Dr. Odysseas Kopsidas and Dr. Nikolaos Karfakis, academics of the School of Business Administration of Aegean College, published a scientific study in the Journal of Environmental Science and Engineering, on the topic: “The Management of Environment Cost Caused by
Ballast Water”.
According to classical economic theory, external cost is the indirect, and uncompensated, social or environmental cost caused to an uninvolved third party that arises as an effect of another party’s activity. In light of this, the environmental cost caused by ballast water is considered as a negative externality.
This paper aims to contribute by proposing that the environmental cost caused by ballast water can be determined through questionnaires, and that the imposition of a Pigouvian retributive tax is required to compensate for the environmental damage caused.The paper proceeds as follows.
Firstly, ballast water management is discussed.
Second, the environmental cost is discussed and it is asserted that it is important to have clear regulations and to update them frequently to prevent or minimize ballast water’s negative impact on the environment.
Finally, it is suggested that the environmental cost caused by ballast water can be determined by questionnaires and, more specifically, by the WTP (Willingness to Pay) method, and that a special Pigouvian corrective taxation which can internalize this cost should be imposed.
Read the full paper here.