Managing Variability: Rules, Incentives, and Behavior Mike Dalton California State University Monterey Bay Marine Biodiversity: Using the Past to Inform the Future Scripps Institute for Oceanography November 16, 2003

Open Access Resources Tragedy-of-the-Commons is the central problem in marine resource management TOC is intensifying with population growth Open access problems have win-win solutions Solutions limit entry, fix incentive problems

Fishing for Solutions Multidisciplinary approach essential Extend the framework of ecosystem services Ecological economics is key but traditional microeconomics also has to be core feature Coupled models: Ecopath/Ecosim and energy- economic growth models could explore multiple futures with population, technical change, etc.

Historical Perspective in Economics Historical data is central to empirical economics and policy analysis: Use observations of past decisions to infer how behavior would respond to specific changes in the decision-making environment Making these inferences requires identifying structural models from time-series data

Sardine Landings and Biomass PDO

Sardine Harvest Control Rule Harvest = Fraction(SST)(Biomass - Cutoff)

Four Cases of ENSO Variability: Northern Anchovies & Pacific Sardine in Monterey Bay & Southern California

Fishing Effort and Ex Vessel Prices

Significant at 5%

Human Dimensions of Climate Variability Significant direct effects of SSTs on fishing effort from changes in abundance and/or ex vessel prices Significant Forward-looking behavior: Expectations about future climate affect current behavior

Past Informing the Future Environmental Variability Abundance & Prices Decisions about Fishing Effort Expectations are forecasts using current information

Management Implications Dynamic inconsistencies can occur if managers do not consider forward-looking behavior when formulating regulations Inconsistent policies can induce destabilizing feedbacks and other unintended problems Consistent policies require managing by rules rather than discretion

Advantages of Environmentally-Based Rules Rules avoid destabilizing feedbacks and reduce risks of fishery collapse Rules reduce uncertainty, providing direct efficiency gains and incentives for conservation Rules can incorporate ecosystem interactions or other information (e.g. estimates of non- consumptive use values)

Acknowledgements California SeaGrant William Daspit (PSMFC/PacFIN) Ray Conser (NMFS/SWFSC) SIO/CMBC, Sloan Foundation, NMFS/SWFSC