Associate professor

I just realised that I never announced on this blog that I presented my (new and improved) research vision to the assessment committee for a second time - and that the assessment committee agreed that I should be appointed associate professor as of 1 November 2014.

So there you go: as of 1 November 2014 I am in the position of associate professor.

(Fireworks, music, ticker tape.)

I would have liked to say that my trip to Australia inspired the main research focus I put into my research vision: to develop computational models of coastal and marine resource use, drawing on experiences from other economics subdisciplines such as macroeconomics. But honestly, it's the other way around: I went there to learn more about computational models because I believe they can be useful. But it was good to talk to my peers in the field and realise that it's actually not so bad an idea. You can find the vision document here, and the presentation here.

I still feel more or less the same about the tenure track system as I did last time: it's a good concept although its application in Wageningen University has its teething problems.

As for any advice I can give other people on the tenure track, I'm not sure whether my advice is worth anything but I can at least give you my opinion:

• Expose your ideas to your peers. We don't have a mentor system in Wageningen (we should!!), neither do we have many staff who have been through the tenure track themselves. So the next best thing is to go out, talk to other academic researchers, and try to learn from them as much as you can. Have a beer with them at a conference. Try to arrange a sabbatical at their university. Try to get them to your own university for a seminar or a PhD defence. Send them your written research vision and ask them what they think.
• Set your own goals. Yes I know you have 18 criteria to meet (I kid you not), but first and foremost you must decide which direction you want to go - and then go there within whatever limits are set by the official criteria.

For what it's worth.

In case you were wondering what I'm doing in the Australian winter

I'm here for two very interrelated goals.

I'm having another assessment meeting in September 2014; this time it's about a possible promotion to associate professor. So Goal #1 is to take a good look again at my research and education vision, and discuss it with whoever I can discuss it with. I got quite some inspiration from the keynotes and discussions at IIFET2014. Not that I went there with a blank slate, but it was good to see my ideas confirmed, in a way, and complemented by other people's ideas.

I have decided long ago that I will focus on the economics of coastal and marine ecosystems. My background is mainly in bioeconomic modelling, so it is logical to focus my research on the kind of questions that require such modelling. But then the question arises: aren't many other people doing that already? People have been doing theoretical fisheries economics since the 1950s (or longer, if you consider Jens Warming's work). And there are gigabytes of applied bioeconomic fisheries models like FishRent and Mefisto, and wholesale ecosystem models like Atlantis, where fishers are included as some sort of predators.

But that's it, actually: either the models are very abstract and qualitative, so that they can be analysed on paper, or they are very detailed and quantitative, so that they can be used for policy assessment or scenario analysis. The problem with the first is that they lack realism; the problem with the second is that they lack transparency. Either you can explain what drives your results, but then your results are close to useless for policy makers, or you can advise policy makers but you cannot explain where your advice comes from.

What has not yet happened much (I know there are people doing it, but not many), is to take the theoretical models, and make them more realistic to the point where you can maintain some intuition as to what drives your results, even though you cannot prove fancy theorems anymore. Macroeconomists and financial economists have reached that stage long ago: where their models get too complicated to be solved by some math magic, they use computation. This way you can add more realism, while maintaining a fair amount of insight into the mechanisms at work. My intention is to apply such computational methods to problems with coastal and marine ecosystems. This includes a lot of fisheries, but also other ecosystem uses, goods, and services.

Which brings me to Goal #2. The Crawford School of Public Policy of Australian National University has among its staff a number of people who have applied computational economic tools to fisheries problems, like Tom Kompas, Hoang Long Chu, and Quentin Grafton. I'm here to learn at least some of the methods they use. Originally I wanted to stay about two months, but for several reasons I only have about two weeks. But in the short time frame I have I'm trying to get the most out of it.

And lo and behold, I have a first result to show you. My first hurdle was writing a perturbation model in a program I can work with. Their models run in a combination of Matlab and Maple, but I don't have a license for either of them, and I'm not well-versed in Maple. Hoang Long Chu was so kind to give me a paper by Kenneth Judd and Sy-Ming Guu on writing perturbation models in Mathematica - another program I don't use, but luckily the paper explains the method well and it presents the entire Mathematica code for a simple optimal growth model. So I decided to write the same method in Python - my language of choice for its elegance, simplicity, and speed (ok, compared with R, which is neither elegant, nor simple, nor speedy). It took me a few days but here it is: the Python code and a pdf with some notes on the paper and the model.

Matteo's mangrove paper

Go here for the very first peer-reviewed article of our former MSc student, Matteo Zavalloni. The article quantifies the trade-off between two different alternative uses of a mangrove ecosystem and finds that it is crucial to take into account spatial links in this process.

The general idea behind the paper is that a mangrove ecosystem can serve many different purposes, but as space is limited you cannot have them all: in other words, we have a typical economic problem of satisfying wants under limited resources. In his paper Matteo (and I, and Paul van Zwieten) focused on the trade-off between two uses: cultivating shrimp in aquaculture ponds; or providing nursery habitat for juvenile wild shrimp. There is a lot more to mangrove ecosystems than just those two functions: tourists also like to come to mangrove forests (I loved the mangrove forest in Ca Mau, for example), and mangroves also form important coastal protection. In this paper, however, we wanted to explore some methodological issues in a spatially explicit manner, and these two uses were the most appropriate for this analysis.

So Matteo developed a model that maximizes the mangrove forest's nursery function, under the restriction that aquaculture production should not drop below some given level. If you run the model for many different levels of aquaculture production, you typically get a picture like this:

(Be aware that this is not the original picture in the paper but a stylized version of it.)

In economics lingo we call this a production possibilities frontier (PPF). It shows all combinations of two goals (in this case aquaculture production and nursery habitat) that are maximally attainable. Combinations above the curve are impossible to attain; combinations below the curve are feasible, but not very efficient.

Why are there two curves? The green curve indicates the PPF you get if you use all available information on differences in habitat quality, and you take into account that in order to function as a nursery, a mangrove forest must in some way be connected to the water course. The blue curve indicates the PPF if you would ignore (or simply not know) that last piece of information. You see that if you ignore the connectivity you arrive at solutions that provide much less benefits in terms of nursery habitat than what would in theory be possible. The reason is that you locate your shrimp farms at the wrong places:

Maximum provision of the nursery ecosystem service at 24% of the possible aquaculture benefits, with and without taking into account the connectivity of nursery habitat

Note that the left picture has all aquaculture clustered together in the west corner of the study area, whereas the right picture has aquaculture located along the water course, blocking the mangrove forest from access to the river. The reason is that farms near the river have lower transport costs, but the consequences for the nursery function are not taken into account.

So how does this help us? First, we wanted to demonstrate that conservation, no matter how noble, has costs, and that those costs should be considered in policy decisions. Second, it illustrates that functions can be combined if you use your information wisely. The approach we developed is one small step towards methods to find the best compromise between different interests in coastal zones.

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.

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?

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.

Going deep south

The day we arrived in Hanoi, Tu invited us at his home to get a taste of genuine Vietnamese biodiversity: swimming crab, carp, blood cockles, tiger shrimp, squid and some other species I don't remember. Like many Asians, the Vietnamese like their seafood fresh: everything except the carp and the squid was alive (and moved). It was served around a big bowl of broth, with tomato, ginger, pineapple, and lemongrass, where everything was cooked and the broth slowly became a delicious fish soup: say hello to the Vietnamese hotpot.

As far as I could see, all of the seafood served came from aquaculture - not a big surprise in a country that ranks third in global aquaculture production. Tu works at the Vietnamese Research Institute for Aquaculture as a fisheries economist, and he does his PhD research at our group on how the shrimp farmers in the Mekong delta adapt to climate change. Expectations are that as sea levels rise, and average temperatures increase, shrimp farmers will increasingly have to deal with disease outbreaks and salt water intrusion (black tiger shrimp are a bit like Goldilocks, preferring their water not fresh, not salty, but brackish). How will these farmers deal with these problems? In other words, what kind of autonomous adaptation will they implement, and what kind of planned adaptation can or should the government implement?

I had discussed these issues at length with Tu over the last twelve months or so, but it is difficult to discuss these issues if you have never seen these farms in reality. So Monique and I reserved a few days to travel to Soc Trang, Bac Lieu, and perhaps Ca Mau, where most of the Mekong Delta's shrimp come from. We were joined by Tu, Le Xuan Sinh (an aquaculture expert from Can Tho University) and Nguyen Trang (a master student at Wageningen University who does her thesis work in the Mekong Delta). Sinh suggested to drive along the coast road between Soc Trang town and Bac Lieu town the first day, and stay the night in Ca Mau town. The day after we went deep south: by car to Nam Can (the most southern town of Vietnam that can be reached by car), and then the boat all the way to Mui Ca Mau (the southern cape of mainland Vietnam).

 

No matter how much I had read about Vietnamese shrimp farming before I came, it still struck me how different the shrimp farms in different regions are, and how strongly these differences depend on their natural environment. The relatively fresh waters of Soc Trang allow for intensive shrimp farming, in many cases even with systems where the pond is perfectly separated from the water or canal. These are fairly capital-intensive systems, with neatly dug ponds, aeration devices, and much use of shrimp feed and other inputs. These farmers have the system quite under control.

How different are the farms you find deeper south, in the vast mangrove forests of Ca Mau province. The water is much more brackish here, so that the ponds are more strongly connected to the rivers and canals. Farmers let water in or out to control the salinity of the water, and in some cases to take in shrimp seed and fish. In the center of the pond you find planted mangrove trees that provide food and shelter to the shrimp, and that are usually sold after about 15 years for firewood or charcoal. The farmers use little feed because the shrimp can feed on algae growing on the mangrove trees.

 

Apparently our visit was quite an event for this farmer. He invited us for a meal of cooked crab and some sort of Vietnamese jenever. Even though it was 11am we bravely jugged the stuff down because it would have been impolite to refuse. So here you have another problem of doing field work in Vietnam: you need to be able to drink. Heavily. All the more reason to let the respondents come to some central place instead of going from door to door yourself.

Although it is hardly featured in tourist guidebooks, I consider Ca Mau one of the highlights of my trip to Vietnam. Of course for being invited to food and drink with some shrimp farmer, and for the thrilling boat trip through the mangrove forests to Mui Ca Mau, but also for the mangrove forests themselves. I just love mangrove forests. The sheer fact of having a forest in such a salty, tidal area, with stilt-roots sticking in the mud. And when you look closely, at any square meter of the mud between the trees, you see the forest is teeming with life. Different species of crabs crawl over the bottom. A snake slithers by. Mud skippers skid over the puddles of brown water at the edge of the forest.

 

So what have I learned from this trip? First of all, there is no one-size-fits-all solution for Vietnamese shrimp farms to deal with medium-term or long-term changes in their natural environment. Adopting a closed system, or cultivating white leg shrimp (a hardy species from South America) instead of black tiger shrimp, may work for the intensive farmers in Soc Trang but not for the extensive farmers in Ca Mau. Second, there is a looming problem in almost all shrimp farms: the waste coming from the pond. Farmers regularly clean the ponds, and then a muddy mixture of shrimp faeces and salt comes out. It may have been a good fertilizer if it weren't for its salinity. So far no solution has been found for it yet, so all farms have a load of salty mud piling up. The farmers are not allowed to dump the mud in the river, but monitoring and enforcement is weak and the farmers have little alternative. Third, another problem is that the stock of wild shrimp is declining as more and more farmers catch wild shrimp seed in order to cultivate it in their ponds. Wild shrimp tend to be more disease resistant, but there is of course only so much that the local ecosystem can provide. Fourth, conducting a survey in areas like Ca Mau is going to be a daunting task: getting there over water, identifying and randomly selecting respondents, and last but not least staying sober.

February: my crazy teaching month

I'm having a crazy week of teaching this week. I'm teaching two lectures on fisheries economics tomorrow; an R practical in fisheries economic modelling and a lecture on dynamic programming on Wednesday; and a practical in dynamic programming in R and a lecture on ecosystems complexity on Thursday. Meanwhile I'll be hosting a guest lecture on Wednesday (a speaker from Shell on energy policy) and on Friday (a speaker from Statistics Netherlands on environmental statistics). Next week I'm teaching two lectures on green national accounting, one on fisheries economics (different course), one on cost-benefit analysis, and hosting another two guest lectures.

It's like this every year, but I enjoy it as much as it is exhausting. February is a very short teaching term at my university (don't get me started on the merits, or lack thereof, of our academic calendar), where students are supposed to study one course, full time, in three to four weeks. I contribute to two courses in this term: one MSc course about natural resource economics and one at BSc level where we present six current topics in environmental economic policy from the viewpoint of academics and that of the real world. In the first course I get to tell students all about the topics I deal with most of my research time (fisheries economics, dynamic optimisation, ecosystem management); in the second course I can invite speakers to discuss the nitty-gritty of environmental policy-making with students. What's not to like?

By the way, in addition to the R practical I revised my introductory text on dynamic programming after seeing how it worked at last year's practical (not at all). As always, comments are welcome.

Crystal ball gazing, the academic way

The excitement of international science workshops

So I'm in this international research project VECTORS, dealing with many exciting and fascinating issues, working with scientists from all over Europe. But if I tell you I was at a VECTORS workshop in Edinburgh last week, it's not exactly like we were sipping 40 year old Talisker in Edinburgh Castle with Queen Elisabeth. A business hotel near the airport is more like it: easier to reach, lots of meeting rooms, good food, and no distractions.

Scenarios were the main theme this time. A lot of the developments that VECTORS deals with are highly uncertain. How warm (or cold) will our waters be in the coming 50 years? How many sunbathers will visit Mediterranean beaches? How many international transport vessels will visit the ports of Rotterdam and Antwerp?

You may be tempted to address these questions through some sort of sensitivity analysis: do your calculations for different values of the uncertain variables, or rather, combinations of different values. If you know the probability of some outcome of some variable (say, "the probability that temperatures increase by 1 degree or more is 30%") you could estimate the probability of some outcome of your models' output ("the probability that average income increases by €100 per month or more is 50%"). But you will run into a number of problems:

• You don't know probabilities.
• Even if you knew the probabilities they would not be independent. A high nutrient load is more likely if there are many people around spending their money on lots of meat or highly fertilised crops than if the population is small and poor.
• The number of possible combinations grows exponentially with the number of variables. Suppose you want to consider three levels of each variable. Then one variable gives you three possible outcomes; two variables have nine possible outcomes; three variables have 27 possible outcomes; 10 variables have 59,049 possible outcomes. And then the ecologists in your team tell you that running one such outcome on their model takes one month. So if you have 5000 years you can do a sensitivity analysis of all 10 variables!
• There are many other possible developments that are difficult to capture in numbers, such as changes in regulations, customs, technologies, and so on.
• Policy makers have neither the time nor the energy to read your entire sensitivity analysis. They want something you can summarise in one page (which they skim rather than read).

So what do we do? We develop scenarios. But what are scenarios?

A scenario is not a prediction of the future. It is more like a story line that describes how the world might develop in the future, taking into account different possible trends. It should be consistent, and ideally you have a set of scenarios that spans a fairly wide range of possible developments.

A scenario is not a policy option. When you see the different scenarios from, say, the IPCC, you may be tempted to say: "let's go for this one." But although you may certainly like some outlooks more than others, the idea is that you don't know which one will come true - and you have no influence on which one comes true.

At least, scenarios can help us to make sense of the complexity of the different social, economic, political, and biophysical changes that may take place in the future. A few consistent story lines are easier to understand than countless histograms and plots, for scientists as well as policy makers. And they still allow us to explore how different policy choices may work out in the future.

At some point I joked that we should have Philip Pullman write our scenarios, but I was only half joking. It's at least as much an art as it is a science.

Stuff I do: Pacific tuna

Chances are you've thrown one of these on your barbecue this summer:

 Tuna is massively important for many Pacific island nations. Kiribati, a country whose land mass is only 0.02% of its total area (the rest is sea), gets about 30% of its GDP from tuna fishing. Not that the I-Kiribati (people from Kiribati, that is) catch much of that themselves: most of it is caught by fishers from other countries, like Japan, Spain, and the United States, who pay Kiribati for the right to fish in its national waters.

Actually, to just call it "tuna" is misleading, because there are several species of it. If you have ever had a tuna sandwich you will probably have eaten skipjack tuna. It is the cheapest, least tasty, but also the most abundant tuna species: the IUCN is not particularly concerned about it, and the FAO assesses we can catch some more of it without depleting its stock (pdf). The species in the pack in the picture, yellowfin, is doing less well: the IUCN labels the species "near threatened", and the FAO argues against catch increases of this species. Other species are doing worse or much worse than that: bigeye tuna, for instance, is labelled "vulnerable" ¹.

Save the apples, don't eat pears
So we should all eat skipjack instead instead of yellowfin and bigeye, right? If only life were that simple. Yellowfin and bigeye are often caught as so-called bycatch of skipjack tuna. Many fishers use Fish Aggregating Devices (FADs) that attract all kinds of fish, starting from small fry all the way up the food chain to several species of tuna. When this includes a school of tuna, fishers draw a purse seine net around the FAD and haul in their bounty. Fishing this way, you are likely to catch a lot of skipjack, yellowfin and bigeye at once, where the yellowfin and bigeye you catch is probably still young and difficult to separate from the adult skipjack. And hence yellowfin and bigeye often end up in a tuna sandwich at a young age where they could have had a glorious career as sushi or tuna steak.

Therefore, the FAO recommends not to increase skipjack catches: not because it is concerned about skipjack stocks, but because catching more skipjack will likely have a negative impact on stocks of yellowfin and bigeye. So perhaps to preserve yellowfin and bigeye stocks, the last thing one should do is buy skipjack tuna.

Governments have used all kinds of different policy instruments to manage fisheries, such as days-at-sea restrictions, or individual transferable quota, or a variety of gear regulations. Such instruments, however, are not everywhere as easy to implement, and governments are in a difficult situation themselves. It is often difficult to observe how much fishers have caught. Moreover, if Kiribati limits its tuna catch in order to preserve tuna stocks for the future, fishers gladly move on to the next Pacific Island Nation to fish there. Perhaps retailers, NGOs, and consumers should step in? We could reward fishers who fish more selectively with some certification scheme: guilt-ridden consumers may be willing to pay some extra for guilt-free tuna. But what if that simply increases demand for fish, and thereby fishing pressure?



Note the neat batik BESTTuna shirts - courtesy of our Bogor partners

BESTTuna
Last week I was in Bogor, Indonesia, to discuss this problem with colleagues from Wageningen University and other institutes. We were at the kick-off of BESTTuna, a project of Wageningen University together with many other organisations, including Bogor Agricultural University, University of the South Pacific, University of the Philippines, University of California, Santa Barbara, WWF, and Anova Seafood. The objective of BESTTuna is to look deeper into the management problem with skipjack, yellowfin, and bigeye tuna, considering the different countries involved, the different fishing techniques, the companies involved, NGOs, fishers, and so on. Should Indonesia introduce individual tradable quota? Will MSC certification give fishers an incentive to fish sustainably or will it only enhance fishing pressure as green consumers can start eating tuna with a seemingly clear conscience? How can we make sure that Pacific Island Nations cooperate to manage their tuna stocks sustainably? It's a complex, but therefore also fascinating problem - and it's one of those problems you're reminded of every time you enter the supermarket.

Footnotes
1
One of the most depressing cases of tuna overfishing is the southern Pacific bluefin tuna. It is currently at no more than about 15% of its 1973 stock. Bluefin, however, is quite a different story than the species I describe in this post.^↩

Two draft course documents

What do you do when you need only one chapter of Perman et al., or Tietenberg, but you can't reasonably ask your students to buy the whole book? You either distribute illegal copies, or you write the text yourself. Of course I'm a decent guy so I just posted two draft texts on my WUR website:

A very basic introduction to Stochastic Dynamic Programming
This is a text that I prepared last year for my lecture on stochastic dynamic programming in a course on the economics of natural resources. Dynamic Programming is one of the more elegant ways of presenting the problem of natural resource depletion: how much should we harvest now, and how much should we save for later? The problem is that most introductory texts in natural resource economics say little about DP, whereas the specialized texts on DP are too difficult technical.

Market failure and natural resource depletion
I co-teach a course on marine resource management where I explain the basic principles of natural resource economics to MSc students with almost no economic background. I have not yet found a text that explains natural resource economics in an accessible manner to this audience. So far this document only features the basics of supply, demand, consumer surplus, and producer surplus, but I intend to extend it in the near future.

Feel free to download, use, comment, etc.

Economists need the softer social sciences

A follow-up to my remark on how few valuation studies include proper qualitative research: this remark was provoked by two travel cost studies presented at EAERE 2012. One looked at the effect that forest fires have on visit rates in Portuguese forests, whereas the other studied how people trade off entrance fees and mortality risk while visiting a nature reserve in Japan.

The Portuguese study reminded me of a paper by Erwin Bulte and others on what they called the 'outrage effect'. They found that people are willing to pay a lot more for conservation of Wadden Sea seals if you tell them the population suffers from pollution than if you tell them the seals suffer from a viral disease. I would expect something similar to happen with regard to forest fires. People might even appreciate a scorched patch of forest if you tell them it is part of a natural or at least indispensible process, but they would be apalled if the fires were caused by human carelessness. I would also expect it matters whether multiple hectares are gone, or whether there are only occasional blackened patches. The researchers did not ask their respondents what they thought was the cause of forest fires, but almost all forest fires in their region were man-made, and they assumed their respondents were aware of that fact.

The Japanese study reminded me of the Darwin Awards, or rather, the fact that most of its recipients are intoxicated, overconfident males. Suppose a respondent prefers a $20 dangerous hike over a $30 safe one, does that mean that he considers $10 too much to lower his risk of getting killed? Or does he (I'm afraid it's mostly a 'he') assume that bad stuff only happens to other people? In this case the researchers stated that it was widely known which hiking trails are dangerous, and that casualties have been all over the news. But that argument ignores how good some people are at downplaying risks - at their peril, indeed.

The bottom line for me is that too much economic research, especially the valuation stuff, seems to blindly jump into the issue, imposing wildly unrealistic assumptions on human behaviour, without doing proper explorative research first. Why not interview a few hikers first, to get an idea what considerations may be at play? Why not talk to a psychologist, or a sociologist, who has done research on how people view their own mortality risks?

I think economists should observe more, and take more heed of what other social scientists have found so far about human behaviour. Economics is a world apart from most other social sciences, notably sociology and anthropology. (Supposedly, an unnamed Hindu economist once claimed that bad economists reincarnate as sociologists.) But I think this is finally changing, as Economics Nobel prizes¹ are being awarded to behavioural economists and political scientists, and economic experiments have become fashionable enough to be published in top journals like American Economic Review.

So how does this relate to my own work? Besides other activities, my work involves modelling of how people exploit natural resources, and estimating how valuable those resources are to them. I think the time is ripe to do such work together with anthropologists and sociologists. I am about to start a research project on international cooperation in management of Pacific tuna, together with Simon Bush from Wageningen University's Environmental Policy Group. But I'll keep my eyes open for opportunities to do more such interdisciplinary work.

Footnotes:
1 Actually, I don't like calling the Economics Nobel an Economics Nobel. It's just that Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, as it is officially called, is a bit too long. But there is no such thing as a Nobel Prize for Economics. The only reason why there is an Economics prize that has "Nobel" in its name, and not, say, a similar biology prize, is that economists work at banks such as the Swedish central bank, and thereby have access to enough money to create the fund for such a prize. Unlike biology faculties.

Stuff I do: Competing Claims on Natural Resources

Here is a project I like to tell students about to make them aware that conservation comes at a price. It was on Dutch television last summer:


If you don't understand Dutch: the project is called Competing Claims as it investigates conflicts between wildlife conservation and the livelihoods of local residents. To put it bluntly, it is very easy for a Dutch granola-munching environmental student to argue for conservation of elephants and lions, but if you're a farmer near the park fence and you can hardly earn a decent living while elephants trample your crops and lions eat your cattle (or your son), you're probably less than enthousiastic.

These conflicts are terribly difficult to solve, but one step in the right direction is to make explicit who is affected, how they are affected, how serious the effects are, and what tradeoffs are present. Economics can play a modest role in this by analysing those tradeoffs, and assessing economic impacts.

I can refer to The Cure at the next EAERE conference

Anyone who had a radio in the 1980s should know these lyrics:

Misjudged your limits
Pushed you too far

It neatly describes my paper with Christopher Costello and Michael Springborn that has just been accepted for presentation at this year's EAERE conference in Prague. The general idea of the paper is this: you are doing something you like, and the more intensively you do it the more you like it. There is a danger, however, of going too far, and if you go too far something nasty happens. Your problem is, you don't know how far is too far. Will you stay on the safe side? Will you experiment to find out what 'going too far' actually means? How much will you experiment? When do you stop experimenting? And how does this all depend on what you already know, and the consequences of crossing the line? That is what the paper is about.

You may wonder what this has to do with the economics of ecosystems. There are several examples of ecosystems suddenly collapsing under man-made pressures such as pollution or exploitation. The most well-known example of this is the shallow lake. You can add phosphorus to a clear shallow lake without noticing any effects, until the phosphorus content crosses a line and the lake suddenly turns turbid. This regime shift, as ecologists call it, happens all of a sudden. It is not like your pasta boiling over, where you can turn the gas down to limit the damage when it happens. And it matters economically whether the lake is clear or turbid: swimmers, anglers and divers prefer clear lakes to turbid ones, so you could lose a lot of recreational values. Moreover, reversing the process is expensive: you need to reduce the phosphorus content to a level much lower than the level that triggered the shift to the turbid state. In many cases you also need to fish intensively for species like bream, because bream enhance the turbid state by stirring up the bottom when they look for food. (By the way, Wageningen University's Mister Shallow Lake, Marten Scheffer, used to play in one of the most legendary Dutch folk bands.)

While working on the paper I realised the problem is actually quite general. The captain of the Costa Concordia faced a similar decision: the closer he got to the Giglio shore to make his salute, the more likely he was to run aground. In his case the consequences of "going too far" are huge: at this moment 30 passengers are confirmed dead while two are still missing.

On a lighter note, Robert Smith describes the same problem in those lines quoted above. I take it he spent just a tad too much time in the pub, at least more than he thought his girlfriend would accept. In some relationships this may cost no more than a box of chocolates, but in the song he loses his relationship altogether. At least he got a hit single out of that experience.

Stuff I do: marine invasive species

I'm in Slovenia now, attending the second annual progress meeting of VECTORS. VECTORS is a huge EU-funded research project on the ecological, social, and economic consequences of invasive alien species (and other related stuff) for Europe's seas. So while outside spring is finally taking off with a clear blue sky and a pleasant 18°C, we're indoors talking about jellyfish and oysters.

To get an idea of what VECTORS is about, consider the fact that international shipping brings us more than cheap laptops from China. As transport ships take in ballast water in the harbour of Shanghai, all kinds of critters may hitch a ride on those transport ships - Shanghaied, as it were. When this ballast water ends up in Rotterdam harbour, so do these species. From that point on, they are considered alien species as they are not native to the North Sea ecosystem. Because they are alien to the North Sea they may not survive for long. They may also find an environment with lots of food and no natural enemies. If this is so, and they become so abundant that they cause problems, we call them invasive alien species.

Take, for instance, the chinese mitten crab, which may very well have travelled from Shanghai to Rotterdam on board a cargo ship. The chinese mitten crab damages fish nets and occasionally clogs up water intakes of factories and power stations. Interestingly, however, it also has benefits because it is considered a delicacy in many Asian countries. Some European fishers sell their mitten crab by-catch to Asian restaurants! Another example is the comb jelly, which was introduced from its native American shores through ballast water. The comb jelly does not sting humans, but it eats fish eggs and larvae. One study estimates that the comb jelly may cost the Black Sea anchovy fishery about $17 million per year.

Shipping is not the only conduit for invasive species. The Pacific oyster was introduced deliberately by oyster farmers due to its size and growth. It is still considered a delicacy, but due to its sharp edges and its nasty habit of pointing its edges upwards it is considered a risk to swimmers and mudflat walkers.

So invasive alien species can have several different effects on the economy, notably fishing, tourism, and energy. In many cases those effects are negative, as fishers, mud-flat walkers and power stations can attest. Occasionally they are positive - if you happen to like sea food.

If it turns out that the negative effects of, say, the Pacific oyster outstrip its positive effects, the next question is what we should do about it. It is possible to reduce oyster abundance by fishing, as this video illustrates. You can also drag heavy chains over oyster colonies to destroy the shells. The big question is whether the costs of these interventions outweigh their benefits, where the benefits include the reduction in the costs of medical treatment and possibly an increase in tourism revenues as tourists probably prefer oyster-free coasts.

You could also try to make it more difficult for a species to enter European marine waters in the first place. Several technologies are available to treat ballast water in ships so that invertebrate stowaways do not become invasive aliens. Again, these methods can be costly.

So dealing with invasive alien species involves finding the right balance between three different sorts of costs. First, there are the costs of making it difficult for invasive species to enter your ecosystem. Second, there are the costs of reducing the species' abundance if it has invaded your ecosystem. Third, there are the consequences of the species' presence which could be good as well as bad. What makes this tradeoff particularly difficult is the fact that you often do not know which species may invade, nor how they will behave once they have invaded. So you need to take into account the possibility that your information changes in the future.

I'd love to say that this is what I do in VECTORS - but I should give credit to Adam, who is actually doing it. Adam is one of the PhD students I co-supervise, and he develops the models to analyse the tradeoffs I have just described. Besides Adam and me, there are 70 or so other researchers involved, including other economists, marine biologists, environmental scientists, ecologists, anthropologists and so on. In about three years, we hope to give EU policy makers some concrete advise how they can best manage invasive alien species in European marine areas.

So next time you cut your foot on a Pacific oyster: we're working on it. But it may turn out that it is better to let you cut your foot than to eradicate the oyster.