4 Catch per unit effortCatch per unit of fishing effort (CPUE) is the total catch divided by the total amount of effort used to harvest the catch.CPUE = c/E
5 Global catch and effort Effort (GW or watts x 109)Catch (million tonnes)Year51015202530405060708090195019551960196519701975198019851990199520002005CatchEffort is in Gigawatts (per year). Watt is a SI unit of power and is Joules per second. The solar constant includes all types of solar radiation, not just the visible light. It is measured by satellite to be roughly 1.366 kilowatts per square meter (kW/m²) which on average for the whole earth is 1.740×1017 W (or 1.74 x 108 GW or 174 Million GW)FAO Fisheries Statistics*Effective effort indexed on 2000 based on average 2.42% increase annually
6 Global catch and effort Effort (GW or watts x 109)Catch (million tonnes)Year51015202530405060708090195019551960196519701975198019851990199520002005CatchEffective effort*Effort is in Gigawatts (per year). Watt is a SI unit of power and is Joules per second. The solar constant includes all types of solar radiation, not just the visible light. It is measured by satellite to be roughly 1.366 kilowatts per square meter (kW/m²) which on average for the whole earth is 1.740×1017 W (or 1.74 x 108 GW or 174 Million GW)Watson et al. (2012)*Effective effort indexed on 2000 based on average 2.42% increase annually
7 Classical Management Problems Overfishing;Overcapacity;Low or negative profits.Can you predict the above using only cpue and/or fishing mortality models? Nope!Bioeconomic models needed to predict these results!
8 These undesirable outcomes are the result of Individually Rational, but Non-cooperative Behavior
9 Issues in fisheries economics Fish as natural capital in a broad sense;Fish as common property resource;Externalities Tragedy of the commons Private property;Need for regulation;Decision making over time.
10 Fish as natural capital in a broad sense The natural environment contains the natural resources essential to life on earth;Natural resources provide inputs to our economic system;By and large economists see natural resources as similar to human made capital.
12 Economic efficiency Maximum profit subject to sustainability; Profit = Total Revenue – Total Cost;With economic efficiency, profit is maximized.
13 A static single species model Fisheries biology – the logistic model;The optimal harvest – equilibrium catch;The maximum sustainable yield;Sustainable yield as a function of effort;Max Profit= max(TR-TC):=Maximum Economic Yield;Profit=TR-TC=0:=Bionomic equilibrium.
14 The Basic Bioeconomic model MEYMSYBionomicequilibrium(BE)Total cost offishing effort(TC)TotalRevenue(TR)Fishing effort (E)TR&TC( $)E1E2E3Max.rentGordon Schaefer bioeconomic model
15 Bioeconomic Models (1) Biological Model: (2) Economic Model: Net annual change of biomass =Growth + Recruitment – Nat. Mortality – Catch(2) Economic Model:Net annual revenue =Sales income - Cost
16 R = pH – cESchaefer Catch Equation: H = qEx (Highly Dubious!)Therefore R = (pqx – c) EBionomic Equilibrium:Under open access, fishery reduces the stocklevel x until R = 0, i.e.,x = c/pqPredictions: Zero rents; overfishing ( if c/p low).
18 How to Fix It? TACs? Gear Regulations? Limited Entry? Vessel Buy-backs?Quasi-property rights through individualized (or community) quotas;MPAs;Taxes.
19 The objective of fisheries management: Bioeconomic modelingThe objective of fisheries management:Conservation of resources through time;Economic viability and profitability;Social objectives.
20 Economic rent/profit Total revenue = price*harvest (V). Total cost = unit cost of effort* effort (C).Economic rent = V – C.
21 Dynamic bioeconomic model Discounted economic rent (V-C) through time to obtain the discounted value of the economic benefits from the fishery.
22 Decision making over time Natural resource (NR) use involves decision making over time:How much oil or gold should be extracted from a mine this year, how much next year, etc?Should salmon on the west coast of Canada be harvested intensively this year or not at all?Time is important because the supply curve of NRs are always shifting due to:Depletion of non-renewable resources andbiological and physical changes in renewable resources.
23 Discount rate vs. discount factor; Present value vs. current value. Hence, a dynamic rather than a static analysis is required to analyze natural resource use in most cases;Interest or discount rates are a crucial link between periods in dynamic models of NR use;Discount rate vs. discount factor;Present value vs. current value.Introduce your quiz!