Environmental Engineering Reference
In-Depth Information
feedback e
rms and the risk of invasion. Horan et al.
(2002) evaluate optimal prevention measures when damages are uncertain (marginal
damage after the
ff
ects due to the response of private
fi
rst invasion is assumed zero). They show it is optimal to allocate more
resources to confront high-damage events with non-negligible probability of occurring,
but possibly no resources to low-probability events, even those carrying very high
damages conditional on occurrence.
fi
Uncertainty and the scope for protectionist policy
For better or for worse, uncertainty over NIS damages provides governments with the
scope to manipulate trade-related NIS policy for protectionist purposes. It is well recog-
nized that governments in large countries have an incentive to erect import tari
s for the
purposes of lowering the international price of imported goods. Governments in small
countries may also want to manipulate policy so as to shift rents to politically powerful
import-competing interests. Margolis et al. (2005) adapt the Grossman-Helpman model
of lobbying to show that a politically captured regulator will set tari
ff
ect both mar-
ginal damages from admitted pests and internal rent shifting. They argue that it is di
ff
s to re
fl
cult
to distinguish between disguised protectionism and legitimate damage internalization
unless damages are commonly known.
When tari
s are constrained, governments have an incentive to distort other policy
instruments for protectionist purposes. In the case of NIS, phytosanitary regulations may
serve this goal.
5
Margolis and Shogren (2007) show that equilibrium inspections may lead
to higher levels of e
ff
s are constrained as opposed to uncon-
strained. Lichtenberg and Lynch (2006) examine pest-free certi
ff
ective protection when tari
ff
cation schemes involving
costly monitoring and eradication protocols. As with eco-labels in general, they
fi
fi
nd
exports may optimally choose to eradicate but eschew certi
fi
cation. Importing countries
also have an incentive to set ine
ciently strict certi
fi
cation requirements for protectionist
purposes.
Importing governments may also be tempted to cite uncertainty to justify discrimina-
tory trade policy. As Paarlberg and Lee (1998), McAusland and Costello (2004) and
Wilson and Anton (2006) all conclude, pre-emptive policy should vary with infection risk
and damage from introduced NIS. These invariably vary by trade partner, not only
because precautionary measures may vary by exporter, but also because the risk that a
hitchhiking NIS will ultimately become a damaging invader also varies by the importer-
exporter pair according to climo-geographic similarities. For example, China is consid-
ered a likely source for introductions of NIS into the USA due in part to a comparable
range of physical environments within the two countries (NRC, 2002). Costello et al.
(2007) estimate marginal invasion risk (MIR) from imports into San Francisco Harbor;
they show that MIRs vary considerably across trade partners and over time, in general
attenuating with imports. They show that, in general, general barriers to trade designed
to reduce expected NIS introductions do not pass a rough cost-bene
t test. Moreover, the
levels of crude import restrictions achieving the same ecological goal vary considerably
across trade partners: in order to reduce the number of NIS introductions from the West
Paci
fi
fi
c region (which includes China and Japan) expected by 2020, trade with the West
Paci
c would have to be reduced by 2 percent; achieving an equivalent one-NIS reduction
from the region with the next largest MIR (the Atlantic-Mediterranean region) would
require a 90 percent reduction in imports. Given the considerable variance in MIRs across
fi
