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Potential Sustainable Economic Benefits of a Closed Zone 

Potential Sustainable Economic Benefits of a Closed Zone 

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This paper investigates the effect of positive marginal monitoring and enforcement costs, 'policing cost,' on the optimal exploitation of a fishery under the management of a marine protected area. It is shown that with positive marginal policing cost, the objective of maximum economic yield is no longer optimal, and that some dissipation of economi...

Contexts in source publication

Context 1
... the superscript designates a numbered zone. If the objective is to minimize the total social cost of a human activity, or to accept some given amount of sustainable rent degradation, maintenance of the inequalities in equation (2) is not rational policy. 8 Rather, the human activity should be shunted out of those zones where its marginal social cost, measured by dV i / dh , is relatively high to where it is lower, so reducing the total social cost of the activity. Such a policy of regulated access re- quires monitoring and policing and, presumably, the greater the number of different types of zones that have to be policed, the greater policing costs will be. This is es- pecially so when different types of human activities are allowed/disallowed in different zones. In this section, attention turns to the modeling of sustainable economic rent, and the economic consequences of biological spillovers. There are several ways to model the economic consequence of an MPA with associated biological and economic spillovers. A simple source-sink model is used here to illustrate the main points. In figure 1, distance from the center of a closed zone is measured on the x-axis, and rent per square unit area (say, per acre) of ocean floor is measured in dollars on the y-axis. The function f ( x ) measures sustainable economic rent per unit area as depending on absolute distance from the center of the closed zone. This declining function is consistent with the assumption that the value of spillovers from the closed zone declines with distance. In equation (1), f x < 0. It should be emphasized that figure 1 represents a cross section through the center of a “designated geographic area” shown in figure 2, which is drawn circular only to simplify the calcu- lations below. The function f ( x ) can be thought of as the outer edge of a “bubble” of sustainable economic rent that exists in three-dimensional space with its highest point centered over the origin. The rate of economic rent, f ( x ), is sustainable in the sense that human users can obtain it period after period. For example, rent is sustainable if fishers take only the annual growth in biomass, or, if hobbyist divers do not interfere with the oceanic objects that they view. As the baseline case, suppose that the designated geographic area in figure 2 is inefficiently managed initially to the extent that fishers and other human users of it reduce economic rent everywhere to zero. This assumption is consistent with the theory of the open-access fishery as discussed by Gordon (1954), and is assumed in many of the bioeconomic models cited earlier. It is also approximately consistent with the analysis of fisheries that use a total allowable catch (TAC) in combination with fishing restrictions, such as of type of gear, number of boats, or workers per boat. Thus, in order to capture the increased economic rents afforded by the catch limit, fishers engage in rent destroying practices, such as capital stuffing and derby fishing (OECD 1997). In order to increase economic rent from the baseline (zero) level, a closed zone is introduced over a biologically productive area chosen on the basis of the considerations discussed earlier. In figure 1, the distance 0 x 1 indicates the closed zone. It is assumed that, with time, the biological productivity of the closed zone increases, ul- timately to its maximum monetary level, I MAX . Such an assumption is consistent with the relevant field studies discussed by Ward, Heinemann, and Evans (2001). An observed problem with closed zones that are not accompanied with other zoning measures is that fishers will fish intensively right up to the edge of the closed zone. This is an example of “fishery displacement” by fishers excluded from the no-take zone and is a familiar assumption in bioeconomic models. Such inten- sive fishing effort (and possibly other human activities such as diving and anchor damage) destroys the potential sustainable economic rent beyond x 1 . If this is the case, the rent profile becomes I MAX Ax 1 x 2 , which is obviously less than it could be along f ( x ). While the managers of some fisheries appear to be content with this state of af- fairs, others are not. Thus, U.S. authorities governing the Gulf of Maine off the northeastern U.S. coast allow fishing right up to the boundary of the closed zones, but in Australia’s Great Barrier Reef Marine Park, closed zones may be further protected by adjacent restricted zones (Day 2002). Such a restricted zone is shown in figure 1 as the distance x 1 to x 2 . As a matter of policy, the objective of the restricted zone is to preserve as much of the sustainable economic rent as possible, subject to a policing cost constraint (as discussed later). Accordingly, some human activities are allowed in the restricted zone, but not others. Such zoning restrictions are consistent with equation (2) and later discussion. We are interested in the maximum amount of sustainable economic rent; i.e. , MEY, created in the restricted zone through biological and associated economic spillovers from the closed zone. To find this, we need to calculate the volume, V , which is a monetary measure of sustainable economic rent, created under f ( x ) between x 1 and x 2 rotated around the y-axis. 9 The necessary integration exercise ...
Context 2
... the superscript designates a numbered zone. If the objective is to minimize the total social cost of a human activity, or to accept some given amount of sustainable rent degradation, maintenance of the inequalities in equation (2) is not rational policy. 8 Rather, the human activity should be shunted out of those zones where its marginal social cost, measured by dV i / dh , is relatively high to where it is lower, so reducing the total social cost of the activity. Such a policy of regulated access re- quires monitoring and policing and, presumably, the greater the number of different types of zones that have to be policed, the greater policing costs will be. This is es- pecially so when different types of human activities are allowed/disallowed in different zones. In this section, attention turns to the modeling of sustainable economic rent, and the economic consequences of biological spillovers. There are several ways to model the economic consequence of an MPA with associated biological and economic spillovers. A simple source-sink model is used here to illustrate the main points. In figure 1, distance from the center of a closed zone is measured on the x-axis, and rent per square unit area (say, per acre) of ocean floor is measured in dollars on the y-axis. The function f ( x ) measures sustainable economic rent per unit area as depending on absolute distance from the center of the closed zone. This declining function is consistent with the assumption that the value of spillovers from the closed zone declines with distance. In equation (1), f x < 0. It should be emphasized that figure 1 represents a cross section through the center of a “designated geographic area” shown in figure 2, which is drawn circular only to simplify the calcu- lations below. The function f ( x ) can be thought of as the outer edge of a “bubble” of sustainable economic rent that exists in three-dimensional space with its highest point centered over the origin. The rate of economic rent, f ( x ), is sustainable in the sense that human users can obtain it period after period. For example, rent is sustainable if fishers take only the annual growth in biomass, or, if hobbyist divers do not interfere with the oceanic objects that they view. As the baseline case, suppose that the designated geographic area in figure 2 is inefficiently managed initially to the extent that fishers and other human users of it reduce economic rent everywhere to zero. This assumption is consistent with the theory of the open-access fishery as discussed by Gordon (1954), and is assumed in many of the bioeconomic models cited earlier. It is also approximately consistent with the analysis of fisheries that use a total allowable catch (TAC) in combination with fishing restrictions, such as of type of gear, number of boats, or workers per boat. Thus, in order to capture the increased economic rents afforded by the catch limit, fishers engage in rent destroying practices, such as capital stuffing and derby fishing (OECD 1997). In order to increase economic rent from the baseline (zero) level, a closed zone is introduced over a biologically productive area chosen on the basis of the considerations discussed earlier. In figure 1, the distance 0 x 1 indicates the closed zone. It is assumed that, with time, the biological productivity of the closed zone increases, ul- timately to its maximum monetary level, I MAX . Such an assumption is consistent with the relevant field studies discussed by Ward, Heinemann, and Evans (2001). An observed problem with closed zones that are not accompanied with other zoning measures is that fishers will fish intensively right up to the edge of the closed zone. This is an example of “fishery displacement” by fishers excluded from the no-take zone and is a familiar assumption in bioeconomic models. Such inten- sive fishing effort (and possibly other human activities such as diving and anchor damage) destroys the potential sustainable economic rent beyond x 1 . If this is the case, the rent profile becomes I MAX Ax 1 x 2 , which is obviously less than it could be along f ( x ). While the managers of some fisheries appear to be content with this state of af- fairs, others are not. Thus, U.S. authorities governing the Gulf of Maine off the northeastern U.S. coast allow fishing right up to the boundary of the closed zones, but in Australia’s Great Barrier Reef Marine Park, closed zones may be further protected by adjacent restricted zones (Day 2002). Such a restricted zone is shown in figure 1 as the distance x 1 to x 2 . As a matter of policy, the objective of the restricted zone is to preserve as much of the sustainable economic rent as possible, subject to a policing cost constraint (as discussed later). Accordingly, some human activities are allowed in the restricted zone, but not others. Such zoning restrictions are consistent with equation (2) and later discussion. We are interested in the maximum amount of sustainable economic rent; i.e. , MEY, created in the restricted zone through biological and associated economic spillovers from the closed zone. To find this, we need to calculate the volume, V , which is a monetary measure of sustainable economic rent, created under f ( x ) between x 1 and x 2 rotated around the y-axis. 9 The necessary integration exercise ...
Context 3
... the superscript designates a numbered zone. If the objective is to minimize the total social cost of a human activity, or to accept some given amount of sustainable rent degradation, maintenance of the inequalities in equation (2) is not rational policy. 8 Rather, the human activity should be shunted out of those zones where its marginal social cost, measured by dV i / dh , is relatively high to where it is lower, so reducing the total social cost of the activity. Such a policy of regulated access re- quires monitoring and policing and, presumably, the greater the number of different types of zones that have to be policed, the greater policing costs will be. This is es- pecially so when different types of human activities are allowed/disallowed in different zones. In this section, attention turns to the modeling of sustainable economic rent, and the economic consequences of biological spillovers. There are several ways to model the economic consequence of an MPA with associated biological and economic spillovers. A simple source-sink model is used here to illustrate the main points. In figure 1, distance from the center of a closed zone is measured on the x-axis, and rent per square unit area (say, per acre) of ocean floor is measured in dollars on the y-axis. The function f ( x ) measures sustainable economic rent per unit area as depending on absolute distance from the center of the closed zone. This declining function is consistent with the assumption that the value of spillovers from the closed zone declines with distance. In equation (1), f x < 0. It should be emphasized that figure 1 represents a cross section through the center of a “designated geographic area” shown in figure 2, which is drawn circular only to simplify the calcu- lations below. The function f ( x ) can be thought of as the outer edge of a “bubble” of sustainable economic rent that exists in three-dimensional space with its highest point centered over the origin. The rate of economic rent, f ( x ), is sustainable in the sense that human users can obtain it period after period. For example, rent is sustainable if fishers take only the annual growth in biomass, or, if hobbyist divers do not interfere with the oceanic objects that they view. As the baseline case, suppose that the designated geographic area in figure 2 is inefficiently managed initially to the extent that fishers and other human users of it reduce economic rent everywhere to zero. This assumption is consistent with the theory of the open-access fishery as discussed by Gordon (1954), and is assumed in many of the bioeconomic models cited earlier. It is also approximately consistent with the analysis of fisheries that use a total allowable catch (TAC) in combination with fishing restrictions, such as of type of gear, number of boats, or workers per boat. Thus, in order to capture the increased economic rents afforded by the catch limit, fishers engage in rent destroying practices, such as capital stuffing and derby fishing (OECD 1997). In order to increase economic rent from the baseline (zero) level, a closed zone is introduced over a biologically productive area chosen on the basis of the considerations discussed earlier. In figure 1, the distance 0 x 1 indicates the closed zone. It is assumed that, with time, the biological productivity of the closed zone increases, ul- timately to its maximum monetary level, I MAX . Such an assumption is consistent with the relevant field studies discussed by Ward, Heinemann, and Evans (2001). An observed problem with closed zones that are not accompanied with other zoning measures is that fishers will fish intensively right up to the edge of the closed zone. This is an example of “fishery displacement” by fishers excluded from the no-take zone and is a familiar assumption in bioeconomic models. Such inten- sive fishing effort (and possibly other human activities such as diving and anchor damage) destroys the potential sustainable economic rent beyond x 1 . If this is the case, the rent profile becomes I MAX Ax 1 x 2 , which is obviously less than it could be along f ( x ). While the managers of some fisheries appear to be content with this state of af- fairs, others are not. Thus, U.S. authorities governing the Gulf of Maine off the northeastern U.S. coast allow fishing right up to the boundary of the closed zones, but in Australia’s Great Barrier Reef Marine Park, closed zones may be further protected by adjacent restricted zones (Day 2002). Such a restricted zone is shown in figure 1 as the distance x 1 to x 2 . As a matter of policy, the objective of the restricted zone is to preserve as much of the sustainable economic rent as possible, subject to a policing cost constraint (as discussed later). Accordingly, some human activities are allowed in the restricted zone, but not others. Such zoning restrictions are consistent with equation (2) and later discussion. We are interested in the maximum amount of sustainable economic rent; i.e. , MEY, created in the restricted zone through biological and associated economic spillovers from the closed zone. To find this, we need to calculate the volume, V , which is a monetary measure of sustainable economic rent, created under f ( x ) between x 1 and x 2 rotated around the y-axis. 9 The necessary integration exercise ...
Context 4
... the superscript designates a numbered zone. If the objective is to minimize the total social cost of a human activity, or to accept some given amount of sustainable rent degradation, maintenance of the inequalities in equation (2) is not rational policy. 8 Rather, the human activity should be shunted out of those zones where its marginal social cost, measured by dV i / dh , is relatively high to where it is lower, so reducing the total social cost of the activity. Such a policy of regulated access re- quires monitoring and policing and, presumably, the greater the number of different types of zones that have to be policed, the greater policing costs will be. This is es- pecially so when different types of human activities are allowed/disallowed in different zones. In this section, attention turns to the modeling of sustainable economic rent, and the economic consequences of biological spillovers. There are several ways to model the economic consequence of an MPA with associated biological and economic spillovers. A simple source-sink model is used here to illustrate the main points. In figure 1, distance from the center of a closed zone is measured on the x-axis, and rent per square unit area (say, per acre) of ocean floor is measured in dollars on the y-axis. The function f ( x ) measures sustainable economic rent per unit area as depending on absolute distance from the center of the closed zone. This declining function is consistent with the assumption that the value of spillovers from the closed zone declines with distance. In equation (1), f x < 0. It should be emphasized that figure 1 represents a cross section through the center of a “designated geographic area” shown in figure 2, which is drawn circular only to simplify the calcu- lations below. The function f ( x ) can be thought of as the outer edge of a “bubble” of sustainable economic rent that exists in three-dimensional space with its highest point centered over the origin. The rate of economic rent, f ( x ), is sustainable in the sense that human users can obtain it period after period. For example, rent is sustainable if fishers take only the annual growth in biomass, or, if hobbyist divers do not interfere with the oceanic objects that they view. As the baseline case, suppose that the designated geographic area in figure 2 is inefficiently managed initially to the extent that fishers and other human users of it reduce economic rent everywhere to zero. This assumption is consistent with the theory of the open-access fishery as discussed by Gordon (1954), and is assumed in many of the bioeconomic models cited earlier. It is also approximately consistent with the analysis of fisheries that use a total allowable catch (TAC) in combination with fishing restrictions, such as of type of gear, number of boats, or workers per boat. Thus, in order to capture the increased economic rents afforded by the catch limit, fishers engage in rent destroying practices, such as capital stuffing and derby fishing (OECD 1997). In order to increase economic rent from the baseline (zero) level, a closed zone is introduced over a biologically productive area chosen on the basis of the considerations discussed earlier. In figure 1, the distance 0 x 1 indicates the closed zone. It is assumed that, with time, the biological productivity of the closed zone increases, ul- timately to its maximum monetary level, I MAX . Such an assumption is consistent with the relevant field studies discussed by Ward, Heinemann, and Evans (2001). An observed problem with closed zones that are not accompanied with other zoning measures is that fishers will fish intensively right up to the edge of the closed zone. This is an example of “fishery displacement” by fishers excluded from the no-take zone and is a familiar assumption in bioeconomic models. Such inten- sive fishing effort (and possibly other human activities such as diving and anchor damage) destroys the potential sustainable economic rent beyond x 1 . If this is the case, the rent profile becomes I MAX Ax 1 x 2 , which is obviously less than it could be along f ( x ). While the managers of some fisheries appear to be content with this state of af- fairs, others are not. Thus, U.S. authorities governing the Gulf of Maine off the northeastern U.S. coast allow fishing right up to the boundary of the closed zones, but in Australia’s Great Barrier Reef Marine Park, closed zones may be further protected by adjacent restricted zones (Day 2002). Such a restricted zone is shown in figure 1 as the distance x 1 to x 2 . As a matter of policy, the objective of the restricted zone is to preserve as much of the sustainable economic rent as possible, subject to a policing cost constraint (as discussed later). Accordingly, some human activities are allowed in the restricted zone, but not others. Such zoning restrictions are consistent with equation (2) and later discussion. We are interested in the maximum amount of sustainable economic rent; i.e. , MEY, created in the restricted zone through biological and associated economic spillovers from the closed zone. To find this, we need to calculate the volume, V , which is a monetary measure of sustainable economic rent, created under f ( x ) between x 1 and x 2 rotated around the y-axis. 9 The necessary integration exercise ...
Context 5
... economic rent, V , is the maximum sustainable rent that can be created through biological spillovers assuming fishers and other human users of the restricted zone abide by the rules of the restricted zone. That is, they don’t partake of illegal activities that reduce economic rent below f ( x ). It is reasonable to assume that without policing activity, fishers and other human users of the restricted zone will engage in illegal activities, thus reducing the level of sustainable economic rent. Support for this proposition is widespread (see Kuperan and Sutinen 1998; Charles, Mazany, and Cross 1999; Nielsen 2003; and Nielsen and Mathiesen 2003). We are now interested in the benefits of policing activity in the restricted zone. If illegal activity occurs, rent is reduced below f ( x ) in figure 1. 10 This cost is modeled on the simplifying assumption that the actual intercept, I , of f ( x ) is below I MAX , the whole f ( x ) function shifting downward. The cost of illegal activity in the restricted zone is calculated in two steps. First, evaluation of the previous equation ...

Citations

... See also [10]. Besides, [11] investigated the effect of positive marginal monitoring and enforcement costs, 'policing cost', on the optimal exploitation of a fishery under the management of a marine protected area and shown that with positive marginal policing cost, the objective of maximum economic yield is no longer optimal and that some dissipation of economic rent is socially optimal. See also [12] and [13] showed the conceptual issues imperative to marine harvest refuges with application from temperate reef fishes. ...
... European Journal of Statistics and Probability, 12 (1)[10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29] 2024 Print ISSN: 2055-0154(Print), ...
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... As predicted by theory, for any particular MPA location, the enforcement level employed declines with an increasing fine level because the fine reduces the expected income from fishing in that site, which implies that the manager achieves the optimal outcome at a lower budget (Sutinen and Andersen 1985;Hallwood 2004; here, figure 5). For both managers, high fines mean that lower enforcement levels are necessary to achieve the same impact as MPAs without fines. ...
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... Consequently, the larger the desired stock size (above the open-access equilibrium) the greater the necessary expenditure on enforcement (Sutinen & Andersen, 1985). More generally, the optimal level of enforcement is attained when the marginal cost of enforcement is equal to its marginal benefit (Becker, 1968;Sutinen & Andersen, 1985;Hallwood, 2005). Other models of fisheries enforcement have considered differences between input controls (e.g. ...
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... Support by fishers may have a favourable influence on enforcement costs (e.g. Causey 1995;Ticco 1995;Bohnsack 1996b;Parrish et al. 2001;Hallwood 2004), developing in some cases a phenomenon of self-surveillance by users (Sutinen and Kuperan 1999). For many authors, the success of a MPA is conditioned by the support of users (e.g. ...
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... Other factors such as the distance from the shore, the size and the type of MPA are also considered. Causey 1995;Ticco 1995;Bohnsack 1996b;Parrish et al. 2001;Hallwood 2004), developing in some cases a phenomenon of self-surveillance by users (Sutinen and Kuperan 1999). For many authors, the success of a MPA is conditioned by the support of users (e.g. ...
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