Red imported fire ants - the benefits of avoiding a national disaster

We suggest that one of the reasons that the eradication plan has gone underfunded is that the latest cost-benefit analysis – commissioned by Biosecurity Queensland of Department of Agriculture and Fisheries, titled Assessing the Impacts of the Red Imported Fire Ant and published in 2021 – downplays the economic case for urgent action. [...] They say that the annual benefits of eradication are equal to the annual total costs that would be caused by taking the “no control” option for 15 years.31 However, we argue that the avoided costs cannot be equal to 100% of the total costs from the “no control” option from year 1 to year 10 because the program would not have eradicated RIFA within that timeframe. [...] Figure 3: Costs and benefits of RIFA eradication over 20 years Cost of eradication Avoided cost/Benefit of eradication 3,000 2,500 2,000 1,500 1,000 500 - Source: Star and& Rolfe (2021) Assessing the Impacts of the Red Imported Fire Ant Taking this approach, the cumulative net benefit of the project is positive in year 16, as noted by Star and Rolfe, and reaches positive $3.3 billion in year 20, a. [...] Source: Star and Rolfe (2021) Assessing the Impacts of the Red Imported Fire Ant; Author calculations The only other minor change made to Star and Rolfe’s model in the above calculations is that we assume that the avoided costs or the benefit of eradication would be half of the price that fire ants could cause in the “no control” option from year 1 to year 10. [...] All of our other assumptions remain the same as Star and Rolfe, including the 2%, 5% and 7% discount rates, the 5 km per year and 48 km per year rate of spread, and the annual $200 million to $300 million cost of eradication.