Gaia J. Larsen – Skewed Incentives: How Offshore Drilling Policies Fail to Induce Innovation to Reduce Social and Environmental Costs
Gaia J. Larsen, NYU Law, Institute for Policy Integrity
The accident at the Deepwater Horizon platform in the Gulf of Mexico in April of 2010 showed the potentially catastrophic damage associated with offshore oil drilling. It also highlighted both the technological advances that have made drilling in deeper and more dangerous waters feasible and affordable, and the lack of similar advances in technology to prevent harm resulting from such drilling. In light of that disaster and current debate over offshore oil drilling, this article looks at the failure of current policies to adequately incentivize investment in innovation to reduce the environmental and social costs associated with offshore drilling. It examines three policy regimes in particular where the federal government has failed to put in place proper incentives to create technology to reduce the likelihood and severity of offshore oil spills. These three regimes include: policies to influence funding for the development of harm-reducing technology; regulations governing offshore drilling technology; and laws limiting liability for companies engaged in offshore drilling. The article finds that weaknesses in all three of these regimes decrease incentives to innovate to reduce environmental and social harm associated with offshore drilling. It concludes by providing potential policy solutions.
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- May 2011
- 32 Stan.Envtl.L.J.