Least-Cost Tradeable Risk Permit Scheme for Controlling Risk of Introducing Invasive Alien Species by Shipping

Hongli Feng and David Hennessy

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: 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.

Keywords: biological control; independence; linearize; permit trading; risk abatement; uniformly mixed pollutant; weakest link (search for similar items in EconPapers)
JEL-codes: D62 H23 Q25 (search for similar items in EconPapers)
Date: 2012-03-29
New Economics Papers: this item is included in nep-env
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Published in Ecological Economics, December 2008, vol. 68 no. 1-2, pp. 532-535

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Journal Article: Least-cost tradeable risk permit scheme for controlling risk of introducing invasive alien species by shipping (2008)
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