135
6.5.2 Incentive Schemes: The Case of Selective Port
Inspections in the Baltic Sea and Other European Waters
Environmental governance schemes based on incentive mechanisms rather than on
command and control regulations typically use taxes or subsidies to alter behaviour
in preferred directions. These schemes have become widely used especially at the
national level mainly because they increase economic effi ciency when designed
appropriately, that is, when externalities are internalised into companies’ and
organisations’ budgets. Theoretically, although often diffi cult to achieve in real
situations where lack of information , uncertainty and strategic behaviour interfere
with management objectives, taxes could be tuned to perfectly offset externalities
such as negative environmental effects from industrial production or transportations.
This would make it rational for targeted actors to reduce pollution until the marginal
cost of environmental side effects equals marginal pollution reduction costs.
Unfortunately, preconditions for successfully establishing economic incentive
schemes at the international level are radically different. It has proven diffi cult to
fi nd robust systems to tax use of ecosystem services and natural resources in the
international commons as they are not under any single country’s jurisdiction. The
highly globalised marine transportation sector is no exception and is indicative of
the fact that almost no environmental taxes have been successfully and uniformly
applied in this area. However, there are other than economic ways to infl uence
actors’ behaviour through altered incentives. Similar to taxes and subsidies, these
other incentive-based mechanisms ideally should be constructed so that behavioural
change among targeted actors result in as large positive environmental effects as
possible in relation to costs inferred. In other words, actors that behave well should
come out better than those behaving not so well.
The modern Port State Control is an interesting example of such an incentivebased mechanism where regional Memoranda of Understandings (MoUs) have
been instrumental in coordinating port inspections. In this brief example, the
focus is placed on the Paris MoU, an organisation established in 1982 and comprising today 26 European member countries plus Canada and the EEC.
7 Until
quite recently, about 25 % of visiting ships were randomly selected for inspection,
but in January 1, 2011, the so-called NIR (New Inspection Regime) was implemented (Paris MoU 2012c ). In the NIR regime, all vessels are assessed when
calling at Paris MoU ports and those that are believed to be more likely to have
safety defi ciencies selected for inspection. In order to build up a legitimate basis
for the selection of risky vessels, a centralised database has been established
under the auspices of EMSA (European Maritime Safety Authority). The ship risk
profi le is updated daily, and specifi c vessels are selected based on parameters such
7 Apart from the Paris MoU, there are nine other regional sister authorities throughout the world:
Abuja MoU, Black Sea MoU, Caribbean MoU, Indian Ocean MoU, Mediterranean MoU, Riyadh
MoU, Tokyo MoU, Asia Pacifi c Region and Viña del Mar Agreement Latin American Region.
6 Oil Spills from Shipping: A Case Study of the Governance of Accidental Hazards…
6.5.2 Incentive Schemes: The Case of Selective Port
Inspections in the Baltic Sea and Other European Waters
Environmental governance schemes based on incentive mechanisms rather than on
command and control regulations typically use taxes or subsidies to alter behaviour
in preferred directions. These schemes have become widely used especially at the
national level mainly because they increase economic effi ciency when designed
appropriately, that is, when externalities are internalised into companies’ and
organisations’ budgets. Theoretically, although often diffi cult to achieve in real
situations where lack of information , uncertainty and strategic behaviour interfere
with management objectives, taxes could be tuned to perfectly offset externalities
such as negative environmental effects from industrial production or transportations.
This would make it rational for targeted actors to reduce pollution until the marginal
cost of environmental side effects equals marginal pollution reduction costs.
Unfortunately, preconditions for successfully establishing economic incentive
schemes at the international level are radically different. It has proven diffi cult to
fi nd robust systems to tax use of ecosystem services and natural resources in the
international commons as they are not under any single country’s jurisdiction. The
highly globalised marine transportation sector is no exception and is indicative of
the fact that almost no environmental taxes have been successfully and uniformly
applied in this area. However, there are other than economic ways to infl uence
actors’ behaviour through altered incentives. Similar to taxes and subsidies, these
other incentive-based mechanisms ideally should be constructed so that behavioural
change among targeted actors result in as large positive environmental effects as
possible in relation to costs inferred. In other words, actors that behave well should
come out better than those behaving not so well.
The modern Port State Control is an interesting example of such an incentivebased mechanism where regional Memoranda of Understandings (MoUs) have
been instrumental in coordinating port inspections. In this brief example, the
focus is placed on the Paris MoU, an organisation established in 1982 and comprising today 26 European member countries plus Canada and the EEC.
7 Until
quite recently, about 25 % of visiting ships were randomly selected for inspection,
but in January 1, 2011, the so-called NIR (New Inspection Regime) was implemented (Paris MoU 2012c ). In the NIR regime, all vessels are assessed when
calling at Paris MoU ports and those that are believed to be more likely to have
safety defi ciencies selected for inspection. In order to build up a legitimate basis
for the selection of risky vessels, a centralised database has been established
under the auspices of EMSA (European Maritime Safety Authority). The ship risk
profi le is updated daily, and specifi c vessels are selected based on parameters such
7 Apart from the Paris MoU, there are nine other regional sister authorities throughout the world:
Abuja MoU, Black Sea MoU, Caribbean MoU, Indian Ocean MoU, Mediterranean MoU, Riyadh
MoU, Tokyo MoU, Asia Pacifi c Region and Viña del Mar Agreement Latin American Region.
6 Oil Spills from Shipping: A Case Study of the Governance of Accidental Hazards…