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Cod today and none tomorrow: The Economic Value of a Marine Reserve

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  • Grafton, R. Quentin
  • Kompas, Tom

Abstract

The northern cod fishery was once one of the world’s largest capture fisheries. Using data from the fishery, this research calculated the economic value of a marine reserve using a stochastic optimal control model with a jump-diffusion process. The analysis shows that, an optimal-sized marine reserve in this fishery would have prevented the fishery’s collapse and generated a triple payoff. Even if harvesting had been ‘optimal’ the profits from fishing would have been raised. The recovery time would also have decreased for the biomass to return to its former state and smoothed fishers’ harvests and profits. Following a negative shock, the chance of a catastrophic collapse would have been lowered.

Suggested Citation

  • Grafton, R. Quentin & Kompas, Tom, 2009. "Cod today and none tomorrow: The Economic Value of a Marine Reserve," Research Reports 94822, Australian National University, Environmental Economics Research Hub.
    • Handle: RePEc:ags:eerhrr:94822
    DOI: 10.22004/ag.econ.94822
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    References listed on IDEAS

    as
    1. R. Quentin Grafton & Leif K. Sandal & Stein Ivar Steinshamn, 2000. "How to Improve the Management of Renewable Resources: The Case of Canada's Northern Cod Fishery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 570-580.
    2. repec:cup:macdyn:v:1:y:1997:i:1:p:45-75 is not listed on IDEAS
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    7. Sanchirico, James N. & Wilen, James E., 2001. "A Bioeconomic Model of Marine Reserve Creation," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 257-276, November.
    8. Gaspar, Jess & L. Judd, Kenneth, 1997. "Solving Large-Scale Rational-Expectations Models," Macroeconomic Dynamics, Cambridge University Press, vol. 1(1), pages 45-75, January.
    9. R. Quentin Grafton & Tom Kompas & Pham Van Ha, 2006. "The Economic Payoffs from Marine Reserves: Resource Rents in a Stochastic Environment," The Economic Record, The Economic Society of Australia, vol. 82(259), pages 469-480, December.
    10. Quirin Schiermeier, 2002. "How many more fish in the sea?," Nature, Nature, vol. 419(6908), pages 662-665, October.
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    12. Smith, Martin D. & Wilen, James E., 2003. "Economic impacts of marine reserves: the importance of spatial behavior," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 183-206, September.
    13. Pezzey, John C. V. & Roberts, Callum M. & Urdal, Bjorn T., 2000. "A simple bioeconomic model of a marine reserve," Ecological Economics, Elsevier, vol. 33(1), pages 77-91, April.
    14. Quirin Schiermeier, 2003. "Europe dithers as Canada cuts cod fishing," Nature, Nature, vol. 423(6937), pages 212-212, May.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 285 – The collapse of North Atlantic Cod
      by David Pannell in Pannell Discussions on 2015-11-02 21:00:27

    Citations

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    Cited by:

    1. Quentin Grafton, R., 2010. "Adaptation to climate change in marine capture fisheries," Marine Policy, Elsevier, vol. 34(3), pages 606-615, May.
    2. Yamazaki, Satoshi & Jennings, Sarah & Quentin Grafton, R. & Kompas, Tom, 2015. "Are marine reserves and harvest control rules substitutes or complements for rebuilding fisheries?," Resource and Energy Economics, Elsevier, vol. 40(C), pages 1-18.
    3. Doole, Graeme J. & Pannell, David J., 2013. "A process for the development and application of simulation models in applied economics," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), pages 1-25.
    4. Greenville, Jared W. & MacAulay, T. Gordon, 2007. "Bioeconomic analysis of protected area use in fisheries management," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), pages 1-22.
    5. Jared Greenville & Gordon MacAulay, 2007. "Bioeconomic analysis of protected area use in fisheries management," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), pages 403-424, December.
    6. Greenville, Jared W. & MacAulay, T. Gordon, 2006. "Protected Areas and the Management of Fisheries: An Institutional Perspective," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139739, Australian Agricultural and Resource Economics Society.
    7. Cuilleret, Mathieu & Doyen, Luc & Gomes, Hélène & Blanchard, Fabian, 2022. "Resilience management for coastal fisheries facing with global changes and uncertainties," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 634-656.
    8. Greenville, Jared W. & MacAulay, T. Gordon, 2006. "A Bioeconomic Analysis of Protected Area use in Fisheries Management," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139738, Australian Agricultural and Resource Economics Society.
    9. Bui Bich Xuan & Claire W. Armstrong, 2019. "Trading Off Tourism for Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 697-716, June.
    10. Mota, Rui Pedro & Nichols, Rachel, 2023. "Habitat considerations in optimal fisheries recovery," Ecological Economics, Elsevier, vol. 214(C).
    11. Maroto, Jose M. & Moran, Manuel, 2014. "Detecting the presence of depensation in collapsed fisheries: The case of the Northern cod stock," Ecological Economics, Elsevier, vol. 97(C), pages 101-109.
    12. R. Quentin Grafton & Tom Kompas, 2014. "Three Pillars of Fisheries Policy," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(3), pages 609-614, September.
    13. Nichols, Rachel & Yamazaki, Satoshi & Jennings, Sarah, 2018. "The Role of Precaution in Stock Recovery Plans in a Fishery with Habitat Effect," Ecological Economics, Elsevier, vol. 146(C), pages 359-369.
    14. Greenville, Jared W. & MacAulay, T. Gordon, 2006. "Marine Protected Areas in Fisheries Management," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25532, International Association of Agricultural Economists.
    15. Greenville, Jared W. & MacAulay, T. Gordon, 2006. "A Bioeconomic Analysis of Protected Area use in Fisheries Management," 2006 Annual meeting, July 23-26, Long Beach, CA 21469, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Wisdom Akpalu & Worku Bitew, 2014. "Optimum reserve size, fishing induced change in carrying capacity, and phenotypic diversity," Journal of Bioeconomics, Springer, vol. 16(3), pages 289-304, October.

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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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