Parameter Uncertainty in CGE Modeling of the Environmental Impacts of Economic Policies

Political and economic factors usually determine the harvest sharesallotted to heterogeneous fisher groups harvesting upon the same fishstock. Given that the fishers harvest upon different segments of a fishstock with, for instance, cannibalistic tendencies, the shares allottedmay have considerable effect upon the well-being of the stock and theeconomics of the fishery. This paper analyses an existing allocationrule defining harvest shares allotted to two vessel groups (trawlers andcoastal vessels) in the Norwegian cod fishery. We apply a model with twointeracting age groups within a single fish stock, where the interactionhas both biological and economic implications. Requiring a first bestapproach to an optimal stock size results in no harvest in the firstyears studied. In order to ensure harvest amounts close to the historicharvest, we design a second best model giving optimal biological sharesin the build-up phase of the stock, and bioeconomic optimal shares atthe optimum fish stock level. The second best model recommends that foran increasing stock size the trawlers should obtain decreasing shares.We find that the actual allocation rule functions in a manner oppositeto the second best model, since this rule allocates an increasing shareto the trawlers for an increasing stock size.     

Optimal fishery harvesting rules under uncertainty

This paper derives the optimal fishery harvest policy in a real-option model with a stochastic logistic growth process, harvest-sensitive output price, and both fixed and variable harvesting costs. The policy specifies the harvest trigger and harvest size, while outputs from the model include the value of the fishery and the risk of extinction. The optimal policy is illustrated with data from the Pacific Halibut Fishery. For this particular case, the optimal policy recommends harvesting when the fish stock rises to about three-quarters the environmental carrying capacity, and the amount harvested should be approximately a quarter of the prevailing stock. This harvesting policy maximizes the value of the fishery, and importantly, the resulting risk of extinction is negligible. We also carry out some sensitivity analysis to see how the optimal policy (and the resulting fishery value and risk of extinction) change when the input parameters are varied, particularly the ecological parameters intrinsic growth rate and volatility of the stock, and also the economic parameters that have been ignored in previous papers (price sensitivity and fixed cost). If the optimal policy is followed, the risk of extinction will be negligible, except for very low growth rate and high volatility.     

Cannibalism and the Optimal Sharing of the North-East Atlantic Cod Stock: a Bioeconomic Model

This paper shows how intra-stock relations such as cannibalism and growth enhancement, determine the economically optimal sharing of a fish resource between heterogeneous harvesting agents. The sharing of resources between different vessel groups is often left for political decision making. Nonetheless, such decisions may have both biological and economic consequences. This becomes quite clear when different harvesting groups exploit different sections (age groups) of a stock that has intra-stock interactions in the form of cannibalism. A two-agent bioeconomic model with cannibalism is developed and used to determine (i) optimal annual harvest sizes (TACs) for cod, and (ii) the optimal proportion of the TAC that should be harvested by the different vessel groups in the fishery. Applying biological and economic data in a numerical procedure, and comparing the results obtained to previous studies, it is shown that intra-stock interactions such as the presence of cannibalism has a significant impact on who should take what proportion of the TAC, and hence, the standing stock size and discounted economic rent achievable. In contrast to other studies, we find that the optimal harvest requires that both trawlers and coastal vessels should harvest the fish resource. In addition, the results indicate that, from a bioeconomic perspective, the existing trawler fleet’s harvest share in the cod fishery is too high. This revised version was published online in August 2006 with corrections to the Cover Date.     

Defining viable recovery paths toward sustainable fisheries

This paper develops a formal analysis of the recovery process for a fishery, from crisis situations to desired levels of sustainable exploitation, using the theoretical framework of viable control. We define sustainability as a combination of biological, economic and social constraints which need to be met for a viable fishery to exist. Biological constraints are based on the definition of a minimum resource stock to be preserved. Economic constraints relate to the existence of a guaranteed profit per vessel. Social constraints refer to the maintenance of a minimum size of the fleet, and to the maximum speed at which fleet adjustment can take place. Using fleet size adjustment and fishing effort per vessel as control variables, we first identify the states of this bioeconomic system for which sustainable exploitation is possible, i.e. for which all constraints can be dynamically met. Such favorable states are called viable states. We then examine possible transition phases, from non-viable to viable states. We characterize recovery paths with respect to the time of crisis of the trajectory, which is the number of periods during which the constraints are not respected. The approach is applied to the single stock of the bay of Biscay Nephrops fishery. The transition path identified through the viability approach is compared to the historical recovery process, and to both open-access and optimal harvesting scenarios.     

Optimal Harvesting of an Age-Structured Schooling Fishery

Biologists have criticized traditional biomass models in fishery economics for being oversimplified. Biological stock assessment models are more sophisticated with regard to biological content, but rarely account for economic objectives. This study includes a full age-structured population model for studying schooling fisheries and extends the delayed difference approach used in earlier studies. We take the total harvest as the choice variable, resulting in a simple analytical structure. The model produces optimal steady states that may be higher or lower compared to the delayed-difference formulation. The model is applied to the Baltic sprat fishery. Both ecological and harvesting cost data support specifying Baltic sprat as a schooling fishery. Given nonlinear harvesting costs, the optimal solution is a path toward a steady state with smooth annual harvest and population age structure. Sensitivity analysis shows that the optimal solution is highly dependent on the population level of the sprat’s main predator Baltic cod. A linear cost function and an interest rate below 9 % imply pulse fishing instead of smooth continuous harvesting. Given nonlinear harvesting cost, the optimal steady state yield is rather insensitive to changes in the interest rate. However, under a high cod scenario, interest rates of 10 % or higher implies that no optimal steady state exists.     

ITQ Systems in Multifleet Fisheries

Optimum management of a particular fishery is analyzed based on an ITQ system. For this purpose, a multifleet deterministic bioeconomic model is developed and applied. Using data on the fishery studied here, estimates are made of the stock dynamics of fish and the technology used by the fleets operating in said fishery. Optimum levels of stock, effort and catch are determined. Finally, we present economic policy recommendations for this fishery and considerations for applying regulatory measures.     

Does the Optimal Size of a Fish Stock Increase with Environmental Uncertainties?

We analyze the effect of environmental uncertainties on optimal fishery management in a bio-economic fishery model. Unlike most of the literature on resource economics, but in line with ecological models, we allow the different biological processes of survival and recruitment to be affected differently by environmental uncertainties. We show that the overall effect of uncertainty on the optimal size of a fish stock is ambiguous, depending on the prudence of the value function. For the case of a risk-neutral fishery manager, the overall effect depends on the relative magnitude of two opposing effects, the ‘convex-cost effect’ and the ‘gambling effect’. We apply the analysis to the Baltic cod and the North Sea herring fisheries, concluding that for risk neutral agents the net effect of environmental uncertainties on the optimal size of these fish stocks is negative, albeit small in absolute value. Under risk aversion, the effect on optimal stock size is positive for sufficiently high coefficients of constant relative risk aversion.     

Cooperative and Non-Cooperative Exploitation of the Arcto-Norwegian Cod Stock

A two-agent model for the exploitation of the Arcto-Norwegian cod stock is developed to investigate the economic benefits that can be realized from the resource, and the effect of exploitation on stock sustainability under cooperation and non-cooperation. The two agents are identified in this study as a trawl fishery versus a coastal fishery. Unlike in Munro (1979), where conflicts in the management strategies of agents arise from differences in the perceptions of the discount factor, fishing effort costs, and consumer preferences, here conflicts arise mainly from the differences in fishing gear and grounds, and the age group of cod targeted by the two agents. Using a game theoretic framework, we show that given available data, the optimum optimorum is obtained under cooperation with side payments and no predetermined harvest shares, in which case the coastal fishery buys out the trawl fishery. However, sensitivity analysis shows that if the price premium assumed for mature cod is taken away, the trawl fishery takes over as the producer of the optimum optimorum.     

Cooperative and non-cooperative management of the Northeast Atlantic cod fishery

The fishery for Northeast Atlantic cod (Gadus morhua) in the Barents Sea is one of the most valuable fisheries in the North Atlantic. After the introduction of Extended Fisheries Jurisdiction, cod is a shared stock between Norway and Russia. Overfishing of quotas has been a concern for a number of years. The purpose of this article is to analyse cooperative and non-cooperative management of the Northeast Atlantic cod fishery. This will be done in a game theoretic context, based on different assumptions regarding important variables such as cost of effort and initial stock size. The game theoretic analysis will be based on an empirical bioeconomic model developed and estimated by Hannesson (Mar Policy 31:698–705, 2007; J Bioecon forthcoming). The case of cooperative management is analysed for different cost parameters and starting values of the stock. An interesting result is that the optimal policy gives rise to pulse fishing. As this involves effort (and harvests) varying from year to year, potentially imposing substantial social costs on the industry in years when the fishery is closed, a policy of constant effort is also considered. Finally, non-cooperative management is analysed.     

International Management Strategies for a Straddling Fish Stock: A Bio-Economic Simulation Model of the Norwegian Spring-Spawning Herring Fishery

In this paper, a three-country dynamic bio-economic simulation model is presented for the spring-spawning herring fishery. The international spring-spawning herring fishery, based on potentially one of the most valuable fish stocks in the world, is currently recovering from a severe depletion of the stock and subsequent harvesting moratorium. Management of the herring fishery is complicated by its multi-nation exploitation, due to the highly migratory behaviour of the species moving between several coastal state zones (exclusive economic zones, EEZs) and the high seas (Ocean Loop). Based on extensive work invested on analysing both the biology of the herring stock and the fisheries economics around its exploitation we study here the profiles of different multi-agent management schemes, simulating catch levels, stock size and profit potentials of alternative management strategies. The stock dynamics are described by a linear discrete-time age-structured population model and the economics are presented by a rent maximising model with constant price of herring catch and different costs of harvesting and efficiency levels for the different national fleets. The simulations, carried out over several decades, show that the benefits of international co-operation far exceed the returns of a competitive open access fishery.JEL Classifications: C7, C15, Q22     

A Bioeconomic Analysis of the Northern Baltic Salmon Fishery: Coexistence versus Exclusion of Competing Sequential Fisheries

We develop a bioeconomic model of the northern Balticsalmon fishery that takes into account thesimultaneous harvest of wild and reared salmon. Weassess the optimal harvest allocation between thecommercial offshore, inshore, and estuary fisheries,and the recreational river fishery that sequentiallyharvest the salmon stock. We restrict the solution tospawning stocks sufficient to preserve the wildsalmon. Empirical results suggest closure of theoffshore and inshore fisheries. Optimal managementenhances the wild stock, and results in substantialeconomic gains to the fishery. Current fisheryregulation improves the performance of the fisheryover open access, but fails to utilize the fullproductive potential of the resource.     

Renewable resource management with environmental prediction: the importance of structural specification

Environmental variability can substantially influence renewable resource growth, and as the ability to forecast environmental conditions improves, opportunities for adaptive management emerge. Using a stochastic stock‐recruitment model, Costello, et al. ( 2001 ) show the optimal management response to a prediction of favourable growth conditions is to reduce current harvests. We find this result may be reversed when environmental variability and stock are substitutes in growth, a possibility that has been ignored by resource economists. As an example, we analyze the South Carolina white shrimp fishery, finding the optimal response to a prediction of favourable overwinter conditions is to increase fall harvests.     

鱼群洄游预测与生态经济问题研究

鱼群洄游预测研究对于渔业资源的可持续开发和利用是十分重要的。文章建立了基于RBF神经网络的鱼群洄游预测模型。研究结果表明,所提出的神经网络模型对于改进鱼群洄游的预测精度十分有效。渔业资源的可持续发展需要广泛、多领域的相互协作,并且需要自然科学与社会科学以及管理策略的相互结合。渔业生态经济的核心问题是处理好渔业经济发展与渔业生态保护的问题。     

Endogenous Fishery Management in a Stochastic Model: Why Do Fishery Agencies Use TACs Along with Fishing Periods?

This paper seeks to explain the circumstances under which using total allowable catch (TAC) as an instrument to manage a fishery along with fishing periods may be of interest from a regulatory point of view. The deterministic analysis by Homans and Wilen (J Environ Econ Manag 32:1?C21, 1997) and Anderson (Ann Oper Res 94:231?C257, 2000) is thus extended to a stochastic scenario where the resource cannot be measured accurately. The resulting model is solved numerically to find the optimal control rules in the Iberian sardine stock. Three relevant conclusions can be highlighted from simulations: first, the greater the uncertainty regarding the state of the stock, the lower the probability of the fishery being closed before the end of the fishing period. Second, the use of TACs as a management instrument in fisheries that are already regulated by fishing periods leads to: (i) an increase in the optimal season length and harvests, especially for medium and high numbers of licences; (ii) improved biological and economic variables when the fleet is large; and (iii) extinction risk for the resource being eliminated. Third, the regulator would rather select the number of licences than restrict the season length.     

Measuring potential profits in a bioeconomic model of the mixed demersal fishery in the North Sea

This paper measures for potential profit in the North Sea mixed demersal fishery for cod, haddock and whiting. Dynamic bioeconomic models for three UK fisheries are developed, incorporating both population dynamics and economic structure. Actual profit in 2006, for the three UK fleets included in the analysis, is estimated at ??10.3?million. If the TAC remains unchanged but vessels are allowed to harvest at near efficient levels with fleet size reduced accordingly, potential profit is measured at ??34.5?million. If demersal stocks are allowed to recover to near optimal levels potential UK profit exceeds ??185?million. This indicates substantial profit dissipation due to overcapacity and stock depletion in the fishery. The results of the paper should be of policy interest and will add to the empirical literature on resource profits in mixed demersal fisheries.     

Modeling the dynamics of regulated resource systems: a fishery example

In this paper, a discrete-time model of regulated fisheries is developed. This class of models is interesting because most modern real-world fisheries are under some kind of regulation. The regulatory part of the fishery in this paper is partitioned into two stages. In the first stage, which is the main focus, total allowable catch quotas (TACs) based on biological and economic considerations are determined in a way that guarantees the safety of the stock from a conservation viewpoint. In addition, we assume that a target biomass level is set by the management authorities to be achieved over a given time horizon to satisfy an economic objective. Since we assume here that the main goal is to rebuild the stock, we propose a gradual approach to the target biomass level via a simple recursive rule.     

Optimal Management Under Institutional Constraints: Determining a Total Allowable Catch for Different Fleet Segments in the Northeast Arctic Cod Fishery

Many real world fisheries have an individual vessel quota system with restrictions on transferability of quota or entrance of new vessels into the fishery. While the standard economic reasoning is that these institutional constraints lead to welfare losses, the size of those losses and optimal second-best policies are usually unknown. We develop a dynamic bioeconomic model, in which a scientific body provides an optimal TAC given restrictions on (i) transferability between vessel segments and (ii) entrance of new vessels. Further, we also quantify welfare losses arising from not maximizing economic welfare, but physical yield—which is actually the case in many fisheries. We apply the model to the Northeast Arctic cod fishery, and estimate not only the cost and harvesting functions of the various vessel types, but also the parameters of the biological model as well as those of the demand function. This allows us to determine optimal second-best policies and quantify corresponding welfare effects for our case study fishery.     

Modelling the economic consequences of Marine Protected Areas using the BEMCOM model

This paper introduces and describes in detail the bioeconomic optimization model BEMCOM (BioEconomic Model to evaluate the COnsequences of Marine protected areas) that has been developed to assess the economic effects of introducing Marine Protected Areas (MPA) for fisheries. BEMCOM answers the question ‘what’s best?’, i.e. finds the overall optimal effort allocation, from an economic point of view, between multiple harvesting fleets fishing under a subset of restrictions on catches and effort levels. The BEMCOM model is described and applied to the case of the Danish sandeel fishery in the North Sea. It has several times been suggested to close parts of the sandeel fishery in the North Sea out of concern for other species feeding on sandeel and/or spawning in the sandeel habitats. The economic effects of such closures have been assessed using BEMCOM. The results indicate that the model yields reliable estimates of the effect of MPAs, and can thus be a valuable tool when deciding where to locate MPA.     

An ecological golden rule

Most renewable biotic resources are subject to random variability in natural growth. We investigate the implications of such variability for long-term management by a risk averse social planner, who maximizes expected long-run utility. In the canonical model of a stochastic fishery, we show that the optimal level of harvesting effort need not necessarily be reduced by variability in stock growth. However, optimal effort is reduced if variability of growth increases for smaller base populations, as suggested in the ecology literature.     

Fishery externalities and biodiversity: Trade-offs between the viability of shrimp trawling and the conservation of Frigatebirds in French Guiana

Sustainable management of natural resources, and in particular fisheries, must take into account several conflicting objectives. This is the case in the French Guiana shrimp fishery for which profitability objectives imply a reduction in the fishing activity. On the one hand, this fishery has negative externalities on marine biodiversity due to discards. On the other hand, this fishery has positive externalities on the economy of the local community and interestingly enough on a protected seabird species in the area (the Frigatebird that feeds on discards). In this paper, we examine the viability of that system considering two sustainability objectives: an economic objective in terms of the profitability of the fishing activity, and a conservation objective in terms of the Frigatebird population. For that purpose, we have developed a dynamic model of that bioeconomic system and study here the trade-offs between the two conflicting objectives. It provides a means to quantify the necessary give and takes involving the economic and ecological objectives that would ensure a viable management solution. Our study confirms the relevance of the viability approach to address natural resource management issues, which should lead to the development of new tools for the arbitration of conflicting sustainability objectives. In particular, such tools could be used as a quantitative basis for cost–benefit analysis taking into account environmental externalities.