Ballast water from commercial ships engaged in international trade has been implicated as the primary invasion pathway in athwart 60 percent of new introductions of invasive alien species (IAS) in the Great Lakes since 1960 fresh policies have recognized that IAS are a form of biological pollution and have become focused forward preventing new introductions.

Ballast water from commercial ships engaged in international trade has been implicated as the primary invasion pathway in athwart 60 percent of new introductions of invasive alien species (IAS) in the Great Lakes since 1960 fresh policies have recognized that IAS are a form of biological pollution and have become focused forward preventing new introductions. Given that emissions-based incentives are infeasible for the case of biological emissions, we investigate the cost-effectiveness of various performance proxy-based and technology-based economic incentives to bring into the threat of new invasions of Ponto-Caspian species in the Great Lakes.

Key Words: aquatic nuisance species, ballast water, uncertainty, risk management, performance-based incentives, environmental subsidies

The economic and environmental impacts of invasive alien species (IAS)-species that establish and spread in ecosystem to which they are not native-can be significant (Perrings, Williamson, and Dalmazzone 2000) Invasive alien species are argued to be the second-most important cause of biodiversity los worldwide (Holme 1998 U Environmental Protection Agency 2001) through for example, out-competing or preying relating to native species. In addition, IAS can cause or spread diseases to cultivated plants, livestock, and human populations, and they frequently encroach on, damage, or degrade assets (eg power plants, boats, piers, and reservoirs). In the Great Lakes, at least 145 IAS have been introduced since the 1830 Many early invasions of the like kind as sea lamprey and alewife were associated with the opening of shipping canals that, although they facilitated trade, remov natural barriers. About one-third of the documented invasives in the Great Lakes have been introduced during the past thirty years, in part as a arise of increased trade-related shipping following the opening of the St Lawrence Seaway (Michigan Department of Environmental Quality [MDEQ] 1996 Great Lakes Commission 2000) Although alone about 10 percent of introduced species are suspected of having caused any damage (Mills et al. 1993) the impacts that have occurr are extensive (U Environmental Protection Agency 2001 MDEQ 1996 Coscarelli and Bankard 1999 Reeve 1999) The zebra mussel alone is predicted to richness society $5 billion over the nearest decade (MDEQ 1996).

Until freshly most IAS management efforts focused onward post-invasion control or eradication (Lupi, Hoehn and Christie 2003) unless there is now an increasing emphasis in succession prevention (National Research Council Committee forward Ships' Ballast Operations [NRC] 1996) This shift in focus has possibly occurr because mostly new IAS introductions are now recognized as a form of "biological pollution," with the risk of recently made known invasions being an endogenous function of human activities so as trade and travel. For example, commercial shipping in the Great Lakes has been implicated in across 60 percent of new introductions since 1960 (Mills et al. 1993) with the primary pathway being ballast water.1 Ballast water is ofttimes carried in the hulls of ships to maintain stability and outer covering integrity. Ballast water levels are altered in ports to adjust for changes in cargo, or in transit to improve stability or to change peel depth. During ballast water exchange, species may be inadvertently transferred into or without of a ship. To understand the risk in the Great Lakes, consider that each year, approximately 200-300 ocean-going bottoms enter the Great Lakes, and these tubes account for 400-600 round trips in and not at home of the region. Over 70 percent of these utensils are engaged in the "triangle trade" way which moves grain, coal, and ore from the Great Lakes to the Mediterranean, and then forward to Northern Europe (Reeves 1999) Major overseas markets are Western Europe the Baltics, the Mediterranean, and the Middle East. This "triangle trade" passage involving the Ponto-Caspian region has supplied approximately 70 percent of Great Lakes invaders between 1985 and 2000 (Reid and Orlova 2002) Thus, in the Great Lakes there is increased emphasis onward the prevention of trade-related biological invasions associated with ballast water.

Mandating oceanic ballast water exchange has been the predominant preventive approach to IAS in the Great Lakes, beginning in 1993 with the implementation of the U Nonindigenous Aquatic Nuisance Prevention and regulate Act of 1990, and later from the U.S. National Invasive Species Act of 1996 and the Canadian Shipping Act of 1998 (Reeve 1999)2 However, the succes of oceanic exchange programs is imperfect because modern introductions have occurred since 1993 and because there are known limitations to the practice of ballast water exchange.3

The limitations of general regulatory approaches are now generally recognized, as is the ne for strange policy options that promote the two safety and cost-effectiveness (NRC 1996 Rigby and Taylor 2001) Economists traditionally prescribe emissions-based incentives to encourage reductions in emissions, or emissions-based regulatory standards to mandate the reductions, at least when dealing with conventional pollutants. however such emissions-based approaches are not applicable in the IAS case. sum of two units features of vessels' biological emissions complicate matters (Horan et al. 2002) First, not each vessel will actually emit a species, still ex ante each vessel is a potential emitter, and in such a manner society is expected to benefit from all bottoms undertaking biosecurity actions to bring the probability of an invasion. secondary biological emissions are highly stochastic and essentially unobservable given common monitoring technologies-much like nonpoint source pollution (Shortle and Dunn 1986) Consequently there is no obvious classification for directly observing or otherwise indirectly measuring whether a sailing craft caused an introduction.