The hidden cost of trade: Invasive species as a trade “externality”

9 November 2011

Importation of invasive species is an intrinsic risk of international trade.[1] As trade volumes rise, so do introductions. Preventing introductions is widely recognised as preferable to responding after they occur. Prevention measures require exporters and importers, as well as national governments and trade-promoting and managing entities such as the World Trade Organization, to implement steps aimed at ensuring that the exchange of goods is not accompanied by the dispersal of damaging organisms.

This article examines one of many possible examples: transport of tree-killing insects and disease pathogens in crates, pallets, and other forms of wood packaging. According to P.E. Hulme in the Journal of Applied Ecology (2009), pest movement in wood packaging is further facilitated by faster transport and the four-fold expansion in use of shipping containers.

Challenges under the current regime

Countries trying to protect their trees and forests and associated ecosystem services from damage by introduced pests face a dilemma. US plant health (phytosanitary) officials have determined that increasing inspection of incoming shipments will not be effective in curtailing introductions of invasive species in wood packaging because the pests are hidden inside the wood. However, tackling the problem through the adoption of phytosanitary regulations mandating other measures is difficult due to constraints imposed by the World Trade Organization’s Agreement on the Application of Sanitary and Phytosanitary Standards (SPS Agreement) and the International Plant Protection Convention (IPPC).

The SPS Agreement requires that phytosanitary safeguards have the least possible impact on trade. Furthermore, in most cases only the relatively few pests that have been evaluated by a pest risk analysis (PRA) may be regulated. The PRA must evaluate each pest for its likelihood of establishment, potential impacts, and efficacy of proposed measures. “Pathway” risk assessments are allowed, but they too must evaluate each pest using the pathway under the same criteria.

When it comes to protecting the Earth’s forests, this restriction presents a nearly impossible challenge. The vast majority of arthropods and fungal pathogens that could attack undomesticated plants in receiving countries’ ecosystems – as distinct from agricultural crops –are unknown, and thus not addressable by PRA. An international panel of experts convened by the International Union of Forest Research Organizations found that only seven percent of plant pathogens are known to science. Among the tree-killing pathogens that were unknown to science until they had been introduced to naïve ecosystems are Ophiostoma ulmi and O. novo-ulmi (“Dutch” elm disease), Phytophthora cinnamomi (ink disease), and Phytophthora ramorum (sudden oak death).

Many wood-boring or bark-dwelling insects are carried as eggs or larvae inside wood, including wood packaging. According to US Forest Service data, nearly 60 newly-detected non-native species of wood-associated insects have been recorded in the US since 1985. Kirkendall and Faccoli in Zoo-Keys (2010) report that Europe has recorded seven new species of wood-boring or bark-dwelling insects just since 1999.

Wood-boring insects: the cost of new introductions

Two examples of such species are the Asian longhorned beetle (ALB) and emerald ash borer (EAB). According to Haack, Hérard, Sun, and Turgeon (2010) and the US Department of Agriculture, ALB has been introduced at least 7 times each to both North America and Europe. EAB has been introduced only once to each continent, but has spread more aggressively. About 20 years after introduction, EAB populations have been established in portions of 15 US states and the Canadian provinces of Ontario and Quebec. Together, ALB and EAB kill dozens of species of trees from 15 plant families. Because vulnerable species constitute about one-third of urban trees in the country, even a partially uncontrolled outbreak imposes staggering costs. Removing or treating trees threatened by pests associated with wood packaging currently cost local governments some US$1.7 billion each year. Homeowners lose an additional US$1.5 billion per year in tree removal costs and reduced residential property values.[2]  These costs will rise in the future as the pests spread and impact additional areas.

These estimates do not include damage to ecosystems from tree loss. Studies have shown that urban trees remove air pollutants; sequester atmospheric carbon; provide residential heating and cooling energy savings; and reduce storm-water runoff. Rural forests sequester carbon, protect watersheds, provide habitat to multitudes of dependent species, as well as support employment in wood products and eco-tourism industries.

Research by Juliann Aukema and others has found that economic damage to the forestry sector from the wood-boring pests has to date been much less than that to urban trees – an estimated US$130 million per year. The authors say this is likely due to the relatively low value of timber from the species of ash primarily affected. Should the Asian longhorned beetle escape eradication efforts, it would add considerably to these damage estimates because of the wide range of species it attacks.

Expenditures by the US government aimed at containing or – in the case of ALB – eradicating these pests are substantial, US$92 million per year. Nevertheless, this figure pales in comparison to the costs imposed on local governments and private property owners.

The international phytosanitary community has responded to the threat, but results so far fall short of the need.

Protective measures

The IPPC’s International Standard for Phytosanitary Measures (ISPM) No. 15 specifies treatments which accepting countries should apply to wood packaging used in international commerce. It was adopted remarkably quickly – only five years after the second detection of ALB in the US raised alarm. However, continuing detections of live pests in wood packaging have raised questions about both compliance and the efficacy of the prescribed treatments.

While the numbers of wood packaging shipments in which pests have been detected has been quite low since adoption of ISPM No. 15 (ranging from 0.1 to 0.4 percent of inspected shipments[3]), concern remains. First, an infestation rate of 0.1 percent of incoming shipments still means at least 70,000 infested shipments moving globally each year. Furthermore, highly damaging insects continue to be found in wood packaging – the US intercepted five shipments containing ALB in 2008.[4]

ISPM No. 15 was strengthened in 2009 to limit how much tree bark may be present on the wood. Because many insects are associated with bark, compliance with this new provision should further reduce the chances of packaging carrying live insects or diseases. However, no country currently collects interception data in a manner that would allow a scientific evaluation of whether ISPM No. 15 has significantly reduced the number of pests in wood.

At the same time that the IPPC party countries tightened the requirements of ISPM#15, they lowered their expectations as to the “level of protection” the standard is supposed to provide. Originally, the parties had said that they expected adoption of ISPM No. 15 “to practically eliminate risk for most quarantine pests and significantly reduce risk from a number of others.” However, in 2009, they changed the stated goal of the standard to a less protective one: “reduce significantly the risk of introduction and spread of most quarantine pests” [5] [italics added for emphasis]. Given the damage caused by pests associated with wood packaging, the decision to lower expectations is disheartening.

Countries cannot rely on early detection and rapid response to minimise pest damage. The ALB is a large, conspicuous beetle which leaves round, 15 mm holes in affected trees; nevertheless, ALB outbreaks are usually detected only 10 years after they have become established. Targeting high-risk sites for surveillance is also ineffective. ALB has been introduced to unexpected places that receive wood packaging in small amounts. By the time these outbreaks are discovered, they infest hundreds of trees over tens of square miles, and infested wood has often been carried to additional areas, thus spreading the outbreak.

The broader picture

The costs described in this article represent a small proportion of the overall costs imposed by invasive species introduced during the course of trade. It is impossible to calculate that figure for all types of invasive species or for most countries because so few studies have been conducted. However, some preliminary data are available. A study for the EU noted that Pimentel and others had estimated that losses caused by all invasive species in the US, UK, Australia, South Africa, India, and Brazil exceeded US$300 billion per year. In Europe alone, the study estimated economic costs of invasions at well above 12 billion Euros per year.

Some of these invasive species were introduced deliberately – if unwisely. Examples include a significant proportion of invasive plants (taken to new areas for such uses as pasture grasses or ornamental plants) and vertebrate animals (which have been introduced as pets or as huntable wildlife, among other reasons). It is not correct, therefore, to consider all invasive species costs as trade-related externalities. However, many of the most damaging invaders are transported unintentionally during movement of goods – including insects and pathogens that attack agricultural crops (as distinct from trees).

Two years ago, the US discovered that an insect that attacks soybeans had become established; the US soybean crop is worth nearly US$32 billion annually. The insect is expected to cause crop yield losses of approximately  20 percent. By now the insect is established across much of four states.

A second category of introductions that occurs through trade is aquatic organisms in ships’ ballast water. The US National Academy of Sciences reported that one of many resulting costs - removing zebra mussels from pipes in power generation plants, public and private drinking water plants, and industrial facilities, as well as from lock and dam structures and marinas, might have reached US$5 billion since 1989.

These studies’ conclusions cannot simply be added since the authors used a variety of methodologies to develop their economic estimates. Nevertheless, they demonstrate both the global nature of the problem and the high costs associated with species introductions.

In the absence of proper precautions, the economic and environmental damage caused by introductions of invasive species impose significant costs and raise issues of equity (since the homeowners losing their trees, in this example, probably enjoy only a fraction of the benefits associated with trade). Trade officials, international trade and (phyto)sanitary bodies, and economic think tanks need to ensure adequate flexibility in sanitary and phytosanitary standards to allow quick action to close off introductory pathways and enhance resources available to sanitary and phytosanitary agencies for identifying and analysing pathways and developing effective pest-minimisation tools.

  1. U.S. Congress, Office of Technology Assessment. 1993. Harmful Non-Indigenous Species in the United States; Holmes, T.P., J.E. Aukema, B. van Holle, A. Liebhold, and E. Sills. 2009. Economic Impacts of Invasive Species in Forests, Past, Present, and Future. The Year in Ecology and Conservation Biology, 2009: Ann. N.Y. Acad. Sci. 1162: 18–38 (2009); Colunga-Garcia, M., R.A. Haack, and A.O. Adelaja. 2009. Freight Transportation and the Potential for Invasions of Exotic Insects in Urban and Periurban Forests of the United States. J. Econ. Entomol. 102(1): 237-246 (2009) ; Burgiel, S., G. Foote, A. Perrault, C. Williams. 2005. Invasive Alien Species Prevention Strategies: Avoiding Conflicts with the International Trade Regime. Center for International Environmental Law; Chiron, F. S.M. Shirley, S. Kark. 2010. Behind the Iron Curtain: Socio-economic and political factors shaped exotic bird introductions into Europe. Biological Conservation 143 (2010); Westphal, M.I., M. Browne, K. MacKinnon, I. Noble. 2007. Biological Invasions (2007) Volume: 10, Issue: 4.
  2. Aukema, J.E., B. Leung, K. Kovacs, C. Chivers, K. O. Britton, J. Englin, S.J. Frankel, R. G. Haight, T. P. Holmes, A. Liebhold, D.G. McCullough, B. Von Holle.. 2011. Economic Impacts of Non-Native Forest Insects in the Continental United States PLoS One September 2011 (Volume 6 Issue 9)
  3. Haack R.A., R.J. Rabaglia. 2011. Exotic bark and ambrosia beetles (Coleoptera: Curculionidae: Scolytinae) in the U.S.: potential and current invaders. In Peña JE (ed.) Potential invasive pests of agricultural crop species. CAB International, Wallingford, UK. (In press)
  4. Haack, R.A., F. H´erard, J. Sun, and J.J. Turgeon. 2009. Managing Invasive Populations of Asian Longhorned Beetle and Citrus Longhorned Beetle: A Worldwide Perspective. Annu. Rev. Entomol. 2010. 55:521–46
  5. Haack, R.A. and E.G. Brockerhoff. 2011. ISPM No. 15 and the Incidence of Wood Pests: Recent Findings, Policy Changes, and Current Knowledge Gaps. Paper prepared for the 42nd Annual Meeting of the INTERNATIONAL RESEARCH GROUP ON WOOD PROTECTION, Queenstown, New Zealand 8-12 May 2011

Faith Campbell is Senior Policy Representative at the Nature Conservancy, where she specialises in policy issues related to the introduction of tree-killing insects and pathogens.

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