Measuring the value of ecosystem-based fishery management using financial portfolio theory

Carmona, Itsaso; Ansuategi, Alberto; Gómez, José Manuel Chamorro; Escapa, Marta; Gallastegui, M. Carmen; Murillas, Arantza; Prellezo, Raúl

doi:10.1016/j.ecolecon.2019.106431

Cited by 5 publications

(4 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Comparing different scenarios could be helpful to quantify changes on risk and return levels, and observe how different decisions would affect the reallocation of our recommended weights. There are also potential scenarios to be explored by the inclusion of a sustainability parameter (γ) in the risk minimization problem (Sanchirico et al, 2008;Jin et al, 2016;Carmona et al, 2020). It would be useful to simulate possible policies and observe how these decisions would affect the reallocation of landings.…”

Section: Discussionmentioning

confidence: 99%

“…There is a growing branch in the literature that suggests financial approaches be considered in fisheries management (Yang et al, 2008;Gourguet et al, 2014;Pokki et al, 2018). Specifically, researchers in the field of environmental and natural resources have recently advocated applying the modern portfolio theory (MPT) (Markowitz, 1952) to improve the guidance and decision making process of natural resources, including agriculture (Knoke et al, 2015;Matthies et al, 2019), landscape conservation under climate change (Ando and Mallory, 2012;Shah and Ando, 2015), forestry (Knoke and Wurm, 2006;Reeves and Haight, 2000;Matthies et al, 2015), energy (Bazilian and Roques, 2009), biodiversity conservation and crop diversification (Fraser et al, 2005;Paut et al, 2019), and last, but not least, fishing resources (Edwards et al, 2004;Sanchirico et al, 2008;Rȃdulescu et al, 2010;Jin et al, 2016;Alvarez et al, 2017;Carmona et al, 2020;Lopetegui and del Valle, 2020). In fact, there exists a sounded parallelism between financial assets and fish stocks.…”

Section: Introductionmentioning

confidence: 99%

“…If we are not including such constraints in the optimisation model, our recommendations might even imply catching up to a level that could lead to the collapse of fish stocks. These additional constraints can limit either, the initial investment and risk preferences (Knoke et al, 2005;Knoke and Wurm, 2006), a desired minimum diversification level (Halpern et al, 2011) and/or a TAC based regulation (Carmona et al, 2020). For the purpose of our study, we are including a compound set of constraints to obtain the financial efficient frontier (FEF).…”

Section: Introductionmentioning

confidence: 99%

“…Thus, with the minimum box constraint, we ensure that our recommendation at least involves the minimum observed proportion to total landings from each fish species. Third, following Carmona et al (2020), we are also including an upper maximum constraint that measures the weight of the quotas as a percentage to total landings. This further constraint works replacing, for regulated species, the above-mentioned maximum observed weight by their quota weight; while for the non-regulated ones the maximum observed constraint is maintained.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

An efficient portfolio approach towards ecosystem-based fisheries governance in EU

Lopetegui

Valle

2022

Fisheries Research

View full text Add to dashboard Cite

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

An efficient portfolio approach towards ecosystem-based fisheries governance in EU

Lopetegui

Valle

2022

Fisheries Research

View full text Add to dashboard Cite

Multispecies Portfolios of U.S. Marine Fisheries: Ecosystem‐Based Fisheries Management Reduces Economic Risk

Townsend,

Link,

DePiper

et al. 2024

Fisheries

View full text Add to dashboard Cite

Fisheries management has focused on single stocks, not directly accounting for species interactions, and usually only considering economic factors in post hoc analysis. This approach has been successfully applied for many species over many years, but may also inadvertently result in greater risks being incurred. We demonstrate a portfolio optimization approach to inform a broader set of fishery concerns as a way to emphasize species interactions and economic considerations in resource management decision making. The approach can use readily available data on landings and revenue to generate easily digestible indicators of risk, namely the risk gap (i.e., the difference between actual and optimal portfolio values). Herein, we calculate portfolio efficiency frontiers that minimize risk for target revenue outcomes and resulting risk gaps for commercial fisheries using the top 25 landed‐value species in six U.S. fisheries regions. Most regions exhibited a risk gap on the order of US$20–50 million, collectively on average over $250 million. Risk gaps can be used as ecosystem‐level indicators to inform managers of the unnecessary risk being assumed for a given level of revenue for a portfolio of fisheries stocks, which can move us towards operational ecosystem‐based fisheries management.

show abstract

Evidence of ecosystem overfishing in U.S. large marine ecosystems

Link

2021

ICES Journal of Marine Science

View full text Add to dashboard Cite

Marine capture fisheries in the U.S. are important from a societal, cultural, economic, and ecological perspective. Although fisheries in the U.S. are generally well-managed, they still face some challenges as do most fisheries around the world. To address these challenges, a broader, more systematic approach is useful. There is a global need to develop measures of ecosystem overfishing (EOF) that detect overfishing of an entire ecosystem using readily available data and based on widely repeatable patterns. These EOF indicators extend the thinking beyond single stock overfishing to an entire ecosystem and are largely based on well-established trophic theory. Moreover, these EOF indicators need to be germane for both data rich and especially data limited situations, easily interpretable, and relatively simple to calculate. Here, I present the results of several of these indicators—the Ryther, Fogarty, and Friedland indices—as well as indices based on cumulative biomass-Trophic Level curve parameters for eight U.S. Large Marine Ecosystems (LMEs). Significantly, all these EOF indicators also have thresholds beyond which EOF is indicated, particularly when coupled with other evidence. Evidence for EOF is suggested for two of the eight U.S. LMEs. Even apart from EOF thresholds, detecting whether EOF is occurring, or how debatable the proposed EOF thresholds are, there are multiple benefits from monitoring these ecosystem-level indicators. Detecting patterns and trends in overall fishing changes for an ecosystem is chief among them. Additionally, EOF indicators detected changes in these LMEs at least 2–3 years, even up to 5 years prior to major impacts that might not be identified by piecing together fishing impacts on a stock-by-stock basis; thus, the EOF indicators could serve as an early warning signal. I propose that instead of starting with the history of which stocks have been assessed or even with what we deem most valuable, we look at the entire system of fisheries in an LME and if EOF is detected, explore means to address excess fishing pressure systematically before delving into the details of specific stocks. I conclude that EOF measures need to be monitored, EOF thresholds refined, and if EOF is detected then the means to mitigate total fishing pressure in an ecosystem should be explored.

show abstract

Measuring the value of ecosystem-based fishery management using financial portfolio theory

Cited by 5 publications

References 26 publications

An efficient portfolio approach towards ecosystem-based fisheries governance in EU

An efficient portfolio approach towards ecosystem-based fisheries governance in EU

Multispecies Portfolios of U.S. Marine Fisheries: Ecosystem‐Based Fisheries Management Reduces Economic Risk

Evidence of ecosystem overfishing in U.S. large marine ecosystems

Contact Info

Product

Resources

About