The prestige Catastrophe: Political decisions, scientific counsel, missing markets and the need for an international maritime protocol

Eduardo Giménez

Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), 2003, vol. 2, 1-38

Abstract: The Prestige tankship with 77.000 Tons of fuel suffered an accident on November 13th, 2002 at 45 miles from Galician coast under a storm. Although the ship arrived as close as 5 miles from Galiza, Spanish government refused to admit it at any harbor, but to send off-shore northwest direction. This was the first in a number of decisions that provoked the widest oil pollution ever from Exxon Valdez accident. In this paper it is shown that the political decisions first taken by Spanish government may be understood in the light of economic theory: first due to missing markets for pollution accidents both domestic and international, i.e. the non existence of any international maritime protocol; and second, because of Spanish government incompetence by neglecting the counsel of scientific institutions to assess the possible risks in the event of a catastrophe, which made the authorities to misperceive the risks involved on the decisions taken, and then hid to population information about all possible dangers. It is argued that the latter magnified the catastrophe -both ecological and social-, and the former became the government objective closer to the individual coastal population interests than to the social planner, so that the observed outcome was (obviously) the well-known free-rider theoretical inefficient result found in the economic theory with externalities, i.e., the Spanish, and later the French, Atlantic coast were fully polluted. This paper has two main goals. First, at the theoretical level, to show the need to introduce the political decision analysis into the economic theory. Second, as a policy recommendation, it is an appeal for the need of an international maritime protocol, which includes scientific assessment for this kind of situations, places of refuge, and a suitable com pensation scheme from those who are benefited, so that this kind of political decisions and this type of disasters will be repeated Never More (Nunca Mais).

Date: 2003
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Working Paper: The Prestige catastrophe: Political decisions, scientific counsel, missing markets and the need for an international maritime protocol
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