Source: Adapted from Bennett, Ayres et al. (2002)

In many cases, the attraction of the identified exotic species is that they offer reductions in recharge similar to lucerne, in areas where lucerne cannot or has not been grown. Reductions of recharge to between 0 – 3 per cent under introduced species, down from 6 – 11 per cent under annual crops and pastures, have been recorded in trials in the 400 – 750 mm zone of NSW (Bennett, Ayres et al. 2002). It is estimated that introduced perennial grass species could be established on 600,000 hectares, and reduce recharge by 25 per cent by 2010 (Bennett, Ayres et al. 2002). While the potential benefits of new species with regard to reducing recharge are largely accepted, there is concern about the weed potential of the new species (Bennett and Virtue in process).

What is a weed and how are they assessed?

To consider the possibility that a potentially beneficial plant may be a weed, it is necessary to consider how a weed should be defined. At one extreme, a weed may be defined as any plant outside of its area of origin. The definition of weediness or ‘what is a weed’ varies throughout the literature, however most writers define weeds in terms of the range of impacts a plant may have. Richardson, Binggeli et al. (2004) for instance define weeds as "plants (not necessarily alien) that are undesirable from a human point of view….usually taxa with detectable economic or environmental effects" and Bennett and Virtue (in process) consider a weed to be a plant species that causes negative economic, ecological and/or social impacts. Unlike most others however, Bennett and Virtue also highlight the importance of a plant's circumstances and environment with the example of radiata pine as a plant species that can be a forestry crop of high value, but also a significant threat to some native ecosystems.

The definitions of a weed, and the processes used to define a weed, employed by agencies such as the United Nations (UN) and in countries such as the United States (USA) and Australia are designed to accommodate a range of impacts. The UN FAO(3) define ‘a quarantine pest' as a pest, including weeds, "of potential economic importance to the area endangered thereby and not yet present there, or present but not widely distributed and being officially controlled" (FAO 1996). The American Animal and Plant Health Inspection Service (APHIS) define a weed as "any plant that poses a major threat to agriculture and/or natural ecosystems within the United States" (USDA 2001). Plant Biosecurity, the group within AFFA’s Biosecurity Australia (BA) responsible for undertaking import risk analyses of plants, animals, and animal and plant products proposed for import and introduction, uses a formalised Weed Risk Assessment (WRA) to define which plants have weed potential. Both the BA and APHIS definitions of weeds, and indeed also their definitions and 'pests' and 'pest risk analysis' approaches are harmonized with the FAO approach to weeds, and pests in general. This is primarily as a result of World Trade Organisation Sanitary and Phytosanitary considerations.

A review of the specific definitions and processes used by each of the Australian, US and UN agencies revealed some recognition of the need to assess plants in terms of a financial and environmental framework. Consideration of the social impacts of an introduction are limited to the potential for "perceived social costs such as unemployment" (FAO 1996) and being toxic or allergenic to humans (AFFA 1997). Each of these agencies however really only considers costs associated with plant introductions, whether within a financial, social and environmental framework or in the absence of such framework. The assumption underlying all questions posed in the three processes reviewed is that if a new plant has the potential to 'impact', that impact will be negative. As such the implicit definition of a weed is any plant with the potential to impose costs regardless of any positive contribution it may have.

When developing a list of the top 20 weeds of national significance (WONS), as a way of focusing weed control efforts in Australia, Thorp and Lynch (2000) defined weeds as ‘"plants growing where they are not wanted"...and that "cause high economic, social and environmental costs". The criteria used to assess the plants included invasiveness; impacts (primarily on the environment and human amenity) potential for spread; and effects on socioeconomic and environmental values. This definition explicitly considers the environment or where the plant is "wanted", but like the agencies focuses on the costs of the plant. The exception to this is that the social component of the criteria allows incorporation of the possibility of weeds having a "range of positive or negative social values that are not covered in the other criteria". The WONS report ranks the top 20 weeds according to the criteria using a multi-criteria analysis approach, with a weighted combination of scores for each criterion. This process provides a systematic means of prioritising weed control however does not allow for the rigorous comparison of costs and benefits. This is because many of the scorings are inevitably qualitative rankings due largely to data unavailability, especially in relation to benefits.

It is evident that there is consideration of both costs and benefits associated with the definition of a plant as a weed, and what requires control or eradication, in the literature (Bennett and Virtue in process; Panetta, Mackey et al. 2001; Paynter, Csurhes et al. 2003; Wainger and King 2001). In terms of weed-eradication decisions there is evidence that managers and ecologists have accepted the need to consider both the costs and benefits in such decisions (Rejmanek 2001). Similarly, the Australian Weeds Committee (AWC) has endorsed the principle that there should be a clear and significant benefit of weed eradication to Australia (Panetta, Pheloung et al. 2002) suggesting fuller consideration of costs and benefits in weed control decisions. However, in terms of practical application in import decisions by agencies, such thinking, is not reflected. Where the literature has considered benefits, it is mostly qualitatively, such that the opportunity to adequately consider relative costs and benefits is limited.

Biological invasions, including those associated with plant introductions, are an economic problem (Perrings 2001). As such and because there is the possibility for introduction decisions to be improved, the weed potential of plants should be considered from an economic perspective. From an economic perspective a plant would be considered a weed when the costs, including negative externalities, associated with an introduced plant exceed the benefits, including positive externalities, derived from the introduced plant.

An economic framework: challenging the precautionary principle

As already discussed, in the practical applications and much of the literature, plants are assessed with an overwhelming emphasis on the costs associated with a potential introduction. An emphasis on costs, or the adverse impacts of an action, is consistent with the essence of the Precautionary Principle, a principle which espouses prevention of serious and irreversible damage even before harm can be scientifically, or economically, assessed (Rogers 1998). A precautionary approach to biological introductions ensures the prevention of irreversible harm, but promotes the likelihood that species which offer substantial benefits to society will be denied import access. Concern in relation to the potential losses to society from adherence to this principle has been raised in relation to the systems currently used to assess plant introductions to Australia (Bennett and Virtue in process; Panetta, Mackey et al. 2001) despite general consensus in the literature that foregone benefits are less important than realised costs (Hughes and Madden 2003). With regard to salinity, reliance on the precautionary principle means that options for limiting future losses would be restricted because limiting the realisation of costs is deemed more important than foregoing benefits.

An economic framework considers benefits and costs equally and as such presents the opportunity to avoid potential welfare losses associated with reliance on the precautionary principle. In an economic framework, the problem of a weed introduction can be shown as in Figure 1 which illustrates the problem in terms of changes in welfare in relation to a weed's impact on agricultural production.
 

Figure 1 The impact of new plants – the cost of weeds

In the production of Q* quantity of agricultural production, at price, P*, the total amount of economic surplus captured is represented by the area of the triangle abc. This economic surplus is shared between consumers (the sum of additional value they derive from a unit of agricultural production over and above the price paid for the unit) and producers (the sum of the value earned from the sale of the unit, in excess of its cost of supply = profit). It is desirable for an economy to maximise the economic surplus available to its producers and consumers (i.e., maximise the area abc).

The introduction of a weed can be represented as a shift of the supply curve to the left, from S* to Sw. That is, the weed increases the cost of production at every level of Q. The shift from S* to Sw, reduces the quantity supplied and increases the price paid for agricultural production. Quantity produced is reduced to Qw and the price increases to Pw resulting in the economy’s welfare falling from abc to aed. The plant's introduction results in a loss of welfare equivalent to the shaded area ebcd.

This framework has been used to estimate the cost of weeds to Australian agriculture. The work completed by Jones, Alemseged et al.(2000) to assess the distribution, density and economic impact of weeds in the Australian winter cropping systems is a good example of its application. While there is likely to be additional difficulty sourcing data for analysis, the same framework can also be used to consider the costs of weeds to businesses other than those involved in agriculture as well as with regard to non-market values associated with public amenity and biodiversity (see Sinden and Thampapillai (1995)).

Consistent with the precautionary principle, most analyses of the impacts of plants and other introduced species finish with consideration of the costs illustrated in Figure 1. Such analyses include the costs of control, the opportunity costs of lost production, lost biodiversity values and in some cases, secondary or indirect costs associated with lost business, but do not include benefits that may be associated with past or potential introductions. In many cases, these analyses are of past introductions and consideration of benefits is justifiably, and knowingly, excluded. An assessment of the change in economic surplus due to an already introduced plant such as rubbervine for example is unlikely to be significantly impacted by not considering benefits associated with the plant's introduction. In the case of potential introductions with the promise of benefits such exclusion is likely to be less prudent.

An economic consideration of the desirability of a new plant, and as such its classification as a weed, includes the benefits that the plant might contribute to the economy’s welfare. In the example of agricultural production, a plant with the capacity to stem salinity has the potential to increase agricultural supply. This shift is shown in Figure 2.
 

Figure 2 The impact of a new plant – benefits of reduced recharge

The benefit of the plant reducing recharge and thus salinity is shown as a supply shift to the right: an increase in the quantity of agricultural production from Q* to QS and reduction in the price at which the agricultural production is available, from P* to PS. The combined impact of the increase in production and reduction in price is to increase economic welfare from abc, with salinity, to agf with reduced salinity. The plant's introduction results in a welfare gain equivalent to the shaded area bgfc.

In the event that a plant introduction has the potential both to become a weed and reduce salinity, the costs, illustrated in Figure 1, and the benefits, illustrated in Figure 2, need to be considered concurrently. Figure 3 illustrates one potential relationship between the costs and benefits of a plant introduced to stem salinity in Australia, where the weed effects of the introduced plant occur in the same industry as the salinity effects.
 

Figure 3 The impact of a new plant – costs and benefits (the case of net costs)

In the example shown in Figure 3, the cost associated with a plant being a weed is shown as the move from S* to Sw, and the benefits of reduced salinity as the shift back to the right. In this example, the supply shift resulting from reduced salinity is only as far as Ss. This illustrates the case where, given certainty, the costs associated with the plant’s weediness (the shift to the left), exceed the benefits associated with the plant’s ability to stem salinity (the shift back to the right). The net change in economic welfare, resulting from weed costs and salinity benefits is represented by fgbc, which is a loss from the original economic welfare of abc. Only in the case where there is a positive externality outside of agriculture equal to an area greater than fgbc, would introduction of a plant be neither a positive contribution to economic welfare.

Similarly, the benefits from reduced salinity could exceed the costs associated with the plant's weediness such that Ss ultimately shifts to the right of the original supply curve, S*. This scenario is illustrated in Figure 4 where the costs associated with the plant's weediness are represented by the supply shift from S* to Sw (and an economic loss equivalent to debc), and the plant's benefits in reducing salinity are represented by the supply shift Sw to Ss (an economic gain from Sw of degf). The net gain is an increase of total economic welfare from abc to agf: a situation whereby no positive externalities are required to ensure the benefits of the introduction exceed the costs.

Figure 4 The impact of a new plant – costs and benefits (the case of net benefits)

In the situation where the magnitude of costs and benefits of introduction are certain and the costs and benefits associated with the introduction are borne equitably and in comparable time periods, the economic framework shown above would be sufficient to assess the desirability of a plant's introduction. In practice, three key considerations need to be added to the framework for its use in guiding introduction decisions:

• Risk: how likely is it that the full costs and benefits will be realised? In terms of an intentional plant introduction this requires consideration of the likelihoods of establishment, spread and effectiveness;
• Spatial differentials: how do we reconcile that those who benefit are unlikely to bear the costs of weeds or in the case of a useful plant not being introduced, that some must continue to bear losses associated with salinity to avoid others not bearing the cost of a new weed?; and
• Temporal differentials: how do we best consider long-run benefits v short-run costs and vis a vis?

In an economic efficiency framework, the inclusion of risk is necessary and often achievable through consideration of expected costs and expected benefits. The determination of expected costs and expected benefits is likely to be difficult in the case of plant introductions because determining the risks or probabilities requires information on a wide range of plant characteristics and plant habitats (Hughes and Madden 2003). In an economic efficiency framework the consideration of spatial and temporal aspects is achievable and necessary though there are likely to be difficulties considering these because estimates of economic impacts will vary depending on which stakeholders are consulted (Hughes and Madden 2003). Despite potential difficulties in their application, risk, spatial and temporal aspects need to be considered.

If we decide to introduce a plant with net benefits what are the potential policy implications?

As discussed an economic framework will contribute to the determination of an efficient introduction decision, but not necessarily a Pareto efficient decision (see Randall (1987) p 141, 146-147, for example). To be Pareto efficient, the decision needs to be accompanied by policy which bridges the gap between those bearing the costs and those receiving the benefits of an introduction. An evaluation of biological introductions should therefore include consideration of the policy responses to introduction decisions.

Externalities are the costs or benefits borne by parties other than those who bore the corresponding costs or benefits. In the case of plant-based solutions to salinity there are competing externalities and competing property rights, making the choice of policies more complex. Who has the right to reduce salinity and who has the right to freedom from additional weeds? Policy options in relation to a public good such as land conservation have been thoroughly investigated (Greiner and Cacho 2001; McDonald and Hundloe 1993; Mullen 2001). Policy options in relation to two public goods that may be in conflict with each other and where the externalities are uncertain, has not been investigated in the same way.

Table 3 presents some implications of competing externalities in the context of plant-based solutions to salinity with weed potential and examples of potential policy options. Risk is included as a source of externalities because while an economic analysis can provide an expected payoff (expected costs v expected benefits) which drives decision making, there will always be some probability that the expected outcome is not the realised.

Table 3: Potential policy options to accompany biological introductions

Even a quick review of the implications and some potential policy options reveals that the application of polices, particularly in the case of private transfer payments, will be fraught with difficulty. The success of implementing policies is likely to be further hampered where the affected stakeholders is a large and loosely defined group. The potential for the polluter-pay principle to be applied with respect to introduced agroforesty plants is one example where the difficulty of implementation with a large group of stakeholders has been identified (Richardson, Binggeli et al. 2004). Where the stakeholder group is not a small and easily defined group, polices accompanying a decision to introduce, have the potential to exacerbate the inequality of a decision to introduce.

Conclusions

There is every reason to believe that the demand for biological introductions will increase in the future: whether these are of exotic species or genetically modified varieties of existing species. Reliance on the precautionary principle to decide whether these introductions will be allowed excludes the possibility that Australian stakeholders will bear the costs of unfavourable introductions, but also limits Australia's opportunity to increase its economic welfare. This limitation applies to decisions regarding new plants as well as animals and plant and animal products.
An economic framework allows consideration of potential introductions in terms of both expected costs and expected benefits, which may lead to the design of appropriate policy and hence the opportunity to make efficient and equitable decisions regarding biological introductions. Any economic evaluation of biological introductions must be accompanied by consideration of policies, their costs and the feasibility of their implementation, especially where there are competing externalities. This suggests that decision rules relating to biological introductions should include both the requirement of clear and significant net benefits and policies which accommodate associated externalities.

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Endnotes

(1) Recharge is a term to define water entering water tables. Excess recharge causes the tables to rise, mobilising salt stored in the soil and bringing it to the surface or root zones of plants, or moving it into surface water bodies (Standing Committee on Conservation 2001).

(2) Includes value of Winter and Summer Grains (inc Rice), Cotton and Sugar in the five years to 2001-2002.

(3) The specific UN FAO secretariat responsible is the Secretariat of the International Plant Protection Convention (IPPC)