Università degli Studi di Roma - “Tor Vergata”

Faculty of Economics

Oil Spills in the Mediterranean Sea.

An evaluation of the EU regulations:

double-hull or -hullabaloo?
Supervisor: Candidate:
Prof. Castellucci Laura Roberto Rinaldi
 INTRODUCTION 1/2

Source: DeLong J.B. (1998) - Estimating World GDP, One Million B.C. - Present.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 2
 INTRODUCTION 1/2
The use of energy has been a key element
in development of human society since
Industrial Revolution.

Source: DeLong J.B. (1998) - Estimating World GDP, One Million B.C. - Present.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 2
 INTRODUCTION 1/2
The use of energy has been a key element
in development of human society since
Industrial Revolution.

Source: DeLong J.B. (1998) - Estimating World GDP, One Million B.C. - Present.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 2
 INTRODUCTION 1/2
The use of energy has been a key element
in development of human society since
Industrial Revolution.

Source: DeLong J.B. (1998) - Estimating World GDP, One Million B.C. - Present.

Production of energy from animal sources to production of energy from

natural sources (coal, petroleum, natural gas, ...).

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 2
 INTRODUCTION 1/2
The use of energy has been a key element
in development of human society since
Industrial Revolution.

Source: DeLong J.B. (1998) - Estimating World GDP, One Million B.C. - Present.

Production of energy from animal sources to production of energy from

natural sources (coal, petroleum, natural gas, ...).

Nowadays,
more than 80% of worldwide energy comes from
burning of fossil fuels. (Petroleum 40%).

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 2
 INTRODUCTION 1/2
The use of energy has been a key element
in development of human society since
Industrial Revolution.

Source: DeLong J.B. (1998) - Estimating World GDP, One Million B.C. - Present.

Production of energy from animal sources to production of energy from

natural sources (coal, petroleum, natural gas, ...).

Nowadays,
more than 80% of worldwide energy comes from
burning of fossil fuels. (Petroleum 40%).

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 2
 INTRODUCTION 1/2
The use of energy has been a key element
in development of human society since
Industrial Revolution.

Source: DeLong J.B. (1998) - Estimating World GDP, One Million B.C. - Present.

Production of energy from animal sources to production of energy from

natural sources (coal, petroleum, natural gas, ...).

Nowadays,
more than 80% of worldwide energy comes from
burning of fossil fuels. (Petroleum 40%).

Petroleum Natural gas Coal

Hydroelectric Nuclear Other

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 2
 INTRODUCTION 1/2
The use of energy has been a key element
in development of human society since
Industrial Revolution.

Source: DeLong J.B. (1998) - Estimating World GDP, One Million B.C. - Present.

Production of energy from animal sources to production of energy from

natural sources (coal, petroleum, natural gas, ...).

Nowadays,
more than 80% of worldwide energy comes from
burning of fossil fuels. (Petroleum 40%).

Petroleum Natural gas Coal

Hydroelectric Nuclear Other

Source: Energy Information Administration 2005 data.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 2
 INTRODUCTION 2/2

Source: The International Tankers Owners Pollution Federation Limited (ITOPF) & Energy Information Administration (2005) - World Oil Transit Chokepoints.

Source:Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC) (2005) - Main routes in the Mediterranean Sea for crude oil tankers for year 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 3
 INTRODUCTION 2/2

- Maritime transportation of oil

more than 60% of the total oil transported every year.

Source: The International Tankers Owners Pollution Federation Limited (ITOPF) & Energy Information Administration (2005) - World Oil Transit Chokepoints.

Source:Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC) (2005) - Main routes in the Mediterranean Sea for crude oil tankers for year 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 3
 INTRODUCTION 2/2

- Maritime transportation of oil

more than 60% of the total oil transported every year.
- More than 2 billion of metric tons (tonnes) in
2005.
Source: The International Tankers Owners Pollution Federation Limited (ITOPF) & Energy Information Administration (2005) - World Oil Transit Chokepoints.

Source:Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC) (2005) - Main routes in the Mediterranean Sea for crude oil tankers for year 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 3
 INTRODUCTION 2/2

- Maritime transportation of oil

more than 60% of the total oil transported every year.
- More than 2 billion of metric tons (tonnes) in
2005.
Source: The International Tankers Owners Pollution Federation Limited (ITOPF) & Energy Information Administration (2005) - World Oil Transit Chokepoints.

- Mediterranean Sea is a
strategic waterway that
accounts for over 15% of
global shipping activity

Source:Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC) (2005) - Main routes in the Mediterranean Sea for crude oil tankers for year 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 3
MEDITERRANEAN SEA RELEVANCE

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 4
MEDITERRANEAN SEA RELEVANCE
- Semi enclosed sea;

- Water circulation almost not existing

(surface waters turnover 80 years);

- UNEP biodiversity hotspot (endemic

species);

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 4
MEDITERRANEAN SEA RELEVANCE
- Semi enclosed sea;

- Water circulation almost not existing

(surface waters turnover 80 years);

- UNEP biodiversity hotspot (endemic

species);

- Main economic activities of the basin highly correlated with sea NR:
commercial fishing and tourism.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 4
MEDITERRANEAN SEA RELEVANCE
- Semi enclosed sea;

- Water circulation almost not existing

(surface waters turnover 80 years);

- UNEP biodiversity hotspot (endemic

species);

- Main economic activities of the basin highly correlated with sea NR:
commercial fishing and tourism.

=> OIL SPILLS INTO MEDITERRANEAN SEA<=

Damages caused to the environment could irreversibly affect the economies of

its 22 countries and the welfare of 132 million of inhabitants.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 4
MARITIME REGULATION IN FORCE

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

OILPOL
Commitment:
prohibition discharges
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

MARPOL 73/78
OILPOL
Regulation:
Commitment:
discharges at sea of oil and other
prohibition discharges
harmful sustances from ship
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

BARCELONA CONVENTION
Protocols:
appropriate measures to
prevent and abate pollution
caused by dumping from
ships in Mediterranean Sea

MARPOL 73/78
OILPOL
Regulation:
Commitment:
discharges at sea of oil and other
prohibition discharges
harmful sustances from ship
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

UNCLOS
Rights and
BARCELONA CONVENTION responsabilities
Protocols: of nations in
appropriate measures to their use of
prevent and abate pollution world’s oceans
caused by dumping from +
ships in Mediterranean Sea Guidelines
protection of the
MARPOL 73/78 environment
OILPOL
Regulation:
Commitment:
discharges at sea of oil and other
prohibition discharges
harmful sustances from ship
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

MARPOL I/13F, I/13G

Mandatory introduction
UNCLOS
in Mediterranean Sea
Rights and
BARCELONA CONVENTION responsabilities standard requirement
Protocols: double-hull
of nations in
appropriate measures to +
their use of
prevent and abate pollution Phase-out schedule
world’s oceans
caused by dumping from old single-hulled fleet
+
ships in Mediterranean Sea Guidelines
protection of the
MARPOL 73/78 environment
OILPOL
Regulation:
Commitment:
discharges at sea of oil and other
prohibition discharges
harmful sustances from ship
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

MARPOL I/13F, I/13G

Mandatory introduction
UNCLOS
in Mediterranean Sea
Rights and
BARCELONA CONVENTION responsabilities standard requirement
Protocols: double-hull
of nations in
appropriate measures to +
their use of
prevent and abate pollution Phase-out schedule
world’s oceans
caused by dumping from old single-hulled fleet ERIKA I
+
ships in Mediterranean Sea Guidelines Safety package:
protection of the creation back
MARPOL 73/78 environment list to improve
OILPOL
Regulation: seaborne
Commitment:
discharges at sea of oil and other petroleum
prohibition discharges
harmful sustances from ship products trade
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

ERIKA II
MARPOL I/13F, I/13G Safety package:
Creation EMSA
Mandatory introduction
UNCLOS +
in Mediterranean Sea
Rights and COPE Fund
BARCELONA CONVENTION responsabilities standard requirement
double-hull +
Protocols: of nations in Improvements creation info
appropriate measures to +
their use of network on port state controls
prevent and abate pollution Phase-out schedule
world’s oceans
caused by dumping from old single-hulled fleet ERIKA I
+
ships in Mediterranean Sea Guidelines Safety package:
protection of the creation back
MARPOL 73/78 environment list to improve
OILPOL
Regulation: seaborne
Commitment:
discharges at sea of oil and other petroleum
prohibition discharges
harmful sustances from ship products trade
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

ERIKA II
MARPOL I/13F, I/13G Safety package:
Creation EMSA
Mandatory introduction
UNCLOS +
in Mediterranean Sea
Rights and COPE Fund
BARCELONA CONVENTION responsabilities standard requirement
double-hull +
Protocols: of nations in Improvements creation info
appropriate measures to +
their use of network on port state controls
prevent and abate pollution Phase-out schedule
world’s oceans
caused by dumping from old single-hulled fleet ERIKA I ERIKA III
+
ships in Mediterranean Sea Guidelines Safety package: Measures:
protection of the creation back port controls
MARPOL 73/78 environment list to improve +
OILPOL
Regulation: seaborne ...
Commitment:
discharges at sea of oil and other petroleum +
prohibition discharges
harmful sustances from ship products trade carriers liability
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 MARITIME REGULATION IN FORCE

ERIKA II
MARPOL I/13F, I/13G Safety package:
Creation EMSA
Mandatory introduction
UNCLOS +
in Mediterranean Sea
Rights and COPE Fund
BARCELONA CONVENTION responsabilities standard requirement
double-hull +
Protocols: of nations in Improvements creation info
appropriate measures to +
their use of network on port state controls
prevent and abate pollution Phase-out schedule
world’s oceans
caused by dumping from old single-hulled fleet ERIKA I ERIKA III
+
ships in Mediterranean Sea Guidelines Safety package: Measures:
protection of the creation back port controls
MARPOL 73/78 environment list to improve +
OILPOL
Regulation: seaborne ...
Commitment:
discharges at sea of oil and other petroleum +
prohibition discharges
harmful sustances from ship products trade carriers liability
in specific areas.

1954 1973 1975 1982 1992 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 5
 PATTERNS OF OIL SPILLS 1/2

Number of oil spills in Mediterranean Sea waters

Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 6
 PATTERNS OF OIL SPILLS 1/2

15

13

11

0
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
Number of oil spills in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 6
 PATTERNS OF OIL SPILLS 1/2
The number of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
15

13

11

0
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
Number of oil spills in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 6
 PATTERNS OF OIL SPILLS 1/2
The number of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
15

13

11

0
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
Number of oil spills in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 6
 PATTERNS OF OIL SPILLS 1/2
The number of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
15

13 1981-1994

11 76 accidents
9

8
vs.

6
1995-2008
4

2
40 accidents

0
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
Number of oil spills in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 6
 PATTERNS OF OIL SPILLS 1/2
The number of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
15

13 1981-1994

11 76 accidents
9

8
vs.

6
1995-2008
4

2
40 accidents

0
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
Number of oil spills in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 6
 PATTERNS OF OIL SPILLS 1/2
The number of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
15

13 1981-1994

11 76 accidents
9

8
vs.

6
1995-2008
4

2
40 accidents

0
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
Number of oil spills in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.
- 40 %

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 6
 PATTERNS OF OIL SPILLS 2/2

Volume of oil spills (>7 tonnes) in Mediterranean Sea waters

Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 7
 PATTERNS OF OIL SPILLS 2/2

280000

245000

210000

175000

140000

105000

70000

35000

0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Volume of oil spills (>7 tonnes) in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 7
 PATTERNS OF OIL SPILLS 2/2
The volume of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
280000

245000

210000

175000

140000

105000

70000

35000

0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Volume of oil spills (>7 tonnes) in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 7
 PATTERNS OF OIL SPILLS 2/2
The volume of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
280000

245000

210000

175000

140000

105000

70000

35000

0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Volume of oil spills (>7 tonnes) in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 7
 PATTERNS OF OIL SPILLS 2/2
The volume of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
280000

245000
1981-1994
210000
325,200
175000
tonnes

140000
vs.
105000

70000
1995-2008

35000 125,210
tonnes
0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Volume of oil spills (>7 tonnes) in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 7
 PATTERNS OF OIL SPILLS 2/2
The volume of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
280000

245000
1981-1994
210000
325,200
175000
tonnes

140000
vs.
105000

70000
1995-2008

35000 125,210
tonnes
0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Volume of oil spills (>7 tonnes) in Mediterranean Sea waters
Moving average from 1995

Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 7
 PATTERNS OF OIL SPILLS 2/2
The volume of oil spills in the Mediterranean Sea waters for the period
1970-2008 shows that:
280000

245000
1981-1994
210000
325,200
175000
tonnes

140000
vs.
105000

70000
1995-2008

35000 125,210
tonnes
0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Volume of oil spills (>7 tonnes) in Mediterranean Sea waters
Moving average from 1995
- 61 %
Source: Elaboration ITOPF database on accidental oil spills in Mediterranean Sea waters > 7 tonnes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 7
 COST-BENEFIT ANALYSIS 1/3
COSTS ASSESSMENT
a) Cost of inaction: costs/damages between 1992 (discussion of MARPOL I/13F and I/13G)
and 1995 (entrance into force of double-hull standard requirement)
OIL SPILT CLEANUP DAMAGES TOTAL
YEAR due to inaction ($ million) ($ million) ($ million)
(tonnes) ETKIN D.S. (1999) A.T.I. ENI-IRI (1992)

1992 46,556 400.17 333.94 734.11

1993 1,476 12.69 10.59 23.27

1994 21,033 180.79 150.87 331.66

TOTAL COST OF INACTION $1.09 billion

per-year COST OF INACTION $0.36 billion

b) Cost of action: increased in 1) capital expenditures to replace retired tankers;

2) operating expenses of double-hull tankers;
3) costs associated with the timing of replacement.

Accoding to the ‘Committee on Pollution Act’ additional operating and

construction costs are expected to be $3.94 billion in Mediterranean Sea

per-year COST OF ACTION $0.28 billion

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 8
 COST-BENEFIT ANALYSIS 2/3

BENEFITS ASSESSMENT

Assessment of all those avoided damages that not spilled oil would have created for 1995-2008.

A monetary value of clean-up cost, loss of commercial fishing and environmental damages that
199,990 tonnes of not spilled oil would have created, based on damage assessment by A.T.I. ENI-IRI
of the M/T Haven oil spill in 1991 off Genoa coasts.

OIL NOT SPILT CLEANUP DAMAGES TOTAL

YEARS
(tonnes) ($ million) ($ million) ($ million)
1995-2008 199,990 1,719.02 1,434.53 3,153.55

TOTAL BENEFITS $3.2 billion

per-year BENEFITS $0.23 billion

NOTE: - Benefits of avoided damages do not last for only 14 years, but their effects extend with an
infinite time horizon (ex. fish species);

- Per-year benefits not discounted.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 9
 COST-BENEFIT ANALYSIS 3/3
COST BENEFIT
YEAR
($ ,000) ($ ,000)
RESULT
1992 734,111.91 -

1993 23,274.35 -

1994 331,659.54 -

1995 260,883.46 225,253.49

1996 264,627.06 225,253.49

1997 274,034.95 225,253.49

1998 279,274.93 225,253.49

1999 264,373.84 225,253.49

2000 271,038.51 225,253.49

2001 259,102.75 225,253.49

2002 275,890.52 225,253.49

2003 289,120.44 225,253.49

2004 291,428.88 225,253.49

2005 306,205.72 225,253.49

2006 309,958.63 225,253.49

2007 300,959.11 225,253.49

2008 289,984.41 225,253.49

per-year ($ ,000) 295,642.88 225,253.49

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 10
 COST-BENEFIT ANALYSIS 3/3
COST BENEFIT
YEAR
($ ,000) ($ ,000)
RESULT
1992 734,111.91 -

1993 23,274.35 -
CBA-ratio = 0.76
1994 331,659.54 -

1995 260,883.46 225,253.49

1996 264,627.06 225,253.49

1997 274,034.95 225,253.49

1998 279,274.93 225,253.49

1999 264,373.84 225,253.49

2000 271,038.51 225,253.49

2001 259,102.75 225,253.49

2002 275,890.52 225,253.49

2003 289,120.44 225,253.49

2004 291,428.88 225,253.49

2005 306,205.72 225,253.49

2006 309,958.63 225,253.49

2007 300,959.11 225,253.49

2008 289,984.41 225,253.49

per-year ($ ,000) 295,642.88 225,253.49

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 10
 COST-BENEFIT ANALYSIS 3/3
COST BENEFIT
YEAR
($ ,000) ($ ,000)
RESULT
1992 734,111.91 -

1993 23,274.35 -
CBA-ratio = 0.76
1994 331,659.54 -

1995 260,883.46 225,253.49

For every $1 of costs sustained for the application of the
1996 264,627.06 225,253.49
MARPOL Regulations,
1997 274,034.95 225,253.49

1998 279,274.93 225,253.49

1999 264,373.84 225,253.49

2000 271,038.51 225,253.49

2001 259,102.75 225,253.49

2002 275,890.52 225,253.49

2003 289,120.44 225,253.49

2004 291,428.88 225,253.49

2005 306,205.72 225,253.49

2006 309,958.63 225,253.49

2007 300,959.11 225,253.49

2008 289,984.41 225,253.49

per-year ($ ,000) 295,642.88 225,253.49

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 10
 COST-BENEFIT ANALYSIS 3/3
COST BENEFIT
YEAR
($ ,000) ($ ,000)
RESULT
1992 734,111.91 -

1993 23,274.35 -
CBA-ratio = 0.76
1994 331,659.54 -

1995 260,883.46 225,253.49

For every $1 of costs sustained for the application of the
1996 264,627.06 225,253.49
MARPOL Regulations,
approximately $0.8 of benefits were registered. 1997 274,034.95 225,253.49

1998 279,274.93 225,253.49

1999 264,373.84 225,253.49

2000 271,038.51 225,253.49

2001 259,102.75 225,253.49

2002 275,890.52 225,253.49

2003 289,120.44 225,253.49

2004 291,428.88 225,253.49

2005 306,205.72 225,253.49

2006 309,958.63 225,253.49

2007 300,959.11 225,253.49

2008 289,984.41 225,253.49

per-year ($ ,000) 295,642.88 225,253.49

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 10
 COST-BENEFIT ANALYSIS 3/3
COST BENEFIT
YEAR
($ ,000) ($ ,000)
RESULT
1992 734,111.91 -

1993 23,274.35 -
CBA-ratio = 0.76
1994 331,659.54 -

1995 260,883.46 225,253.49

For every $1 of costs sustained for the application of the
1996 264,627.06 225,253.49
MARPOL Regulations,
approximately $0.8 of benefits were registered. 1997 274,034.95 225,253.49

1998 279,274.93 225,253.49

1999 264,373.84 225,253.49

2000 271,038.51 225,253.49

2001 259,102.75 225,253.49

2002 275,890.52 225,253.49

2003 289,120.44 225,253.49

2004 291,428.88 225,253.49

2005 306,205.72 225,253.49

2006 309,958.63 225,253.49

2007 300,959.11 225,253.49

2008 289,984.41 225,253.49

per-year ($ ,000) 295,642.88 225,253.49

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 10
 COST-BENEFIT ANALYSIS 3/3
COST BENEFIT
YEAR
($ ,000) ($ ,000)
RESULT
1992 734,111.91 -

1993 23,274.35 -
CBA-ratio = 0.76
1994 331,659.54 -

1995 260,883.46 225,253.49

For every $1 of costs sustained for the application of the
1996 264,627.06 225,253.49
MARPOL Regulations,
approximately $0.8 of benefits were registered. 1997 274,034.95 225,253.49

1998 279,274.93 225,253.49

1999 264,373.84 225,253.49

2000 271,038.51 225,253.49

2001 259,102.75 225,253.49

2002 275,890.52 225,253.49

2003 289,120.44 225,253.49

2004 291,428.88 225,253.49

2005 306,205.72 225,253.49

IS DOUBLE-HULL 2006 309,958.63 225,253.49

2007 300,959.11 225,253.49

A HULLABALOO??? 2008 289,984.41 225,253.49

per-year ($ ,000) 295,642.88 225,253.49

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 10
 CONCLUSION 1/3

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 11
 CONCLUSION 1/3
YES

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 11
 CONCLUSION 1/3
YES Incentives for technological improvements in the LR
of technology standards (as double-hull) equal to zero.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 11
 CONCLUSION 1/3
YES Incentives for technological improvements in the LR
of technology standards (as double-hull) equal to zero.

NO

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 11
 CONCLUSION 1/3
YES Incentives for technological improvements in the LR
of technology standards (as double-hull) equal to zero.

NO The introduction of the MARPOL Regulations had a decreasing effect

on both the number of accidents with an oil release and the volume of
oil spilled in Mediterranean Sea waters.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 11
 CONCLUSION 1/3
YES Incentives for technological improvements in the LR
of technology standards (as double-hull) equal to zero.

NO The introduction of the MARPOL Regulations had a decreasing effect

on both the number of accidents with an oil release and the volume of
oil spilled in Mediterranean Sea waters.

FURTHERMORE

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 11
 CONCLUSION 1/3
YES Incentives for technological improvements in the LR
of technology standards (as double-hull) equal to zero.

NO The introduction of the MARPOL Regulations had a decreasing effect

on both the number of accidents with an oil release and the volume of
oil spilled in Mediterranean Sea waters.

FURTHERMORE
In the CBA, only ‘use-value’ has been assessed.
but
TOTAL ECONOMIC VALUE (TEV) = f (DUV, IUV, OV, BV , EV)
where:
DUV= Direct Use Value
IUV= Indirect Use Value
OV = Option Value
BV = Bequest Value
EV = Existence Value

If non-use value introduced, benefits would overweigh costs.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 11
 CONCLUSION 2/3

M/T HAVEN Oil Spill ERIKA Oil Spill

AMOCO CADIZ Oil Spill

off Genoa, Italy coasts off Brittany coasts[no-Med waters]
1 million barrels worst disaster (damages)

MARPOL I/13F, I/13G ERIKA II

off Brittany coasts[no-Med waters] Creation EMSA
1.6 million barrels Mandatory introduction
UNCLOS +
in Mediterranean Sea
Rights and COPE Fund
BARCELONA CONVENTION responsabilities standard requirement
double-hull +
Protocols: of nations in
+ Improvements creation info
appropriate measures to their use of
Phase-out schedule network on port state controls
prevent and abate pollution world’s oceans
caused by dumping from old single-hulled fleet ERIKA I ERIKA III
+
ships in Mediterranean Sea Guidelines Safety package: Measures:
protection of the creation back port controls
MARPOL 73/78 environment list to improve +
OILPOL
Regulation: seaborne ...
Commitment:
discharges at sea of oil and other petroleum +
prohibition discharges
harmful sustances from ship products trade carriers liability
in specific areas.

1954 1973 1975 1978 1982 1991 1992 1999 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 12
 CONCLUSION 2/3
Each international and national regulation or amendment has been enacted
only after a major oil spill.

M/T HAVEN Oil Spill ERIKA Oil Spill

AMOCO CADIZ Oil Spill

off Genoa, Italy coasts off Brittany coasts[no-Med waters]
1 million barrels worst disaster (damages)

MARPOL I/13F, I/13G ERIKA II

off Brittany coasts[no-Med waters] Creation EMSA
1.6 million barrels Mandatory introduction
UNCLOS +
in Mediterranean Sea
Rights and COPE Fund
BARCELONA CONVENTION responsabilities standard requirement
double-hull +
Protocols: of nations in
+ Improvements creation info
appropriate measures to their use of
Phase-out schedule network on port state controls
prevent and abate pollution world’s oceans
caused by dumping from old single-hulled fleet ERIKA I ERIKA III
+
ships in Mediterranean Sea Guidelines Safety package: Measures:
protection of the creation back port controls
MARPOL 73/78 environment list to improve +
OILPOL
Regulation: seaborne ...
Commitment:
discharges at sea of oil and other petroleum +
prohibition discharges
harmful sustances from ship products trade carriers liability
in specific areas.

1954 1973 1975 1978 1982 1991 1992 1999 2000 2002 2005

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 12
 CONCLUSION 3/3
SO

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 13
 CONCLUSION 3/3
SO
- Being better to avoid a loss than make it up for damages caused,
it is less costly to avoid damages from oil spills than to remedy to the
catastrophic consequences that any accidental oil spillage causes.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 13
 CONCLUSION 3/3
SO
- Being better to avoid a loss than make it up for damages caused,
it is less costly to avoid damages from oil spills than to remedy to the
catastrophic consequences that any accidental oil spillage causes.

- Continued compliance by Mediterranean countries against oil spills

must be forced, focusing on illegal operational discharges (< 7 tonnes).

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 13
 CONCLUSION 3/3
SO
- Being better to avoid a loss than make it up for damages caused,
it is less costly to avoid damages from oil spills than to remedy to the
catastrophic consequences that any accidental oil spillage causes.

- Continued compliance by Mediterranean countries against oil spills

must be forced, focusing on illegal operational discharges (< 7 tonnes).

- European Union, representing almost half of the Mediterranean

countries, could play a leading role in the enforcement of new laws.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 13
 CONCLUSION 3/3
SO
- Being better to avoid a loss than make it up for damages caused,
it is less costly to avoid damages from oil spills than to remedy to the
catastrophic consequences that any accidental oil spillage causes.

- Continued compliance by Mediterranean countries against oil spills

must be forced, focusing on illegal operational discharges (< 7 tonnes).

- European Union, representing almost half of the Mediterranean

countries, could play a leading role in the enforcement of new laws.

- Only through concrete and prompt decisions there could be an

effective improvement of the environment.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 13
 CONCLUSION 3/3
SO
- Being better to avoid a loss than make it up for damages caused,
it is less costly to avoid damages from oil spills than to remedy to the
catastrophic consequences that any accidental oil spillage causes.

- Continued compliance by Mediterranean countries against oil spills

must be forced, focusing on illegal operational discharges (< 7 tonnes).

- European Union, representing almost half of the Mediterranean

countries, could play a leading role in the enforcement of new laws.

- Only through concrete and prompt decisions there could be an

effective improvement of the environment.
An environment that is the source for the survival of all living being -
humans included.

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO 13
Thank you for your attention!

Oil Spills in the Mediterranean Sea. An evaluation of the EU regulations: double-hull or -hullabaloo? - RINALDI ROBERTO