Department of Environmental and Natural Resource Economics, University of Rhode Island, Kingston, USA

^*The authors acknowledge support for this work by the Regional Program for Prevention of Marine Pollution in East Asian Seas and the University of Rhode Island, Agric. Experiment Station (AES Contr. # 3808). Helpful comments by S. Adrian Ross, Yong-Chul Youn and two anonymous referees are gratefully appreciated. Any remaining errors are the authors' alone.

Abstract

Pollution from shipping is a major issue in the Straits of Malacca (SOM). Unless appropriate measures are taken, pollution may increase as traffic through the SOM grows. This paper examines alternative mechanisms to finance straits-wide, transboundary measures to prevent or control pollution from shipping in the SOM. Cooperative programs and various user charges for cost of services are examined, and issues and options for financing these services presented. The implications of financing alternatives are assessed in general terms using the criteria of economic efficiency, fairness, transaction costs, impact on behaviour, and political feasibility.