Measuring Economic Risk Benefits of USCG Marine Safety Programs

Abstract

Abstract : The benefits of the Marine Safety Programs of the U.S. Coast Guards can be estimated as the incident probability-weighted potential losses the regional and national economy would suffer due to the absence or failure of the programs. In this report, we analyze the economic impacts of two port shutdown scenarios on the Port Arthur/Beaumont MSA Region and the U.S. economy as a whole. The first, a Medium Consequence Scenario, is a four-day shipping disruption of Port of Beaumont due to the fuel oil spill from a tank ship accident. The second, a Complete Port Shutdown Scenario, is a total shutdown of both the ports at Port Arthur and Beaumont for 3 months. This preliminary report outlines the Input-Output method developed to estimate these indirect economic losses. In addition to conventional aspects of economic consequence analysis, we also factor in resilience. This refers to the ability to mute the negative impacts of a breach in port security or safety by using remaining resources more efficiently and recovering more rapidly. The report also outlines the key economic assumptions associated with the method and identifies the data needed to implement it. It then illustrates the methodology for the case of a complete shutdown of the ports in Port Arthur and in Beaumont, Texas.

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