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The Role of Economics
In Addressing Impacts of Climate Change
on the Northwest Atlantic Marine Ecosystem
Preparing for Climate Change Impactson the Northwest Atlantic Marine Ecosystem
A symposium hosted by: Center for Law & Innovation of the University
of Maine School of Law, and Gulf of Maine Research Institute April 26-27
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The Panel
Dr. Dan Holland (Chair)Resource Economist
Gulf of Maine Research Institute
Dr. Jon SutinenProfessor, Dept. of Environmental & Natural Resource Economics,
University of Rhode Island
Dr. Robert Johnson
Associate Professor and Associate Sea Grant DirectorUniversity of Connecticut
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Three Basic Roles for Economics
Evaluate the costs and benefits and economic impacts of specificpotential outcomes (e.g. decline or extinction of a fish stock)
Understand how economic incentives influence human behavior,
and how that behavior influences outcomes (economic and
ecological). Assist in designing policies that create appropriate
economic incentives.
Evaluate how the set of institutions (including markets) that
comprise the overall human governance system for the marine
ecosystem affect outcomes. Assist in designing governance
systems that lead to appropriate behavior by individuals as well
as actors in the governance system.
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Understanding and modeling humans as part of the
marine ecosystem
Fishery Management Measures
(e.g. mesh size, closed areas,
effort limits, trip limits, quotas)
Outcomes
Biological, Economic, Social andAdministrative
The Fishery System
Biological, Human andTechnological Components
Fishery Policy Making Institution
Legislative mandates and courtimposed requirements
Incentives of policy makers Stakeholder input Information to predict outcomes
Environmental influences
(e.g., weather, oceanography, etc)
Information and incentives
of fishermen
Markets for inputs and outputs
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Direct and Indirect coupling of fisheries through
economic, regulatory, environmental and ecological linkages
Lobster
Groundfish
Herring
Human
Markets, technology,
regulations, etc.
Environment
Environment Environment
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Dr. Robert JohnsonAssociate Professor and Associate Sea Grant Director
University of Connecticut
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Climate Changeand the Allocation of Fishery Resources
Daniel S. HollandGulf of Maine Research Institute
Preparing for Climate Change Impactson the Northwest Atlantic Marine Ecosystem
A symposium hosted by: Center for Law & Innovation of the University ofMaine School of Law, and Gulf of Maine Research Institute April 26-27
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Climate Change, Fisheries and Diversification
There is a high degree of uncertainty about how specific fisherieswill be affected by climate change
It is highly likely that some existing fisheries will decline while
others will increase
Most fishermen now have limited ability to respond to thesechanges by shifting from declining fisheries into healthier ones
If changes in fisheries productivity are slow, this may be a limited
problem, but even gradual climate changes may result in relatively
quick and dramatic shifts in productivity for some species
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From Limiting Access to Limiting Options
Limited access has been implementedin most fisheries in New England overthe last few decades
Excess fishing capacity has requiredfirst limiting and then reducing the
number of active fishermen and howmuch they can fish
The general rule has been to grantongoing access to the most activefishermen and to virtually eliminateaccess for everyone else
The end result is that fishermen havebecome more specialized and lessdiversified
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The A-B-Cs of Groundfish Fishery Access
In 1994 Amendment 5 implemented a limited accessscheme for the Northeast Multispecies Fishery and
allocated fishing days to individuals.
Effort allocations were further curtailed with Amendment
7 in 1997 and
Additional cuts were still necessary in 2002 asAmendment 13 was being crafted and substantial latent
effort still existed in the fishery.
The decision was made to create A, B and C days
with only active vessels being granted A and B days.
C days can not be used for the foreseeable future. B
days could only be used for special access programs.
A current management proposal could require fishermen
to choose a specific area within the Gulf of Maine
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Lobster Management Zones:
Fishing in Little Boxes
Lobster permit
holders in Maine
must choose one
of seven zones
and must fish themajority of their
traps in that zone
Transfer is
possible, but
subject to long
waiting lists (years)
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Other New England Fisheries
Scallops Amendment 4 limits access in 1994 Limited access permits with individual days at sea allocations
General category scallop (up to 400 pounds of meats per day) remained open
to a much larger (but still limited) group but will soon curtail access under
amendment 11
Red Crab implemented limited access in 2002
Herring Amendment 1 limits access 2006
In all of these fisheries there was a clear need to limit effort and
catch, but the end result is that many fishermen have lostopportunities for diversification
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What goes up may come down
Lobster Landings in Maine, Massachusetts and Rhode Island
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
1965 1970 1975 1980 1985 1990 1995 2000 2005
Year
Pounds
RI MA ME
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Happy Scallop Permit Owners, Others not so happy
Massachussets Scallop, Cod and Lobster Revenues
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
1980 1985 1990 1995 2000 2005
Year
Dollars
Scallop ($)
Cod, Haddock, Yellowtail ($)
Lobster ($)
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A Portfolio Approach to Fishing Access Rights
Individualtransferable quotasmight provideopportunities todiversify fisheryaccess rights
Fishing cooperativeswith access rights tomultiple fisheriesmight do so as well
Both represent a
major cultural changethat many arestrongly resisting
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Sharing the fish the international context
The Gulf of Maine is home to a number ofcommercially fished stocks that straddle USand Canadian waters (e.g. herring andseveral groundfish stocks)
Some highly migratory stocks fished in theGulf of Maine range even more widely (e.g.
Northern Bluefin tuna) Optimal management and perhaps even
sustainability of these stocks depends onbilateral or multilateral cooperation
Economists, using a game theoreticapproach, have demonstrated that climatechange could create country-level incentivesthat could destabilize cooperativeagreements and undermine sustainability
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Implications of climate change for management of
transboundary fish stocks
A strong case can be made for the involvement of the 1977 shift in thePDO in destabilization of bi-national management of North AmericanPacific salmon fisheries (McKelvey et al. 2006).
Changing conditions for the North Sea herring stock are therefore likely toput agreements on cooperation under strain, especially because suchsecular changes in resource growth may be difficult to distinguish fromyear-on-year variability (Hannesson 2006).
The 1995 United Nations Fish Stocks Agreement facilitates the creation ofregional fishery management organizations (RFMOs) to govern harvestsof straddling and highly migratory fish stocks. The stability and success ofthese organizations will depend, in part, on how effectively they canmaintain member nations incentives to cooperate despite theuncertainties and shifting opportunities that may result from climate-drivenchanges in the productivity, migratory behavior, or catchability of the fish
stocks governed by the RFMO. Such climatic impacts may intensifyincentives for opportunism, and create other management challenges forthe RFMOs now governing tropical tuna fisheries in the Pacific and IndianOceans (Miller et al. 2007)
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Sharing for now
The US and Canada
have only recently
developed agreements
on how to share
transboundary stocksof cod, haddock and
yellowtail flounder on
Georges Bank.
Herring is jointly
assessed but no
formal sharing
agreement is in place
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Conclusions
Fishery management systems in New England tightly constrainfishermens choices and leave them highly vulnerable to shifts in
productivity of fisheries
Designing access rights that allow for greater diversification may insulate
fishermen from risks associated with climate change impacts on fisheries
This may also be important for generating support for tradeoffs betweenfisheries that may be desirable in the context of ecosystem based
management
Managing the marine ecosystem in the Northwest Atlantic depends on
international cooperation, and climate change may undermine existing
cooperative agreements Game theoretic analyses can point out why cooperation might break down
and may help in design of international treaties that will be robust to
potential climate change impacts