Proceedings of the 2 nd Annual Beaufort Marine Socio-Economic Workshop Organised by SEMRU (Socio-Economic Marine Research Unit), National University of Ireland, Galway in association with the Marine Institute, Ireland Proceedings of the 2nd Annual Beaufort Marine Socio-Economic Workshop Wednesday, 17th November, SAC Room (CA 110), J.E. Cairns School of Business and Economics, National University of Ireland, Galway, Co. Galway Organised by SEMRU (Socio-Economic Marine Research Unit), J.E. Cairnes School of Business and Economics, National University of Ireland, Galway. Compiled by: Stephen Hynes (SEMRU, National University of Ireland, Galway) Copies can be downloaded from: http://www.nuigalway.ie/semru/documents/beaufortworkshop2.pdf Table of Contents Introduction .............................................................................................................. 2 Stephen Hynes, SEMRU, NUI Galway Quantifying the Value of the Marine Sector in Ireland............................................... 3 Karyn Morrissey, Stephen Hynes, Cathal O’Donoghue, SEMRU, NUI Galway The Role of Marketing in Driving the Sustainable Consumption of Seafood............... 5 Ann Walsh, SEMRU, NUI Galway Marine Biotechnology, Ireland and the European Bio-Economy. A complex pattern of opportunities ............................................................................................................ 7 Ilaria Nardello*, The Marine Institute, Galway and Ryan Institute, NUIG Neglect of the Maritime in Irish Culture and Society.................................................. 9 Jim Mac Laughlin, political geographer and author of “Troubled Waters: A Social and Cultural History of Ireland's Sea Fisheries” Four Courts Press, Dublin. Hedonic Valuation of Proximity to Coast and Beaches in Ireland ............................... 9 Seán Lyons, Karen Mayor, David Duffy and Richard Tol, ESRI, Dublin Evaluating the Non-Market Value of Ecosystem Services Provided by Galway Bay .. 10 Daniel Norton and Stephen Hynes, SEMRU, NUI Galway Agricultural Catchments Programme socio-economic analysis of farmer attitudes to water quality regulations......................................................................................... 12 Cathal Buckley, Agricultural Catchments Programme, Teagasc Estimating the Value of Water Bodies in Ireland Achieving “Good Ecological Status” under the Water Framework Directive .................................................................... 14 Mavra Stithou, Stephen Hynes, Nick Hanley, University of Stirling, Scotland and SEMRU, NUI Galway An Economic Profile of the Irish Off-Shore Fishing Fleet 2006 -2008.................... 16 Patrick Gillespie and Stephen Hynes, SEMRU, NUI Galway The Application of Portfolio Theory to the Management of Irish Fish Stocks ........... 18 Benjamin Breen and Stephen Hynes, SEMRU, NUI Galway The Rise and Fall of the Irish Orange Roughy Fishery: An Economic Analysis ........... 20 Naomi Foley, Tom van Rensburg, and Claire Armstrong, SEMRU, NUI Galway Collecting fishers’ knowledge: A chance for social scientists to become fisheries scientists ................................................................................................................. 22 Edward Hind, School of Political Science and Sociology and SEMRU, NUI Galway Annex 1 ................................................................................................................... 24 Annex 2 ................................................................................................................... 25 1 Introduction Stephen Hynes, SEMRU, NUI Galway Introduction On Wednesday the 17th November, SEMRU (the Socio-Economic Marine Research Unit) in association with the Marine Institute held the second annual Beaufort Marine Socio-Economic Workshop. This annual workshop is an opportunity for researchers and policy makers in the area of marine socio-economics, working in Ireland, to get together to meet and discuss their on-going work. The J.E. Cairns School of Business and Economics, NUI Galway hosted this year’s event. The workshop was divided up into 3 sessions. The topic of the morning session was “The Irish Ocean Economy: National and Sectoral Perspectives”. The second session was dedicated to “Water Quality and the Environment” and the evening session was entitled “Fisheries Management in Ireland”. Speakers on the day discussed such diverse marine socio-economic topics as the role of fishers in the formation of scientific marine policy to the valuation of the Irish Ocean Economy. There were 9 presenters on the day from academic institutions across Ireland including University College Cork, NUI Galway, the University of Ulster and the Rural Economy Research Centre, Teagasc. SEMRU and the Beaufort Socio-Economic Award This annual workshop is held as part of the work program of the Beaufort Socio-Economic Research Award. SEMRU, based in NUI, Galway was set up though the commitment in funding from the Beaufort Award under the Marine Research SubProgramme of the National Development Plan 2007–2013. Personnel from a range of university departments are actively involved in the Beaufort Socio-Economic Research Award Work Program. These include members of the Department of Economics, the Department of Marketing, the Department of Management and the Department of Political Science & Sociology. Other research institutes across Ireland and the UK also collaborate on projects within SEMRU. These include the Rural Economy Research Centre, Teagasc, the Irish Marine Institute and the Department of Economics, Stirling University, Scotland. Three PhD students are currently funded under the Award with a further 2 PhD students within the Unit. There are currently 13 active research projects within the unit. The main research focus of the unit is on the economic importance of coastal and off-shore marine environments. This involves examining the economic utility of the marine environment (e.g. transportation, recreation) and ecological value (e.g. fisheries, aquaculture) derived from the productivity of associated ecosystems. The coastal and contiguous marine environment surrounding Ireland and the EU in general provides the geographical focus for the research of the unit. Consideration of the human dimension in the management of marine ecosystems is also a critical component of all research projects within the unit. Unit projects include the collection and monitoring of socio-economic marine data for Ireland, the estimation of participation rates and value of marine-related recreation activities and an analysis of market orientation, competitiveness and innovation of firms in the Irish seafood sector. The unit has also been successful in the last 12 month in getting EU INTERREG IV and EPA funding to carry out further research in the areas of marine biotechnology and the economic valuation of achieveing “good ecological status” under the Water Framework Directive (see www.nuigalway.ie/semru for further information on the activities of the unit). Given one of the main aims of the Beaufort Award is to build marine socio-economic research capacity in Ireland, this second workshop was once again a means of finding out what others in the marine research community are working on. The exchange of knowledge in the area of marine socio-economics is of benefit not only to the different research institutes but also marine policy makers. In what follows, the presentations given on the day of the workshop are reviewed in two page summaries. The growth in SEMRU research activity since last years workshop is reflected in the number of papers presented by SEMRU team members at this year’s event. 2 Quantifying the Value of the Marine Sector in Ireland Karyn Morrissey, Stephen Hynes, Cathal O’Donoghue, SEMRU, NUI Galway Introduction 2 Ireland’s ocean resource consists of 900,000km of seabed and 1448km of coastline (Cooper, 2009). Economically, Ireland depends heavily upon its maritime transportation sector with 95% of the value and 99% of its trade transported by sea (Shields et al., 2005). To date, however, little emphasis has been placed on the development of the marine sector in Ireland. However, the realisation that the world’s oceans play an important role in climate regulation and many territory activities, notably food production, coupled with economic changes and the rapid advancement in ocean technology have seen a shift in the perception of the importance of the marine resource. Research on the economic value of the marine sector in Ireland has been limited to date. This is mainly due to the difficulties in empirically measuring a multi-industry resource such as the marine sector. The fragmented, cross sectoral nature of the marine economy and the difficulty in distinguishing between land-based and marinebased activities (Kildow and McIlgorm, 2010) has meant that national economic datasets do not explicitly contain a marine sector. Thus, the aim of this paper is to define and describe the marine sector in Ireland, to quantify it according to economic parameters and to establish its importance to Ireland. Following on from the work by Shields et al., (2005) and employing a new methodology an up-dated value of the marine sector is estimated using four different parameters: turnover, Gross Value Added (GVA), employment and indirect GVA. These parameters are in turn broken down across the main commercial sub-sectors: marine services, resources and manufacturing. Methodology Drawing on the 5 step methodology devised by the National Oceans Economic Programme (NEOP) in the US (Kildow and McIlgorm, 2010), this paper aims to define and quantify the value of marine sector to Ireland in 2007. The methodology may be defined as: 1. Define the industries that are part of the marine economy 2. 3. 4. 5. Identify publicly available economic data Collect non-public data from alternative data sources or a survey Record the economic indicators of interest Ensure consistency of data across different data sources, compile the data and provide sectoral and spatial breakdowns of the value of the marine sector Morrissey et al., (2011) provide a comprehensive outline of the methodology and its application to the Irish marine sector. Table 1 Turnover, GVA and Employment in the Irish Marine Sector in 2007 Turnover €million GVA €million Direct Employment Marine Services Shipping & 889 Maritime Transport Water Based 944 Tourism Cruise 45 High Tech 44 Services Marine 100 Commerce Other Marine 140 Services Marine 2,162 Services Sub Total Marine Resources Sea-Fisheries 251 Aquaculture 105 Seafood 396 Processing Seaweed 18 Oil & Gas 197 Renewable 6 Energy Marine 974 Resources Sub Total Marine Manufacturing Marine 265 Manufacturing Marine 265 Manufacturing Sub-Total Total 3,401 329 2,194 453 5,836 30 27 0 350 47 65 62 569 949 9,014 100 42 88 2,200 1,061 2,090 9 137 4 185 790 101 381 6,427 110 1,600 110 1,600 1,440 17,041 3 The Value of Ireland’s Marine Economy This paper estimated that the marine economy had a turnover of €3.4 billion in 2007, of which €1.44 billion was attributable to GVA (Table 1). The marine economy employed approximately 17,000 individuals in the same period. Ireland’s total Gross Domestic Profit (GDP) in 2007 was €189.7 billion. Hence, 1% of GDP was derived by the marine sector. Table 1 indicates that marine services accounted for over two-thirds of total marine turnover. This sub-sector is dominated by marine tourism and maritime transport. The analysis further found that companies involved in marine resources (primarily marine food) are the second largest subsector and account for approximately 28% of total turnover in the marine economy. The marine manufacturing sector is the smallest sector, contributing 8% to annual marine turnover. A Comparison with Previous Estimates Ireland’s economy grew substantially over the mid part of the decade. It is therefore interesting to examine if the same economic growth was experienced in the marine sector. A comparison of the GVA and employment for each sector in 2003 (the baseline year taken in Shields et al., (2005)) and 2007 was therefore undertaken. To ensure comparability of estimates between 2003 and 2007 some methodological adjustments have been made to the estimates presented in Shields et al., (2005). Morrissey et al., (2011) provide a detailed overview of these adjustments. Based on these adjustments it was found that the marine sector grew from €0.865 billion in 2003 to €1.4 billion in 2007. This represents a 66% increase in GVA. Over the period, employment in the marine sector increased by 7% from 15,924 to 17,041. During the same period GVA increased by 36% across the Irish economy and employment increased by 17%. The marine sector therefore grew at a higher rate than the wider Irish economy during this period. Examining this growth across the three main sub-sectors, this high level of growth is mainly attributable to the marine services sector, which experienced over a 100% increase in GVA and 11% increase in employment between 2003 and 2007. This substantial increase in growth is mainly due to large increases recorded in the marine transportation and marine tourism sector. Marine resources also increased its GVA from €338 million to €379 million. However, employment in marine resources fell slightly from 6,962 to 6,427. This decrease in employment is mainly due to quota restrictions for sea-landings and the resulting decrease in total fishing effort. The knock-on effects of reduced sea-landings are also apparent in the seafood processing sector, where employment in the sector fell from 2,800 to 2,090 employees (-25%). The manufacturing sector is not directly comparable due to methodological differences between the two reference years (Morrissey et al., 2011). Conclusions The value of the marine sector to the overall national economy has been previously under researched in Ireland. Traditionally seen as a sector dominated by the seafood industry, a report on behalf of the Marine Institute, by Sheilds et al., (2005) showed that two-thirds of the value of the marine sector was derived from the service sector in Ireland. Using a methodology that drew on previous international studies (Kildow and McIlgorm, 2010) and refining it meet the data necessary to estimate the Irish marine sector; it was found that the marine sector provided €1.4 billion (1%) in GVA to the Irish economy in 2007. The sector employed over 17,000 individuals (FTE). The analysis further found, that similar Shields et al., (2005) and other international marine studies, marine services provided the greatest share of GVA, particularly water-based tourism and shipping activities. The paper further found that the economic growth experienced by the marine sector from 2003 to 2007 (66% increase in GVA) outperformed the wider Irish economy during the same period. References Cooper, J.A.G. (2009). Coastal economies and people, In Marine Climate Change Ecosystem Linkages Report Card, (Eds.) Baxter JM, Buckley PJ and Frost MT), Online science reviews, 18pp. www.mccip.org.uk/elr/coasts Kildow, J.T., McIlgorm, A. (2010). The Importance of Estimating the contribution of the Oceans to National Economies, Marine Policy, 34, 367-374. Morrissey, K., Hynes, S. and O’Donoghue, C. (2011). Quantifying the Value of Multi-Sectoral Marine Commercial Activity in Ireland, SEMRU Working Paper Shields, Y., O’Connar, J. and O’Leary, J. (2005). Ireland’s Ocean Economy and Resources, Marine Institute, Renville, Oranmore, Co. Galway. 4 The Role of Marketing in Driving the Sustainable Consumption of Seafood Ann Walsh, SEMRU, NUI Galway Introduction The concept of sustainability is increasingly being addressed theoretically by scholars and practically by managers and policy-makers (Hult, 2011). Over the past ten months alone, three leading marketing journals (Journal of Academic Marketing Science; Journal of Macromarketing and Journal of Consumer Behaviour) have devoted special editions to the subject of sustainability, with many more journals set to release further special editions devoted to sustainability in the coming months. Burroughs (2010) reflects the views of many authors when he states simply that the current system of everexpanding production and consumption is unsustainable. Literature Review Thogersen (2010) states that there is a growing consensus in society that altering consumption patterns is one of humanity’s greatest challenges in the quest for environmentally sound and sustainable development. The extent of the challenge is highlighted by the fact that consumption is the means by which progress has been achieved in Western societies over the last century (Prothero et al. 2010). The orthodox political perspective on “progress” continues to equate social progress and the pursuit of economic growth, with most economic growth being derived from increased personal consumption (Varey 2010). Consumption is a central component of the dominant social paradigm that prevails. Consumerism is set to continue. Burroughs (2010) warns that countries such as Brazil, Russia, India and China are poised to join the global consumer economy i.e. another three billion individuals who want to participate as fully in the consumer society as their Western counterparts. Meeting this demand, according to Jackson (2009), would mean that the global economy would need to be fifteen times larger than it is today. Burroughs (2010) goes on to report that attaining an economy of this size would require sustained world-wide economic growth of about 7.2% annually. To put this in perspective, in 2007 (the year just before the global economic meltdown), the worldwide economic growth peaked at 4.9% (IMF 2008). Burroughs (2010) claims we would have to start consuming resources nearly 50% faster than we do now and continue this pace almost indefinitely. According to the Worldwatch report (2004), while the US and Western Europe only represent 12% of the world’s population, these countries account for 60% of the world’s consumer spending. The report goes on to note that US consumers, while only 5% of the world’s population, consumes 26% of its oil, 25% of its coal and 27% of its natural gas. The Global Footprint Network (2008) claims that humanity, in satisfying current levels of consumer demand, is already using the resources and services of 1.31 Earths, meaning that humanity is using nearly one third more of the earth’s capacity than is available, thus undermining the resilience of the ecosystem services on which humanity depends. The Millennium Ecosystem Assessment (2005), a comprehensive review of scientific research that involved 1,360 experts from 95 countries, found that approximately 60% of ecosystem services, including climate regulation, fresh water provision, fisheries, and many other services were either being degraded or used unsustainably. The Irish Seafood Industry perspective In 1987 the World Commission on Environment and Development defined sustainable development as being development that “meets the needs of the present without compromising the ability of future generations to meet their own needs”. From the perspective of the Irish Seafood Industry, achieving sustainable development will indeed be a challenge given that concern over declining fish stocks currently dominates discussions. 5 Industry stakeholders are faced with the inescapable fact that 75% of the fish stocks in the waters around Ireland are harvested beyond their safe biological limits, (Cawley et. al, 2006). While the market for seafood is buoyant, EU seafood consumption is already 74% dependant on imported seafood (Cawley et. al, 2006). A review of the marketing literature in recent years reveals a converging view of sustainability. The Centre for Sustainable Enterprise (2010) defines sustainability as “a way of doing business that creates profit while avoiding harm to people and the planet.” Hult (2011) goes further when he says that an organisation achieves market-based sustainability to the extent that it strategically aligns itself with the market-oriented product needs and wants of customers and the interests of multiple stakeholders concerned about social responsibility issues involving economic, environmental, and social dimensions. Huang and Rust (2011) see sustainability as the triple bottom line of economic profitability, respect for the environment and social responsibility. Supply-side concerns, as in the case of the Irish Seafood Sector, present unique challenges with the result that several marketing authors are focusing their attention on sustainability within a supply chain context. Conclusions Closs et al (2011) state that sustainability initiatives run the gamut from changing the facade (advertising and packaging that promotes green products/services) to radical changes in business procedures (marketing focus, where facilities are located, how products/services are delivered, and how employees, customers, suppliers and other stakeholders are treated throughout the process). It is within this context that the author will continue to investigate sustainable consumption and development in the Irish Seafood Sector. References Burroughs, James E (2010) Can Consumer Culture be Contained? Comment on ‘Marketing Means and Ends for a Sustainable Society Journal of Macromarketing 30(2) 127-132 Cawley, N., Murrin and J., O’Bric, R. (2006) “Steering a New Course: Strategy for a Restructured, Sustainable and Profitable Seafood Industry 2007 – 2013, Report of the Seafood Industry Strategy Review Group” Centre for Sustainable Enterprise (2010) http://kenan-flagler.unc.edu/cse/cseoverview.cfm Accessed 22 December 2010 Closs, D. J., Speier, C., Meacham, N. (2011) Sustainability to support end-to-end value chains: the role of supply chain management Journal of the Academy of Marketing Science 39:101-116 Global Footprint Network (2008) The ecological footprint Atlas 2008 Oakland, CA: rev. Ed. Huang, M. H., Rust, R. T. (2011) Sustainability and consumption Journal of the Academy of Marketing Science 39:101-116 39: 40-54 Hult, G. T. M. (2011) Market-focused sustainability: market orientation plus! Journal of the Academy of Marketing Science 39: 1-6 International Monetary Fund (IMF) 2008 World economic outlook update: An update of the key WEO projections. http://www.imf.org/external/pubs Accessed on 30 December 2010 Jackson, Tim (2009) Prosperity without growth? A transition to a sustainable economy. London, UK: Sustainable Development Commission Millennium Ecosystem Assessment (2005) Ecosystems and human well-being: Synthesis Washington, DC: Island Press Prothero, A., Mc Donagh P., Dobscha, S. (2010) Is Green the New Black? Reflections on a Green Commodity Discourse Journal of Macromarketing 30(2) 147-159 Thogersen, John (2010) Country Differences in Sustainable Consumption: The Case of Organic Food Journal of Macromarketing 30(2) 171 - 185 Varey, Richard J. (2010) Marketing Means and Ends for a Sustainable Society Journal of Macromarketing 30(2) 112-126 Worldwatch (2004) The state of consumption today Worldwatch – Institute Report. http://www.worldwatch.org Accessed on 5 January 2011 6 Marine Biotechnology, Ireland and the European Bio-Economy. A complex pattern of opportunities Ilaria Nardello*, The Marine Institute, Galway and Ryan Institute, NUIG Introduction Marine Biotechnology Ireland is the Irish National Programme of Marine Biotechnology. It has been established in 2008 to engage the national community of researchers, industries and funding agencies towards the development of innovative research and market-oriented products from the sustainable use of Ireland’s extensive marine biological resources. As envisaged in the Marine Research and Innovation Strategy for Ireland 20072013 -“Sea Change” (2006) [1], marine biotechnology is targeted as a strategic area for the country’s economic development. Strategic investments in scientific research complement our ecological and industrial landscape, and have enabled the rapid establishment of research capabilities in areas of science that support marine biotechnology including genomics, bioprospecting, biomedical sciences, biochemistry and bioinformatics, which determine a huge potential for marine biotechnology research to address the societal “grand challenges” such as the sustainable production of food, pharmaceuticals and energy. Biotechnology Biotechnology is a pillar of the European Knowledge-Based Bio-Economy (KBBE). The sector is expected to lead a new revolution in industrial production through the application of our knowledge of the sciences of life and our technological ability to modify it to obtain new products and processes fabricated sustainably. Marine Biotechnology in Ireland Ireland’s Marine Resources Ireland’s underwater territory is vast and largely unexplored, and is hosts to in excess of four hundred different types of seaweeds, three thousand animal species, and the largest European representation of cold water corals (in the picture, a remotely operated robotic arm is sampling marine biota along the continental margins west of Ireland, during a recent expedition on board our national research vessel Celtic Explorer). Ireland is also home to a consolidated life science industry sector, in the areas of pharmaceuticals, biotechnology, medical devices and diagnostics, with nine out of ten of the world leading companies present in the country (Industrial Development Agency, Ireland; 2009). Marine biotechnology is expected to be one of the major technologies of the XXI century with a sector global growth forecast at a compound annual rate of 4.3% over the period 2007-2012. Pharmaceutical and biopharmaceutical products are expected to take the largest share of the markets, followed by consumer products such as food, beverages, nutraceuticals, and cosmetics [1]. 7 The main challenges for Marine Biotechnology Ireland (www.marinebiotech.ie) are to understand the product opportunities, leverage funding towards strategic R&D initiatives, and stimulate scientific excellence. To overcome the main vulnerabilities of the sector -namely the natural fragmentation of its infrastructures, capabilities and interests as well as the present economic situation, significant effort is being deployed in the coordination of ongoing projects, including the large inter-institutional research initiatives focused on marine biodiscovery and marine functional foods. A number of projects regarding the coordination of the sector are also funded through the European Commission (i.e. ShareBiotech, Biotecmar, MG4U). Conclusion Marine Biotechnology Ireland will act as focal point for marine biotechnology in Ireland, building on the country’s strategically advanced position and working towards harnessing the societal and economic prospects of the sector. ------------------------------------------------------------------------------------------------------------------------------- [1] Marine Institute of Ireland. 2006. Sea Change – A Marine Research and Innovation Strategy for Ireland 2007-2013”. Marine Institute, Ireland. [2] ‘Marine Biotechnology – Worldwide Market Trends Report’. BizAcumen, 2009An Irish fishery targeting orange roughy began in 2001 and ended shortly after, resulting in the boom and bust cycle of many orange roughy fisheries. Prior to 1999, Irish landings of deep-water, nonquota species were very limited due to the lack of suitable vessels greater than 24m overall length and 1000hp in the fleet (Nolan, 2004). Large highsea French trawlers targeted orange roughy in ICES area VII from the late 1980s. *Marine Biotechnology Ireland, Marine Institute, Ireland. Dr. Ilaria Nardello, Marine Biotechnology Ireland, Marine Institute, Oranmore, Co. Galway, Ireland. Phone: +353.(0)91.387200. Email: inardello@marine.ie 8 Neglect of the Maritime in Irish Culture and Society Jim Mac Laughlin, political geographer and author of “Troubled Waters: A Social and Cultural History of Ireland's Sea Fisheries” Four Courts Press, Dublin. This paper presented some of the findings from a study of the history of sea fishing in Ireland to date. Much of the presentation is based on the authors recently published book “Troubled Waters – A Social and Cultural History of Irish Sea fisheries”. The presentation charted the evolution of fisheries from the earliest times, and discussed the historical importance of the coastal economy to the country’s maritime communities. It demonstrated the significant roles played by inshore and deepsea fishing in the evolution of modern Irish society. The author argued that the general neglect of Ireland’s sea fisheries by historians and social commentators is matched only by political marginalisation of the country’s fishing industry. The presentation touched on topics that included the archaeology of Irish fishing; the internationalisation of Irish waters in the fifteenth and sixteenth centuries; the organisation of fish shambles and markets in coastal Ireland; the social world and working lives of Irish fishing communities; and the ‘crowded shoreline’ of nineteenth-century Ireland. Hedonic Valuation of Proximity to Coast and Beaches in Ireland Seán Lyons, Karen Mayor, David Duffy and Richard Tol, ESRI, Dublin Market transactions can be used to help value non-market amenities such as proximity to coasts and bathing beaches. This presentation discussed how hedonic models can be used to value such amenities and will presented results from two models covering different Irish regions and time periods. One is based on house prices collected by an estate agency and the other from a mortgage lender, but they give broadly consistent results. Proximity to coasts and beaches were shown to have significant value that declined with distance. Being near a bathing beach attracted a higher premium than proximity to the coast alone. These models also provided estimates of the values of many other amenities and house characteristics. 9 Evaluating the Non-Market Value of Ecosystem Services Provided by Galway Bay Daniel Norton and Stephen Hynes, SEMRU, NUI Galway Introduction Coastal ecosystems such as beaches, saltwater wetlands and coastal lagoons provide many unique services due to their location at the interface between land and sea. These habitats are under increased pressure from development or are being degraded through other means throughout the world, despite the fact that they are known to provide higher non-market ecosystem service value flows per hectare than deep-sea and terrestrial ecosystems (Brenner et al., 2010). Valuing the benefits derived from these coastal ecosystem services allows those managing coastal zones (i.e. regional policy makers and related stakeholders) to make more informed decisions. While there has been great progress made in our understanding of coastal ecosystem processes and functions, and in the economics of developing and applying non-market techniques for valuation, there remains a gap between the two. In what follows, we attempt to narrow this gap by using a GIS benefit transfer to provide an estimate of the non-market coastal ecosystem value flows within the Galway Bay coastal zone. Benefit Transfer (BT) An alternative to the primary non-market valuation methods such as revealed (e.g. travel cost and hedonic valuation methods) and stated (e.g. contingent valuation and choice experiments) preference approaches is benefit transfer (BT). Benefit transfer (BT) is a process of valuing a nonmarket good or service of a site (often called the policy site) by using values estimated for similar non-market services at another site (often called the study site) and applying these values to the policy site. BTs other major advantage is that it can also be applied on a scale that would be unfeasible for primary research in terms of valuing large numbers of services across multiple ecosystems. A recent extension to the benefit transfer approach is to use GIS (Geographical Information Systems) to apportion ecosystem values on a geographic basis to the study site (Wilson & Liu, 2008). The value function approaches to BT were not suitable for use in this study as they do not easily lend themselves to the estimation of multiple services across multiple ecosystems. For this reason we opted for the unit transfer approach adjusted to an Irish policy site by taking into account differences between study and policy sites in income, exchange rates and price levels over time. Galway Bay – The Policy Site The geographical area of the policy site was based on coastal waters as defined by the Western River Basin District (WRBD) under the Water Framework Directive (WFD) (CEC, 2000). As shown in figure 1, the study area comprised of 143,430 hectares of water based habitats and 2,840 hectares of terrestrial habitats. The study covered the Irish coastline from Slyne Head in the Northwest of the study area to Blackhead in the south of the study area, a distance of 688 km along the Western coastline of the main island of Ireland and with offshore islands included this aggregates up to a shoreline of 1161 km. The site encompasses a variety of temperate coastal ecosystems, represented in its salt marshes, rocky coasts, beaches, intertidal flats, estuaries and coastal lagoons. A significant area of the study site (49,460 km2, which is 34% of the study area) is also protected under EU “Natura 2000” site designation. Figure 1. The Galway Bay Coastal Zone with Associated Ecosystems Methodology We follow a number of steps in estimating the total non-market value of ecosystem services in Galway Bay. These include selecting ecosystems 10 services to be valued; defining, using GIS, the geographical area of the site; defining the land and marine cover typologies; the search and analysis of the valuation literature; the transfer of value estimates and estimation of ecosystem values on a per hectare basis and the calculation of the total non-market value of ecosystem services at our policy site. Results A total of 209 valuation studies on marine and coastal ecosystem services were found, of which 193 valuation estimates could be used. Those deemed unusable was mostly due to the lack of data at the policy site (e.g. hedonic pricing estimates for the value added to houses due to proximity to the coast had to be dropped due to lack of GIS data on the housing stock in the policy site). The 193 valuation points were taken from 107 studies of which 71 were peer-reviewed papers and the other 36 comprised of PhD theses, university working papers and technical reports. Several of the relevant ecosystem services across the different ecosystems could not be assigned a value as there was not sufficient information or values to ascertain what the value of that ecosystem service was. Table 1. Total ecosystem value flow for Galway Bay, GDP Adjusted Values EcosystemType Beaches, Dunes, Sand Salt Marshes Intertidal Flats Coastal Lagoons Estuaries Sea Seagrass and Kelp Total Hectares 691 279 1584 400 3976 139386 1622 146316 EcosystemServices Value Flow(€2007) €127,645,497 €29,844,306 €3,233,222 €77,693,166 €63,594,411 €327,033,130 €5,798,427 €634,842,160 The highest ecosystem values per hectare (shown in Figure 2) was found to be for coastal lagoons (€194,233) which is mainly due to their value in regards to eutrophication mitigation (€142,890). A cautious view needs to be taken with regard to this eutrophication mitigation value estimate as it is based on only two contingent valuation studies. The next highest value on a per hectare basis was for beach, dunes and sand (total non-market ecosystems service value of €127,645,497) and this is in common with many other studies which found that beaches are the most valued coastal ecosystem type often gaining high values due to their recreational value. This is the case here with recreation being worth €110,610. Beaches were also associated with high service values for sediment retention, pollution control, aesthetic value and the legacy of nature. The sea has low service values when compared to the other ecosystems on a per hectare basis (Table 2) due to the large area it covers (95% of the study area), but at €327,033,130, the aggregated area of the sea provides the highest total ecosystem value in 2007. This represents half of the total value of the non-market ecosystem services flow of the Galway Bay coastal zone (Table 3). The highest values associated with the sea ecosystem measured here are for eutrophication mitigation and primary production. Estuaries are similar to sea in regards to the type and level of the services they produce. Similar to sea, the highest valuation of any ecosystem service within the estuaries is eutrophication mitigation. Estuaries are also unique in this study as they have a cost (or negative benefit) associated with the atmospheric regulation ecosystem service (-€91). This carbon production of estuaries was found to outweigh the aggregated value of carbon sequestering in the sea, salt marshes and seagrasses. Conclusion Our estimate of the total value of the non-market ecosystem service flows per year is most likely a conservative estimate due to data gaps and coarseness of some of the study area data. Further research on the valuation of coastal ecosystem goods and services is recommended, particularly in areas which currently could not be valued such as resilience and cultural heritage. References Brenner, J., Jiménez, J.A., Sardá, R. and Garola, A (2010) An assessment of the nonmarket value of the ecosystem services provided by the Catalan coastal zone, Spain. Ocean Coast Manage 53: 27– 38. CEC (2000) “Directive of the European parliament and of the council 2000/60/EC establishing a framework for community action in the field of water policy”, Official Journal of the European Communities (2000) L 327/1. Wilson M, Liu S. (2008) Evaluating the non-market value of ecosystem goods and services provided by coastal and nearshore marine systems. In: Patterson M, Glavovic B. (eds). Ecological Economics of the Oceans and Coasts. Edward Elgar. Northampton, MA. 11 Agricultural Catchments Programme socio-economic analysis of farmer attitudes to water quality regulations Cathal Buckley, Agricultural Catchments Programme, Teagasc Introduction The 1991 European Nitrates Directive is one of the earliest pieces of EU legislation aimed at controlling and improving water quality. The Directive aims to minimise surplus phosphorus (P) and nitrogen (N) losses from agriculture to the aquatic environment. Nutrients in fertilisers (principally nitrogen, phosphorus and potassium) promote plant growth but application in excess of plant requirement can cause negative environmental externalities such as eutrophication (EPA, 2008). The Nitrates Directive requires each member state to introduce a programme of measures through a National Action Plan (NAP). However, these NAPs have not met with universal acceptance by farmers across the EU. None more so than is the Republic of Ireland where there was considerable political opposition. The Irish NAP was not transposed into legislation until 2006 through the Good Agricultural Practice (GAP) regulations (S.I. No. 378 of 2006). The GAP regulations in the Republic of Ireland are implemented on a whole country basis and in operational terms limit nutrient application according to soil P status, crop type and livestock intensity and restrict chemical and organic fertiliser spreading and ploughing to periods of the year with typically lower exposure of nutrients to runoff and leaching. The regulations also require buffer zones between fields and water courses when applying organic or chemical fertilisers. An upper base limit for livestock manure loading of 170 kg ha-1 organic N also prevails except where a specific derogation to 250 kg ha-1 is sought based on farm conditions. Farmers in the Republic of Ireland have voiced opposition to operational elements of the GAP regulations (Brosnan, 2004). Farmer acceptance of the legitimacy of the measures is a key element of compliance (Barns et al., 2009). The efficacy of the NAP measures is being evaluated holistically in the Republic of Ireland by an Agricultural Catchments Programme through intensive bio-physical and socio-economic monitoring in six representative small scale river catchments dominated by moderate to high intensity grassland and arable enterprises across Ireland (see Fealy et al., 2010). This paper aims to investigate the attitude of farmer stakeholders towards implementation of the GAP regulations using Q methodology. Data and Methodology Q methodology is a technique first pioneered by Stephenson (1935) and encompasses a distinctive set of psychometric and operational principles that when combined with the statistical application of factor analysis provides the researcher with a systematic and robust means of examining human subjectivity. Q methodology is expressly aimed at identifying different patterns or shared ways of thinking on a topic that is relatively independent of the researcher. The experimental design of the Q methodology reduces any potential researcher bias and pre-specification of concepts by the researcher. Brown (1980) describes it as the ‘science of subjectivity’ where the goal is to extract patterns of similarity between the responses of a small respondent sample which represent the spectrum of views among the targeted population. The technique is not designed to have results scaled up to draw conclusions about the relevant whole population. However, where there is considerable diversity among respondents it is feasible to make assumptions about the wider target population. Implementing a Q methodological study typically involves 6 main stages (Addams and Proops, 2000). The first step is to identify the discourse of interest and relevant population. In this instance farmers opinion on the implementation of the EU Nitrates Directive through the GAP regulations. Second stage implementation involves collection of a full concourse of statements on the discourse by the relevant population. A questionnaire was developed with a number of open ended questions designed to educe statements on the implementation of the EU Nitrates Directive in the Republic of Ireland as implemented through the GAP regulations. The questionnaire was delivered to 6 farmer discussion groups during the summer of 2009. A total of 51 farmers across a range of 12 farming systems completed this scoping questionnaire and 556 statements emerged. However, there was a large degree of repetition among statements generated such that the final concourse of statements totalled 120 statements. The statements were either positive, negative or neutral across a number of thematic areas including farm management, environment, farm profitability, information provision and equity of implementation. Each of the statements was assigned to a relevant box in a matrix depending on the thematic area and orientation. The third stage of Q methodology implementation involves reducing the concourse of statements down to a representative manageable number, or a Q set. A Q set typically range between 30 and 50 statements. Brown (1993) suggests that in line with sampling procedures the main goal in selecting a Q set is to provide a miniature that is representative of the larger population. The concourse is usually around three times the size of the Q set (Stainton Rogers, 1995). In this application of the Q methodology a total of 30 statements were chosen to be representative of the full concourse. The fourth stage of implementation involves selecting participants and instructing them to rank or ‘sort’ the selected statements from most agree to most disagree normally following a forced quasi-normal distribution structure. The Q sort were administered to a representative sample of farmers across the agricultural catchments programme (N=50). Respondents were instructed to sort the statements on a 7 point scale from -3 (most disagree) to +3 (most agree). The fifth stage of statistical analysis involves the extraction of a few ‘typical’ sorts which are representative of distinct attitude or understanding of an issue or policy. This involves Q sort correlation, factor analysis and rotation to reduce the data to a limited number of defining factors which define different views on the discourse. The penultimate stage was undertaken using the PQMethod. In Q methodology the individual farmers are the defacto variables, hence there could be N different discourses if each farmer ranked the 30 statements in a statistically different manner. Factor analysis determines if there are a smaller number of families of Q sorts that represent a discourse pattern among the participants (Sweden. 2006). A principal components analysis was conducted to identify a small number of heavily loaded factors (groupings of farmers). Varimax rotation was then used to rotate factors to find the simplest structure in the data that can explain the greatest amount of variability. Results After considering several different iterations it was decided that 3 farmer typologies represented the most logical and robust representation of opinion on the implementation of the EU Nitrates Directive. The 3 farmer groups were labelled “Constrained Practitioners”, “Benefit Rejecters” and “Benefit Libertarians”. “Constrained Practitioners” will accepting some beneficial elements to the regulation were more occupied by restrictions on their freedom to farm and seem to take issue with how the regulation dictates farm management practices they deem to be counter productive and which negates their land stewardship experience. “Benefit Rejecters” which sharing a lot in common with “Constrained Practitioners” seem to refute that the regulations as implemented are leading to any environmental benefit. Finally, “Benefit Libertarians” while taking issue with some element of the regulation generally accept its relevance and environmental benefits. References Barns, S.A., Willoughby, B.E., Kaine, G., Lourey, R and Murdoch, H., 2009. How can marketing theory be applied to policy design to deliver on sustainable agriculture in England? The 83rd Annual Conference of the Agricultural Economics Society, Dublin. Brosnan, D., 2004. Draft National Action Programme under the Nitrates Directive. Brown, S.R., 1980. Political Subjectivity: Applications of Q Methodology in Political Science. Yale University Press, New Haven, CT. 355 pp. Environmental Protection Agency, 2008. Ireland’s State of the Environment Report 2008. Fealy, R. M., Buckley, C., Mechan, S., Melland, A. Mellander, P. E., Shortle, G., Wall, D. and Jordan, P., 2010. The Irish Agricultural Catchments Programme: catchmentselection using spatial multi-criteria decision analysis. Soil Use and Management, 26, 225–236. Stainton Rogers, R., 1995. Q methodology. Rethinking methods in psychology. Stephenson, W., 1935. Correlating persons instead of tests. Character Pers. 4, 17–24. 13 Estimating the Value of Water Bodies in Ireland Achieving “Good Ecological Status” under the Water Framework Directive Mavra Stithou, Stephen Hynes, Nick Hanley, University of Stirling, Scotland and SEMRU, NUI Galway Introduction The aim of the Water Framework Directive (WFD) (2000/60) (WFD) is “to establish a framework for the protection of inland surface waters, transitional waters, coastal waters and ground waters”. The Directive calls for integrated catchment management plans to be prepared for all river basins in order to achieve ‘good ecological status’ (GES) in all EU waters by 2015. This concept is a broader measure of water quality than the chemical and biological measures, which were previously dominant. As such the Directive aims at a minimum for a ‘good’ and ‘non-deteriorating status’ for surface, underground and coastal waters and sets common approaches and goals for water management in the EU Member State countries. An important element of the Directive is that it calls for a consideration of the economic costs and benefits of improvements to ecological status in catchment management plans, along with the introduction of full social cost pricing for water use. Hence, benefits play an important role in the assessment of the proportionality of costs in the implementation of the WFD. By observing and modelling how respondents change their preferred option in response to the changes in the levels of the attributes using random utility based modelling approaches, it is possible to determine how respondents tradeoff between the different choice options. By including price/cost as one of the attributes of each option, the monetary welfare impact of moving from the status quo policy today to an alternative water management policy with attribute levels set to be representative of what would result under alternative management strategies can be calculated. The Study Sites and Survey The rivers that were chosen for the study are the Boyne and Suir. The first belongs to the Eastern River Basin District while the second to the South Eastern River Basin District. Figure 1 presents the geographical location of the Hydrometric Areas (HAs) or catchment areas of Boyne and Suir showing that they belong to different River Basin Districts (RBDs). Figure 1. The Boyne and Suir Catchments Ireland is somewhat behind in terms of measuring the economic value of achieving “good ecological status” under the WFD across catchments. This paper aims to fill this gap in the research by exploring the use of choice experiments in placing a value of achieving this main objective (good ecological status) of the WFD across 2 water bodies in Ireland. Choice Experiments (CE) In a Choice Experiment framework, choices are broken down into component attributes, which are presented to respondents normally as set combination of the attributes. Respondents are then presented with a sequence of these choice sets, each containing alternative descriptions of the choices, differentiated by attributes and levels. Respondents are then asked to state their preferred alternative within the choice set. In this study, deciding on the selection of the relevant attributes of the non-market good, which is the quality of surface inland rivers, two main criteria were considered. On the one hand, people’s preferences for a river’s ecological status, and on the other hand attributes that can be impacted by the implementation of the WFD. Hence, in this study the aim is to use indicators 14 of ecological status, which ordinary people see as important, but which are also consistent with regulator’s expectations about the scientific interpretation of this concept. The attributes chosen and their levels are shown in table 1. Table 1. River Attributes and Levels Attribute Description River life: Composition and abundance of fish, insects, plants biological elements Condition of river banks Water appearance Levels 1. Poor, 2. Moderate, 3. Good Level of erosion and presence 1. Visible erosion, needs repairs of vegetation and animals Clarity, plant growth, visible pollution, noticeable smell activities Number of activities available 1. No improvement 2. Some improvement 3. A lot of improvement 2. No swimming 3. All available (walking, boating, fishing, swimming) Cost Annual household taxation for 10 years. Results Table 2 reports the implicit prices (marginal values of attributes) estimated using the results of the Random Parameter Logit (RPL) model. 2. Natural looking banks 1. No fishing and swimming Recreational The marginal value of a unit change in an attribute of the management option can be calculated as can the value of a package of attributes that make up alternative policy options. This model generalizes the standard conditional logit by allowing the coefficients of observed variables to vary randomly over people rather than being fixed. Table 2. Implicit Prices (€/person/year) Attribute Moderate Improvement in River Life Good Improvement in River Life Some Improvement Water Appearance Alot of Improvement Water Appearance Most Recreational Activities Possible (bar swimming) All Recreational Activities Possible Natural Looking Banks Mean WTP 45.13 23.18 18.15 34.49 16.48 20.71 18.53 €0, 5, 10, 20, 40, 80 The final survey consisted of 502 individuals living in the Boyne and Suir catchments and was conducted between July and August 2009. A quota controlled sampling procedure was followed to ensure that the survey was representative for the population aged 18 years and above. Methodology In the CE, respondents were informed about the WFD and acquainted with the attributes employed to describe river improvements. When respondents had familiarised themselves with these attributes they were shown an example of a choice card with three options and were told that it represented improvements to happen in their local river. The interviewer talked through the choices in order to explain better the choice card and then asked from the respondent to make a choice so as to test that she understands it properly. Following this the respondent was presented with 8 choice cards and asked to choose their preferred option on each. The data on choices made is then used in a decision making discrete choice model where the respondent’s choice is estimated as a function of the attribute levels using a random parameter logit model. Table 3 shows the levels of each attribute associated with the status quo on each river and the levels associated with a policy that achieves “good ecological status” in each river. Table 3. The WFD Policy Scenario Attribute Improvement in River Life Improvement Water Appearance Recreational Activities Possible Recreational Activities River Banks Business as Usual Poor None None Most Possible Visible Erosion needing Repair Policy Change Good A Lot Most All Possible Natural Looking Banks Using the coefficients from the model corresponding to the policy attribute levels in table 3 and the Hanemann Log Sum Formulae the value of the policy change is estimated to be €57.90 per person per year with a 95% confidence interval of (€37.98, €77.84). Conclusion Given than no major valuation exercises on water quality in Ireland have been conducted previously, this study will help shed light on the possible monetary value of achieving “good ecological status” under the WFD. Further research will be crucial for estimating benefit/cost ratios across a wide range of Irish water bodies, in order to identify cases of disproportionate costs for which derogations can be sought. Benefit transfer techniques may need to be used to estimate benefit across a wide range of sites given the cost involved in primary single catchment valuation exercises. 15 An Economic Profile of the Irish Off-Shore Fishing Fleet 2006 -2008 Patrick Gillespie and Stephen Hynes, SEMRU, NUI Galway Introduction This paper presents an analysis of 5 segments of the Irish fishing fleet, drawing on volume and price data on landings and days at sea provided by the Sea Fisheries Protection Authority (SFPA), which collects data on every active vessel in the Irish fleet. The SFPA collects and analyses data on fish landings and fishing activity by all Irish vessels and foreign vessels landing into Ireland. This data includes information on the quantity, value, and location of fish caught, together with effort data and details of fishing methods used. The data collected by the SFPA from the log sheets (such as landing weights, details of days at sea, vessel descriptors, etc.) and the sales notes (prices per kg per species per landing) are an important source of data for fishery scientists to conduct stock assessment and population modelling. In addition however, this data relating to fishing activity and catch value can be used to assess the economic status of the fishing industry from year to year. This is important information given that this industry forms a vital part of the economy of many rural coastal areas. As such, this paper fills a gap in the use of the log sheet and sales note data by using it to present, for the first time, a microlevel analysis of the earnings of the different fishing segments in the Irish fishing fleet. 2006 we used CSO data on the change in value per kg of fish stocks between 2006 and 2007. Using this index we adjusted the 2007 prices from the sales notes to be representative of the price per species per port per month for 2006. One other issue that had to be dealt with was the fact that the log sheets specifies the quantities of fish species landed as ‘estimated live weight’ so we had to adjust these figures using conversion factors to calculate the gutted or tailed value of the fish species. This is important as most species of fish are gutted or tailed on board and when presented for sale, yet skippers are instructed to record catch values must in the operational section of the logbook in “kg LIVE WEIGHT”. If our analysis simply used the live weight figures we would be grossly overestimating the value of most species landed in Irish ports. For example, the ratio of live weight to gutted weight for monkfish is 1.23: 1. BIM Species Conversion Factor Tables were used to covert from live weight to sales (gutted or tailed) weight. Data and Methodology Due to data available this report only analyses what is referred to as the coastal and off-shore Irish fleet. The coastal fleet we define as vessels between 10 and 18 metres while the off-shore fleet is defined as all vessels greater than 18 metres. Data on the inshore fleet which we define as vessels of less than 10 metres was not available from the SFPA. market will have its negative effect on portfolio return dampened by the uncorrelated outcomes of alternative, non affected sectors. In order to calculate earnings per month for each vessel in the dataset we then had to multiply the landings by species by port for each vessel in each year from the logbook data by the price for each of the species by month by year by port from the sales note data. In some instances a species would be recorded as landed at a particular port in a particular month in the logbook but no entry would exist for that species for that month at that port in the sales note data. In these instances we used the price per species per month per port area. The port areas refer to groupings of ports along the coast that serve particular regions or fleets though a central port office as defined by the SFPA. If this price was still not available we used the price per species per month as the next best alternative price for the landing of the species in the port in question. In using the SFPA data we had to combine the Sales Note data and the Logbook landings data. The data in the Logbook gave the monthly landings by species by landing port by vessel while the sales note data provided the average monthly price by species by port but not by vessel. Only the log book data was available for 2006 so in order to calculate the price per kg of alternative species in Once we had a price per species per port allocated for all months in the years 2007 and 2008 we multiplied this price by the equivalent landings (sales weight) from the logbook data to calculate the earnings per species per port per vessel per month per year. Aggregating across species per month per vessel gave us the monthly earnings per vessel while aggregating the monthly earnings by 16 vessel for the year allowed us to calculate the total earnings of each vessel per year. In terms of our analysis every coastal and off-shore vessel active in 2006, 2007 and 2008 was allocated into one of 5 segments. The segment classifications are Beamer, Pelagic, Polyvalent General, Polyvalent Potting and Specific. Results The Irish coastal and offshore fleet can be broken down into five segments, Pelagic, Beamer, Polyvalent General, Polyvalent Potting and the Specific segments. Polyvalent General had a 58.7 percent share of total coastal and off-shore fleet earnings in 2006. It then rises to 60 percent in 2007 only to fall back to 50 percent in 2008. It should be noted that the total number of vessels remain constant over the 3 year period for the Pelagic segment whilst the Specific segment nearly doubles its number from 15 to 29 vessels. Effort can be measured both in terms of physical characteristics such as length or engine size, and also in terms of activity measures (e.g. days at sea). An interaction between these variables is often calculated to arrive at units of effort, and we have followed this methodology in our calculations. Specifically, our measure of effort is simply the engine size of a given vessel in kilowatts (kW) of power multiplied by the days at sea for a particular entry. Figure 2 - Earnings per vessel per unit of effort Meanwhile, the Pelagic segment’s share falls slightly in 2007, but then it increases by 4 percentage points to 39 percent in 2008. The Specific segment’s gain is the most noticeable difference as it goes from a quite small 1.9 percent of earnings to a more sizeable 7 percent. Finally, the Beamer segment joins Polyvalent General in giving ground to the other segments over the reference period while Polyvalent Potting remains largely unchanged. 23 Pelagic 33 33 6.3 Specific 31 44 5.2 Polyvalent General 8.5 8.9 3.3 4.7 6.1 Beamer 13 Polyvalent Potting An examination of Figure 1 helps to explain the growth or contraction of the different segments. The most striking element of the figure is the disproportionate level of yearly earnings per vessel exhibited by the Pelagic segment. However, when looking beyond this feature one may detect a pattern of substantial increases in earnings per vessel taking shape in both the Pelagic and Specific segments. Figure 1 - Average earnings per vessel per year 1.7 2.8 Pelagic Specific Polyvalent General 3.2 .2 .26 .65 .28 .41 .36 .32 .43 .32 Beamer Polyvalent Potting 0 .087 .098 .081 1 2 Million euro 2006 2008 3 2007 4 22 17 0 10 20 30 40 Euro 2006 2008 2007 In a time period as short as the one for which we were able to conduct this analysis, characteristics such as engine size and vessel length tend to be fixed (i.e. they change very little, if at all), so although our measure of effort includes engine size it is really the number of days at sea that determine the changes to the level of effort from year to year. This being the case, a snapshot of days at sea will go a long way in telling the effort story within each segment, whereas engine size becomes more important for cross segment comparisons. The return for a unit of effort (i.e. that measure which accounts for engine size) is depicted in Figure 2. This figure highlights the growth in earnings per unit effort in the Pelagic and Specific segments as well as the diminishing Polyvalent General segment. The explanation lies in the higher earnings per unit of effort. 17 The Application of Portfolio Theory to the Management of Irish Fish Stocks Benjamin Breen and Stephen Hynes, SEMRU, NUI Galway Introduction Ecosystem based fisheries management (EBFM) is a fisheries management initiative which has received increasing focus in recent years, in both the marine science literature and from a policy perspective (Botsford et al., 1997; Pikitch et al., 2004; Hall and Mainprize, 2004). The idea is to take major ecosystem components and services into account in managing fisheries and embrace a multispecies perspective. One of the major challenges to multispecies considerations of marine biological stock dynamics however, is the data restrictions with which researchers are presented; marine ecosystems are complex structures which are difficult to observe and understand. There is also little guidance in the literature on how such an empirical approach to EBFM should be constructed. This research applies portfolio theory to Irish fisheries data as an empirically based form of EBFM which may complement traditional bioeconomic and ecosystem structural models. Its strength lies in its capacity to make use of already existent fisheries data (historical dockside revenues by species), and through the construction of portfolio’s of species, represent the economic and biological gains of embracing diverse species considerations in fisheries practice and policy, the idea being that species diversity is desirable not just from a social and ecological perspective, but also for its ability to reduce fisher’s revenue volatility. commodities. Within each of these asset classes, investments may be spread out across alternative sectors. For example, equities may be made up of alternative industry types, bonds will relate to different countries’ and companies’ debt issuances and commodities may be made up of copper, gold etc. By directing resources into diverse asset classes and industry sectors, the overall volatility of return can be controlled or reduced. A collapse of one asset class, industry sector or commodity market will have its negative effect on portfolio return dampened by the uncorrelated outcomes of alternative, non affected sectors. The formal objective of portfolio theory then is to estimate (on the basis of historical trends) the “optimal percentage of investment weights” among alternative investment opportunities which minimize the trade off between expected return and expected variance. Optimization techniques are employed to calculate these weights, which provide an asset manager’s best estimate of the optimal allocation of resources, such that for any desired level of portfolio return, expected portfolio variance will be the lowest possible. Portfolio Theory Methodology The intuition behind portfolio theory is that financial risk can be diversified by directing resources/investments/effort into a large number of uncorrelated or negatively correlated outcomes. Financial asset manager’s spread their investments over different asset classes and industry types. For example, an asset manager may have the overall investment amount of the portfolio allocated across asset classes such as equities, bonds and 18 The output of the optimization process, conducted using the averages/estimates of historical asset returns, variances and asset covariances, is what is referred to as the mean-variance efficient frontier of investment options. At any point along the efficient frontier, no combination of asset weights will lead to a better estimate of the trade off between risk and return. Portfolio Theory as Applied to the Management of Irish Fish Stocks Of course, there are major differences between financially traded assets and wild fish stocks. An application of the methodology therefore needs to be adapted to reflect fishery management objectives. We follow the methodology of Sanchirico et al. (2008). The core objective of this research is to employ the methodology to achieve greater biodiversity, and determine areas of the ecosystem where species inter-relatedness may benefit from adaptations to fishing effort. Also however, it may be possible that by redirecting resources and effort in the correct way, Irish fisher’s can achieve further revenue diversification without reducing revenues. This redirection of effort may have potentially positive ecosystem outcomes, and is desirable from a socioeconomic perspective under the assumption of risk-averse economic agents. Using historical data on the catch quantity and sale price of target commercial species (available from the Central Statistics Office) we estimate future quantity catches, sale prices and therefore average dockside revenues. Using the historical annual revenues we also attain the variance covariance matrix for all species for which there is data. This information allows us to determine the optimal percentage allocation of species in a target portfolio. Species inter-relatedness, or revenue correlations, will arise from either ecosystem relationships or market price relationships. Through the optimization of various portfolios of species, useful information may be generated to ascertain which management strategies or approaches may yield both economic and ecosystem gains. The results of the analysis will have connotations for determining optimal quotas for individual species, and also insights into drivers behind fisher’s incentives in their economics decision making. Conclusions The analysis is a novel approach and despite the data limitations which multispecies fisheries analysis is plagued by, may hold productive insights into fishing management options under a mixed species framework. Further work may also allow the methodology to reflect various objectives which fishery managers wish to achieve, such as determining Total Allowable Catches across species, and incorporating exogenous precautionary Maximum Sustainable Yield constraints to restrict the potential weights of certain key species in the portfolio, while increasing others to compensate fishers, from a revenue perspective. Currently, which species should feature as part of the portfolio selection is something that is being reviewed. Increased scientific and industry considerations will allow for more realistically and usefully tailored alternative target species options. References Pikitch, E.K., Santora, C., Babcock, E.A., Bakun, A., Bonfil, R., Conover, D.O., Dayton, P., Doukakis, P., Fluharty, D., Heneman, B., Houde, E.D., Link, J., Livingston, P.A., Mangel, M., McAllister, M.K., Pope, J., Sainsbury, K.J., 2004. Ecology: ecosystem-based fishery management. Science 305, 346–347. Botsford, Louis W., Castilla, Juan Carlos, Peterson, Charles H., 1997. The management of fisheries and marine ecosystems. Science 277, 509–515. Sanchirico, J.N., Smith, M.D., Lipton, D.W. (2008). An empirical approach to ecosystem-based fishery management. Ecological Economics, 64, 586-596. 19 The Rise and Fall of the Irish Orange Roughy Fishery: An Economic Analysis Naomi Foley, Tom van Rensburg, and Claire Armstrong, SEMRU, NUI Galway Introduction An Irish fishery targeting orange roughy began in 2001 and ended shortly after, resulting in the boom and bust cycle of many orange roughy fisheries. Prior to 1999, Irish landings of deepwater, non-quota species were very limited due to the lack of suitable vessels greater than 24m overall length and 1000hp in the fleet (Nolan, 2004). Large high-sea French trawlers targeted orange roughy in ICES area VII from the late 1980s. In 2000 a programme to develop an Irish deepwater fishery began in ICES area VII with the support of grant aid from the Whitefish Renewal Programme (Shephard et al., 2007). Levels of capital grant aid provided under the programme included up to 40% of the eligible costs of new vessels (Nolan, 2004). Conditions of the grant aid included specification that a percentage of target species should be non-quota. The exploratory fisheries were run with Irish Sea Fisheries Board (BIM) and some commercial fishermen. Of the deep water species harvested during the exploratory period, orange roughy fisheries appeared to be the most valuable and offer the largest returns (Nolan, 2004). There was a directed fishery for orange roughy, but other species targeted by the deep-water trawl fleet included blue ling, black scabbard and roundnose grenadier (Gordon et al., 2003). makes these vessels extremely sensitive to fuel price increases (Tyedmers et al., 2005; Sumaila et al., 2010). Landings declined markedly in 2003 and 2004, as shown in Figure 1 with several vessels being forced out of the fishery (Shephard and Rogan, 2006). In 2001 the average price per tonne was at its highest at €3,138 but by 2003 price had dropped 41% to €1,285 per tonne. Mellett (Mellett, 2009) reports that the market was flooded, and with the price collapse, large quantities of orange roughy were sold for fishmeal. All this resulted in several vessels being forced out of the fishery (Shephard et al., 2007). There is a growing literature on subsidies and fisheries (Gianni, 2004; Sumaila and Pauly, 2006). The Irish orange roughy fishery began with the assistance of government grant aid to update or purchase vessels. Many argue that global deep sea fishing could not be possible without subsidies (Pauly et al., 2003; Gianni, 2004; Sumaila et al., 2010). This analysis on the Irish orange roughy fishery applies a bioeconomic model to assess the influence of grant aid on the establishment of the fishery. In the first case we consider the fishery as it was i.e. with the subsidy included in the total costs. In the second case the subsidy is removed from the model and the change in open access conditions is analysed. Results Data Landings data suggests pulse landings; the first occurred in 1992 when over 3,000t were landed and the second in 2002 (ICES, 2007). In 2003, a total allowable catch (TAC) of 1,349 tonnes was set on the orange roughy fishery in ICES area VII, of which Ireland received 300 tonnes (Shephard et al., 2007). In addition to a rapid drop in landings, fuel prices increased during the short period of the fishery and the average prices per tonne dropped. The large fuel consumption of deep water trawling The results of our bioeconomic analysis are interesting for two reasons (1) the calculated open access effort and harvest are significantly lower than the estimated MSY levels, i.e. the costs are so high that even under open access, the effort is low, and (2) through the analysis it has been shown that even in the presence of grant aid total costs would have been too high for a sustainable fishery of any size to take place. In essence the government’s grant aid was a subsidy for mining the Irish orange roughy stock. The analysis with no subsidy suggests that on average the costs were too high, and the prices too low to support entry 20 into the fishery. For a fish stock with a low growth rate relative to the market discount rate, there is the incentive to mine the stock and invest the profits in other sectors (Sumaila and Pauly, 2006). It is better, according to capital theory, to harvest the stock and invest it in a sector that offers a higher a rate of return. Gordon, J.D.M., O.A. Bergstad, I. Figueiredo, and G. Menezes. 2003. Deep-Water Fisheries of the Northeast Atlantic: I. Description and Current Trends. J. Northw. Atl. Fish. Sci., 31: 137-150. ICES. 2007. Report of the Working Group on the Biology and Assessment of Deep-Sea Fishery Resources (Wgdeep). ICES CM 2007 / ACFM:20, ICES: 486. Mellett, M. 2009. Ecosystem Based Ocean Governance - the Sustainable Management of Cold Water Corals (Cwc) and Associated Biodiversity a State’s Property Rights Approach. Faculty of Political and Social Science. Galway, NUI Galway. Doctor of Philosophy. Conclusions Though mining of orange roughy can be defended on capital theoretic terms, when resource rent is optimally taxed and reinvested, the trawling after orange roughy can be expected to impose significant external effects in terms of future user costs to the fishery as well as heritage and existence values (Glenn et al., In Press). There are additional costs of harvesting species such as orange roughy, namely the potential loss of deep water habitats such as cold water corals which can be considered a negative externality caused by the trawling industry. The external costs of deep water trawling include the loss of spawning grounds and the amenity value associated with CWC habitat. For a fishery such as orange roughy, where biological and stock data is limited and where the external costs have yet to be itemised and valued a precautionary approach is well advised. Nolan, C.P. 2004. A Technical and Scientific Record of Experimental Fishing for Deepwater Species in the Northeast Atlantic, by Irish Fishing Vessels, in 2001. Fisheries Resources Series. Dun Laoghaire, Ireland, Bord Iascaigh Mhara (Irish Sea Fisheries Board): 172pp. Pauly, D., J. Alder, E. Bennett, V. Christensen, P. Tyedmers, and R. Watson. 2003. The Future for Fisheries. Science, 302(5649): 1359-1361. Shephard, S., P. Connolly, N.-R. Hareide, and E. Rogan. 2007. Establishing Stakeholder Connections for Management of the Irish Orange Roughy Fishery. ICES J. Mar. Sci., 64(4): 841-845. Shephard, S., and E. Rogan. 2006. Seasonal Distribution of Orange Roughy (Hoplostethus Atlanticus) on the Porcupine Bank West of Ireland. Fisheries Research, 77(1): 17-23. References Sumaila, U.R., A. Khan, L. Teh, R. Watson, P. Tyedmers, and D. Pauly. 2010. Subsidies to High Seas Bottom Trawl Fleets and the Sustainability of Deep-Sea Demersal Fish Stocks. Marine Policy, 34(3): 495-497. Gianni, M. 2004. High Seas Bottom Trawl Fisheries and Their Impacts on the Biodiversity of Vulnerable Deep-Sea Ecosystems: Options for International Actions. Gland, Switzerland, IUCN. Sumaila, U.R., and D. Pauly. 2006. Catching More Bait: A Bottom-up Re-Estimation of Global Fisheries Subsidies. Fisheries Centre Research Reports, 14(6): 114. Glenn, H., P. Wattage, S. Mardle, T.V. Rensburg, A. Grehan, and N. Foley. In Press. Marine Protected Areas--Substantiating Their Worth. Marine Policy. Tyedmers, P.H., R. Watson, and D. Pauly. 2005. Fueling Global Fishing Fleets. AMBIO: A Journal of the Human Environment, 34(8): 635-6 21 Collecting fishers’ knowledge: A chance for social scientists to become fisheries scientists Edward Hind, School of Political Science and Sociology and SEMRU, NUI Galway Introduction Despite extensive collection of ecological data by fisheries scientists, fisheries managers are often still unable to make management decisions for some fisheries, because the information they need is unavailable. It would be assumed then that scientists and managers would be keen to supplement their knowledge with complimentary sources of data in an effort to address these shortcomings, but this seems not always to be the case. A number of publications have shown that fishers have a detailed socio-ecological knowledge of the fisheries in which they operate that often prove novel when compared to findings of research done by state-employed biologists (e.g. Murray, et al., 2006). However, fishers’ knowledge has not been recognised widely as complimentary to traditional fisheries science and has rarely been used to inform management policy. Using examples from the commercial fishery of Galway Bay and the Aran Islands in Ireland, this study firstly shows how fishers’ knowledge differs from traditional science and then how fishers’ knowledge could be harnessed to help improve fisheries management. Finally, it concludes how fishers’ knowledge can be best discovered and mobilised by social scientists. Why fisheries scientists should embrace fishers’ knowledge Detailed life histories of fishers in the Galway Bay and Aran region were uncovered using the methods described by Hind (2009). Analyses of these histories reveals that fishers have much knowledge that could either compliment existing fisheries science or expand the breadth of scientific understanding through the introduction of previously undiscovered information. The first thing to note is that the content of knowledge differs from fisher to fisher. Previous research has generally considered fishers’ knowledge to be purely ecological. Results in this case study though show that fishers’ knowledge is a socio-ecological construct and that the lifeworld they operate in is equally influenced by social, economical, legislative and operational factors as it is by ecological ones. Chart 1: Percentage of interview by time during which fisher expressed various types of knowledge. The above chart shows this diversity of knowledge. Content analysis of interviews with three fishers from the sample shows that each has a very different knowledge. Fisher A has a similarly natured knowledge as Fisher B, except socioeconomically where A is more knowledgeable. The transcript shows that this is perhaps down to Fisher A controlling an onshore fish retail operation, where B simply sells his catch at the dock. Fisher C has little policy and management knowledge compared to A and B. This can be attributed to the fact that he is retired and has little experience of operating in the more heavily regulated present. Regarding content, another variation between fisheries science and fishers’ knowledge should be considered. Fisheries science is generally geared up to quantifiably record specific and predetermined data. Fishers’ knowledge however does not necessarily fit this template of data collection. As quotes from fishers in Hind (2010) show they use different units of quantification such as boxes of fish. More importantly, most of their knowledge is not quantitative, but qualitative. It can be lengthy, anecdotal and hard to summarise, but can give excellent insight into a fishery including a diverse range of information, from how trawls are performed to when species of fish migrate (Hind, 2010). 22 Secondly, the extent of fishers’ ecological knowledge is not always captured by fisheries science. This study found that fishers were actually fairly poor at measuring their whole catch, or individual specimens within it, quantitatively. Their estimates and recollections were vague and varied too much between fishers to meet the rigorous criteria that would be needed for the stock assessments of fisheries since. However, it was found that they could provide novel historical trend data for fish species where scientific data did not exist (e.g. for periods before records commenced, where species were non-commercial). For instance scientific measurement of cod stocks in the West of Ireland started in 1988, but fishers in this study identified changes in cod population as far back as the 1950s. Fishers also gave detailed anecdotal descriptions of events such as species extinctions and of fishery features like spawning grounds. In this case they identified a local commercial extinction of cod in the late 1980s and the presence of a significant herring spawning ground near their home port of Rossaveal. Thirdly, and little considered to this point is the discovery that fishers have strategies which dictate how they fish. Fisheries scientists may argue that we already know how fishers fish, but what is lesser known is why they fish this way. If this were known it would show possible future levels of fishing intensity for certain fishery species as well as any prospective change in the spatial distribution and activity of the fleet. This would allow fisheries management to become a preemptive science, where currently it is almost always reactive. An example of this is the change in usage of fishing gear within the Galway and Aran trawl fishery for nephrops. Quantitative data collected during the research showed that a majority of fishing skippers had upgraded their boat engines significantly from the late 1980s to early 1990s to allow them to pull a two net twinrig setup, rather than the single net they had used to date. This would have lead to a dramatic increase in fishing pressure on nephrops. The strategy behind this for a few fishers was to maximise their catch and profits, but it was found that for many they hadn’t necessarily wanted to make this upgrade and they had just followed suit, as it was the only way to keep pace in the fishery. They would rather have stayed with the smaller boats, which exerted less fishing effort. Indeed a small number of fishers had already returned to shorter boats. A number of other skippers wanted to do the same, but economic conditions and regulation were preventing this. This shows that with bespoke changes in management it may be possible to reduce fishing intensity in this nephrop fishery, which would greatly increase the potential for a permanently sustainable fishery. How social scientists can mobilise fishers’ knowledge The traditionally biological scientists of fisheries science have little training in discovering or understanding the often qualitative, anecdotal and socio-economic data that characterises fishers’ knowledge. Applied social scientists such as sociologists, economists, political scientists and geographers could be employed in fisheries science to discover this underutilised data and the fishers’ strategies, which could importantly inform more efficient and sustainable fisheries management. Conclusions Wider mobilisation of social scientists in fisheries science practice should allow for the collection of more diverse ecological recordings. It would also open up whole new data fields that are unique to fishers’ knowledge, including additional socioeconomic information and fishing strategies. Inclusion of these new findings would surely result in more informed fisheries management at the same time as providing the bonus benefit of a more connected relationship between fishers and fisheries scientists. Acknowledgments This project is a collaborative effort with the Irish Fisheries Science Research Partnership. The project is funded by the Irish Marine Institute. Thanks are due to the participating fishers and the fishing community for their excellent contribution. References Hind, E. (2009). Fishers: Scientists, Sociologists, Economists, Politicians and Marine Managers. Proceedings of the 1st Annual Beaufort Marine Socio-Economic Workshop. SEMRU, NUI Galway. Publication, downloadable at http://www.nuigalway.ie/semru/documents/beau fortworkshop.pdf Hind, E. (2010). Fishers: The Forgotten Scientists. Working Paper 10-WP-SEMRU-11. SEMRU, NUI Galway. Publication, downloadable at http://www.nuigalway.ie/semru/documents/h_10 _semru_wp11.pdf Murray, G., Neis, B. and Johnsen, J. (2006). Lessons Learned from Reconstructing Interactions Between Local Ecological Knowledge, Fisheries Science, and Fisheries Management in the Commercial Fisheries of Newfoundland and Labrador, Canada. Human Ecology, 34, pp. 549-571. 23 Annex 1 Beaufort Marine Socio-Economic Workshop Agenda 8.45 -9.25 Registration and Tea/Coffee Welcome and Overview of Days Proceedings – Professor John McHale Session 1. The Irish Ocean Economy: National and Sectoral Perspectives Chairperson: Dr. Stephen Hynes 9.30 - 9.55 9.55 - 10.20 10.20 - 10.45 10.45 – 11.15 11.15 - 11.35 Session 2. A Profile of Ireland’s Ocean Economy The Role of Marketing in Driving the Sustainable Consumption of Seafood Marine Biotechnology, Ireland and the European Bio-Economy. A complex pattern of opportunities Neglect of the Maritime in Irish Culture and Society - Karyn Morrissey and Stephen Hynes, SEMRU, NUI Galway - Ann Walsh and Declan Fleming, Depart. of Marketing and SEMRU, NUI Galway - Ilaria Nardello, The Marine Institute, Galway and Ryan Institute, NUIG - Jim Mac Laughlin, political geographer and author of “Troubled Waters: A Social and Cultural History of Ireland's Sea Fisheries” Four Courts Press, Dublin. Tea/Coffee Water Quality and the Environment Chairperson: Dr. Michael O’Toole 11.35 – 12.00 12.00 - 12.25 12.25 - 12.50 12.50 - 1.15 1.15- 2.00 Session 3. 2.00 - 2.25 2.25 - 2.50 2.50 - 3.15 3.15 - 3.35 Hedonic Valuation of Proximity to Coast and Beaches in Ireland Evaluating the Non-Market Value of Ecosystem Services Provided by Galway Bay The Agricultural Catchment Programme – A Socio-Economic Analysis of Attitude to Water Quality Measures Estimating the Value of Water Bodies in Ireland Achieving “Good Ecological Status” under the Water Framework Directive Lunch - Seán Lyons, Karen Mayor, David Duffy and Richard Tol, ESRI, Dublin - Daniel Norton and Stephen Hynes, SEMRU, NUI Galway - Cathal Buckley, RERC Teagasc - Mavra Stithou, Stephen Hynes, Nick Hanley, University of Stirling, Scotland Fisheries Management in Ireland Chairperson: Professor Michael Cuddy An Economic Profile of the Irish Off-Shore Fishing Fleet 2006 -2008 An Application of Portfolio Theory to the Management of Irish Fish Stocks The Rise and Fall of the Irish Orange Roughy Fishery: An Economic Analysis Collecting Fishers’ Knowledge: A Chance for Social Scientists to Become Fisheries Scientists Close of Workshop - Patrick Gillespie and Stephen Hynes, SEMRU, NUI Galway - Benjamin Breen and Stephen Hynes, SEMRU, NUI Galway - Naomi Foley, Tom van Rensburg, and Claire Armstrong, SEMRU, NUI Galway - Edward Hind & Brendan Flynn, Political Science & Sociology, NUI Galway 24 Annex 2 Workshop Participants Name Organisation Email Mick O'Toole Dave Reid Geoffrey O'Sullivan Marine Institute Marine Institute Marine Institute motoole@marine.ie david.reid@marine.ie gosullivan@marine.ie Trevor Alcorn Patrick Tyndall Marine Institute Bord Iascaigh Mhara talcorn@marine.ie tyndall@bim.ie Sean Lyons Cathal Buckley Economic and Social Research Institute Teagasc sean.lyons@esri.ie cathal.buckley@teagasc.ie Naomi Foley Lava Yadav University Tromso National University of Ireland, Galway naomifoley@gmail.com lava.yadav@gmail.com Stephen O'Neill Ilaria Nardello National University of Ireland, Galway Marine Institute/NUIG stepheno_neill_1999@yahoo.com inardello@marine.ie Michael Cuddy Anthony Keohone SEMRU, NUI, Galway SFPA michealcuddy@eircom.net anthony.keohane@sfpa.ie Emmet Jackson Conor Nolan Bord Iascaigh Mhara Bord Iascaigh Mhara jackson@bim.ie cnolan@bim.ie Colm Lorlan Oliver Tully Marine Institute Marine Institute colm.lorlan@marine.ie oliver.tully@marine.ie Ben Breen Ed Hind SEMRU, NUI, Galway SEMRU, NUI, Galway B.BREEN1@nuigalway.ie Ed.hind1@nuigalway.ie Will Maclennan Kevin Kilcline Natural England National University of Ireland, Galway willmaclennon@hotmail.com kevinkilcline@gmail.com Patrick Gillespie Natasha Evers SEMRU, NUI, Galway/Teagasc National University of Ireland, Galway patrick.gillespie@teagasc.ie natasha.evers@nuigalway.ie Paul Ryan Meadbh Seoighe National University of Ireland, Galway Udaras na Gaeltacht paul.ryan@nuigalway.ie meadbh.seoighe@udaras.ie Ann Walsh Jim MacLaughlin National University of Ireland, Galway N/A Thomas van Rensberg John McHale National University of Ireland, Galway National University of Ireland, Galway ann.walsh@nigalway.ie N/A thomas.vanrensburg @nuigalway.ie john.mchale@nuigalway.ie Amaya Vega Brian O'Toole National University of Ireland, Galway National University of Ireland, Galway amaya.vega@nuigalway.ie N/A 25