Potential Benefits of a Transboundary Marine Protected Area in Non-Cooperative Scenarios

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1 Potential Benefits of a Transboundary Marine Protected Area in Non-Cooperative Scenarios Renato Molina - Chris Costello - Steve Gaines University of California, Santa Barbara July, 2014

2 Introduction According to the FAO, shared fisheries could be: 1 Stocks that cross one or more EEZs (Transboundary fishery) 2 Stocks that distribute over EEZs and international waters 3 Stocks fished exclusively in international waters 4 Highly migratory species

3 Problems Introduction Generally speaking, there are three main factors that make the management of shared stocks a difficult task: 1 Lack of property rights 2 Movement over several or no jurisdictions 3 Fishing externality

4 Incentives Introduction These three factors altogether will induce the following rationale: What I don t fish today, will be fished by others tomorrow All the others fishing is affecting my own availability of fish The benefits of my catch are only mine Whatever I m fishing is not enough to affect the resource If no one owns the resource, I own the resource The combination of these incentives will induce over-fishing in the long-term.

5 Solutions Introduction Pretty often, some sort of fishing agreement is suggested to deal with these problems Co-management and cooperation are the most common These agreements can often be perceived as unfair or hard to implement

6 Are there any other alternatives?

7 overview Introduction We can try to answer this question by having a model that considers: Spatially distributed stock Movement over space Strategic interaction between agents

8 Can we use a Marine Protected Area (MPA) to manage a fishery?

9 Transboundary fishery Country 1 Country 2

10 Transboundary MPA Introduction Country 1 MPA Country 2

11 framework Introduction We expanded the seminal model for transboundary fisheries proposed by Levhari and Mirman (1980), and included: Two agents: an aggressive and a conservative country Countries agree on declaring an MPA but behave non-cooperatively All possible combinations of an MPA equally shared by both countries Different movement patterns (as a function of distance) over space

12 Status Quo - High Movement High Movement Medium Movement Low Movement Financing Country 1 Country 2 Total Optimal Equilibrium catch Equilibrium utiltiy Equilibrium biomass Equilibrium biomass

13 Trade Off - High Movement High Movement Medium Movement Low Movement Financing Country 1 Country 2 Total Optimal Equilibrium catch Equilibrium utility Equilibrium biomass Equilibrium biomass

14 Status Quo - Medium Movement High Movement Medium Movement Low Movement Financing Country 1 Country 2 Total Optimal Equilibrium catch Equilibrium biomass Equilibrium utiltiy Equilibrium biomass

15 Trade Off - Medium Movement High Movement Medium Movement Low Movement Financing Country 1 Country 2 Total Optimal Equilibrium catch Equilibrium utility Equilibrium biomass Equilibrium biomass

16 Status Quo - Low Movement High Movement Medium Movement Low Movement Financing Country 1 Country 2 Total Optimal Equilibrium catch Equilibrium utiltiy Equilibrium biomass Equilibrium biomass

17 Trade Off - Low Movement High Movement Medium Movement Low Movement Financing Country 1 Country 2 Total Optimal Equilibrium catch Equilibrium utility Equilibrium biomass Equilibrium biomass

18 Implications of an MPA High Movement Medium Movement Low Movement Financing Despite having benefits in some scenarios, protecting a fraction of space in a fishery could have several implications: Effort mobilization Decrease of harvest levels in the short-term Economic losses in the short-term Stake-holder opposition (However, fishing agreements are not exempt from the same consequences)

19 Investment and Gains Introduction High Movement Medium Movement Low Movement Financing Using the MPA with the highest total long-term utility for the high movement example: Status Quo Optimal Gains Utiltiy Investment Time

20 Financing mechanisms High Movement Medium Movement Low Movement Financing We propose three financing mechanisms that can make agents indifferent to the implementation of an MPA Continued Status Quo Fixed payment Share of gains

21 Status Quo Introduction High Movement Medium Movement Low Movement Financing All gains over the Status Quo are destined to cover the investment Status Quo Optimal Perceived Utiltiy Investment 0.6 Payback Gains Time

22 Fixed Payment Introduction High Movement Medium Movement Low Movement Financing Fixed payment as a function of the investment amount Status Quo Optimal Perceived Payback 1 Gains Utiltiy 0.8 Investment Time

23 Share of Gains Introduction High Movement Medium Movement Low Movement Financing A fixed share of the gains over the Status Quo is destined to cover the investment Status Quo Optimal Perceived Payback Gains Utiltiy 0.8 Investment Time

24 Transboundary MPA Introduction The problem of shared stocks is real and needs to be solved Common solutions require strong institutions and willingness to cooperate Non-usual approaches such as MPAs could be used when these institutions are not in place or too expensive to implement MPAs could be used to correct non-cooperative scenarios under proper conditions and design

25 Financing the MPA Introduction To decrease stake-holder opposition, short term negative effects need to be diminished Financing mechanisms could be used to induce indifference in the system and ease implementation of MPAs and/or other type of fishery reforms MPAs and other reforms make complete economic sense as long as gains exist in the system It is necessary then, to explore and create instances for the discussion of implementing MPAs and other management strategies for shared stocks management

26 Thank you!