Economic and Financial Aspects of Oil Spill
After describing the oil, oil spill, and response and recovery system, the focus in this section moves to the economic and financial aspects of an oil spill. The emphasis is still on offshore oil spill cases.
Figure 9.2 shows a diagram of an oil spill impact framework (Chang et al., 2014). The impact of the oil spill can be described from short-term and long-term perspectives, which link two main parts: ecological and societal impacts. When an oil spill happens, the spilled oil will be exposed to the external environment, and the transportation and weathering start to happen with the interaction with the environmental conditions. Meanwhile, the corresponding response actions usually also begin to remove the oil and mitigate the oil spill impacts. Thus, the first economic impact is from the response actions which include various cooperation, equipment, and resource deployments. The further weathered oil then begins to influence the ecosystems in the places to which it is transported. The regional ecosystem species, mobility, and habitat will be affected and even cause damage in the long term. This leads to natural resource damage. In addition, the impacted ecosystem will also influence the society and its economy through fisheries, tourism and recreation, etc. The socioeconomic impacts will interact regionally and even globally through the global economic and financial system and cause long-term impacts. There are also social impacts on human beings, e.g. health and physiological impacts, and there will
FIGURE 9.2 Oil spill impact framework. (Boxes=outcomes, lowercase=variables, solid lines = linkages between oil spill occurrence and socioeconomic impacts, dotted lines=link- ages between exogenous variables and outcomes) (after Chang et al., 2014).
also be more research activities going on after the oil spills. All of these will have a further impact on the technology, regulations, and marine activities, e.g. traffic volume, oil drilling, etc.
Based on the diagram of how an oil spill influences the ecology and society in Figure 9.2, the following sections are going to summarize an overall structure of the economic and financial impacts from an oil spill, as shown in Figure 9.3.
First, the economic impact is divided into local and global impacts. Local impacts refer to the damage or costs to the regional environment and society. They include cleanup costs, socioeconomic loss, natural resource damage, and other costs. In the global aspect, the impact is transferred through the global financial market and has an influence on the global society. The impact may be reflected in the oil price, stock market, industry, and regulations, which further influence the global economy
FIGURE 9.3 Economic impacts from oil spills.
and finance. This global impact exists mainly for the major oil spills. The local and global impacts will be discussed in the following sections in detail.