A second look at managing import risk from invasive species

Pierre R. Mérel and Colin A. Carter

Journal of Environmental Economics and Management, 2008, vol. 56, issue 3, pages 286-290

Abstract: This paper investigates optimal trade-related policies for managing import risk arising from invasive species. We find analytical evidence that when a cleaning technology is available for foreign exporters and the optimal level of import inspections is strictly positive, a penalty imposed on contaminated imports is likely to be superior to a simple tariff policy designed to reduce the overall volume of trade, for low levels of the inspection cost. The first-best policy involves a two-part tariff composed of a penalty levied on contaminated units to internalize the invasive species externality, plus a fee collected on all imported units to cover inspection costs.

Keywords: First-best; policy; Import; risk; Invasive; species; Tariffs; Trade; policy (search for similar items in EconPapers)
Date: 2008

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Persistent link: http://EconPapers.repec.org/RePEc:eee:jeeman:v:56:y:2008:i:3:p:286-290

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