B.  Fisheries

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1.  Principles of renewable resource management

a.  Renewable resources - resources that can be regenerated over time through ecological processes, but can be depleted through exploitation

b.  Source function - ability of the environment to make services and raw materials available for use

c.  Sink function - ability of the environment to absorb wastes and pollution

d.  Sustainable management - management of natural resources such that natural capital remains constant over time

e.  Open access resource - a resource that is nonexcludable

f.  Maximum sustainable yield - the maximum quantity of a natural resource that can be harvested annually without depleting the stock or population

g.  Resilience - the capacity of the ecosystem to  recover from adverse impacts

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• Most natural systems are complex, e.g., multiple species

• Compromise between economic and ecological goals

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2.  Ecological analysis of fisheries

• Population biology - study of how the population of a species changes as a result of environmental conditions

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a.  Total population

• Carrying capacity - the level of population and consumption that can be sustained by the available natural resource base

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b.  Annual growth

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3.  Economic analysis of fisheries

a.  Total basis

• Total revenue = fish catch * price

• Assume cost per unit of effort is the same

• More effort required if fish population is low => TR curve is a mirror image of growth curve

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b.  Per unit basis

• Assume no constant returns to effort

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c.  Conclusions

(1) Economically optimal and ecologically sustainable level of fishing effort will be less than that required to harvest MSY

(2) Economically optimal and ecologically sustainable level of fishing effort will be obtained when fish population stocks are relatively high

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4.  Economics of fisheries in practice

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• Bycatch - harvesting aquatic organisms other than intended commercial species

• About 40 percent of global marine catch

• Includes undersized fish

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• Fishery classification

  a.  Underfished - harvest levels are below MSY

  b.  Fully fished - harvest levels are at or near MSY

  c.  Overfished - harvest levels are above MSY

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5.  Policies for sustainable fisheries management

• Oceans are a common heritage resource - belong to everyone and no one

• Private ownership solution not possible

• Law of the Sea Treaty (1982) - countries can limit activities with an Exclusive Economic Zone (within 200 nautical miles of the coast of a country)

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a.  Regulation

(1)  Fishing licenses

• Can be sold for a set fee or by auction

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• Could encourage overinvestment in equipment

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(2)  Quotas

• Difficult to enforce area-wide quotas

  • Individual transferable quotas - tradeable rights to harvest a resource

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b.  Demand-side management

• Use education to get public to avoid fish and seafood produced with environmentally damaging techniques

• Ecolabeling - labeling that provides information on environmental impacts of producing a good

Ex. - Dolphing-safe tuna

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c.  Aquaculture

• Controlled cultivation of aquatic organisms

• Increasing in importance, now exceeds wild production

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• Focused on a few economically profitable species, e.g., salmon and shrimp

• Could have negative externalities - contamination by excess food and waste, spread of disease to wild population, degrading of wild gene pool, habitat degradation

• Aquaculture Stewardship Council - set standards to limit use of antibiotics, reduce pollution from overfeeding, prevent the destruction of mangrove habitats, keep surrounding waters clean, treat workers fairly, protect indigenous rights

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