Working Paper Series

U.S. Environmental Protection Agency

National Center for Environmental Economics

1200 Pennsylvania Avenue, NW (MC 1809)

Washington, DC 20460

http://www.epa.gov/economics

The Economic Impacts of Aquatic Invasive Species: 

A Review of the Literature

Sabrina J. Lovell and Susan F. Stone

Working Paper # 05-02

January, 2005
The Economic Impacts of Aquatic Invasive Species: 

A Review of the Literature

Sabrina J. Lovell and Susan F. Stone

NCEE Working Paper Series

Working Paper # 05-02

January, 2005

DISCLAIMER

The views expressed in this paper are those of the author(s) and do not necessarily represent

those of the U.S. Environmental Protection Agency. In addition, although the research described

in this paper may have been funded entirely or in part by the U.S. Environmental Protection

Agency, it has not been subjected to the Agency's required peer and policy review. No official

Agency endorsement should be inferred.

Correspondence:

Susan F. Stone

1200 Pennsylvania Ave

Mail Code 1809T

Washington, DC 20460

202-566-2351

stone.susanf@epa.gov
1

THE ECONOMIC IMPACTS OF AQUATIC INVASIVE SPECIES:

A REVIEW OF THE LITERATURE

Sabrina J. Lovell and Susan F. Stone

National Center for Environmental Economics

U.S. EPA

January 2005

Abstract: 

Invasive species are a growing threat in the United States, causing losses in 

biodiversity, changes in ecosystems, and impacts to economic enterprises such as 

agriculture, forestry, fisheries, power production, and international trade. The costs of 

preventing and controlling invasive species are not well understood or documented, but 

estimates indicate that the costs are quite high, in the range of millions to billions of 

dollars per year. EPA’s Office of Water needs to develop a national estimate of the costs 

of aquatic invasive species and the benefits of control. This review of the economic 

literature on invasive species is the first stage in the development of that estimate. The 

review includes studies on fish, mollusks, crustaceans, invertebrates, and plants. There 

are few theoretical, and even fewer empirical, studies dealing with the economic costs of 

aquatic invasive species. Due to the high level of invasions in the Great Lakes, a number 

of studies focus on species found there, and on Zebra Mussels in particular. The aquatic 

studies reviewed show values ranging from several hundreds of thousands of dollars a 

year to tens of millions of dollars a year. It seems apparent that a systematic approach is 

needed to develop a consistent method to estimate such costs. As the literature points 

out, invasive species and their control have definite public good aspects and thus call for 

some level of government intervention. However, to what extent and what form that 

intervention takes place depends on myriad of issues associated with both the region and 

the species involved. Optimal policy appears to be as unique as the individual species or 

ecosystem it is attempting to control and protect.

Key Words: Aquatic Invasive Species, Costs, Literature Review

Subject Matter Categories: Marine/Coastal Zone Resources, Economic 

Damages/benefits, Biodiversity

Contact: Susan F. Stone Sabrina Lovell

1200 Pennsylvania Ave NW 1200 Pennsylvania Ave NW

MC 1809T MC 1809T

Washington DC 20046 Washington DC 20046

202-566-2351 202-566-2272

Stone.susanf@epa.gov ise-lovell.sabrina@epa.gov
2

Introduction

Invasive species are a growing threat in the United States, causing losses in 

biodiversity, changes in ecosystems, and impacts to economic enterprises such as 

agriculture, forestry, fisheries, power production, and international trade. An ‘invasive 

species’ is a species that is “1) non-native to the ecosystem under consideration and 2) 

whose introduction causes or is likely to cause economic or environmental harm or harm 

to human health” (Executive Order 13112, Appendix 1, 1999)1. Not all non-native or 

non-indigenous species (NIS) become, ‘invasive’. Some fail to thrive in their new 

environment and die off naturally. Others survive, but without destroying or replacing 

native species. Most introduced species do not meet the standards defined in Executive 

Order 13112 as ‘invasive’ (NISC 2000). However, those that do meet the definition have 

the ability to cause great harm on the ecosystem. About 400 of the 958 species listed as 

threatened or endangered under the Endangered Species Act are considered to be at risk 

primarily because of competition with, and predation by, invasive species (Wilcove et al. 

1998).

The means and routes by which species are introduced into new environments are 

called ‘pathways’. Some species that become invasive are intentionally imported, and 

escape from captivity or are carelessly released into the environment. Other invasives are 

unintentionally imported, arriving through livestock and produce, or by transport 

equipment such as packing material or a ship’s ballast water. Fish and shellfish pathogens 

and parasites have been introduced unintentionally into the U.S. in infected stock 

destined for aquaculture. Crates and containers can harbor snails, slugs, mollusks, beetles 

 

1

 For a full description of the Executive Order see http://www.invasivespecies.gov/laws/main.shtml.
3

and other organisms. Military cargo transport may also harbor unintended species. 

Stimulated by the expansion of the global transport of goods and people, the numbers and 

costs of invasive species are rising at an alarming rate (NISC 2001). The cost to 

preventing and controlling invasive species is not well understood or documented, but 

estimates indicate that the costs are quite high, in the range of millions to billions of 

dollars per year (OTA 1993, Pimental et al. 2000). EPA’s Office of Water is interested in 

developing a national estimate of the costs of aquatic invasive species and the benefits of 

control. This review of the economic literature on invasive species is the first stage in the 

development of that estimate. 

Both theoretical and empirical studies are included in this review. In general, the 

review was limited to studies dealing with aquatic or aquatic related species and does not 

include estimates of the costs of invasive agricultural weeds and other purely terrestrial 

species. Studies dealing with the general economic aspect of the problem are included 

even if they do not focus on aquatic species per se. Many of the studies focus on aquatic 

invasive species in the Great Lakes, due to the large amount of ship traffic and 

corresponding potential for invasion from ballast water. Since the 1800’s, over 145 

nonindigenous aquatic species have become established there, including 24 species of 

fish, 9 mollusks, and 61 species of plants (Dohnahue, 1999; Horan and Lupi 2004).

General Cost Studies

There are two studies which tried to estimate the total cost of invasive species in 

the United States. The first is “Harmful Non-Indigenous Species in the United States” by 

the Office of Technology Assessment of the U.S. Congress (1993). It details both the 
4

ecological impacts and estimated economic impacts of those invasive species considered 

harmful, rather than all invasive species inhabiting the nation. It also considers native 

U.S. species outside of their natural ranges as invasive. Over the period examined in the 

report (1906-1991), 59% of introduced species to the US have caused economic or 

ecological harm. The report estimated the total cost of damages related to 79 harmful 

species to be $97 billion, with a ‘worst case’ scenario total cost of $137 billion. The $97-

137 billion estimate is the cumulative cost of invasive species to agriculture, forestry, 

fisheries and other water uses, utilities, buildings and natural areas.

For aquatic invasives, OTA considered 111 species of fish (88% of total known 

invasives) and 88 mollusks (97%). Of the 76 fish species intentionally introduced, 35 

have caused harm and of the 26 unintentionally introduced in the U.S. 10 species are 

considered invasive according to the report. For mollusks, 5 out of 10 intentionally 

introduced and 27 of the 67 unintentionally introduced species have caused harm. Of 

those considered, 4 fish species and 15 mollusk species had high negative impacts. The 

list of high impact aquatic species include the Sea lamprey, Zebra Mussel, and Asian 

clam. OTA estimated that the cumulative loss to the U.S. for the period 1906-1991 for 3 

harmful fish species was $467 million (1991 dollars) and $1,207 million for 3 aquatic 

invertebrates. In terms of aquatic or riparian plants, high impact species include the Salt 

Cedar, Purple Loosestrife, Melaluca, and Hydrilla. OTA reports that spending on control 

of aquatic plants in the U.S. is $100 million per year. 

Pimentel et al. (2000) produced a more recent study, attempting to update and 

expand these costs estimates. At the time of the OTA study, they estimated the total 

number of harmful species in the U.S. to be 4,500. Pimentel et al. (2000) estimated 5,000 
5

and by 2004 that estimate had increased to over 6,000 (Burnham 2004). Invasive weeds 

are spreading and invading approximately 700,000 ha/yr of U.S. wildlife habitat 

(Pimentel et al.. 2000). Examining a series of case studies, the Pimentel study estimates 

the total economic damages and associated control costs for the U.S. due to “harmful 

non-indigenous species” is $138 billion annually. They attribute their higher estimate 

(vis a vis the OTA study) to the broader base at which they look and the increase in the 

economic cost estimates available for many invasive species. However, they also 

characterize their cost estimates as low because the study does not take into account the 

extensive ecosystem damage caused by these species.

The Pimentel study has a number of flaws. First, the methods applied to 

estimating costs are anecdotal in nature. No systematic empirical methods of estimating 

costs, which would have provided a statistical basis to judge the validity of the estimates, 

were applied. There was also no attempt to incorporate ecosystems services. Finally, 

there was no explicit consideration of the potential benefits provided by some of these 

invasive species (such as the recreational benefits from introduced game fish). While the 

effects arrived at by Pimentel are widely cited, these flaws tend to undermine the 

credibility of the numbers. Both the OTA (1993) and the Pimentel et al. (2000) studies 

illustrate the difficulty in quantifying the harm done to both the economy and the 

ecosystem by invasive species. Both studies point to the lack of data available to 

adequately estimate costs that would help put the problem in some perspective. In a 

further study, Pimentel et al. (2001) look at the impact of invasive species on 6 countries, 

including the United States, stating that over 120,000 NIS have invaded these regions at 

estimated costs of over US$314 billion per year in damages. For the U.S., they report 
6

estimated US$1 billion a year in environmental losses alone from introduced fish, 

US$2.13 billion from arthropods and US$1.3 billion from mollusks.

Government spending on invasives may be a furthe r guide in estimating costs. In 

1999/2000, the federal government spent $459 million and $556 million respectively for 

invasive species activities. For fish and aquatic invertebrates, $20.4 million in federal 

funding was given out in 1999 (GAO, 2000). The U.S. Geological Service Aquatic 

Nuisance Species Program had a $5.5 million budget for the National Biological 

Research Division’s Invasive Species Program. The U.S. Coast Guard has a total of $4.5 

million annually for invasive related activities, mostly focused on ballast water programs 

and surveys (Sturtevant and Cangelosi, 2000). 

Theoretical Economic Research and Models

Very few studies dealing with invasive species exist in the formal economics 

literature. Of those that are available, they primarily concentrate on theoretical 

considerations with relatively little empirical analysis. A number of papers concentrate 

on issues related to trade. Others develop models of the risk of invasive species or 

incorporate both ecological and economic models. 

Evans (2003) lays out the economic dimensions of invasive species and why 

economics is increasingly called upon to understand the issues. The causes of biological 

invasions are often related to economic activities and furthermore, the economic 

consequences of invasives are broader than just direct control costs and damages. The 

economic impacts of trade barriers that attempt to prevent an invasive species from 

entering the U.S. are becoming more complicated. Economic modeling expertise is 
7

important for understanding the issues involved. Economic models of the value of 

nonmarketed environmental and health effects can also be called upon to understand 

many of the impacts of invasives, beyond control costs. Evans notes that the impacts of 

invasives can be classified into 6 types: production, price and market effects, trade, food 

security and nutrition, and financial costs. 

Perrings et al. (2002) frame the issue of control of invasive species as a public 

good and discuss why both the causes of invasive species and the solutions are primarily 

economic in nature. They point out that the full economic costs of invasive species 

include the effects on native ecosystems and the human populations that depend on such 

ecosystems, and are not limited to just the damage or control costs. The authors point out 

that little investigation has been done into the economic and social causes of biological 

invasions, which are often the result of decisions related to , land use and conversion of 

habitat , the use of certain species in production or consumption, and global movement of 

people and products. Economic drivers such as property rights, trade rules, and prices 

often influence these decisions. Human behavior influences the probability of invasives 

becoming established as well as their spread, specifically how people respond to the 

threat of invasives by either mitigation or adaptation. The control of the risk of invasives 

has a public good element, in the sense that the benefits of control are neither rival nor 

exclusive. In other words, control can protect one person or group without excluding 

those benefits on another or reducing the benefit implying the need for government 

involvement. Further, effective control of invasives is only as good as the weakest 

provider of control. If even one nation or state does not provide adequate control, a 
8

species can spread and cause damage to all. This argues for a coordinated response 

among affected parties, both the sources and recipients of the invasive species. 

Shogren (2000) addresses the issue of incorporating economics into risk reduction 

strategies for invasive species using a model of endogenous risk. The model represents 

the choices available to a policy maker regarding the allocation of resources to reduce the 

risk of invasive species by both mitigation and adaptation. Throughout the paper, the 

point is made that economics should be included in risk assessment to improve the 

effectiveness of such assessment. The study finds that a higher risk of invasive species 

increases adaptation, but the effect on mitigation depends on whether or not mitigation 

and adaptation are substitutes or complements. The paper does not provide any empirical 

examples. 

Horan et al. (2002) address the appropriate level of preinvasion control of 

invasive species and show how decisions can be made both when full information is 

available and when there is a high degree of uncertainty about invasions. They start with 

the premise that decision models based on standard economic expected utility theory 

provide little guidance in the case of invasive species. This occurs because of the 

probabilities associated with invasions; they exhibit both a low probability of occurring, 

but often have catastrophic consequences when they do occur. Expected utility theory is 

insensitive to this type of risk. Risk management models are thus better suited for 

analyzing strategies of preinvasion control. They set up two models, one under full 

information and one under ignorance. The first, the risk-management model, assumes 

that firms are potential carriers of an invading species. Each firm makes choices on 

production and biosecurity control. Based on its choices, and environmental conditions, 
9

there is some probability that a species will be introduced and will successfully invade 

the new ecosystem. Invasions from one firm are independent of those from other firms. 

The probability of invasion increases with the number of firms and decreases with 

biosecurity measures. The model minimizes the expected social cost of invasions and 

control using the cost of control and the expected damages of invasion. At the optimal 

level of control, the marginal cost of taking a control action equals the marginal expected 

benefits, as measured by the reduction in damages. The risk of invasion and damage 

impact this marginal level of expected damages. This model assumes, however, that the 

risk of invasion (the probability of invasion given choices of firms) is known. 

In the second model described, the risk is unknown, and uncertainty and 

ignorance of the risk is explicitly modeled. The model assumes that a decision maker 

will focus on those potential outcomes that will come as the least surprise. The model 

also assumes that costs and expected damages are minimized, but some of the 

conclusions differ from the previous model. When uncertainty is present, more resources 

should be devoted to high damage events that are considered more certain even with a 

low probability, and less resources to those events considered less likely to happen 

regardless of the amount of damages. While the risk management model supports firm 

specific levels of control, the uncertainty model advocates that control be spread equally 

across firms, thus supporting most current policies that are based on uniform mandated 

technologies. 

Thomas and Randall (2000) look at the role information and revocability play in 

NIS management by focusing on intentional releases. Usually the protocol is to follow 

an ex ante approach to fully elucidate the issue before proceeding. Ecologists argue 
10

against introductions until the full spectrum of implications are understood via the 

collection of more and better ex ante information. However, there is no guarantee (and 

indeed an almost certainty) that enough information will ever be collected. In addition, it 

is often costly and a “seemingly endless effort” to gain more information. A second 

approach is to allow only revocable releases. Assuming that marginal costs of damage 

avoidance are increasing in both approaches, ex ante full information and revocability, 

the paper argues that improvement in the current procedures could be made by paying a 

little less attention to ex ante information and more to revocability. 

By combining the concept of revocable actions and incentive compatible 

behaviour, Thomas and Randall present a protocol that first identifies the potentially 

affected parties and implements a Coasian liability principle when the affect parties are 

known and property rights clearly established. This involves the establishment of an 

independent oversight authority and an insurance scheme for both public and private 

interests wishing to intentionally release non-native species. When the affected parties 

are large in number and/or dispersed, the protocol suggests a limited role for the 

oversight authority to act on behalf of affected parties. The authority would deny permits 

to releasing agents that fail to post bonds sufficient to compensate in worst-case damage 

scenarios. The oversight authority may decide to permit a methodical step-by-step 

process of controlled releases designed to make maximum feasible use of revocability 

and learning-by-doing. Starting with a very small, tightly controlled revocable release 

and thorough review of the results, each subsequent step would involve larger releases, 

less rigid controls and lower levels of revocability. The process would terminate as soon 

as the prospect of a sufficiently harmful outcomes merged with a high probability the 
11

harmful outcome could be avoided. The success of such an approach is less dependent 

on reliable prediction of the consequences of a release based on ex ante information, and 

more on precommittment to avoid irrevocable actions. Moral hazard is avoided by the 

establishment of an independent oversight authority to make permitting decisions and the 

ex ante assignment of liability to releasing agents.

Eiswerth and van Kooten, (2002) apply a stochastic optimal control model for 

invasive plant species given the uncertainty surrounding the ability to determine efficient 

management strategies for any given NIS. Sources of uncertainty regarding relevant state 

variables include paucity of data, measurement errors, and substantial variability in 

intrinsic rates of spread. This means that invasions possess the properties associated with 

fuzzy sets and are thereby subject to analysis through fuzzy membership functions. They 

employ insights from expert panels to develop spread and damage estimates caused by 

invasive plants. Then , similar to Leung et al. (2002), they employ the stochastic 

dynamic programming model to identify economically optimal management choices 

from a portfolio of potential options with the results compared to those of a program that 

seeks to eradicate the invasive.

Eiswerth and van Kooten apply their model on the decision making process of 

agricultural producers faced with harmful invasion of the weed, yellow star thistle (YST). 

Each producer wants to maximize the present value of future stream of net revenues. The 

expert panel focused on three potential agricultural land uses; grazing on rangeland, 

grazing on pastureland, and harvest of hay from pastureland. As the productivity of the 

land increases, the optimal weed management strategy gravitates toward more expensive 

options. For rangelands offering lower productivity, the optimal strategy is to apply 
12

chemicals, or to have no control at all. At the other end of the spectrum, it is optimal to 

apply more expensive technologies to irrigated pasture that affords both harvested hay 

and summer grazing. They conclude by stating that decision making under uncertainty 

where experts can provide only linguistic descriptors of the growth of the invasive 

species and its potential damages can be beneficial when hard data are unavailable.

Bioeconomic Models

Knowler and Barbier (2000) develop a model of an invasive species when there is 

competition between the invader and a native species in a given ecosystem. The two 

principles of their model are that the effects of the invader depend on the exa ct nature of 

the interaction and that the correct comparison for determining effects is an ex-ante and 

ex-post invasion scenario. Their model can accommodate diffusion, competition, or 

predation and is applied to a case study of the effects of a comb-jelly in the Black Sea on 

a traditional anchovy fishery. Using the model, they show a decline in profits due to the 

introduction of the comb-jelly. Barbier (2001) presents the same model as in his earlier 

paper, but without the case study. 

Leung et al. (2002) develop a quantitative bioeconomic model that can evaluate 

risks and quantify relative benefits of prevention and control strategies for invasive 

species. The model determines an acceptable level of risk and the impacts on optimal 

investments. As in earlier papers, the authors point out that risk analysis of invasives is 

inherently an interdisciplinary problem and requires both economics and ecological 

expertise. The model is a stochastic dynamic programming model that allows both 

ecological and economic factors to simultaneously determine the results on social 
13

welfare. Both market and non-market values can be included. The model was applied to 

the case of Zebra Mussels inhabiting a single lake in the Midwest. Under different 

scenarios results show that the time frame of the analysis mattered in determining an 

optimal strategy of prevention and mitigation. For a given probability of reducing 

invasions, the model can determine society’s willingness to pay for which the prevention 

costs equal the benefits of prevention. However, the model did not include nonmarket 

benefits, was risk-neutral, and did not model multiple invasions simultaneously, all of 

which would be more realistic. 

Settle and Shogren (2002) model the interaction between native Cutthroat Trout 

and introduced Lake Trout in Yellowstone Lake. Lake Trout prey on Cutthroat Trout 

along with grizzly bears, birds of prey, and humans. These interactions are incorporated 

into an ecological-economic model that provides a comparison of optimal policy action 

with current policies for removing Lake Trout. Humans obtain benefits from the 

populations of both fish species as do other non-fish species via harvesting fish, catch and 

release fishing, and nonconsumptive uses, such as wildlife viewing. The model assumes 

there also exists another composite good for which humans derive benefit that does not 

depend on any of the species in Yellowstone. The management agency, the National 

Park Service in this case, has a fixed budget to spend on one or both of the trout species 

along with other non-species related goods (such as road improvements). It seeks to 

maximize the net benefits of visitors given this budget. The Park Service will optimally 

choose a policy that equates the marginal benefit from spending a dollar on removing 

Lake Trout with the marginal benefit of improving other park resources (such as roads) 

based on the dynamics of the species population interactions and the benefits derived 
14

from visitors. Three scenarios are considered based on the model both with and without 

accounting for the feedback between the economic and ecological model components. 

The feedback arises from fishermen’s behavior, as they adjust their catch based on 

Cutthroat Trout population size (with less catch when population declines). In the best 

case scenario, Lake Trout are eliminated right away and with little cost. The populations 

of Cutthroat Trout stabilize at 2.7 million without any feedback and stabilize at 3.4 

million with feedback. Under the worst case scenario, Cutthroat Trout populations 

decline to almost zero, with no feedback and to 1 million with feedback. The current 

policy is between these two cases, with around 1.8 million to 2.4 million Cutthroat Trout 

without and with feedback. Specifying discount rates and existence values for trout, an 

optimal large scale Lake Trout control program can be created for $169,000.

Another paper that looks at invasive management policy incorporating economic 

consideration is Olson and Roy (2002). The analysis examines the economics of 

controlling a biological invasion whose natural growth and spread is subject to 

environmental disturbances, outlining conditions under which it is optimal to eradicate 

versus conditions under which eradication is not optimal. They show that the growth of 

the invasion and the associated level of disturbance that leads to slowest expansion plays 

a critical role. Marginal damages at each point in the future are determined by 

multiplying the compound annual growth rate by a unit of the species today. The 

marginal benefits of control are the expected discounted sum of marginal damages that 

are incurred if the species is not controlled. The results capture the stochastic nature of 

the problem by incorporating both the worst environmental disturbance and the mean of 

the disturbances in the analysis. 
15

The first result of Olson and Roy establishes that if the marginal costs of 

eliminating an arbitrarily small invasion are less than the damages from such an invasion, 

compounded indefinitely at a rate equal to the discounted expected growth of the 

invasions, then complete eradication is optimal. However, if the damages from an 

arbitrarily small invasion are less than the marginal costs of removing the entire invasion, 

then it is always optimal to allow some of the invasion to remain. For an arbitrarily small 

invasion, if the damages compound indefinitely at the discounted expected intrinsic 

growth rate are less than the marginal costs of eradicating the invasion then the optimal 

policy is not to control the invasion at all when it is sufficiently small. This then implies 

that eventually, eradication is not an optimal strategy for an invasion of any size.

For a controlled biological invasion that is small, the marginal costs of control are 

balanced against the infinite geometric sum of intrinsic marginal damages. In summing 

damages, the ratio of successive terms depends on the discounted mean intrinsic rate of 

expansion of the invasion. If the discounted expected intrinsic growth rate is higher than 

one, then eradication is optimal for small invasions even if the marginal costs of control 

are large relative to marginal damages. The reason is that if an invasion is controlled 

then it is worth eradicating a small invasion to avoid the rapid growth in future costs that 

accompany a higher expansion rate of the NIS. As an invasion approaches its ecological 

limit, its marginal growth rate necessarily falls below one. Hence for large invasions, it is 

the interaction of costs and damages with the discount rate and the invasion growth rate 

that determines whether eradication is optimal or not. The magnitude of the disturbance 

that leads to the slowest expansion plays a critical role but not its probability. The 
16

combination of control and the inevitability of a sufficient number of bad disturbances 

eventually leads to eradication.

Trade-Related Studies

It is a generally accepted principle that trade provides a major conduit for the 

introduction of invasive species. OTA (1993) estimates that 81 percent of invasive weeds 

have entered the United States via commodity transport. Species ‘hitchhike’ on 

commodities, packing materials and transport vessels, especially ships.2 The World 

Wildlife Fund (WWF) estimates that as many as 4,000 different species can hitch-hike in 

typical ships’ ballast at any one time (Plant Ark 2004).

Expanding volumes and diversity of trade are seen as having contributed to the 

growth of invasives in the United States. The expansion of trading partners has served to 

produce an array of possible invaders. Historically, damage (either actual or anticipated) 

from the establishment of invasive species has led to import bans or quarantine measures 

on all commodities from countries known to harbor the NIS (Lynch 2002). These bans 

and/or quarantine measures designed to protect plants from other plants, weeds, insect 

and pathogens are called phytosanitary regulations. Because tariff levels in the world 

have decreased since the first GATT agreement3, these phytosanitary regulations (also 

called non tariff or technical barriers to trade) are more likely to be binding. In addition, 

as countries attempt to protect domestic producers competing with foreign counterparts 

without the benefit of tariffs, governments may use these types of trade barriers as a non-

 

2

 More infamous examples of hitchhiking species include the Zebra Mussel (Dreissena polymorpha) and 

the Asian Clam (Corbicula fluminea).

3

 The General Agreement on Tariffs and Trade (GATT) was succeeded by the World Trade Organization 

(WTO) in 1995.
17

transparent means of protectionism even when little scientific basis for these regulations 

exist. As a result, measures instituted to protect domestic ecosystems at the expense of 

trade are coming under increasing scrutiny.

There are two distinct concerns regarding increased globalization and the 

occurrence of trade with respect to NIS. The first is that increased trade will bring with it 

a global homogenization that will lead to a decline in diversity. Indeed, Polasky, Costello 

and McAusland, (2004) argue that trade increases specialization in production which in 

turn promotes specialization in ecosystems and their associated biodiversity. Trade 

affects habitat loss through conversion of land for economically driven uses such as 

agriculture, forestry and expansion of urban areas. When trade partners have similar 

species, trade has little effect on global biodiversity, but may affect it at the local level. 

On the other hand, with endemism, specialization can cause significant declines in both 

local and global biodiversity. This loss in biodiversity may reduce the overall utility 

gains associated with moves toward free trade.

The second concern about free trade is that increases in standards of living 

leading to increases in import demand, will increase the probability of NIS (Jenkins 

1996). Given that most NIS are brought to their new homes unintentionally in ballast 

water, packing material and cargo, the resulting invasions represent market failure rooted 

in international trade (Margolis and Shogren 2004). 

Establishing a definitive link between NIS and trade is not easy, stemming mostly 

from data issues. Estimates of introductions are usually species or region specific, while 

trade data tend to be reported by commodity or country of origin. Also, there is a 

difference in time horizon between the two. Trade volumes can be measured monthly, 
18

quarterly, or annually while species introduction, and eventual propagation, is measured 

in terms of weeks, months, years and even decades. Finally, while trade data is provided 

in a relatively detailed and abundant manner, data on NIS are of notoriously poor quality 

(see, for example, Nozic et al. 2000 or Pimentel et al. 2000). Thus, there have been few 

attempts to quantify the link between trade and invasives. The exceptions to this are 

discussed below.

Dalmazzone (2000) examines whether available data support the contention that 

economic activities in general, and trade in particular, are correlated with NIS. He tests 

which activities play a role either as pathways/vectors, or by increasing the domestic 

economy’s susceptibility. The study measures the degree to which various economic 

factors explain the share of established alien plant species of total native species across 

26 countries. For example, of Egypt’s 2,015 native plant species, there are 86 invasives, 

representing a share of 0.043. The first hypothesis Dalmazzone tested is that invasions 

are an increasing function of the openness of the economy (in terms of movement of 

goods and services as well as people). He uses trade and tourism as proxies for openness. 

The second hypothesis is that invasions are an increasing function of the degree to which 

natural habitat are disturbed in the course of economic activity. For this he uses measures 

of grazing land and agricultural activity. 

The first hypothesis, that of openness, is marginally rejected. Dalmazzone makes 

this claim by finding that neither trade (as a percentage of GDP) nor tourism are 

statistically significant in explaining the share of NIS. However, when total trade flows 

are measured and imports inserted as a separate measure, there is marginal significance. 

Also, trade duties are significant and negative. This finding, that trade as a percentage of 
19

GDP is not significant but imports and duties are, seems to support the idea that its not so 

much the volume of trade that is important in determining NIS, but rather what goods are 

traded and from where. Duties influence the types and source of goods a country 

receives. Dalmazzone reports evidence supporting the second hypothesis, that is that 

economic activity increases the probability of NIS. Population is significant and positive, 

as is per capita GDP. Agriculture is also significant, but has a negative sign. This may 

be explained by the fact that agriculture involves a simplification of ecosystems and alien 

plants and insects, along with indigenous populations, are frequently eradicated to 

support production. 

Levine and D’Antonio (2003) attempt to forecast the rate of future invasion by 

examining the historical relationship of international trade with the level of invasive 

species in the country. They apply several different species accumulation models, noting 

that there is no current consensus as to which performs best. Past merchandise trade is 

related to accumulated number of biological invasions focusing on insects, plant 

pathogens and mollusks. All three models fit the historical data well.4 Their predictions 

for increases in NIS introductions as a result of international trade volumes between 2000 

and 2020, range between 3 and 61 percent, depending on the model and the species. 

Given the evidence and performance of the models, they support the most likely estimate 

to be between 15 and 24 percent. The paper notes that these values represent less than 

twice the number of observed invasions over the 20 year period between 1960 and 1980, 

in which imports were roughly 10 percent of the amount forecasted for the next twenty 

years. This would imply that while the rate of introductions may slow, the total number 

 

4

 The three models were Log-log species area, Log-linear species area and Michaelis-Menten.
20

of NIS is likely to increase. Thus, if the 10 percent rule is applied, the burden on society, 

even looking at the lower bound numbers, is likely to be large.5

The problem with using trade volumes in and of themselves as a predictive tool is 

implied in Dalmazzone’s work. He showed that total trade is not a significant predictor 

of the rate of species invasion, where imports are. Types of goods imported, modes of 

transportation and the type, and state, of receiving ecosystem are key factors (Colautti et 

al. 2003). The relationship between NIS and trade is not linear; spatially or temporally.

Studies on Marine Shipping 

Accepting there is a link between trade and NIS, what is the most likely vector for 

their introduction? Those studies that pay passing attention to packing materials, or the 

commodities themselves, usually do so in the context of explaining how the relevant 

species arrived in the ecosystem, rather than attempting to establish a firm link between 

traded items and NIS (OTA 1993, Pimentel et al. 2000, Nozic et al. 2004) Those studies 

that do look at pathways tend to focus on transoceanic shipping as the most likely vector 

for invasives, especially aquatics. There are a number of studies which have attempted to 

measure the degree to which shipping plays a role in both the introduction and spread of 

NIS.

Predicting invasions in estuaries, seas and lakes utilized by foreign transoceanic 

ships is difficult because these ecosystems are impacted by many human activities, not 

just trade. Also, successful invasions may dramatically change the ecosystem, potentially 

increasing vulnerability. Thus, as stated above, an increase in NIS may have more to do 

with an increase susceptibility than trade volumes. Invasives may interact and effect 

 

5

 Rule of thumb states that 10 % of the species introduced will become invasive.
21

distribution or colonization of existing NIS. Finally, in systems subject to multiple 

mechanisms or introductions, it is difficult to predict the timing or types of species trade 

is responsible for introducing (Horan and Lupi 2004).

Fernandez (2004) examines under what conditions various invasive species 

management programs are optimal given that the goal of the regulating port is to 

minimize social costs of shipping, including any potential environmental impacts. The 

shipper’s objective is to maximize expected profits. The paper shows that, using 

estimated costs of various management techniques used to control for invasive species 

(ballast water treatment or exchange and biofouling), ships maximize profits by 

biofouling alone in the absence of existing subsidies or taxes. This result is important 

given that most regulation (including IMO standards) focus on ballast water. The 

potential for cross media multiple externalities adds an index of invasive species damage 

severity to the mix. Given imperfect information most shippers know they will 

ultimately bear the cost of only a fraction of any damage they cause. This causes their 

optimal chose of ballast management and biofouling management to diverge from the 

socially optimal choice.

Fernandez shows that by applying an incentive mechanism consisting of two 

subsidies (one based on per unit ballast water and the other a lump sum), and depending 

on the shipper’s anticipated liability share of the damage, a socially optimal mix of 

ballast management and biofouling management can be achieved. This is done through a 

lump-sum subsidy that the port pays to ensure the shipper reports its true anticipated 

damage rate. As the shipper reports larger values of anticipated damage, the two

subsidies vary inversely with respect to one another. If the shipper reports small values, 
22

that is, if the shipper reports that its liability share for cross media damages will likely be 

small, then a large per unit ballast water subsidy is chosen by the regulating port. This is 

because an unregulated shipper would otherwise discount cross media damages and 

select an inefficiently low level of ballast water abatement and an inefficiently high level 

of biofouling abatement. As the shipper’s reported value increases, the shippers 

increasing liability for multiples externality damages serves as an increasingly sufficient 

incentive for it to select the socially optimal combination of ballast and biofouling. As a 

result, the per unit ballast water subsidy necessary to ensure that the firm selects the 

socially optimal combination decreases. If the regulator relied on the ballast water 

subsidy as the sole policy instrument, the shipper would have the incentive to report 

small values of anticipated damages regardless of the true liability in order to manipulate 

the regulating port into providing large ballast water subsidies. The regulating port, thus 

can use the lump sum subsidy to combat the shippers incentive to report false values of 

anticipated damages.

Colautti et al. (2003) also examine transoceanic shipping as a possible vector for 

NIS, focusing on the Great Lakes. Given the lakes are a freshwater ecosystems closely 

association with human activity, they are particularly vulnerable to NIS. There are two

ways Great Lakes receive NIS from ballast tanks. The first is through large volumes of 

water from a small number of ships that enter the region with saline ballast water 

(“ballast” ships). The second is from large numbers of ships that enter, loaded with 

cargo, and fill their tanks in lakes as they discharge cargo (“no ballast” vessels). The 

loaded water mixes with the residual water containing both living organisms and resting 

stages, in the tanks. As these “no ballast” ships trade around, loading cargo and 
23

subsequently discharging ballast, they may facilitate invasion. The paper attempts to 

determine the relative importance of the two types of introduction. 

There is evidence (MacIsaac et al. 2002) that propagule pressure of individual 

ships that enter the Great Lakes loaded with cargo and that declare no ballast on board, is 

typically one to two orders of magnitude higher than that of vessels that exchange ballast 

water. Because no ballast vessels dominate (about 90 percent) the inbound traffic of the 

Great Lakes, these vessels collectively appear to pose the greatest risk of new 

introductions, even though their individual risks are lower than ballast ships. 

According to Colautti et al (2003) the fraction of inbound “ballast” ships has 

fallen sharply throughout the 1980s and 1990s and is thought to have leveled off in recent 

years. Inbound traffic has been dominated by ships from Europe, which account for 

about 88 percent of the top 10 vessels source region. Thus, many of the NIS in the Great 

Lakes are from habitats in Europe, notable the Baltic Sea and lower Rhine River areas. 

The first port of call for most (52 %) of ballast ships is Lake Superior. While the first no 

ballast vessels ports of call are Lake Ontario (about 40 %) and Lake Erie (about 43 %), 

the majority of deballasting still takes place in Lake Superior (even when it’s the third or 

fourth stop). Thus, Lake Superior receives more discharges than all other lakes 

combined.

While Lake Superior gets more ballast water, the lower lakes report more NIS. 

The paper suggest several reasons why this may be so. 

1. Lake Superior is not as supportive of an environment. Smith et al. (1999) show 

that in the upper Chesapeake Bay, relatively few ballast mediated NIS are found 

due to adverse environmental conditions.
24

2. There are NIS, but they remain undetected due to bias and low sample effort 

(most research is done on the lower lakes).

3. Lake Superior hasn’t been altered physically, chemically or biologically to extent 

of the lower lakes (although some ports are similar in terms of human use and 

physical-chemical stresses). 

4. Ships may not deballast and port as assumed by the model (i.e. en route) so lower 

lakes are actually getting more than shown. 

5. NIS could be hull fouling (hull, anchor chain, etc) and not originating from 

ballast, although the authors heavily discount this explanation.

The results of the Colautti study imply that policies should have greater emphasis 

on invasions mediated by resting stages in ships sediment and less on ballast water itself. 

Resting stages are less likely to be purged during ballast exchange because they reside at 

the bottom of tanks and are less likely to be killed by saline when tanks are refilled. To 

date, however, most policies still focus on ballast water exchange. Beginning in 1993, 

with the implementation of the US Nonindegenous Aquatic Nuisance Prevention and 

Control Act of 1990, and later by the US National Invasive Species Act of 1996 and the 

Canadian Shipping Act of 1998, oceanic ballast water exchange (BWE) was mandated 

and remains the predominate approach to prevention. The BWE legislation implemented 

in 1993 stipulated that ships must deballast in open water not less than 2K deep and at 

least 320Km from nearest coast line. 
25

In February 2004, a new international ballast water convention was adopted. This 

International Convention for the Control and Management of Ships Ballast Water and 

Sediment will enter into force 12 months after ratification by 30 countries representing 

35% of the world’s merchandise shipping tonnage. Domestically, the US Coast Guard 

currently requires all vessels transiting to US waters with ballast water that was taken 

within 200 nautical miles of any coast after operating beyond the US Exclusive 

Economic Zone (EEZ) conduct one of the following:

1. Mid-ocean ballast water exchange prior to entering US waters

2. Retain ballast water on board while in US waters, or

3. Use a Coast Guard approved alternative environmental sound to treat the 

ballast water.

Horan and Lupi (2004) examine the economic efficiency of several compliance 

strategies in addition to BWE. The paper also argues that there are two features which 

complicate the traditional process of emission-based approaches (standards or 

incentives), such as outlined in the Colautti et al. paper. The first is that while not every 

vessel will actually emit a species, ex ante each vessel is a potential emitter and so 

society should benefit from all vessels undertaking biosecurity actions to reduce the 

probability of an invasion. Second, biological emissions are highly stochastic and 

essentially unobservable given current monitoring technologies. So there is no direct 

way to observe or otherwise indirectly measure if a vessel is responsible for an 

introduction. This makes enforcement problema tic.
26

Given this, the paper examines the relative efficiency of various economic 

incentives for reducing risk of NIS invasion in the Great Lakes where the type of 

incentive differs according to the compliance measure used. Horan and Lupi consider 

various subsidies to reduce risk of an invasion and implement certain biosecurity 

measurers. However, the most effective of these subsidies are shown to be excessively 

complex to administer because they would have to be tailored to individual vessels in 

accordance with each vessel’s marginal environmental impact.

Each vessel entering the Great Lakes is a potential carrier of NIS and makes 

certain biosecurity decisions based on efforts involved in ballast water exchange, the 

number and location of stops, time at sea, use of biocides, filtering, heat, etc. The 

probability of an invasion is decreasing in biosecurity measures and increasing in those 

measures which made introductions more likely (such as the number of stops). Since 

damages are presently unknown and perhaps unknowable for many species, a useful 

method to defining the least cost approach uses probabilistic constraints. The marginal 

cost of undertaking a particular action equals the imputed marginal value of reduced risk 

stemming from the action. The marginal value of reduced risk depends on both vessel i’s 

actions and the actions of all other vessels. Four biosecurity techniques are identified and 

the authors determine which would be most efficient in lowering potential damage due to 

three possible invaders (Ponto Caspain species, Corophium spp. Mysids, and Clupeonella 

caspia). The efficiency of each of the four techniques is then examined under five 

different management strategies. 
27

The first two management strategies are performance-based approaches while the 

last three represent flat subsidies. Thus, the first two are administratively more difficult 

and resource intensive than the last three.

The least cost strategy encourages full participation by all vessels with the 

aggregate mix of adopted technologies depending on the levels of risk stipulated in the 

experiment. Ballast water exchange is optimally used more extensively for larger 

allowable risk levels. As the overall level of risk is reduced, the effort required for an 

effective ballast transfe r becomes so high that it becomes optimal for some vessels to 

incur fixed costs of filtering to take advantage of its low unit cost and high degree of 

effectiveness. Heating’s high unit costs prevent it from being a preferred option by any 

vessel for any risk level. The cost of the risk reduction strategy depends on the overall 

level of risk assumed. At relatively less stringent levels, the control costs are 28 percent 

larger than in the least cost allocation system. At lower levels of acceptable risk, the cost 

differential falls to less than 10 percent. The model shows that all vessels are willing to 

participate in this scenario as well.

Studies on policy responses 

If subsidies can be used to effectively manage threats by individual shippers, what 

policy options are available at a more aggregate level? That is, is there an effective way 

to manage general trade flows so as to reduce the risk of invasives entering the country? 

Quarantine and import bans have been the often favored methods over the years (Jenkins 

1996). However, one must consider the cost of these restrictions , including the loss in 
28

consumer surplus. There are several studies which look at optimal policy responses to 

trade in light of these factors.

The primary conduit of unintentional introduction of NIS is through agricultural 

products, timbers, packing materials, ballast water and tourism.. However, the 

relationship between protectionism and the effort to slow invasives by slowing trade is 

not simple. Freer trade, by way of reduc ed protectionism may even lead to less damage 

for some countries because while a decrease in protectionism increases trade volume and 

the platform for NIS, it also changes the product mix of a country and thus alters 

susceptibility (Costello and McAusland 2004). 

In a series of papers, Costello and McAusland, (2003, 2004, and with Polasky 

2004) examine specific rules for trade and invasives, given expected damage, rate of 

infection in imports, and changing production costs of foreign suppliers. Most estimates 

of NIS costs are derived from crop damage. Agriculture related costs make up 90-93 % 

NIS damage of the OTA (1993) estimates and more than half of Pimentel’s (2000) 

numbers. None of these consider ecosystems damages however. 

The first paper (Costello and McAusland 2003) argues that there may be an upper 

bound on the marginal costs associated with invasives with respect to agricultural 

activity. This is especially true because costs incurred in the absence of viable 

populations of non native species are not deducted. For example, $27 billion of the 

Pimentel estimate comes from damages and control costs associated with non native crop 

weeds. Since it is plausible native species would either become or expand their presence 

as weeds in the absence of nonnative species, this figure overestimates the true marginal 

costs of NIS in this context. The article serves as a ”first pass”’ at establishing a 
29

theoretical relationship between invasive-related damage and patterns of trade and 

protectionism. The frequency and severity of damage are related to the extent to which 

the host country modifies its natural environment and the frequency of exposure. The 

frequency of exposure is proxied by volume of imports. The paper explores the 

relationship between trade, protection and NIS within an agricultural framework. 

Assume a two country, two goods model where each country either exports 

agricultural goods and imports manufactured goods, or vise versa.6 The paper defines the 

relationship between tariff levels and expected damage from an invasion. It relates the 

change in expected damage of type k to changes in tariff rates of a series of sensitivity, or 

elasticity, measures. These include the elasticity of the arrival rate with respect to the 

volume of imports and the elasticity of supply for agricultural goods with respect to its 

domestic relative price (both of which are shown to be positive). This implies that the 

arrival rate of NIS increases with the volume of imports and this has a positive influence 

on the rate of change in damages.

The authors then show that the effect of protectionism depends on how responsive 

imports are to domestic prices of agriculture goods and thus how import tariff affects 

relative price. An increase in the tariff on imports reduces the volume of trade and so 

long as trade is a conduit of introductions, the expected arrival rate of a new NIS will also 

fall. However, this policy will have a distortionary effect on domestic prices, which 

effects the production mix in an economy. If the import tariff causes domestic 

agriculture prices to rise, this may stimulate domestic production affecting the extent to 

which the country is susceptible to damage.

 

6

 Assuming constant returns to scale and competitive markets.
30

The fact that an import tariff may raise the expected damage a rising from 

invasive species comes from the fact that augmented damages depend in part on the 

sensitivity of those types of damages to agricultural output. It also depends on the 

elasticity of the introduction rate with respect to the volume of imports. The assumption 

made in the paper is that the latter term equals 1 and derives from the simple fact that 

while contamination rates of traded goods appear to vary with the country of origin and 

by the mode of transport, these characteristics are unaffected by a uniform barrier to trade 

such as a tariff. Moreover, there is no evidence that the rate of hitchhiking is anything 

but proportional to the volume of a given commodity traded, for a given trade partner. 

However, to the extent that changing tariffs change a country’s mix of partners and/or 

commodities, this assumption may not hold.

Overall there is a general prediction that barriers to trade are more likely to 

backfire as a means of preventing damage from exotic species when the country in 

question is an importer of agricultural goods, when the country’s citizens are in a high 

income group and so demand for agriculture goods is price insensitive and when there is 

substantial potential for domestic agriculture to expand in response to high local prices. 

The paper focuses on agriculture using crop damage as a proxy for total damage. 

Estimates of invasion-related damage that are based on one type of damage may be 

misleading however, particularly if we believe pecuniary losses to agricultural production 

are more easily observed than ecological damage from NIS. Most real world estimates of 

invasion related damage derive predominately from estimates of damage to crops and 

livestock. Only a small amount of funds in the US are spent on non-crop related 

measures (GAO 2001). Also, policy changes that lead to reduced crop damages (i.e. 
31

reduced protectionism) may simultaneously increase ecological damages. If we treat 

damages arising in agriculture as a proxy for overall costs related to invasives we may 

misjudge not only the magnitude of these costs but other qualitative effect that trade 

policy has on the problem. No averting behavior is considered in their model. They 

assume that industrial mix respond to producer prices but not net harvest rates. In an 

economy in which producers face undistorted (i.e. world) prices such behavior (e.g. 

switching from corn to wheat) may reduce the magnitude, but not change the sign, of 

crop damage imposed. However, if producers initially faced distorted prices than 

biological invasions may actually generate net benefits by getting farmers out of 

subsidizing behavior which may have ecological benefits (such as irrigating). The study 

also does not consider eradication, control or monitoring behavior.

The second paper (McAusland and Costello, 2004) examines substitutability and 

complementarities between two different policy tools aimed at minimizing introductions. 

The two policies are tariffs and inspections. The first best strategy would seem to support 

adopting an optimal Pigouvain tariff which would internalize the externality caused by 

trade. However, since trade itself is not the problem there is also an argument that it 

should not be suppressed, rather inspections should be designed to optimally weed out 

some most offensive individuals. The paper develops a series of optimal strategies 

depending on infection rates of imports, anticipated marginal damages from infected but 

undetected imports, and consumer surplus. The importing country’s incentive to 

undertake port inspections is to minimize the costs associated with trade in infected 

goods, by balancing the costs of additional inspections and more rejections of incoming 

goods, with benefits of fewer infected units making it past inspectors.
32

Optimal tariff and inspection mix with respect to infection rates

As a starting point, if the fraction of contaminated goods is sufficiently high, or 

production costs are high, or marginal damage is low, then it is preferable to simply 

accept all goods received uninspected and charge a tariff equal to anticipated damages 

based on expected infection rates. However, as infection rates rise, then a given level of 

inspections is more productive (i.e. detected cases). As more infected units are detected, 

more are subsequently barred which reduces imported quantities. This, in turn, raises the 

price of imports, and thus the opportunity cost of rejecting a unit. As long as infection 

rates are low to begin with, then the rate at which prices respond to inspections is low and 

more inspections increase welfare. When infection rates are higher to begin with, the rate 

at which prices respond increase and there is a higher opportunity cost. At this point an 

increase in inspections decreases welfare.

The home’s optimal tariff also increases with infection rate, but absolutely so that 

the higher the infection rate, the more inspections are redundant. When initially detected 

infected units is low, but the actual infection rate is high, inspections should increase, 

increasing in the cost-recovery portion of the tariff. But even as more inspections lead to 

increased opportunity costs, the higher infection rates imply an increase in expected 

damages, thus higher tariff rates needed to cover the cost of the damage.7

Optimal tariff and inspection mix with respect to anticipated damage 

 

7

 However, increasing inspections could actually decrease the probability of undetected NIS getting in the 

country so the tariff needed to cover the anticipated damages may actually decline. Therefore, the paper 

states that tariffs tend to increase with infection rates.
33

An increase in the marginal damage from infected imports unambiguously 

requires greater inspections but because stricter monitoring reduces the proportion of 

units that will be accepted to begin with, the optimal trade tax may instead become 

smaller. That is, an importer may want to treat goods harboring more dangerous 

contaminants with harsher inspections but smaller trade tariffs. So the importer’s policy 

mix should be based on the level of infection rates as well as anticipated damage for 

undetected infected goods. If anticipated damage is high, more inspections are needed, 

but the good should be subjected to lower tariffs. If infection rates are high, the more 

efficient strategy is to rely on tariffs and less on inspections.

The paper goes in to discuss how the policy mix is affected with a change in 

production cost in a foreign country and with multiple trading partners. Rising foreign 

costs lowers exports and imports and raises the consumer surplus for the last good 

accepted, making rejecting units less attractive at the margin. With many trading 

partners, the importer wants to set policy so as to maximize trade with the most efficient 

partner (in terms of some combination of production costs, infection rates and damage), it 

is more effective to do so through tariff policy than inspections. However, this may be 

difficult given international trading rules. Domestic policy formation must take place 

within the larger framework of regional and global trade policy. 

Policy in an international context

As stated above, the rules for international trade that allow countries to implement 

regulation to protect human and plant life (sanitary and phytosanitary rules especiallymay 

also be used as disguised protectionism. Indeed, once rules are established, it becomes 
34

difficult to objectively distinguish genuine attempts to protect home country ecosystems 

and attempts to protect home country producers. Margolis and Shogren (2004) apply 

Grossman and Helpman’s model of political economy in tariff formation in the presence 

of interest groups, and add externalities in trade. Thus, the government’s objective 

function now incorporates a damage term from potential NIS. By incorporating the 

invasive species externality of trade into the predominate model of the political economic 

of tariff formation, the paper shows that countries, freely setting tariffs, will add this the 

external damage to the tariff chosen.

Grossman and Helpman’s model illustrates the gap between equilibrium and 

optimum policy when political contributions are introduced to the government objective 

function. In this context, the gap is a logical measure for disguised protectionism. The 

most important feature of the model is that the two components of the tariff - disguise 

protectionism and internalization of invasive damage – cannot be distinguished without 

knowledge of either the social damage vector or the weight the government places on 

public welfare, neither of which are directly observable. In this context there is no way to 

design trade rules that will reduce disguised protectionism without nations giving 

international bodies the right to decide how much value to place on public goods 

endangered by NIS. As with other such issues (e.g. GMOs) it is likely individual 

countries will be resistant to allowing domestic NIS policy be determined by international 

bodies such as the WTO.

Margolis and Shogren conclude by observing that public polices to control NIS 

are not immune from political pressures. They find that private political contributions 

cause the regulators to select a tariff level that exceeds socially optimal levels. Free trade 
35

is also constrained with the invasive species tariff being set higher than it would be if the 

government were not influenced by rent seeking contributors. This gap is disguised 

protectionism created by the existence of the externality, NIS. Good intentions aimed at 

reducing risks to native ecosystems from NIS can thus be leveraged into protectionists 

policies. 

As shown by the review thus far, there have been two broad policy approaches to 

control NIS: one focusing on vector (usually shipping) and the other on limiting the 

amount of imports entering the country either by quarantine bans or tariffs, or by customs 

or port inspections. 

The US is bound by two major trade regimes: NAFTA and WTO. The WTO’s 

legal framework imposes the principle of national treatment which requires importing 

countries treat foreign goods the same way they treat “like” domestic goods (Article III). 

There are general exceptions to this which include measures “necessary to protect human, 

animal or plant life or health” (XXb) and those “relating to conversion of exhaustible 

resources” (XXg).8 Disputes arising over the meaning of these two passages led to two 

agreements: SPS (Sanitary Phytosanitary), dealing specifically with issues of human, 

animal and plant health; and TBT (technical barriers to trade), dealing with coordination 

of product regulations and setting criteria for imposing potentially discriminatory 

technical standard on imports. SPS standards are based on risk assessment. Within this 

context, “zero” risk has been accepted as a reasonable goal for a country to pursue. The 

agreements encourage full disclosure of scientific information and symmetry of 

information among members. For TBT the idea is for standards to be made in terms of 

 

8

 See http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm for a complete discussion of the trading 

rules and processes under the WTO framework.
36

product specifications or characteristics that can be measured at the border, not in 

production or process standards. There is no equivalent requirement for scientific 

assessment in TBT issues.

The risk assessment process under SPS standards is not inconsequential and the 

cost of conducting such analysis can be prohibitive. For example, a dispute surrounding 

the import of raw Siberian larch (timber) called for a risk assessment that cost in excess 

of $500,000 (Jenkins, 1996). If international trade authorities set standards to determine 

how invasive species risks should be measured or assessed, then trade regulation decision 

based on these standards could have the potential to overrule tougher national, state or 

local regulations (Jenkins, 1996 and OTA, 1993). The results could lead to weaker 

overall standards and greater threats of biodiversity loss. Exporting countries with little 

or no NIS standards could resist the more onerous standards imposed by strict importing 

countries. Thus, increasing border protection measures imposed domestically have the 

potential to be challenged in the WTO framework. There are provisions within the WTO 

framework that allow countries to uphold tougher domestic standards, as long as they are 

not in conflict with agreed-to WTO rules.

As compared with the WTO, NAFTA allows national governments more latitude 

over their technical standards and SPS measures which could impact policy surrounding 

invasive species. The first burden of proof is assigned to the plaintiff or party 

challenging the protection measure. Arbitration cases may be heard by either a NAFTA 

or a WTO committee at the option of the defending party. NAFTA also established the 

North American Commission for Environmental Cooperation (CEC). The CEC 

strengthens regulators under NAFTA in two ways. First, it explicitly states that an SPS 
37

measure does not have to be the least trade restrictive option to be considered “necessary” 

to achieve its goal. Second, the scientific basis for setting levels of allowable risk in SPS 

measures is determined by the regulating authority (the defendant) not by a dispute 

settlement panel. 

A recent study by the CEC (Perrault et al. 2003) showed the NIS impacts from 

regional trade primarily exacerbates impacts of global trade. It determined that trade 

among NAFTA countries spreads invasive species that have been introduced as a result 

of trade of NAFTA countries with non-NAFTA countries. Many fewer examples exist of 

regional trade facilitating introduction and establishment of an invasive species within 

NAFTA countries. The study also purports that since NAFTA, regional and global trade 

have grown significantly while the capacity to inspect for NIS has rema ined constant.9 

As a result, the potential for introduction of NIS via trade has increased significantly.

The report recommends, in addition to existing effort to exchange information and 

ideas, that NAFTA countries:

1. develop a North America strategy to address NIS concerns including building 

technical and institutional capacities;

2. recognize costs associated with introductions via trade of NIS and shift focus 

from increasing trade while dealing with NIS to addressing NIS while allowing 

trade;

3. minimize dependence on inspections by, for example, ensuring that those 

responsible for the movement of NIS are motivated to reduce risks they pose of 

introduction of NIS;

 

9

 Approximately 2 percent of goods are inspected. Thus, if the volume over which this percentage is 

applied is increasing, the total number of introductions may be increasing as well.
38

4. institute additional measures to prevent introduction and establishment of NIS 

including, for example, requiring documentation of country or origin of specific 

materials, mandating use of materials other than SWPM (solid wood packing 

material), etc;

5. encourage involvement of regional organizations in development of regional and 

international standards; and

6. ensure that existing and future bilateral and regional FTAs provide sufficient 

leeway to develop sanitary, phytosanitary and zoosanitary measures necessary to 

prevent the introduction of NIS, including through the use of a pathway approach 

(Perrault et al. 2003).

More research is needed to establish a definitive link between NIS and trade. It is 

likely that it is not the sheer volumes of trade that account for increases in NIS, but rather 

such things as the region or origin, packing material and the effectiveness of monitoring 

and preventative efforts. “Real world” policy for controlling damage seems to be more 

reactive than proactive, suggesting higher initial populations should lead to increases in 

the restricted policies. Economic intuition states that higher initial populations should 

lead to lower marginal damage and call for less restrictive policies.

 Empirical Cost and Benefits Estimates by Species

This section is organized by types of species and for specific species within those 

groupings. The groups are fish, crustaceans, mollusks, and aquatic/riparian plants. 
39

Fish

Pimentel et al. (2001) report that a total of 138 non-native fish species have been 

introduced into the United States, most taking place in states with warm climates such as

Florida and California. They also state that 44 native species are endangered due to NIS 

with an additional 27 being negatively affected. The paper estimates that economic 

losses due to alien fish is approximately US$1 billion annually. This takes into account 

the estimated annual US$69 billion in benefits from sport fishing. 

Sea Lamprey

The Sea Lamprey has caused great losses to the commercial and recreational 

fisheries of the Great Lakes as a parasite on native fish. Unlike many other Great Lakes 

invasives, it entered the Lakes naturally traveling from its natural range in the Atlantic 

through the St. Lawrence Seaway (Jenkins 2001). Control methods for lampreys include 

lampricide for larvae control, barriers, traps, and a sterile male release program (Great 

Lakes Fishery Comm. 2004). A number of estimates are available for the costs of 

lamprey control and prevention. The OTA report states that $10 million is spent annually 

for control and research and another $10 million on fish stocking. Another estimate 

gives total control costs for annual control and monitoring of sea lamprey in the U.S. and 

Canada as $13 million (U.S. Invasives Species Council; Jenkins 2001). The U.S. GAO, 

based on a survey of seven states, estimated that 1999 expenditures on sea lamprey were 

$275,000 for New York and $3 million for Michigan (GAO 2000). Lupi et al. (1999) 

report that Granular Bayer treatment, a lampricide, costs approximately $5 million per 
40

application in U.S. waters of Lake Huron. This same treatment in the St. Mary’s River 

costs $4.2 million per application (Lupi et al. 2003). The costs for sterile male release are 

on the order of $300,000 per year in Lake Huron (Lupi et al. 1999; Jenkins, 2001). 

Lupi et al. (2003) estimate the benefits of lamprey control on the St. Mary’s River 

to Michigan anglers. Three options are evaluated, sterile male release and trapping, 

sterile male release/trapping with larvicide applied every five years, and sterile male 

release with a one time application of larvicide. An existing random utility model of 

recreational fishing for Michigan anglers for Michigan waters of the Great Lakes was 

adapted to estimate economic benefits of increases in Lake Huron lake trout populations 

as a result of lamprey control. (Lampreys that spawn in the St Mary’s River are the 

source of lampreys in Lake Huron.) Treatment options were linked to changes in lamprey 

populations and then to changes in trout populations. The authors assumed a proportional 

change in catch rates to changes in trout populations. These catch rates were then fed into 

the economic model to determine changes in recreational fishing trips and thus the 

benefits of control. Benefits were measured in the year 2015, after allowing populations 

to adapt, and in 1994 dollars. Option 1 had $2.6 million annual benefits, option 2, $4.7 

million, and option 3 $3.33 million. 

The authors also calculated the net present value of net benefits (benefits minus 

the treatment costs) for a range of interest rates. They found that the estimated net 

present values were similar across all three options, even though annual undiscounted 

benefits varied by option. The difference appears to be the cost and the timing of controls 

and trout population growth. The option that had the highest net present value varied by 
41

which discount rate was used. Nevertheless, across all options, net present values were 

positive for a wide range of interest rates and suggest that there are definite economic 

benefits for control. Considering that only benefits to anglers were measured, there are 

likely to be more economic benefits than those measured. Benefits arising from other 

uses and non-uses that would further increase net present benefits of control.

Two other sources report on the benefits of control. The Great Lakes Fishery 

Commission reports benefits in the range of $2-4 billion per year (Sturtevant and 

Cangelosi 2000). Lost fishing opportunities and indirect economic impacts if control 

were terminated are estimated at $500 million annually (OTA 1993).

Ruffe

The Ruffe is another invasive fish, native to Europe, that like the lamprey has 

invaded the Great Lakes. It is a predator on native fish and competes for habitat. Control 

includes toxins, trawling, and ballast water management. Estimated losses for the native 

fishery are estimated at $0.5 million annually (Jenkins 2001). For Lake Erie, between 

1985 and 1995, Hushak (1997) estimated losses of $600 million for the sport fishery. 

Leigh (1988) evaluated the benefits and cost of a proposed Ruffe control program. 

The proposed program would control Ruffe using a pesticide also used on Sea Lampreys 

and would be used at river mouths at specific times of the year when Ruffe are 

concentrating in those locations. Control would occur over an 11 year period, at which 

time the population would be no longer a significant threat. Total costs for the control 

program would be $12 million with about 10%-20% variability depending on water level 

fluctuations in the rivers. The benefits of control are estimated based on the value of both 
42

commercial and sport fishery impacts over a 50 year time period. Without the control 

program, Ruffe populations are estimated to expand to all Great Lakes and to cause 

declines in walleye, yellow perch and whitefish. Angler day values (1985) for Great 

Lake sportfishing were used as the basis of benefits for sport fishing and broken out 

between values for walleye and perch and all other fish except salmonoids. It was 

assumed that decreases in native fish populations would lead to proportional decreases in 

the number of angler days per year. Three scenarios were estimated, a minimum, 

moderate and maximum for fish population reductions. If fish populations occur right 

away, then annual benefits of the control program for both sport and commercial fishing 

varied between $24 and $214 million for the three estimates. Assuming that benefits 

accrue over the 50 year time period, and discounting benefits, the net present value 

varies between $105 million and $931 million. An estimated net public savings of $513 

million could be achieved for the moderate scenario, primarily benefiting recreational 

fisheries. 

Other Species

Other invasive fish include the Round Goby, which inhabits the Great Lakes and 

is a predator of benthic fauna. Currently there are no established controls for the goby 

but research is underway (Jenkins 2001). The mosquito fish has caused the declines of 

at least 15 native species in Southwestern desert rivers and springs (OTA 1993). The 

grass carp and common carp that were introduced to control aquatic weeds, have become 

a problem as they indiscriminately consume aquatic vegetation and destroy habitat for 

young native fish. (OTA 1993). There are no known specific economic studies available 

for these species. 
43

Crustaceans

Invasive crustaceans include the European Green Crab, the Mitten Crab, the 

opossum shrimp, and some species of crayfish. Estimates of costs attributed to the Green 

Crab are $44 million but it is unclear what those costs include (Licking 1999).

Mollusks

Pimentel et al. (2001) report that 88 species of mollusk have become established 

in the US. However, this number is based on the OTA study which is over 10 years old. 

Zebra Mussels

Zebra Mussels are one of the best studied and well-known aquatic invasive 

species. Originating from the Caspian Sea, they are assumed to have been introduced 

first to the Great Lakes via ballast water discharges. Now found throughout the Great 

Lakes and rivers of many states and Canadian provinces, Zebra Mussels colonize docks, 

locks, ship hulls, water intake pipes, and other mollusks and cause great damage to power 

plants and water treatment facilities. Controls include biocides, chlorine, thermal 

treatment and mechanical/manual removal (Jenkins 2001). 

There are many estimated costs for preventing, controlling, and studying Zebra 

Mussels. Unfortunately, the many estimates are not always reported in the same units 

which makes it somewhat hard for comparison. A number of reports and publications 

have reported that the costs of the mussel to be around $5 billion. A US Fish and 

Wildlife estimate as repoted in Sun (1994) states that for a 10 year period (1990-2000) 
44

the costs in the Great Lakes will be in this range. This same estimate appears at least 4 

other times and is presumed to be restatements of this original estimate (Anonymous, 

1999; Jenkins 2001; Pimental et al. 1999; IMO 2001). However, another US FWS 

estimate puts the cost of damages over 10 years to intake pipes, water filtration 

equipment, and power plants at 3.1 billion (Cataldo 2001). 

Many of the cost estimates deal with the impacts on power plants and water 

treatment plants. OTA reports that the New York Seas Grant Extension Service 

estimated the costs of the Zebra Mussel to the power industry alone, were as much as 

$800 million for plant redesign, and a further $60 million annually for maintenance. In 

addition, fouling by Zebra Mussels of cooling or other critical water systems in power 

plants can require shut down, costing as much as $5,000 per hour for a 200-megawatt 

system10 (OTA 1993). Armour et al. state that the net impact on the US Great Lakes 

power plants (46) could be $100 million annually based on a one to two day downtime 

and a 1% reduction in plant heat rate. USGS estimates that annual control costs for 

hydroelectric plants are $83,000 per plant, for fossil-fuel plants $145,000, and $822,000 

for nuclear plants (Anonymous 1999). One major power utility reported costs for 1991 of 

mussel monitoring at $100/megawatt of generating capacity (Jenkins 2001). O’Neil 

(1997) reports on a 1995 study of 35 states and 3 Canadian provinces that found the 

economic impact of Zebra Mussels to have total costs of $69 million, with a mean of 

$205,570 per facility (339 facilities surveyed). Nuclear power plants had the highest 

expenditure of $787,000 per facility, whereas fossil fuel electric generating stations had 

 

10 Some invasive species (such as the Zebramuscle) have also provided benefits to the habitats they 

‘invade’. Most cost estimates of invasive species fail to take benefits into account, thus leaving them open 

to criticisms of overstating costs. At the same time, most studies fail to account for eco-system damage, 
45

the lowest expenditure of $146,000 per facility. Annual expenditures were found to have 

increased between 1989 and 1995, from $234,000 to $17.8 million as the range of the 

mussels increased (O’Neill 1997).

Upgrading chlorination injection for water utilities in six locations around the 

Great Lakes could cost between $250,000 to $2.5 million per location (Armour et al. 

1993). Water power plants are reported to spend around $3 billion annually (Licking 

1999). Research expenditures from 1992-1994 were $8.8 million annually (Hushak and 

Deng 1997). Reutter (1997) reports that the average large water user in the Great Lakes 

spends $350,000-$400,000 on Zebra Mussel control. Sturtevant and Canelosi (2000) cite 

the same figures, but clarify that these amounts are per year and just for cleaning water 

intake pipes. 

For Great Lakes water users with lake water intake structures, Park and Husak 

(1999) report on the results of a 1994-95 survey of 418 facilities using surface water 

consisting of industries (44%), municipal water plants (28%), private utilities (15%), and 

public utilities (14%).11 Average monitoring and control costs from 1989-1994 were 

$0.43 million for 142 reporting facilities. Control costs were the sum of costs for 

retrofitting, physical removal, mechanical exclusion, chemical treatment and other related 

costs. Monitoring costs included labor, equipment investment, training, and contracts for 

monitoring. Using this figure and extrapolating to all facilities in the Great Lakes area, 

total monitoring and control costs were $120 million from 1989-1994, and averaged $30 

million annually from 1992-1994. Control costs are further broken out by municipal 

 

which implies an understatement of costs. The net effect of these oversights is essentially an empirical 

question. 
46

water treatment plants and for utilities and industries combined. Yearly average costs are 

given for different size plants from 1989-1994. For municipal water treatment plants, 

average total costs were $154,000 in 1993 for medium sized plants (11-300 mgd) and 

$84,000 for small plants (0-10 mgd). Most of this total cost was spent on treatment costs, 

rather than monitoring. Retrofit costs averaged about 90% of total control costs, and 

chemical costs were less than 10% of total control costs. Monitoring costs averaged 

about $5,000 per year for medium facilities and $3,000 for small facilities. For utilities 

and industrial sources combined, average monitoring and control costs were $439,000 for 

large, $92,000 for medium and $10,000 for small facilities in 1993. Large facilities were 

defined as 300 or more mgd, medium was between 11-300 mgd, and small was less than 

11 mgd. 

A few studies related to the impact on recreational activites have been done. 

Vilaplana and Hushak (1994) conducted a survey of Ohio residents to determine the 

effect of Zebra Mussels on recreational activities at Lake Erie. The survey was 

conducted in 1991 and 439 surveys were obtained. Respondents were questioned about 

their knowledge of the Zebra Mussel and its impact on their recreation decisions. 

Thirteen out of 285 respondents who those answering that question actually decreased 

their time spent recreating at the lake due to the mussel. Boat owners reported expenses 

for protective paints (average cost was $94), additional maintenance ($171) and insurance 

costs ($207) related to the mussel, but the sample size was small (14/13%). At the time 

this paper was written, further work was expected and needed to estimate actual monetary 

impacts on recreation.

 

11 This paper is one of a number reporting on the results of this survey, conducted by the Ohio Sea Grant 

and Ohio State University. We limit our discussion here to the latest paper on the survey. See the 
47

Sun (1994) conducted a similar study of Zebra Mussels on Lake Erie recreation. 

A travel cost model was estimated for Lorain County Ohio boaters (n=140). The results 

were presented at the Fourth International Zebra Mussel Conference in 1994, and appear 

preliminary. They are also contradictory, in that both positive and negative impacts of 

the mussel on recreation seem to have occurred. Although the ideas and generic modeling 

framework do appear applicable to estimating the impacts of Zebra Mussels on recreation 

in Lake Erie, this particular discussion did not provide enough details to determine actual 

impacts. 

Other mollusks

Another invasive mollusks include the Asian Clam which by one estimate, cost 

$4.5 million in compliance in 1980 for the nuclear electric industry, and $1 billion 

annually in the early 1980’s in terms of total losses (OTA 1993). 

Cost-effective control strategies for Oyster drills were investigated by Buhle et al. 

(2004). Oyster drills are marine snails that drill through the shells of oysters in order to 

prey on them. They have been accidentally introduced into many areas via aquaculture. 

The paper shows how biological and economic data can be combined to determine the 

least cost strategy for control at various life stages of the invasive species. Using 

population data on different life stages can identify which life stage is least costly to 

control. Oyster drills can be controlled either by the destruction of eggs or the collection 

of adults. Simulations with different cost parameters showed that targeting of adults was 

more cost effective than collecting eggs. In general, species that are short lived with high 

reproductive rates are more effectively controlled by reducing eggs and juveniles, but 

 

references for earlier reports on this same survey.
48

when adults are long-lived and there is low reproduction, it is more cost effective to 

target adults. 

Plants

Aquatic or riparian invasive plant species include Hydrilla, European Loosestrife, 

Eurasian water milfoil, melaluca, and salt cedar. Hydrilla blocks irrigation canals, 

enhances sedimentation in flood control reservoirs, interferes with water supplies, 

impedes navigation and reduces the productivity of native fisheries. Similar impacts 

occur from water milfoil. (Jenkins 2001). Florida spends approximately $14.5 million 

each year on hydrilla control (OTA 1993). European loosestrife invades wetlands and 

endangers native plants and wildlife by changing the resident plant community and 

altering the structure and function of the wetland (Jenkins 2001). It is estimated that 

European loosestrife imposes $45 million a year in control costs and forage losses 

(Pimentel et al. 2000). 

Rockwell (2003) summarized the literature on the economic impact of aquatic 

invasive weeds. Invasive aquatic plants create a wide impact including those on 

commercial and recreational fishing, boating, swimming, water quality, navigation, and 

ecological resources such as wildlife habitat. There is a wide variety in both the types of 

water bodies impacted, the life cycles and characteristics of the plants, and the means of 

control. Control may be mechanical, biological, or chemical. Early estimates of the costs 

and benefits of weed control in Florida were made in the late 1960’s. Costs of $6 million 

were reported annually and benefits were reported as $82 million, with the largest 

benefits coming from increased land use (due to drainage) and prevented flood damages. 
49

In 1989, Florida spent $14 million on aquatic weed control. Relatively few estimates of 

the harm done by aquatic weeds or the benefits of control are available from the 

literature. What is available is concentrated on the state of Florida. A 1991 study found 

annual benefits of $7.3 million for residential damage control for 11 Florida counties. 

Benefits of control to improve drainage for citrus production were found to be $5000 per 

acre or $8000 per acre wit slightly more increases in control by a 1992 study. For 

vegetable production, benefits were on the order of $300,000 (1993 study).

Recreational benefits are the primary form of benefits estimated for weed control. 

Three types of benefits have been reported by 5 separate recreational studies. Locations 

studied were Illinois, Florida, Alabama, and British Columbia. Annual willingness to pay 

results ranged from $176,000 (1989 study) to $1.3 million (1984 study) (undiscounted 

figures). Economic impacts and expenditures on recreation were also measured. Impacts 

were reported by one study on the order of $10 million, and expenditures ranged from 

$900,000 (1986) to $100 million (1995). Rockwell uses benefit cost ratios from the 

literature together with the estimated cost of $14 million for Florida weed control on 

85,000 acres to generate national estimates of the total impact of aquatic weeds (based on 

assumptions about Florida as a percent of the national problem). He finds that the range 

of national impacts are between $1 and $10 billion dollars. A second estimate uses data 

on the costs of chemicals used to treat weeds. A 1983 study estimated benefits of one 

chemical (silvex) to be $40 million on 60,000 acres at a cost of $4.8 million, or $80 per 

acre. Rockwell uses data from two other studies to estimate a cost of $17 million for the 

entire U.S for applications of the weed control chemical 2,4-D on 223,000 acres.
50

Conclusion

This paper reviews the economic literature on invasive species, focusing on 

estimates of the costs of aquatic invasives. The most obvious point of the paper is that 

the literature is still in its infancy. There are few theoretical, and even fewer empirical, 

studies dealing with the economic costs of invasive species. The aquatic studies 

obtaining cost estimates reviewed above show values ranging from several hundreds of 

thousands of dollars a year to tens of millions of dollars a year. It seems apparent that a 

systematic approach is needed to develop a consistent method to estimate such costs.

The second point the paper illustrates is the difficulty involved in obtaining such 

an estimate. Determining economic costs of environmental concerns is no easy task 

under the best of circumstances. Human health values, use values, existence values, 

valuations of ecosystem services are all issues environmental economists struggle with 

every day. The unique circumstances surrounding invasive species add a level of 

complexity to the task that increases difficulties involved in such valuations at a 

geometric rate.

Besides the common measurement problems and lack of observable data, 

measuring the economic costs of invasive species involve determining rates of biological 

propagation which don’t always conform neatly with economic metrics (such as years or 

states). There are also the difficulties associated with assessing the risks of invasives. 

While few NIS actually become invasives and even fewer of those invasives cause 

significant harm, the harm caused by these few can be quite substantial. How to estimate 

the benefits associated with controlling such a process is a difficult task.
51

These issues combine to make policy options difficult to both formulate and 

evaluate, especially a priori. As the literature points out, invasive species and their 

control have definite public good aspects and thus call for some level of government 

intervention. However, to what extent and what form that intervention takes place 

depends on myriad of issues associated with both the region and the species involved. 

Optimal policy appears to be as unique as the individual species or ecosystem it is 

attempting to control and protect.
52

Table 1. Summary of studies providing empirical cost estimates 

Authors Time 

period 

covered

Species Geographic 

area

Dollar Value Outcomes

General Estimates

Pimentel 

et al 

1993-

2001

Weeds, 

vertebrate, 

insects& 

mites, plant 

pathogens,, 

mammals, 

bids, 

amphibians, 

reptiles, fish, 

mollusks, 

arthropods, 

human 

diseases.

US, UK, 

India, 

Australia, 

South 

Africa, & 

Brazil

$314 billion 

annually for six 

nations; $136 

billion for the 

US.

Review of 

selected literature 

citing studies 

which estimate 

economic losses 

across six 

nations, including 

the US. 

OTA 1906-

1991

79 harmful 

invasives 

Including 

Sea lamprey, 

zebra 

mussel, 

Asian clam, 

Salt Cedar, 

Purple 

Loosestrife, 

Melalluca 

and Hydrilla.

US Total cumulative 

damage (1991$)

between $97 –

137billion; 3 

harmful fish 

$467million; for 

3 aquatic 

invert.$1.2 

billion; and $100 

million/annually 

for control of

aquatic plants

Attempts to 

capture both 

economic and 

ecological 

damages caused, 

estimating 59% of 

no indigenous 

species have 

caused harm.

Perrault et 

al

Saltcedar or 

tamarisk

US Irrigation value 

of water loss 

$39 to 

$121million/yr

Looks at the 

effect of invasives 

on agriculture and 

trade within the 

context of the 

NAFTA 

agreement. The 

focus of the study 

is on 

recommending 

strategies 

including 

minimizing 

dependence on 

inspections by 

putting more of 

the burden on 

potential carriers.
53

Authors Time 

period 

covered

Species Geographic 

area

Dollar Value Outcomes

Fernandez Ballast Water Optimal 

abatement 

strategies are 

adopted 

applying 

subsides of 0.5 

to 30 cents per 

cubic meter and 

a lump sum fee 

of 0.10 to 0.18 

cents

Examines 

different incentive 

mechanisms that 

can be applied to 

ships to help 

ports about 

unintended 

consequences of 

NIS.

Species Estimates

Jenkins Sea lamprey US and 

Canada

$13 million

GAO 1999 Sea lamprey New York 

and 

Michigan

$275,000 (NY)

$3 million 

(Michigan)

Lupi et al 

(1999)

Sea lamprey Lake Huron $5 million per 

treatment

Granular Bayer 

treatment, a 

lampricide.

Lupi 

(2003)

Sea lamprey St Mary’s 

River

$4.2 million per 

treatment

Granular Bayer 

treatment, a 

lampricide

Lupi et al 

(1999) 

and 

Jenkins 

Sea lamprey Lake Huron $300,000 per 

year

Both report this 

number as the 

cost of sterile 

male release 

Lupi 

(2003)

Projected 

2015 

population 

and 

1994$

Sea lamprey St Mary’s 

River

$2.6-$4.7 million Estimates of the 

benefits of control 

to Michigan 

anglers, based on 

catch rates under 

3 different control 

options. Using 

present values, all 

options provided 

positive net 

present values.

Sturtevant 

and 

Cangelosi

Sea lamprey Great Lakes $2-4 billion/year Benefits of control 

programs

OTA Sea lamprey $500 million 

annually

Lost fishing 

opportunities and 

indirect economic 

impacts of 

terminating 

control.

Jenkins Ruffe Great Lakes $0.5 million 

annually

Losses for native 

fisheries
54

Authors Time 

period 

covered

Species Geographic 

area

Dollar Value Outcomes

Hushak 1985-

1995

Ruffe Lake Erie $600 million Estimated losses 

to sport fishery.

Leigh Ruffe $12 million Estimated total 

cost of control 

program. that 

would run over 11 

years

Leigh Ruffe $513 million The same study 

estimated the 

benefits of these 

control programs, 

both sport and 

commercial 

fishing. 

Estimates of the 

net present value 

of the control 

programs ranged 

from $105 to 

$931 million.

Licking Green Crab $44 million Not clear what 

these costs 

included.

Various Zebra mussel $5 billion There are many 

studies which 

have attempted to 

estimate the costs 

of the zebra 

mussel. This is a 

commonly quoted 

figure.

Sun 1990-

2000

Zebra mussel Great Lakes $5 billion Sun reports the 

results of a US 

Fish and Wildlife 

estimate.

Cataldo 10 year Zebra mussel Great Lakes $3.1 billion 

Armour et 

al

Zebra mussel Great Lakes $100 million 

annually

Costs to 

approximately 46 

power plants

USGS Zebra mussel Great Lakes $83,000/per 

plant/yr 

(hydroelectric 

plants)

$145,000/per 

plant/yr (fossilfuel plants)

$822,000/per 

plant/yr (nuclear 

plants)
55

Authors Time 

period 

covered

Species Geographic 

area

Dollar Value Outcomes

O’Neill 1995 Zebra mussel 35 US 

States and 3 

Canadian 

provinces

$69 million and 

a mean of 

$205,570 per 

facility

Looked at 339 

facilities and 

measured the 

economic impact.

O’Neill 1989-

1995

Zebra mussel $17.6 million 

annually

Estimated that the 

annual costs 

increased from 

$234,000 to $17.8 

million

Licking Zebra mussel Great Lakes $3 billion 

annually

Estimated 

expenditures by 

water power 

plants.

Hushak 

and Deng

1992-

1994

Zebra mussel $8.8 million 

annually

Research 

expenditures

Ruetter Zebra mussel Great Lakes $350,000-

$400,000 

annually

Estimated control 

costs of average 

large water user. 

Another study 

stated same 

figures but for 

cleaning water 

intake pipes only.

Park and 

Husak

1989-

1994

Zebra mussel Great Lakes $120 million total 

for period or $30 

million annually 

between 1992 

and 1994

This was based 

on $0.43 million 

average costs per 

a survey of 142 

facilities.

Vilaplana 

and 

Hushak

Zebra mussel Lake Erie $94 average 

costs for 

protective paint, 

$171 

maintenance 

and $207 

insurance.

Survey of 

recreational users 

increased 

expenses. Low 

response rate.

OTA Early 

1980’s

Asian Clam $4.5 million in 

1980 and $1 

billion in annual 

losses

$4.5 million figure 

is compliance 

costs for nuclear

electric industry.
56

Authors Time 

period 

covered

Species Geographic 

area

Dollar Value Outcomes

Plant Estimates

OTA Hydrilla Florida $14.5 million 

annually

Estimated control 

costs

Pimnetel 

et al

European 

loosestrife

$45 million 

annually

Estimated control 

costs and forage 

losses

Rockwell 1984 Aquatic 

weeds

Florida $14 million Aquatic weed 

control 

expenditures

Rockwell 1991 Aquatic 

weeds

Florida $7.3 million 

annually

Estimated 

benefits for 

residential 

damage control in 

11 Florida 

counties.

Rockwell 1992 Aquatic 

weeds

Florida $5,000-$8,000 

per acre

Benefits of control 

programs to citrus 

production.

Rockwell 1993 Aquatic 

weeds

Florida $300,000 Benefits of control 

programs to 

vegetable 

production.

Rockwell Aquatic 

weeds

Illinois, 

Florida, 

Alabama 

and British 

Columbia

$176,000-$1.3 

million

Annual 

willingness to pay 

for recreational 

benefits of weed 

control. 

Rockwell 1986 and 

1995

Aquatic 

weeds

Illinois, 

Florida, 

Alabama 

and British 

Columbia

$10 million in 

total economic 

impacts; 

$900,000 in 

1986 

expenditures 

and $100 million 

in 1995 

expenditures.

Annual 

willingness to pay 

for recreational 

benefits of weed 

control. 

Rockwell Aquatic 

weeds

National $1 - $10 billion Impacts 

estimated 

extrapolating from 

the Florida 

estimates. 

Rockwell Aquatic 

weeds

National $17 million Costs to treat 

(chemicals) 

weeds estimated 

extrapolating from 

the Florida 

estimates. 
57

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Web Sites on Invasive Species

Aquatic Ecosystem Restoration Foundation

http://www.aquatics.org/index.html

California Department of Fish and Game. Chinese Mitten Crab Site.

http://www.delta.dfg.ca.gov/mittencrab/

Chesapeake Bay Program. Invasive Species in the Chesapeake Bay Watershed 

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Exotic Aquatics on the Move 

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Great Lakes Fishery Commission 

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Region 

http://www.great-lakes.net/envt/flora-fauna/invasive/invasive.html 

Global Ballast Management Programme 

http://globallast.imo.org/ 

Integrated Systems for Invasive Species. Ecological Forecasting and Risk Analysis 

for Nonindigenous Species.

http://www.math.ualberta.ca/~mathbio/ISIS/index.html

Massachusetts Aquatic Invasive Species Management Plan 

http://www.mass.gov/czm/invasivemanagementplan.htm

National Aquatic Nuisance Species (ANS) Task Force 

http://www.anstaskforce.gov/index.htm#
64

National Aquatic Nuisance Species Clearinghouse. New York Sea Grant 

http://www.aquaticinvaders.org/nan_ld.cfm

National Sea Grant 

http://www.nsgo.seagrant.org

National Sea Grant Library. University of Rhode Island 

http://nsgd.gso.uri.edu/

National Sea Grant Nonindigenous Species Site (SGNIS) 

http://www.sgnis.org/

National Sea Grant Non-indigenous Species Research and Outreach 

http://www.nsgo.seagrant.org/research/nonindigenous/index.html

Northeast-Midwest Institute: Biological Pollution - Aquatic Invasive Species 

http://www.nemw.org/biopollute.htm 

RIDNIS Project. University of California, Davis.

http://www.ridnis.ucdavis.edu/index.html

San Francisco Bay Invasive Species. RIDNIS Project. University of California, 

Davis.

http://www.ridnis.ucdavis.edu/NISofConcern1.html

Smithsonian Environmental Research Center. Marine Invasions Research Lab.

http://www.serc.si.edu/labs/marine_invasions/

U.S. Geological Service. Nonindigenous Aquatic Species Information Resource.

http://nas.er.usgs.gov/

Western Regional Panel on Aquatic Nuisance Species. 

http://answest.fws.gov/

Washington Department of Fish and Wildlife. 

http://www.wdfw.wa.gov/fish/ans/greencrab.htm