Economics and the marine environment David Whitmarsh CEMARE

Economics and the marine environment David Whitmarsh CEMARE, Department of Economics University of Portsmouth Presentation given at the Portsmouth Business School Research Conference July 21 st 2005

Introduction • CEMARE research is concerned with socio-economic • Ø Ø • Ø Ø Ø aspects of natural resources and the environment An important focus is on: marine living resources and how they can be used sustainably marine environmental impacts, especially in coastal areas Key questions: Will the pressures on the marine environment intensify ? Do changes in the marine environment have any measurable social or economic impact ? Is there an efficient way of controlling the exploitation of the sea and preventing its misuse ?

Problems and pressures in the coastal zone • Coastal areas are important to society but are under pressure from multiple activities and uses, e. g. • Shipping, waste disposal, dredging, recreation, fishing, aquaculture, oil and gas exploration, port and harbour development, etc. • Plus: accidents and ‘perturbations’ (e. g. oil spills) • Environmental impact on: water quality, critical habitat, biodiversity, fish stocks • Pressures are likely to intensify due to: Ø Increased population in coastal areas Ø Increased demand for marine products Ø Increased competition for ocean space

Socio-economic impacts of marine environmental degradation • Negative effects on: Ø Ø • • Incomes (e. g. oiled beaches tourist receipts, reduced fish stock fishing revenue) Environmental assets (e. g. damage to valuable natural resources such as coral, mangrove, etc. ) Human health (e. g. pathogens in contaminated seawater) Public attitudes (e. g. salmon farming: ‘farmed and dangerous’) Monetary values can be placed on some (but not all!) non-market environmental impacts, e. g. Exxon Valdez oil spill (1989) – lost conservation values (wildlife etc. ) estimated at $2. 8 billion

Damage assessment: the Sea Empress oil spill South Wales Sea Empress Incident: 72, 000 tonnes of oil discharged, 1996

The Sea Empress case: summary of economic costs Category Lower estimate (£M) Upper estimate (£M) Clean-up & salvage 49. 1 58. 1 Tourism 0. 0 2. 9 Recreation 1. 0 2. 8 Commercial fisheries 0. 8 1. 2 Recreational fisheries 0. 8 2. 7 Local industry 0. 0 Conservation values 22. 5 35. 4 Human health 1. 2 3. 0 TOTAL 75. 3 106. 1 • Apart from clean-up and • • • salvage, the largest cost item was the lost conservation values. NB: Most of the affected area fell within Pembrokeshire Coast National Park, and involved 35 SSSI and 2 National Nature Reserves. These were treated as non -use values and assessed using the Contingent Valuation Method. Source: Moore et al. 1998

Managing the marine environment efficiently • Economic valuation of environmental impacts is crucial for decision-making using a cost-benefit approach, e. g. Ø Ø Is it worth spending £ x million on coastal defence to preserve ‘priceless’ wildlife habitat ? Should the expansion of marine aquaculture be curtailed because of the (supposed) environmental harm caused ? • Economic instruments can be applied to: Control pollution (e. g. liability laws, emission charges, tradable water pollution permits) Ø Conserve natural resources (e. g. property and use rights in fisheries, ecolabelling and seafood certification) Ø

Current research: the ECASA project • ECASA (= Ecosystem Approach to Sustainable • • • Aquaculture) is a € 2. 5 M project funded under the EU Framework Programme Six Background: The expansion of aquaculture has brought benefits to society, but there is evidence of negative effects on the environment Partners: UK, Norway, Sweden, Germany, France, Greece, Italy, Spain, Portugal, Slovenia, Croatia, Israel. Coordinated by Scottish Association for Marine Science Website: http: //www. sams. ac. uk/research. htm Duration: 3 years, commenced December 2004 University of Portsmouth (CEMARE) is responsible for the socio-economic component CEMARE staff: David Whitmarsh and Gianna Palmieri

Socio-economic research within the ECASA project • Factors affecting aquaculture production (e. g. demand, • • Ø Ø Ø • Ø Ø technological innovation, policies, etc. ) Externalities of aquaculture and other CZ activities (e. g. pollution damage costs) Models for evaluating the impact of policies on: Financial performance of aquaculture producers Prices and markets Employment and output (e. g. multiplier effects) Public attitudes and preferences. Focussing on: The social acceptability of aquaculture development and its environmental impact Identification of factors determining attitudes and values