zondag 29 december 2013

ITQs and organisational costs

There is a fair bit of controversy in fisheries science on the merits and caveats of ITQs, catch shares, or whatever you want to call them. I won't go into the details of that debate here, but the following news caught my attention (H/T Adam Soliman/Ecology Action Center):
California fishers say quota system is all wet
(...) Commercial fishers, industry experts and government officials are among those who say that while fish populations are recovering, too few people in California are benefiting from that rebound in part because there aren't enough qualified monitors to oversee the program. (...)
Apparently, all fishers under the California catch share system are required to have on-board observers to monitor their catch. This is quite expensive, especially for small-scale fishers. It is one of the great disadvantages of an ITQ system: how do you make sure that fishers do not catch more than their fair share? Monitoring landings, if at all possible, runs the risk of increasing discards. The latest trend in the EU is to install cameras, something which the Californian fishers in the article seem to favour as well.

Monitoring costs are part of the organisational costs of a policy instrument: you need people to do the paperwork, to decide who gets what, to monitor compliance, and so on. These costs usually depend little on the size of the transaction or the parties involved in it. That's why the fishers complain:
Also, operators of small, family-run boats say the costs of the monitors, which are the same for them as for corporate boats, have created inequality.
I'm not sure what to say about this complaint. I don't agree small-scale fishers or farmers should be protected for the sake of being a small-scale fisher or farmer; neither am I buying the argument that small-scale fishers are inherently more 'sustainable', whatever that means. Small-scale fisheries can offer valuable sources of income in developing countries, where poverty is rife and people have little to fall back on when they lose their job. California is not a developing country; although few Europeans would be impressed with its social security system, you cannot expect the local fishery to provide one. But I do believe that transaction costs usually prevent markets from finding efficient solutions, so a system that requires such heavy monitoring costs is likely to cause substantial losses in efficiency.

maandag 23 december 2013

Matilda, three songs, and the melancholy of travelling

'Tis the season again. In The Netherlands this means that a bunch of radio jocks have a public fasting exercise to collect donations for the Red Cross. Serious Request it's called, and, guess what, the main thing is to make your donation together with your request for your favourite song. I'm not too much of a listener to 3FM (their radio station), but it's becoming a bit of a tradition for me to request Tom Waits's Tom Traubert's Blues every year:


Waits wrote the song in the 1970s, when his music was usually a bourbon-soaked mix of jazz and blues, with a Sinatraesque ballad thrown in here and there, and as major themes booze, gambling, and bad women. Everything changed, however, when he met Kathleen Brennan. She got him to give up drinking, introduced him to the music of Captain Beefheart, and thereby induced his major shift to the almost absurdistic albums he made from that point on, like Swordfishtrombones, Raindogs, and Bone Machine. I must admit I usually prefer the post-Brennan crazy stuff. His 1970s ballads could verge dangerously on the sentimental and the cliche-ridden; meanwhile, nothing beats the spooky weirdness of What's he building in there?, or the brutal stomp of Singapore.

Except, that is, for this one song. The lyrics conjure up strong images, yet are sufficiently abstract to give the song an enigmatic quality - and to provoke lots of debate on what the song is about. Some think it is about addiction, or even suicide. Tom Waits himself usually introduces the song by saying "this song is about throwing up in a foreign country." Supposedly he wrote the song after a drinking binge in Copenhagen with Danish singer and violinist Mathilde Bondo (hence the subtitle "Four sheets to the wind in Copenhagen"). Another story is that he wrote the song after hanging out with LA's down-and-out ("every single guy...a woman put him there" he is reported to have said).

I used to think the song was about the First World War - seriously. When I started listening to Tom Waits I had been playing Irish music for a few years. The standard repertoire includes The Band Played Waltzing Matilda by the Scottish-Australian songwriter Eric Bogle:


That song is about WW1, telling the story of one of the many Australian soldiers caught up in the murderous meat grinding machine of Gallipoli, in what was in those days the Ottoman Empire. The title of Bogle's song (and the chorus in Waits') refers to Waltzing Matilda, an Australian folksong about a transient worker that was (and still is) Australia's unofficial national anthem. Apparently, 'To waltz Matilda' is Australian slang for travelling by foot with your belongings stuffed in a rucksack. Bogle's song describes how Waltzing Matilda accompanied the soldiers' march to and from the battlefield, their remembrance marches, and perhaps even their afterlife:
And their ghosts may be heard as you pass by a billabong
Who'll come a-waltzing Matilda with me?
So when I heard Waits sing:
I'm an innocent victim of a blinded alley
And I'm tired of all these soldiers here
No-one speaks English and everything's broken
And my stacys are soaking wet
I couldn't help but imagine a lonely American, lost somewhere in a faraway corner of the crumbling Ottoman Empire (say, present-day Egypt, or Jordania), with nothing but his once fancy, but now torn and dirty clothes and shoes. And what about these lines?
You can ask any sailor and the keys from the jailer
And the old men in wheelchairs know
Matilda's the defendant, she killed about a hundred
And she follows wherever you may go
I figured the old men in wheelchairs could very well be the veterans in Bogle's song:
And now every April I sit on my porch
And I watch the parade pass before me
I see my old comrades, how proudly they march
Renewing their dreams of past glory
I see the old men, bent, stiff, and sore
These tired old heroes of a forgotten war
And young people ask: what are they marching for?
And I ask myself the same question
Bogle wrote his song in 1971, so it is possible - but I'm quite sure it is a coincidence and Waits did not have The Great War in mind when he wrote Tom Traubert's Blues.

Not that I care much for whether he did. To me, this image of a forlorn Westerner, lost in a country where he does not speak the language while the world is crumbling all around him, fits the lyrics perfectly. The song has a loneliness and a lostness to it that Waits must have recognized in the LA skid row (or in the Copenhagen porcelain truck after his drinking binge with Mathilde). I usually play the song on my mp3 player when I'm abroad for work. When you are in the bus from the center of Reykjavik to your hotel in a depressing office quarter at the border of town, nothing fits your mood better than hearing this grinding voice wail
It's a battered old suitcase
To a hotel some place
And a wound that will never heal
Just writing it gives me goosebumps: a wound that will never heal. When we travel, we leave behind the places and people we know and love. But we also develop a fondness for the place we've travelled to, which only gets stronger as we stay there longer. What I'd give for just one more bike ride along the coast of Santa Barbara, or a Guinness in Gogarty's, Dublin, or a fried fish and a vinho verde in some small unassuming restaurant on the Azores... Wherever you go, even if you go home, part of you still wishes you were back somewhere else.

dinsdag 3 december 2013

The curious silence on activist science

My two cents on the Seralini retraction story (Retraction Watch has all the details which I won't rehash here):

The first author, Gilles-Eric Séralini, is board member of an anti-GMO lobby group. Its website presents rather gleefully the horrible pictures of lab rats with huge tumors. What it does not tell you is that no matter what you feed them, this type of rats is highly likely to grow such tumors - indeed, they were bred for this very purpose. Previous research by Mr Séralini was funded by Greenpeace. Mr Séralini has been accused before of questionable, politically motivated scientific practices.

To me this reeks of the kind of political bias in research I come across all too often. What bothers me most, however, is the deafening silence about it in the news media. Accept a cup of coffee from a Monsanto employee and your reputation as an independent scientist is in tatters; but when it comes to furthering your own political views everything seems to be allowed, including sloppy science and misleading, exaggerated headlines. I wonder which is the more damaging.

The other problem is the natural law that it is always the initial headline that sets the image. The retractions, the errata, and the rectifications at best get page three. A few months ago heavy accusations of highgrading and overfishing thrown at a Dutch fishing company were all over the news. The news of its acquittal by the authorities never made the papers.

maandag 2 december 2013

Grow Fins likes Cow Burps

And the latest contender for the title of "Funniest Titled Environmental Economics Blog" is the UK-based Cow Burps:

  • We like to think ‘Cow Burps’ is a humorous and unique name therefore reflecting the idea that the blog should be fun both to write and read
  • We liked the idea of ‘burps’ as a euphemism for the interesting blog posts that we hope to write
  • The predicament of rising beef/dairy demand from an increase in population and rising middle classes in conflict with climate change impacts and habitat damage/deforestation is a perfect example of a situation where the use of environmental economics can provide better information to decision-makers. You can read more about this on the post How many cows?
  • And lastly, it reminds everyone to examine conventional wisdom, with cow burps being a much higher source of methane than cow farts!

woensdag 6 november 2013

Bitung: Plight of the baby tuna

Meet you on the corner of skipjack street and yellowfin street

Recent news announced that Indonesia will become a full member of the Western and Central Pacific Fisheries Commission, instead of a cooperating non-member as it has been so far. This is good news, because the country is an important player in the Western and Central Pacific tuna fishery. Indonesia caught more than 900,000 tons of tuna in 2010, about a third of which was skipjack (cakalang, as the Indonesians call it), and another substantial share is yellowfin (madidihang), bigeye, and other species. What's more, Indonesia and the Philippines are known to catch a large number of juvenile tuna:

Number of yellowfin tuna caught (vertical axis) by 2-cm size class (horizontal axis) in 2012. Blue colours indicate tuna caught by purse seines; yellow indicates tuna caught by fisheries in Indonesia and the Philippines. Yellowfin matures by about 100 cm. Source: Williams, P. and Terawasi, P. 2013. Overview of tuna fisheries in the Western and Central Pacific Ocean, including economic conditions. WCPFC Scientific Commission, Ninth Regular Session.

You can use juvenile tuna as bait, consume it yourself, or sell it. But each juvenile tuna you don't catch may become an adult. This adult tuna would then produce more tuna. It might also fetch a higher market price, especially if it is yellowfin tuna. Granted, it may also be caught in Pacific areas outside Indonesia. In that case Indonesia would not benefit from this one juvenile tuna it leaves in the ocean, although other countries would. So the catch of juvenile tuna is one of the issues WCPFC would like Indonesia to address.

Shinta in action on a handline vessel
Shinta Yuniarta, one of our PhD candidates on BESTTuna, is currently trying to estimate the magnitude of the catch of juvenile tuna (or baby tuna, as the Indonesian fishers call it) through a survey in such ports as Bitung and Ambon. I visited Shinta last week in Bitung to learn as much as I could about the situation on the ground, and to work with her in further sharpening the survey questions and the rest of her research. It was one of those trips that stay with you long after you have boarded the airplane back home.

Everything in Bitung says "fish". And very often, it actually says "tuna". The hotel even smelled of fish when I arrived. It sports a picture of a bigeye tuna right above the breakfast buffet. Small eateries (warung makan as the Indonesians call them) offer pieces of yellowfin tuna in a spicy sauce, or delicious coral fish roasted on a charcoal fire. Everywhere you look there are huge fish processing plants, canneries, or fishing companies that have their own fishing wharf. The small-scale fishers land their fish at the central landing place in the port. Originally it was meant to be an auction, but for some reason the auction never really got off the ground, so fishers sell their fish directly to traders who bring the fish to local markets or to processing companies.

As far as I could see the small-scale fleet featured three main types of fishing. The most common seemed to be the handline fishery, where fishers use a single line with some bait on a hook to catch the tuna. Another important fishery is the pole-and-line fishery, where bait is simply thrown into the water (and water is also sprayed on the surface) to get the tuna into a feeding frenzy, so that it will bite anything that comes along. Fishers then only have to throw in a hook and the tuna will bite; these vessels are usually larger than the handline vessels, and employ a lot of crew. The third common method turned out to be the pajeko, or small purse seine, but this method was mainly used to catch not tuna, but small pelagic species such as anchovies and Indian Mackerel.

Special offer: room with a view in Sulawesi. Water and food not included
In all cases the Fish Aggregation Device (FAD), or rumpon as the Indonesians call it, is important. It's an interesting system. Before I came I was wondering: when you make a FAD and place it in the sea, how do you make sure that it is used by nobody else but you? The solution turned out to be simple: you put a guard on it. Yes, every rumpon has somebody guarding it 24 hours a day. This guy lives in the small hut built on top of it, with probably some sort of radio communication, and makes sure that nobody but the owner catches the fish gathered under it unless the owner is paid a comfortable sum of money. The rumpon guard also informs the owner or his vessels of the amount of fish under it, so they won't waste their time coming to a rumpon with no fish under it.

So what did we learn so far? First, a lot of fishers readily admit that they catch a fair amount of baby tuna. They use it as bait, consume it on board, or take it home to their families. It is not illegal to catch juvenile tuna, so they seem willing to tell us how much they usually catch. And although the weight of baby tuna may be small, the number of baby tuna caught, and the fact that each baby tuna could have become a big, valuable tuna makes that the catch of baby tuna can still be a serious problem. Second, the catch of baby tuna is by far not the only unknown in the Indonesian tuna fishery. There may be unreported or even illegal catch. Some authors argue that Indonesian ports lack sufficient staff to check the accuracy of logbook data. Third, although it was fairly easy to contact and survey small-scale fishers, it turns out to be a lot more difficult to contact large-scale fishing companies.

But perhaps the most important lesson was the reminder that "small-scale" does not necessarily mean "sustainable" or "green". The idea of small-scale fishers tends to conjure up the idyllic images of hardy, honest folk that you see on Discovery Channel, read about in stories like Hemingway's The Old Man And The Sea, or hear about in songs like The McCalmans' "Five O'Clock In The Morning". No doubt that the people we spoke to in Bitung are honest, hard-working people who must endure many hardships to scramble a meagre income for themselves and the family they support. But a lot of fishers and consumers may benefit greatly if less baby tuna were caught. It's a difficult dilemma: a lot of very poor people depend on a fishing method that might disadvantage a lot of others.

maandag 30 september 2013

What is this researcher afraid of?

A thoughtful article in the Dutch newspaper De Volkskrant of 25 September 2013 deals with publishing in Science and Nature and cites a researcher who wishes to remain anonymous:
We try every now and again to get in the top journals, because Science or Nature look good on your cv (...) But it's nonsense. My two most important articles (...) were not even considered by Science or Nature. On the other hand: I once had a Nature publication on what was absolutely the worst experiment I ever did. But that was on a hot and photogenic topic. (...) What matters to the editing boards of those journals is to keep up the status of the journal, by keeping up their impact factor. This automatically leads to a preference for fields and articles that will be cited a lot. (...) The result is also that editors have less expertise in less popular disciplines, and they have failed recently in that respect.
This is very similar to Ray Hilborn's complaints about the quality of these two journals. But then, why does this researcher want to remain anonymous? What is he or she afraid of? Being sued or ostracized by Nature and Science editors? (If he or she has reason to be afraid, why am I putting this on my blog? Oh wait...)

vrijdag 27 september 2013

My impressions of the 2013 ICES Annual Science Conference

My impressions after a week of presentations, discussions, and lots of delicious food:
  • Of all the interdisciplinary conferences I've been to so far, the ICES meeting was the most scientific (read: least political, notwithstanding ICES's role as advisory body for fisheries policy), and the most constructive in its interaction with social scientists (read: economists). Besides EAERE (which I consider a disciplinary meeting) I was once at an ESEE meeting, and once at the European Congress for Conservation Biology. I had mixed feelings about those for their tendency to bash "mainstream economics" (whatever that may be) and to blur the line between science and activism. Perhaps it's because those communities have the hidden assumption that nature is best left alone by man, whereas fisheries scientists investigate, by definition, a form of interference in nature.
  • Is it just me, or is there a major disconnect between textbook fisheries economics and the practice of fisheries management? Concepts we teach (notably maximum economic yield and the role of the discount rate) are nowhere to be seen - in fact, I once heard a fisheries industry representative refer to maximum economic yield as "a plaything for economists". In our teaching we hardly pay attention to the stochastic nature of fish stocks, but these days fisheries science is all about reference points and harvest control rules - which only make sense in a stochastic context.
  • Economists can make big contributions to fisheries management by further strengthening how fisheries models describe human behaviour. So far those contributions were largely confined to modelling where fishers fish, but what about investments in gear, or boats? Let alone market structures, global developments (tilapia!), value chains, and policy-makers.
  • Iceland is like an extreme version of Norway. Thought the Norwegian landscape was rugged? Iceland has volcanoes, and geysers! And where I thought Norwegians don't give a hoot what the rest of the world thinks of hunting and whaling, only Icelanders can serve raw whale meat and rotten shark to a crowd of foreign scientists. (And it was delicious! The whale, that is.) Neither do Icelandic pubs have qualms with playing the entire Velvet Underground & Nico, including John Cale's ear-piercing viola solo in Heroin.

woensdag 25 september 2013

Are humans like fish?

This spaceship currently hosts about 700 fisheries scientists attending the Annual Science Conference of ICES. ICES is an international body that assembles stock assessments and other results from fisheries research in Northern Europe, Canada, and the United States. Fisheries scientists use a lot of detailed models of the marine ecosystem, which allows them (up to a point) to project how different policies affect such things as fish stocks, catches, and so on. I also entered the vessel (more accurately the Harpa conference center and concert hall in Reykjavik, Iceland) to discuss how such models can take the human factor into account. After all, humans take part in the marine ecosystem (in many cases we are the top predator), but we also develop policies with the interests of humans in mind. So if we can model fish, why not also model humans?

"It can't be done"
A common objection against this is that human behaviour cannot be modelled. Of course, as a model-building economist I don't agree with that. Economists have a large set of quantitative models at their disposal that describe human behaviour at several different spatial scales, from consumer choices to entire economies or even international trade. Some biologists at the meeting explained that similar objections were made when biologists started developing their own ecosystem models, but that has never stopped such models from proliferating. Why would humans be any different? The discussion set me thinking about the similarities and differences between humans and fish, and how they could make modelling human behaviour easier or more difficult than modelling animal behaviour or ecosystems.

Why humans are like fish
Basically we discussed three objections that were made against biological models, and are now made against modelling humans. First, people object that the object of the model is too complex. That's true, but so are the global climate, the cascade of nuclear fission and fusion in a hydrogen bomb, and a horde of blood-thirsty zombies climbing over a 50 meter high wall. But that never stopped people from modelling these processes in a plausible manner (admittedly, one of these examples is fictional and no, it's not the first one). If we don't model these processes we will never understand them or how they interact with other processes.

In the fish tank
A second objection is that the processes are uncertain. But although uncertainty complicates matters, it can be dealt with. You can do a sensitivity analysis to assess the robustness of your results. There are methods to optimize uncertain systems, such as stochastic dynamic programming models or uncertainty analysis. Such steps are necessary, they can be difficult, but that is no reason not to try.

A third objection is that models tend to induce tunnel view, where effects that are not "in the model" are ignored. This is a fair point, and as an economist I must admit that my profession has not been immune to this effect. So we need a diverse ecosystem of theories, approaches, and models, in order to stay open-minded for arguments or effects we hadn't thought of. Again, this objection has also been made with respect to biological models, and it has never stopped biologists from modelling.

Why humans are not like fish
This is where it gets interesting. First of all, fish don't read. People, however, may read your report and respond. There is evidence that negative news coverage on consumer confidence further reduces that same consumer confidence. This is a typical feature of social science research: as a researcher you have an impact on your object of research (i.e. people) that goes much deeper than any quantum physicist could get. Your results could be self-fulfilling, as in the consumer confidence case. They could also be self-defeating, as some people argued was the case with Limits To Growth: the stir caused by this report inspired efforts to reduce pollution and resource use to such an extent that we evaded the environmental catastrophe predicted by the report. (I'm not sure I'm buying the argument about this particular example but you get the idea.)

Second, I would argue that humans are much better at anticipating what other humans, including governments, do. For example, a common objection against vessel buybacks is that they create an expectation among fishers that the government will buy access capital (at tax-payers' expense) when the going gets tough for fishers - an open invitation for creating excess capacity because fishers face only part of the financial risks. Likewise, fishers may anticipate what other fishers do in their decision whether to fish, and how much to fish.

Who needs a window if you can have a view on virtual nature?
Third, many properties of humans, such as customs, habits, and technologies, are much more subject to change than those of animals. Over the 200,000 years of its existence, homo sapiens has developed sticks, houses, wheels, fish nets, purse seines, and pulse trawls. We're the only animal with such a massive change in capability and impact. And although economists commonly assume that preferences don't change over time, I'm not so sure. Suppose we estimate the recreational value of a natural park to be, say, €5 million, will it remain like that forever? There was a time when forests were for cutting down - they were seen as collecting grounds of villains and predators. Now we want to protect them out of love of exercise, hunting, and nature. What if our descendants develop a taste for hikes in virtual reality (or simply get glued to their iPads), and hikes in real forests fall out of fashion?

Fourth, on the bright side, we cannot communicate with fish but in social research we can do surveys and interviews to gain insight into their considerations, their lines of reasoning, and so on. These methods are not perfect (people can lie, or withhold information), but neither are biological measurement tools such as the ones used in stock assessments.

Should we? Can we? How?
The bottom line is that we can to some extent model human behaviour, and by doing so we can address a lot of pressing problems. But it will be tricky. I can't judge whether it will be trickier than modelling fish, but it will surely be tricky in different ways. Again, that should not be an impairment to doing it.

maandag 16 september 2013

Confusing Nemo (3): Enjoy your fish in 2049

Next in my little fact-checking exercise of The Black Fish's movie Losing Nemo:

If the fishing industry keeps fishing at its current rate, science predicts that all fish will be gone by 2048

This statement is based on a paper in Science (see a copy of the article here) by marine scientist Boris Worm, published in November 2006. Intriguingly, the objective of the article is not to predict anything like stock collapse: rather, it investigates the importance of biodiversity for the provision of a host of marine ecosystem services, such as fisheries, nursing juveniles of marine species, and filtering of waste from human sources. The article finds a crude but nevertheless convincing positive correlation between species richness and such traits as productivity and speed of recovery from overfishing: in other words, species-rich ecosystems produce more biomass than species-poor ecosystems, and also recover more easily from overexploitation. So is that where the 2048 prediction comes from, a projection of biodiversity decline that should lead to worldwide stock collapse around 2048?

Actually not. One of the driving forces considered in the article is fishing pressure, so it describes how more and more fish stocks have collapsed (defined as catches dropping below 10% of the highest catch ever recorded) since 1950, according to data from the Sea Around Us project. Based on these data the authors estimate a mathematical formula to describe this trend:

y = 0.0168*x1.8992

where y denotes the percentage of fish species currently collapsed and x denotes the number of years after 1950. Later in the article the authors make the following remark:
This trend is of serious concern because it projects the global collapse of all taxa currently fished by the mid–21st century (based on the extrapolation of regression in Fig. 3A to 100% in the year 2048).
2048 is 98 years after 1950: indeed, 0.0168*981.8992 is about 101.

The perils of extrapolation
So that's where the 2048 comes from. A trend, based on data over about 50 years, extrapolated another 50 years until we reach 100 percent. This claim, and how the authors arrived at it, has attracted a lot of criticism, which I won't discuss in detail here, but in my view the most fundamental objection is that extrapolating any trend, especially an exponential trend describing a number with a natural maximum (like a percentage), by as far as twice the observed range is bound to give extreme and unrealistic outcomes. In this particular case, as more and more stocks 'collapse', you are bound to have stocks left that are actually quite well-managed. Most Atlantic pelagic stocks, such as herring and mackerel, are healthy and well-managed. Not only are the stocks large enough to ensure plenty of replenishment that compensates fishing mortality, the institutions to manage the fishery, like Exclusive Economic Zones, scientists doing stock assessments, and stringent government policies, are also in place. North Sea herring is MSC certified. Iceland has practically its own national cod stock which it would be crazy to deplete. A lot of overfishing is due to poor exclusivity of stocks and the ensuing Prisoner's Dilemma, but these institutional flaws are largely absent for most North Atlantic stocks. And this is just one example.

How a side remark came to define a paper
If the 2048 estimate is so shaky, why do the authors make this claim? Remember that the objective of the article has never been to predict fisheries collapse: the authors wanted to assess the importance of species richness for marine ecosystem services. The 2048 claim was a side remark that ended up as a red flag in the associated press release. Interestingly, in the same month the 2048 article was published, the American fisheries scientist Ray Hilborn complained in the American magazine Fisheries (see a copy of the article here) that more and more articles in marine science, especially in leading journals such as Nature and Science, were published not for their scientific merit but for the public impact of their press release:
These four examples [not including the 2048 article, RG] illustrate a failure of the peer review system and lack of the basic skepticism needed in science, and are unfortunately but a few of the many papers now appearing with similar sensational but unsubstantiated headlines. [...] Critical peer review has been replaced by faith-based support for ideas and too many scientists have become advocates.
Indeed, Worm's paper was accompanied by a press release running the secondary headline "Current trends project collapse of currently fished seafoods by 2050". Apparently, the headline was meant as a wake-up call:
In a note to colleagues that was mistakenly sent to The Seattle Times, Worm wrote that the projection could act as a "news hook to get people's attention." "One reason why nobody cares about marine biodiversity is that there seemed no clear end in sight," he continued. "... Well, it's time to wake up — IF the current trend continues we will see drastic consequences in our own lifetime." (Excerpt from The Seattle Times)
Trevor Branch recently published a very insightful analysis of how the article was received in the scientific community. He found that among the articles citing the Worm et al. paper, the ones referring to the 2048 claim "had characteristics that suggest unfamiliarity with the controversy surrounding this projection, namely papers with few authors, published in journals with low impact factors, in fields far removed from ecology and fisheries, and sharing no coauthors with the Worm et al. paper." In other words: it's the rebels without a clue who cite the article for its doomsyear 2048.

The usual disclaimer
I'm no environmental Pangloss. There is plenty to be worried about, like the criminally exploited bluefin tuna stocks, or the continuous decline of European eel. Institutional problems abound in many regions of the world, making it exceedingly difficult to implement a sustainable system of stock management. And then there are pressures like ocean acidification, proliferation of invasive species, accumulation of plastics, and so on.

But I also believe that activist science will eventually eat itself. If a scientist bases his claims on wild extrapolations such as these, he or she is making it the pseudo-skeptics just too easy.

zondag 8 september 2013

Lava, limpets, and lotsa fresh fish

What I did last Summer: spent two weeks on the Azores.

Why The Azores? Because they have the perfect climate for a summer holiday (a steady 25 degrees), lots of hiking trails, plenty of fresh seafood, many small natural swimming pools, and great opportunities for spotting whales and dolphins. And I was fascinated by this Portuguese outpost almost in the middle of the Atlantic Ocean, where locals still caught sperm whales in the 1980s with small rowing boats, and where the ocean is a natural part of the landscape.

It's magnificent. All nine islands originated from volcanic activity, the remnants of which are visible in the form of dead volcanoes in the landscape. Settlements are crammed between the steep slopes of the volcanoes on one side and the ocean on the other side, often on what the Azoreans call fajas: small areas of flat land, often consisting of rubble from collapsed rocks. On one side the volcanoes, which used to spew fire and sulfur but are now covered in sinister dark boulders of basalt; on the other side the ocean, thriving with life but also unpredictable and dangerous. You can truly say the Azoreans live between the devil and the deep blue sea.

A taste of local marine biodiversity:
grilled limpets on the island of Sao Jorge
Before you go, read Moby Dick. The American sperm whale fishery of the nineteenth century, so vividly described by Herman Melville, brought whaling to The Azores. Until the Azoreans abandoned whaling in 1983, their method of whaling was very similar to the method described in the book. The Azorean whalers approached the whale in small rowing boats, from which they drove a harpoon into the sperm whale's body. In panic the whale would quickly dive to escape his attackers, who, by means of the rope attached to the harpoon, would be able to track the whale's location. When the whale resurfaced, the whalers would further wound the whale until it succumbed. Catching one whale could take a dangerous and blood-drenched struggle of several hours.

I admit it must have been the most gruesome way of killing an animal, and I'm sure few visitors mourn its demise. But for the Azoreans, especially the people from whaling towns like Lajes do Pico, it was a valuable tradition and a source of pride. We were so lucky to arrive on Pico in the middle of its Whalers Week. Lajes do Pico features two whaling museums, a few whale watching companies, and a small fleet of traditional whaling boats. During the Semana Dos Baleeiros, as the week is called in Portuguese, the people of Pico honor Our Lady of Lourdes, the whalers' patroness saint. The week is a mix of live music (lots of brass bands), folkloric and religious processions, and lots of food (fish, fish, and some meat) and drink (we stuck to the caipirinhas).

The whaling industry has disappeared, not because of animal welfare concerns or because they ran out of sperm whales, but because the products from whaling (oils, fats, proteins, with many applications in cosmetics, agriculture and industry) got more and more competition from cheaper synthetic alternatives. But no more than three years after the local whale oil factory closed down, the first whale watching company emerged. Nowadays a complete industry has evolved in whale watching, swimming with dolphins, diving with sharks, and so on. I'm not sure I agree with all of it, but in any case we enjoyed seeing real-life sperm whales (their flukes, at least). As regards the dolphins, if you're lucky you only have to take the ferry to spot them:

video

The Azores have a small-scale tuna fishery that catches mainly skipjack tuna by pole-and-line. The islands have their own brands, certified with the Friend of the Sea label, and they export most of it to Italy where their particular brand is much preferred. We didn't get to see much of the fishery but we could see the vessels in many of the harbors we passed.

And that, I must say, was perhaps the main treat of the place: fresh fish, fresh seafood, everywhere you go. Species you never heard of but that taste deliciously. A waiter warning you that the fish is not fresh but frozen (the only Dutch restaurants not serving fish from the deep-freeze are vegetarian restaurants). And all that washed down with some delicious Pico wine or mainland vinho verde.

Back to work.

zondag 21 juli 2013

Confusing Nemo (2): Fisheries subsidies, good and bad

Next in my little fact-checking exercise of The Black Fish's campaign movie:

"Every year, $25,000,000,000 of tax money continues to subsidize a very harmful industry"

And that's a literal quote from the movie. The implication is clear: our tax money - $25 billion of it - is being spent on promoting overfishing. Where does the figure come from?

Rashid Sumaila is a Canadian resource economist who has gained a big reputation with his work on game theoretic analyses of fisheries and big, global-scale analyses of fisheries subsidies. If anyone knows about the global scope of fisheries subsidies it is him; the $25 billion in The Black Fish's movie is based on his 2010 article in the Journal of Bioeconomics.

Interestingly, the article does not only give an estimate of the total amount of subsidies, but also distinguishes three types of subsidies: beneficial subsidies, capacity-enhancing subsidies, and ambiguous subsidies. The distinction is based on what the subsidy does to the resource stock: does it lead to bigger (beneficial) or smaller (capacity-enhancing) fish stocks? This criterion is fairly easy to apply and interpret, but it also leaves some issues out of the discussion, as we will see later.

Beneficial subsidies

Beneficial subsidies contribute to the resource stock, and include such expenses as monitoring programmes, research for stock assessments, and establishing MPAs. Their total amount is about $8 bln.

The article does not ask the question whether this should all be funded by tax money. The rule of thumb should be: subsidize public goods, but let the users of the public good pay whenever possible. As a fish consumer I'm willing to contribute (through a higher fish price, ideally) to a responsible management of our fish stocks, but I'm not sure I agree with sending the bill to those who have no stake in it, like vegetarians (or principled meat eaters, for that matter). The exception may be MPAs, which provide more public goods than just more fish (which is not as clear-cut as it seems, by the way).

Capacity-enhancing

This includes tax-payers' money spent on enhancing fishers' capacity to deplete fish stocks, like public money spent on port development, fleet renewal, and price support. With $16.2 bln this is the largest category. By far the largest type of capacity-enhancing subsidy (or any kind of fishery subsidy) are fuel subsidies: every year a whopping $6.4 bln is spent to lower the price fishers pay for their fuel. Sumaila et al.'s definition of fuel subsidies is interesting: they define fuel subsidies as the difference between what fishers pay for their fuel and what other sectors pay for the same fuel. This means that (partial) tax exemptions, like the red diesel that The Netherlands until recently had, are included; however, blanket fuel subsidies, like those in Indonesia, Nigeria, and Egypt, are not.

I don't know how the authors categorize subsidies for more selective, or low-impact fishing gear, such as the pulse trawl. It must have been difficult to identify exactly on what kind of innovation or renewal a subsidiy is spent, so I suspect the authors have filed this as capacity-enhancing.

You could also argue that port development is simply an investment in infrastructure, which is a public good. The government also builds roads, railways, and glass fiber networks, why single out port infrastructure as a subsidy to fisheries? Moreover, is port development bad if fish stocks are healthy and well-managed?

Ambiguous subsidies

For researchers this is the most interesting category because its effect is unclear. Buyback subsidies, for example, may reduce fishing capacity on the short term, but on the long term the effect is less clear-cut. The vessels bought may go to other countries at dumping prices; fishers may also anticipate future buybacks when deciding whether or not to invest in new fishing capacity. Ambiguous subsidies amount to about $3 bln.

Do tax-payers spend $25 bln on overfishing?

Now I'm confused. $8 bln + $16.2 bln + $3 bln = $27.2 bln, not $25 bln as the movie states. The article's abstract, however, estimates the global amount of subsidies at between $25 bln and $29 bln. Does The Black Fish prefer to give a conservative estimate, rather than the best estimate according to the article? But then why lump together scientific research and establishing MPAs (which I cannot believe The Black Fish would oppose) with fuel subsidies (which are undoubtedly wrong)?

dinsdag 9 juli 2013

Weird music, ditto beer

Call me a snob, but I've never cared much for the music you hear on everyday radio. I don't know what it is. I prefer the grinding doom of Ufomammut and the richness and purity of a skilled traditional fiddler to the polished one-size-fits-all music mostly served on prime time. So while around 80,000 pop music lovers were sweating away in a simmering Rock Werchter, I was one of the 5,000 folk music lovers enjoying the atmosphere, the music, and the local lambic beer at the Gooikoorts festival.

I discovered traditional music (like many of my generation) through The Pogues. While attending college I spent four months in Ireland, going after the local folk music with my guitar and buying a cheap and crappy mandolin. Years later the Saint Chartier festival was a revelation to me: all those musicians, all those dancers, all those instrument makers, in such a small village! As soon as I came home I hung the mandolin on a wall and bought a fiddle. The fiddle's been with me ever since. Slowly the Saint Chartier festival gave way to Gooikoorts, which feels like a much smaller and friendlier version of Saint Chartier with even a higher degree of joie de vivre. In Dutch I would call it "Burgundian", a term that refers to the days when present-day Belgium, Luxemburg, and The Netherlands were part of the Duchy of Burgundy, but also to the stereotype of a people that loves the good life.

Gooik is a small village (about 9,000 inhabitants) in the Pajottenland, southwest of Brussels. The region is famous for its mattetaarten (cakes made from cream and buttermilk), but even more famous are its unique beers. Unlike most beers, where carefully selected yeasts convert the sugars to alcohol, geuze and lambic get their fermentation bugs from the open sky. The beers are an acquired taste: deeply sour, and in the case of lambic not a single bubble of carbonate. But once you get used to the sourness you start appreciating the tones of apple and oak not found in any other beer. Many brewers from other regions, from West-Flanders to the United States of America, have tried to imitate the process by taking samples from the Pajottenland air, but so far they haven't been able to beat the real thing. You need the right mix of micro-organisms, especially Brettanomyces bruxellensis, which is a bacterium unique to the region. Real geuze and lambic can only be brewed in the Pajottenland, and nowhere else.

Since 1997 Gooik has its own geuzestekerij. "Steken" is a local term for blending, so a stekerij is a place where geuze is matured and blended, but not brewed - they get the wort from other breweries and mature and blend it in Gooik. I finally had the opportunity to visit the geuzestekerij and buy some bottles of the stuff. The place is crammed with 200-year old oak casks where the beer matures, soaking in the oak flavour as well as more germs. The beer matures for 3-6 years ("1 bottle = 3 years work", the label says) and is then blended to oude geuze or mixed with fruit. What struck me was the dedication to tradition of the people working in the stekerij, but also its international appeal. Just when I entered the building there was a delegation from Brazil tasting the local brew.

The local brew and the excellent food are just two of the many factors that add to Gooikoorts' Burgundian atmosphere. The bands play mainly traditional European folk, varying from strictly traditional Flemish folk songs, to jazzy interpretations of French dance music, to mixtures of Finnish polka and bluegrass. All generations are present: young parents with toddlers in their arms, teens with hormone-driven chutzpah, pensioners with an open mind. For me, the greatest enjoyment was to meet old friends, and to grab the fiddle and play. Ten years ago, at the first edition of the festival, we would play until the sun rose, sleep a few hours, and party on. Now most of us had kids, a demanding working life, or both, so we took it easy. And easy is how you take Gooikoorts.

Have a great summer.

maandag 8 juli 2013

Confusing Nemo (1): How much is too much?

The Black Fish, an environmental NGO, has made an animation movie on fisheries. Laudibly, the organisation provides the sources for its (albeit not all) claims. I agree with some statements they make, but not all. Let me go through some of them one by one in a series of posts. Number one:
"The global fishing fleet hauls in 80 million tonnes of sea food"
The latest FAO report on the State of the World's Fisheries and Aquaculture (SOFIA) on this states that the amount of fish captured in marine areas is indeed around 80 million tonnes each year. I suspect, however, that this only includes the recorded landings: figures on discards and illegal landings are probably too shaky to be included in these figures. So catches might actually be higher.

So the 80 million tonnes seems accurate, but is it much? For comparison: FAOSTAT states that the world produced almost 300 million tonnes of meat in 2011. But that says little about whether 80 million tonnes (or perhaps more, due to discards and illegal landings) is too much. The most widely used benchmark for this is maximum sustainable yield (MSY). The SOFIA does that, and concludes that around half of evaluated stocks is fully exploited (around MSY); overexploited stocks (stocks that, in the report's definition, "produce lower yields than their biological and ecological potential", due to low stock abundance) make up about 30% of the stocks evaluated. Of the remaining 20% harvests can be increased sustainably. What the report also says is that
The declining global catch over the last few years together with the increased percentage of overexploited fish stocks and the decreased proportion of non-fully exploited species around the world convey a strong message – the state of world marine fisheries is worsening and has had a negative impact on fishery production.
In other words, the fact that slowly the number of overexploited stocks is increasing while catches stabilize or decline should, according to the FAO, be taken as a bad sign.

If you want a second opinion, this article by Boris Worm and others should be a good place to start. The authors examined the exploitation rate and biomass of 166 stocks worldwide and found, among others, that
For about two-thirds of the examined stocks (63%), biomass (B) has dropped below the traditional single-species management target of MSY, that is, B < BMSY. About half of those stocks (28% of total) have exploitation rates that would allow for rebuilding to BMSY, that is, u < uMSY, whereas overfishing continues in the remainder (u > uMSY in 35% of all stocks).
That's the bad news. Interestingly, the article also states that
Since the 1990s, Iceland, Newfoundland-Labrador, the Northeast U.S. Shelf, the Southeast Australian Shelf, and California Current ecosystems have shown substantial declines in fishing pressure such that they are now at or below the modeled uMMSY. However, only in the California Current and in New Zealand are current exploitation rates predicted to achieve a conservation target of less than 10% of stocks collapsed.
So is the 80 million cited in Losing Nemo accurate? It seems so. Is 80 million too much? For the short run it also seems so, but on the long term it is more difficult to say. As Worm et al. state, it is still possible to rebuild stocks, and we can only do so by catching less. So far I haven't found any figures on how productive world fisheries stocks could be if we managed them well: 70 million tons? 90 million tons? In any case, things are moving in the right direction as the exploitation rate is slowly declining in most, albeit not all fishing grounds.

maandag 1 juli 2013

Mapping marine economics (6): Putting it all together

I promised myself not to write this post. I'm sure not everybody will agree with how I redefine some of the terms commonly used in economics, or perhaps more broadly in philosophy of science. But doing so gives me a framework that I find quite helpful to map a disciplinary field.

So here goes.

In this post I argued that economists working on a particular policy issue (climate change, health, overfishing) do four types of research, similar to the four types of questions a doctor asks when treating a patient:
  1. Assessment: how bad is the problem?
  2. Diagnosis: what causes the problem?
  3. Objective: what is the best possible improvement?
  4. Prescription: how can we realize the objectives?
It is common among economists to distinguish positive economics (what is happening?), also called descriptive economics, from normative economics (what should be happening?), which is also called prescriptive economics. But for some issues it's not so clear-cut whether they are positive/descriptive or normative/prescriptive. For example, take monetary valuation of ecosystem services. On one hand you could argue that such valuation is positive/descriptive because it merely describes people's preferences with respect to ecosystem services: the recommendation comes later. On the other hand, by putting a price tag on nature you do make a normative statement: this is more important than that. So you might as well call a valuation study a normative/prescriptive exercise. I think analysis of policy instruments has the same problem. You could label such research positive/descriptive (e.g. "ITQs are more likely to lead to discarding than restrictions on fishing effort"), but also normative/prescriptive (e.g. "if you're worried about discards, don't introduce ITQs"). I think it would be easier if you slightly redefine the terms (and this is where the hatemail probably starts):
  • Positive: analyzing without judging, e.g. "if you do x then y will happen"
  • Normative: making a judgement, e.g. "x is better than y"
  • Descriptive: considering the situation 'as is', e.g. "we have a problem"
  • Prescriptive: making recommendations, e.g. "you can solve the problem with y"
The nice thing about these definitions is that you can make a quadrant that neatly describes the Assessment, Diagnosis, Objective, and Prescription:

NormativePositive
Descriptive1. Assessment2. Diagnosis
Prescriptive3. Objective4. Prescription

I know the boundaries between these four quadrants are not perfectly clear-cut either. If you do cost-benefit analysis you may need to do some non-market valuation (Quadrant 1), but you will make recommendations on which policy alternatives are more desirable (Quadrant 3 - or is it 4?). You can only set objectives (Quadrant 3) properly if you know how to achieve them (Quadrant 4). That's why I prefer to call it a map, rather than a classification. And as such I find it a helpful model to understand how different strands in the literature fit together.

So here it is, my map of the economics of coastal and marine ecosystems, formulated in research questions:
NormativePositive
Descriptive
  • What is the economic value of a coral reef?
  • How much tourism value is being lost by jellyfish outbreaks?
  • What are people willing to pay for whale conservation?
  • How do social norms evolve in common pool resource management?
  • When will countries cooperate in international fisheries management?
  • How do fishers decide how much and when to fish?
Prescriptive
  • What is the optimal harvest rate in an uncertain fishery?
  • What is the optimal spatial allocation of shrimp farming and mangrove forest in a coastal zone?
  • What is the optimal management strategy of an invasive species?
  • How do ITQs perform in a mixed fishery?
  • How can we design effective PES schemes?
  • How will a ban on discards affect a fishery?

Or in research methods:
NormativePositive
Descriptive
  • Contingent Valuation
  • Travel Cost Method
  • Choice Experiments
  • Game Theory
  • Field experiments
  • Evolutionary models
Prescriptive
  • Optimal Control Theory
  • Numerical optimization models
  • Cost-benefit analysis
  • Applied fisheries models
  • Game Theory
  • CGE models

woensdag 12 juni 2013

Dear students, please question my authority

Some more thoughts on the Stapel saga.

In most fraud cases Diederik Stapel told his students that he would perform his experiments, collect the data, do the analysis, and give the students the results. Some students wanted to be at the experiments (a good suggestion, because you can learn a lot from it), but he wouldn't allow them. A few students wanted to see the raw data, but when they pressed him he expressed doubts whether they were good enough to be his PhD students. A filthy intimidation tactic if you ask me. But not only his students were duped: other academics, like the Dutch professor Roos Vonk, co-authored articles that turned out to be based on fake data. In the end the whole fraud came out because a few students finally had the courage to stand up to him (and, possibly, the university board where he had a lot of friends - luckily the board did the right thing and took their complaints seriously). Other students, who allowed themselves to be intimidated, now have flawed dissertations. A few of them have left science because of the affair.

Dear students, learn from this. I promise I won't cook the books, but don't take my word for it - don't take anyone's word for anything. Not just your thesis supervisor. After you graduate you will work with other people, like your boss or your co-authors. They can make mistakes. They can lie. When your name is on a proposal, a thesis, or an article, than you (and your co-authors) are responsible for its contents. Convince yourself that its contents is correct. Yes, I do the same with your contributions.

I know that in some cultures it is impolite to question the advice of your superiors, much like foot soldiers are supposed to follow their sergeant's orders. That may work in the army, but we're not in the army here. The one order I give you is not to take orders from me.

woensdag 5 juni 2013

Great jelly report, shame about the mudslinging

Nando Boero, the man who named a jellyfish after Frank Zappa, has just written a new FAO report on the impact of jellyfish in the Mediterranean and Black seas. As far as I can judge it is a fairly comprehensive overview of these impacts, including some sensible recommendations, including
  • Develop jellyfish products (if you can't beat them, eat them!)
  • Use cutting nets to destroy jellyfish
  • Destroy the polyps (this may actually be an argument against wind farms, whose concrete structures are excellent breeding grounds for jellyfish polyps)
  • Prevent spread by shipping and so on
It's just a shame that the report concludes with some unnecessary mudslinging against my profession:
One of the paradigms of current economy is growth. Production, income, and consumption must grow, in order to have a healthy economy. The expectation, thus, is infinite growth.
I have never, ever met a serious economist (surely not an environmental economist) who says that production and consumption can or should grow indefinitely. We are all aware of the second law of thermodynamics, and we are all aware that the earth's resources are finite. Yes, I know The Economist newspaper recently argued that in order to alleviate poverty we need to increase economic output. But that is an issue of raising people's income above some absolute level: nobody says our income should rise forever. In any case, are we going to tell 1.1 bln people living on less than $1.25 a day that they should remain poor?
Obviously this is not possible, since our planet is finite, and the biomass ecosystems can produce is limited. The growth of human populations is exerting an unbearable pressure on natural systems that, obviously, are on the edge of collapse.
As I explain in this post, this would be true if economic growth is the same as producing ever more stuff, by putting in ever more other stuff. But it's not. A lot of economic growth comes from meeting needs (material and immaterial) ever more efficiently, which does not necessarily imply using and producing more material. Can we keep increasing that indefinitely? Personally I don't think so either. I'd bet our stock of ideas is likely to be as finite as our stock of fossil fuels, but that I'd also expect the bottom of that stock is still a long way off. Again, it is important to remember that not all economic growth is material growth. The economy also grows if we learn how to produce the same amounts with less inputs, for instance by being less wasteful. So for the foreseeable future I believe we can raise those 1.1 bln people above the poverty line while remaining within the boundaries of our planet.
The scientific community is warning about this problem since the times of Malthus and Darwin, but it is apparently unheard by decision-makers, economists having much greater influence than ecologists.
For the record: Malthus was an economist. And economists having influence on policy makers? If only. If this really were the case we would have an effective tax on carbon emissions, much less farm subsidies, and much healthier fish stocks.

woensdag 29 mei 2013

Damn you, lack of global warming

The lack of Spring is taking its toll. We'll have to wait another two weeks for our fresh maatjes:
The first barrel of fresh herring will be auctioned two weeks later than usual. The reason is the bad weather. Plankton, which is the main food source of herring, has been growing very slowly due to the lack of sunlight. (Source: Trouw.nl)
Actually, it's not as dramatic as it sounds. "Fresh herring" is a bit of a oxymoron because all herring is frozen. If they weren't you'd have to worry about this uninvited guest. So go on and order some onions with it.

dinsdag 28 mei 2013

Who's the sucker here: Kiribati, Mauritania, or the EU?

In many developing countries with large fish stocks most of the fishing is done by fleets from rich countries such as Japan, Spain, or The Netherlands. The EU has made a few new deals recently and they make interesting case studies.

On the EU's latest deal with Kiribati (H/T Adam Baske):
Kiribati has secured a US$1.71 million deal for 15,000 tonnes of tuna per year with the European Union. Under the agreement, the EU is now able to deploy four purse seiner and six longline vessels in Kiribati’s waters.
There are many Pacific Island Nations making such deals. It's a classical Prisoner's Dilemma: if those countries stick together in the negotiations they could earn a lot more than if they go it alone. No wonder the Parties to the Nauru Agreement are not amused. Dr Transform Aqorau of the PNA comments:
“Kiribati could have generated an annual income of US$11.3 million from its agreement with the EU. But as I said, countries have their own reasons for doing what they do, but you have to wonder why in the face of great need by our people, we allow our natural resources to be sold short?”
On the other side of the globe Mauritania seems to have taken the other extreme. The Dutch newspaper De Volkskrant reports (25 May 2013) that ever since Mauritania's fishing deal with the European Union has come into force, hardly any European fishing vessel has entered Mauritanian waters. Fishing in Mauritania has become unprofitable for these vessels due to several restrictions, including the distance they are required to keep from the coast, the fee they are required to pay, and the number of Mauritanian workers they are required to hire.

European fishing in Mauritania's waters is often portrayed as a hostile takeover of a poor African country's resources by rich nations' fishers, so you may be tempted to cry victory over Western imperialism. But this is no victory for Mauritania (my translation from Dutch):
According to Jedna Deida, a Mauritanian fisheries consultant, four thousand people in the port city of Nouadhibou have lost their jobs because the foreign fishing fleets stay away. A few thousand earned a living as crew. Many others worked in processing factories. "It's a terrible situation, " Deida says. "People can't pay their children's schools. It's been like this for months."
Many coastal (can I call Kiribati coastal?) developing countries struggle with the same question: should we allow foreign fishers in our waters? Under what conditions? Shouldn't we develop our own fisheries? But what if we earn more from lucrative deals with big foreign vessels than from our own small-scale fleet?

maandag 27 mei 2013

Why economists argue with ecologists (6): Can we price nature?

Can we express nature's value in currency, such as dollars, euros, or yuan? I usually get one of the following three replies to this question.

The first is the hardcore ecologist:
"Most certainly not. Nature has a value in itself. Pricing nature is disrespectful to nature; it violates nature's intrinsic value; it's cynical and perhaps even blasphemous. Can't we just enjoy something without putting a price tag on it? Why does everything have to be expressed in money?"

The second is the hardcore economist:
"Well, duh. People have preferences. Do you prefer an apple or an orange? Do you prefer a highway or a forest? From preference orderings we can derive the amount of compensation people would need for building that highway. So of course we can price nature. We do it every time we make a choice between nature and something else."

The third is the pragmatic ecologist:
"I don't like it, but if we don't do it policy makers won't listen to us. Economists rule the world, so to promote nature conservation we need to speak the language of economists, and that is money. So I'll just hold my nose and price nature. But I will also remind people that the price tag does not mean that nature can be substituted for something else."

Believe it or not, but my view is closer to the hardcore ecologist than any of the other two. So what am I doing teaching monetary valuation of the environment next June?

When we do monetary valuation of, say, a coral reef, we don't value a coral reef. Does my wage say how much I am worth as a human being? (Boy, am I glad I never pursued that career in Dutch folk music.) No, at best it gives an indication of the value of the skills and expertise I am offering in the labor market as a teacher and researcher. Likewise, coral reef valuation aims to estimate the economic value of the goods and services provided by a coral reef, like diving tourism, coastal protection, or nursing juvenile fish. By "economic value" I mean how badly we want or need those goods and services, and how easy it would be to get them elsewhere if the coral reef disappears. That tension between how badly we want something and how easily we can get it is also called relative scarcity. Water is not scarce in The Netherlands, even though it is an essential resource. The fact that it is so easy to get makes that it has a very low market price. On the other hand, diamonds are hugely expensive, not because we need them so badly but because they are so difficult to come by. You rarely see newspaper headlines about the scarcity of people, but there is common mention of scarcity of skills or labor. The last time we put price tags on humans was during the shameful era of the slave trade. Likewise, monetary valuation does not, and should not, even pretend to price nature as such.

This view puts me at odds with the hardcore economist who argues that ethics can be fit in preference orderings and compensated for. I don't agree with this line of reasoning. It would imply that one person can block a policy if he finds it absolutely unacceptable - after all, he would require an infinite amount of compensation in order to be left "as well off" as without the policy. In practice we would call him a protest bidder and remove his data point from our analysis. Another problem is that this line of reasoning assumes that moral objections are purely individual. Moral considerations, however, typically pretend to hold for everybody. If I think eating meat is wrong, I can allow you to order a hamburger while still condemning it. If it were a purely individual preference, for instance if I would have no quarrels with eating meat but I simply don't like hamburgers, I would have no reason to condemn your ordering of a hamburger. So when we talk about the intrinsic value of a coral reef or a species, we have no other option but to debate it with others. The outcome of that debate may be that the majority dismisses the idea of an intrinsic value of a coral reef. But at least the argument would have its proper place in the political process, which it would not have if we tried to express it in a monetary value.

It also puts me at odds with the pragmatic ecologist. First, I find his line of reasoning insincere. If you think coral reefs are unique, unsubstitutable, and should be preserved for their own worth, just say so and don't start using economic value as an argument of convenience. Second, economic value implies substitutability, period. If I compensate you for the loss of an environmental asset, I substitute the environmental asset by something that makes you just as well off as with the asset. So I have substituted the asset by something of similar value to you. If I cannot substitute the asset by all the wealth in the universe, then its value must be infinite: hence Michael Toman's characterization of Costanza's $33 trillion paper as "a serious underestimate of infinity". Third, valuation should be done sincerely, and with the prime goal to make sure that all relevant information is available for public decisions. If you blur the line between moral considerations and purely economic ones, you will be tempted to overstate the economic arguments because the moral ones didn't work.

The bottom line is that when you do economic valuation, you need to define very precisely what it is you are measuring, and whether the methods you use answer the question you ask. I am deeply skeptical of measuring such notions as existence value (an economic value derived from no more than knowing something exists), because I doubt whether people understand the concept, and whether we will ever be able to distinguish it from moral considerations. But perhaps that is what the role of economists should be in this issue: to properly phrase the question, to explicitly lay out the arguments and considerations, and to quantify those considerations that can be quantified.

maandag 20 mei 2013

Mapping marine economics (5): Getting the incentives right

On October 23, 1924, Canada and the United States of America signed their first Halibut Convention. Halibut fishers had long pressed for an international treaty to regulate the fishery, but it had taken a few years before Canada was finally allowed by its former colonial ruler, Great Britain, to sign its own international treaties. It was an important step to prevent overfishing of halibut, because the convention provided for a three-month closed season in winter. After a few years, however, those three months turned out to be insufficient. New fishers had entered the halibut fishery, and many fishers had invested in bigger vessels. So fisheries managers shortened the fishing season to compensate for the increased fishing capacity. What did the fishers do? They bought even bigger boats. Small wonder what the fisheries managers did in response. Around 1990, the Alaskan halibut fishing season comprised no more than a few 24 hour periods, spread over the year. In those few days the fishers caught all the fish they used to catch in nine months. It was a textbook example of what fisheries scientists call a derby fishery.

What went wrong here? No matter the good intentions of the fisheries managers, they overlooked an essential factor in the system they were supposed to manage: human ingenuity. Animals can be inventive (ever seen your cat figure out how to open your fridge?), but humans are champions at this. When fishing days were limited, they bought bigger boats. When boat length was limited, they built wider boats. Human ingenuity has brought us the wheel, the steam engine, the Internet, and the smallpox vaccine, but it has also exaggerated overfishing. So how do we make sure it works only in our benefit?

Enter ITQs (and discards)
In Alaska the policy makers introduced Individual Transferable Quota, or ITQs. ITQs work much like tradable water rights, or tradable pollution permits: the government sets the maximum allowable catch, and ITQ owners have the right to catch (mostly, actually, to land) a share of that maximum. The possibility to trade ITQs allows inefficient fishers to sell their share to more efficient fishers at a price that makes both better off than without the trade. In the Alaska halibut fishery it worked: the derby fishing was over while the catch of halibut remained within limits. ITQs are now all the rage all over the world, as they seem to be the best instrument so far that fisheries scientists have come up with. But that does not mean they are perfect.

The problem is that ITQs limit landings, not catch. Monitoring catch is very difficult unless you send a police officer with every fishing vessel. So instead of monitoring how much fishers catch out at sea, managers monitor how much fish fishers bring to shore, in ports, auctions and so on. But landings are not the same as catch. If you run out of plaice quota while having plenty of sole quota left, you'd be sorely tempted to throw back your catch of plaice and keep your catch of sole. What is being thrown back is called discards. Discards have been in the news lately due to the proposed EU discard ban, for reasons good and bad. Nobody likes throwing away food, and throwing away half the catch of edible fish, as happens in some fisheries, comes across as criminally wasteful. Moreover, discards distort fishery statistics because by definition, they are the difference between catch (which fisheries scientists want to know) and landings (which they actually measure). But let's not forget that estimates of the survival of discarded fish vary wildly and depend on the type of fishing gear, the species, and how long the fish stays on board before being thrown back into the sea. In other words, not all discarded fish die. Moreover, the quota system is at least as much to blame as the fishers themselves. If you introduce ITQs in a mixed fishery like the Dutch cutter fleet, where fishers catch many different species in one single haul, but you do not consider the ratios in which those species are caught, you are bound to put fishers in a situation where taking your unused quota back to shore seems more of a waste than discarding fish. Perhaps you say it is wrong to discard fish. Well, it is also wrong to steal a bike, but that doesn't mean you shouldn't lock yours.

There is no panacea
The bottom line is that fisheries management does not manage fish - it manages people. So to do it properly you need to understand how people think, how they make their decisions, and why. This holds not only for fisheries management, but also for other ecosystems where human activity is a key player, like rangelands. Coastal ecosystems are rarely untouched by humans, because by definition they are located where people are most likely to settle first; they are also important holiday destinations. So to manage mangrove ecosystems you need to consider how, why, when, and where shrimp farmers cut, pollute, or otherwise degrade mangroves. To manage coral reefs you need to understand how, why, when, and where clumsy divers do the most damage.

The research in this domain has provided us with innovative policy instruments like ITQs, TURFs (territorial use rights for fishers), and PES (payments for ecosystem services). What these instruments have in common is that each was once hailed as the answer to all the problems in marine and coastal management, and that each turned out not to be. Every medicine has side effects; there is no panacea. What is needed is the right medicine for the right situation.

So what do I do?
This year I had a paper in Ecological Economics on policy instruments to manage transgenic maize - not exactly a marine topic, but still an example of how applied economic models can give quantitative insights into the effectiveness and efficiency of policy instruments. My contribution to this year's EAERE is about certification as an instrument to nudge fishers in a more sustainable direction. In BESTTuna we analyze, among others, how instruments like ITQs and Vessel Day Schemes can manage Pacific tuna stocks. I have been involved in the supervision of Diana van Dijk, who investigates the performance of multiannual quota and limits on adjustment of quota in a volatile fishery with costly capital adjustment.

And there is still plenty to do. The debate on ITQs and PES is far from over, and there are plenty of questions on how to consider human behavior in the design of policy instruments. There is a theme session on modelling human behavior coming up at this year's Annual Science Conference of the International Council for the Exploration of the Sea (ICES), which I organize together with Jan-Jaap Poos of Wageningen IMARES and Olivier Thebaud of CSIRO. One of the more difficult, and therefore more interesting, questions is how we include institutions and social norms in our analyses: can we model it? Or should we leave it to other social sciences that have better, qualitative tools to analyze these issues?

maandag 22 april 2013

My tuna paper for the upcoming EAERE conference

My paper for the upcoming EAERE conference (PDF here) deals with certification of a fishery that is practically unmanaged. Usually you should steer clear of such fisheries as they tend to be heavily overfished, but what if a bit of consumer power can still nudge fishing effort from bad practices to slightly less bad practices?

This is a contentious issue. The Marine Stewardship Council simply does not certify a fishery if it has no plausible management plan. This is understandable, because before you label a fishery 'sustainable' you should check whether it has any mechanism to prevent future overfishing. It's the classical problem of open-access resources: if users cannot be excluded from harvesting, it will be a free-for-all, at the future's peril. So we need some institution that does the excluding.

But now take a look at the Western Pacific tuna fishery. It may not be completely open-access, but given the sheer size of the area (I'm talking half the largest ocean on the planet here) and the number of sovereign states involved, it comes pretty close to a free-for-all. Some of the tuna species (skipjack) are hardly affected, but they are caught in ways that affect other species (yellowfin) that are doing less well (although, admittedly, not as disastrously as some others). Some fishers use Fish Aggregation Devices (FADs), which attract schools of skipjack as well as juvenile yellowfin; their catch tends to end up in your sandwich as canned tuna. Other fishers do not use FADs but look for free-swimming schools of tuna. These fishers can select schools consisting purely of skipjack or yellowfin, which enables them to avoid catching juvenile yellowfin. There are good economic reasons to leave juvenile yellowfin in the sea: just compare the price of a tuna steak to that of canned tuna. So we want less tuna from FADs, and perhaps more from free-swimming schools.

But this is where it gets tricky. We could tell consumers to stop buying tuna from FADs, and lure them towards the tuna from free-swimming schools by using some sort of 'FAD-free tuna label' (if you can find the space besides MSC, dolphin-friendly, FOS, RFS, Grüne Punkt, Fair Trade, and all the other labels out there). But remember this is an open-access fishery, so the free-swimming schools are very likely to be as overfished as other schools. If we could simply shift consumer demand from FAD tuna to FAD-free tuna that would be good, but there is a risk that the FAD-free tuna label also boosts overall demand for tuna. After all, the label may attract tuna-conscious consumers who feel they can now finally buy tuna without feeling guilty. And enhancing overall demand may make matters worse rather than better. This is a major concern with certification in general, but so far I haven't come across anyone looking at this problem for tuna.

I wrote this paper with Martin Quaas of Kiel University. I'm very happy to work on this issue with him: he works on many fisheries problems, and he has ample experience in the type of microeconomic modelling that we apply here. It's a huge problem, with many facets, and I feel we have so far only scratched the surface of it. We (not Martin, but me and my colleagues at Wageningen University) further explore the issue in the BESTTuna project, but then in a much more applied and detailed manner. BESTTuna is huge, with partners all over the Western and Central Pacific and about 12 PhD students from the same region. This paper is just me and a German professor covering the same issue in a handful of equations. But such simplified analyses can yield insights that more detailed studies don't.