Capital Investment for Optimal Exploitation of Renewable Resource Stocks in the Age of Global Change

The world is rapidly changing, and biotic resources and their users are adapting. Determining how ecological and economic interactions determine the outcomes of this adaptation is critical to understanding the future of natural resources. We model a two-species fisheries as a stylized system to investigate the adaptation strategies of a harvester faced with shifting species composition in an ecological community. We explore how interspecies interactions and pricing effects jointly determine the optimal adaptation strategy. We consider two interacting species that are harvested jointly, but where the harvester may exert effort towards each species differentially provided she invests in reproducible capital that allows targeting. The possible adaptation strategies comprise changes in how people interact with natural capital (for example, changing harvest levels) and investment in reproducible or human capital, which may be a substitute or complement for natural capital stocks. We find that the market price of the harvested species exerts a particularly strong impact on the adaptation strategy; all else equal, unequal prices tends to drive extreme targeting or avoidance of a new species. Economic and ecological factors can necessitate investment at equilibrium, and early, transient management decisions for beneficial species may, like with nuisance species, produce large benefits.