aquaculture and environment interactions in the perspective of renewable resource management theory

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Aquaculture and environmentinteractions in the perspective ofrenewable resource managementtheoryDenis Bailly a & Philippe Paquotte ba Centre de Droit et Economie de la Mer, University de BretagneOccidentale, Brest, Franceb IFREMER, Service Economie Maritime, 155 rue J. J. Rousseau,Issy‐les‐Moulineaux Cedex, 92138, FrancePublished online: 30 Sep 2008.

To cite this article: Denis Bailly & Philippe Paquotte (1996) Aquaculture and environmentinteractions in the perspective of renewable resource management theory, Coastal Management,24:3, 251-269, DOI: 10.1080/08920759609362294

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Aquaculture and Environment Interactionsin the Perspective of Renewable Resource

Management Theory

DENIS BAILLY

Centre de Droit et Economie de la MerUniversity de Bretagne OccidentaleBrest, France

PHILIPPE PAQUOTTE

IFREMERService Economie MaritimeIssy-les-Moulineaux, France

Aquaculture is characterized by a great dependence on the quality and productivityof the environment. Its development also bears a risk of negative environmentalimpact, such as pollution, landscape modification, or biodiversity change. Thereforeaquaculture development is subdued to an institutional context that defines the rulesfor the use and conservation of natural resources in aquatic ecosystems. The needto design such rules and the appropriate means to implement them is widely recog-nized today, but an increasing number of conflicts and collapses in relation to envi-ronmental issues attests to the difficulties in designing and implementing efficientenvironmental or management policies. Considering the diversity and complexity ofissues covered by the term "environmental problems" in the case of aquaculture, asocioeconomic approach is proposed in this article to review various policy optionsas envisaged by the theory. This approach refers to the economic theory of exter-nalities and to renewable resources management. It focuses on institutions and poli-cies intended to regulate competition among uses of common property resources. Itis illustrated by examples drawn from the experience of Western European countriesabout aquaculture development and environmental issues.

Keywords aquaculture, environment, public policy, renewable resources

Environmental issues play an important role in relation to aquaculture development. Asaquaculture production develops in the world, environmental policymaking increasinglybecomes a major area for research. The objective is either to guarantee minimum envi-ronmental requirements for aquaculture development or to ensure that environmentalclaims from other users are not affected by aquaculture. The term environmental policyis used here in a broad sense to cover the regulation of pollution problems as well as themanagement of natural resources in shared-access among farming units or with otherindustries.

Received 14 October 1995; accepted 15 December 1995.Address correspondence to Philippe Paquotte, IFREMER, Service Economie Maritime, 155

rue J. J. Rousseau, 92138 Issy-les-Moulineaux Cedex, France.

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Coastal Management, 24:251-269, 1996Copyright © 1996 Taylor & Francis

0892-0753/96 $12.00+.00

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252 D. Bailly and P. Paquotte

The relation between aquaculture and the environment is all the more complicatedbecause there are (1) dependence and impact on medium quality, (2) interdependenceamong production units and with other activities that impact on environment, and (3)dependence on the limited biological productivity of aquatic ecosystems. To illustratethe diversity of these issues, it is necessary to recall briefly some of the major problemsthat are generally referred to as environmental issues when aquaculture development isconsidered.

In all cases, a given level of aquaculture production requires a minimum quantity ofwater of appropriate quality. Among the physical and chemical parameters that definewater quality, temperature, oxygen concentration, and salinity (for marine waters) arebasic items for sustaining biological production. Other elements (e.g., currents, chemicals,protection from the wind) also may be crucial to the sustainability of aquaculture devel-opment. Some characteristics of water quality are conditioned largely by natural factors,whereas others are connected directly to anthropic activity. Water quality, then, is a majorinput to aquaculture production that depends largely on waste and disease dispersionfrom other activities as well as from aquaculture units (e.g., feces, nitrogen, antibiotics,antifouling, diseases). In this sense, water quality also is an output of aquaculture pro-duction. Much of aquaculture production also depends on biological productivity1 ofaquatic ecosystems: juveniles, phytoplankton, zooplankton, and adult fishes used forfeed. This biological productivity is a natural input, particularly in the case of extensivefarming systems. Aquaculture facilities modify coastal landscapes that in many Europeanregions are considered valuable environmental resources for tourism. Aquaculture alsocompetes with other activities for public space in coastal zones, lakes, and rivers. Aqua-culture may come in conflict with environmentalist claims when an endangered species isa predator on the farmed species. Competition for access to all these resources occursunder complex interdependency relations among aquaculturists and with other direct orindirect users of aquatic ecosystems. Interdependencies can be close, as from one farm toits neighbor, or distant, as in the case of coastal ecosystems linked to their watershedhydrosystem. At various levels of trophic chains, the exploited biological productivity isa common property resource, as are environmental resources, such as water quality,landscape attractiveness, and biodiversity. In this regard they share many characteristicsin terms of policymaking issues related to the management or coordination of their uses.

Water quantity, water quality, water productivity, public space, landscapes, and pro-tected ecosystems or species are resources that may contribute to the definition of aqua-culture development sustainability. Their contributions may be in terms of inputs, out-puts, or constraints as mentioned above. Conflicts on these matters and the actions takenby public agencies or producer organizations in various contexts attest that they willraise still more concern in the near future. To make sense in terms of aquaculture eco-nomic viability, the cost of handling environmental constraints should remain withinthe profitability range of the business. In an economic approach to sustainability, cost-benefit analysis is a key criterion for decision making about alternative policies. Costsand benefits to be considered are private and public expenses for the preservation ofenvironmental quality, as well as associated productivity losses or gains. In some cases,environmental benefits or losses refer to amenities such as the aesthetic value of land-scapes or the existence value of endangered species. It often is difficult to practicallyevaluate the costs of alternative policies, including the "do-nothing" attitude. Costs andbenefits of public action are also difficult to assess. Uncertainties about the real effectsof policies and about natural process variability contribute to the difficulty. It is not easyto propose scales for amenity losses that compare with monetary losses of production

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Aquaculture and Environment Interactions 253

activities. Therefore cost-benefit analysis plays a limited role in the design of environ-mental policies, although much work is done by economists in designing public expenseaccounting and natural resources valuation methodologies. Still decisions must be madeif public and private investments put into aquaculture development are not to be lostbecause environmental issues have not been properly cleared. Environmental policiesalso are needed to preserve aquatic ecosystems. The collapse of shrimp farming in Tai-wan and the destruction of mangrove areas in tropical countries to build shrimp pondsare among the best known examples.2 At a less impressive scale, freshwater and marineaquaculture in Europe also faces many difficulties.

To tackle environmental issues in a policymaking or management perspective, aconceptual framework that goes beyond cost-benefit analysis is needed. This articleproposes some bases for analyzing the diversity of environment and aquacultureinterdependencies, and possible approaches for their management. It is based on socio-economic considerations drawn from the economics of renewable resources managementand externalities theory as explained in the first section, "A Conceptual Framework forGrasping Environmental Policy Issues." A second section, "European Aquaculture andEnvironmental Policy: Theory and Practice" reviews the policy options as discussed intheory. It provides an introduction to the presentation of the actual environmental policiesimplemented today in Western Europe (the European Union and Norway) applying toaquaculture development.

A Conceptual Framework for GraspingEnvironmental Policy Issues

Public space, biological production, water quality as an input or an output of a produc-tion system, aquatic ecosystems as waste assimilators, and coastal landscapes have beendescribed as resources above. They are of course very different in terms of the naturalprocesses and uses affecting them. In view of an economic analysis, however, theyshare one important feature: Trade-offs among users in the access to these limited re-sources do not easily occur under market rule. When these resources become scarce,competition for access rarely is regulated by market allocation. The main reason for thisis that they are not easy to individually control as private properties. Unlike most othereconomic resources, they usually remain under shared-access among the participants ofone user group or among different users. This may be voluntarily accepted, as amongshellfish farmers sharing the natural productivity of a bay, but it also may be imposed,as in the case of external pollution. The reasons that these resources are not individuallyowned may be physical (indivisibility of water quality, biological productivity, land-scape amenities) or by public decision (public space).

As long as a resource is plentiful compared with user demand, no rule limitingaccess is needed. The resource may remain in free-access. When pressure over the re-source increases, regulation of access is requested under an economic motive (economicefficiency of resource use), environmentalist claim (preservation), ethical principle(equity), or other reason. In market exchange, increasing cost of access "naturally"limits the demand over scarce resources. One condition for such market transactions toefficiently reveal scarcity, however, is that individual property rights be clearly defined,guaranteed, and left to free market exchange. Although it may be possible to accomplishthis by creating artificial shares of the resource (e.g., emission permits or individualquotas), it often is difficult to set individual property rights over the resources consid-ered here. Consequently, environmental quality is a no-cost resource for the emitter of

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pollution. It is difficult to imagine a market price "signal" indicating that the assimila-tion capacity of an aquatic ecosystem is saturated. To cover the theoretical backgroundof the socioeconomic approach to policymaking in relation to these observations, twofields of discussion are of particular interest: the economic theory of externalities andthe management of renewable resources.

The Economic Theory of Externalities

In economic theory, the term externality refers to any situation where the outcome ofchoices made by one economic agent depends on the choices of other decision centers byany type of relation other than market exchange. Depending on the type of impact, theexternality will either affect a production activity by modifying the efficiency of theproduction process, or affect the satisfaction of a consumer. It may be a positive or anegative effect. Externalities may be spoken of when this impact is not compensated. Forexample, a firm releasing pollutants into a river may cause damage to other users of thewater. Because there is no market transaction to express the scarcity of water quality asdemanded by downstream users, the water remains a free-access good and there is noreason for the polluter to stop his or her activity. Compensation for the loss of satisfactionmay occur in ways other than market transaction. It may be based on direct negotiationof compensation or on tax and subsidy systems. The problem also may be solved bylimiting the external effect to a level considered acceptable by the receptors. This gener-ally is the motivation for setting environmental norms and standards either by state ruleor by collective agreement. If losses of utility are compensated for or avoided in a waythat is satisfactory to downstream users, the externality is said to be internalized.

Two broad categories of externalities can be identified. The first group occurs inthe creation of an undesirable "atmosphere" for others under more or less objectivemotives (threat of public health, worsening of production conditions, destruction of re-markable ecosystems, aesthetic losses). This refers to pollution or destructive impacts ofanthropic activity that put a cost on people (present or future) that is not compensatedfor or paid for by the one responsible for the external effect. The cost can be a loss ofproductivity, an increase in investment or labor needed for the same production, or aloss of utility for consumers. The second group of externalities is congestion effectsover limited stocks of renewable resources. In this case, all users compete for a resourcethat is limited. At some point it cannot offer enough to satisfy the global demand. Eachuser increases its efforts to obtain a share of the pie that tends to be smaller and smaller.Competition in access to the limited resource leads to inefficiency as more economicresources, such as capital, labor, and consumer income, are devoted to get less benefit.

Theoretically, the preferable method of negotiating compensation for losses ofutility should work like a market transaction. The cost of access to limited environmen-tal resources should increase as environmental conditions worsen, to a point where theoperation of the pollution source or the investment in subtracting a resource is no longerprofitable. A first condition for such a bargaining process to take place satisfactorily forboth emitter and receptor is that rights over the resources must be clearly defined. Bar-gaining over the share of scarce natural resources will not occur if property rights onenvironmental resources are not acknowledged and guaranteed. This is true not only fora market type of negotiation, but also for any other type of direct negotiation amongusers, as well as negotiations involving the state administration. Even if rights to cleanair or water are legally founded, a second condition for efficient negotiation is that thesources and receptors of the external effects, along with the external effects themselves

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and their acceptable levels, be clearly identified and defined. Diffused pollution andlong-distance effects make it difficult to negotiate the compensation or reduction ofexternalities. Scientific controversy over acceptable levels of pollution and understand-ing of the processes involved in the diffusion of externalities also are major sources ofdifficulty. Lastly, differences among users in the perception of environmental resourcesoften make it difficult to conclude agreements over acceptable levels of emission.

From a purely economic point of view, externalities (either positive or negative)should be reduced to limit losses to acceptable levels or to compensate losses or bene-fits resulting from the decisions of other economic agents. Policymakers also may takeinto consideration social or political objectives in the designing of policies to reduceexternalities. An economic approach also is concerned with the cost-benefit aspect ofreducing externalities. If public action is requested, it has a cost referred to in economictheory as a transaction cost. Economically, it is not worth the risks to implement apolicy that would cost more than the benefit awaited. This is one reason why policyoptions may not be equivalent in terms of efficiency. Among transaction costs, the con-trol of rule observance is a major constraint to effective implementation of environmen-tal policies.

Tlie Management of Renewable Resources

Renewable resources may be defined as capital or natural assets that can ensure a sus-tainable flow of benefits to users as long as the support is preserved. There are manytypes of renewable resources as defined in this broad sense and they should not all betreated in the same way. A resource is defined by the functionality of its natural assetsregarding a given use. Air quality is a resource for breathing. Water quality is a resourcefor tourist bathing. Water quality and productivity are resources for aquaculture produc-tion. Air and aquatic ecosystem dispersion or assimilation potentials are resources forthe activities releasing waste into them. Fish stocks are resources for fishing, just aslandscapes may be considered resources by tourists and the tourism industry. The samenatural asset may be the support for many different flows of benefits to many differentusers. Viewed from each user's side, they are different resources that are not indepen-dent. Some resources are very complex to define.

Water quality, crucial to aquaculture, is an easy term, but in practice the precisedefinition of water quality for different user groups may be difficult when various usesare involved. Defining attributes of the resource may be objective when consideringminimum requirements for a production process, but they also may become subjectivewhen defining the amenities of the nature as enjoyed by the consumer. Individual pref-erences also draw on sociocultural backgrounds. A typical example is the dispute thatarises between aquaculture destroying natural coastal landscapes and the building oforiginal and attractive landscapes. New cage, raft, and pole culture that is developing intourist areas, such as the Mediterranean countries and the French, Spanish, and IrishAtlantic coasts, can generate this type of debate. Most of the oyster and mussel farmingareas in France use the landscape of aquaculture grounds to promote their touristicimage. Conflicts about salmon farming in Ireland and sea bass and sea bream farming inthe Mediterranean have led in some places to the ban of aquaculture production tosatisfy claims by tourism industry. A similar asymmetry exists in the debate betweenconservationists and aquaculturists: Does aquaculture enhance or reduce ecosystem naturalbiodiversity? Part of this question can receive a scientific answer, but actual conflictsshow that policies are based rather on public perception of conservationist issues.

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From the social sciences view, natural resources (renewable or not) are elements ofnature that are requested for uses. A use may be a contribution to production or con-sumption activities, sometimes only as support of life (viability or quality). A use alsomay be in terms of resource subtraction, for example, fish stocks in fisheries or waterfor human consumption. These resources provide inputs. A use also may be in terms ofemissions, such as pollution (outputs). In this case the resource is in the dispersion orassimilation capacity of the medium where wastes are disposed, but the quality of themedium also is an input to other users. Assimilation or dispersion capacity and viabilityof ecosystems are properties that contribute to definitions of resources from varioususers' points of view. A use for consumers also may result from the aesthetic value ofnatural amenities. One output of anthropic activity can be the destruction of such re-sources.

This transformation of natural assets within a set of benefit flows to the society isconsidered here as a social process of nature appropriation. It is dependent on

• the technical and economic characteristics of each use (e.g., efficiency in input-output relations, preference of the consumers),

• the characteristics of the resource (e.g., divisibility, subtractability, variability, re-newability conditions), and

• the social context of the uses (e.g., political and legal aspects, symbolic represen-tations).

Environmental resources occupy a specific position among resources. When refer-ring to pollution, to the decrease of aquatic ecosystem biological productivity, or tolosses of biodiversity, it is common to speak of environmental problems. Although manydefinitions are proposed, the one most appropriate to the discussion in this article is thatenvironment is all the contributions to the satisfaction of human needs (present orfuture) that do not fall under the control of a private property right or that flow across .private properties (Weber & Bailly, 1993). With this definition, most of the renewableresources considered above fall under the category of environmental resources. Morerestrictive definitions separate exploited renewable resources (mainly biological stocksunder anthropic predation) and environment (e.g., air quality, water quality, landscape,biodiversity). With regard to many aspects, this separation is either artificial or notdetailed enough to express the diversity of the resources. Environmental resourcesappear, then, as a broad range of renewable resources that are not privately controlled.Most of them offer all the conditions for development of externalities phenomena, mainlynegative externalities linked to congestion effects or external impacts causing the degra-dation or destruction of benefit sources to other uses.

Most renewable natural resources are under free-access regimes, common propertyregimes, or public control. In most cases, individual actions on these resources are inter-dependent through the various types of external effects described above. Source andimpact links among uses of renewable resources may be direct or indirect, cumulative ornot cumulative, close or distant in space and time. To avoid or at least limit the negativeconsequences of excessive pressure on these resources and to ensure sustainable devel-opment, ways to coordinate individual choices at the collective level3 must be found assoon as their limits are reached. This is the time when free-access resources tend to beput under limited access schemes either by state or user group control, as is the case formost of the resources associated with aquatic ecosystems. Limited space and renewableresources and ecological fragility make it necessary to develop coordination rules be-tween the actors. These rules aim first at defining conditions of access to the resource

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(e.g., eligibility, bundle of rights, transferability of rights). Their definition and imple-mentation require organizations, all of which may play different roles such as discussionand definition of rules, legitimating of rules and decision-making processes (social rec-ognition), implementation of rules (control structures), and conflict settlement.

When they are due to a socially guaranteed contract between different persons orgroups, such rules and organizations may be called institutions. Knowledge of the natureof these institutions as well as the constitution of the users' groups is important in un-derstanding how they function and how public policy plays a role. These institutionsare characterized by the relative importance of administrative links, market-oriented links,and personal links (e.g., cooperatives, village communities); by their ability to play thedifferent roles mentioned above; and by the nature of the control of their activity (e.g.,social, administrative, religious). They may be informal, based on common values, reg-istered in the law, or erected in permanent organizational structures.

Resources, uses, and coordination means (i.e., institutions and other organizationaldevices as value systems) compose an appropriation regime of natural resources(Weber & Riveret, 1993). It lies at the interface of both natural dynamics and socialdynamics (Figure 1). Biological, physicochemical, and geophysical cycles are basic tonatural dynamics, whereas individual and collective choices are key to social dynamics.Their determinants and referentials for space and time scales do not necessarily match.4

That is why appropriation regimes are to be considered as complex systems, with simi-larity of issues in principle but high diversity in practice. Understanding of appropriationregimes centered on interaction of social and natural dynamics calls for multidisciplinarycomparative research. This is the case when studying insertion of aquaculture into coastaleconomies and ecosystems. Management of water quality, landscape, and biodiversitywill call for answers appropriate to each specific case in each specific location. In theabundant literature about common property management, various criteria are proposedto measure the efficiency of alternative appropriation regimes: long-term viability, adap-tability, conflict avoidance, maximization of resource rent, and resource preservation orenhancement (Ostrom, 1990). It is beyond the scope of this article to review these pro-posals. Management of renewable resources (to which the environmental issues relatedto aquaculture development refer) appears, then, as a complex and diverse theme thatcannot easily be covered by few theoretical principles.

SOCIETY

SOCIAL DYNAMICS

Value systems /Perceptions \Politics ^LawEconomyTechnologyInformation

/-'"MODE OF ̂ ^ \ ^/ APPROPRIATION \N^

/ USES RESOURCES \ ^(users groups (natural assets in use)and their practices)

V PROPERTY REGIME AND\ COORDINATION MEANS

N. (institutions and other\ ^ organisation forms) ^ /

\ . ^ ^

NATURE

NATURAL DYNAMICS

\\ Biological reproduction

1 Physico-chemical processesJ Geo-physical cycles

Figure 1. The mode of appropriation of natural resources at the interface of social and naturaldynamics (adapted from Weber & R^veret, 1993).

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European Aquaculture and Environmental Policy:Theory and Practice

Keeping in mind the above-defined conceptual framework, the authors will now focuson how environmental policies and resource management schemes can be envisaged orare practically developed in the case of aquaculture. Looking at management within theaquaculture development point of view necessarily restricts the scope of this discussion.As mentioned above, most resources are shared not only among users of one group butamong different users. Uses are not the same for all even when the natural asset they arebased on is the same. Therefore, it should be assumed here that our concern is thesustainable development of aquaculture as one entry to the management of lake, river,or coastal resources. Thus it first will be necessary to review the theoretical options toregulate externalities as the key objective of management policies. Then the major casesof externalities involving aquaculture will be listed. Discussion of both will provide thefoundation for an analytical grid of environmental policies that may be applied to regu-late externalities induced by the common use of renewable resources in relation to aquaculturedevelopment. Finally, a limited number of cases will be reviewed to illustrate the policychoices made in Europe in the area of aquaculture and environment interactions.

The Theoretical Option to Internalize Externalities

Externalities, as defined above, appear as cases where individual actions create scarcityof resources to other users that is not expressed by any change in the cost of access tothese resources. Reducing the environmental benefits of others has no economic cost forthe user that causes the external effects. That is, unless users' rights on environmentalresources are defined to support claims from the receptor to force the emitter of exter-nalities to reduce or compensate for them. In free-access, no mechanism provides a"signal" of the increasing scarcity of environmental resources. When the limits are reachedand negative impacts appear, it is generally recognized that such a signal should begiven to individual actions.

The basic approach to this problem is to transfer the case to a public authority.Because there are no individual property rights on these resources, the state should bearthis responsibility and control externalities by regulatory means such as norms or stan-dards. This is probably the most common way to deal with environmental problemssuch as pollution, but often it has a high cost for society: research to propose scientificbasis for standards and provision of laws and administrative action to implement publicrules. To some extent the cost of regulating externalities can be transferred to thosecausing them, such as by fines put on infringement to laws and costs of control sup-ported by industry. This objective of "internalizing" the social costs of externalities (i.e.,to have the emitter of externalities support the costs put on other economic agents) isthe key question regarding the economic theory of externality regulation or manage-ment. Argument has developed along two basic lines: taxes and property rights.

The first approach advances the idea that a price should be put on limited environ-mental resources by the state through the means of taxes. This is called the Pigovianapproach (Pigou, 1920) and is summarized by the "polluter-payer" principle. Taxes maybe used to compensate agents affected by externalities, to finance administrative regula-tory activity, and to subsidize investment in more environmentally friendly technologyor practices. Properly set, a tax may produce the same result as fixing norms. Practi-cally, the taxation approach has several weak points. Competitivity of industry can be

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affected when tax rates differ from one place to another. Also, it sometimes is difficultto find a basis for taxation that is clearly correlated to the level of externality. There isnot an incentive to invest in more efficient technologies unless tax rates are differenti-ated or subsidies are paid. Lastly taxes are not easily accepted by the public, thereforepoliticians often are reluctant to implement them (Henry, 1989).

The second approach to the internalization of externalities is based on propertyrights. In a famous article, Coase (1960) argued against Pigou that taxes have manydisadvantages. He suggested that the discussion should rather be centered on the defini-tion of property rights over the resources involved in externalities. The ideal case forCoase would be to define property rights similar to the rights applying to tangible items,so that market exchange would solve the case. He recognized, however, that if prop-erty rights do not exist, it is because they are too difficult or costly to define and guar-antee. Again here, the transaction costs of creating the conditions of a market exchangeare too high. If full property rights cannot be ensured, then partial property rights maycontribute to reduce externalities at a limited cost for society. These may be users'rights, such as the right to a quiet environment, to clean air or water, and to a fixedshare of the resource. Standards may work as rights over the environment. Rights alsomay be set as principles that can be used by claimants before a court to obtain compen-sation or reduction of externalities. Coase spoke of appropriate institutions that could actas incentives for economic agents to bargain directly without requesting public interven-tion. If users' rights regarding the environment are clearly defined, a threat to sue theemitter of pollution should be an incentive for direct bargaining over externality reduc-tion or compensation. Thus institutions such as users' rights provide the means to sharethe environmental pie in a way that is satisfactory to all and to have the cost of bargain-ing supported by the economic agents rather than by society.

The property rights approach has inspired many authors and policies under variouslines. One is the search for supports to individual property rights that can be madetransferable, thus giving the role of the regulatory institution to market transaction andprices. Tradable emission permits or individual transferable quotas are based on thisapproach (Gastaldo, 1992). Another favors a definition of general rights that provideslegal foundation for claims over renewable resources (e.g., rights of future generations,rights of endangered species or ecosystems, global quotas). The tenants of the comanagementapproach urge that the right of use be given to user groups that would retain the author-ity to design and implement practical access rules.

Most renewable resources management schemes mix these principles to set means forlimiting and organizing access to the resource benefits. Key questions in defining suchrules remain regarding the proper levels and conditions for their administration so thatmanagement objectives can be met at a reasonable cost. To decide on, change, or imple-ment rules may be costly and inefficient if the majority of participants ignore them.Therefore, between purely state-administered management (public property regime) anda market allocation system (private property regime), many intermediary schemes (com-mon property regimes) generally are found (Berkes et al., 1989). In most cases, state au-thority or an equivalent power plays an important role in guaranteeing the rights. An activecontribution by user groups to the definition and implementation of rules may contributeto the efficiency of a management scheme, however. Participatory management is consid-ered by many authors to be more cost-effective than administrative rule, but as quotedabove a management system cannot be evaluated from only one criterion. Multicriteriaassessment, an area that remains under much discussion, is needed (Goddard, 1993).

In some cases, the source of an externality is difficult to determine. Rather than

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searching for compensation or reduction of the externality, sufferers may decide to pre-serve the economic viability of their activities by sharing the burden with insurancesystems. This would apply in cases of accidental pollution in aquatic ecosystems, wheresources often remain unknown.

Aquaculture and External Effects

Due to high anthropic pressure and lack of adequate policies, most aquatic areas aresubject to conflicting competition over their natural resources. Various social groups,users, and environmentalists claim rights over space, water quality, biomass, landscapes,or remarkable ecosystems and endangered species. As urban areas, industries, tourism,harbor activities, agriculture, aquaculture, and fisheries expand, these resources becomeincreasingly limited. Congestion effects lead to losses of economic efficiency or ameni-ties in the use of natural assets, and in some cases to their destruction. Coastal aquaticecosystems (fresh, brackish, and marine) are particularly affected. Interdependencies withupstream activities along a connected watershed make it difficult to ensure sustainabilityof the major resources for which aquatic ecosystems are valued: space (circulation, aqua-culture facilities), water as a physical asset (irrigation, human consumption), water qual-ity to sustain life (human consumption, tourism, aquaculture, fisheries), capacity of wasteassimilation (industrial or urban, agriculture, aquaculture), exploited living resourcesand primary production (fisheries, hunting, extensive aquaculture), landscapes for theiraesthetic and entertainment value (tourism, urbanization), and remarkable ecosystemsfor their existence value.

The increase in environmental problems with respect to aquaculture results bothfrom endogenous and exogenous causes. The first is due to development of aquaculturethat goes beyond the carrying capacity of ecosystems. The second is due to the compe-tition of fast-growing activities in coastal zones or in close connection with other aquaticecosystems. Aquaculture often is but one activity among numerous uses that demandenvironmental resources. Few categories of externalities involving aquaculture may bedefined as renewable resource or environmental management issues.

External Effects of Aquaculture on Other Activities. Aquaculture is a production activitythat may have an impact on other production or consumption activities on a coastline.First, aquaculture requires land, inducing conflicts both with agriculture (for on-shoreinstallations and for wetlands) and fisheries (off-shore installations). Onshore aqua-cul-ture seawater requirements may be the cause of damage to agricultural soils due tosalinity increase. Second, seed requirements in most extensive forms of aquaculture mayaffect the natural stocks of juveniles and cause damage to traditional fisheries (Phillipset al., 1993). Fish farm waste can bring about enrichment of aquatic ecosystems throughthe release of soluble dissolved nutrients and particulate organic waste. In the case ofoffshore installations, waste dispersion in the flows makes it difficult to appraise impactson the environment. Excessive use of veterinary products, such as antibiotics, also mayhave negative impacts. From a consumer viewpoint, aquaculture modifies the aestheticaspects of a coastline and its value for leisure. This judgment is variable according totraditions and natures of the use of a seashore. What may be considered as part of thelandscape in Matsushima Bay in Japan may be rejected on the French Riviera. Freeaccess to the seashore for tourism (e.g., swimming, sailing) also is restrained by aqua-culture when it is given priority, as in Japan.

External effects of other activities on aquaculture. Given the increase of anthropic

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pressure along rivers and coasts, aquaculture is particularly subdued with respect towater quality and real estate speculation issues. Agriculture (e.g., because of fertilizersand pesticides) and industry cause chemical pollution, whereas urbanization causes bac-terial pollution, all of which limit areas suitable for aquaculture and submit aquacultur-ists to costly controls for water quality and high investments in sea products deprivation.Most often this pollution is from non-point-source discharges, which makes it difficultto implement regulatory policy, voluntary agreements, and economic tools such as taxesor individual property rights.

External Effects on Natural Assets. Mangrove, wetlands, and wildlife destruction istypical. Large areas of mangrove have been cut in tropical countries in order to developintensive shrimp farming. Mangroves are important in coastal protection, and their re-moval may cause coastal erosion and changes in patterns of sedimentation and shorelineconfiguration. Mangrove forests also are used for other products, including lumber, thatchingmaterial, and a variety of foodstuffs. Thus even beyond conservation issues mangroveremoval can have far-reaching economic and social aspects. The value of mangroves issuch that a cautionary approach seems warranted to ensure that an end is put to theprocess of mangrove destruction. Aquaculture also may conflict with conservation ofnature through potential effects such as genetic interaction and disturbance of wildlifecommunities (Gowen & Rosenthal, 1993). Wetlands valued for the habitats they provideto wildlife also may be threatened by aquaculture development.

Externalities Within the Aquacultural Sector. Modifications caused by aquaculture to theenvironment, water quality, water productivity, and substratum condition may impactthe aquacultural activity itself. These interactions may occur between different produc-tions, for example, organic matter settings due to fish farming are a nuisance for sea-weed cultures in Japan and the Philippines. They also may affect the aquaculture enter-prises themselves, either by competition for access to water productivity or by spoilageof environmental conditions. In the first case, the issue is that the water flow that carriesthe food (i.e., phytoplankton or zooplankton) for extensive aquaculture cannot be indi-vidually allocated even when space is individually allocated. If there is no self-designedor externally imposed limitation, producers may attempt to increase their pressure overthe resource. This may lead to overstocking and losses in efficiency. This type of exter-nality within an industry has been analyzed in the case of French oyster farming (Bailly& Paquotte, 1990). The second case refers to an intensification of aquaculture that meansmore water requirements and more fertilizers, industrial feed, and veterinary products,which eventually are discharged into the environment. In some sites characterized bylittle water renewal and weak currents, waste dispersion capacity is not efficient enoughto protect fish farms from suffering from their own waste. Major collapses of tropicalshrimp aquaculture sectors have been caused by such types of self-pollution (e.g., inTaiwan and Indonesia). Spread of diseases among the fish farms is close to an external-ity phenomenon that is not yet fully understood.

Aquaculture and Environmental Policies in Europe

Theoretical options to regulate externalities may be crossed with the various types ofexternalities encountered in the case of aquaculture to build an analytical grid of aqua-culture and environment interaction management. As is true with most policymakingissues, no deterministic rule can be formulated stating that a specific problem is always

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better solved by a specific means of regulation. Different policies may be applied to thesame type of issue under different circumstances, but empirical studies also show thatsome approaches are favored while others simply are not considered at all. This generalstatement, often found in common property resources literature, is confirmed in the caseof aquaculture. The following is a literature survey covering a limited number of casesin Western Europe that illustrate this debate.

Aquaculture in Europe concerns bivalve mollusks and fish, in both freshwater andmarine water. Table 1 shows the present level of production in each country. Regulatoryactivity in the field of aquaculture and environment is limited at the European Union(EU; formerly European Community [EC]) level. The first EC regulation applying tocontinental and coastal waters with the objective of protecting and restoring the environ-ment dates back to the late 1970s. Among others, EC Directive5 85/337 suggested thepossibility of requesting an environmental impact study for any salmon farm above a100-tonne capacity. Since then, the development of coastal and continental aqua-culturein many member states has led to numerous national regulations (Morice, 1994). InNovember 1992, the Hamburg summit reviewed these regulations. Because of heteroge-neity of the regulations and also because of the increasing importance given to thesubsidiarity principle, it is not likely that this will lead to any horizontal legislation atthe European level. Recommendations and directives probably will be the main inter-ventions from European institutions toward aquaculture, as they are for all issues relatedto coastal or continental aquatic ecosystems and water resources management. Practi-

Table 1Production of aquaculture in Western Europe in 1994 (in tonnes)

Species

GermanyAustriaBelgiumDenmarkSpainFinlandFranceGreeceIrelandItalyNetherlandsPortugalUnited KingdomSwedenSwitzerlandNorwayIceland and Feroe

Total

Bivalves

25,000

120,000187,000

140,00021,00018,000

124,000107,000

2,6008,000

800

853,400

Salmonidsin seawater

8,5001,000

14,0001,900

12,000

65,000

220,00012,000

334,400

Other sea-water fish

5,000

4,00013,000

7,600

500

30,100

Freshwaterfish

39,0004,0002,300

35,00021,5004,000

59,0002,700

90055,7002,0001,200

13,0005,2001,1007,5002,000

256,100

Total

64,0004,0002,300

163,500214,500

18,000304,90036,70030,900

187,300109,000

4,30086,0006,0001,100

227,50014,000

1,474,000

Source: European Commission (1995); IFREMER (1996); and Food and Agriculture Organiza-tion (1995).

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cally, design and implementation of the rules will be left to national, regional, or localauthorities, with broad guidelines and general standards or principles being set by theEuropean authorities. This is already the case with the Habitats Directive (92/43), theUrban Wastewater Treatment Directive (91/271), the Quality of Bathing Water Directive(76/160), the Birds Directive (79/409), and many others (Convery, 1995). Thereforeenvironmental policies applying to aquaculture are best reviewed at the national level, asin the following cases of regulations applying to freshwater finfish aquaculture and tomarine aquaculture.

Freshwater Aquaculture and Environment in Denmark and France. In Denmark, thefirst legislation concerned with the pollution of rivers and groundwaters by finfish aqua-culture dates back to 1974. Actual implementation of water quality objectives in thenational plan only began in 1989, however, following a decree that sets

• limits for physicochemical parameters, such as nitrogen or phosphorus emissionsand suspended matter concentration;

• limits for feed inputs (a maximum is set to 1.2 times the average feed quantitiesused between 1984 and 1988);

• an obligation to build water purification facilities, such as tanks and filters; and• an administrative obligation to declare animal stock levels and quantities of feed

distributed.

Thus the major means for further developing production within these environmentalconstraints become the innovations in terms of feed quality: better conversion rate andbetter reduction of waste. Based on the Environment Protection Law, a decree passed in1991 makes it obligatory for new fish farms and those planning modifications to exist-ing farms to realize an environmental impact study and to propose environment protect-ing technical solutions. The Danish farmers' federation is strongly opposed to this set ofregulations, claiming that it is discriminatory because no similar limitations apply tocompetitors in other European countries and because it forces the industry to underuseexisting productive capacity. In the field, most of these problems seem to have beensolved by direct negotiation with the administration, and positive effects on the environ-ment have been acknowledged (Tesson, 1994).

In France, all finfish farms above a 20-tonne capacity (10 tonnes in the case ofsalmon) have been subject to the exploitation permission regime since 1985. This re-gime requires a process of public consultation and environmental impact assessment inorder for a permit of operation to be granted for a farm. Its objectives are to ensure bothpublic information and environmental protection by allowing any potential sufferer toclaim his or her rights and oppose to the project. Negotiations between farmer associa-tions and the river basin agencies began in 1992, with the support of the EnvironmentMinistry, to envisage the feasibility of a water tax to be paid by the farmers to theagencies. River basin agencies are in charge of managing water quality of the mainrivers and their watersheds. The agencies' main sources of financing are the state anddirect receipt of water taxes from various users' groups. The general principle applyingto water taxes received by these agencies in France is that the money should support themonitoring activities of the agencies and also be partly allocated to redistributive incen-tives, such as grants or low-rate credit for water taxpayers to invest in low-pollution ordepollution technology. Negotiations with users' groups like fish farmers are about thebasis and level for tax calculation, which should express the real effort put into limitingemissions into the ecosystem. With or without the support of the agencies, an invest-

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ment in reducing pollution should lead to reduction of the tax paid. In the case ofaquaculture the main parameters considered for calculation of the tax are suspendedmatter, nitrogen, and phosphorus emissions to be calculated in feed input equivalent.

Marine Aquaculture and Environment in Scotland, Norway, and European Mediterra-nean Countries. Most of the regulations applying to marine finfish aquaculture are basedon freshwater aquaculture regulations that are not fitted to marine aquaculture condi-tions where emissions are more rapidly diluted. Effluents are difficult to measure becausethey rapidly disappear. The nitrogen and phosphorus contributions of finfish speciesare not yet precisely known, except in the case of trout and salmon excretions, forwhich scientific data do exist (Kempf et al., 1994). For other species, further research isneeded. Because the dispersion potential of coastal waters varies greatly from one placeto another, standards almost need to be defined on a case-by-case basis. In some countriesa solution is to impose a minimum distance between rearing structures in the sea.

In Scotland, farming of salmon Salmo salar has developed rapidly since 1970. In1994, production was 63,000 tonnes. Regulations have been developed progressively onan empirical basis, when and where problems have appeared, before being put into acoherent set of rules. The present system has been operational since 1989, with a keyobjective being the avoidance of long-term degradation of the ecosystems. The Environ-ment and Fisheries and Agriculture Departments of the Scottish Office coordinate theregulations. The Crown Estate Commission and the River Purification Authorities alsoare involved in the process for obtaining permission to start a farm. A 28-day publicenquiry and an environmental impact assessment are the main components of this pro-cess. The impact study is compulsory only above a certain volume of production orcage area; values are set according to the exchange rate of the water. In closed lochs, animpact assessment is needed above 2,000 m2 cage area. In the open sea, the limit is setto 12,000 m2 or 500 tonnes. A study by the Nature Conservancy Council published in1989 confirmed that the impact of salmon farms on water quality depends largely on theopenness of the area. In closed lochs, aquaculture waste (i.e., feces and uneaten feed)may modify the ecosystem significantly.

The River Purification Boards (RPBs) are responsible for monitoring effluents incoastal waters up to 3 miles from the coast and thus have authority to measure wastesemitted by aquaculture farms. Control is based on a pollution discharge permit. Thetotal discharge allowed to a farm is expressed in a total weight of nitrogen emissionobtained by multiplying the annual production target by 123 kilograms of nitrogen pertonne of fish. If a higher level of waste is calculated, a farm may lose its right to usepublic space and the case may be brought to court (Richards, 1992).

This set of norms and principles may be criticized from various points of view.Criteria for standard definitions are a matter of measurement and valuation, and are notnecessarily technically or socially efficient. Both may be easily contested. Measurementin the sea is difficult and valuation can be subjective. The RPBs' capacity to monitoraquaculture standards and their power to enforce the standards through administrative orlegal action seems questionable in light of breaches. Costs of the control mechanism andefficiency of the standards as incentives for producers to improve rearing techniques areother economic efficiency issues that are presently being discussed (Soley et al., 1994).

The initial development of salmonid farming in Norway took place in shelteredembayments with little regard for environmental consequences. Enrichment of the sea-bed ecosystem, enrichment of the water column, and resistance to pesticides in sea licepopulations were noted, but did not lead to a reduction of the activity (Gowen & Rosenthal,

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1993). Given the ability of soils to regenerate because of water flows, rotation of cageswas first advised. Later, technological innovations allowed for access to more openwaters with higher dispersion capacity. Despite this trend, the rapid growth of the indus-try met its environmental limits in many areas. Today Norwegian salmon aquaculture isstrictly controlled under a set of regulations, the Fish Farming Acts of 1973 (Breiby,1986). A license to start an aquaculture production and the possibility to operate it arebased on restrictive conditions that all refer in one way or another to potential impactson the environment. It takes an average of 10 months to obtain a license. Cage area wasoriginally set at 800 m2, but was extended to 1,200 m2. This limit soon will be expressedin production volume rather than in area, which does not work well as a limit of impacton the environment. Minimal distance between two farms is one kilometer. Maximaldensity offish is set to 25 kg/m2, and the feed conversion ratio is to be kept below 1.2.The sea bottom must be monitored. For onshore-based farms, all effluents must be treatedand solid waste collected by an authorized enterprise. Each farm must provide an annualreport to the Environmental Department, covering, for example, stock, mortality, vol-ume of feed used, and escapement.

Presently, the main problem in Norwegian aquaculture is the spread of disease thathas led to production losses in many regions. The links between environmental condi-tions and disease outbreak are not yet fully understood. The impact of aquaculture onunfarmed salmon stocks, because of disease transfer or hybridization, is a major sourceof conflict between aquaculture and fishers' associations and environmentalist groups.Diseases are a major cause of the high mortalities recorded in unfarmed stocks, alreadybadly affected by acid rain (Landesman, 1994). Escapement from aquaculture cages andthe use of veterinary products, such as antibiotics, are under strict control.

Anthropic pressure is low along most of the Norwegian coast. This probably is onereason that aquaculture was able to develop to its present stage. Even if external pollutionand claims for other uses did not constrain aquaculture development, it would be self-constraining. Water exchange with the open sea is rather low in many fjords, thus aqua-culture tends to destroy its own environment and the environment of unfarmed salmonpopulations. The need to limit farmed stocks in relation to interests of the industry and toclaims from other interest groups motivated the LENKA program, a "nation-wide assess-ment for the suitability of the Norwegian coast and water courses for aquaculture," begunin 1987. Three types of coastal areas have been defined: open coastal areas and largefjords, open areas and fjords, and small silled fjords and other enclosed areas. Objectivesof the program are to calculate an "available capacity of organic loading" and an "areacapacity." Available capacity of organic loading is expressed as the total loading ofnutrients that an area can tolerate, including all potential sources. Area capacity is themaximum aquaculture biomass that an area can host; thus, in some areas, aquaculture hasbeen prohibited. The program also has assessed potential conflicts among users' groupsand the need for infrastructure, and has concluded that support of coastal zone and riverplanning by municipality and county authorities is necessary. It also has facilitated thelicensing process, but has not been accurate enough to optimize the location of cages inthe fjords. Further development of the LENKA data base is seen as necessary in anintegrated geographical information system for the coastal zone. Such assessments havebeen based on the present dominant farming technology, and conclusions will have to berevised if major technological change is to happen (Ibrekk et al., 1993).

European Mediterranean countries (Spain, France, Italy, and Greece), have seen therapid development of finfish farming (sea bass and sea bream) since the early 1980s.Because coastal waters are state property, a license or permit is required in all Mediter-

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ranean countries to start a fish farm. In decisions to allow fanning activity, the weight ofenvironmental concerns varies from one country to another. As mentioned above forfreshwater farming, France fish farms over 20 tonnes have to realize an environmentalimpact assessment as part of their application for an exploitation permit. Because of thelack of sufficient knowledge, the definition of proper environmental protection and monitoringis set on a case-by-case basis in concert with research organizations. This is an expensiveand time-consuming procedure at present. In Greece, the Agriculture Ministry coordinatesthe powers of agencies concerned with a potential interaction with aquaculture, such asEnvironment, Navigation, Tourism, Fisheries, and Antique Preservation. An impact studyis requested and a minimum distance from other farms must be left. Other criteria are setconcerning rearing density, feed quality, monitoring of the sea bottom, and site rotation,but the criteria are indicative rather than effectively controlled (Zanou, 1994). In Mediter-ranean finfish farming, there seem to be no major problems from negative impact on anaquaculture farm by another farm. Few cases of self-induced pollution by degradation ofthe bottom conditions have been recorded in Greece (Klaoudatos, 1994).

In Mediterranean fish farming, the major environmental conflict is with the tourismindustry. The economic importance of tourism makes it a strong interest group thatopposes the development of aquaculture in many locations. The preservation of marinelandscapes is argued for refusing licenses or obtaining their withdrawal. Such conflictsare numerous, sometimes completely preventing the development of aquaculture or forc-ing farms to close down. When put to the court, the legal foundations for a judgmentare usually based on general principles, such as those set by the "Coast Law" in France,or indicative or constraining land use planning. In most cases, the zoning established bylocal planning agencies is defined from a land perspective and rarely considers potentialoccupation of the sea. Priorities in use of the sea are set according to priorities given forland occupation. On the French Riviera, a farm was forced to move to another locationwhen claims were put to the court on grounds of the Soil Occupation Plan (POS) thatdefines the area as "touristic." The case is under appeal. In Peloponisos, Greece, anindividual claimed that his land located on the shore had lost value because sea basscages had modified the landscape. The case was lost by the claimant because the farmfully respected aquaculture regulations (N. Papandroulatis, personal communication).

Similar difficulties have been encountered by Irish salmon and shellfish farmers.Claims have arisen mainly from environmentalist groups. Political pressure on local au-thorities to oppose aquaculture development also is strong in some locations, either inconnection with environmental or touristic issues. In Ireland, the conflict is not limitedto case-by-case negotiations and administrative or court decisions as it is in the Mediterra-nean. There the designation of areas for ecological purposes (biodiversity preservation)becomes a legal framework that strongly limits the conditions of aquaculture develop-ments. In the Netherlands, environmentalist claims over the preservation of unfarmedmussel stocks for feeding the bird population have engendered another major conflictduring the past years. These claims, strongly backed by the public opinion, forced themussel fanning industry to reduce the quantity of young mussels collected from thewild. Large areas of the Wadden Sea have been closed to mussel fishing (Dankers &Zuidema, 1995).

Conclusion

It appears from this brief review that in Europe the most common way to control impactof aquaculture on the environment is first to request an environmental impact assess-

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ment and then to set emissions standards and requirements for treatment installations(Jensen, 1990). In the case of freshwater trout farming on inland rivers, such regulationis relatively easy to set up, although it has not always proved to be efficient. That iswhy requirements have been extended to the composition of fish feed and to an annualmaximum allowable feed consumption. An administrative regulatory approach prevailsin setting such standards, but aquaculture industry representatives seem to play an im-portant rule in defining these norms. Most of the regulations apply to nitrogen, phospho-rus, and suspended matter concentrations. Veterinary products, such as antibiotics, areless often covered by regulation. Concerns about the pathological or genetic impacts onaquaculture stocks and unfarmed stocks are still less visible in the law. Disputes arisingin Norway have put this issue on the agenda. Few cases of taxes based on feed or othersupplies are recorded as incentives for better husbandry and to lower the feed conver-sion ratio. Their role may increase in the future, which is supported by the general trendto develop environmental taxes. Such taxes are intended to limit self-induced pollutionand impact on other related activities or ecosystem viability. Tradable emissions permitsystems do not exist in aquaculture, though such possibilities have been discussed forfreshwater aquaculture.

Environmental regulation applying specifically to aquaculture in Europe mainly con-cerns aquaculture as a source of pollution, either to the overall quality of the ecosystemor to itself. Standards, taxes, and subsidies systems are set to control emissions fromaquaculture. Criteria for determining adequate waste levels refer to the carrying capacityof the ecosystem (a controversial issue) and to the preservation of environmental qualityfor aquaculture itself. Prohibition as a zero standard also exists regarding protection ofwater quality, preservation of the genetic pool, and preservation of the landscape. Onthe side of protecting aquaculture from external pollution, little has been done apartfrom general environmental regulations that only apply in cases of catastrophe (i.e., highmortalities) for which a cause can be precisely identified. Even then the proof is oftendifficult.

The difficulty for aquaculture to have its environmental needs legally recognizedmay be explained by various factors. In many cases, negotiating powers of externalsources (e.g., industrial, urban, agriculture waste) are much stronger than the ability ofaquaculture to voice its concerns in the process of setting aquatic ecosystems manage-ment schemes. The reasons for this may be its relatively low economic weight and poorpolitical connections. Complexity of the issues, including the difficulty of ascertainingmany cause-effect relationships in the environment, also contributes to this difficulty,but the preference for administered rule also limits efficient management. High variabil-ity of phenomena and multiplicity of interdependencies between the users' groups in-volved sometimes make administrative rule irrelevant for river or coastal management.Responsible participatory management (where users' groups such as aquaculturists wouldbe involved with the backing of public authority) probably would be a better approach.In most of the cases presented above, attempts to obtain direct involvement from pro-ducers in setting and implementing rules have been quoted. Yet principles and commonvalue systems to be attached to such practices must still be designed in many cases ifthe goal of participatory management is to be met. Little is available from the literaturetoward understanding the determinants of the policy choices observed above. They maybe easily presented as the result of power relations among users' groups with adminis-tration. As also mentioned above, the diversity of determinants for externality regulationsuggests that the case is much more complex and that explanations should be searchedfrom a more analytical perspective. The framework developed in this article may pro-

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vide a foundation for further empirical studies and comparative analyses that are neededto respond to the rapidly growing environmental problems in aquatic ecosystems asaquaculture continues to develop.

Notes

1. This essentially refers to aquatic ecosystems, and productivity is of course a componentof quality. The reason for differentiating them is because there is a difference between environ-mental characteristics acting as a constraint for viability of fanned species (physical and chemicalcharacteristics) and those acting as a direct contribution to the productivity of aquaculture sys-tems (biological productivity in the case of extensive production).

2. We shall leave aside here the debate about "sustainability" as a policy objective. We onlymay make the following remark about the desire for long-lasting economic activities. Speaking instrict economic terms, if the investment in shrimp aquaculture (including the costs of reclaimingcoastal land and coastal water quality for other uses) has brought positive returns to be investedin other businesses, there is not much to be concerned about with the eventual stoppage ofshrimp production. One problem is that generally only private costs and benefits are consideredand social costs are ignored. Another problem is that farmers may have lost their only capital(land) and may not be able to move to another business.

3. Collective here does not refer to the global outcome of aggregated individual choices, theindividual being private decision centers such as households or firms. Considered as collectivedecisions and organizations are any agreements between a minimum of two individuals that arenot based on a market transaction. The highest level of collective choice or action is the publicauthority (the state and its administration), which also retains the power to guarantee rights andinstitutions. The most deeply rooted collective level is probably common knowledge or valuesystems.

4. For example, it may take centuries for some of the mangrove forests cut for shrimpaquaculture to return to their level of functionality toward coastal ecosystems, whereas it maytake only 6 months to obtain a return on the investment in a shrimp pond.

5. An EC directive does not have force of law, but it may propose indicative or constrainingobjectives to be interpreted and transcribed according to the specificities of the national laws ofeach member state.

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