NATURAL RESOURCE MODELING Volume 20, Number 2, Summer 2007

INTRODUCTION TO SPECIAL ISSUE: ECONOMIC EFFECTS OF CLIMATE CHANGE ON FISHERIES Fishing is a relatively primitive form of production. It is essentially the age old hunting-gathering activity conducted with expensive and sophisticated modern technology. Unlike land-based production, utilization of wild sh stocks has not reached the stage of economic and social organization generally prevailing in agriculture or animal husbandry (sh farming is, of course, an entirely dierent thing). There are few analogies to breeding and herding in sheries and even fewer to plowing, seeding and fertilizing. Young salmon are often released from hatcheries into rivers and shed upon their return. In Japanese coastal sheries sh houses are sometimes put on the sea bottom and wild marine stocks enhanced by releases from hatcheries. Some oyster beds are seeded, and occasionally sh habitat is improved by articial reefs. But, globally speaking, such yield enhancement activities are few and far between. So, even if shing is sometimes referred to as harvesting this is really a misnomer, if we view harvesting as consequent to sowing. What we harvest is what nature gives us. Fisheries management still revolves around making the best we can from the generosity of nature and not exceeding its limits. The time-honored term catching describes much better than harvesting what sheries are still all about. So, shing is a production activity that takes place under uncommonly uncontrolled conditions. It follows that the output of sheries, as well as their costs and net benets, are directly and strongly affected by variations in natural conditions. We can do very little about these conditions but have to adjust to them as best we can. We are not in a position to warm up the ocean or change its salinity as would t our interests. Neither can we change the ocean currents that aect the migrations of sh. Basically, in sheries, unlike most other types of economic production, we cannot choose the output volume, at least not in the long run. We have to make do with what nature decides to make available.
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Among the environmental factors that can greatly aect the availability of sh is atmospheric and ocean temperatures. It is well known that the replenishment of sh stocks depends on survival of eggs and larvae that in turn is governed by sucient nutrition being available at the right time. Whether this is the case or not very much depends on variations in atmospheric pressure, winds and the conguration of ocean currents. In a longer time perspective (decadal or longer), the productivity of sh stocks has changed in some cases for the better, in others for the worse presumably in response to cycles in fundamental sh habitat conditions. In other cases, sheries are known to have disappeared, or to have been displaced, by changes in ocean currents that aected the availability of forage sh. These habitat conditions, which are the main determinants of the productivity and location of sh stocks, are in turn strongly aected by ocean and atmospheric temperatures. The current prospect of a substantial global warming therefore leads to concern about what this is likely to mean for the worlds sheries. Not only will the atmosphere warm up, the ocean will do so as well. This will aect the productivity and migrations of sh stocks and hence both the sustainable volume and location of sheries. Considerable attention has been given to the general economic consequences of global warming. In comparison, little attention seems to have been paid to the sheries. This is a somewhat regrettable omission for two reasons: First, sheries are a globally important economic activity, not least from the perspective of human nutrition in underdeveloped societies. Second, sheries, due their primitive nature outlined above, are among the human activities most exposed to climate changes. The papers in this issue were presented at a workshop in Bergen, Norway, in June 2005, dedicated to the economic eects of climate change on sheries (a few less technical papers were published in a special issue of Marine Policy in January this year). Some of the papers presented at this workshop dealt with the eects of climate variability rather than global warming. They are nevertheless of great interest for the global warming issue, because certain regional variations in ocean temperatures in the past have been on a scale similar to what is now predicted as a result of global warming. The eects of these past events on sheries are likely, therefore, to give a clue to how global warming is likely to aect sheries. Furthermore, global warming is likely to be a

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trend around which there will be substantial variations. Past variations in ocean climate and their eects on sheries are therefore of interest for the global warming perspective. What are the sheries related issues arising from global warming? One is the productivity of sh stocks. Some stocks will become more abundant because their food supply improves, while others may decline because their food supply will decline. All sh have a range of preferred temperatures. A change in ocean temperature is therefore likely to adversely aect stocks in marginal areas which become too hot and to positively aect stocks in marginal areas which become warm enough. In currently ideal habitats the conditions could be improved or worsened. These changes will in turn aect biomass growth potentials and, hence, the sheries. Another and a related eect is that preferred habitats and, consequently, stock migrations and concentrations could be signicantly displaced. This would adversely aect shing boats with a limited range. More seriously, perhaps, it could aect the sharing of stocks that migrate between or straddle the economic zones of two or more states. If the changes are suciently dramatic and lasting, they would upset existing international agreements and perhaps push the stocks into a twilight zone of excessive exploitation while the parties are groping towards a new solution, a process that is typically dicult and lengthy and may in the case of global warming be subject to additional complications because of the variability in the warming process itself. Yet another issue is the warming process and the associated changes in migrations and productivity. If the process is gradual, there is perhaps little to worry about, as countries could adjust gradually and smoothly to the changes in sh stock productivity and geographic distribution. But even if the warming process itself is gradual, the changes in sh stock abundance and migrations could be abrupt. There could be certain threshold values of temperature beyond which the living conditions of certain stocks are suddenly and dramatically aected. This possibility, in turn, raises the question whether such events could be predicted and, if so, in a timely and cost eective fashion? Chances are that they would not, especially if global warming is a trend and, in any given region, we suddenly pass into a climate range of which we have no previous experience.

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These issues are addressed in the collection of papers presented in this issue. The rst three papers take their cue from predictions by existing climate models and study the eects on specic sh stocks or areas. Arnasons paper deals with the possible eects of ocean warming on the sheries and economies of Iceland and Greenland. The waters around Iceland and Greenland were considerably warmer in the 1920s and 30s than before or after, which particularly beneted the herring and cod sheries. In the 1960s these waters cooled considerably, which severely reduced the range of cod and drove the herring away. Higher temperatures in these areas are likely therefore to improve yields in the cod shery and the herring shery. Econometric modeling and simulations are applied to study the possible eect of ocean warming on the sheries of these two countries and the repercussions for their economies. Eide examines the eect of global warming on the cod shery in the Barents Sea. He allows for both a cooling and a warming eect. The Barents Sea could be an area where global warming causes cooling, due to weakening of the Gulf Stream. To analyze this, an elaborate simulation model of the Barents Sea ecosystem has been built, taking into account the interaction between key sh species, but in terms of economic results the focus is on the cod shery, which is by far the most valuable one in this area. He nds that the management regime is much more important for the development of the stock and the economics of the shery than the temperature changes being considered. The result that warming of the ocean does not much improve the productivity of the stock is unexpected. So is also the result that open access could bring higher prots than the management regimes being considered. The latter result owes much to quick entry and exit of boats in response to prot uctuations. Furthermore, none of the management regimes considered is based on any optimization, but the result is nevertheless thought-provoking and hints that open access might in some circumstances not be quite as bad as its reputation. Rckmann et al. also deal with a cod shery, but this one is located in o the Baltic Sea. The critical eect of global warming in this context is a decline in salinity. The Baltic Sea is a marginal area for the cod because the salinity can at times be too low for their eggs to hatch. In the past, salinity has uctuated because of uctuations in the inow from the Atlantic, giving rise to uctuations in the cod stock. Scenarios based

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on existing climate models show that the Baltic cod is likely to become extinct over the next 50 years. A better management would improve the yield from the stock and postpone the ultimate disappearance, but probably not prevent it altogether. This somber scenario poses some uncomfortable questions. Would it be sensible to accelerate the ultimate disappearance of the stock rather than constrain the shery in a futile eort to preserve it? What is the evidence one would need to follow that kind of policy? Then follow two theoretical papers which consider how imperfect information about environmental variability, or its consequences rather, may aect the exploitation of shared sh stocks. Golubtsov and McKelvey deal with environmental variability causing variations in growth and migrations of a sh stock shared by two countries. Specically they consider how incomplete information may aect exploitation, both when the countries cooperate and when they do not. This is a very rich paper with some counterintuitive results. More accurate and widely shared information is not always benecial. Being suciently in the dark and facing the risk of stock extinction, insucient knowledge may entice countries to be more cautious. Even under cooperation better information can harm the party that has it; the party might be better o giving its information to the other party and then forget all about it. Hannesson deals explicitly with global warming, which is modeled as a trend with uctuations. The warming aects the migrations of a sh stock which originally is controlled by one country. Gradually it spills over into another countrys economic zone and ultimately ends up there. Neither country is able to forecast what is going on but both revise their beliefs on the basis of past experience. Also here insucient information can be benecial. A country seeing a sh stock slipping out of its zone for good might be tempted to ruin it completely before it disappears, but if it is not clear what is going on the country might abstain from this in the belief that all will not be lost. More generally, changes in sh migrations are likely to upset existing agreements on shared stocks, leading to serious overexploitation or extinction. The question of forecasting climate change is taken up by Kaje and Huppert. To be useful, forecasts of climate change must be timely and reliable, and they must be worthwhile in the sense of yielding improvements in economic results that outweigh their cost. Kaje

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and Hupperts fundamental point is that not all forecasts, even very accurate ones, meet these self-evident criteria. They then go on to outline a systematic approach to determining a priori whether this is the case or not. Obviously, employing their approach can be of great practical use. Kaje and Huppert illustrate their approach by an example from the coho shery in Washington state. This is a notoriously variable shery and the variations are known to be caused to a great extent by environmental changes. Kaje and Huppert provide estimates as to the benets of environmental forecasts for this shery. These six papers all contribute in their own particular way to the understanding of how global warming can aect our sheries and, subsequently, our economies. The contributions are both theoretical in the sense of attempting to identify and describe the key relationships involved and empirical in the sense of attempting to measure the potential impact. They can also be said to be methodological in the sense that all of them suggest a way to deal with the complicated issue of the economic impact of global warming on sheries and natural resource use in general. The papers in this volume do not by any stretch of the imagination oer anything like a complete picture of how global warming may aect sheries. Neither do they claim to do so. What they do is to provide a beginning to tackling this large and possibly very important task. We hope that by doing so they will provide other researchers with both the impetus and a certain basis for their own research on this topic. It is up to the reader and the future to judge whether this hope is justied. Rgnvaldur Hannesson o Centre for Fisheries Economics The Norwegian School of Economics and Business Administration Helleveien 30 N-5045 Bergen Norway E-mail: rognvaldur.hannesson@nhh.no