Economic and environmental impacts of ballast water management on Small Island Developing States and Least Developed Countries

Zhaojun Wang, Amanda M. Countryman, James J. Corbett and Mandana Saebi

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Abstract: The Ballast Water Management Convention can decrease the introduction risk of harmful aquatic organisms and pathogens, yet the Convention increases shipping costs and causes subsequent economic impacts. This paper examines whether the Convention generates disproportionate invasion risk reduction results and economic impacts on Small Island Developing States (SIDS) and Least Developed Countries (LDCs). Risk reduction is estimated with an invasion risk assessment model based on a higher-order network, and the effects of the regulation on national economies and trade are estimated with an integrated shipping cost and computable general equilibrium modeling framework. Then we use the Lorenz curve to examine if the regulation generates risk or economic inequality among regions. Risk reduction ratios of all regions (except Singapore) are above 99%, which proves the effectiveness of the Convention. The Gini coefficient of 0.66 shows the inequality in risk changes relative to income levels among regions, but risk reductions across all nations vary without particularly high risks for SIDS and LDCs than for large economies. Similarly, we reveal inequality in economic impacts relative to income levels (the Gini coefficient is 0.58), but there is no evidence that SIDS and LDCs are disproportionately impacted compared to more developed regions. Most changes in GDP, real exports, and real imports of studied regions are minor (smaller than 0.1%). However, there are more noteworthy changes for select sectors and trade partners including Togo, Bangladesh, and Dominican Republic, whose exports may decrease for textiles and metal and chemicals. We conclude the Convention decreases biological invasion risk and does not generate disproportionate negative impacts on SIDS and LDCs.

Date: 2021-08
New Economics Papers: this item is included in nep-env, nep-isf and nep-sea
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