Background Location: Channel Islands National Marine Sanctuary and Santa Barbara Channel

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1 Title: Vessel Speed Reduction, Air Pollution, and Whale Strike Tradeoffs in the Santa Barbara Channel Region: Solution-oriented Integration of Health and Ecosystem Service Valuation Proposer Information Shannon Walker Jennifer Bone Kendall Mills Primary Author Primary Author Student Co-Author Sarah Gonyo (Ball), PhD Dean Steve Gaines, PhD Chris Costello, PhD Client Co-Author Faculty Co-Advisor Faculty Co-Advisor Clients Theresa Goedeke, PhD Sean Hastings Mary Byrd NCCOS Social Scientist Resource Protection Coordinator Community Programs Supervisor NOAA CINMS SBCAPCD Objective Reduced shipping speeds minimize lethal whale strikes, as well as emissions that have harmful human health and environmental repercussions. Given the success of a recent Vessel Speed Reduction (VSR) pilot trial in Santa Barbara Channel, this project will use cost-benefit analyses, including both market and non-market valuations, to identify tradeoffs between shipping costs and environmental conservation as well as explore alternative sources for economic incentives that could fund a sustainable VSR program. By integrating values to human health and ecosystem services, resulting analyses can inform current discussions addressing implementation of a VSR program within Santa Barbara County and potential broader geographic expansion. We aim to identify for our clients a sustainable, market-based solution to VSR by quantifying social, ecosystem, and corporate costs and benefits from several novel perspectives. We have identified key data and analytic gaps in the vast body of previous work addressing this topic (Fig. 1) which, if filled, will enable an integrated synthesis and economic analysis not previously possible, and not otherwise achievable in the context of a year-long group project. The two main valuations are (1) the value of ecosystem services conserved through reduced whale-strikes from high ship speeds and (2) the value of improved human and environmental health from reduction in air pollution emissions. These two social benefits are known results of VSR in the Santa Barbara Channel, which our group project will work toward quantifying in order to develop solutions that are economically sustainable and beneficial to marine conservation, human health, and the environment. Significance The implementation of a long-term VSR program is expected to ameliorate two environmental problems - whale strikes and air pollution - while also benefitting the commercial whale watching industry, local businesses, and human health. Through cost-benefit analysis of the aforementioned perspectives, the project will examine opportunities to place a market value on the environmental and biological externalities mitigated by slower vessel speeds. It will also provide a model for a possible statewide funding program. Furthermore, this study will contribute to an ongoing effort to incorporate ecosystem service valuation in Sanctuary management, including Management Plans and Condition Reports.

2 Background Location: Channel Islands National Marine Sanctuary and Santa Barbara Channel The Santa Barbara Channel is a highly trafficked route of both economic and ecological importance. Each year thousands of large vessels traverse the channel, as do several endangered whale species following annual migratory and feeding paths. 1,2 Whale strikes by shipping vessels result in injuries - often lethal - to recovering endangered species such as humpback, fin, and blue whales. 3 Right whales on the eastern seaboard face a similar threat from encroaching shipping lanes and much work was undertaken in the late 1990s to develop effective management strategies based on vessel-speed restrictions. West Coast sanctuaries and CINMS, in particular, have since determined that similar approaches might be appropriate on the western coast. 2 Studying the economic costs of risk management options originally started as a small project, focusing on vessel speed reduction. In 2011, a MESM Group Project was completed under faculty advisor Professor Costello. This project explored the costs and benefits of potential vessel management options, based on the probabilities of whales and ships being in the same place at the same time and whale strike threat related to ship speed. In addition, a course on Cost-Benefit Analysis (ESM 245) also produced reports on cost structures of the shipping industry and analyzed potential costs of different shipping speed reduction schemes in the CINMS. In 2014, Santa Barbara County Air Pollution Control District (SBCAPCD), CINMS, and the Environmental Defense Center piloted a successful VSR incentive program that reduced the speed of large ocean-going vessels through the channel. Vessels were offered $2,500 to slow down to 12 knots through the channel. Funding was available for 32 one-way transits (the program received more than 40 requests for inclusion), and seven major international shipping companies participated in this trial project, indicating the industries willingness to participate in such a program. 4 Khan et al (2012) found that ocean-going vessel speed reduction to 12 knots significantly lowered CO 2 and NO x emissions by 61% and 56% respectively. 5 This project will build upon a wealth of previous work (Fig. 1), enabling students to identify novel economic approaches to VSR and achieve an integrated analysis of larger scope than before possible. Data NOAA is providing data on the number of whale strikes and deaths occurring due to vessel strikes, and will also mentor summer interns to collect economic data on the value of the whale-watching industry. Dr. Bob Leeworthy, Chief Economist of the Office of National Marine Sanctuaries, NOAA, and client co-author Dr. Sarah Gonyo, NOAA, are available to assist with design and analysis of surveys on economic valuation of whale-watching. Additionally, Dr. Bob Miller, Marine Biodiversity Observation Network, would be willing to mentor on the valuation of whale-watching in relation to species biodiversity in CINMS. The SBCAPCD is providing data on local Santa Barbara County air quality and greenhouse gas emissions, as well as models on the amount of local emissions generated by the shipping industry. An ESM 245 class conducted a cost-benefit analysis project on the economic incentives for various vessel speed reduction programs and supplied it to NOAA. Data generated by this project 6 will be used in these analyses to determine the economic impact on the shipping industry. Some facets of this project involve functional relationships that are difficult to quantify, such as those between vessel speed and lethal whale strikes and air pollution. Therefore parts of our analysis will rely

3 on previously published scientifically sound models, equivalency metrics, and information from industry experts for a generalized understanding of each party s respective costs. Possible approaches We have identified focal analyses (Fig.1-green boxes/black text) that are achievable within the timeframe of this project. This work will resolve gaps in the vast body of existing datasets, literature, prior analyses and client expertise (Fig.1-gray boxes/blue text). We will approach our integrated economic analysis from two different perspectives: 1. Whale Ecosystem Service Valuation: a. Using newly available whale habitat models 7, we can build upon past models 6 to more accurately predict the number of whales in the Santa Barbara Channel each year and their associated risk of strike at different locations and vessel speeds. To perform this analysis we will utilize the CINMS Automated Identification System data set and existing spatial models of up to three whale species (humpback, fin, and blue). b. To estimate the value of a whale lost to a vessel strike, we will first conduct willingnessto-pay and expenditure surveys of whale watching participants. For example, we will ask the respondents if they would prefer the costless status quo scenario (i.e., no reduction in vessel speed) or a costly scenario where there is a reduction in lethal whale strikes (due to a decrease in vessel speed). How much is a consumer willing to pay to see more whales on a whale watching trip? c. We will collect logbook data from commercial whale watching boat operators to better estimate the total population of whale watchers. In conjunction with the survey results, this information will allow us to estimate the impact of the whale watching industry on the local economy. Is the total cost of whales lost to vessel strikes significant enough to affect the economy of Santa Barbara County? d. The final step will be to develop economic models to estimate the value of a VSR program to the whale watching industry and the local economy. How does this value compare to the economic cost of slowed vessels in the Channel? 2. Air Pollution and Human Health Valuation: e. Using data available from SBCAPCD, we will examine the local air pollution patterns to determine the largest emitters. Then, costs of air quality compliance by these local emitters will be estimated. How are local emitters currently reducing their air pollution, and could their costs be ameliorated through vessel speed reductions in the nearby channel? f. Our analysis will study the current and projected auction prices of carbon offsets being traded through the California Cap-And-Trade program. How do these prices compare to the costs shipping vessels incur while reducing speeds? Through this analysis we will evaluate the potential for incorporating a VSR program as an offset option for compliance entities within California. g. We will also explore the possibility of encouraging shipping retail clients (e.g. Walmart/Patagonia) to support whale safe and cleaner shipping practices and their role in applying pressure on shipping companies to participate in VSR. Could these retail companies elicit increased participation in VSR by only importing goods from ships that participate in the program?

4 Deliverables Completion of this project will provide an integrated economic analysis of the value of whale watching/conservation, human health, and shipping in the Santa Barbara region. It will also provide a basis for a sustainable VSR program, balancing the interests of conservation, shipping, ecosystem, and human health entities. The holistic nature of this analysis, integrating previously disparate sources of value, will enable exploration of new, creative economic solutions. The economic valuations produced will also inform policy makers of the integrated market and nonmarket costs and benefits of implementing a long-term VSR program. We hope to provide specific recommendations on how such a program can be structured and funded - e.g. via a single source or a combination of multiple sources of economic incentives. The resulting recommendations not only have implications for regional policy, but may also provide a basis for statewide expansion. If successful, this method of economic valuation will also be applicable to a wide variety of other issues in marine conservation economics. Finally, our deliverables are expected to directly inform Federal conservation and management efforts through the Sanctuary Advisory Council and its working groups as well as future shipping related decisions that may be considered by the Marine Shipping Working Group. Internships NOAA will provide 3 paid summer internships for their local California offices. California-based internships would focus on developing and distributing surveys to participants of whale watching trips in order to collect data for the industry economic valuation aspect of this project. Video and teleconferencing technology will be available for communication with east coast personnel. References 1. Calambokidis, J Abundance estimates of humpback and blue whales off the US West Coast based on mark-recapture of photo-identified individuals through No. PSRG San Diego, CA: Pacific Scientific Review Group. 2. Abramson, L., Polefka, S., Hastings, S., & Bor, K Reducing the Threat of Ship Strikes on Large Cetaceans in the Santa Barbara Channel Region and Channel Islands National Marine Sanctuary: Recommendations and Case Studies. Channel Islands National Marine Sanctuary Advisory Council. 3. Jensen, A.S., Silber, G.K Large Whale Ship Strike Database. NOAA Technical Memorandum NMFS-OPR-25. National Oceanic Atmospheric Administration. 4. Birney, K., D. Van Mullem, S. Hastings, K. Zacharki Slowing ships down for cleaner air and whale protection- Six global shipping companies to participate in trial incentive program for Santa Barbara Channel. Press Release August, Khan, M.Y., H. Agrawal, S. Ranganathan, W.A. Welch, J.W. Miller, and D.R. Crocker Greenhouse gas and criteria emission benefits through reduction of vessel speed at sea. Environmental Science and Technology 46, Betz, S. Bohnsak, K., Callahan, A., Green, Sarah., Labrum, K. Reducing the Risk of Vessel Strikes to Endangered Mammals in the Santa Barbara Channel. Master s Group Project: Bren School of Environmental Science & Management. March 18, Redfern, J. V., et al Assessing the risk of ships striking large whales in marine spatial planning. Conservation Biology 2:

5 Appendix Figure 1. Project Flow Chart. This collaborative project will evaluate possible economic incentivebased solutions to VSR by linking existing studies and datasets with targeted new data collections and analyses to integrate: (1) whale ecosystem service valuation and (2) air pollution & human health valuation. The flowchart illustrates how new data collections with be integrated with past work to enable a holistic cost-benefit analyses and the design of novel economic solutions capable within the scope of a 1-year Group Project.

6 Figure 2. Proposed Speed Reduction Zone. Map of proposed VSR zone through the Santa Barbara Channel which was used during the 2014 pilot trial. Shipping lanes (pink lines) indicate the shortest path ships take through the channel and into the ports of Los Angeles and Long Beach. Voluntary VSR programs are in effect within the 40nmi zone around port of Long Beach and Los Angeles (light pink zone).

7 Figure 3. Valuation Survey. This choice set was given to respondents for a project related to urchins and sponges. A similar choice set focused on whales would be used in our surveys.

8 Full List of Proposers and Clients Proposer Information Shannon Walker Jennifer Bone Kendall Mills Primary Author Primary Author Student Co-Author Sarah Gonyo (Ball), PhD Dean Steve Gaines, PhD Chris Costello, Client Co-Author Faculty Co-Advisor Faculty Co-Advisor Co-Client: National Oceanic and Atmospheric Administration (NOAA) Bob Leeworthy, PhD Theresa Goedeke, PhD Brian Kinlan, PhD ONMS Chief Economist NCCOS Social Scientist NCCOS Marine Ecologist Co-Client: Channel Islands National Marine Sanctuary (CINMS) Sean Hastings Chris Caldow Resource Protection Coordinator Research Coordinator Co-Client: Santa Barbara County Air Pollution Control District (SBCAPCD) Mary Byrd Community Programs Supervisor

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