MARINFORSK-Marine ressurser og miljø

Production risk is of particular importance in fisheries, where input regulations often are a part of the management system. When the regulators influence input use by restricting factors such as vessel size and gear types to limit fishing effort, or by subsidizing inputs (e.g. capital and fuel) to support fisher incomes, they are potentially not influencing only harvest levels, but also production risk. Hence, while it is well known that creating vessel groups by size reduce economic efficiency, little is known with respect to the impact on production risk of these regulations. Similarly, fuel subsidies have received significant attention in the literature as it is perceived to support overfishing. While this is true in open access and poorly regulated fisheries, the subsidies impact on production risk may vary with management system. Decisions with respect to input use can be influenced by fishers? risk preferences and depend on whether the inputs reduce or increase production risk. As such, understanding production risk is an important component of understanding fisher behavior. The purpose of the first paper in this project is to investigate production risk and its implications for different vessel groups and for fisheries policies, conducting an empirical analysis in the Norwegian fisheries. The results indicate that production risk is present and that the effect of input use on production risk varies between vessel groups. Capital has a risk-reducing effect in the ocean fleet but are risk-increasing in coastal fisheries. Fuel use is found to be a risk-increasing input for most of the vessel groups, while labor use is risk-reducing. The second paper of this project examines the consequences of lifting the fuel is tax-exempt the Norwegian fishery industry face today. For a climate tax to be successful from an environmental perspective, the tax must motivate the vessel to utilize less fuel. However, it is unclear to what degree this is possible and therefore the effect the introduction a possible tax will have. A fuel tax will however increase the effective price a fishing vessel paying for fuel, which in turn might reduce the profit and fishermen?s income to fall further behind the level of manufacturing workers. How big the economic consequences will be depending on to what degree vessels can substitute away from fuel. In this article we examine the environmental impact and economic consequences of introducing a carbon tax, and by that increasing fuel prices for the Norwegian fishing fleet. The results show that all vessel groups have consistently low own-price elasticity for fuel. This means that increases in fuel prices have only minor consequences for fuel consumption, and therefore the environmental impact will be marginal. Further, we find that substitution between fuel and labor and fuel and capital is only possible to a limited degree. Hence, our results indicate that the vessels only by a limited extent can adapt to changes in fuel prices by changing operating patterns. The results also reveal that increased catch volume per vessel will increase fuel utilization. This means that vessels with a high degree of traded quotas will be more fuel efficient.

The result of the research stay is two scientific articles: Article 1 are forthcoming: Asche, F., A. L. Cojocaru, R. B. M. Pincinato and K. H. Roll (2020) Production Risk in the Norwegian Fisheries Journal. Environmental and Resource Economics, (), 1-13. For article 2 there exist a draft, that will be submitted to relevant journal winter/spring 2020. Roll, K., F. Asche and T. Bjorndal. The effect of introducing fuel tax to the Norwegian fishery industry - Workingpaper. I have been working with researchers both at the Econ Dept at UCSD and the research institute NOAA. As we have already stated severally other related project, this collaboration will continue after returning to Norway. Because of the complexity of the research questions, discussions and consultations with scientist from different discipline have also added valuable perspectives to the project. I will try to transferee the knowledge I incurred during me stay, by invite my research colleges in Norway into these projects.

The next fall I have been invited to University of California at San Diego and the associated research center - NOAA Southwest Fisheries Centre. By spending a period at these institutions, I will have the opportunity work together with some of the world's leading scientists within the fields of environmental economics, biology, oceanography and regulation of natural resource-based industries with a focus on fishery. Around the world there are few oceanic research centers where scientists from different discipline work together to solve common research question. Relationships and networks I create will be important for this project as well as for future research and possible future NFR projects. In the research project I will investigate how climate change might affect the socio-economic sustainability of important fisheries along the Norwegian coast. To approach this question empirical bioeconomic models using data on fleet composition, fishing behavior, climate, and oceanography will be developed. The estimated models will be used to evaluate the impact of climate change and the effectiveness of management policies. The economic impacts of climate change on Norwegian fisheries will occur both from biological effects on species and from changes in the behavior of fishers. The goal of the project is to link climate-driven changes in fish stocks with estimates of fishers' responses to arrive at total changes in fisheries production and economic activity. By combining both biological and behavioral driven changes in harvest, economic models can be used to predict characteristics of the fishery under alternative climate change and policy scenarios. I will address these key questions: 1. How do climatic and environmental factors affect fish stocks? 2. How will fish population changes alter local and regional economics and behavioral patterns of commercial fisheries? 3. What management strategies can most sustainably address future climate change scenarios?