Essays on the Bioeconomics of the Northern Baltic Fisheries

World marine fisheries suffer from economic and biological overfishing: too many vessels are harvesting too few fish stocks. Fisheries economics has explained the causes of overfishing and provided a theoretical background for management systems capable of solving the problem. Yet only a few examples of fisheries managed by the principles of the bioeconomic theory exist. With the aim of bridging the gap between the actual fish stock assessment models used to provide management advice and economic optimisation models, the thesis explores economically sound harvesting from national and international perspectives. Using data calibrated for the Baltic salmon and herring stocks, optimal harvesting policies are outlined using numerical methods. First, the thesis focuses on the socially optimal harvest of a single salmon stock by commercial and recreational fisheries. The results obtained using dynamic programming show that the optimal fishery configuration would be to close down three out of the five studied fisheries. The result is robust to stock size fluctuations. Compared to a base case situation, the optimal fleet structure would yield a slight decrease in the commercial catch, but a recreational catch that is nearly seven times higher. As a result, the expected economic net benefits from the fishery would increase nearly 60%, and the expected number of juvenile salmon (smolt) would increase by 30%. Second, the thesis explores the management of multiple salmon stocks in an international framework. Non-cooperative and cooperative game theory are used to demonstrate different "what if" scenarios. The results of the four player game suggest that, despite the commonly agreed fishing quota, the behaviour of the countries has been closer to non-cooperation than cooperation. Cooperation would more than double the net benefits from the fishery compared to a past fisheries policy. Side payments, however, are a prerequisite for a cooperative solution. Third, the thesis applies coalitional games in the partition function form to study whether the cooperative solution would be stable despite the potential presence of positive externalities. The results show that the cooperation of two out of four studied countries can be stable. Compared to a past fisheries policy, a stable coalition structure would provide substantial economic benefits. Nevertheless, the status of the salmon stocks would not improve significantly. Fourth, the thesis studies the prerequisites for and potential consequences of the implementation of an individual transferable quota (ITQ) system in the Finnish herring fishery. Simulation results suggest that ITQs would result in a decrease in the number of fishing vessels, but enables positive profits to overlap with a higher stock size. The empirical findings of the thesis affirm that the profitability of the studied fisheries could be improved. The evidence, however, indicates that incentives for free riding exist, and thus the most preferable outcome both in economic and biological terms is elusive.Maailman kalakannat kärsivät taloudellisesta ja biologisesta ylikalastuksesta: liian monta kalastusalusta pyytää yhä niukempia kalakantoja. Luonnonvarataloustieteen osa-alue kalastusekonomia tarjoaa perustan ylikalastusongelman ratkaisulle. Tästä huolimatta kalastusta säädellään taloudellisesti mielekkäällä tavalla vain muutamissa valtioissa. Väitöskirjan tavoitteena onkin yhdistää taloustieteellinen ajattelu kalastuksensäätelyssä käytettäviin malleihin. Kehitetyillä malleilla tuotetaan taloudellisesti ja biologisesti kestäviä kalastuksensäätelyvaihtoehtoja kansallisesta ja kansainvälisestä näkökulmasta. Esimerkkitapauksina työssä käytetään Itämeren lohen ja silakan kalastusta. Tulokset osoittavat, että kalastuksen taloudellista kannattavuutta ja kalakantojen tilaa on mahdollista parantaa samanaikaisesti. Väitöskirjan ensimmäisessä osajulkaisussa tarkastellaan tilannetta, jossa yhtä lohikantaa kalastetaan sekä kaupallisesti että virkistysmielessä. Tulosten mukaan taloudellisin vaihtoehto lohen kalastuksen järjestämiselle olisi lohen kaupallinen pyynti Pohjanlahden rannikolla rysillä ja virkistyskalastajien toimesta vapavälinein joella. Tällainen kalastuksenrakenteen muuttaminen lakkauttaisi kaupallisen ajosiima- ja ajoverkkokalastuksen, mutta lohenkalastuksen yhteiskunnallinen arvo kasvaisi 60 % ja lohen vaelluspoikasmäärä 30 %. Kalastuksenrakenteen uudelleen organisointi olisi siten sekä taloudellisesti että biologisesti järkevää. Väitöskirjan toinen osajulkaisu tarkastelee Itämeren merkittävimpien lohikantojen kaupallista hyödyntämistä kansainvälisestä näkökulmasta. Tulosten mukaan EU:n yhteisestä kalastuspolitiikasta ja yhteisesti sovitusta kalastuskiintiöstä huolimatta lohenkalastuksen taloudellinen tilanne ja lohikantojen ekologinen tila muistuttavat tilannetta, jossa kalastuspolitiikkaa ei olisi harjoitettu lainkaan. Tulosten mukaan taloudellisesti järkevä yhteistyö valtioiden kesken mahdollistaisi 35 55 % suuremmat nettotuotot ja huomattavasti suuremmat lohen vaelluspoikasmäärät kuin harjoitettu politiikka. Kuten kalastussopimuksia huomattavasti enemmän julkisuutta saaneet ilmastosopimusneuvottelut ovat osoittaneet, sitovan sopimuksen aikaansaaminen on vaikeaa. Näin siksi, että sopimukseen halukkaiden valtioiden toimenpiteet kestävämmän kalastuksen puolesta voivat tarjota mahdollisuuden sopimuksen ulkopuolisille valtioille suurempiin saaliisiin ja tuottoihin. Väitöskirjan kolmas osajulkaisu osoittaakin, että merkittävimpien Itämeren lohikantoja hyödyntävien valtioiden yhteistyö ei ole kaikille osapuolille kannattavaa. Sitova sopimus voitaisiin siirtomaksujen avulla aikaansaada vain kahdelle tutkimuksessa mukana olleista neljästä valtiosta. Sitova sopimus mahdollistaisi noin 40 % nettotuottojen kasvun, mutta lohen vaelluspoikasmäärät säilyisivät samalla tasolla kuin ne olisivat ilman kansainvälistä kalastuspolitiikkaa. Väitöskirjan neljäs osajulkaisu tarkastelee siirrettävien kalastuskiintiöiden käyttöönoton mahdollisia taloudellisia ja biologisia seurauksia. Siirrettävillä kalastuskiintiöillä voidaan ehkäistä taloudellinen ylikalastus ja myös biologinen ylikalastus, jos suurin sallittu saalismäärä on asetettu tasolle, joka turvaa kalakannan elinvoimaisuuden. Tulosten mukaan siirrettävillä kiintiöillä voitaisiin parantaa silakan kalastuksen kannattavuutta, mutta kannattavuuden parantumisen edellytyksenä on kalastusalusten määrän merkittävä vähennys. Taloudellisesti järkevä kalastuksen määrä kuitenkin mahdollistaisi suuremmat kalakannat ja siirtymäkauden jälkeen myös suuremmat saaliit kuin nykyinen säätely

Reconciling Economic and Biological Modeling of Migratory Fish Stocks:Optimal Management of the Atlantic Salmon Fishery in the Baltic Sea

The paper puts forward a model of the Atlantic salmon fishery in the Baltic Sea that integrates the salient biological and economic characteristics of migratory fish stocks. Designed to be compatible with the framework used for actual stock assessments, the model accounts for agestructured population dynamics, the seasonal harvest and competing harvesting by commercial and recreational fishermen. It is calibrated using data and parameter estimates for the Simojoki River stock. The socially optimal policy for maximizing discounted net benefits from the fishery within an uncertain environment is determined using a dynamic programming approach and numerical solution method. Our results indicate that substantial economic benefits could be realized under optimal management without compromising stock sustainability.Resource /Energy Economics and Policy,

Integration of biological, economic and sociological knowledge by Bayesian belief networks: the interdisciplinary evaluation of potential Baltic salmon management plan

There is a growing need to evaluate fisheries management plans in a comprehensive interdisciplinary context involving stakeholders. In this paper we demonstrate a probabilistic management model to evaluate potential management plans for Baltic salmon fisheries. The analysis is based on several studies carried out by scientists from respective disciplines. The main part consisted of biological and ecological stock assessment with integrated economic analysis of the commercial fisheries. Recreational fisheries were evaluated separately. Finally, a sociological study was conducted aimed at understanding stakeholder perspectives and potential commitment to alternative management plans. In order to synthesize the findings from these disparate studies a Bayesian Belief Network (BBN) methodology is used. The ranking of management options can depend on the stakeholder perspective. The trade-offs can be analysed quantitatively with the BBN model by combining, according to the decision maker’s set of priorities, utility functions that represent stakeholders’ views. We show how BBN can be used to evaluate robustness of management decisions to different priorities and various sources of uncertainty. In particular, the importance of sociological studies in quantifying uncertainty about the commitment of fishermen to management plans is highlighted by modelling the link between commitment and implementation success.Baltic salmon, bio-economic modelling, Bayesian Belief Network, expert knowledge, fisheries management, commitment and implementation uncertainty, management plan, recreational fisheries, stakeholders., Resource /Energy Economics and Policy,

Atlantic Salmon Fishery in the Baltic Sea – A Case of Trivial Cooperation

This paper analyses the management of the Atlantic salmon stocks in the Baltic Sea through a coalition game in the partition function form. The signs of economic and biological over-exploitation of these salmon stocks over the last two decades indicate that cooperation among the harvesting countries, under the European Union's Common Fisheries Policy, has been superficial. Combining a two-stage game of four asymmetric players with a comprehensive bioeconomic model, we conclude that cooperation under the Relative Stability Principle is not a stable outcome. In contrast, the equilibrium of the game is non-cooperation. The paper also addresses the possibility of enhancing cooperation through more flexible fishing strategies. The results indicate that partial cooperation is stable under a specific sharing scheme. It is also shown that substantial economic benefits could have been realised by reallocating the fishing effort.Atlantic salmon, bioeconomic model, coalition formation, partition function, sharing rules, stability analysis, Research and Development/Tech Change/Emerging Technologies,

Is there a Finnish Animal Welfare Kuznets Curve?

Livestock Production/Industries,

Growing into interdisciplinarity: how to converge biology, economics and social science in fisheries research?

It has been acknowledged that natural sciences alone cannot provide an adequate basis for the management of complex environmental problems. The scientific knowledge base has to be expanded in a more holistic direction by incorporating social and economic issues. As well, the multifaceted knowledge has to be summarized in a form that can support science-based decision making. This is, however, difficult. Interdisciplinary skills, practices, and methodologies are needed that enable the integration of knowledge from conceptually different disciplines. Through a focus on our research process, we analyzed how and what kind of interdisciplinarity between natural scientists, environmental economists, and social scientists grew from the need to better understand the complexity and uncertainty inherent to the Baltic salmon fisheries, and how divergent knowledge was integrated in a form that can support science-based decision making. The empirical findings suggest that interdisciplinarity is an extensive learning process that takes place on three levels: between individuals, between disciplines, and between types of knowledge. Such a learning process is facilitated by agreeing to a methodological epoch and by formulating a global question at the outset of a process.v2012o

Identifying Nash equilibrium strategies for a multi-fleet multi-national fishery under uncertainty

Designing economic incentives to achieve a desired policy outcome from a fishery could be helped by exploring it within a game-theoretic context. We use Baltic salmon fishery to show how complex interactions between national fleets, offshore and coastal fishermen, and migratory stock dynamics can be analysed with a bio-economic model set up as a game of four asymmetric players. For Baltic salmon there is a stochastic and complex bio-economic model conditioned on a state-space Bayesian stock assessment which captures uncertainty in stock dynamics. We calculate Nash equilibrium under various cost and price scenarios for each combination of a salmon population model parameters, using an MCMC chain obtained from their joint posterior distribution so that the correlations between different life-history parameters are accounted for. We use results of many simulations to explore how natural variability and economic uncertainties affect Nash equilibrium strategies

Optimal Management of Conflicting Species: Grey Seal (Halichoerus grypus) and Atlantic Salmon (Salmo salar) in the Northern Baltic Sea

In the Baltic Sea, the successful conservation of grey seals has increased seal-induced damages to the Atlantic salmon fishery. The paper addresses the conflict between the conservation of the formerly endangered species and professional fishermen whose livelihood is also regulated by fisheries management. We develop a bioeconomic model that accounts for the age-structure of Atlantic salmon and grey seal populations. In order to reach a social optimum, we maximize the discounted net present value taking into account the seal-induced losses through a damage function. The socially optimal salmon stock size, salmon catch and fishing effort is studied under different management schemes aimed at mitigating the seal-salmon conflict. The results suggest that technological adaptation would effectively reduce the cause of the conflict, while a technology subsidy encouraging such adaptation shifts the economic responsibility from individual fishermen towards a broader public

Optimal Management of Conflicting Species: Grey Seal (Halichoerus Grypus) and Baltic Salmon (Salmo Salar L.)

Conservation goals and resource use can easily conflict when externalities exist. This is the case in the Baltic Sea with grey seal (Halichoerus grypus) and Atlantic salmon (Salmo salar). Both of the species have been defined as critically endangered in the late 20th century but due to conservation schemes, harvest controls and enhanced environmental quality the situation of both species has ameliorated. Grey seal population has been growing quickly after 1980s and is now regarded as near threatened whereas salmon is still regarded as endangered. The disadvantages towards the professional fishing have been growing along with the increasing grey seal population in the Northern Baltic. Catch losses (eaten and injured fish) and broken fishing gears have been identified as the most common seal induced damages to the fishery. Fishery, however, poses a threat to grey seals that are caught as by-catch. To these ends, we construct an age-structured bioeconomic model accounting for both species. The model observers commercial and recreational salmon fisheries and the damages caused by seals especially to commercial fishery. Further, the model accounts for the non-use and potential use value of increasing seal stock. Numerical methods are used to solve the socially optimal number of seals and optimal harvest allocation between commercial and recreational salmon fisheries