous paper is entirely theoretical
• Would like to establish empirical basis for
  differential treatment of trade partners
• Basic Question Which partners are most
  infectious?
• More specifically With 1 more unit of trade, how
  many new species should we expect from each
  partner?

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Introduction

• Dont ask
• Which partner has introduced more species
• Instead ask
• What is marginal effect of one more unit of trade
  from each partner?
• Data
• Trade volume over time
• Species discoveries over time
• An important challenge is to disentangle
  discoveries from introductions see Costello
  Solow (2003) and Solow and Costello (2004)

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Approach

• Have discoveries as function of trade volume.
• Want introductions as function of trade volume.
• Develop empirically estimable model of
• New species introductions with each shipment
• Effort over time to discover
• Perform calculations for multiple trade partners
• Estimate marginal contribution of additional
  trade from each partner.
• Illustrate with 2 data sets 1 terrestrial, 1
  marine

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Graphically
Cumulative Species
Slope gives marginal Contribution of more trade
Accumulation curve is empirically estimated
Trade Volume
V2004
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An example with multiple partners
B
Both A and B have same cumulative volume of
trade and same number of introductions to Home.
Species
A
But B has much higher marginal contribution of
species from trade
Volume
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Empirical applications

• Marine
• San Francisco, about 140 species introduced via
  ballast water, discovery dates
• Known origins (12 regions)
• Trade volume by year by country (1850-2000)
• Terrestrial
• Still looking for empirical applications
• Suggestions?