Savings the Seas? The Economic Justification for

Marine Reserves by

R. Quentin Grafton (CRES, ANU)Pham Van Ha (ANU) Tom Kompas (ABARE & ANU)

ABARE Fisheries Resources Research Fund ProjectContact E-mail: grafton@cres.anu.edu.au

at Bureau of Rural SciencesMarch 12, 20004

Motivation• Currently, Australia has several hundred marine

reserves and two of the world’s largest reserves (GBRMP, Heard & McDonald Islands).

• Reserves (especially marine reserves) as a management tool are receiving increasing attention (e.g. WSSD 2002) in response to growth, recruitment and economic overharvesting and mismanagement of marine resources.

Potential Benefits of Reserves

• If population exhibits density dependent growth then at low levels of population (high rates of exploitation) reserve can increase abundance and may even raise harvest.

• Reduced probability of extinction or extirpation as can have protected population greater than minimum viable.

• More desirable population structure (older & larger individuals that are more fecund) that increases mean recruitment plus biodiversity & recreational values.

Optimal Reserve Size?

• Despite proposed widespread use of reserves, there remains a key unanswered question---what should be their optimal size taking into account both sustainability and net returns from harvesting?

• The answer will vary across populations and requires a bioeconomic model of reserves that explicitly accounts for uncertainty to assess impact on resilience and variability of population, harvest and rents.

Bioeconomic Model

• In absence of harvesting population growth is governed by logistic growth

• Maximize inter-temporal rents defined by

( , ) ( ) ( , )NRxh x p h h c hK

( ) (1 )xf x rxK

Model of Reserve

• In case of permanent reserve that protects of population, the corresponding growth

functions are[0,1]s

( , ) (1 )RR R

xf x s rxsK

( , ) (1 )(1 )

NRNR NR

xf x s rxs K

Optimisation Problem

,0

( , ) max ( , , )tR NR s h NRV x x e h x s dt

Subject to[ ( , ) (1 ) ( )] ( ) ( )

(1 )NRR

R R R Rxxdx f x s s K dt g x dW x dq

sK s K

[ ( , ) (1 ) ( ) ] ( ) ( )(1 )

NRRNR NR NR NR

xxdx f x s s K h dt g x dW x dqsK s K

0 (0)x x

Parameter Values for Simulations

• a= 0.35 b= 0.2, = 0.05, transfer rate = 0.3125 and estimates from Canada’s northern cod fishery (1962-1991) used to obtain r=0.30355, K=3.2 million and =0.35865.

• Diffusion: g(xR) = 0.01 xR and g(xNR) = 0.01 xNR • probability of natural catastrophe of 0.1 and

magnitudes

( ) 0Rx ( ) 0.10NR NRx x

Figures1. Value function with identical negative

shocks2. Value function with different shocks3. Harvest rate with different reserve sizes4. Resilience and reserve size5. Discount rate and reserve size

Resilience Effect

• Key and general result of paper is that resilience (speed to return to former state) of exploited population increases monotonically in reserve size. Effect is different to population persistence or ensuring a minimum viable population.

• Reserves are valuable because they act as buffers following a negative shock that allows additional harvesting because of transfers from reserve.

‘Rules of Thumb’

Optimal reserve size is increasing the:1. Larger magnitude or likelihood of

negative shocks in the fishery2. Smaller are shocks on reserve3. More actual harvest exceeds optimal

harvest4. Lower intrinsic growth rate5. Lower the discount rate 6. Larger the transfer rate

Concluding Remarks

• Model allows us to determine optimal reserve for any fishery subject to stochastic shocks.

• Results indicate value of ‘small’ or ‘adaptive’ reserves that generate a ‘win-win’ and provide‘rules of thumb’ about reserve size.

• To optimally set reserve size, initially establishing small reserves then collect data & experiment to then determine optimal size is consistent with active adaptive management.

BRS Seminar Next Week – Friday 27 February 

 Kevin Paris

Agriculture Directorate, OEDC, Paris 

11:00am - 12:00noon, Friday 19 March 2004EBB Conference Centre (in the courtyard)

Edmund Barton BuildingKings Avenue, Canberra

OECD Work on Agri-environmental Policies and Indicators:

What have we achieved and where to next?