Using a Bioeconomic Modeling Approach to Value Environmental Change in the Black Sea

1. Using a Bioeconomic Modeling Approach to Value Environmental Change in the Black Sea Duncan Knowler School of Resource and Environmental Management Simon Fraser University, Canada

2. The Black Sea Region

3. Management issues Need to address nutrient loads and fisheries Some fish species have a complex interaction with nutrients Presence of invasive spp can further complicate matters Research question: what is welfare change associated with nutrient abatement under alternative invasive species assumptions (present/not present) Response is to model this system using a bioeconomic modeling approach Consider optimal management: what fish escapement policy is optimal in each case?

4. Description of the Bioeconomic System under a Particular Environmental Regime

5. Invasive comb jelly “Mnemiopsisleidyi”

6. Key modeling relationships (-) (+) • Main issues: • How to model the influence of Mnemiopsis under a nutrient enrichment situation? • How should the commercial fisheries be managed (escapement )? ?

7. Modeling an Environmental Disturbance (e.g. Mnemiopsis) as a “Regime Shift”

8. - q E h X = ( 1 - e ) t t t 1 E X X h = [ln ( ) - ln ( - ) ] q t t t t Economic Component of the Model St = Xt – htor ht = Xt - St

9. Economic Component of the Model, cont’d

10. Maximization Problem under Optimal Management Ri (St,Pt)

11. Variants of the Recruitment Function, Before (R1) and After (R2) the Introduction of Mnemiopsis

12. Solution Expression for the Maximization Problem Substituting functional forms into the solution, assuming P is fixed and dividing the resulting expression by p/p, gives an implicit statement for optimal escapement ,S*:

13. Estimated Black Sea Anchovy Stock-Recruitment Function using the Ricker Model Using Data from 1968-93

14. Alternative Environmental Regimes in the Black Sea: (1) Pre-enrichment, (2) Pre-Mnemiopsis, and (3) Mnemiopsis

15. Final Functional Form Specifications

16. Long Run Equilibrium Values for the Black Sea Anchovy Fishery under Optimal Management and Pre- and Post-invasion Conditions (US$ 1989/90)

17. Producers Surplus in the Black Sea Anchovy Fishery for the Pre-Mnemiopsisand Mnemiopsis Periods (US $’000, 1990 prices) Source: Knowler and Barbier 2000

18. Epilogue

19. Valuing Freshwater Salmon Habitat on the West Coast of Canada Duncan Knowler School of Resource and Environmental Management Simon Fraser University

20. Salmon Habitat Case Study: Bioeconomic Model Approach to Valuation • Setting up the valuation problem as a bioeconomic model • Linking habitat quality to salmon recruitment in the South Thompson River (B.C.) drainage area • Results for an optimally managed coho salmon fishery versus historical values for entire Georgia Strait fishery • Valuation results for salmon habitat in the South Thompson River drainage area

21. South Thompson River Catchment, BC Fraser River S. Thompson River Canada Strait of Georgia USA

22. Why a Bioeconomic Modeling Approach? Can take a ecological-economic system approach (e.g. Strait of Georgia fishery) Allows for economic and biological ‘adjustment’ as habitat changes Can assess habitat values assuming efficient management Proper welfare measurement is possible

23. Bioeconomic model of the Coho Salmon Fishery

24. Bioeconomic model, cont’d

25. Bioeconomic model, cont’d

26. Specification of relationships in the bioeconomic model

27. Solution of the bioeconomic model at the steady state, i.e. Xt+1 = Xt= X Golden Rule Adjoint Equation

28. Habitat valuation using the bioeconomic model

32. Table of Parameter Values (C$ 1994)

33. Schematic Diagram of the Simulation Procedure to the Impact of Habitat Change on Fisheries in the South Thompson River Basin, BC