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
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?
2 Projects
1. Tariffs vs. Inspections
2. Accumulation Curves
• Under what conditions
would we favor tariffs vs.
port inspections?
• How does optimal policy
respond to characteristics
of trade partner or
magnitude of damage?
• Can we estimate species
introductions as a function
of trade volume?
• Disentangle discoveries
from introductions.
• Estimate marginal
contribution from each
trade partner.
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?
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)
Home’s objective
• Components of Home’s Welfare:
– Consumer Surplus
– Tax Revenue from Tariff, inspection cost
– Damage from undetected species
• 2 Decision Variables
– Tariff and Inspections Intensity
• Objective:
– Maximize Home Welfare
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.
Conclusions
• Strong theoretical evidence for partnerspecific policies
• May offer guidance for trade policy (tariffs &
inspections) that that are contingent on
characteristics of trade partner.
• McAusland and Costello. 2004. Avoiding invasives: traderelated policies for controlling unintentional exotic species
introductions. Journal of Environmental Economics and
Management. In Press.
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?
Introduction
• Don’t 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)]
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
Graphically…
Cumulative
Species
Slope gives marginal
Contribution of more
trade
Accumulation curve
is empirically estimated
V2004
Trade Volume
An example with multiple partners
B
Species
A
Both A and B have
same cumulative volume
of trade and same number
of introductions to Home.
But B has much higher
marginal contribution
of species from trade
Volume
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?