Policy and Risk Processes of Trade-Related Biological Invasions

This report summarizes the methodologies, results and empirical insights of ERS-funded research on trade-related nonindigenous species (NIS) introduction risk. Costello and McAusland (2004) is the first attempt in the economics literature to establish theoretical relationships between trade, trade policy (in the form of tariffs), and NISrelated damage, accounting for the dependence of land-use decisions on tariff rates. McAusland and Costello (2004), extending the policy choice set, characterize the optimal mix of tariffs and inspections and show how the balance depends on trading partner attributes, such as the infection rate of shipments and the marginal NIS damage level. The theory of trade-driven introductions is extended in Costello et al. (2007), where novel trade and NIS discovery data sets are used to gain an empirical understanding of dynamic invasion risk. Results support the hypothesis that cumulative introductions from some regions are a concave function of cumulative trade. Overall, this collection of research on trade-related NIS introductions highlights the welfare and biological implications of both broad and differentiated policy instruments, and the challenge of empirically supporting the latter.