Least-Cost Tradeable Risk Permit Scheme for Controlling Risk of Introducing Invasive Alien Species by Shipping
The probability of alienspecies invasion is reasonably characterized by a weakest link technology. A tradeableriskpermit system for shippers has been proposed as a means of efficiently reducing this invasion probability. Economic jointness arising from statistical independence among private risks for the weakest link technology implies that the risk instrument to be traded should be linear in the log of firm success probabilities, rather than linear in firm success probabilities.
|Date of creation:||29 Mar 2012|
|Date of revision:|
|Publication status:||Published in Ecological Economics, December 2008, vol. 68 no. 1-2, pp. 532-535|
|Contact details of provider:|| Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070|
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Web page: http://www.econ.iastate.edu
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- Lupi, Frank & Horan, Richard D., 2005. "Economic Incentives for Controlling Trade-Related Biological Invasions in the Great Lakes," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(1), April.
- Horan, Richard D. & Lupi, Frank, 2005. "Tradeable risk permits to prevent future introductions of invasive alien species into the Great Lakes," Ecological Economics, Elsevier, vol. 52(3), pages 289-304, February.
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- Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December.
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