We highlight the potential benefits of adopting Ecosystem-based Fishery Management (EBFM). We compare the EBFM implementation with the more traditional single-stock approach. We show the contribution of the portfolio theory to the EBFM, which can be achieved by selecting an optimal portfolio to maximise the average revenues and minimise the variance. We use this approach to construct two frontiers: the ecosystem efficient frontier, which considers stock interactions (the variance-covariance matrix), and the stock efficient frontier,only considering individual stock variances.
We also define two risk gaps. The first gap shows the reduction in the standard deviation per unit of revenuethat the fleet could have achieved if they had decided to use the optimal portfolio of the stock frontier instead ofthe historical portfolio. The second gap reflects the reduction in the standard deviation per unit of revenue when the management moves from the stock frontier to the ecosystem frontier portfolio.
This approach is adapted to the Basque inshore fleet. According to our results, taking the single-stock approach as the benchmark, the EBFM would obtain the same historical revenue while reducing the risk by 23%.Alternatively, allowing the same level of risk, it could achieve a 21% increase in revenues.This work has received funding from Basque Government Department of Education (Grant IT-799-13). I. Carmona has benefited from a grant of the Department of Economic Development and Competitiveness of the Basque Government. A. Ansuategi, J.M. Chamorro and M. Escapa also thank financial support from the University of the Basque Country (Grant GIU 18-136) and from the Spanish Ministry of Science, Innovation and Universities (Grant RTI2018-093352-B-I00)
