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Theory and Practice of Fisheries and Water Economics
Theory and Practice of Fisheries and Water Economics RQ Grafton, The Australian National University, Canberra, ACT, Australia D Squires, National Marine Fisheries Service, La Jolla, CA, USA; University of California, San Diego, CA, USA ã 2013 Elsevier Inc. All rights reserved.
Glossary Biological diversity (biodiversity) The total variation in all life on earth or within a given area or ecosystem, typically expressed as the total number of species found within the area of interest or the genetic diversity within a species. Common resources Resources that are nonexcludable (no restrictions on a person using the resource) and rivalrous (one person’s resource use diminishes other people’s use); sometimes called common-pool resources. Compensatory mitigation or biodiversity offsets Allows compensating for loss of biodiversity through production by compensating or offsetting this loss through increasing biodiversity elsewhere. Depletion cost or resource cost The reduction in value of a non-renewable resource that results from a fall in the total quantity available due to extraction. Direct conservation Conservation that directly links economic incentives to desired conservation outcomes. Ecosystem-based fisheries management An approach to fisheries management that focuses upon the whole, and linkages among components within an ecosystem, including human activities, so as to ensure ecological integrity. Ecosystem services Term given to the services that the environment can provide as part of its natural functions. For example, the water cycle provides an invaluable service by helping to restore water contaminated with pollutants. Ecosystems provide services that are supporting, regulating, provisioning, and cultural. Externality An economically significant effect of an activity, the consequences of which are borne (at least in part) by parties other than the party who engages in the activity. Impure public good A good that combines the features of both private and public goods.
Introduction The economics of water use and fisheries offers a number of important parallels. First, both of these renewable natural resources face key scarcity challenges in the services they provide at regional and global spatial scales due to overexploitation and habitat transformation; second, ensuring a sustainable, optimal management of fisheries or water requires explicit consideration of competing interests (use and nonuse among resource beneficiaries) and their use over time; third, the economic approaches proposed to resolve the scarcity challenge in water and fisheries are similar despite key differences in the physical nature of the two resources and how they are utilized; fourth, in the rural/coastal landscape, they share similar governance and organizational/industrial structures; fifth, both resources are critical components of local and global food
Encyclopedia of Energy, Natural Resource and Environmental Economics
Indirect conservation Integrates conservation and development by rewarding local communities for conserving habitat in ways that also improve their living standards. Market failures The failure of private markets to provide certain goods at all or at the most desirable level, typically arising from a situation in which multiple parties benefit from a good without decreasing one another’s benefits, and in which those who have paid for the good cannot prevent others from benefiting from it. Maximum sustainable yield The maximum yield or catch that a population can support, in which the additions to the population through recruitment, growth of individuals, and natural mortality are just balanced by removals from the population through catch. Nonpoint pollution Pollution where emissions and discharges cannot be traced to a specific point or location. Private benefits Benefits from private goods, which typically enter into markets and receive a price. Public benefits Benefits from public goods, many of which are not traded or valued in markets and which are external benefits. Because of free rider problems, public benefits are usually under-supplied. Public goods Goods that are neither rivalrous (one person’s resource use diminishes other people’s use) nor excludable (no restrictions on a person using the resource). Public goods can be pure or impure. Social norms Explicit or implicit rules specifying what behaviors are acceptable within a society or group. User cost The future cost, in terms of increased extraction costs in the future, and lost market opportunities from extracting an extra unit of a resource. Value of marginal product The marginal product of an input times the price of the output.
supplies such that their misuse and misallocation impose human impacts that greatly exceed their economic value added; and sixth, climate change affects both. First, this article separately reviews the challenges of efficiently managing fisheries and water; second, it provides an economic framework to judge performance; and third, it evaluates the gap between theory and practice, providing insights into better management of these critically important natural resources.
The Fisheries Problem Fisheries are locally important sources of high-quality protein, trade, and income in many developed and developing coastal nations. Seafood is also the most highly traded food
http://dx.doi.org/10.1016/B978-0-12-375067-9.00163-7
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internationally (over 50% of the catch is traded) and is an important but overlooked component of global food security and the right to food. As a source of livelihood, capture fisheries and aquaculture employed 43.5 million people in 2006, and 520 million people relied on income from seafood production. Global production of seafood from wild stocks is at or close to its long-run biological maximum level. Growing demand for fish, especially in Asia and to a lesser extent in Europe and North America, has been a major driver of the increased fishing effort that has contributed to this rise in overfishing and overfished stocks and overcapacity. According to the Food and Agriculture Organization of the United Nations, one-half of the global marine capture fish stocks are fully exploited, producing at, or close to, their maximum sustainable yield (MSY). A stagnant global marine catch at a level of 80–85 million metric tons since 1990 masks several underlying trends in the composition of the catch. In particular, the catch increasingly relies on lower-value species, which are characterized by large fluctuations in annual productivity, masking the slow degradation of the demersal (bottom-dwelling) high-value species, such as cod. Adding in unreported catch, especially from smallscale and artisanal fisheries and discards, makes the decline more pronounced. Fisheries economics provides a framework for understanding the causes of overexploitation as well as for approaches to resolve these challenges.
Economic Efficiency in a Fishery The economics of marine capture fisheries has traditionally focused on the bioeconomic optimal use of renewable and common resource stocks over time and on the underlying absence of well-defined, strong, and enforced property rights that lead to market failure and economic inefficiency. The fish stock is a resource that is renewed through natural growth and mortality and is common to all who exploit it. This is illustrated in Figure 1 in which the size of the fishery measured by
Growth in biomass
Maximum sustainable yield
rk/4
the weight of fish in the sea, or biomass, is shown relative to the growth or sustainable catch available from the fishery. At an intermediate size of the biomass, less than the maximum possible size of the biomass (k), the MSY or catch is realized. In this representation, the biomass that maximizes the sustained yield is exactly one-half of the maximum possible biomass (k/2), but it could be less or more than this proportion in an actual fishery. Due to weak or absent property rights and their enforcement, fishing vessels have largely been free to enter a fishery and to invest in the physical capital stock, adopt new technologies, and exert fishing effort until the economic rents in the fishery have been depleted. This is the tragedy of the commons. The presence of subsidies to fisheries further aggravates the overfishing, overcapacity, and overfished resource stocks by lowering the costs of fishing and/or increasing the revenues that are received. Most subsidies are for developed country fleets and are for fuel, and boat construction and renovation. When the stream of economic rents and consumer utility over time is discounted and optimized, the economically optimum stock of fish, often called the maximum economic yield stock, is often larger than the stock size corresponding to the MSY due to the marginal stock effect. The adoption of technical change, however, may reduce costs sufficiently in what is known as the marginal technology effect to give a resource stock corresponding to the maximum economic yield that may be lower than the MSY. Technical change is reshaping global fisheries and is arguably a more important contributor to the growth in capacity and fishing mortality than increases in vessel numbers and size, especially because vessel numbers of most of the world’s industrial fishing fleets have been largely stable in the past decade. Indeed, it is technical change, which includes electronic and mechanical process innovations that are added through investment in the physical capital stock, called investment-specific or embodied technical change, that is responsible for much of the increased fishing effort in recent decades. The economically efficient biomass and catch for a fishery must account for spatial heterogeneity in both the exploitation of fish stocks and fisher behavior that varies among demersal, benthic, and pelagic species and can lead to another source of market failure. This is because fish are not uniformly distributed across space, with some areas containing more biodiversity and larger biomasses than others, and some species that are relatively immobile and others that are migratory. Fishing vessels also do not uniformly disperse across the ocean. Instead, vessels exploit the heterogeneity, recognizing that some areas are more productive, and also balance the additional costs of fuel, opportunity cost of catch, and fish spoilage that may occur when traveling longer distances.
Fisheries Management
0
k/2
Biomass Figure 1 Maximum sustainable yield in a fishery.
k
Traditional approaches to management of marine capture fisheries have focused on ‘command-and-control’ regulations that are generally biologically motivated. The aim has been to keep aggregate catches at sustainable levels or to maintain a certain spawning stock biomass. The absence of well-defined property rights, however, generated ‘race to fish’ incentives to maximize
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their share of the total allowable catch (TAC). For instance, traditional command-and-control regulations included time and area closures, limits on trip frequencies or catches, and, often, restrictions on the use of one or more inputs, such as gear restrictions or lengths on vessel size, but to which fishers responded by expanding the use of unregulated inputs. These limited-entry programs have also been ‘grandfathered in’ excessive numbers and failed to resolve the ‘race to fish.’
Limited-Entry Management Experience with the ineffectiveness of limited entry and microregulation of marine capture fisheries has eventually led to the adoption of even stronger forms of property rights, either rights to a catch share of a TAC or, far less frequently, a share of total allowable effort (TAE) measured in days or quantity of pots, traps, or other gear. These rights can be individual and private, typically called individual transferable quotas or ITQs, when secure and transferable rights for catch shares of the TAC are assigned to individual vessels or common property, and held by groups that can include communities (community development quotas) or groups of vessels (harvesting cooperatives). These individual or group rights can be specified as shares of the TAC or TAE. Group rights can facilitate collective action and coordination; enable efficiency gains similar to ITQs or firms rather than markets organizing inputs and outputs; provide monitoring, compliance, and enforcement; limit fishing effort and capacity; enhance internalization of externalities among fishers; and generate conservation incentives. Experience has shown that strengthening property and use rights redirects economic incentives from the perverse incentives associated with the ‘race to fish’ to incentives that are more closely aligned with economic–ecological objectives. Secure and durable harvesting or territorial rights, in most cases, provide fishers with two incentives: they protect the value of their assets and encourage the greatest possible sustainable flow of benefits from fishing. These incentives are complementary and occur concurrently, but the former is likely to be manifested in forms of collective action, whereas the latter manifests itself in individual actions.
Right-Based Management Fisheries that have adopted effective rights-based management demonstrate increases in economic returns; higher quality and valued products; lower variable costs, scale, and scope economies; and exit of vessel numbers (thereby lowering fixed costs) and fewer fishers (thereby lowering employment), especially when the rights are explicitly transferable with few restrictions. Experience with some rights-based management has shown an increase in conservation incentives. This is because holders of rights enjoy the gains to conservation and ecological stewardship, often through a rise in the capital value of the catch or effort right for conservation of the target resource. Conservation incentives also strengthen and arise for bycatch, discards, and habitat destruction. Incentive-based approaches make management more robust by ensuring, in most cases, that those who have the greatest impact on fisheries have an increased interest in their long-run conservation and directly bear the cost of overexploitation.
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Rights-based management in international fisheries with transboundary resources is complicated by the need for selfenforcing multilateral cooperation and an additional right, access to exclusive economic zones, in addition to the right for catch or effort shares; the sovereign access right is held by the state and the use right is typically held by the firm, leading to potential tensions. Developing countries rely more heavily on common property resource management, in which communities organize themselves to solve the commons problem through customary management that focuses on local governance institutions and practices. Comanagement between central governments and developing country rights holders is required, but difficult.
Ecosystem-Based Management: Reconciling Private and Public Benefits The economics of marine capture fisheries must go beyond the private benefits accruing to fishers to consider optimum use of the entire marine environment, that is, its ecosystem services. These ecosystem services are the flows of value to human societies that arise from both the state and quantity of natural capital and include provisioning, regulating, cultural, and supporting services of the environment.
Ecosystem-Based Management Ecosystem-based fisheries management is an approach that tries to manage an ecosystem’s structure and function and nurtures and cultivates ecosystem services for humanity. Its goal is to sustain healthy marine ecosystems and the fisheries they support, whether or not the goods and services enter markets. Indeed, for many ecosystem services, markets simply do not exist. For instance, biodiversity conservation is a key component of ecosystem-based fisheries management that balances the mix of species to assure a flow of benefits over a range of conditions rather than the optimum rate of exploitation of a species. Biodiversity conservation contributes to producing and delivering ecosystem services and to ecosystem resilience, and ecosystem services are the primary motivation for biodiversity conservation. The optimum mix of private and public uses of the total marine environment occurs when marginal private benefits equal the marginal public benefits through the equimarginal principle. In a dynamic setting, the marginal net benefits (MNBs) should not only be equalized over competing uses but also be equalized at each point in time. If this were not the case, private and public use could be reallocated intertemporally to increase the present value of the discounted net benefits of the fish stocks and more broadly, the ecosystem and its services. Explicitly accounting for public benefits is likely to lead to larger resource stocks, richer biodiversity, greater ecosystem services, and larger-size fish. The traditional commons problem and traditional fisheries optimization framework emphasized private benefits and the resource stock externality. Common resource stocks – those that are nonexcludable and rivalrous – can be viewed as yielding public as well as the traditional private benefits on which the economics of fisheries has so long focused. Protected resource stocks – those for which protection generates some degree of nonrivalry – and
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biodiversity and ecosystems and their services can be viewed as impure public goods, generating both private and public benefits and with a range of nonexcludability and nonrivalry. In sum, the private and public benefits from unprotected and protected resource stocks and, more broadly, biodiversity and ecosystem services comprise the total economic value with a large nonmarket component that accompanies the traditional direct use values with market values in the economic optimization problem.
Public and Private Benefits Until marine policy and fisheries management explicitly considers both private and public benefits across a wide range of temporal and spatial scales, insufficient conservation and underprovision of common and protected resources, ecosystem services, and biodiversity will result. Economic policies to realize the full potential benefits from the marine environment include command-and-control regulation, such as performance standards that control bycatch; voluntary initiatives; economic incentives established through taxes and subsidies; the creation of markets for biodiversity and direct and indirect conservation policies; liability laws; technology standards (such as restrictions on gear and harvesting practices); property rights; and comanagement. To these standard economics tools can be added collective direct provision of the public benefits through marine-protected areas. Social norms, or explicit or implicit rules specifying what behaviors are acceptable within a society or group, can also be important for conservation and management. For example, a wide range of age, sex, totem, and community-wide practices limit or prohibit consumption of certain marine species and govern coral reef use in the Indo-Pacific, which in part confers conservation and management benefits. More generally, norms help define property rights and increase and sustain participation in conservation and management programs that underlay society’s foundations for the property rights fundamental to addressing the commons problem.
Rights-Based Approaches Rights-based management, as has been introduced and advocated in managing targeted fisheries populations, is a major step forward, but as currently practiced, falls short of what is required to achieve the broader goals of ecosystem-based management. In particular, contemporary rights-based management through individual rights to catch or effort shares of the TAC or TAE addresses only the private benefits or direct use value from an individual resource stock, that is, the conventional commons problem. Similar limitations apply to group rights to catch or effort shares. However, current rights-based management fails to address the nonmarket public benefits that include biodiversity and ecosystem services, both of which are impure public goods. Rights-based management has been applied to national waters within the Exclusive Economic Zones, but is beginning to be applied to the high seas, such as the Inter-American Tropical Tuna Commission’s Dolphin Mortality Limits and limited-entry program that also limits capacity.
Rights-based approaches can be expanded to include public ‘bads,’ such as bycatch or adverse impacts on habitat. For example, the Dolphin Mortality Limits have been created for tuna purse seine vessels setting on dolphins to capture yellowfin tunas in the Eastern Pacific Ocean. The bycatch limits have, in turn, helped to reduce dolphin bycatch. Bycatch rights, especially when the species is rare and stochastic, can also be organized along the lines of group rights, such as in Hawaii’s shallow set pelagic longline fishery for swordfish, or even as an insurance scheme where bycatch risk is pooled.
Spatial Controls The enforcement of marine reserves, no-take areas, and spatial zoning is a management approach that supports ecosystem-based fisheries. The provision of protected areas can be viewed as the public provision of pure and impure public goods, but through conservation or abatement. Reserves can potentially lead to increased abundance, size, and biodiversity, as well as a more fecund population within no-take areas, and can potentially increase harvests in exploited areas via fish migration. No-take areas are particularly helpful in the face of uncertainties and can also promote resilience to shocks and raise profitability, even when harvesting is optimal. Despite these considerable benefits, reserves fail to overcome key contributors to unsustainability, such as overcapacity and more fundamentally weak or absent property rights to the fishery as a whole. Spatial zoning of different activities has traditionally been followed, but is now receiving additional emphasis. For example, different TACs have been applied to different geographical areas, and in developing countries where catch or effort shares of TACs or TAEs are difficult to apply, limited entry is combined with zoning so that artisanal fishers exploit nearshore waters and increasingly larger vessels are progressively zoned offshore.
Direct Conservation Direct approaches to conservation directly link economic incentives to desired conservation outcomes and notably include payments for environmental services (PES). PES involve buyers and sellers in service provision, do not generally allow free entry and exit, and do not typically converge toward a clearing price. PES are based on conditionality, in which payments are only made conditional upon verifiable performances. PES are usually voluntary, contractual relationships rather than a market per se. They can potentially be applied in the marine realm to protect coral reefs, sea turtle and sea bird nesting habitats, and shark pupping grounds that provide mitigation to bycatch and are part of biodiversity conservation and ecosystem-based management; shift gear uses and harvesting practices toward lower bycatch of finfish, sea turtles, sea birds, and marine mammals; establish migration corridors through fishing grounds for sea turtles and marine mammals; establish incentives for small-scale and artisanal fishers to redirect or reorient fishing during nesting or pupping seasons; stop dynamite or cyanide fishing on coral reefs; establish conservation concessions or direct payments to help enforce MPAs and no-take zones; protect coastal habitat such as mangroves and sea grass; and ensure ongoing rather than one-shot incentives based on
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conditionality. PES have considerable potential for blue carbon programs with nearshore coastal habitat, such as mangroves, salt marshes, and sea grass beds, that can bury carbon in sediments faster than land habitats.
Offsets Compensatory mitigation or biodiversity offsets are yet another direct approach to regulate fishing activities. Although widely used for climate change such as with the use of clean development mechanisms and for terrestrial applications (wetlands banking, species conservation), it has yet to be widely practiced in fisheries. The approach could provide a supplemental tool for marine bycatch species with well-defined nesting sites, such as for sea turtles, sea birds, and sharks, with well-defined pupping grounds, or biological hotspots with aggregating animals. Noncompensatory mitigation will be required for rare, endangered, and threatened species.
The Water Scarcity Problem The rapid growth in global population is putting increasing pressure on existing water resources such that the global demand for water is predicted to outstrip supply by 40% in 2050. At the same time, a changing climate is shifting the availability of water resources across the planet, with many areas that are already water-scarce likely to receive even less water and/or a more variable precipitation. A key to understanding the economics of water use and its allocation is that water is not a single or homogeneous resource. Rather, the services water provides differ greatly in terms of where it is located, its time of use and nonuse, who the beneficiaries of its use and nonuse are, and the nature of its use and nonuse. Quantifying the trade-offs of when, where, and how water is utilized (use and nonuse) is the basis for efficiently allocating water to generate improved water outcomes.
Indirect Approaches
Water Allocation: The Economic Framework
Indirect conservation approaches integrate conservation and development by rewarding local communities for conserving habitat in ways that also improve their living standards and are largely applied in developing countries. Community conservation attempts to create a link between development and conservation, so both can be achieved simultaneously. Indirect approaches use development initiatives and indirect incentives to align local resource users’ behavior with conservation. Individuals and communities are not directly rewarded for pursuing conservation activities or directly punished for degrading activities. Instead, conservation is a joint product with development through indirect incentives through redirecting labor and capital away from activities that degrade ecosystems, encouraging commercial activities that supply ecosystem services as joint outputs (e.g., ecotourism), and raising incomes to reduce dependence on resource extraction that degrades the ecosystem. Indirect approaches can be used for sustainable exploitation of mangroves through limited aquaculture in return for protection of remaining areas; similarly for shellfish beds, for limited exploitation of reef fish for consumption, or export coupled with protection rather than cyanide or blast fishing; for ecotourism on MPAs; and protection of blue carbon systems. The International Coral Reef Action Network in Kenya’s Malindi/Watamu Marine National Parks and Reserves supports community activities, including improved repair and maintenance facilities for vessels belonging to local tour-boat operators, improved visitor accommodation facilities and increased capacity among tour-boat operators and park staff in visitorguiding skills. New ecotourism projects (e.g., mangrove boardwalks) generate funds for school fees. The difficulty in applying indirect conservation to fisheries is complicated by the marginal geographical and social role of marine communities, absence of clearly defined property rights, insufficient comanagement, and difficulties in developing alternative livelihoods, especially in areas with low ecotourism potential and limited alternative economic activities.
Economic theory provides a theoretical framework for making choices on how to allocate scarce resources, such as water. In a static framework, this requires that the MNBs of water use are equalized across competing uses and nondirect uses, including the retention of water for environmental purposes. From an economic perspective, an efficient allocation of water requires that among all competing uses, the MNBs, or the marginal net returns less marginal cost, are equalized. If this were not the case, it would be possible to reallocate water across competing uses and fully compensate all the losers and still have a higher social surplus. This is illustrated in Figure 2 in which there are two competing uses of water: water for irrigation and water for
$
$ MNB for energy
MNB for irrigation
p*
p*
X: Water use irrigation
Y: Water use energy
Total water supply Figure 2 Marginal net benefits of water use.
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electricity or energy generation. Any other allocation than a volume of X for irrigation and Y for energy uses is inefficient. The equimarginal principle shown in Figure 2 is a necessary condition for an economically efficient allocation of water, or indeed any scarce resource. In a dynamic setting, the MNBs should be equalized not only over competing uses but also at each point in time. If this were not the case, water use could be reallocated intertemporally to increase the present value of the discounted net benefits of water. An important economic cost of water use in a dynamic setting is the ‘shadow price’ of water. This is a resource cost or depletion cost that represents the additional future cost brought forward in time from a marginal use of the resource today rather consuming the water at some point in the future. For example, if a water utility is depleting a dam or aquifer, the extra costs of this depletion, such as greater pumping costs, that will be incurred in the future must be accounted for as a cost of current water use. If the shadow price is not considered, then current consumption exceeds the efficient level of consumption that maximizes the discounted net benefits of water use over time. While the theory of economically efficient water allocation is straightforward, its application is anything but simple. This difficulty stems from the physical characteristics of water and also the fact that water has a social and cultural significance that is not only important but also difficult to quantify. In terms of its physical characteristics, water is far more than the bonding of two hydrogen atoms with one oxygen atom. For instance, the value of water is determined by when water is available; the quality of the water and whether it is fit for the purpose; if it can be captured or stored; and whether access and use of water can be controlled or regulated. All of these factors are confounding factors that may hinder an efficient allocation of water across uses and over time. Even if water were a homogeneous resource that could be easily quantified and controlled, the challenge of allocating water across uses and users would still be formidable because in many locations there is no system for reallocating water across competing uses. Thus, in many parts of the world, even if there were a higher valued and alternative use for water than the existing use, the reallocation would never occur if there was no market or other mechanism to facilitate the transfer. Another challenge is that water consumption is considered to be a basic human right by many. As a result, any efficient reallocation that disadvantages a community in terms of its basic use of water may not be permitted by decision makers even if the winners could, in theory, fully compensate the losers for their losses.
relatively low and when current supply is scarce relative to current demand, prices should be relatively high. Unfortunately, the price paid for water by a household or by a farmer or by industrial plant rarely represents its marginal social net benefit. Typically, households pay a regulated price that fails to account for the full marginal cost that should include the shadow price of water. In many locations, however, the water price is set equal to the long-run average cost, that is, the average cost of supplying water from the existing water infrastructure (including upfront and ongoing costs). As a result of the failure to price water on the basis of its marginal cost during periods of low rainfall, there may be an imbalance in supply and demand. In irrigated agriculture, farmers are typically subsidized in terms of the infrastructure used to deliver the water to their farms, and rarely do they incur a charge or cost for any reductions in water quality from their subsequent use of the water. In many cases, water use is heavily subsidized and prices are set without proper consideration of scarcity at an inefficiently low level or are even set at zero. This results in overuse and fails to promote either efficient consumption or investment in water conservation. For example, water prices in the agricultural sector in Israel rose 100% over the last decade. These price increases have led to substantial changes in agricultural practices including a move to drip irrigation, adopting more appropriate crops, removing water-intensive trees and replanting with water-saving types, and increasing the use of recycled and desalinated water sources. As a result, agricultural water demand has declined significantly and desalinated and recycled sources of water now make up around 50% of irrigated water use. Recent studies suggest that price can also be a highly effective means of regulating household water demand. Thus, by setting efficient water prices or abstraction charges, the demand for water can be regulated and overuse of water resources can be prevented. A key issue in setting an efficient price is the question of equity as studies by the Organization for Economic Cooperation and Development (OECD) confirm that the affordability of water in low-income households can be a problem. In order to reduce the burden of higher water prices on low-income households, several measures could be implemented, such as reduced water access fees, progressive tariffs, water vouchers, or lump sum transfers. If water pricing is designed well, increasing prices may actually improve equity, as the revenues can be used to increase water access among lowincome households who may not otherwise have access to public or municipal water supplies.
Water Markets – Quantity
Water Allocation: Theory and Practice The Importance of Price The most efficient way to regulate the demand for a resource is through its price. Provided that the price of water reflects its marginal social net benefit and its relative scarcity, the resulting allocation of water should be efficient if there are no restrictions on its trade or consumption. Thus, when the current water supply is plentiful relative to demand, prices should be
An alternative to setting water prices directly is to establish a competitive market for water rights so that the efficient price for water use is obtained via market trades. Water markets involve setting a fixed cap on the amount of water that can be withdrawn from a resource and then creating tradable property rights for access to the available water. This allows water authorities to prevent overuse of resources by limiting the amount of access rights that are provided in total, and also promotes the efficient allocation of water across
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competing uses because water is allocated to the users who value it the most. Under a properly functioning market (where the number of rights is not overallocated), access to the resource is no longer freely available, but depends on acquiring the right to access the resource. This creates a scarcity value for water and an incentive for individuals to use water more efficiently, for example, by employing water-efficient technology, adopting deficit irrigation, or growing less water-intensive crops, thereby reducing demand. Markets also permit water to be transferred from low-value uses to high-value uses. For example, allowing water to be traded from lower-valued agricultural use to higher-valued urban use can be beneficial to both buyers and sellers. In response to rising water demand and increasing water scarcity, the use of water markets to manage water demand is growing, and well-developed markets exist in Australia’s Murray–Darling Basin (MDB), Chile, and the southwestern United States. The type and structure of water markets differ widely across countries, depending on the historical context of water law and the priorities of the regulators when water markets were established. Key factors that facilitate water trade include adequate amounts of upper catchment water storage that allow for both upstream and downstream trade, a property rights structure that unbundles land from water and provides adequate security and confidence in the property right, and a cap or overall limit on water use such that water is scarce. In the millennium drought that covered most of the MDB for almost a decade, and ended in 2010, water markets allowed water to be traded large distances from low- to higher-value uses. The water traded in the MDB represented about 20% or more of the entire water consumed, and despite a 70% reduction in surface-water use by irrigators from 2000/01 to 2007/08 as a result of the drought, the nominal gross value of irrigated agriculture declined by less than 1%. One of the principal objections to water trading is that it can have negative impacts on third parties who are not represented in the cost of the trade. For example, at an individual level, purchasing a water allocation upstream may reduce downstream flows in times of drought. However, if water rights are granted as shares of the annual water availability and so are adjustable based on levels of runoff, as in Australia, such parties are not differentially impacted and potential thirdparty harm from trades would be reduced. At a regional level, there are also concerns that there may be significant third-party impacts of trade on communities that are dependent on water-intensive industries. While such concerns are legitimate, the evidence suggests that the impacts are not as significant as is often feared. An evaluation of water markets in California, for instance, concluded that although there were some negative effects locally, overall water transfers increased total welfare.
Water Markets – Quality Markets can be used to help regulate water quality. In this case, what are traded are not volumes of water but quantities of a pollutant or emissions that reach a water body. In theory, trading of emissions under a fixed cap can be more cost-effective than command-and-control instruments that impose the same
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controls on all polluters and do not take into account the heterogeneity of abatement costs. A market-based approach also provides a dynamic incentive for additional pollution abatement, as polluters can reduce their costs by the amount of the emissions or permit price for each additional unit of pollution abatement. To date, most water quality or water emissions trading schemes have been implemented in the United States with mixed success. A successful scheme is the Long Island Sound Nitrogen Credit Exchange Program in the United States, where 12 million credits have been bought or sold at a value of USD 30 million. In Australia, the Hunter River Salinity Trading has helped to ensure that the defined water salinity target has not been exceeded, and water treatment and storage costs have been significantly reduced. The relative success of these schemes is due to the minimal regulation on trades, the large number of eligible participants in trading markets, effective monitoring and enforcement procedures, and strong legislation underpinning the schemes. The combination of emissions standards, taxes, and trading has been largely successful at reducing point source water pollution in many developed countries, particularly from urban and industrial sectors. To date, however, little progress has been made in tackling nonpoint sources of pollution, primarily from agricultural sources, as they are much more difficult to manage. The particular challenges with nonpoint sources of water pollution are (1) it is much more difficult to identify and monitor the actual sources of pollution and (2) ambient levels of nonpoint source water pollution are influenced by the weather and other environmental factors, all of which have a strong stochastic element.
Water Valuation In order to set efficient prices that account for externalities, or to set the appropriate cap on extractions and in the absence of water markets, the value of water across different uses needs to be estimated so that the net marginal values are equalized across competing uses. If water is a fully variable input in a production process such as growing a crop of cotton or rice, the value of water can be measured by its value of the marginal product of water (VMP), or the marginal change in output from using an additional unit of an input multiplied by the price of the output (or marginal revenue if the output price varies). This provides a measure of the willingness to pay for changes in the quantity of water used, as shown in Figure 3. If the production function and the quantities of each input are known, and the prices of each input (except for water) can be observed in input markets, the VMP of water can be estimated from the remainder of the total value of the output. In order to quantify the value of leaving water in the environment, nonmarket valuation approaches are required. These include (1) revealed preference methods, where the value of water is estimated based on individual’s actual expenditures on water resources; (2) stated preference methods, which ask individuals directly how much they would be willing to pay for hypothetical changes in water resources; and (3) benefit transfer methods, where the value of water is estimated using data from studies of similar water resources.
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Price
p0
p1
VMP of water
Quantity w0
w1
Figure 3 Value of marginal product of water.
Concluding Remarks For both fisheries and water, an economic framework provides important insights and guidance on how to reduce overexploitation and increase efficiency, and to consider the complicated trade-offs and market failures inherent in their use. Some key insights from economic theory and its practice in these two resources are (1) the importance of incentives at an individual, group, and regulator level to ensure efficient and equitable outcomes; (2) the need to get ‘prices right’ so that the price of fish or water reflect their economic opportunity cost, including the value of the resource in the environment and over time; (3) the difficult challenge of managing a resource that is highly variable and stochastic; and (4) the importance of adequately adapting economic frameworks to existing institutional constraints and limitations.
Further Reading 2030 Water Resources Group (2009) Charting Our Water Future: Economic Frameworks to Inform Decision Making. http://www.2030waterresourcesgroup.com/water_full/ Charting_Our_Water_Future_Final.pdf. Anderson J, Asche F, and Tvetera˚s S (2010) World fish markets. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 113–123. Oxford: Oxford University Press. Asche F and Bjørndal T (2010) Aquaculture: Production and markets. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 60–71. Oxford: Oxford University Press. Boyd JW, Shabman LA, and Stephenson K (2007) Trading as a U.S. water quality management tool: Prospects for a market alternative. Ecological Economics of Sustainable Watershed Management 7: 385–407. Brander K (2010) Climate change and fisheries management. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 123–136. Oxford: Oxford University Press. Cinner J (2005) Socio-economic factors influencing customary marine tenure in the Indo-Pacific. Ecology and Society 10(1): 1–36. Cinner J and Aswani S (2007) Integrating customary management into marine conservation. Biological Conservation 140: 201–216. Clark CW (2005) Mathematical Bioeconomics: The Optimal Management of Renewable Resources. New York: John Wiley & Sons. Clark CW (2010) Challenges in marine capture fisheries. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 638–645. Oxford: Oxford University Press.
Conrad J and Smith MD (2012) Nonspatial and spatial models in bioeconomics. Natural Resource Modeling 25(1): 52–92. Curtin R and Prellezo R (2010) Understanding marine ecosystem based management: A literature review. Marine Policy 34: 821–883. Grafton RQ (ed.) (2009) Economics of Water Resources. Cheltenham: Edward Elgar Publishing. Grafton RQ, Arnason R, Bjørndal T, et al. (2006) Incentive-based approaches to sustainable fisheries. Canadian Journal of Fisheries and Aquatic Sciences 63(3): 699–710. Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (2010) Marine fisheries conservation and management: At the crossroads. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 3–19. Oxford: Oxford University Press. Grafton RQ and Hussey K (eds.) (2011) Water Resources Planning and Management. Cambridge: Cambridge University Press. Grafton RQ and Ward MB (2010) Dynamically Efficient Urban Water Policy. CWEEP Research Paper 10-13. Canberra: Australia National University. Grafton RQ, et al. (2011a) An integrated assessment of water markets: A cross-country comparison. Review of Environmental Economics and Policy 5(2): 219–239. http://dx.doi.org/10.1093/reep/rer002. Grafton RQ, et al. (2011b) A comparative assessment of water markets: Insights from the Murray–Darling Basin of Australia and the Western US. Water Policy. http://dx.doi.org/10.2166/wp.2011.016. Grafton RQ, et al. (2011c) Determinants of residential water consumption: Evidence and analysis from a 10-country household survey. Water Resources Research 47 (W08537). http://dx.doi.org/10.1029/201 0WR009685. Hannesson R (2004) Privitzation of the oceans. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 666–674. Oxford: Oxford University Press. Hilborn R (2007) Defining success in fisheries and conflicts in objectives. Marine Policy 31(2): 153–158. Hilborn R, Oresanz JM, and Parma A (2005) Institutions, incentives, and the future of fisheries. Philosophical Transactions of the Royal Society B 360: 47–57. Howitt RE (1994) Empirical analysis of water market institutions: The 1991 California water market. Resource and Energy Economics 16(4): 357–371. Jentoft S, McCay B, and Wilson D (2010) Fisheries co-management: Improving fisheries governance through stakeholder participation. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 675–686. Oxford: Oxford University Press. Kraemer RA, Kampa E, and Interwies E (2003) The Role of Tradable Permits in Water Pollution Control. Ecologic, Institute for International and European Environmental, Policy. http://ecologic.eu/1017. OECD (2008) OECD Environmental Outlook to 2030. Paris: OECD. OECD (2009) Managing Water for All: An OECD Perspective on Pricing and Financing. Paris: OECD. OECD (2010a) Pricing Water Resources and Water and Sanitation Services. Paris: OECD. OECD (2010b) Taxation, Innovation and the Environment. Paris: OECD. Olmstead SM (2010) The economics of water quality. Review of Environmental Economics and Policy 4(1): 44–62. Pikitch EK, Santora C, Babcock EA, et al. (2004) Ecosystem-based fishery management. Science 305: 346–347. Rice J and Ridgeway L (2010) Conservation of biodiversity and fisheries management. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 139–149. Oxford: Oxford University Press. Rogers P, de Silva R, and Bhatia R (2002) Water is an economic good: How to use prices to promote equity, efficiency, and sustainability. Water Policy 4: 1–17. Selman M, et al. (2009) Water Quality Trading Programs: An International Overview. Washington, DC: World Resources Institute WRI Issue Brief, No. 1. Smith A and Fulton E (2010) Ecosystem modeling and fisheries management. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 182–194. Oxford: Oxford University Press. Squires J, Kirkley J, and Tisdell C (1995) Individual transferable quotas as a fisheries management tool. Reviews in Fisheries Science 3(2): 141–169. Squires D and Vestergaard N (in press) Technical change and the commons. Review of Economics and Statistics. Tietenberg TH (1990) Economic instruments for environmental regulation. Oxford Review of Economic Policy 6(1): 17–33. Willmann R and Kelleher K (2010) Economic trends in global marine fisheries. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 20–43. Oxford: Oxford University Press.
Glossary Biological diversity (biodiversity) The total variation in all life on earth or within a given area or ecosystem, typically expressed as the total number of species found within the area of interest or the genetic diversity within a species. Common resources Resources that are nonexcludable (no restrictions on a person using the resource) and rivalrous (one person’s resource use diminishes other people’s use); sometimes called common-pool resources. Compensatory mitigation or biodiversity offsets Allows compensating for loss of biodiversity through production by compensating or offsetting this loss through increasing biodiversity elsewhere. Depletion cost or resource cost The reduction in value of a non-renewable resource that results from a fall in the total quantity available due to extraction. Direct conservation Conservation that directly links economic incentives to desired conservation outcomes. Ecosystem-based fisheries management An approach to fisheries management that focuses upon the whole, and linkages among components within an ecosystem, including human activities, so as to ensure ecological integrity. Ecosystem services Term given to the services that the environment can provide as part of its natural functions. For example, the water cycle provides an invaluable service by helping to restore water contaminated with pollutants. Ecosystems provide services that are supporting, regulating, provisioning, and cultural. Externality An economically significant effect of an activity, the consequences of which are borne (at least in part) by parties other than the party who engages in the activity. Impure public good A good that combines the features of both private and public goods.
Introduction The economics of water use and fisheries offers a number of important parallels. First, both of these renewable natural resources face key scarcity challenges in the services they provide at regional and global spatial scales due to overexploitation and habitat transformation; second, ensuring a sustainable, optimal management of fisheries or water requires explicit consideration of competing interests (use and nonuse among resource beneficiaries) and their use over time; third, the economic approaches proposed to resolve the scarcity challenge in water and fisheries are similar despite key differences in the physical nature of the two resources and how they are utilized; fourth, in the rural/coastal landscape, they share similar governance and organizational/industrial structures; fifth, both resources are critical components of local and global food
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Indirect conservation Integrates conservation and development by rewarding local communities for conserving habitat in ways that also improve their living standards. Market failures The failure of private markets to provide certain goods at all or at the most desirable level, typically arising from a situation in which multiple parties benefit from a good without decreasing one another’s benefits, and in which those who have paid for the good cannot prevent others from benefiting from it. Maximum sustainable yield The maximum yield or catch that a population can support, in which the additions to the population through recruitment, growth of individuals, and natural mortality are just balanced by removals from the population through catch. Nonpoint pollution Pollution where emissions and discharges cannot be traced to a specific point or location. Private benefits Benefits from private goods, which typically enter into markets and receive a price. Public benefits Benefits from public goods, many of which are not traded or valued in markets and which are external benefits. Because of free rider problems, public benefits are usually under-supplied. Public goods Goods that are neither rivalrous (one person’s resource use diminishes other people’s use) nor excludable (no restrictions on a person using the resource). Public goods can be pure or impure. Social norms Explicit or implicit rules specifying what behaviors are acceptable within a society or group. User cost The future cost, in terms of increased extraction costs in the future, and lost market opportunities from extracting an extra unit of a resource. Value of marginal product The marginal product of an input times the price of the output.
supplies such that their misuse and misallocation impose human impacts that greatly exceed their economic value added; and sixth, climate change affects both. First, this article separately reviews the challenges of efficiently managing fisheries and water; second, it provides an economic framework to judge performance; and third, it evaluates the gap between theory and practice, providing insights into better management of these critically important natural resources.
The Fisheries Problem Fisheries are locally important sources of high-quality protein, trade, and income in many developed and developing coastal nations. Seafood is also the most highly traded food
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internationally (over 50% of the catch is traded) and is an important but overlooked component of global food security and the right to food. As a source of livelihood, capture fisheries and aquaculture employed 43.5 million people in 2006, and 520 million people relied on income from seafood production. Global production of seafood from wild stocks is at or close to its long-run biological maximum level. Growing demand for fish, especially in Asia and to a lesser extent in Europe and North America, has been a major driver of the increased fishing effort that has contributed to this rise in overfishing and overfished stocks and overcapacity. According to the Food and Agriculture Organization of the United Nations, one-half of the global marine capture fish stocks are fully exploited, producing at, or close to, their maximum sustainable yield (MSY). A stagnant global marine catch at a level of 80–85 million metric tons since 1990 masks several underlying trends in the composition of the catch. In particular, the catch increasingly relies on lower-value species, which are characterized by large fluctuations in annual productivity, masking the slow degradation of the demersal (bottom-dwelling) high-value species, such as cod. Adding in unreported catch, especially from smallscale and artisanal fisheries and discards, makes the decline more pronounced. Fisheries economics provides a framework for understanding the causes of overexploitation as well as for approaches to resolve these challenges.
Economic Efficiency in a Fishery The economics of marine capture fisheries has traditionally focused on the bioeconomic optimal use of renewable and common resource stocks over time and on the underlying absence of well-defined, strong, and enforced property rights that lead to market failure and economic inefficiency. The fish stock is a resource that is renewed through natural growth and mortality and is common to all who exploit it. This is illustrated in Figure 1 in which the size of the fishery measured by
Growth in biomass
Maximum sustainable yield
rk/4
the weight of fish in the sea, or biomass, is shown relative to the growth or sustainable catch available from the fishery. At an intermediate size of the biomass, less than the maximum possible size of the biomass (k), the MSY or catch is realized. In this representation, the biomass that maximizes the sustained yield is exactly one-half of the maximum possible biomass (k/2), but it could be less or more than this proportion in an actual fishery. Due to weak or absent property rights and their enforcement, fishing vessels have largely been free to enter a fishery and to invest in the physical capital stock, adopt new technologies, and exert fishing effort until the economic rents in the fishery have been depleted. This is the tragedy of the commons. The presence of subsidies to fisheries further aggravates the overfishing, overcapacity, and overfished resource stocks by lowering the costs of fishing and/or increasing the revenues that are received. Most subsidies are for developed country fleets and are for fuel, and boat construction and renovation. When the stream of economic rents and consumer utility over time is discounted and optimized, the economically optimum stock of fish, often called the maximum economic yield stock, is often larger than the stock size corresponding to the MSY due to the marginal stock effect. The adoption of technical change, however, may reduce costs sufficiently in what is known as the marginal technology effect to give a resource stock corresponding to the maximum economic yield that may be lower than the MSY. Technical change is reshaping global fisheries and is arguably a more important contributor to the growth in capacity and fishing mortality than increases in vessel numbers and size, especially because vessel numbers of most of the world’s industrial fishing fleets have been largely stable in the past decade. Indeed, it is technical change, which includes electronic and mechanical process innovations that are added through investment in the physical capital stock, called investment-specific or embodied technical change, that is responsible for much of the increased fishing effort in recent decades. The economically efficient biomass and catch for a fishery must account for spatial heterogeneity in both the exploitation of fish stocks and fisher behavior that varies among demersal, benthic, and pelagic species and can lead to another source of market failure. This is because fish are not uniformly distributed across space, with some areas containing more biodiversity and larger biomasses than others, and some species that are relatively immobile and others that are migratory. Fishing vessels also do not uniformly disperse across the ocean. Instead, vessels exploit the heterogeneity, recognizing that some areas are more productive, and also balance the additional costs of fuel, opportunity cost of catch, and fish spoilage that may occur when traveling longer distances.
Fisheries Management
0
k/2
Biomass Figure 1 Maximum sustainable yield in a fishery.
k
Traditional approaches to management of marine capture fisheries have focused on ‘command-and-control’ regulations that are generally biologically motivated. The aim has been to keep aggregate catches at sustainable levels or to maintain a certain spawning stock biomass. The absence of well-defined property rights, however, generated ‘race to fish’ incentives to maximize
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their share of the total allowable catch (TAC). For instance, traditional command-and-control regulations included time and area closures, limits on trip frequencies or catches, and, often, restrictions on the use of one or more inputs, such as gear restrictions or lengths on vessel size, but to which fishers responded by expanding the use of unregulated inputs. These limited-entry programs have also been ‘grandfathered in’ excessive numbers and failed to resolve the ‘race to fish.’
Limited-Entry Management Experience with the ineffectiveness of limited entry and microregulation of marine capture fisheries has eventually led to the adoption of even stronger forms of property rights, either rights to a catch share of a TAC or, far less frequently, a share of total allowable effort (TAE) measured in days or quantity of pots, traps, or other gear. These rights can be individual and private, typically called individual transferable quotas or ITQs, when secure and transferable rights for catch shares of the TAC are assigned to individual vessels or common property, and held by groups that can include communities (community development quotas) or groups of vessels (harvesting cooperatives). These individual or group rights can be specified as shares of the TAC or TAE. Group rights can facilitate collective action and coordination; enable efficiency gains similar to ITQs or firms rather than markets organizing inputs and outputs; provide monitoring, compliance, and enforcement; limit fishing effort and capacity; enhance internalization of externalities among fishers; and generate conservation incentives. Experience has shown that strengthening property and use rights redirects economic incentives from the perverse incentives associated with the ‘race to fish’ to incentives that are more closely aligned with economic–ecological objectives. Secure and durable harvesting or territorial rights, in most cases, provide fishers with two incentives: they protect the value of their assets and encourage the greatest possible sustainable flow of benefits from fishing. These incentives are complementary and occur concurrently, but the former is likely to be manifested in forms of collective action, whereas the latter manifests itself in individual actions.
Right-Based Management Fisheries that have adopted effective rights-based management demonstrate increases in economic returns; higher quality and valued products; lower variable costs, scale, and scope economies; and exit of vessel numbers (thereby lowering fixed costs) and fewer fishers (thereby lowering employment), especially when the rights are explicitly transferable with few restrictions. Experience with some rights-based management has shown an increase in conservation incentives. This is because holders of rights enjoy the gains to conservation and ecological stewardship, often through a rise in the capital value of the catch or effort right for conservation of the target resource. Conservation incentives also strengthen and arise for bycatch, discards, and habitat destruction. Incentive-based approaches make management more robust by ensuring, in most cases, that those who have the greatest impact on fisheries have an increased interest in their long-run conservation and directly bear the cost of overexploitation.
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Rights-based management in international fisheries with transboundary resources is complicated by the need for selfenforcing multilateral cooperation and an additional right, access to exclusive economic zones, in addition to the right for catch or effort shares; the sovereign access right is held by the state and the use right is typically held by the firm, leading to potential tensions. Developing countries rely more heavily on common property resource management, in which communities organize themselves to solve the commons problem through customary management that focuses on local governance institutions and practices. Comanagement between central governments and developing country rights holders is required, but difficult.
Ecosystem-Based Management: Reconciling Private and Public Benefits The economics of marine capture fisheries must go beyond the private benefits accruing to fishers to consider optimum use of the entire marine environment, that is, its ecosystem services. These ecosystem services are the flows of value to human societies that arise from both the state and quantity of natural capital and include provisioning, regulating, cultural, and supporting services of the environment.
Ecosystem-Based Management Ecosystem-based fisheries management is an approach that tries to manage an ecosystem’s structure and function and nurtures and cultivates ecosystem services for humanity. Its goal is to sustain healthy marine ecosystems and the fisheries they support, whether or not the goods and services enter markets. Indeed, for many ecosystem services, markets simply do not exist. For instance, biodiversity conservation is a key component of ecosystem-based fisheries management that balances the mix of species to assure a flow of benefits over a range of conditions rather than the optimum rate of exploitation of a species. Biodiversity conservation contributes to producing and delivering ecosystem services and to ecosystem resilience, and ecosystem services are the primary motivation for biodiversity conservation. The optimum mix of private and public uses of the total marine environment occurs when marginal private benefits equal the marginal public benefits through the equimarginal principle. In a dynamic setting, the marginal net benefits (MNBs) should not only be equalized over competing uses but also be equalized at each point in time. If this were not the case, private and public use could be reallocated intertemporally to increase the present value of the discounted net benefits of the fish stocks and more broadly, the ecosystem and its services. Explicitly accounting for public benefits is likely to lead to larger resource stocks, richer biodiversity, greater ecosystem services, and larger-size fish. The traditional commons problem and traditional fisheries optimization framework emphasized private benefits and the resource stock externality. Common resource stocks – those that are nonexcludable and rivalrous – can be viewed as yielding public as well as the traditional private benefits on which the economics of fisheries has so long focused. Protected resource stocks – those for which protection generates some degree of nonrivalry – and
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biodiversity and ecosystems and their services can be viewed as impure public goods, generating both private and public benefits and with a range of nonexcludability and nonrivalry. In sum, the private and public benefits from unprotected and protected resource stocks and, more broadly, biodiversity and ecosystem services comprise the total economic value with a large nonmarket component that accompanies the traditional direct use values with market values in the economic optimization problem.
Public and Private Benefits Until marine policy and fisheries management explicitly considers both private and public benefits across a wide range of temporal and spatial scales, insufficient conservation and underprovision of common and protected resources, ecosystem services, and biodiversity will result. Economic policies to realize the full potential benefits from the marine environment include command-and-control regulation, such as performance standards that control bycatch; voluntary initiatives; economic incentives established through taxes and subsidies; the creation of markets for biodiversity and direct and indirect conservation policies; liability laws; technology standards (such as restrictions on gear and harvesting practices); property rights; and comanagement. To these standard economics tools can be added collective direct provision of the public benefits through marine-protected areas. Social norms, or explicit or implicit rules specifying what behaviors are acceptable within a society or group, can also be important for conservation and management. For example, a wide range of age, sex, totem, and community-wide practices limit or prohibit consumption of certain marine species and govern coral reef use in the Indo-Pacific, which in part confers conservation and management benefits. More generally, norms help define property rights and increase and sustain participation in conservation and management programs that underlay society’s foundations for the property rights fundamental to addressing the commons problem.
Rights-Based Approaches Rights-based management, as has been introduced and advocated in managing targeted fisheries populations, is a major step forward, but as currently practiced, falls short of what is required to achieve the broader goals of ecosystem-based management. In particular, contemporary rights-based management through individual rights to catch or effort shares of the TAC or TAE addresses only the private benefits or direct use value from an individual resource stock, that is, the conventional commons problem. Similar limitations apply to group rights to catch or effort shares. However, current rights-based management fails to address the nonmarket public benefits that include biodiversity and ecosystem services, both of which are impure public goods. Rights-based management has been applied to national waters within the Exclusive Economic Zones, but is beginning to be applied to the high seas, such as the Inter-American Tropical Tuna Commission’s Dolphin Mortality Limits and limited-entry program that also limits capacity.
Rights-based approaches can be expanded to include public ‘bads,’ such as bycatch or adverse impacts on habitat. For example, the Dolphin Mortality Limits have been created for tuna purse seine vessels setting on dolphins to capture yellowfin tunas in the Eastern Pacific Ocean. The bycatch limits have, in turn, helped to reduce dolphin bycatch. Bycatch rights, especially when the species is rare and stochastic, can also be organized along the lines of group rights, such as in Hawaii’s shallow set pelagic longline fishery for swordfish, or even as an insurance scheme where bycatch risk is pooled.
Spatial Controls The enforcement of marine reserves, no-take areas, and spatial zoning is a management approach that supports ecosystem-based fisheries. The provision of protected areas can be viewed as the public provision of pure and impure public goods, but through conservation or abatement. Reserves can potentially lead to increased abundance, size, and biodiversity, as well as a more fecund population within no-take areas, and can potentially increase harvests in exploited areas via fish migration. No-take areas are particularly helpful in the face of uncertainties and can also promote resilience to shocks and raise profitability, even when harvesting is optimal. Despite these considerable benefits, reserves fail to overcome key contributors to unsustainability, such as overcapacity and more fundamentally weak or absent property rights to the fishery as a whole. Spatial zoning of different activities has traditionally been followed, but is now receiving additional emphasis. For example, different TACs have been applied to different geographical areas, and in developing countries where catch or effort shares of TACs or TAEs are difficult to apply, limited entry is combined with zoning so that artisanal fishers exploit nearshore waters and increasingly larger vessels are progressively zoned offshore.
Direct Conservation Direct approaches to conservation directly link economic incentives to desired conservation outcomes and notably include payments for environmental services (PES). PES involve buyers and sellers in service provision, do not generally allow free entry and exit, and do not typically converge toward a clearing price. PES are based on conditionality, in which payments are only made conditional upon verifiable performances. PES are usually voluntary, contractual relationships rather than a market per se. They can potentially be applied in the marine realm to protect coral reefs, sea turtle and sea bird nesting habitats, and shark pupping grounds that provide mitigation to bycatch and are part of biodiversity conservation and ecosystem-based management; shift gear uses and harvesting practices toward lower bycatch of finfish, sea turtles, sea birds, and marine mammals; establish migration corridors through fishing grounds for sea turtles and marine mammals; establish incentives for small-scale and artisanal fishers to redirect or reorient fishing during nesting or pupping seasons; stop dynamite or cyanide fishing on coral reefs; establish conservation concessions or direct payments to help enforce MPAs and no-take zones; protect coastal habitat such as mangroves and sea grass; and ensure ongoing rather than one-shot incentives based on
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conditionality. PES have considerable potential for blue carbon programs with nearshore coastal habitat, such as mangroves, salt marshes, and sea grass beds, that can bury carbon in sediments faster than land habitats.
Offsets Compensatory mitigation or biodiversity offsets are yet another direct approach to regulate fishing activities. Although widely used for climate change such as with the use of clean development mechanisms and for terrestrial applications (wetlands banking, species conservation), it has yet to be widely practiced in fisheries. The approach could provide a supplemental tool for marine bycatch species with well-defined nesting sites, such as for sea turtles, sea birds, and sharks, with well-defined pupping grounds, or biological hotspots with aggregating animals. Noncompensatory mitigation will be required for rare, endangered, and threatened species.
The Water Scarcity Problem The rapid growth in global population is putting increasing pressure on existing water resources such that the global demand for water is predicted to outstrip supply by 40% in 2050. At the same time, a changing climate is shifting the availability of water resources across the planet, with many areas that are already water-scarce likely to receive even less water and/or a more variable precipitation. A key to understanding the economics of water use and its allocation is that water is not a single or homogeneous resource. Rather, the services water provides differ greatly in terms of where it is located, its time of use and nonuse, who the beneficiaries of its use and nonuse are, and the nature of its use and nonuse. Quantifying the trade-offs of when, where, and how water is utilized (use and nonuse) is the basis for efficiently allocating water to generate improved water outcomes.
Indirect Approaches
Water Allocation: The Economic Framework
Indirect conservation approaches integrate conservation and development by rewarding local communities for conserving habitat in ways that also improve their living standards and are largely applied in developing countries. Community conservation attempts to create a link between development and conservation, so both can be achieved simultaneously. Indirect approaches use development initiatives and indirect incentives to align local resource users’ behavior with conservation. Individuals and communities are not directly rewarded for pursuing conservation activities or directly punished for degrading activities. Instead, conservation is a joint product with development through indirect incentives through redirecting labor and capital away from activities that degrade ecosystems, encouraging commercial activities that supply ecosystem services as joint outputs (e.g., ecotourism), and raising incomes to reduce dependence on resource extraction that degrades the ecosystem. Indirect approaches can be used for sustainable exploitation of mangroves through limited aquaculture in return for protection of remaining areas; similarly for shellfish beds, for limited exploitation of reef fish for consumption, or export coupled with protection rather than cyanide or blast fishing; for ecotourism on MPAs; and protection of blue carbon systems. The International Coral Reef Action Network in Kenya’s Malindi/Watamu Marine National Parks and Reserves supports community activities, including improved repair and maintenance facilities for vessels belonging to local tour-boat operators, improved visitor accommodation facilities and increased capacity among tour-boat operators and park staff in visitorguiding skills. New ecotourism projects (e.g., mangrove boardwalks) generate funds for school fees. The difficulty in applying indirect conservation to fisheries is complicated by the marginal geographical and social role of marine communities, absence of clearly defined property rights, insufficient comanagement, and difficulties in developing alternative livelihoods, especially in areas with low ecotourism potential and limited alternative economic activities.
Economic theory provides a theoretical framework for making choices on how to allocate scarce resources, such as water. In a static framework, this requires that the MNBs of water use are equalized across competing uses and nondirect uses, including the retention of water for environmental purposes. From an economic perspective, an efficient allocation of water requires that among all competing uses, the MNBs, or the marginal net returns less marginal cost, are equalized. If this were not the case, it would be possible to reallocate water across competing uses and fully compensate all the losers and still have a higher social surplus. This is illustrated in Figure 2 in which there are two competing uses of water: water for irrigation and water for
$
$ MNB for energy
MNB for irrigation
p*
p*
X: Water use irrigation
Y: Water use energy
Total water supply Figure 2 Marginal net benefits of water use.
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Media Non-Biological | Theory and Practice of Fisheries and Water Economics
electricity or energy generation. Any other allocation than a volume of X for irrigation and Y for energy uses is inefficient. The equimarginal principle shown in Figure 2 is a necessary condition for an economically efficient allocation of water, or indeed any scarce resource. In a dynamic setting, the MNBs should be equalized not only over competing uses but also at each point in time. If this were not the case, water use could be reallocated intertemporally to increase the present value of the discounted net benefits of water. An important economic cost of water use in a dynamic setting is the ‘shadow price’ of water. This is a resource cost or depletion cost that represents the additional future cost brought forward in time from a marginal use of the resource today rather consuming the water at some point in the future. For example, if a water utility is depleting a dam or aquifer, the extra costs of this depletion, such as greater pumping costs, that will be incurred in the future must be accounted for as a cost of current water use. If the shadow price is not considered, then current consumption exceeds the efficient level of consumption that maximizes the discounted net benefits of water use over time. While the theory of economically efficient water allocation is straightforward, its application is anything but simple. This difficulty stems from the physical characteristics of water and also the fact that water has a social and cultural significance that is not only important but also difficult to quantify. In terms of its physical characteristics, water is far more than the bonding of two hydrogen atoms with one oxygen atom. For instance, the value of water is determined by when water is available; the quality of the water and whether it is fit for the purpose; if it can be captured or stored; and whether access and use of water can be controlled or regulated. All of these factors are confounding factors that may hinder an efficient allocation of water across uses and over time. Even if water were a homogeneous resource that could be easily quantified and controlled, the challenge of allocating water across uses and users would still be formidable because in many locations there is no system for reallocating water across competing uses. Thus, in many parts of the world, even if there were a higher valued and alternative use for water than the existing use, the reallocation would never occur if there was no market or other mechanism to facilitate the transfer. Another challenge is that water consumption is considered to be a basic human right by many. As a result, any efficient reallocation that disadvantages a community in terms of its basic use of water may not be permitted by decision makers even if the winners could, in theory, fully compensate the losers for their losses.
relatively low and when current supply is scarce relative to current demand, prices should be relatively high. Unfortunately, the price paid for water by a household or by a farmer or by industrial plant rarely represents its marginal social net benefit. Typically, households pay a regulated price that fails to account for the full marginal cost that should include the shadow price of water. In many locations, however, the water price is set equal to the long-run average cost, that is, the average cost of supplying water from the existing water infrastructure (including upfront and ongoing costs). As a result of the failure to price water on the basis of its marginal cost during periods of low rainfall, there may be an imbalance in supply and demand. In irrigated agriculture, farmers are typically subsidized in terms of the infrastructure used to deliver the water to their farms, and rarely do they incur a charge or cost for any reductions in water quality from their subsequent use of the water. In many cases, water use is heavily subsidized and prices are set without proper consideration of scarcity at an inefficiently low level or are even set at zero. This results in overuse and fails to promote either efficient consumption or investment in water conservation. For example, water prices in the agricultural sector in Israel rose 100% over the last decade. These price increases have led to substantial changes in agricultural practices including a move to drip irrigation, adopting more appropriate crops, removing water-intensive trees and replanting with water-saving types, and increasing the use of recycled and desalinated water sources. As a result, agricultural water demand has declined significantly and desalinated and recycled sources of water now make up around 50% of irrigated water use. Recent studies suggest that price can also be a highly effective means of regulating household water demand. Thus, by setting efficient water prices or abstraction charges, the demand for water can be regulated and overuse of water resources can be prevented. A key issue in setting an efficient price is the question of equity as studies by the Organization for Economic Cooperation and Development (OECD) confirm that the affordability of water in low-income households can be a problem. In order to reduce the burden of higher water prices on low-income households, several measures could be implemented, such as reduced water access fees, progressive tariffs, water vouchers, or lump sum transfers. If water pricing is designed well, increasing prices may actually improve equity, as the revenues can be used to increase water access among lowincome households who may not otherwise have access to public or municipal water supplies.
Water Markets – Quantity
Water Allocation: Theory and Practice The Importance of Price The most efficient way to regulate the demand for a resource is through its price. Provided that the price of water reflects its marginal social net benefit and its relative scarcity, the resulting allocation of water should be efficient if there are no restrictions on its trade or consumption. Thus, when the current water supply is plentiful relative to demand, prices should be
An alternative to setting water prices directly is to establish a competitive market for water rights so that the efficient price for water use is obtained via market trades. Water markets involve setting a fixed cap on the amount of water that can be withdrawn from a resource and then creating tradable property rights for access to the available water. This allows water authorities to prevent overuse of resources by limiting the amount of access rights that are provided in total, and also promotes the efficient allocation of water across
Media Non-Biological | Theory and Practice of Fisheries and Water Economics
competing uses because water is allocated to the users who value it the most. Under a properly functioning market (where the number of rights is not overallocated), access to the resource is no longer freely available, but depends on acquiring the right to access the resource. This creates a scarcity value for water and an incentive for individuals to use water more efficiently, for example, by employing water-efficient technology, adopting deficit irrigation, or growing less water-intensive crops, thereby reducing demand. Markets also permit water to be transferred from low-value uses to high-value uses. For example, allowing water to be traded from lower-valued agricultural use to higher-valued urban use can be beneficial to both buyers and sellers. In response to rising water demand and increasing water scarcity, the use of water markets to manage water demand is growing, and well-developed markets exist in Australia’s Murray–Darling Basin (MDB), Chile, and the southwestern United States. The type and structure of water markets differ widely across countries, depending on the historical context of water law and the priorities of the regulators when water markets were established. Key factors that facilitate water trade include adequate amounts of upper catchment water storage that allow for both upstream and downstream trade, a property rights structure that unbundles land from water and provides adequate security and confidence in the property right, and a cap or overall limit on water use such that water is scarce. In the millennium drought that covered most of the MDB for almost a decade, and ended in 2010, water markets allowed water to be traded large distances from low- to higher-value uses. The water traded in the MDB represented about 20% or more of the entire water consumed, and despite a 70% reduction in surface-water use by irrigators from 2000/01 to 2007/08 as a result of the drought, the nominal gross value of irrigated agriculture declined by less than 1%. One of the principal objections to water trading is that it can have negative impacts on third parties who are not represented in the cost of the trade. For example, at an individual level, purchasing a water allocation upstream may reduce downstream flows in times of drought. However, if water rights are granted as shares of the annual water availability and so are adjustable based on levels of runoff, as in Australia, such parties are not differentially impacted and potential thirdparty harm from trades would be reduced. At a regional level, there are also concerns that there may be significant third-party impacts of trade on communities that are dependent on water-intensive industries. While such concerns are legitimate, the evidence suggests that the impacts are not as significant as is often feared. An evaluation of water markets in California, for instance, concluded that although there were some negative effects locally, overall water transfers increased total welfare.
Water Markets – Quality Markets can be used to help regulate water quality. In this case, what are traded are not volumes of water but quantities of a pollutant or emissions that reach a water body. In theory, trading of emissions under a fixed cap can be more cost-effective than command-and-control instruments that impose the same
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controls on all polluters and do not take into account the heterogeneity of abatement costs. A market-based approach also provides a dynamic incentive for additional pollution abatement, as polluters can reduce their costs by the amount of the emissions or permit price for each additional unit of pollution abatement. To date, most water quality or water emissions trading schemes have been implemented in the United States with mixed success. A successful scheme is the Long Island Sound Nitrogen Credit Exchange Program in the United States, where 12 million credits have been bought or sold at a value of USD 30 million. In Australia, the Hunter River Salinity Trading has helped to ensure that the defined water salinity target has not been exceeded, and water treatment and storage costs have been significantly reduced. The relative success of these schemes is due to the minimal regulation on trades, the large number of eligible participants in trading markets, effective monitoring and enforcement procedures, and strong legislation underpinning the schemes. The combination of emissions standards, taxes, and trading has been largely successful at reducing point source water pollution in many developed countries, particularly from urban and industrial sectors. To date, however, little progress has been made in tackling nonpoint sources of pollution, primarily from agricultural sources, as they are much more difficult to manage. The particular challenges with nonpoint sources of water pollution are (1) it is much more difficult to identify and monitor the actual sources of pollution and (2) ambient levels of nonpoint source water pollution are influenced by the weather and other environmental factors, all of which have a strong stochastic element.
Water Valuation In order to set efficient prices that account for externalities, or to set the appropriate cap on extractions and in the absence of water markets, the value of water across different uses needs to be estimated so that the net marginal values are equalized across competing uses. If water is a fully variable input in a production process such as growing a crop of cotton or rice, the value of water can be measured by its value of the marginal product of water (VMP), or the marginal change in output from using an additional unit of an input multiplied by the price of the output (or marginal revenue if the output price varies). This provides a measure of the willingness to pay for changes in the quantity of water used, as shown in Figure 3. If the production function and the quantities of each input are known, and the prices of each input (except for water) can be observed in input markets, the VMP of water can be estimated from the remainder of the total value of the output. In order to quantify the value of leaving water in the environment, nonmarket valuation approaches are required. These include (1) revealed preference methods, where the value of water is estimated based on individual’s actual expenditures on water resources; (2) stated preference methods, which ask individuals directly how much they would be willing to pay for hypothetical changes in water resources; and (3) benefit transfer methods, where the value of water is estimated using data from studies of similar water resources.
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Media Non-Biological | Theory and Practice of Fisheries and Water Economics
Price
p0
p1
VMP of water
Quantity w0
w1
Figure 3 Value of marginal product of water.
Concluding Remarks For both fisheries and water, an economic framework provides important insights and guidance on how to reduce overexploitation and increase efficiency, and to consider the complicated trade-offs and market failures inherent in their use. Some key insights from economic theory and its practice in these two resources are (1) the importance of incentives at an individual, group, and regulator level to ensure efficient and equitable outcomes; (2) the need to get ‘prices right’ so that the price of fish or water reflect their economic opportunity cost, including the value of the resource in the environment and over time; (3) the difficult challenge of managing a resource that is highly variable and stochastic; and (4) the importance of adequately adapting economic frameworks to existing institutional constraints and limitations.
Further Reading 2030 Water Resources Group (2009) Charting Our Water Future: Economic Frameworks to Inform Decision Making. http://www.2030waterresourcesgroup.com/water_full/ Charting_Our_Water_Future_Final.pdf. Anderson J, Asche F, and Tvetera˚s S (2010) World fish markets. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 113–123. Oxford: Oxford University Press. Asche F and Bjørndal T (2010) Aquaculture: Production and markets. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 60–71. Oxford: Oxford University Press. Boyd JW, Shabman LA, and Stephenson K (2007) Trading as a U.S. water quality management tool: Prospects for a market alternative. Ecological Economics of Sustainable Watershed Management 7: 385–407. Brander K (2010) Climate change and fisheries management. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 123–136. Oxford: Oxford University Press. Cinner J (2005) Socio-economic factors influencing customary marine tenure in the Indo-Pacific. Ecology and Society 10(1): 1–36. Cinner J and Aswani S (2007) Integrating customary management into marine conservation. Biological Conservation 140: 201–216. Clark CW (2005) Mathematical Bioeconomics: The Optimal Management of Renewable Resources. New York: John Wiley & Sons. Clark CW (2010) Challenges in marine capture fisheries. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 638–645. Oxford: Oxford University Press.
Conrad J and Smith MD (2012) Nonspatial and spatial models in bioeconomics. Natural Resource Modeling 25(1): 52–92. Curtin R and Prellezo R (2010) Understanding marine ecosystem based management: A literature review. Marine Policy 34: 821–883. Grafton RQ (ed.) (2009) Economics of Water Resources. Cheltenham: Edward Elgar Publishing. Grafton RQ, Arnason R, Bjørndal T, et al. (2006) Incentive-based approaches to sustainable fisheries. Canadian Journal of Fisheries and Aquatic Sciences 63(3): 699–710. Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (2010) Marine fisheries conservation and management: At the crossroads. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 3–19. Oxford: Oxford University Press. Grafton RQ and Hussey K (eds.) (2011) Water Resources Planning and Management. Cambridge: Cambridge University Press. Grafton RQ and Ward MB (2010) Dynamically Efficient Urban Water Policy. CWEEP Research Paper 10-13. Canberra: Australia National University. Grafton RQ, et al. (2011a) An integrated assessment of water markets: A cross-country comparison. Review of Environmental Economics and Policy 5(2): 219–239. http://dx.doi.org/10.1093/reep/rer002. Grafton RQ, et al. (2011b) A comparative assessment of water markets: Insights from the Murray–Darling Basin of Australia and the Western US. Water Policy. http://dx.doi.org/10.2166/wp.2011.016. Grafton RQ, et al. (2011c) Determinants of residential water consumption: Evidence and analysis from a 10-country household survey. Water Resources Research 47 (W08537). http://dx.doi.org/10.1029/201 0WR009685. Hannesson R (2004) Privitzation of the oceans. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 666–674. Oxford: Oxford University Press. Hilborn R (2007) Defining success in fisheries and conflicts in objectives. Marine Policy 31(2): 153–158. Hilborn R, Oresanz JM, and Parma A (2005) Institutions, incentives, and the future of fisheries. Philosophical Transactions of the Royal Society B 360: 47–57. Howitt RE (1994) Empirical analysis of water market institutions: The 1991 California water market. Resource and Energy Economics 16(4): 357–371. Jentoft S, McCay B, and Wilson D (2010) Fisheries co-management: Improving fisheries governance through stakeholder participation. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 675–686. Oxford: Oxford University Press. Kraemer RA, Kampa E, and Interwies E (2003) The Role of Tradable Permits in Water Pollution Control. Ecologic, Institute for International and European Environmental, Policy. http://ecologic.eu/1017. OECD (2008) OECD Environmental Outlook to 2030. Paris: OECD. OECD (2009) Managing Water for All: An OECD Perspective on Pricing and Financing. Paris: OECD. OECD (2010a) Pricing Water Resources and Water and Sanitation Services. Paris: OECD. OECD (2010b) Taxation, Innovation and the Environment. Paris: OECD. Olmstead SM (2010) The economics of water quality. Review of Environmental Economics and Policy 4(1): 44–62. Pikitch EK, Santora C, Babcock EA, et al. (2004) Ecosystem-based fishery management. Science 305: 346–347. Rice J and Ridgeway L (2010) Conservation of biodiversity and fisheries management. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 139–149. Oxford: Oxford University Press. Rogers P, de Silva R, and Bhatia R (2002) Water is an economic good: How to use prices to promote equity, efficiency, and sustainability. Water Policy 4: 1–17. Selman M, et al. (2009) Water Quality Trading Programs: An International Overview. Washington, DC: World Resources Institute WRI Issue Brief, No. 1. Smith A and Fulton E (2010) Ecosystem modeling and fisheries management. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 182–194. Oxford: Oxford University Press. Squires J, Kirkley J, and Tisdell C (1995) Individual transferable quotas as a fisheries management tool. Reviews in Fisheries Science 3(2): 141–169. Squires D and Vestergaard N (in press) Technical change and the commons. Review of Economics and Statistics. Tietenberg TH (1990) Economic instruments for environmental regulation. Oxford Review of Economic Policy 6(1): 17–33. Willmann R and Kelleher K (2010) Economic trends in global marine fisheries. In: Grafton RQ, Hilborn R, Squires D, Tait M, and Williams M (eds.) Handbook of Marine Fisheries Conservation and Management, pp. 20–43. Oxford: Oxford University Press.