NOAA Technical Memorandum NMFS NE 158
A
Framework for Monitoring and Assessing
Socioeconomics
and Governance
of Large Marine Ecosystems
by Jon G. Sutinen1,
Editor,
with contributions
(listed alphabetically) by
Patricia Clay2;
Christopher L. Dyer3; Steven F. Edwards2; John
Gates1; Tom A. Grigalunas1; Timothy Hennessey3;
Lawrence Juda3; Andrew W. Kitts2; Philip N.
Logan2; John J. Poggie, Jr.3; Barbara Pollard
Rountree2; Scott R. Steinback2; Eric M. Thunberg2;
Harold F. Upton1; and John B. Walden2
1Univ.
of Rhode Island, Dept. of Environmental & Natural Resource Economics,
Kingston RI 02881
2National
Marine Fisheries Serv., Woods Hole Lab., 166 Water St., Woods Hole MA 02543
3Univ. of Rhode Island, Dept. of Marine Affairs, Kingston
RI 02881
Print
publication date August 2000;
web version posted August 16, 2001.
Citation: Sutinen JG, editor. 2000. A Framework for Monitoring and Assessing
Socioeconomics and Governance
of Large Marine Ecosystems. US Dep Commer, NOAA Tech Memo NMFS NE 158; 32 p.
Download complete PDF/print version
PREFACE
In September 1997, NOAA awarded
a contract (i.e., #40 ENN F7 00378) to researchers at the University
of Rhode Island to develop the conceptual framework for the analysis
and monitoring of the large marine ecosystem (LME) modules for socioeconomic
activity and governance of LMEs. This report provides a framework for
linking the socioeconomic and governance modules with the natural resource
science-based LME modules (productivity, fish and fisheries, and pollution
and ecosystem health). This report fulfills the terms of the 12-mo
contract.
Questions and comments on the report should be directed
to:
Professor Jon G. Sutinen
Department of Environmental and Natural Resource Economics
University of Rhode Island
Kingston Coastal Institute Building, Room 205
1 Greenhouse Road
Kingston, RI 02881-0814
(401) 874-4586
JSutinen@uriacc.uri.edu
INTRODUCTION
The
ecosystem paradigm is emerging as the dominant approach to managing natural
resources in the United States as well as internationally. The shift
away from the management of individual resources to the broader perspective
of ecosystems has not been confined to academia and think tanks where
it first began; it also is beginning to take root in government policy
and programs. Since the late 1980s, many federal agency officials, scientists,
and policy analysts have advocated a new, broader approach to managing
the nations natural resources. The approach recognizes that plant
and animal communities are interdependent and interact with their physical
environment to form distinct ecological units called ecosystems. These
systems contribute to the production of fish, marine birds, and marine
mammals that cross existing jurisdictional boundaries. The approach also
recognizes that many human actions and their consequences, including
marine pollution, extend across jurisdictional boundaries.
Emergence of this paradigm is a response to the failure of the single
sector/single species approach to achieve sustainable development of
interdependent natural resources and effective protection of the natural
environment. There is now a pronounced trend toward more integrated ecosystem
management. U.S. administration and legislation are increasingly requiring
an ecosystem approach to natural resource research and management. The
September 1993 Report of The National Review: Creating a Government
That Works Better and Costs Less recommended that the President
issue an executive order establishing ecosystem management policies across
the federal government.[1]
To implement an ecosystem approach for environmental management, the
White House Office of Environmental Policy established an Interagency
Ecosystem Task Force to implement an ecosystem approach to environmental
management. To date, the movement toward ecosystem management is reflected
in, for example, the Magnuson-Stevens Fishery Conservation and Management
Act (as amended through October 11, 1996), NOAAs Marine Sanctuaries
Program, the National Estuary Program, the National Estuarine Research
Reserves System, the 1990 Amendments to the Coastal Zone Management Act,
and also in the actions of federal agencies with resource management
responsibilities.[2] Further, NOAAs
1997 strategic plan is based, in large part, on the ecosystem approach
to living marine resource management.
Ecosystem management is defined as a system driven by explicit
goals, executed by policies, protocols, and practices, and made adaptable
by monitoring and research based on our best understanding of the ecological
interactions and processes necessary to sustain ecosystem structure and
function (Christensen et al. 1996). Ecosystem management
necessitates intergovernmental and intersectoral management. This is
why federal agencies will have to identify barriers to interagency coordination
and why they must develop alliances and partnerships with nonfederal
agencies and private sector stakeholders (Hennessey 1997). Ecosystems
management must be able to cope with the uncertainty associated with
the complexity of ecosystems as natural systems, and the organizational
and institutional complexity of the implementation environment (Hennessey
1997; Acheson 1994).
The fit between the spatial and temporal scales of government jurisdictions
on the one hand and ecosystems on the other requires investigation of
ways to connect nested ecosystems through networked
institutions at federal, state, local, and nongovernmental organization
(NGO) levels (Hennessey 1997). How these institutions must adapt to deal
with the complexity of the ecosystem and the complexity of the governance
system in order to achieve an optimal mix of benefits and costs is a
fundamental issue (Creed and McCay 1996).
The need for improved management of living marine resources is critical.
The livelihood of coastal populations and national economies have depended,
for many decades, on coastal and marine resources. As indicated in NOAAs
strategic plan, over half of the [U.S.] population now lives on
the coast. Between one-third and one-half of [U.S.] jobs are located
in coastal areas. About one-third of the nations GNP [gross national
product] is produced there through fishing, transportation, recreation
and other industries dependent on healthy coastal ecosystems for growth
and development. Rapid population growth and increasing demand for recreation
and economic development in many coastal areas have degraded natural
resources and led to declines in both environmental integrity and general
productivity. Coastal areas provide essential habitats for the majority
of commercially valuable marine species. But habitat loss, pollution[,]
and overfishing have reduced populations of coastal fish and other species
to historically low levels of abundance and diversity. Maintaining coastal
ecosystems[] health and biodiversity is essential to the sustainable
development of coastal resources and economies, and to the future welfare
of the Nation.
The complex interplay of socioeconomic, ecological, political, and
legislative processes underscores the need for an integrated approach
to the management of drainage basins, coastal areas, and linked continental
shelves and dominant current systems. In this report, we develop an integrated
approach to these problems based on the LME concept.
The concept of LMEs is a science-based method for dividing the worlds
oceans, developed 15 yr ago by Kenneth Sherman and Lewis Alexander. LMEs
are geographic areas of oceans that have distinct bathymetry, hydrography,
productivity, and trophically dependent populations. The geographic limits
of most LMEs are defined by the extent of continental margins and the
seaward extent of coastal currents. Among these are the Northeast U.S.
Continental Shelf, Southeast U.S. Continental Shelf, Gulf of Alaska,
Gulf of Mexico, Eastern Bering Sea, and California Current. Some LMEs
are semi-enclosed seas, such as the Caribbean, Mediterranean, and Black
Seas. LMEs can be further divided into subsystems such as the Gulf of
Maine, Georges Bank, Southern New England, and the Mid-Atlantic Bight
in the case of the Northeast U.S. Continental Shelf (Sherman et al.
1988). Approximately 95% of all fish and other living marine resources
produced are taken from the worlds 49 LMEs. Unfortunately, many
LMEs are currently stressed from overexploitation of marine resources,
habitat degradation, and pollution.
The LME management approach links the management of drainage basins
and coastal areas with continental shelves and dominant coastal currents.
The approach: 1) addresses the many-faceted problem of sustainable development
of marine resources; 2) provides a framework for research monitoring,
assessment, and modeling to allow for prediction and better management
decisions; and 3) aids in focusing marine assessments and management
on sustaining productivity and conserving the integrity of ecosystems.
The World Bank and the Global Environment Facility (GEF) have adopted
the LME approach to marine ecosystem research and management, viewing
it as an effective way to manage and organize scientific research
on natural processes occurring within marine ecosystems [and] to study
how pollutants travel within these marine systems... (World Bank
1995).
The World Banks operational guidelines for LME research require
social science as well as natural science investigations, since many
of the problems of the marine environment are human induced. The GEFs
LME initiative has five modules: productivity, fish resources and fisheries,
pollution and ecosystem health, socioeconomics, and governance.
The first three modules are natural resource science-based and well
developed. During the past 15 yr, extensive scientific work has resulted
in methods for monitoring and assessing the productivity, fish resources
and fisheries, and pollution and ecosystem health of LMEs. Sustained,
accurate, and efficient assessments of changing ecosystem states are
now feasible because of the advent of advanced technologies applied to
coastal ocean observation and prediction systems. Such systems can now
measure ocean productivity, changes in fish stocks, and changes in water
and sediment quality and general health of the coastal ocean.
Consideration of the socioeconomic and governance modules has been more
limited,[3] despite the fact that
work on these modules is essential to achieving effective ecosystem management.
Management of LMEs requires not only knowledge of changing states of
the system, but also the effects of change on socioeconomic benefits
to be derived from using the LME resources. To provide sustainable, optimal
use of marine resources, the services they provide must be identified
and valued, the sources of market failure must be understood, and policy
instruments to correct market failures and move toward sustainability
must be adopted.
This report presents a methodology for determining what is known of
the socioeconomic and governance aspects -- the human dimensions -- of
LME management. The following sections describe a basic framework for
identifying the salient socioeconomic and governance elements and processes
of an LME. Methods for monitoring and assessing the various elements
and processes are also discussed.
HUMAN
DIMENSIONS OF LMES
Monitoring and assessment are prerequisites to effective management
of LMEs threatened by pollution, overexploitation and other misuses of
these important resources. Furthermore, management involves altering
human behavior, especially behavior that threatens, directly or indirectly,
the sustainability of LME resources. Therefore, we need to understand
the human system and its relationship to the sustainability of LME resources
and their services.
Human and ecological systems are both composed of complex webs of interrelated
components and processes. Interactions occur both within each respective
system and between systems. We view the natural environment and related
human dimensions as a set of interrelated components and processes rather
than isolated elements that act independently.
Ecological components of an LME can be viewed as, among other things,
biophysical capital (i.e., stocks of valuable natural resources).
The various forms of the biophysical capital generate flows of goods
and services, many of which are directly or indirectly used by humans
(e.g., in fishing and shipping activities). Some ecological goods
and services are transformed into commodities that are cycled through
the economy. These flows also include outputs of processes that are returned
to the environment, sometimes as wastes.
Traditionally, property rights are poorly defined in the coastal zone
and marine areas.[4] Externalities
impact fishermen, recreation, and other activities that rely on the natural
system for flows of commodities and opportunities from these capital
assets.[5] Human activities that
use or impact the biophysical capital of a typical LME may occur on land,
in the coastal zone, or in offshore areas. High human population densities
in the coastal regions and associated manufacturing, transportation,
and extractive activities often result in environmental degradation and
overexploitation. Municipal sewage and industrial waste disposal in coastal
waters often overwhelm the assimilative capacity of marine areas. Nutrient
pollution may result in large increases in phytoplankton production and
microbial activity -- eutrophication. Fish and shellfish populations
that are dependent on estuaries as essential habitat may be harmed, displaced,
or rendered unfit for human consumption. In virtually all of these examples,
the five LME modules are interdependent -- a change in one module will
have impacts on other modules.
MONITORING
AND ASSESSMENT
We anticipate several steps in the process of monitoring and assessing
the human dimensions of an LME and the use of its resources. These steps
are summarized in Table
1.
These steps provide information to management authorities, especially
with regards to the efficacy of management policies. Most of these steps
should be repeated periodically to update the information on the status
of the LME. This information is an essential ingredient of the adaptive
management approach, which requires frequent evaluation and feedback
to take full advantage of experience and learning (Hennessey 1994; Lee
1993; Walters 1986).
STEP 1:
IDENTIFY PRINCIPAL USES OF LME RESOURCES
The first step in the monitoring process involves identifying principal
uses of LME resources. Management of LMEs requires comprehension of a
variety of relationships within the natural and human environment and
also of the effect of human uses on the environment. That is, policymakers
need to be aware of, and sensitive to, the pattern of interaction resulting
from their policy decisions if the sustainability of the environment,
which supports human needs, is to be maintained.
Use is an important concept and requires careful definition. We define
several types of use as follows:
- Direct use refers to the physical use of a resource on site
or in situ. Common examples of direct use include commercial
and recreational fishing, beach use, boating, and wildlife viewing.
Most direct use is targeted by participants who visit a beach, fish
at a particular location, and so forth. Direct use also may be incidental,
for example, when a person traveling by boat unexpectedly sees whales
or marine birds while en route to a destination (Freeman 1993).
- Indirect use occurs when, for example, wetlands or other LME
habitats contribute to the abundance of wildlife or fish observed or
caught elsewhere in the LME. In effect, the ecological services of
the wetland or habitat help produce the wildlife or fish
concerned, although the link between the direct use and the ecological
services provided by the wetland or habitat may not be apparent to
the recreational participant.
- Nonuse (or passive use) refers to the enjoyment
individuals may receive from knowing that the resources exist (existence
value) or from knowing that the resources will be available for
use by ones children or grandchildren (bequest value)
or others even though the individuals themselves may not actually use
the resources concerned.
Another useful distinction is between consumptive use and nonconsumptive use:
- Consumptive use occurs when one persons use of a resource
prevents others from using it. For example, the shellfish, finfish,
or waterfowl one person takes in the LME are unavailable for others
to harvest. Hence, consumptive use of natural resources in this sense
is like consumptive use of private goods exchanged on markets, such
as a pizza or a pair of shoes.
- Nonconsumptive use refers to cases where one persons
enjoyment does not prevent others from enjoying the same resource.
For example, my viewing of marine mammals, other wildlife, or attractive
views in the LME does not prevent you from enjoying the same resources.[6]
In this report, the uses include direct consumptive and nonconsumptive
use, such as shipping, commercial and recreational fishing, mining, boating,
beach use, and wildlife viewing. We emphasize that many activities, such
as fishing and viewing of wildlife, rely upon the ecological productivity
of LMEs; hence, these activities also involve the indirect use
of these ecosystems.
STEP 2: IDENTIFY LME RESOURCE USERS AND THEIR ACTIVITIES
LME-related activities play a major role in the livelihood of coastal
state residents who own, operate, or are employed by thousands of businesses
in many sectors. These sectors engage in, or support, such activities
as fisheries, marine transportation, and particularly tourism and recreation.
Determining use sectors that are LME-related is not always straightforward,
and judgment necessarily plays an important role in making such decisions
(e.g., Rorholm et al. 1967; King and Story 1974; Grigalunas
and Ascari 1982; Crawford 1984). Certain sectors are clearly LME-related,
such as commercial fishing, marinas, ferries, and specialized retail
stores such as bait and tackle shops. These are primary activities, which
by their nature operate on or around the water; or they supply goods
and services clearly related to consumptive and nonconsumptive uses of
LME resources.
In a broad sense, however, much if not most activity along a coast is LME-related, at
least in part. For example, restaurants, hotels and motels, retail shops,
real estate, and gasoline stations serve seasonal visitors to the coastal
resources of the LME, as well as year-round residents and businesses.[7] Thus,
these sectors are also LME-related to a large extent (although some activity
in these sectors may also be dependent, in part, on the inland, terrestrial
resources). Moreover, many residents may view the quality of the LME
environment as an important factor attracting them to the area. In short,
the dependence of human activity on LME resources and their quality is
much broader (and more subtle) than might be suggested by first impressions.[8]
We recommend a pragmatic approach by defining two broad use sectors
that are LME-related: directly-related and indirectly-related use sectors.
Both sectors are involved with the consumptive or nonconsumptive uses
of LME resources.
- Directly-related use sectors are relatively distinct and include
primary activities or those that operate on or in the LME. These marine-related
sectors are considered to be 100% LME-related. Examples include commercial
fishing ports, marinas, and ferries that are physically located along,
or that operate within, the LME.[9]
- Indirectly-related use sectors include tourism and recreation
activities such as hotels, motels, restaurants, and sport facilities
(e.g., public golf courses and membership sports clubs) and
retail sectors that service tourists and coastal residents, such as
gas stations, bakeries, grocery stores, general merchandise stores,
etc. Other indirectly-related sectors may include land-based agriculture,
manufacture, and forestry, which may indirectly affect the health of
the LME via pesticide runoff, wastewater discharge, or soil erosion
upstream. These use sectors are considered not fully LME-related since
the link between the LME and the level of these activities is weak
or less clear.
STEP 3:
IDENTIFY GOVERNANCE MECHANISMS INFLUENCING LME RESOURCE USE
As conflict of use and negative environmental consequences of human
use become more obvious, collective responses at a variety of levels
begin to emerge -- in short, governance efforts evolve. We recommend
developing a governance profile for each LME (Juda and Hennessey
2001). It should be noted that in the case of most of the identified
LMEs, governance involves governments and people of more than one state
since political and LME boundaries typically do not coincide. This reality
has significant implications and could provide either a rationale for
interstate cooperation or, alternatively, an abandonment of national
efforts, since if they are undercut by the actions of others they will
be rendered ineffective.
Just as natural ecosystems vary from one another, so too do governance
systems. Governance arrangements already exist in areas encompassed by
LMEs; they are not, however, presently organized around the concept of
LMEs. Institutional, sociocultural, and economic factors are of substantial
significance in the use and management of the natural environment; like
aspects of the natural environment, they are also site specific. In
seeking to move toward a governance system which is more appropriate
for ecosystem-based management, it is necessary to understand how existing
institutional and cultural systems operate, their implications for the
natural environment and its resources, and how needed change may emerge,
given societal structures and norms.
Why is governance important? The answer to this question lies in the
fact that attempts to manage resources and the environment are really
about managing human behavior and encouraging patterns of conduct that
are in accord with the operation of the natural world. Governance affects
human uses of LME resources and may be conceived of as:
the formal and informal arrangements, institutions, and mores
which determine how resources or an environment are utilized; how
problems and opportunities are evaluated and analyzed, what behavior
is deemed acceptable or forbidden, and what rules and sanctions
are applied to affect the pattern of resource and environmental
use. (Juda 1999)
As suggested by this definition, the concept of governance is not equivalent
to government but rather incorporates other mechanisms and institutions
(both formal and informal) that serve to alter and influence human behavior
in particular directions.
Reflecting the notion that governance is not the same as government,
there are three key, general mechanisms of governance: markets, government,
and nongovernmental institutions and arrangements. These mechanisms interact
with one another in a pattern of dynamic interrelationships. Through
the forces they generate, they individually and collectively impact use
behaviors (Figure 1).
Markets generate prices, which structure the incentives faced by firms
and households, affecting how environmental resources are utilized. Resources
for which no markets exist in effect have zero prices (e.g., fish
in the sea), artificially deflating the cost of using such resources.
That is, users do not face the full social and environmental cost of
fishing, habitat destruction, waste disposal, etc., when these resources
are not priced. Lower cost of use, in turn, tends to encourage excessive
use and results in depleted LME fish stocks, too little essential habitat,
and too much pollution.
Government regulations and requirements, whether at a local, regional,
national, or international level, affect resource use. In general, government
sets a wide array of rules and enforces them, recognizes and protects
property rights, and produces goods and services. The rules regulate
the use of environmental resources and affect the way goods and services
are produced. The protective function of government is to maintain security
and order by enforcing a set of rules within which people can interact
peacefully with one another. These include rules against theft, fraud,
and physical harm to person and property. Without protection, property
rights are not secure and externalities arise. The government also produces
goods and services that cannot be efficiently organized by the market.
These activities and outputs include a system of jurisprudence (an example
of a pure public good), fisheries and oceanographic research (quasi-public
goods), fishing license and boat registries (regulatory services), guaranteed
loans, and vessel buyback programs (transfer payments to users of the
marine environment). These and other government activities tend to have
a profound influence on how LME resources are used.
Social forces that are generated by nongovernmental institutions and
arrangements also influence use patterns. These forces are shaped by
norms, values, and beliefs that rationalize cognition of self and other
members of society (ICGP 1993). They are dependent on the importance
people attach to their community and neighborhoods, traditions, and long-standing
social networks. Failure to heed the pressures from these factors may
lead to sanctions that range from economic loss, to incarceration or
monetary penalties, or to expulsion from the community.
The principal task of this step it to identify and describe the salient
forces (markets, governmental, and nongovernmental institutions and arrangements)
influencing users and theirs uses of LME resources. Practical, applied
field methods will have to be developed to insure a complete inventory
of such forces is compiled.
STEP 4:
ASSESS THE LEVEL OF LME-RELATED ACTIVITIES
This step involves assessing the nature and extent of all LME-related
activities identified in Step 2. The tasks
include measuring the quantity and value[10] of
the goods and services produced, the employment and income generated,
use rates of LME resources, and other significant inputs used by these
sectors.[11] These levels of LME-related
activities should be calculated for the LME as a whole, and disaggregated
by appropriate subregions and user/producer groups. Recent trends and
patterns in these activities should be described in as much detail as
the data allow. Historical uses should also be incorporated in order
to provide a context with regard to present activities and arrangements.
STEP 5:
ASSESS THE INTERACTIONS BETWEEN LME- RELATED ACTIVITIES AND LME RESOURCES
The notion that human use alters the natural environment is not new;
what is relatively new is the degree to which that environment and its
natural processes may be affected by human actions. If future sustainability
is a matter of concern to decisionmakers, then it is necessary for them
to consider the nature and character of the interactions between human
activities and natural systems. That is, our monitoring and assessment
framework must fully integrate the human and ecological systems related
to an LME.
The need for human-ecological system integration is readily understandable
due to the similarities and interaction between the two systems. This
is reflected in many government and development agency policies, which
advocate the use of ecological management and principles. However, the
complexity with respect to the number of components and relationships
makes this a difficult task. Most ecological studies have not fully integrated
human activities, and most approaches have considered only one or a few
sectors at a time. There is also a broad body of integrated environmental
and ecological economics studies, but relatively few of these attempts
have been successful (van den Bergh 1996).
Early attempts to integrate the two systems utilized input-output models
to construct matrices of economic and ecological components and processes
(Cumberland 1966; Daly 1968; Isard 1972; Victor 1972). Although the format
of each attempt varied, the framework generally followed work by Isard
(1972), depicting both ecological and economic processes. A variety of
matrices also have been used by others in conjunction with generic coastal
or ocean use (Couper 1983; Vallega 1992).
Input-output models have disadvantages that limit their usefulness.
Input-output models are composed of a system of linear equations that
are dependent on technical coefficients which symbolize the amount of
an input required for each dollar of output. This assumes constant proportions
with no substitution or economies or diseconomies of scale. Unfortunately,
most socioeconomic and ecological systems involve component relationships
which are neither static nor linear. Additional problems are related
to the complexity of ecological systems. Most models of ecosystems consider
the transfer of energy through the food chain. However, ecosystems resemble
a web with multiple connections rather than a linear chain. Many species
are generalists that change diet according to season, prey availability,
or life history stage, while each prey item has a different energy transfer
efficiency. Decomposers that utilize dead organisms and other unused
organic matter also add another layer of complexity to the structure
of food webs. In addition, there are other interactions within the system
such as competitive and mutualistic relationships that are especially
difficult to quantify. Given more realistic, albeit complex, modeling
alternatives, input-output models may be too restrictive and simplistic
for quantitative assessments of these systems. However, the input-output
framework is a good foundation for our purposes, especially with respect
to the inventory, organization, and exploration of the myriad relationships
related to an LME.[12]
We believe it is important to organize data and information about the
interplay of human activities with natural processes in such a manner
as to illuminate interrelationships, with the hope that consideration
of highlighted interactions will foster behavior appropriate to the goal
of sustainability. The framework that follows seeks to promote understanding
of relationships and to encourage the utilization of adaptive management
approaches (Hennessey 1994; Lee 1993; Walters 1986) that take full advantage
of experience and learning. For these purposes, this study proposes the
use of interaction matrices which can serve as diagnostic tools and provide
a framework for analysis and consideration of management problems and
possibilities. These matrices have the capacity to inventory human uses
of the LME and ecological processes that are related to the LME, to organize
human activities, commodities, and processes within a framework, and
to explore linkages and relationships among sectors. The interaction
matrices can be modified to depict different geographic zones and different
industrial or species groupings. The geographic designation of land and
marine can be further broken down into economic and ecological subgroupings.
Therefore, regions or ecological groups can be subdivided depending on
the desired method of classification, the desired scale, and the functional
relationships that are being investigated. Given the complexity and need
for a comprehensive approach, interaction matrices can provide a description
of the current situation and provide a basis for predicting the consequences
of changes to the system. The matrices also are a useful education and
communication tool for policymakers that readily shows relevant sectors
and linkages.
The study of these systems relies on common descriptive characteristics
such as scale, spatial and temporal distribution, linkages, thresholds,
resiliency, and diversity. Ecosystems can be assessed on different levels
that include the individual organism, population, community, and ecosystem.
Human systems also include different levels such as the individual, household
and family, community, business enterprise, use-sector, region, and society.
Scale is essential to understanding both human and ecological systems.
An ecosystem may range in scale from a cubic foot of soil to thousands
of square miles. Human systems also range from the household to the national
and global economy. Spatial and temporal factors are also important considerations
for both systems. Many socioeconomic activities and ecological distributions
may be seasonal, patchy, and migratory in nature. Ecosystems with greater
diversity are likely to be the most stable (Caddy and Sharp 1986). This
is also likely to be true of a regional economy with diverse economic
sectors compared to one dependent on only one or a few commodities.
Perhaps the most important characteristics are the linkages and interdependencies
between components within both systems. In both cases, a change in one
element has repercussions for other elements within the system. Figure
2 illustrates a matrix that could be used to show the potential
linkages among land-based and marine-based processes. For example, nutrients
from agriculture can affect productivity in estuaries and nearshore areas.
Land-based processes that affect marine-based processes potentially involve
similar modules that may need to be taken into account. Figure 2 divides
the processes in each region into ecological and use sectors, and provides
a few examples of such processes (e.g., fishing, aquaculture,
marine transportation). The matrix contains cells wherein the relationships
between, say, aquaculture and ecosystem health, are described in terms
of the degree of compatibility and nature and extent of impact.
This and the other matrices illustrated in this report are recognized
as being general and simplistic. Clearly, it is necessary that broad
categories of activity be subdivided appropriately. In the case of fishing,
operations are conducted in many different ways around the world and
even among fishermen of a particular state. Commercial, industrial, artisanal,
recreational, and subsistence fishing, and the use of different gear
and techniques, while all coming under the general rubric of fishing,
may have varying impacts on the biomass and the physical environment,
and, accordingly must be differentially assessed.
Contained in the elements of the matrices is information on the interactions
between human use activities and the LME environment and its resources.
It may well be that the effects of human use are not well understood,
or, fully documented, and a degree of precaution may be called for to
avoid irreversible damage or long-term costs as decisions are made. Indeed,
it would be useful for decisionmakers if some explicit assessment could
be made as to data availability and the degree of understanding of natural
processes, both of which could be factored into decisions about the application
of precaution. Consideration of interplay based on experience may be
suggestive of priorities for future study where data or understanding
are deemed insufficient.
To a considerable extent, human use of, and effects on, the ocean/coastal
natural environment have been generally described. For instance, water
quality has been monitored and evaluated, wetland loss has been studied,
the introduction of alien species has been noted, and coastal demographic
changes have been documented. But in addition to studying changing conditions
of the environment, greater consideration must be given to the consequences
of those changes. The scientific community needs to highlight, in terms
understandable to the lay person, the consequences of those changes for
human well being, a step which goes beyond observing the relationships
of the type noted in the interaction matrices.
The finding of depleted oxygen in coastal waters, for example, needs
to be attached to the more practical consequences of fewer opportunities
for commercial and recreational fishermen since it is such considerations
which may serve to motivate public concern and appropriate actions. Accordingly,
a subsidiary matrix which reflects the impact of ecosystem effects on
outcomes of interest to stakeholders and the wider public is warranted.
A more sophisticated version would provide for contemplation of impacts
of human uses on the environment and its ecosystem resources.
A vulnerability assessment of specific environmental conditions
is needed for coastal management (Lourens et al. 1997), since
variance in a number of natural conditions may alter the significance
of possible threats. Indeed, the process of International Maritime Organization
special area designation as a result of the Protocol of 1978 of the 1973
International Convention for the Prevention of Pollution from Ships,
the establishment of marine sanctuaries through the 1972 Marine Protection,
Research, and Sanctuaries Act, the inclusion of the concept of essential
fish habitat in the 1996 Sustainable Fisheries Act, and other special
area zones such as those in the 1972 Coastal Zone Management Act 1972,
indicate recognition of vulnerabilities of particular areas.
STEP 6:
ASSESS THE IMPACTS OF LME-RELATED ACTIVITIES ON OTHER USERS
The lack of strong and complete property rights to all biotic and abiotic
elements of an LME is the fundamental cause of externalities and threats
to the sustainable use of an LME. (For more on this, see the later section
on Property Rights Entitlements and Regimes for LME Management.)
The users of LME resources usually have free and open access to those
resources (e.g., transportation of goods, harvesting of food and
industrial raw material, use for leisure activities). The resulting negative
externalities tend to affect the marine ecosystem in injurious ways:
overharvesting of wild species, destruction of habitat, pollution, etc.
These effects are costs (harms) imposed on the environment and other
users that are external to those causing the damage. The methods developed
for assessing the damages to natural resources can be employed to estimate
the external costs of pollution, habitat destruction, etc. We explain
below (Example 1)
how the monetary damages from oil spills and other transboundary marine
pollution can be assessed.[13]
This step aims to assess the impacts that activities directly or indirectly
have on others, especially the extent and nature of those impacts. The
task is to identify and measure the benefit or harm imposed and the compatibility
or incompatibility of particular uses in relation to other uses. Contained
in the elements of an interaction matrix is information on the nature
and extent of the interactions among the users of the LME environment
and its resources. The information should characterize the interactions
in terms of: 1) degree of impact, 2) compatibility, and 3) desirability.
Compatibility implies either that the uses do not interfere with one
another, or, possibly, that they may serve to enhance one or both of
the uses through positive externalities. Incompatibility indicates detrimental
effects of one use on another or both on each other through negative
externalities. The compatibility of particular uses in relation to other
uses may be measured or described in terms such as compatible, conditionally
compatible, or incompatible. The amount or frequency of activity (e.g.,
high, moderate, or low) needs to be considered as it relates to compatibility.
At low levels of use, uses may be compatible, while this might not be
the case with high levels of an activity.
The concept of compatibility and conflict of use is basic to the fields
of coastal zone management (Clark 1996) and land planning; as ocean uses
increase and intensify, it has been recognized in sea or ocean use management
(Vallega 1992). Some activities are mutually exclusive while others are
compatible to varying degrees. Often incompatibility is demonstrated
in practice as sectorally based decisions are implemented and negative
externalities are generated. In the face of such experience, planners
and coastal managers, accordingly, have resorted to devices such as zoning
to keep apart activities which have significant incompatibilities.
Social conflict may take several forms both within specific sectors
and between sectors. Allocation decisions that favor a specific sector
may be economically efficient, but detrimental to a specific user group.[14] This
may result in high social costs at the household or community level if
alternatives are unavailable. Social costs may take the form of higher
crime rates, poor diet, drug use, or the breakup of households and families.
These effects include less easily quantified social considerations such
as community stability, maintenance of social networks and traditions,
and the distribution of benefits.
The normative characterization (e.g., desirable or undesirable)
of the interplay among users and uses is essential to management decisions.
We note that normative characterizations are determined largely in a
cultural context, a factor which once more underscores the need for a
site-specific analysis of human interaction with the environment (Juda
and Hennessey 2001).
How should these elements be measured, and what scale should be used?
The characterizations suggested above require operationalization; that
is, terms such as compatible, high, substantial, and desirable need
to be given definition. As suggested by McGlade (1995) fuzzy logic may
be of assistance in this regard. But beyond the matter of assessing each
of the four elements, the question remains as to how the data will be
aggregated (Underdal 1980). Whatever device or procedure is used to organize
and evaluate data, there can be no escape from a significant element
of subjectivity. Moreover, values and preferences aside, the fact is
that decisions will be made under conditions of imperfect knowledge and
uncertainty.
STEP 7:
ASSESS THE INTERACTIONS BETWEEN GOVERNANCE MECHANISMS AND RESOURCE
USE
Traditionally, governance arrangements have developed along sectoral
lines on an ad hoc, piecemeal basis. As noted in the classic report
of the Stratton Commission (1969), in governmental contexts, a problem
is brought to light one way or another and some department or agency
is given the responsibility to address that particular problem. Over
time, responsibilities for a host of activities and areas are spread
among levels of government and among departments. Eventually, interactional
problems become evident since decisions are being taken without due regard
to externalities: the lack of coordination leads to mutual interference,
inefficiencies, and uncoordinated management.
While substantial attention has been given to mapping ecosystems, the
mapping of governance systems, too, deserves attention. The mapping
of LME governance can be facilitated by filling in the cells of
a matrix such as the Gulf of Maine example in Figure
3. There is no question but that the governance system affects
the pattern of use of coastal/ocean areas. It is important to know who
is responsible for what, and how the elements of governance, like those
of ecosystems, interrelate and interact. They, too, are part of the working
environment and must be taken into account as efforts are made
to provide for effective use and protection of ecosystems.
As noted above, the concept of governance involves more than government
and its dimensions include: 1) levels of governance (e.g., international,
national, regional, local); 2) sectoral areas (e.g., fisheries,
offshore mining, waste disposal, recreation); and 3) stakeholders (e.g.,
fishermen, corporations, real estate interests, port authorities). As
is the case with particular LMEs, governance arrangements have site-specific
characteristics that need to be recognized and understood.
Relating to levels of governance, one issue which needs consideration
is: At what level should a problem be addressed? The principle of subsidiarity
suggests that authority belongs at the lowest level capable of effective
action (von Moltke 1997). In fact, the European Union (EU), in its Integrated
Coastal Zone Management Programme, has adopted this principle and calls
for problems to be addressed in the order of local, regional, national,
and EU levels (EU 1998). And, in its consideration of a needed framework
for managing activities in the ocean and coastal areas of the United
States, a recent report of the National Research Council, entitled Striking
a Balance: Improving Stewardship of Marine Areas, emphasizes the
need for a federalist approach in which power is placed at the level
appropriate to achieving desired objectives (National Academy of Sciences
1997). In this context, different levels of governance share responsibility,
and coordination is provided at higher levels. The subsidiarity principle
is suggestive, then, of another matrix, one which relates level of governance
to issues, and ponders what is the appropriate level of governance to
treat identified problems.
Governance Interactions
The manner of organization of governance arrangements can certainly
affect resource use and ecosystem health (Costanza et al. 1992).
As long noted by political scientists and office holders, bureaucratic
arrangements can be instruments of delay, and introduce the element of turf into
all decisions (Downs 1967). But, the interplay of different elements
of government and governance can also play a positive role by widening
perspectives and forcing consideration of externalities.
In looking to the future and considering how ecosystem-based management
efforts may be improved, it is necessary to take the current governance
system as a given and the point of departure. Changes will be needed
in terms of institutions, mores, and values if there is to be a shift
away from sectoral approaches to management of natural systems and their
resources. Identification of incremental modifications would be desirable
since such changes are easier to adopt and implement than more radical
changes, and cumulatively may still have substantial effects.
Government Programs and
Use Interactions
As the problems associated with sectoral approaches to problems become
increasingly manifest, efforts are made to overcome them. One approach
is through the adoption of legislation and the development of governmental
programs which reach across sectoral divides, with crosscutting effects,
and force consideration of externalities. The National Environmental
Policy Act of 1969 provides one such legislative example (Juda 1993).
The requirement for the use of an environmental impact statement, mandates
attention to the subject of externalities.
In the United States, major federal, state, and local programs have
the potential to impact LMEs. Such programs now encompass all of the
coastal watersheds associated with areas of fisheries and marine habitat.
Watershed management emerged through the passage of Section 6217 of the
Coastal Zone Management Act (CZMA) Reauthorization Amendments of 1990
which mandate efforts to control nonpoint-source pollution in coastal
waters. Coastal states are required to use a watershed planning and control
approach to deal with sources of pollution from agriculture, forestry,
urban development, marinas, recreational boating, and hydromodifications.
Plans must address the preservation and restoration of wetlands and riparian
areas. States are to develop enforceable management measures to treat
these sources of pollution (Imperial and Hennessey 1993, 1996).
The National Estuary Program, established in 1987, complements the above
efforts by providing funding to states to develop a comprehensive planning
process to improve water quality and enhance living resources. There
are currently 30 estuary programs in the United States, including four
in the Gulf of Maine watershed (Imperial and Hennessey 1996).
Coastal habitat issues have recently come to the fore and have been
addressed through the Sustainable Fisheries Act of 1996 which reauthorized
and modified the Magnuson Fishery Conservation and Management Act (now
the Magnuson-Stevens Fishery and Conservation and Management Act, FCMA),
and required NMFS to specify essential fish habitat for all
managed species and fisheries. Each regional fishery management council
must amend its fishery management plans to: 1) identify and describe
the essential fish habitat for each managed species, 2) identify the
fishing- and nonfishing-related threats to the habitat, and 3) develop
management and conservation alternatives for that habitat.
Exploring the legislative or programmatic mandates relevant to LME management
is worthwhile for several reasons. First, it is important to understand
the program interactions with different LME uses and interaction with
existing governance structures. Second, management decisionmakers need
to understand how they may alter traditional agency activities and how
they may serve to contribute to more holistic management approaches. Figure
4 indicates selected programmatic initiatives in the United States
that merit specific attention in this context. Many other programmatic
examples are available which also merit evaluation.
STEP 8:
ASSESS THE SOCIOECONOMIC IMPORTANCE OF LME-RELATED ACTIVITIES AND ECONOMIC
AND SOCIOCULTURAL VALUE OF KEY USES AND LME RESOURCES
The coastal and marine natural resources of an LME are capital assets
-- in effect representing wealth embodied in its marine natural resources.
Capital assets -- natural or otherwise -- can provide valuable services
(interest) over time if maintained, much like savings in
a bank provides a flow of interest income.
Underlying much of environmental economics is the notion of resource
valuation (i.e., valuing natures services). Resource valuation
involves the use of concepts and methods to estimate the economic value
the public holds for natural resource services.[15] These
services may be direct or indirect; and they may or may not be bought
and sold in the marketplace.
Direct services include onsite use of marine parks, beaches, commercial
fishing, exploitation of marine minerals, or harvesting of fish, shellfish,
or wood from mangroves. Indirect services occur offsite, for example,
when fish produced by a mangrove are harvested many miles
away. Some natural resources services are exchanged in organized markets,
such as commercial fisheries, oil and other minerals, some coastal property,
or tourism. However, a central feature of many, if not most, marine resource
issues is that the services provided are not traded on markets. The services
provided, as for example, by mangroves, corals, and sea grasses, water
quality, recreation, scenic amenities and biodiversity, are not bought
and sold on markets -- and as a result, often are given inadequate attention
in public policy.
Four types of value are associated with resource services. First, use
value is the benefit received from onsite or physical use, such as harvesting
of fish, exploitation of oil, or beach use. Second, passive use value
is the enjoyment one gets from a resource above and beyond any direct
use.[16] Passive use losses may
arise if individuals feel worse off when they learn of the loss of an
endangered species, closure of beaches, or other adverse impacts on other
natural resources -- even if they do not use these resources themselves.
People might be willing to pay to prevent such losses, much as they might
pay to preserve, say, an historically or culturally significant building
or site, even if they never actually visit it. Third, total value is
the sum of use and passive use value. Fourth, individuals also may have
an option value when supply (e.g., threat of extinction, the outcome
of a policy) or demand is uncertain. Option value may be thought of as
what you would pay to keep the opportunity open to later use a site or
resource.
Resource valuation usually is not an end in itself, except in the case
of commodities such as oil or other minerals, or of fish, where the government
might lease public resources to private businesses.[17] Instead,
estimates of the value of particular resource services normally are more
useful as contributions to policy for improving resource management.
Most policy decisions involve specific proposals affecting resources
and their services at the margin; hence, resource valuation
most often will involve assessments of the marginal value of resource
services rather than the aggregate value.
Social and cultural factors correspond to, and reinforce, the need for
economic valuation, but their focus and the use of sociocultural analysis
are also quite different. Indicators such as income, employment, and
economic sector performance are elements of both types of investigation.
However, sociocultural analysis takes a step away from strict enumeration
of these elements and focuses on peoples knowledge and views (norms
and values) about their work, and how this affects their perceptions
and actions toward LME resources (Brainerd et al. 1996). Although
this is not easily measured on a monetary scale, these factors are considered
significant by those involved in resource use. Sociocultural analysis
has the capacity to contribute to management by considering the values
of cultural and social elements of the community, and the potential costs
associated with social and economic disruption and dislocation.
Social and cultural factors are closely linked to governance, users,
and uses of LME resources. One way to account for these linkages is to
view human action within the context of natural resource communities
(NRCs) (Dyer et al. 1992). The interface between a regional system
of extractive NRCs, their service flows, and the associated LME is here
defined as a natural resource region (NRR).[18] Dyer et
al. (1992) define NRCs as populations whose sustainability depends
upon the utilization of renewable natural resources. By broadening the
definition to include those dependent on nonrenewable aspects of the
marine environment as well, they and their aggregations as NRRs represent
the LME-dependent communities within a coastal region.
The NRR includes social, cultural, human, economic, and biophysical
capital and their interactions within networks of LME-dependent communities
(Dyer and Poggie 1998). These forms of capital are defined as follows:
- Social capital is the interactive network of humans that occurs
within and between natural resource communities. Social capital is
key to the flow of other forms of capital, as well as central to the
dynamics of governance and resource utilization.
- Cultural capital is the behaviors, values, knowledge, and
culturally transmitted behavior and ideas of a population, applied
to the transformation and utilization of natural resources.
- Human capital is the human population and the knowledge and
skills it acquires from formal and informal education associated with
the occupational roles of natural resource extraction.
- Manufactured capital is long-lasting manufactured goods (e.g.,
buildings, machines, tools, fishing vessels and gear) that enhance
the ability to produce other goods and services.
- Biophysical capital, as explained above, is used to denote
those natural resources of an LME that directly or indirectly generate
flows of goods and services used by humans. The value of these natural
resources is derived from the dynamic between human action and the
natural environment. These include potential resources, identified
but not actively utilized in extractive processes, or those having
primary value in passive recreational activities (e.g., the
whale as resource to the whale watching industry).
Fishing is a good example of the interactions of some of these forms
of capital. A fishing boat out at sea is a production-extraction unit
of the NRR, relying directly on the productivity of the fish resources
of the LME (the NRR biophysical asset). The fishing boat is thus an extension
of the NRC from which it came, carrying with it social, cultural, human,
and manufactured capital in its hunt for fish resources.
The conceptualization of capital interactions within an NRR network
lends understanding to the occupational valuation placed on way
of life. For example, Doeringer et al. (1986) show how kinship
support systems -- a form of social capital in our formulation -- allow
fishermen to maintain labor linkages to the fishing industry in defiance
of seemingly debilitating economic conditions, usually associated with
declines in volume and value of fish catch, as well as severe management
restrictions on fishing.
In the interface with LMEs, primary units of human-environment interaction
-- individuals, families, households or communities -- are to be viewed
as interconnected within regional networks held together by shared values
and forms of capital. The NRC is a nodal form of human organizational
structures and of regional and capital interactions, and provides for
points of spatial reference by which to study the LME-NRR dynamic.
Networks of NRCs within NRRs act as conduits through which total capital
is exchanged, shared, and transformed by human action. For example, we
can consider the NRC[19] as a
regional contributor to whatever commerce is stimulated by LME-related
activities, and as a means of providing sustainable support to LME-related
households and families as they contribute products and services to the
region and nation in which they are embedded. While only a subset of
the NRC interact directly with the marine environment and its resources
(e.g., fishermen, shipping vessel operators), these individuals
are nevertheless connected to more differentiated communities and towns,
contributing to the economic and food security of those communities and
towns, and buffering coastal development in a way that contributes to
social and economic diversity.
Social impact assessment variables point to measurable change in the
human population, communities, and social relationships resulting from
policy change (ICGP 1993). The Interorganizational Committee on Guidelines
and Principles (ICGP) identified a list of social variables under the
general headings of: 1) population characteristics, 2) community and
institutional structures, 3) political and social resources, 4) individual,
household, and family changes, and 5) community resources. Definitions
of each heading considered by the ICGP are as follows:
- Population characteristics mean present population and expected
change, ethnic and racial diversity, and influx and outflows of temporary
residents as well as the arrival of seasonal or leisure residents.
- Community and institutional structures mean the size, structure,
and level of organization of local government to include linkages to
the larger political systems. They also include historical and present
patterns of employment and industrial diversification, the size and
level of activity of voluntary organizations and interest groups, and
how these institutions relate to each other.
- Political and social resources refer to the distribution of
power and authority, the identification of interested and affected
parties, and the leadership capability and capacity within the community
or region.
- Individual, household, and family changes refer to factors
which influence the daily life of the individuals, households, and
families, including attitudes, perceptions, family and household characteristics,
and social networks. These changes range from attitudes toward the
policy to an alteration in family and household relations and social
networks to perceptions of risk, health, and safety.
- Community resources include patterns of natural resource and
land use, notably, the availability of housing and of community services
for health, police and fire protection, and sanitation. Key to the
continuity and survival of human communities are their historical and
archaeological cultural resources. Under this collection of variables,
we also consider possible changes for indigenous, ethnic, and religious
subcultures.
Sociocultural elements may also be assessed by performance indicators
related to equity issues such as the distribution of benefits among stakeholders,
the nature of access to LME resources, and the reliance of communities
on LME resources (Patricia Clay, NMFS, per. comm., 1998). The distribution
of income is a measure of equity within NRCs and between NRCs and wider
society. Benefits distribution can take other forms such as the pattern
of fish consumption and distribution, and allocation of, and/or access
to, resources. The nature of access to LME resources considers property
rights as well as the local involvement in resource management. Community
reliance on LME resources may take several forms, including employment
and other economic factors, food security, and cultural factors. The
relative importance of different social variables will vary depending
on the specific NRC and its relationship to the resource in question.
Dyer and Griffith (1996) isolated five variables that help identify
fishing community dependence on an LME. It will become obvious that the
five variables overlap somewhat; thus, they must be considered together.
These are:
- Relative isolation or integration of LME resource users into alternative
economic sectors. To what extent have users (e.g., fishermen,
processors) segmented themselves from other parts of the local political
economy or other fisheries?
- User types and strategies of users within a port of access to LME
resources. What impact does the mix of types (e.g., fixed fishing
gear -- weirs, fish corrals -- versus mobile fishing gear) across ports
and states have on the long-term sustainability of LME resource stocks?
- Degree of regional specialization. To what extent have users from
related areas and use-sectors moved into the region? Clearly, those
users who would have difficulty moving into alternative use-sectors
are more dependent on LME resources than those who have histories of
moving among several sectors in an opportunistic fashion.
- Percentage of population involved in LME resource-related industries.
Those communities where between 5 and 10% of the population are directly
employed in LME resource-related industries are more dependent on the
LME than those where fewer than 5% are so employed.
- Competition and conflict within the port, between different components
of use sectors. Competition between smaller scale and industrial scale
users can create conflict between users within the same port -- as
well as between different actors in a use-sector (such as boat owners,
captains, and processors). Dependence may have a strong perceptual
dimension, with users perceiving the resources they are extracting
to be scarce and that one user groups gain (e.g., industrial
trawling, purse seining) is another user groups loss (e.g.,
gill netting).
These five variables can be adapted and broadened to cover the full
range of LME-related activities. A fundamental assumption of the NRR
model is that there is some degree of reliance on the natural resources
(i.e., biophysical capital) of an LME. In an LME-linked NRC, biophysical
capital reliance manifests itself as learned social behaviors of LME-related
activities. The combined social, cultural, and economic interactions
arise from the conditions that increase or decrease access to the LME
and its biophysical capital. Furthermore, dependence on natural resources
limits the occupational roles of community members, and can intensify
cultural assimilation for those immigrating into an NRC.
Disruption of LMEs is occurring more frequently as NRRs are stressed
by human factors that push resources beyond their ability to renew themselves
and permanently degrade physical structures such as bottom topography.
Such resource degradation patterns in an NRR can be found in conditions
of severe poverty, overpopulation, management which inadequately takes
into account local or site-specific conditions, the practice of destructive
extraction techniques (e.g., blast fishing in Philippine reef
systems), or the development of overcapacity in a fishery [e.g.,
the groundfish fisheries of New England (Dyer and Griffith 1996)]. In
an idealized condition, an effective state of environmental awareness
is generated among NRC residents and NRR networks that allows for sustainable
utilization of biophysical capital in an LME. Less idealized conditions
-- most real world ecosystems and their human actors -- require some
form of management appropriate to the political ecology and cultural
and environmental history of the region in question. Thus, although a
generic LME/NRR management framework for the Bay of Bengal and the Gulf
of Maine may be conceptually similar, operationalizing the model cannot
proceed without considering site-specific human-environmental dynamics.
The interdependence of economic, social, cultural, and governance elements
is readily apparent. They overlap, complement, and conflict with one
another in different situations. Their relative importance and tradeoffs
between different sociocultural and economic values will depend on the
interplay of the community, LME resources, and larger society.
STEP 9:
IDENTIFY THE PUBLICS PRIORITIES AND WILLINGNESS TO MAKE TRADEOFFS
TO PROTECT AND RESTORE KEY NATURAL RESOURCES
An implicit assumption underlying social science research in this document
is that what people want -- that is, their preferences -- matters in
public policy decisions concerning LMEs. In economies where markets work
reasonably well, market prices are a good indicator of the marginal value
individuals attach to incremental units of a good or service. However,
widespread market failure in LMEs makes the connection between market
prices and preferences tenuous or nonexistent for many major problems.
An important issue in the absence of reliable market data, then, is how
to obtain useful information on public priorities and preferences that
can be used in decisionmaking for LME management.
One possibility is greater use of opinion polls and general attitude
surveys on LME resource issues. However, most members of the public,
when asked, will identify the environment as an important
concern and will indicate that, at an abstract level, we should do
more for the environment. Such general attitudes, however, are
not very informative of actual values people hold for resources and their
services. This is because value is indicated by what one is willing to
give up to keep or get more of something, and general opinion polls do
not confront respondents with the costs of their decisions. It is not
surprising, for example, that when asked to assign priorities to management
actions to improve coastal environments, survey respondents will recommend
actions that impose little or no direct costs on themselves, but are
less favorably disposed to measures that would require them to bear costs
(Opaluch et al. 1999). Choices, by definition, imply tradeoffs
and values. Real policy actions are not free, and opinion polls and general
surveys that do not require respondents to recognize costs of actions
are unlikely to provide useful information to LME decisionmakers about
public preferences. For this purpose, more structured surveys are needed
that specifically ask respondents to make tradeoffs.
Stated preference methods, such as contingent choice and contingent
valuation, are potentially valuable frameworks for assessing public priorities,
the willingness of the public to make tradeoffs, and the publics
economic values. These methods involve the use of carefully developed
surveys that are then administered to a random sample of the population
of interest. Stated preference methods are one way to assess resource
priorities for public goods and to potentially estimate passive use values
for LME resources.
Ethnographic fieldwork can provide in-depth assessment of values and
the degree to which they are strongly or weakly held. This type of research
is more labor intensive, but can be especially important when dealing
with site-specific decisions or where a decision must be made that may
go against particular local values and thus require public education
or remediation.
Hence, the development of socioeconomic and governance elements for
LMEs may well draw heavily upon advances in the use of survey and other
methods (e.g., ethnographic interviews, focus groups, panels)
for obtaining information on public preferences for resource management
decisions, information that otherwise may be unavailable for decisionmakers
to consider.
STEP
10: ASSESS THE COST OF OPTIONS TO PROTECT OR RESTORE KEY RESOURCES
Typically, many alternatives will be available for addressing any problem
within an LME, and each can be accomplished at different scales. Consider
nutrients, for example, a serious coastal water quality issue in many
areas. This issue can be addressed in many ways, including: expanding
or upgrading public wastewater treatment facilities, encouraging measures
to reduce application of fertilizers in agriculture, using buffers for
agricultural lands along water bodies to reduce runoff, introducing measures
to control runoff of animal wastes from farms and roads into coastal
waters, and investing in sewage lines to avoid use of septic systems
for household residences. Pollution trading between sources (e.g.,
wastewater facilities and farmers) also is possible.
Each of the above alternatives is technically feasible and will be effective
in varying degrees. However, the investment and recurring costs of the
alternatives will vary substantially. Selecting among them is not straightforward
and requires information not only on costs over time, but also on their
relative efficiency in reducing nutrient discharges -- that is, cost
effectiveness. Cost effectiveness involves selecting the alternative(s)
with lowest cost per unit treated. At one level, this can be viewed as
a technical, engineering-economic problem. However, effective policy
requires implementation, and thus it is critical that management mechanisms
and institutional structures be in place that will allow alternatives
to be considered with their cost-effectiveness used as an important criterion.
STEP
11: COMPARE THE BENEFITS WITH THE COSTS OF PROTECTION AND RESTORATION
OPTIONS
As noted often, many technically feasible alternatives are available
to address resource management problems. Cost effectiveness, outlined
above, ensures activities will be done at least cost. However, cost effectiveness
presumes that an activity is a worthwhile investment of societys
scarce resources. In fact, there are many good potential societal investments
that compete implicitly or explicitly for limited public resources. An
important issue concerns whether a particular proposal is a good investment
in the sense that the resulting benefits justify the costs (i.e.,
what society must give up in other goods and services to realize the
benefits).
Increasingly, international agencies and others require benefit-cost
analysis be conducted to help decide whether, and to what extent, to
undertake projects. In carrying out such analyses, agencies are concerned
about considering not only narrow, commercial transactions, but environmental
benefits and costs as well.
Benefit-cost analysis can be a valuable decision tool, for several reasons.
First, it puts public investments on the same footing as private investments
in that they must meet the same standard: the costs of a policy, program,
or activity should be justified by the resulting benefits. Further, a
well-done benefit-cost analysis makes all calculations and assumptions
explicit, and by that, transparent for all stakeholders. This may help
add legitimacy to a process, an important consideration in many situations.
Of course, benefit-cost analysis raises several issues, as well. One
is whether all-important benefits and costs can be quantified. Many advances
have been made in natural resource valuation, and the opportunities and
limitations of resource valuation are becoming increasingly well understood.
But it is also true that many difficulties remain, and data problems
are always an issue, especially in developing countries. Furthermore,
equity -- the distribution of the benefits and costs of a proposed policy
action -- is an important issue influencing whether or not actions will
be taken and the form they will take (e.g., Zeckhauser 1981).
However, distributional effects can always be included in an analysis.
For example, different groups and/or regions can be assigned different
weights, provided one knows the relative importance (weight) assigned
to them; indeed evaluation of such issues is a strength of analytical
methods commonly used in economics. Beyond this, even the best benefit-cost
analysis is not a substitute for good policymaking; decisionmakers as
a matter of course take into consideration the distribution of benefits
and costs when deciding whether and how to implement a program or action.
Looked at this way, to the extent good social science data are available
on distributions and types of impacts (e.g., through social and
economic impact analyses based on the framework established here), the
equity problem in practice is not as serious an issue for benefit-cost
analysis as some may believe.
STEP
12: IDENTIFY FINANCING ALTERNATIVES FOR THE PREFERRED OPTIONS FOR PROTECTING/RESTORING
KEY LME RESOURCES
The results of cost-effectiveness analysis, benefit-cost analysis,
and social impact analysis can help select the preferred option from
among several technically feasible alternatives. To implement the preferred
option, however, sustainable financing must be available. Financing is
often viewed as merely a distributional issue, but, in fact,
sustainable financing has become an increasingly important issue not
just to ensure that revenues cover costs, but also as a way to affect
incentives that encourage favorable behavior and discourage unfavorable
actions.
Many alternative financing approaches are available, depending upon
the issue and area. Broad principles to be employed may include the user-
or beneficiary-pays and polluter-pays principles. The user- or beneficiary-pays
principle has strong appeal on fairness grounds in many if not most cases,
but is less useful and may need modification for cases where a program
is provided specifically to achieve an equity objective. The polluter-pays
principle also has a strong basis in fairness, but additionally -- when
effective -- provides incentives for operators to avoid pollution by
internalizing costs. The polluter-pays principle also works to place
at least some of the costs of such actions on the consumer of the polluting
good. In sum, the polluter-pays principle ensures that operators and
consumers face the full social costs of producing and using the good
involved.
The user- or beneficiary-pays principle is especially challenging to
invoke in practice for resources that have widely dispersed and significant
nonuse benefits. For example, preservation of unique marine parks (e.g.,
the Great Barrier Reef) or marine mammals (e.g., sea manatees
or whales) likely provide major benefits far beyond those who use these
resources and may extend to the public nationally and internationally.
A user pays or beneficiary pays principle obviously is difficult to invoke
on nonusers in such cases. This suggests that for such unique, widely
appreciated resources with strong nonuse value, international donations
must play a critical role rather than reliance on access fees.[20]
Criteria for selecting the type of financing might include adequacy
of revenues, transactions costs, distributional effects, political feasibility,
effects on behavior, and conflicts with other objectives. Examples of
the last criterion include actions by some countries to: 1) provide subsidies
to fisheries while at the same time trying to limit catch, 2) impose
taxes on imports of construction materials while trying to protect corals
(which are mined in some countries as a source of construction materials),
or 3) encourage agriculture while at the same time attempting to protect
or restore water quality.
APPLICATIONS
OF THE MONITORING AND ASSESSMENT FRAMEWORK[21]
Example
1: Assessing Monetary Damages from Oil Spills and Other Transboundary
Marine Pollution[22]
Oil spills and other transboundary pollution in an LME are important
concerns due both to: 1) the risk of accidents, and (2) the many important
resources, activities, and ecosystems that are vulnerable to injury from
pollution. Managing the risk of spills raises two interrelated issues.
One is the appropriate scale of measures to prevent and control spills.
A second issue -- the focus of this section -- has to do with the institutional
framework, methods, and standards that might be used to assess the monetary
value of natural-resource-related damages when spills occur.
When oil spills or other pollution incidents occur, it is necessary
to decide whether to assess damages, which losses can be compensated
for, the best method(s) to be used to assess damages, and the institutional
framework within which such assessments take place. This is where natural
resource damage assessment (NRDA) becomes important.
NRDA is a method that applies legal, scientific, and economic principles
to assess monetary damages caused to natural resources by pollution and
other human actions. NRDA provides measures for sustainable financing
in the form of compensating for injuries and lost natural resource services
due, for example, to transboundary pollution. NRDA, as applied in the
United States, consists of a formalized process and an institutional
regime within which allowable losses from covered incidents can be quantified
and collection of claims can be undertaken and enforced. NRDA is a relatively
new area of research, and the concepts and approaches being used have
been evolving relatively quickly.
The intended outcome of an NRDA is a claim against a responsible party.
The scope of items included by governments as damages has grown, as has
the size of settlements. As a result, NRDAs necessarily involve tensions
and adversarial debate between government, which is responsible for implementing
and enforcing NRDAs, and industry, which must respond to and pay legitimate
claims. Critics of NRDA question the reliability and, in some cases,
the appropriateness of NRDA assessments. Supporters of NRDA make comparisons
with the many empirical challenges and imprecisions addressed as a matter
of course when assessing damages such as the value of intellectual property
rights, antitrust issues, and losses from personal injury in work-related
accidents.
In spite of controversies surrounding NRDA throughout its evolution,
establishing liability for damages due to oil and hazardous substance
marine pollution is of increasing interest. This interest stems from
its important role as a practical method based on economic incentives
(i.e., the polluter-pays principle) in environmental policy. Improvements
in the understanding of the scientific, economic, and legal concepts
used in NRDA facilitate its implementation. NRDA is of interest to many
parties, because:
- Littoral states must decide the adequacy of NRDA measures for compensation
for losses due to spills. Particularly important are losses to publicly
controlled or managed resources, such as open-sea fisheries, wildlife,
and ecosystems.
- Owners and operators of mariculture, fishing, tourism, and other
coastal businesses at risk from spills are concerned about recovering
lost earnings.
- Industry is concerned about the legitimacy of claims against them
for losses, about transactions costs for legal and expert reports and
proceedings, and about avoiding double counting of losses (paying twice
-- or more -- for the same loss). They are especially troubled about
the potential for damage claims based on speculative losses or losses
based on unreliable or theoretical methods. Of particular
worry is the potential for major claims, if damages are expanded to
include nonmarket and other, hard-to-quantify losses, especially passive
use value[23], as they have
in the United States, for example (e.g., USDOC/NOAA 1993; Hanemann
1994).
- Insurance companies are concerned about the nature and size of claims
they will face for response, cleanup, assessment, and damages. In many
respects, their concerns are similar to those of industry.
Interest in NRDA by public bodies stems from the promise of NRDA in
helping to achieve two important environmental policy goals. First, it
provides an organized framework for pursuing compensation for the many
costs that can result when natural resources, coastal activities, and
property are adversely affected by oil and other marine pollution. Many
types of pollution damages currently are not compensated for, and as
a result, these costs are borne by coastal states. Second, polluter liability
under NRDA requires the responsible party to bear the costs of marine
pollution (i.e., polluter-pays principle). Liability provides
built-in incentives for polluters to avoid incidents, and by that, plays
to their self interest as a matter of course (e.g., Opaluch and
Grigalunas 1984; Grigalunas and Opaluch 1988). This is consistent with
worldwide trends toward the use of market mechanisms to address environmental
issues as recommended, for example, in Agenda 21 of the 1992 Rio Convention.
At the same time damage assessment raises several issues, including the:
- Nature of liability
- Scope of incidents covered
- Scope of impacts (injuries) for which damages can be
assessed
- Allowable damages
- Allowable methods for estimating damages
- Standards to apply in weighing the results of such methods
- Means for limiting transactions costs
A recent survey paper by Grigalunas et al. (1998) presents concepts
and issues in NRDAs and summarizes several case studies to illustrate
different types of losses and efforts to estimate these losses. Any attempt
to develop an LME-wide approach for NRDA in an LME would need to address
these (and other) issues in great detail.
Example
2: Economics, Science, and Policy in Estuary Management
This example is based on a series of economic studies for the Peconic
(New York) Estuary System as part of the National Estuary Program in
the United States. The estuary and surrounding watershed are very attractive
and used intensively, particularly during the peak summer season. The
estuary itself has generally good water quality. However, pollution exists
and threatens some uses; for example, extensive shellfishing grounds
have been lost due to pollution. Also, development has caused the loss
of important habitats/ecosystems, and threatens the scenic amenities
of the area. Thus, many market- and nonmarket-valued resource services
are at issue in this case -- as is true in most other coastal and marine
cases.
By close work among program mangers, scientists, and citizen advisory
groups, a series of studies have been carried out, or are ongoing (Grigalunas
and Diamantides 1996; Opaluch et al. 1999), to:
- Estimate the economic importance of estuary-related activities
- Identify coastal users, their activities, and concerns, using a carefully
prepared survey
- Identify the publics priorities and willingness to make tradeoffs
to protect and restore key natural resources using a second carefully
developed survey
- Estimate the economic value (benefits) of key recreational uses and
coastal amenities
- Assess wetland productivity and habitat services
- Assess the cost of options to preserve or restore key resources
- Compare the benefits with the costs of preservation and restoration
options
- Help select financing alternatives for the preferred options for
preserving/restoring key natural resources
Preliminary results indicate that estuarine-related activities play
a major role in the livelihood of several thousand residents who own,
operate, or are employed by more than 1,000 businesses in some 24 identified
sectors. These sectors engage in, or support, such activities as fisheries,
marine transportation, and particularly tourism and recreation.
It was also found that more than 100,000 people annually engage in millions
of days of recreational activities, and preliminary estimates of the
value of key recreational activities range from $8.59 per trip for beach
use to $38 for a recreational fishing trip. The total annual value across
the three recreation activities studied to date is more than $50 million
per year, again based on preliminary results. These are economic benefits
to users above the costs they incur (i.e., unpaid-for benefits).
An interesting and potentially very important part of this work is how
users of coastal areas are affected by water quality. A link between
objective water quality measures and subjective measures of quality,
as perceived by recreationists, has been estimated. This allows joint
work with scientists who estimate the changes in various measures of
water quality due to policies being considered to control pollution.
Given the cost of such control measures and of preservation and protection
measures, the benefits will be able to be compared with the costs of
these policies.
Preliminary survey results also suggest that the public holds strong
values for preserving key area natural resources. These results are supported
by preliminary results from a separate, housing value study. This study
suggests that residents are willing to pay more for property located
near coastal waters, parks, and open space.
A wetland productivity study of the value of eelgrass, intertidal salt
marsh and mud flats yielded preliminary results for the marginal value
(asset value) ranging from $12,700 per acre for eel grass to $4,400 per
acre for mud flats. These estimates include the estimated market value
of fish and shellfish produced by, and harvested from, these
ecosystems, and the value of waterfowl hunted and birds viewed. The value
estimates include only food web effects and habitat values, and hence
are conservative in that such services as shoreline erosion protection
and storm protection services provided by salt marshes, for example,
were not considered. The estimates of economic value (benefits) of these
three types of wetlands will be used in benefit-cost studies of management
proposals for restoration of habitats.
As noted, ongoing work will examine the cost of options for preserving
and restoring resources, compare the benefits with the costs for different
options, and help select financing alternatives for the preferred options.
Again, an important aspect of this work is the willingness and commitment
among the program managers and participants to work together to link
socioeconomics, natural resource science, and policy.
Example
3: Sustainable Financing for Pollution Prevention and Control[24]
Environmental programs to prevent or control pollution may require
major investments. Benefit-cost analyses of public projects often do
not consider how projects will be financed, nor do they usually present
the implications of different financing and institutional alternatives.[25] Yet,
to be successfully implemented and maintained, attention must be given
to financing, to important institutional measures, and to the distribution
of benefits and costs in general. Financing in particular is important
for several obvious and perhaps less apparent reasons:
- Inadequate funding will limit the implementation of effective pollution
prevention measures.
- Mechanisms used to finance projects (e.g., user fees versus
general revenues, different formulae for cost-sharing) have important
distributional effects which often are a major factor influencing how
-- and even whether -- a policy is adopted (Zeckhauser 1981).
- Financing options can affect users incentives, thus influencing
behavior and the resulting size of benefits.
- Financing options may differ with respect to ease of administration
(transactions costs), political feasibility, stability of revenues,
or in other important respects, all of which influence whether and
how measures are adopted, as well as their effectiveness.
For all of these reasons, sustainable financing of pollution management
actions is a significant issue for LMEs.
Sustainable financing mechanisms include: 1) user fees and related,
cooperative mechanisms, when available and appropriate (and allowed under
the United Nations Convention on the Law of the Sea); 2) NRDA; 3) potentially
attractive investments in private-public partnerships, including potential
investments under the Buy-Transfer-Operate and related public-private
programs; 4) international donors; and 5) international trusts.
User fees and, more generally, mechanisms employing incentive-based
approaches, have considerable appeal. They are based on the user-pays
and polluter-pays principles, and reflect commonly shared notions of
fairness. They also can work to harness the power of the market to sustain
pollution prevention and control measures, in an efficient manner, in
effect using private interest to serve the broader public interest (Schultz
1975; Grigalunas and Opaluch 1988).
To be effective, however, markets must work, or appropriate institutional
arrangements must exist to allow markets to function. Major problems
may arise in devising mechanisms to prevent and control pollution, because
of market failure and institutional failure. For example,
many navigational aids and safety measures are public goods; other safety
measures (e.g., use of pilots and vessel transit systems) may
create important external benefits not captured in the market; and in
still other cases, institutional problems prevent effective reliance
on user fees. As a result, developing methods to promote greater reliance
on user fees for sustainable financing of antipollution measures often
is not a straightforward exercise.
Many measures are available to prevent or control sea-based transboundary
pollution:
- Best management practices to control agricultural wastes
- Sewerage treatment facilities in critical areas
- Compulsory pilotage
- Salvage operation
- Vessel traffic information service (VTIS)
- Navigational aids/services
- Electronic charts (marine electronic highway)
- Shore reception facilities
- Contingency planning and oil spill response
These measures are, or can be, taken by private parties (e.g.,
vessel and cargo salvage, shore reception facilities, sewerage facilities),
governments (e.g., navigational aids), or a combination of the
two (e.g., VTIS), to prevent or control spills or promote port
efficiency. The above list is not exhaustive and omits some measures
(e.g., efforts for further cooperation and training among the coast guards
of littoral states).
Mechanisms currently used to finance programs in most areas rely primarily
on national sources, but also include user fees, international donations,
and other support through international organizations, notably the International
Maritime Organization, in the case of pollution from shipping. Liability
used to compensate for response, control, and cleanup of spills, as well
as for payment for certain economic losses and for restoration actions,
is another funding source for managing pollution by restoring the environment.
Individual companies also spend considerable (but unknown) amounts on
pollution prevention and response training, as well as on purchase of
equipment to prevent and control spills and avoid other sources of marine
pollution.
Financing mechanisms to prevent transboundary pollution include:
- Penalties, fines, and taxes
- Subsidies
- User fees
- Port dues
- Revolving funds
- Public-private partnerships
- Privatization
- NRDA
Briefly, the revolving fund is a source of money that the littoral
countries can draw upon (i.e., borrow from) to finance response
and cleanup activities in the event of a spill. NRDA is a process to:
1) identify categories of costs and losses due to oil spills for which
compensation would be paid, and 2) provide appropriate methods and standards
to be used to quantify losses in monetary terms.[26] Port
dues are self explanatory. Public-private partnerships involve various
cooperative approaches the private and public sectors might take to jointly
address pollution from shipping or other pollution.
Measures can be evaluated using several criteria or factors, such as
administrative efficiency, effectiveness as a regionwide instrument,
revenue-generating potential, behavioral change potential, fairness and
equity among users and beneficiaries, and political acceptability among
the littoral states.
PROPERTY
RIGHTS ENTITLEMENTS AND REGIMES FOR LME MANAGEMENT
Marine resource management is fragmented in many coastal states by
policies that pay little attention to environmental, institutional, social,
and economic scale, or to interactions and tradeoffs. In fisheries in
particular, the single-species (stock) approach to management does not
adequately account for ecological interactions (Larkin 1996) or for what
factors influence harvesting and investment decisions (Hanna 1998). Recent
research on environmental management is attempting to integrate natural
and human systems in order to sustain benefits that humans derive from
fishery and other natural resources (Costanza et al. 1997; Larkin
1996; McGlade 1989; Sherman et al. 1996).
This section investigates the implications of ecology, technology, and
what are known as transactions costs for the structure of property rights
entitlements in LMEs; and it comments on the characteristics of concordant
property rights regimes that structure human behavior vis-à-vìs
an LME. This line of inquiry has received serious attention recently
in the ecological economics literature (Costanza and Folke 1996; Hanna
1998; Hanna et al. 1996), but it was introduced mid-century by
economist H. Scott Gordon who explained why the absence of property rights
to fishing grounds caused fishery resources to be overfished
and their value dissipated through investment in too much fishing capital.
Although the subsequent literature developed around disaggregated fish
stocks, by grounds Gordon (1954) actually referred to shallow
continental shelves where upwelling waters support marine-food
chains of resident demersal and migratory pelagic species. He emphasized
that it is necessary to treat the [collective] resource of the
entire geographic region as one. In another, later seminal work,
Steven N. Cheung (1970) asked: What resource in marine fisheries
is nonexclusive [accessible with little or no effective restriction]
-- the ocean bed, the water, or the fish? The answer is that any productive
resource is multi-dimensional, and the term fishing ground is
chosen to include all of them.
Related anthropological literature on common property regimes (e.g.,
McCay and Acheson 1987) and territorial use rights fisheries, or TURFs [e.g.,
Pollnac (1984)] describes the frequency of geographically based folk
management [e.g., McGoodwin (1990)] and the applicability of such
approaches to modern management [e.g., Cordell (1984), Dyer and
McGoodwin (1994)], as well as discusses the implications and benefits
of property held under group versus individual tenure [e.g., Hunt
(1997)].
Although shrouded by confusion, bias, and emotion, property rights and
their institutional context are the foundation of economic activity and
are therefore essential to sustainable management of the goods and services
supplied by marine ecosystems. LME management will be improved by scientific
research, but we risk repeating the mistakes of single-species fishery
management in particular if humans continue to be regarded as exogenous
agents of regulatory regimes. Ecosystem management also requires structures
of property rights that reflect environmental and economic principles,
and it requires governance institutions that reflect the goals and values
of a society.
THE STRUCTURE
OF PROPERTY RIGHTS ENTITLEMENTS IN AN LME
Property Rights
In his book on the evolution of property rights in natural resource
sectors, Gary Libecap explained that [b]y defining the parameters
for the use of scarce resources and assigning the associated rewards
and costs, the prevailing system of property rights establishes incentives
and time horizons for investment, production and exchange (Libecap
1989). Different property rights structures lead to different rewards
(or penalties) and thereby create incentives that influence how people
use the natural environment. For claritys sake, we adopt the definitions
of property and property rights used by Bromley (1992):
Property is a benefit (or income) stream, and a property right
is a claim to the benefit stream that some higher body -- usually
a government -- will agree to protect through the assignment of
duty to others who may covet, or somehow interfere with, the benefit
stream.
It is useful to identify five dimensions of property rights which affect
the size and duration of benefits that owners can expect to receive from
economic resources: 1) entitlements, 2) divisibility, 3) exclusion, 4)
right to transfer entitlements, and 5) enforceability.
Entitlements are the ways that owners -- government, commons,
or private entities -- are allowed to use and derive benefits from assets,
including attributes of the environment. For example, the U.S. federal
and state governments own marine resources on behalf of the public. In
contrast, fishermen own vessels and fishing permits, energy companies
own leases to outer continental shelf lands above pools of petroleum
and natural gas, and shipping companies own access rights to shipping
lanes, to name a few. Virtually all entitlements are attenuated, however.
Thus, it is against the law for fishermen to use their vessels to smuggle
contraband into the United States, and their fishing activities tend
to be regulated by a host of gear restrictions and time and area closures.
Divisibility involves the richness of entitlements to complex
resources with multiple attributes. The scope of this property right
is suggested in a quote from Alchian (1977) who wrote about partitioning
land: [A]t the same time several people may each possess some portion
of the rights to use the land. A may possess the right to grow wheat
on it. B may possess the right to walk across it. C may possess the right
to dump ashes and smoke on it. D may possess the right to fly an airplane
over it. E may have the right to subject it to vibrations consequent
to the use of some neighboring equipment. We can obviously substitute
fishing ground or a marine environment such as Georges Bank or the Gulf
of Maine in the Northeast U.S. Shelf Ecosystem for land and
illustrate with separate entitlements to harvest (or preserve) populations
of Atlantic cod, sea scallop, and American lobster, to extract minerals
such as sand, gravel, and petroleum from the seabed, to sail a boat or
to ride a personal watercraft, to transport cargo in shipping corridors,
to patrol using military craft, to conduct scientific research on benthic
communities and habitat requirements, to dump sewage, and so on. The
ecology and economics of divisibility will be a major consideration in
designing property rights structures for multi-attribute LMEs as discussed
later.
The remaining three dimensions of property rights are mentioned here,
but they are most relevant to the discussion of regimes in the next section. Exclusion concerns
whether others are prevented from using or damaging your entitlements.
In the papers by Gordon and Cheung that were quoted earlier, nonexclusiveness,
or even extreme attenuation of this right, shortens time horizons, giving
rise to short-term profit motives. In fisheries, harvesters invest in
technologies that facilitate rapid catches of target species independent
of the technologies impacts on discards or habitat. Sustainability
is further undermined by the absence of investment in resource productivity,
including the enhancing of the survival of prey and the controlling of
predator populations.
The right to transfer entitlements to other entities increases
the time horizon beyond the owners lifetime or generation. Transfer
increases property value by making it available to others who value it
more highly, and by implicitly including demands of future generations.
Finally, without enforcement, the other rights have no practical
value. In addition to being a property right, enforcement must also be
affordable, otherwise it wont be practiced. Enforcement is the
bane of fisheries management by governments, and it is infeasible for
resource claimants when resources are nonexclusive.
Virtually all property rights are attenuated by private contracts, laws,
or government regulations that protect public safety and social values.
For example, you are entitled to drive your car to work if you are licensed
and your car is registered; however, you may not exceed speed limits
or violate other motor vehicle laws. Likewise, fishermen are entitled
to use their vessels to harvest fish stocks, but their landings might
be restricted in terms of overall weight or fish size, or time or area
closures might be imposed to protect marine mammals and endangered species,
or their gear might be restricted to configurations that reduce discarding
of uneconomic species. Attenuations reduce the value of a property right
to the owner, but they are justified to protect public welfare.
Bundled Entitlements
The remainder of this section attempts an objective analysis of the
implications of ecology, technology, and transactions costs for partitioning
LME resources into bundles of entitlements. Transactions costs are a
collection of costs involved with gathering information on, and otherwise
delineating, a resource, establishing contracts (formal or informal)
that define the entitlement(s), and monitoring and enforcing the entitlement(s).
The three other property rights reflect societys preferences for
an environmental property rights regime and are therefore normative.
From an economics perspective, an ecosystem such as an LME can be viewed
as a matrix of environmental and biological attributes, some of which
either yield or contribute to as inputs (e.g., prey,
habitat) a variety of goods, such as food, and services, such as assimilation
of waste, over time that benefit humankind (Costanza et al. 1997).
The variety of resources in an LME stems from heterogeneity in biological
(e.g., fish populations), physical (e.g., sediments, currents,
space), and chemical (e.g., dissolved nutrients and salts) attributes
and their structure (e.g., trophic relationships, current systems)
and function (e.g., regulate prey populations, recycle nutrients).
From this perspective, an LME is a differentiated capital asset that
provides humans with flows of environmental goods and services not unlike
what Rosen (1974) described for humanmade capital assets (e.g.,
houses, automobiles, vessels, docks).
In theory, each LME attribute is potentially a resource when it contributes
to goods and services valued by humans, sometimes indirectly. For example,
the megafaunal prey (e.g., polychaetes and shrimps) of commercially
important Atlantic cod stocks across the Northeast U.S. Shelf Ecosystem
and the biogenic (e.g., bryozoan colonies, sponges) and sedimentary
(e.g., sand waves, glacial gravel deposits) habitats of those
prey are not themselves in demand by seafood consumers, but they do contribute
to Atlantic cod production. Likewise, microorganisms in sediments are
essential to primary productivity because they recycle nutrients in detritus.
However, there are several reasons why not all resources are candidates
for property right entitlements at a point in time. First, there is no
need to conserve resources that are not scarce because there is more
than enough to satisfy demand at zero price. For example, salinity and
the concentration of dissolved carbon in the open ocean do not limit
photosynthesis. In other cases, the cost of gathering information on
a resource may be too great (e.g., population dynamics of deepsea
fishes), or there may be relatively cheaper substitutes (e.g.,
production of manganese from deepsea nodules or of energy from temperature
gradients). Finally, where resource attributes can be delineated, it
might cost too much to monitor and enforce entitlements, or the institutions
that govern use might preclude ownership. Many resource attributes thereby
remain in the public domain until such time that technological innovations
or changes in peoples preferences make them economical (Barzel
1989; Cheung 1970).
We can contemplate which of an LMEs many resource attributes are
not viable candidates for property rights at this time. Diffuse and fluid
resources, such as water temperature, concentrations of dissolved nutrients
(e.g., nitrogen, phosphorus, trace metals) and currents and related
oceanographic phenomena such as warm-core rings and El Niño all
limit the survival or transport of fish larvae and, therefore, eventual
recruitment to harvestable stocks, but they are indivisible and nonexclusive.
Such resources are sometimes classified as public goods (or public bads).[27] Plankton
communities -- phytoplankton, copepods, microorganisms, fish larvae --
are similarly off limits at this time.
We can also nominate a class of LME resources that is suitable for property
rights definitions given todays information, technology, and demand.
These include the measurable stocks of renewable fishery resources, mineral
deposits, ocean space, and, conceivably, highly migratory species such
as herring, tunas, salmon, marine mammals, and sea turtles. The migratory
species present problems due to relatively high transactions costs, but
recall the 1911 Pacific Fur Seal Treaty in which Russia, Japan, and Canada
contracted harvest rights to the United States in return for annual compensation.
Finally -- and importantly -- entitlements to resource attributes can
be bundled using geographical coordinates as implied by Gordon (1954),
Cheung (1970), and Pollnac (1984). Doing so will include many of the
resource attributes that currently defy divisibility/partitioning, but
which are known to contribute to a good or service in demand. A spatial
orientation is critical to LME property rights structures because it
moves benefits out of the public domain where they will be dissipated
by too rapid use and depletion into the calculus of a government, commons,
or private owner. Of special importance to fisheries is management of
discards and habitat, but interactions -- and tradeoffs -- with other
resource attributes, including marine mammals, minerals deposits, and
ocean space are important too.
Design Principles for
Property Rights Structures
Bundling LME resource attributes within spatial boundaries raises several
questions regarding geographical scale and what logically belongs in
a bundle from the perspectives of ecology, economics, and sociocultural
theory. Coexistence and coevolution of marine species and the chemical
and physical surroundings are important considerations so as to control
losses from externalities, or spillover effects. By
externalities, economists are referring to situations where interdependence
between production practices and peoples welfare (utility)
are exogenous to the decisionmakers.[28] In
other words, entitlements intermingle owing to an inability to completely
delineate property rights because it is too costly or because of institutional
constraints (Cheung 1970; Russell 1994). Although positive externalities
are equally germane, externalities that damage the property interests
of others receive the most attention. For example, otter trawl and dredge
fishing tear up lobster pots and other types of fixed gear. However,
groundfish and scallop fishermen have no incentive to restrict their
fishing practices or to invest in different technologies (hook-and-line
fishing for cod or cage culture of scallops) when fishing grounds and/or
lobster stocks are nonexclusive.
The Coase Theorem (Coase 1960) teaches us that externalities do not
result in a misallocation of resources (aside from wealth effects) in
a utopian world of perfect knowledge, zero transactions costs, and complete
property rights assignments to all resources. Where externalities crop
up due to changes in technology or peoples preferences, property
rights are exchanged in order to maximize total net value. In reality
-- and this is certainly the case for the nascent assignment of property
rights in an LME -- the transactions costs of delineating resources (e.g.,
costs of information) and negotiating and enforcing new contracts can
preclude exchange. Thus, it is prudent to consider ways to bundle LME
resources that are consonant with todays ecological and socioeconomic
information, but are also flexible to change.
First, the 50 vast LMEs probably can be subdivided into smaller areas
in order to incorporate principal interactions among attributes and reduce
externalities. The division could be based on physical features that enclose enduring
species assemblages of marine species (marine communities) over time,
and that largely entrain energy flow and nutrient recycling across trophic
levels. The physical features may be geologic, such as trenches or deepwater
slopes that limit seasonal migrations, or oceanographic, such as areas
where upwelling or eddies occur. For example, scientists divide the Northeast
U.S. Shelf Ecosystem into four subsystems: Georges Bank, the Gulf of
Maine, Southern New England, and the Mid-Atlantic Bight (Sherman et
al. 1996). Competitive or mutually exclusive uses of the same areas
-- potentially, minerals extraction, transportation, and/or endangered
species protection -- could be accommodated through contracts, litigation
or combination sales (Demsetz 1967). For example, the National
Audubon Society has managed bird sanctuaries, cattle grazing, and oil
production at its Rainey Wildlife Sanctuary in Louisiana where the public
is excluded (Baden and Stroup 1981).
Moving in the other direction on the spatial scale, whole subsystems
might be subdivided into parcels of same uses or zoned for different
uses based on smaller landscape or seascape features, but geopolitical
lines (e.g., state waters in the United States) probably are arbitrary
criteria, and fragmentation of communities and habitat requirements would
be counterproductive if it substantially interfered with the basic ecosystem
functions of energy flow and nutrient cycling (Costanza and Folke 1996).
Scale also has socioeconomic and geopolitical determinants that will
affect design. The cost of monitoring and enforcing property rights will
be a function of scale, and monopoly power in markets for LME goods and
services would be illegal. Dividing LMEs into smaller units might
help resolve or minimize transboundary disputes with other countries
where resource attributes are mostly fixed in their location and can
be zoned or otherwise allocated among users.[29]
Coexistence is only a necessary -- not a sufficient -- condition for
bundling LME resource attributes. Strong complementarity and separability
should also be guides when deciding what resources to bundle in a geographic
area. User groups local classifications (e.g., commonly
known fishing grounds) also need to be taken into consideration. Joint
ecologic relationships that have coevolved to a high degree of specificity
over time, such as species-specific predation, commensalism, and habitat
dependence, are strongly complementary and, therefore, should justify
inclusion in a bundle. Special attention should be given to possible
cascade effects (see Christensen et al. 1996).
Unions made on the basis of joint ecological relationships should be
overlaid by technology to see where joint production by fishing gear
or interactions with other technologies (e.g., sand and gravel
mining) might combine ecological bundles. For example, in their study
of the New England multispecies trawl fishery, Kirkley and Strand (1988)
rejected the hypothesis of nonjoint production of several groundfish
species, including Atlantic cod and haddock, and concluded that [m]anagement
of one species independent of other species or of an aggregate output
will not prevent overfishing or economic waste.
In contrast to jointness, strong separability implies ecologic independence
among resources and, in economics, an ability to substitute environmental
inputs in order to produce different outputs. Ecological separation of
species populations with closely related niches -- i.e., competitive
exclusion -- is a criterion for separate bundles provided technologic
interactions are minimal. In stark contrast, regulatory bycatch --
a political economy artifact of single-species thinking (e.g.,
groundfish and lobster caught in sea scallop dredge gear) -- defies any
ecologic-economic rationale for separability.
The rationale for using observed technology to determine resource bundles
needs to be qualified. The technologies we observe in fisheries reflect
the mostly nonexclusive history of marine resources that created incentives
for rapid capture of target species. Institutional change that includes
property rights will change investment decisions, conceivably to technologies
that are more selective and less destructive of habitat. For example,
production of the Japanese scallop increased over 30-fold after fisheries
cooperatives in Japan substituted fixed-gear culture technology for dredging.
PROPERTY
RIGHTS REGIMES AND MANAGEMENT OF LME RESOURCES
Institutions
North (1992) succinctly defines institutions as the rules of the
game in a society, or the humanly devised constraints that
shape human interaction. We are especially interested in how property
rights regimes influence use of the natural environment (Hanna et
al. 1996).
Hanna (1998) appears to have been the first to discuss at length the
role of institutions in marine ecosystem management. Economic development
and sustainability depend on an institutional environment that promotes
the following management functions: integrate multiple objectives, control
transactions costs, promote socially appropriate time horizons, engender
legitimacy among users, and be flexible to change. No specific type of
property right regime is endorsed (state, common, private), but decentralized
decisionmaking is favored over centralized economic planning on these
grounds. The Conference of the Parties to the Convention on Biological
Diversity has likewise recommended decentralized systems among
its dozen principles of ecosystem management (UNEP 1998).
A discussion of institutions addresses how a societys rules for
exclusion, transfer, and enforcement rights influence use of entitlements
and affect long-run economic performance and resource sustainability.
Such a discussion has several considerations.
First is the notion of sustainability itself. Nobel laureate economist,
Robert Solow, expressed a perspective that is likely shared by most economists
when he remarked that preservation of an individual species or habitat
is fundamentally the wrong way to go in thinking about [sustainability] (Solow
1992). Instead, he emphasizes the important fact that people substitute
goods and services for one another: If you dont eat one species
of fish, you can eat another species of fish, and thereby defines
sustainability as, an obligation to conduct ourselves so that we
leave the future the option or capacity to be as well off as we are (Solow
1992).
The Ecological Society of American (ESA) also embraced long-term
sustainability when it defined ecosystem management as follows:
Ecosystem management is management driven by explicit goals,
executed by policies, protocols, and practices, and made adaptable
by monitoring and research based on our best understanding of the
ecological interactions and processes necessary to sustain ecosystem
composition, structure, and function. Ecosystem management does
not focus primarily on deliverables but rather on sustainability
of ecosystem structures and processes necessary to deliver goods
and services (Christensen et al. 1996).
Although one wonders about its view on substitution, the ESA did downplay
notions of constancy when it endorsed homeorhesis (i.e., tendency
of a system to return to its previous trajectory) over homeostasis (return
to a predisturbed state), and cautiously suggested biomanipulation as
a means to enhance deliverables. Biomanipulation includes
predator control and the selective removal of close competitors, artificial
habitats that enhance survivorship or productivity, and fertilizing waters
with inorganic or organic nutrients (e.g., sewage) to increase
primary productivity or the growth of detritovores that are prey for
target species.
Economists, anthropologists, sociologists, and ecologists are likely
to agree about many of the ecosystem structures and functions that need
to be sustained, if not about specific components. For example, instead
of maximum sustainable yields being determined for individual species
(stocks), the aggregate biomass yields from species in a community that
are in demand by consumers (whether for food, ritual, or other uses)
might be sustained, although not necessarily at the natural maximal level.
Predator control and culture could increase yields beyond that observed
for conventional fisheries. On the other hand, alternative uses of the
same area -- recreation, preservation, minerals extraction -- may prove
more valuable than only commercial fishing in some areas.
At a higher level of ecologic organization, biological diversity as
it relates to ecosystem functions (photosynthesis, nutrient recycling,
energy flow) and responses to disturbance (resistance and resilience)
probably should be maintained. This is not an endorsement of community-type
diversity indices that would maintain a constant number or kind of species
or their abundance (e.g., the Shannon-Wiener index). It concerns
ecosystem health. Systems require redundancy to be homeorhesically
stable; therefore, entitlements to harvest functionally similar competitors
might be attenuated. Likewise, predator control should not proceed to
the point of trophic cascades. Fishing down food webs -- i.e.,
depleting long-lived, high trophic level fish and then transitioning
to low trophic level invertebrates and planktivorous fish -- is not a
sustainable fisheries policy because piscivore populations do not recover
(Pally et al. 1998).
A second consideration with direct ties to institutions is uncertainty
and variability. The environmental influences of temperature, currents,
and food supply on commercially and recreationally valuable fish populations
are poorly understood and highly variable year-to-year and over longer
periods of time (McGlade 1989). Fishing technologies and markets are
also difficult to predict. Institutions that are able to adapt quickly
to change and to experiment and innovate to gain new knowledge -- i.e.,
adaptive management (Walters 1986; McGlade 1989; Larkin 1996) -- would
be consonant with LME management.
The mention of commercial and recreational fishing in one sentence raises
a third important function of institutions, namely resolving multiple-use
or goal conflicts cost effectively. The myriad resources of an LME --
renewable, nonrenewable, space -- have scores of uses and values that
can be competitive or mutually exclusive. In addition to seafood and
recreation, a short list includes energy, waste disposal, transportation,
and preservation of marine mammals. Addressing conflicts through the
political process by rent-seeking is costly for a society because it
uses scarce productive resources to transfer or otherwise alter the distribution
of benefits, not to increase economic growth (Rowley et al. 1988).
Market exchange or direct negotiations among affected parties (Coase
1960; Demsetz 1964; Pollnac 1992), or resorting to courts to settle liability
claims (compensation), will resolve problems with minimum transaction
costs. Divisibility, exclusion, and transfer rights are important here.
Related to multiple-use conflicts are a host of transboundary problems
that most LME property rights regimes will confront. To be of any value,
an LME, such as the Northeast continental shelf (Sherman et al.
1996), will be large enough to subsume the principal ecosystem and human
dynamics. Yet, no LME is insulated from the rest of the world, and vice
versa. Surface currents pass through LMEs and carry with them nutrients,
plankton, and pollutants. Many species of marine finfish (e.g.,
tunas), mammals, and sea turtles migrate through several LMEs in a year.
Fishing effort is derived from consumer demand for fish products -- including
foreign demand -- and, therefore, from peoples preferences and
incomes. Technological advances in power, food processing, transportation,
and electronics eventually find uses in marine fisheries. Development
and other economic activities within coastal watersheds impact nursery
grounds and generate pollutants that are carried to LMEs. LMEs straddle
geopolitical boundaries.
Accountability for management decisions is widely cited as a principle
of ecosystem management (Christensen et al. 1996; Hanna 1998;
UNEP 1998). Here, the theory of agency, which is a branch of the economics
of transactions costs and, therefore, involves property rights regimes
(Eggertsson 1990), is germane. In an agency relationship, an owner delegates
or transfers some rights to an agent for their mutual benefit. Such relationships
exist in all types of human organizations, including those involving
natural resource management. Accountability is weakened by the costs
of gathering information to monitor the agent. The scope of agency problems
might be a function of the scale of an LME holding if resource management
is centralized.
Scale has other economic and social ramifications. Economic ramifications
relate to competition in markets for goods and services and to the transaction
costs of exclusion and enforcement. Monopoly power is not in societys
best interest when compared to competition because too little is produced.
Regarding transactions costs, it is unclear whether there are scale economies
to owning large parcels (Demsetz 1967). Scale -- along with degree of
social and cultural diversity within any given stratum -- also has a
strong influence on factors such as enforcement and mutual monitoring
(Ostrom 1990).
Finally, there is the issue of temporal scale. Much of the misguided
criticism about sacrificing the environment for short-term profits stems
from situations where resource attributes are nonexclusive (Cheung 1970)
or property rights are incomplete, inconsistent, or unenforced (Hanna et
al. 1996), including the right to transfer entitlements to others.
Coupled with exclusivity, transferability allows entitlements to move
into the hands of people who value the resources more highly, and it
also increases the value of property entitlements in the present by factoring
in demands by future generations.
CONCLUSIONS
This report has described a framework for assessing and monitoring the
salient socioeconomic and governance elements of LMEs. The assessment
and monitoring framework consists of 12 steps that, if applied, are expected
to produce the essential information required for adaptive ecosystem
management (Christensen et al. 1996). The 12 steps are:
- Identify principal uses of LME resources
- Identify LME resource users and their activities
- Identify governance mechanisms influencing LME resource use
- Assess the level of LME-related activities
- Assess interactions between LME-related activities and LME resources
- Assess impacts of LME-related activities on other users
- Assess the interactions between governance mechanisms and resource
use
- Assess the socioeconomic importance of LME-related activities and
economic and sociocultural value of key uses and LME resources
- Identify the publics priorities and willingness to make tradeoffs
to protect and restore key natural resources
- Assess the cost of options to protect or restore key resources
- Compare the benefits with the costs of protection and restoration
options
- Identify financing alternatives for the preferred options for protecting/restoring
key LME resources
One of the most challenging aspects of ecosystem management, especially
for LMEs, is [t]he mismatch between the spatial and temporal scales
at which people make resource management decisions and the scales at
which ecosystem processes operate (Christensen et al. 1996).
Christensen and his coauthors, writing for ESA, went on to lament that we
have identified few mechanisms to translate the actions occurring within
individual forest ownership or local fishing communities into strategies
to reconcile competing demands for resources or promote a regional vision
for sustainability.
We have argued in this report that the property rights paradigm could
very well be the framework necessary to design LME resource management
policies for long-term economic growth and resource sustainability. Property
rights establish the incentives and time horizons for resource use and
investment (Libecap 1989). Property rights structures could be designed
using ecological, economic, and sociocultural principles related to jointness
and separability on spatial scales that bundle resource attributes instead
of leaving them exposed to overexploitation in the public domain. Property
rights regimes need to translate a societys legitimate goals for
use of its LMEs into concordant rules for exclusion, transfer, and enforcement.
ENDNOTES
- The policies are based on the following principles:
1) managing along ecological boundaries; 2) ensuring coordination among
federal agencies and increased collaboration with state, local, and
tribal governments, with the public, and with Congress; 3) using monitoring,
assessment, and the best science available; and 4) considering all
natural and human components and their interactions.
- Since 1992, all four of the primary land management
agencies (National Park Service, Bureau of Land Management, U.S. Fish
and Wildlife Service, and Forest Service) have independently announced
that they are implementing or will implement an ecosystem approach
to managing their natural resources, and each has been working to develop
its own strategy (GAO 1994). Several other agencies, including the
Natural Resource Conservation Service, Department of Defense, Department
of Energy, Bureau of Indian Affairs, Bureau of Mines, Bureau of Reclamation,
Minerals Management Service, U.S. Geological Survey, Environmental
Protection Agency, and National Aeronautics and Space Administration,
have engaged in significant ecosystem management activities (CRS 1994).
- The only work on this is a brief sketch by Broadus
(Sherman 1997; Sherman et al. 1993) and an unpublished white
paper, LME Socioeconomic Module (Sociocultural Submodule), prepared
for the NMFS Office of Science and Technology (1315 East-West Hwy.,
Silver Spring, MD 20910).
- As explained below, we define property as a benefit
(or income) stream, and a property right is a claim to the benefit
stream that government agrees to protect from those who may covet,
or somehow interfere with, the benefit stream (Bromley 1992).
- Externalities are unintended harmful or beneficial
effects incurred by a party that is not directly involved with exchange,
production or consumption of the commodity in question.
- Some recreational uses, for example beaches, are
intermediate cases. An individuals use of a beach may not interfere
with others, at least up to a point, after which beach (or parking)
congestion would make use of a beach like a consumptive use in that
my use may prevent you from gaining access to the resource.
- Input-output studies could be used to identify linkages
among sectors within an area. See, e.g., Rorholm et al.
(1967), Grigalunas and Ascari (1982), King and Story (1974), and Tyrrell et
al. (1982), for examples of such studies for other marine areas.
- Property value studies also give general support
for the relatively high residential demand for, and the correspondingly
relatively high value of, shoreline proximity (e.g., Edwards
and Anderson 1984).
- Other LME-related sectors, such as retail or wholesale
seafood, may also be somewhat dependent on activities in the LME.
- These values should include market and nonmarket
values, gross and net values, and net benefits to consumers and producers.
- Excellent guidelines on fisheries data needs are
Brainerd et al. (1996), Kitts and Steinback (1999), and FAO
(1999).
- It appears certain that further work in this area
will require incorporation of a great deal of complexity, nonlinear
relationships, and dynamics. Previous work using general equilibrium
models (Ayres and Kneese 1969) and systems approaches may be productive.
- Also see Dyer et al. (1992) for an examination
of sociocultural considerations in assessing oil spills.
- Public policies are also shaped by political expediency
that may favor the minority that is composed of a specific user group
over society. Special interest effects occur when an issue is important
to a specific group, while most members of society are unaware of,
or disinterested in, its outcome. In these cases, it becomes politically
expedient for politicians and policy makers to agree with the minority
-- even when the decision is detrimental to society or economically
inefficient. Often these conflicts take the form of a tug-of-war between
stakeholders -- each of which claim to represent what is best for society
-- and between stakeholders and the actual interests of society.
- A succinct explanation of these methods is provided
by the National Academy of Sciences (1997).
- Many improvements in methods have been made, but
reliable quantification and acceptability of passive use value as a
measure of damages are still a subject of lively debate (e.g.,
Portney 1994; Diamond and Hausman 1994; Hanemann 1994).
- Common examples of resource valuation involve determining
the value of oil and gas leases, tradable fishing licenses, and government
concessions. These cases are relatively straightforward in that they
involve the use of market information on anticipated revenues and costs
over time. An important issue, discussed further later, concerns estimating
the change in the value of a marine asset due to changes in pollution
or fishery regulations, for example.
- An NRR is thus formally defined as a network of
NRCs whose existence is defined by the interactions among the social,
cultural, human, economic, and biophysical capital that are part of,
or closely linked to, the resources of an LME (Dyer and Poggie 1998).
- The NRC may encompass more than one port.
- Of course, this argument, in part, provides the
justification for international donors and programs including the GEF.
- The following examples are excerpted from Grigalunas
(1998).
- This section draws heavily from a recent report
prepared for the Regional Programme for Preventing Pollution in East
Asia Seas (Grigalunas and Opaluch 1998).
- As noted earlier, passive use losses may arise if
individuals feel worse off when they learn of the adverse effects of
a spill on wildlife, beaches, and other natural resources -- even if
they do not use these resources themselves. People might be willing
to pay to prevent such losses, much as they might pay to preserve,
say, an historically or culturally significant building or site, even
if they never actually visit it. Many improvements in methods have
been made, but reliable quantification and acceptability of passive
use value as a measure of damages are still a subject of lively debate
(e.g., Portney 1994; Diamond and Hausman 1994; Hanemann 1994).
- This section is drawn from Grigalunas and Opaluch
(1998).
- See Musgrave (1969) for further discussion of benefit-cost
analysis and financing when capital markets are not perfect, when social
and private discount rates differ, and when the distribution of benefits
and costs are important.
- Note, however, that NRDA can also be considered
a pollution prevention measure, to the extent that it provides an incentive
for vessel operators to exercise more care (Grigalunas and Opaluch
1988; Grigalunas 1997).
- Pure public goods are nonrival and nonexcludable;
and pure private goods are rival and excludable. Examples of pure public
goods include national defense, where food and clothing are examples
of private goods.
- Anthropological theory can be especially helpful
in teasing out the different utility functions that may be held by
different stakeholder groups due to social or cultural variances in
preferences.
- The basic idea here involves zoning certain resource
attributes the way that real estate is zoned on land. For example,
does a timber stand that stretches across the U.S.-Canadian border
have to be jointly managed? Probably not if lumber production is the
only commodity -- but maybe so if the most valuable use of the forest
is habitat for a wandering endangered species. Likewise, does the Hague
Line across Georges Bank present a problem for sustainable use of sea
scallop resources? Probably not, since scallop resources are relatively
sedentary. The line does present a problem for migratory groundfish.
However, zoning or some other means of allocating shares even in the
migratory-type cases may or may not result in larger authorities (government
or private), depending on scale efficiencies and other things. Small
authority A could purchase small authority B (or be joined by Congress
or an international management authority). Or A and B may be able to
negotiate contracts (treaties) that specify levels/locations of activities
-- e.g., unitization of common-pool oil fields.
GLOSSARY
Abiotic -- reference to the nonliving portion of the environment.
Adaptive management -- regulation or control of resource use
that adapts in response to the results of management actions. It is
also a learning process as managers observe environmental responses
to actions and learn how the system reacts to a given set of measures.
Alien species (a.k.a. introduced, exotic, or nonindigenous species) --
a species that has been transported by human activity, intentional or accidental,
into a region where it does not naturally occur.
Asset (a.k.a. capital asset) -- a physical entity with embodied wealth
(such as a house or fishing vessel) that provides a flow of valuable services
over time.
Assimilative capacity -- capacity of the ocean to dilute, absorb,
or modify wastes such as sewage or heat.
Bathymetry -- the measurement of the depths of oceans, seas, or other
large bodies of water.
Beliefs -- opinions or convictions that shape social relationships
or perceptions.
Benefit-cost analysis -- a comparison of the economic benefits of
using a productive resource with the opportunity cost of using the resource.
Projects or regulations are evaluated based on how they change net economic
value.
Biodiversity (biological diversity) -- the diversity of life that
occurs at several hierarchical levels of biological organization. Usually
defined by three levels: genetic, species, and ecosystem.
Biotic -- the living portion of the environment.
Commensalism -- having benefit for one member of a two-species association,
but having neither positive nor negative effect on the other.
Complementarity -- LME resources that are closely linked such as organisms
that have mutualistic relationships.
Consumptive use -- occurs when one persons use of a resource
prevents others from using it. For example, the shellfish, finfish, or waterfowl
I take in the LME are unavailable for others to catch. Hence, consumptive
use of natural resources in this sense is like consumptive use of common
private goods exchanged on markets, such as a pizza or a pair of shoes.
Contingent choice -- a direct economic valuation technique that is
dependent on choices that respondents make in response to hypothetical questions
or situations such as the ranking of environmental options.
Contingent valuation -- a direct economic valuation technique that
ascertains value by asking people their willingness to pay for a change in
environmental quality. The information that is sought from respondents is
conditional on some hypothetical market context such as the nature of the
change, how it will be implemented, and what it will cost.
Cost effectiveness -- minimization of costs in order to achieve a
given end, such as the selection of the alternative(s) with the lowest cost
per unit.
Direct use -- refers to the physical use of a resource onsite or in
situ. Common examples of direct use include commercial and recreational
fishing, beach use, boating, and wildlife viewing. Most direct use is targeted
by participants who set out to visit a beach, to fish at a particular location,
and so forth. Direct use also may be incidental, for example, when
a person traveling by boat unexpectedly sees whales or marine birds while
en route to a destination.
Ecology -- the branch of biology that involves the study of the relationships
among organisms and the interaction between organisms and the physical environment
Economics -- is the study of the choices people make to allocate scarce
resources among alternative uses to satisfy human needs and desires.
Economic value -- the most people are willing to pay to use a given
quantity of a good or service; or, the smallest amount people are willing
to accept to forego the use of a given quantity of a good or service.
Ecosystem -- the biotic components of a community, and the abiotic
elements of the environment that interact with these components.
Ecosystem health -- the state of ecosystem metabolic activity levels,
internal structure and organization, and ability to resist external stress
over time and space.
Environmental resources -- in the most general sense, all renewable
and nonrenewable resources of the LME. Sometimes used to refer to water and
air resources as opposed to natural resources such as fisheries or oil.
Estuary -- a semienclosed body of water that has a free connection
with the open sea, and within which seawater is diluted measurably with freshwater
that is derived from land drainage.
Eutrophication -- enrichment of a waterbody with nutrients, resulting
in excessive growth of phytoplankton, seaweeds, or vascular plants, and often
in oxygen depletion from decomposition of plant material.
Externalities -- unintended harmful or beneficial effects incurred
by a party that is not directly involved with production or consumption of
the commodity in question.
Fishery -- commonly, the actions by, and the interactions among, fishermen
using certain gear to catch certain fish in a certain area at a certain time.
Also, the stock(s) of fish being fished for.
Fuzzy logic -- mathematic technique capable of using qualitative,
linguistic, and imprecise information. Relationships are based on a linguistic
implication between an antecedent and its corresponding consequent.
Goods and services -- any commodities or nonmaterial goods (services)
such as assistance or accommodations that yield positive utility.
Governance -- the formal and informal arrangements, institutions,
and mores which determine how resources or an environment are utilized, how
problems and opportunities are evaluated and analyzed, what behavior is deemed
acceptable or forbidden, and what rules and sanctions are applied to affect
the pattern of resource and environmental use.
Governance module -- considers the formal and informal efforts to
manage human behaviors that affect the LME, and encourages patterns of conduct
which are in accord with the natural world.
Government -- the political direction and control exercised over actions
of the members, citizens, or inhabitants of communities, societies, and states.
Government or institutional failure -- inefficient delivery or use
of scarce resources by the public sector.
Habitat -- the place where an animal or plant lives.
Homeorhesically stable -- tendency of a system to return to its previous
trajectory or a return to normal dynamics rather than some undisturbed state.
Hydrography -- measurement of waterbody arrangement and movements,
such as currents and water masses.
Hydromodifications -- modification of ocean, estuarine, and riparian
areas and features such as currents, depth, or the configuration of the coastline
and adjacent waters.
Indirect use -- occurs when, for example, wetlands or other LME habitats
contribute to the abundance of wildlife or fish observed or caught elsewhere
in the LME. In effect, the ecological services of the wetland or habitat
help produce the wildlife or fish concerned, although the link
between the direct use and the ecological services provided by the wetland
or habitat may not be apparent to the recreational participant.
Input-output models -- a systematic method that both describes the
financial linkages and network of input supplies and production which connect
industries in a regional economy, and predicts the changes in regional output,
income, and employment. Input-output analysis generally focuses on economic
activity and the self-sufficiency of an economy, unlike cost-benefit analysis
which focuses on changes in net national benefits from use of a productive
resource.
Institutions -- the humanly devised constraints that shape human interaction,
or the rules that govern human behavior.
Integrity of ecosystems -- when subjected to disturbance, an ecosystem
sustains an organizing, self-correcting capability to recover toward an end-state
that is normal and good for that system.
Interaction matrices -- the use of matrices to organize LME activities
and resources by listing them on each axis. Matrix cells represent potential
interactions or linkages between the components listed in a particular column
and row of the matrix. These matrices have the capacity to inventory, organize,
and explore relationships or linkages among human uses, ecological components,
and processes of the LME.
Jointness -- interdependence among a systems components, such
as spatially or temporally related species of an LME.
Large marine ecosystem -- a geographic area of an ocean that has distinct
bathymetry, hydrography, productivity, and trophically dependent populations.
Legitimacy -- perception of conforming to established social rules
or standards.
Management -- the act of influencing, directing, or controlling use
of a resource.
Market failure -- the inability of the market to allocate resources
efficiently. The major causes of market failure include: 1) imperfect competition
(monopoly), 2) imperfect information, 3) public goods, 4) inappropriate government
intervention, and 5) externalities.
Markets -- a collection of buyers and sellers who interact, resulting
in the exchange of goods and services.
Modeling -- a simple representation or abstraction of a feature of
the real world that reveals important relationships, processes, or elements
of the feature.
Monitoring -- to observe and record changes with regard to physical,
biological, or social conditions related to an LME.
Maximum sustainable yield -- largest long-term average yield or catch
from a stock under prevailing ecological and environmental conditions.
Nonconsumptive use -- refers to cases where one persons enjoyment
does not prevent others from enjoying the same resource. For example, my
viewing of marine mammals in the LME, other wildlife, or attractive views
does not prevent you from enjoying the same resources.
Nongovernmental institutions and arrangements -- informal norms and rules of
behavior embodied in social arrangements and organizations such as nongovernmental
organizations (NGOs)
Nonjoint production -- production of a single or few elements of an
LME without regard to relationships to other elements.
Nonuse (passive use) -- refers to the enjoyment individuals may receive
from knowing that the resources exist (existence value) or from
knowing that the resources will be available for use by ones children
or grandchildren (bequest value) or others even though the individuals
themselves may not actually use the resources concerned.
Normative -- analysis leading to a recommendation or prescription
that is based on value judgements or that reflects societys preferences.
Norms -- the understood rules for appropriate behavior.
This is broader than social organization and includes nonsocial behavior.
Nutrient pollution -- pollution such as sewage, agricultural runoff,
or atmospheric deposition which increases nutrients available for primary
production. Increased nutrient levels may lead to eutrophication.
Open access -- access to the resource is free to anyone who wants
to use or harvest it because there is no ownership of the resource.
Overexploitation -- level of exploitation where the resource level
has been drawn down below the level that on average would support the long-term
maximum yield of the fishery.
Passive use -- see Nonuse.
Phytoplankton -- passively drifting or weakly swimming usually microscopic
plant organisms. They are the most important community of primary producers
in the ocean.
Productivity -- usually in reference to primary productivity, the
rate of assimilation of energy and nutrients by green plants (photosynthesis)
and other autotrophs (chemosynthesis). Usually expressed as grams of carbon
per square meter per year.
Property -- is a benefit (or income) stream associated with a property
right.
Property right -- a claim to the benefit stream that some higher body
-- usually government -- will agree to protect through the assignment of
duty to others who may covet, or somehow interfere with, the benefit stream.
Property rights structures -- various types of property rights arrangements,
all of which exhibit attributes of the five dimensions of property rights.
For example, private and common property each exhibit the following dimensions
to varying degrees: 1) the goods and services that owners can derive benefits
from; 2) divisibility, the richness of entitlements to complex resources
with multiple attributes; 3) exclusion of others from using or damaging the
owners entitlements; 4) the right to transfer ownership of entitlements;
and 5) enforcement of property rights.
Public good -- a good that can be used by anyone and for which one
persons use does not diminish the goods value for others.
Rent seeking -- actions by individuals and interest groups designed
to restructure public policy in a manner that will either directly or indirectly
redistribute more benefits to themselves.
Resources -- anything that has value; living and nonliving components
of nature such as fish, oil, water, and air.
Resource valuation -- calculation or estimation of the economic value
of a natural resource.
Separability -- independence among resources and in economics, an
ability to substitute environmental inputs in order to produce outputs. Therefore,
these resources may be managed or utilized separately due to the lack of
strong linkages to other LME components.
Social and cultural factors -- in addition to factors related to economics
such as benefits, capital, and labor, considerations such as social structure
and social organization, peoples knowledge and views (norms and values)
about their work, and how this relates to the resource.
Social conflict -- when the existing order is perceived as oppressive
or unfair, parties try to meet their needs by destroying their opposition
and by replacing those who make the rules.
Social costs -- costs associated with the disruption of communities,
households, and related social structures resulting in the loss of human
potential.
Social forces -- factors related to human behavior as shaped by group
life, including both collective forces (group construction) and the ways
in which people give meaning to their experiences (self-reflection).
Social impact assessment -- an evaluation of the likely outcomes and
impacts of a specific policy or regulation on a designated target group or
groups, as well as likely ripple effects to other groups.
Social networks -- comprises the sum total of ones group membership
and relationships.
Social systems -- represents an arrangement of statuses and roles
that exist apart from the people occupying them.
Socioeconomic -- pertaining to the combination or interaction of social
and economic factors and involves topics such as distributional issues, labor
market structure, social and opportunity costs, community dynamics, and decisionmaking
processes.
Socioeconomic benefits -- benefits to humans gained through utilization
of resources, including both economic and social benefits.
Socioeconomic module -- application of economic and social science
analysis to LME management. Six major elements of analysis include: human
forcing functions (i.e., ways in which human activities affect the
natural marine system); assessing impacts; feedback of impacts to human forcing
functions; the value of ecosystem services/biodiversity; estimation of nonmarket
values; and integration of economic and social science and natural science
assessments.
Spillover effects -- sometimes referred to as externalities, an unintended
effect (positive or negative, benefit or cost) imposed on others and not
borne by the party responsible for the effect.
Stated preference methods -- general category of indirect valuation
methods that includes contingent choice or contingent valuation methods.
Individuals are asked to makes choices regarding their willingness to pay
or to rank environmental options.
Stocks -- generally referred to as LME assets since such natural resources
can be utilized as inputs for economic processes. In fisheries science, a
fish stock is used as a unit for fisheries management.
Subsidiarity principle -- as related to levels of governance, suggests
that authority belongs at the lowest level capable of effective action.
Sustainability -- resources are managed so that the natural capital
stock is nondeclining through time, while production opportunities are maintained
for the future.
Sustainable development -- development that recognizes the need to
maintain capital stock and future production opportunities.
Tradeoffs -- compromises among resource uses that are required because
some bundles of entitlements defy divisibility/separability.
Transaction costs -- a collection of costs involved with gathering
information on, and otherwise delineating, a resource; establishing contracts
(formal or informal) that define the entitlement; monitoring and enforcing
the entitlement.
Transboundary -- resources or economic impacts such as pollution that
straddle political boundaries, usually national borders. For example, transboundary
stocks occur on both sides of a given national border.
Trophic (trophic level) -- position in food chain determined by the
number of energy-transfer steps to that level. Plant producers constitute
the lowest level, followed by herbivores and a series of carnivores at the
higher levels.
User group -- a group of individuals that utilize a resource in a
specific manner such as inshore lobster fishermen.
Utility -- the level of satisfaction that a person gets from consuming
a good or undertaking an activity.
Value -- market and nonmarket values, gross and net values, and net
benefits to consumers or goods and services.
Values -- ideals, customs and beliefs of a given society.
Welfare -- the prosperity or, more broadly, the well being of a person
or group.
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Acronyms
CZMA = Coastal Zone Management Act
ESA = Ecological Society of America
EU = European Union
GEF = Global Environment Facility
GOM = Gulf of Maine
ICGP = Interorganizational Committee on Guidelines and Principles
LME = large marine ecosystem
NAFO = Northwest Atlantic Fisheries Organization
NGO = nongovernmental organization
NMFS = NOAA National Marine Fisheries Service
NRC = natural resource community
NRDA = natural resource damage assessment
NRR = natural resource region
VTIS = vessel traffic information service