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Economic Analysis of Invasive Species Policies 361
Leung et al. (2002) focus on the invasion of zebra mussel (Dreissena polymorpha)
in North America, and show that the costs of optimal control in an
invaded lake reduce the social welfare (measured as the benefits from economic
activities minus the costs of managing IAS) by one-half relative to welfare
in a lake in which optimal prevention measures were adopted before the
invasion. Therefore, they conclude that prevention is the best investment.
More recently, Heikkila and Peltola (2004) analysed strategies to manage the
Colorado potato beetle (Leptinotarsa decemlineata) in Finland. These authors
compare the current public policy based on eradication or pre-emptive control,
preventing the pest from establishing permanent populations, with a
potential alternative in which reactive control, to limit the damage costs, is left
to private agriculture producers. Their results show that, for most of their simulations,
the total costs of pre-emptive control are smaller than those for the
reactive control, so protection against pest establishment is recommended.
Reactive policy is preferred only when the magnitude of the invasion is low
and there are moderate–low damages. In an evaluation of the economic effectiveness
of the UK’s Plant Health Programme, Mumford et al. (2000) consider
the costs and benefits of five single-organism case studies and one case study
of protecting potatoes as a commodity. The lowest ratio of benefits to costs of
the plant health programme (the publicly funded UK plant protection system)
was 3.1:1, rising to almost 30:1. For all but one of the organism-specific
studies, no change in the exclusion/eradication policy (pre-invasion policy)
was recommended. For the other, a review of this policy was recommended
due to expected falls in the benefits and expected rises in the costs.
20.4 Uncertainty Surrounding Invasion Risk
Uncertainty is a key feature of biological invasions and, therefore, determines
the appropriateness and feasibility of the responses to invasions (Williamson
2001; Perrings 2005; Caley et al. 2006). Uncertainty surrounds the risk of
introduction, establishment and spread of IAS, the potential severity of their
impacts in the environment, and even the effectiveness of management
instruments. For example, for the tradable permit system described above to
function, one needs to know a significant number of these uncertain parameters,
and the system provides gains only when stakeholders are prepared to
accept a higher level of invasion risk.
Horan et al. (2002) compare prevention strategies when there is full information
with those when there is ignorance or uncertainty. They focus on
biosecurity measures by firms which may release invasive species into the
environment. They show that, when there is information about the probability
of invasion and its potential damages, the firms minimize damages plus
control costs by using prevention measures up to the point where the cost of