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1Â Â Â Â Introduction
Juan Carlos Seijo and Jon G. Sutinen
Economic considerations have long shaped policies directed at conserving and managing fisheries and other natural resources. Efforts to systematically integrate economic and biological elements into what has come to be known as bioeconomics began in the 1950s. Bioeconomics has evolved into a sophisticated tool commonly practised by natural and social scientists that advise fishery policymakers. Bioeconomics is a rich and robust framework that has stood up well over time, proving its ability to incorporate new dimensions and complexities.
Todayâs fishery managers face a far more complex set of issues than in the 1950s, when bioeconomics first emerged. Contemporary management issues are challenging bioeconomic analysts like never before. The chapters in this book demonstrate many of the ways in which bioeconomics is responding to address such issues by providing insights to innovative approaches that address emerging complex environmental and fisheries management issues, including novel ideas involving changes in fisheries management paradigms. This book presents advancements in fisheries bioeconomics research to address some of these challenges.
The subject area covered by the book is both taught and researched at a large number of universities. The book is relevant to advanced courses in fisheries science, natural resource biology and ecology, and environmental and natural resource economics. It is also relevant to the global community of scholars, policymakers and advocacy groups, a community that spans both developed and developing countries in all parts of the world.
Following this introduction, leading experts in the fields of fisheries bioeconomics examine the theory and policy implications of several contemporary fisheries issues. Summaries of Chapters 2 through 10 follow below.
In Chapter 2, Rögnvaldur Hannesson applies basic non-cooperative game theory to illustrate how countries exploiting a common fishery may totally annihilate the fish stock. Hannesson shows as the number of players (countries) increases, theory predicts conservation of the fish stock becomes less likely, leading to extinction. This prediction is challenged by Hannesson, who asks whether this necessarily means that fish stocks are increasingly likely to be exploited to extinction as the number of players increase. Would not players (countries) prefer to avoid annihilation of their fisheries even if no single one of them is dominant enough to conserve the stock in its own interest? He examines this question in some detail with evidence from an actual fishery.
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In Chapter 3, Jon G. Sutinen and Peder Andersen present the theory and policy implications of recovering enforcement costs in fisheries. Services such as research, enforcement, decision-making and administration services are essential ingredients of regulatory programmes directed at the management of common pool resources. The recovery of fishery management costs from the fishing industry is becoming increasingly common among the fishing nations of the world. Although some aspects of cost recovery mechanisms are well studied and documented, there remain some important implications for fisheries policy that have not been adequately studied. To partially address this gap in knowledge, this chapter investigates how cost recovery in the form of a royalty influences producer behaviour and optimal policy for managing a fishery. Sutinen and Andersen build on their earlier economic analysis of fisheries law enforcement to examine the economic and policy consequences of using a royalty on production to recover the costs of enforcement services for fisheries management.
In Chapter 4, John F. Caddy challenges the conventional approach to fishery management that focuses on harvesting those cohorts that have matured and spawned at least once while protecting juveniles. This conventional approach may be appropriate when there is no shortage of mature fish, but this is not the case in many world fisheries today. Instead, the mature cohorts of many demersal fisheries have been fished down to low levels, leading to an intense focus in the literature on models that define the minimum number of spawners needed to replace the population. In a very rich and comprehensive discussion, Caddy replaces the assumption of a constant natural mortality for all age groups, with a more realistic declining mortality rate at age for juveniles, combined with an expanded life cycle model. With estimates for the Mediterranean hake fishery, Caddy simulates the outcomes of the conventional approach (harvesting older fish) compared with a multi-gear allocation approach that harvests juveniles and conserves spawning fish.
In Chapter 5, Juan Carlos Seijo and Raul Villanueva present the theory of ocean acidification effects on fisheries targeting calcifier species. Organisms in benthic and neritic environments are susceptible to changes in saturation of carbonates, and even small changes in concentrations of CO2 in oceanic waters can cause negative impacts in calcifier organisms, such as molluscs, echinoderms and crustaceans, as well as ecologically valuable critical habitats such as corals. To deal with the possible effects of ocean acidification (OA), Seijo and Villanueva present equilibrium and dynamic bioeconomic frameworks and trajectories to account for the OA stressor affecting marine species and the likely performance of their fisheries over time in data-limited fisheries contexts. Questions addressed in this chapter include: (1) How do we incorporate analytically in bioeconomic models the effect of ocean acidification on calcifier species in data-limited situations with available catch and effort data to determine bioeconomic reference points with ocean acidification? (2) What is the possible dynamic bioeconomic effect of OA on calcifier species with different renewability capacities? Seijo and Villanueva address these questions with a bioeconomic biomass dynamic model in which OA effects are built into the natural growth of biomass function. They use the model to explore the OA effect on fisheries targeting species with different renewability capacity.
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In Chapter 6, Peder Andersen and Lisa StÄhl examine the prevalent problem of unwanted by-catch. By-catch is often discarded, resulting in direct food waste, and indirectly influences biodiversity, stock abundance and long-term catch. To minimize by-catch problems, fisheries management regulations such as restricting the legal minimum sizes of landed fish, mesh size and closed areas are applied. A more dramatic approach to reduce the discards of unwanted catches requires landing of all caught fish, independent of size and quality. This has been part of the fishery policy in Norway and Iceland for years. By 2015, the European Common Fisheries Policy Reform instituted a landing obligation (discard ban), one of the most significant changes of the Common Fisheries Policy since 1983. Despite this major change in the governance of EU fisheries, there is a lack of theoretical as well as empirical analyses of the consequences of a landing obligation policy. Andersen and StÄhl address this gap in knowledge with a simple model for analysing fleet behaviour under a landing obligation regime and an empirical analysis of the economic impact of implementing an LO for the Danish fishery, a multispecies fishery regulated by ITQs.
In Chapter 7, Rashid Sumaila and Anna Schuhbauer discuss the distributional implications of subsidies in industrial and small-scale fisheries. They use a simple bioeconomic model to explain why fisheries subsidies are generally seen to lead to overcapacity and overfishing. Next, Sumaila and Schuhbauer summarize the latest estimates of fisheries subsidies in the literature, showing that the amount of taxpayer dollars given to the fishing sector is large.
In Chapter 8, Kevern Cochrane discusses the trends and impacts of eco-labelling and eco-certification of fisheries. Environmental concerns about the sustainability of fisheries and aquaculture globally have fuelled a demand, especially in developed countries, for seafood products that are certified as having come from sustainable sources. This in turn has driven growth in the number of schemes offering certification and labelling services. The success of these schemes can be measured by the growing number of fisheries that are certified or are seeking certification. Reliable certification schemes provide an incentive to fisheries to comply with globally recognized sustainability standards, but at the same time the concepts and practice have generated conflict and confusion among scientists, consumers and retailers. This chapter examines some of the biggest challenges being faced, which include concerns that developing countries and small-scale fisheries are disadvantaged, criticism of the sustainability standards that are applied, and confusion in the marketplace because of the proliferation of schemes and a lack of transparency on performance.
In Chapter 9, Lee G. Anderson argues that, at its core, the primary function of fisheries management in the single stock case is the determination of the annual allowable harvest, which most often is based on the selection of a target stock size and a control rule that specifies a harvest path that causes the target stock size to be achieved or maintained. The selection of the target stock and the control rule are policy decisions. Anderson describes a procedure for the ecosystem-based fisheries management (EBFM) approach based on setting a multidimensional target space and a control rule for a multidimensional harvest path to lead to a vector of stock sizes within the target stock space. He uses economic principles to describe the nature of the target stock space, based on a broadly defined metric for measuring the value of the bundle of sustainable production from the set of stocks, and that considers the value of output trade-offs from different harvest production bundles.
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In Chapter 10, Anthony Charles examines the emerging practice of bio-socio-economic analysis to support fishery management programmes. According to Charles, there are five prominent ingredients of bio-socio-economics: (1) incorporating and assessing multiple fishery objectives, and dealing with the resulting conflicts; (2) recognizing and analysing distributional impacts of fishery policy and practice; (3) human dimensions of fisheries governance and rights in the commons; (4) consideration of behavioural and labour dynamics in fisheries, including fisher response to regulations and the role of labour markets; and (5) interactions of fisheries and fishing communities (including underlying values, objectives, knowledge, institutions and functions). After describing these ingredients, Charles discusses two specific examples of bio-socio-economic models and analysis (one with a combination of multiple objectives and labour dynamics, and another involving dynamics of fishing communities and the nature of distributional impacts). Lastly, the discussion shifts from model-based analysis to fishery policy analysis, explaining how the bio-socio-economic perspective can produce improved fishery policy.
Finally, in Chapter 11, Jon G. Sutinen and Juan Carlos Seijo summarize the major results and conclusions of this volume, and propose some topics for future research to further advance the application of bioeconomics to global fisheries issues.
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2 The number of players in a fisheries game
Curse or blessing?
Rögnvaldur Hannesson
Introduction
In a non-cooperative game, the players look for the best response to what they think the other players will do. This is known as the Nash-Cournot equilibrium solution, applied in the seminal papers by Clark (1980) and Levhari and Mirman (1980). In equilibrium, no participant can improve his position; all players do exactly what they are expected to do, and all players apply the best response to these actions. The outcomes of these games in the fisheries context are known to be potentially disastrous, especially when the number of players is large (Hannesson, 2007). It is tempting, therefore, to conclude that a large number of countries sharing a fish stock is a recipe for disaster. We argue that this is not necessarily so. Taking a far-sighted view and realizing the disastrous consequences of uncoordinated and aggressive playing, countries might cooperate, albeit in an informal and implicit way, with the risk of common ruin maintaining cooperation as in infinitely repeated games.1 Furthermore, the sustainable but non-cooperative outcomes in games with dominant players might have pay-offs that are perceived as sufficiently unfair to the dominant player to dissuade him from seeking such outcomes even if apparently in his best interest.
We shall begin with a simple two-country model, applying the Nash-Cournot approach as in Clark (1980) and Levhari and Mirman (1980). In this setting, âbadâ outcomes, and possibly total annihilation of the fish stock, are likely to occur unless one country is sufficiently dominant. To obtain a non-cooperative solution with a viable stock, one country must have a sufficiently large share of the stock to provide an incentive for conservation. We derive this critical share for the case of stock-independent cost per unit of fish caught, a case where stock extinction can result from a non-cooperative play. In a multi-country setting, one country is less likely to be sufficiently dominant, and hence stock extinction would seem all the ...
