Tragedy  of  the  Commons  and  the  South  Atlantic  Vermilion  Snapper  A  Cost-­‐Benefit  Analysis  of  Current  and  Future  Policy  Options      4/9/2012 University of Denver School of Public Policy Michael Stephens Final Masters Project

 

Table  of  Contents  Executive Summary ....................................................................................................................................... 1  

Key Findings .............................................................................................................................................. 1  

Problem Definition ........................................................................................................................................ 2  

Introduction ............................................................................................................................................... 2  

Issue Analysis ................................................................................................................................................ 4  

Tragedy of the Commons ........................................................................................................................... 4  

CPR Management Models ......................................................................................................................... 7  

Co-Management .................................................................................................................................... 7  

Government Intervention ....................................................................................................................... 9  

Property Rights .................................................................................................................................... 10  

Tragedy of the Commons: The South Atlantic Vermilion Snapper ......................................................... 11  

Historical Analysis of Property Rights and the Vermilion Snapper .................................................... 14  

The South Atlantic Vermilion Snapper and CPR Management Models .................................................. 16  

Government Model .............................................................................................................................. 16  

Co-Management Model ....................................................................................................................... 17  

Property Rights .................................................................................................................................... 19  

Stakeholders and the Vermilion Snapper Fishery ............................................................................... 22  

Methods ....................................................................................................................................................... 25  

Proposed Solutions ...................................................................................................................................... 28  

Current Regulation- TAC ........................................................................................................................ 28  

Alternative 1- Catch Shares ..................................................................................................................... 29  

Alternative 2 - Co-management ............................................................................................................... 30  

Cost-Benefit Analysis .................................................................................................................................. 32  

Qualitative CBA ....................................................................................................................................... 34  

Sensitivity Analysis .................................................................................................................................. 36  

Weaknesses and Limitations ....................................................................................................................... 39  

Strategic Recommendation .......................................................................................................................... 40  

Appendix A .................................................................................................................................................. 42  

Status Quo: Total Allowable Catch ......................................................................................................... 42  

Catch Shares: Individual Transferrable Quotas ..................................................................................... 45  

Co-management Low ............................................................................................................................... 47  

Co-management High .............................................................................................................................. 49  

Appendix B .................................................................................................................................................. 51  

Social Discount Rate (.03) Sensitivity Analysis ....................................................................................... 51  

Social Discount Rate (.07) Sensitivity Analysis ....................................................................................... 52  

Decreasing TAC Sensitivity Analysis ...................................................................................................... 54  

Increasing TAC Sensitivity Analysis ........................................................................................................ 56  

Increased Time Sensitivity Analysis ........................................................................................................ 57  

 

 

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Executive  Summary   The purpose of the study was to look at and quantify the costs and benefits of different policy measures to stop overfishing of the South Atlantic vermilion snapper. Given that the South Atlantic vermilion snapper is a common-pool resource, it can easily be exploited and suffer from tragedy of the commons as it currently is. Experts in natural resource management have developed three different management models to stop tragedy of the commons. This study qualitatively and quantitatively looked at the costs and benefits of each of three different management models as they relate to the South Atlantic vermilion snapper.

Key  Findings  

1) In a theoretical analysis of the three management models, the catch share system is a better option than either the co-management or the centralized control model that currently exists. A catch share system increases the costs of management and can potentially increase highgrading and increase fishing pressure on other fisheries. However, there are no problems with the implementation of a catch share system. Co-management may be hard to implement given the diversity of costs that exists among the different fishermen in the South Atlantic vermilion snapper fishery. It will be incredibly hard to implement a co-management system. Also, the current centralized model has not stopped current overfishing practices. The three years for which there exists data show that the fishermen have not followed the established limit, and therefore, the centralized system has not created a sustainable fishery.

2) In the quantitative analysis, the co-management system provided the most and the least in terms of net present value. The co-management system provides a range of values from $12,935,370 and $43,159,472. These values are dependent upon the fishermen and government agreed upon catch limit. A catch share policy came in second with an NPV at $24,778,779. The current policy provides $16,599,450 NPV, so it is between a catch share and co-management low.

3) The co-management low estimate is the more probable estimate, and this estimate is lower than the catch share policy estimate, so I did sensitivity analysis on catch shares. Two out of the three analyses performed found that a reasonable range of values between $17 million and $30 million net present value. Even when I increased the time it took to increase the total allowable catch the net present value was still higher than co-management low at $15 million.

4) The catch share policy has the most ideal theoretical implementation and the highest probable net present value. Given these two facts, I recommend implementing a catch share system in the South Atlantic vermilion snapper fishery.

 

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Problem  Definition  Introduction    

Overfishing has become a serious problem around the globe, and no continent has been spared

from the effects of overfishing. A study by the Pew Environment Group estimated that out of the 1,066

species studied 36-53% were overfished1. This overfishing accounts for nearly 10 million metric tons of

lost fish population, and therefore lost fishing opportunity, since 19502. Also, in the year 2000 anywhere

from $6.4 billion to $36 billion in 2004 dollars was lost due to loss of catch3. The effects of overfishing

go beyond economic loss. This same study estimated lost fish catch could have helped over 20 million

people avoid undernourishment4. This is not just a third world problem. The western world, Europe and

North America, has seen the highest levels of overfishing5.

The South Atlantic (SA) vermilion snapper is one of the many fishes in the US where overfishing

is occurring6. Current stock estimates show that the vermilion snapper is at 86% of its target level7.

Broadly speaking, this means that the fishermen are catching the vermilion snapper above the maximum

sustainable yield (MSY), which could eventually lead to fishery closure and possibly species extinction.

Healthy vermilion snapper stocks are important for two reasons. First, there is the environmental

argument, which sees the value of protecting biodiversity. However, it goes further than all life having

1 U.T. Srinivasan et al., “Overfishing Trends and the Global Food Crisis,” The Pew Environment Group, September 2010, 1-4, 3. http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/News/Press_Releases/Protecting_ocean_life/Pew%20OSS%20Food%20Security%20FINAL.pdf (accessed March 22, 2012). 2 Ibid, p. 3 3 Ibid, p. 3 4 Ibid, p. 3 5 U.T. Srinivasan et al., “Overfishing Trends and the Global Food Crisis,” The Pew Environment Group, September 2010, 1-4, 3. http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/News/Press_Releases/Protecting_ocean_life/Pew%20OSS%20Food%20Security%20FINAL.pdf (accessed March 22, 2012). 6 National Oceanic and Atmospheric Administration, “Vermilion Snapper (rhomboplites Aurorubens),” National Oceanic and Atmospheric Administration: Fish Watch, http://www.nmfs.noaa.gov/fishwatch/species/vermilion_snapper.htm (accessed November 28, 2011). 7 Ibid.

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intrinsic value, although, this is extremely important; some of these fish species provide important

ecosystem services for humans. For example, the overfishing of the rainbow parrotfish in the Caribbean

has had devastating impacts in the region. Parrotfish are herbivorous grazers and protect the reefs from

algal overgrowth. This makes reefs are extremely sensitive to parrotfish exploitation8. While there are no

known physical or natural capital benefits of the vermilion snapper, biodiversity does increase the

resilience of all coexisting species to overexploitation9. This will be discussed further in the qualitative

cost-benefit analysis section.

There is also an anthropocentric argument for keeping the vermilion snapper stock healthy. Many

people depend on vermilion snapper for food, income, and jobs. The vermilion snapper is the second most

fished specie in the South Atlantic Snapper Grouper (SASG) fishery, which accounts for almost 11% of

all commercial SASG catch10. It also accounts for over 15% of the total revenue for the SASG fishery or

over $2.5 million in revenue11. This means that limiting fish catch decreases the revenue, jobs, and fish

available to people in the South Atlantic fishery (SA), which is why in the short-term it makes more

economic sense to fish as much as possible. However, in the long-term, overfishing is a bad strategy for

the fishermen because it could eventually decrease fish catch up to the point where the vermilion snapper

fishery closes. The SA red snapper is a great example. They were overfished to the point where now it is

illegal to harvest or have in possession a red snapper, so all of the benefits of the red snapper fishery have

been lost12. While the health of the vermilion snapper is not as bad as the red snapper, the vermilion

snapper is being subject to overfishing. If this overfishing is not stopped, it will lead to continually

8 Mumby, Peter J., Alan Hastings, and Helen J. Edwards. “Thresholds and the Resilience of Caribbean Coral Reefs.” Nature 450 (September 11, 2007): 98-101. 9 Costello, Christopher, Steven D. Gaines, and John Lynham. “Can Catch Shares Prevent Fisheries Collapse?” Science 321:5896 (2008): 1678-81. 10 Caplog Group. “Overview of the Commercial Fishing in the South Atlantic Snapper Grouper Fishery.” Caplog Group, April 2011. p.13. http://www.caploggroup.com/www.caploggroup.com/Publications_files/Overview%20of%20Commercial%20Fishing%20in%20the%20SASG%20Fishery.pdf (accessed December 8, 2011). 11 Ibid., p.14 12 South Atlantic Fishery Management Council, “South Atlantic Snapper Grouper Complex Commercial Regulations,” South Atlantic Fishery Management Council, http://www.safmc.net/LinkClick.aspx?fileticket=hCYZ2q8q86A%3d&tabid=248 (accessed December 8, 2011).

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decreasing catch rates for the SA fishermen in the future with the potential for the eventual future closure

of the commercial fishery. If the SA wants to maintain and maybe even grow the $2.5 million in revenue,

the government needs to take steps to ensure that long-term sustainability of the SA vermilion snapper.

The organization of the paper will go as follows. The next section will look at the theory behind

tragedy of the commons as well as the natural resource management models to end tragedy of the

commons. This will be followed by a short discussion about tragedy of the commons as it exists in the

vermilion snapper fishery. The second section will look at the methods used in the paper to quantify the

costs and benefits of each of the policies as well as the specifics of each of the policy options. The CBA is

next section with some sensitivity analyses. The fourth part will look at the weaknesses and limitations in

the assumptions and quantification of each of the policies, which will then be followed by a strategic

policy recommendation.

Issue  Analysis  Tragedy  of  the  Commons    

The idea of “tragedy of the commons” was formalized by Garret Hardin in 1968. In his article, he

had the readers envision a pasture “open to all” where each herder had large profits from selling his cattle

but low costs for overgrazing13. Each herder, in this scenario, is incentivized to add more cattle to the

pasture because they receive all of the benefits from the extra cattle, but they only pay part of the cost of

overgrazing. Garret Hardin concluded,

Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit – in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons14.

13 Garret Hardin, “The Tragedy of the Commons,” Science 162 (1968): 1243-48. 14 Ibid., p.1244

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The “open to all” pasture is known as a common-pool resource (CPR). For tragedy of the

commons to occur a CPR must have two key qualities. First, the CPR must be subtractable, which means

that any resource taken from the ecosystem limits the amount others have to that resource15. Second, it

must be expensive or difficult to restrict access (excludability) to the resource16. Given these two

qualities, Table 1 below summarizes the four possible scenarios.

Table 1 Subtractability and Excludability17

Subtractability

High Low

Excl

udab

ility

Hig

h Common-Pool Resource-Lakes, fisheries, forests

Public Good-National defense, knowledge, fire protection

Low

Private Goods- Food, clothing

Toll Goods- Theaters, private clubs

As Table 1 shows, it can be almost impossible to exclude people, but not suffer from tragedy of

the commons because a good can be non-subtractable as in knowledge and national defense. It is almost

impossible to restrict knowledge, and one person benefitting from national defense does not limit

another’s ability to benefit from national defense. Therefore, knowledge and national defense are not

CPRs. On the other hand, a good can be highly subtractable, and still not suffer from tragedy of the

commons. Food is a great example. If someone buys a peach, there is one less peach for someone else to

buy, so it is very subtractable, but prices make exclusion easy, so it is very excludable. Therefore, the

good needs to have high subtractability and excludability to have the potential of suffering from tragedy

of the commons. If these two factors are present and the demand for the resource is high enough tragedy

of the commons will occur.

15 Raymond De Young and S. Kaplan. Adaptive Muddling. Ed. Raymond De Young and T. Princen. (Cambridge, MA: The MIT Press, (2012), 287-298. 16 Feeny, D. et al. The tragedy of the commons - 22 years later, Human Ecology. (1990): 1-19, 18. 17 Ostrom, Elinor. “Beyond Markets and States: Polycentric Governance of Complex Economic Systems.” American Economic Review 100 (June 2010): pg., 3.

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This is not to say that all natural resources are destined for exploitation. Hardin believes that there

are two solutions to maintain the commons: centralized control from either the government or a private

party, or private property rights18. Without one of these two solutions, he believes that the herders would

be stuck in this commons trap19. However, the Nobel Prize winning economist Elinor Ostrom believes

that Garret Hardin’s conclusions are oversimplified and there are other solutions to the problem20. She

states that the herders can manage the commons among themselves21. Therefore, the herders are not

uncontrollably stuck in this commons problem; they are part of the solution through cooperatives. The

Maine lobster fishery is just one example of a successfully co-managed system22, 23. This is an important

insight in natural resource management because many governments do not have the resources to enforce

laws or property rights, and therefore:

In the absence of effective governance institutions at the appropriate scale, natural resources and the environment are in peril from increasing human population, consumption, and deployment of advanced technologies for resource use, all of which have reached unprecedented levels24.    

In other words, many fisheries would be doomed to destruction because of lack of government

institutions and their lack of ability to enforce laws or property rights. In this case some third world

countries would be doomed to natural resource overexploitation. This does not mean that co-management

is best solution for all fisheries. For some fisheries co-management may present more favorable

management options; while other fisheries may find property rights or centralized control more favorable.

The next section will look at the three main natural resource management models along with the strengths

and weaknesses of each of the models.

18 Garret Hardin, “The Tragedy of the Commons,” Science 162 (1968): 1243-48. 19 Ibid., 20 Thomas Dietz, Elinor Ostrom and Paul C. Stern, “The Struggle to Govern the Commons,” Science 302 (2003): 1907-12. 21 Ibid., 1907 22 James M. Acheson, Capturing the Commons: Devising Institutions to Manage the Maine Lobster Industry (New Hampshire: UPNE, 2004). 23 James A. Wilson et al., “Chaos, Complexity and Community Management of Fisheries,” Marine Policy 18, no. 4 (1994): 291-305. 24 Thomas Dietz, Elinor Ostrom and Paul C. Stern, “The Struggle to Govern the Commons,” Science 302 (2003): 1907.

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CPR  Management  Models  

Co-Management

Under co-management, herders/fishermen work with government institutions to solve the

commons problem. At times, scientific experts and environmental organizations are invited to help with

some expertise in the process. These groups are in charge of: policy formulation, resource estimation,

access rights, harvesting regulations, market regulations, monitoring, control, and enforcement25. With so

many different people and groups involved, the process is complicated and long. Still, many experts

believe that co-management is the best way to solve the problem because of the involvement of the

fishermen in the process. There are two features that fishermen have that governments do not that make

regulation easier and more effective. First, fishermen knowledge is not based on scientific inquiry but

years and years of work in the industry, which means they have hands on understanding of the health of

the fishery26. Second, fishermen are more likely to comply with the regulations if they participated in the

process of making the regulations. “Compliance and involvement are interrelated phenomena… [and]

participation contributes to compliance through the process of involvement”27. Therefore, co-management

supporters believe that co-management provides a more equitable and effective means to manage the

commons28.

Co-management can be set up in one of five different ways. Some forms give more decision

making power and enforcement to fisherman than others. Table 2 shows and explains the five different

models available. The cooperative model is considered to be the ideal co-management model because

25 Sevaly Sen and Jesper Raakjaer Nielsen, “Fisheries Co-Management: A Comparative Analysis,” Marine Policy 20, no. 5 (1996): pg., 408. 26 Christopher L. Dyer, James R. McGoodwin and editors, Folk Management in the World's Fisheries: Lessons For Modern Fisheries Management (CO: University Press of Colorado, 1994) 27 Pamela S. Tolbert and Richard H. Hall, Organizations: Structures, Processes, and Outcomes, 10th ed. (New Jersey: Prentice Hall, 2009), pg. 131. 28 Christopher L. Dyer, James R. McGoodwin and editors, Folk Management in the World's Fisheries: Lessons For Modern Fisheries Management (CO: University Press of Colorado, 1994)

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both major parties are involved in all decision making processes29. This provides the hands on with the

scientific knowledge that can help better manage natural resources. The more power that is given to the

fishermen does not mean it is a better system because the process will miss some of the scientific

expertise. Ideally both parties, the government and fishermen, should be equally engaged to come out

with a more accurate and easily enforceable system.

Table 2 Co-management Models30

Model Description

Instructive There is only minimal exchange of information between the government and the users.

Consultative Decisions are taken by the government, but mechanisms are in place to consult the users.

Cooperative Users and the government work together as equal partners to make decisions.

Advisory Government advises the users on what decisions they should make and the users make the decision.

Informative Government delegates authority to users who then update the government.

One of the major assumptions with co-management is that users, if involved in the process, are

more likely to obey the regulations. Skeptics of co-management, free market resource economists, worry

about free-riding under the co-management model31, 32. Even after an agreement has been made between

the government and the users, it is still in the best interest of the users to over harvest the resource to earn

more money or increase individual utility. In other words, there are no mechanisms in place to prevent

cheating. Supporters for co-management argue that this view is too pessimistic. First, they argue that there

are mechanisms to control cheating such as giving the authority to the fishermen cooperative to restrict

29 Svein Jentoft, “Fisheries Co-Management: Delegating Government Responsibility to Fishermen's Organizations,” Marine Policy 13, no. 2 (1989): 1243-48. 30 Sevaly Sen and Jesper Raakjaer Nielsen, “Fisheries Co-Management: A Comparative Analysis,” Marine Policy 20, no. 5 (1996): pg., 406-07. 31 18 in social theory and fisheries co-management 32 Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups, Second Printing with New Preface and Appendix (Harvard Economic Studies), Revised ed. (Massachusetts: Harvard University Press, 1971).

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access to the resource33. Second, they argue the assumptions about rationality in neoclassical economic

and game theory models are wrong. Rationality assumes that (i) all possible solutions or decisions are

known, (ii) the consequences of each decision is known given the behavior of all other players, and (iii) a

person can rank all of these outcomes as a measured utility34. Under these assumptions no person can be

completely rational, and therefore, they do not always know how to maximize their own utility35. Third,

they also argue that decisions are made by individuals, but that these decisions are reinforced by cultural

and structural forces36, 37. If fisherman with governments could create a system that makes free-riding

unacceptable, social and structural forces could stop free-riding.

Government Intervention

Tragedy of the commons can also be seen as a negative externality problem. Negative resource

externalities occur when the users, looking for higher resource rents, inflict costly technological38 and

pecuniary39 effects on other users40. These externalities create a resource rush in anticipation of these

externalities. This rush is what can create tragedy of the commons. As with any externality, a government

can resolve the externality through taxation or regulation. One purpose of taxation or regulation is to

bring the private and social marginal costs closer together or exactly in line if possible.

In order to tax or regulate properly, the government needs to know the social costs, optimal levels

of production, and the private production and compliance costs which can vary among the different

33 Edella Schlager and Elinor Ostrom, “Property-Rights Regimes and Natural Resources: A Conceptual Analysis,” Land Economics 68, no. 3 (August 1992): 249-62, 253. 34  Ostrom,  Elinor.  “Beyond  Markets  and  States:  Polycentric  Governance  of  Complex  Economic  Systems.”  American  Economic  Review  100  (June  2010):  pg.,  3.  35 Ibid., p.3. 36Mark Granovetter, “Economic Action and Social Structure: The Problem of Embeddedness,” American Journal of Sociology 91, no. 3 (November 1985): 481-510. 37 Bonnie J. McCay and Svein Jentoft, “Market or Community Failure? Critical Perspectives On Common Property Research,” Human Organization 57, no. 1 (Spring 1998): 21-29. 38 A technological externality is an externality where the production function of one producer affects the production function of another producer. 39 A pecuniary externality is an externality where the efforts of one affect the value or price of the good, which in turn affects others. 40 Gary D. Libecap, “The Tragedy of the Commons: Property Rights and Markets as Solutions to Resource and Environmental Problems,” The Australian Journal of Agricultural and Resource Economics 53 (2009): 130.

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producers41. It is hard enough to know what the optimal production level is with natural resources; trying

to figure out the different production and compliance costs of each company makes taxing or regulating at

the appropriate level incredibly difficult to almost impossible. This is why governments use uniform

standards. However, uniform standards hurt some companies more than others, so businesses at times

look for ways to evade the regulation/tax. If producers evade regulation/taxation, then the government has

to spend more money on monitoring and enforcing regulation or allow unsustainable resource extraction.

If the resources are still harvested at an unsustainable rate, then the regulation/tax has failed. In fact,

government intervention has been so unsuccessful that no new CPR models use government intervention

as the way to actually solve the commons problem42. It is an obsolete solution to a very complex problem.

Property Rights

Property rights are another way for the above externalities to be solved. Property rights end the

technological externality because each user has a right to a certain amount or a certain geographical

location of the CPR. Therefore, a user that decides to extract resources quickly does not impact other

users because the other users have been legally guaranteed a right to a portion of the resource. In other

words, one person’s actions do not change the production function of any other users. In fact, it

incentivizes the most efficient means to harvest the natural resource. Property rights function in a similar

manner with the pecuniary externality. Property rights guarantee certain extraction rights to many

individuals, and therefore, what one user does with his resources will not affect the price or value of the

good of the other users.

It is important to note that property rights are important in both the co-management and

government control models. Property rights in the co-management model can be retained by the

government or given to the fishermen. When given to the fishermen, property rights can be a group right

as found in some fisheries in Japan, they can be an individual right given to individual fishermen like

41 Ibid., p. 131 42 Jentoft, Svein, Bonnie J. McCay, and Douglas C. Wilson. “Social Theory and Fisheries Co-Management.” Marine Policy 22, no. 5 (1998): p. 423.

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some fisheries in Canada and New Zealand, or they can have no right over the resource only the right to

make decisions regarding the resource as in fisheries in Norway43. The government retains the property

right in the government model.

Without some sort of property right, natural resources would be destined for tragedy of the

commons because of the open access nature of natural resources without regulation. This is why most

understand the importance of some type of property right in CPR management. The differences come in

the costs of enforcing the regulations and benefits that the policies provide to the fishermen and

community. This is the purpose of the CBA to look at the costs and benefits of each of the policies to see

which policy provides the highest net present value.

Tragedy  of  the  Commons:  The  South  Atlantic  Vermilion  Snapper  

The first question that needs to be asked is whether the SA vermilion snapper suffers from

tragedy of the commons. In other words, is the vermilion snapper being subject to overfishing44 or is it

being overfished45? In fishery science, there are three important indicators of species health. The first

looks at how many fish are being extracted compared to a scientifically estimated maximum sustainable

yield (MSY). Any number above 1, also known as the fishery status, indicates that the specie is being

subjected to overfishing46. A study done by the National Oceanic and Atmospheric Administration

(NOAA) in 2007, the last time the stock of the vermilion snapper was assessed, found the fishery status to

be 1.2747. Figure 1 shows a historical perspective of overfishing of the vermilion snapper.

43 Ibid., p. 433. 44 Being subject to overfishing means that the specie of fish is being fished over the maximum sustainable yield. 45 If a specie is overfished and not subject to overfishing, then the specie has been fished to the point where the specie biomass is below the minimum spawning stock threshold. 46Fishing status is obtained by looking at a fishing year (Fyear) and dividing it by the fishing maximum sustainable yield (FMSY). F2007/FMSY=1.27. Anything above 1 indicates overfishing is occurring. 47 Southeast Data, Assessment, and Review, “Stock Assessment Report South Atlantic Vermilion Snapper,” Southeast Fishery Science Center of the National Atmospheric and Administration, 2008, p.32 http://www.sefsc.noaa.gov/sedar/download/S17%20VS%20SAR%202.pdf?id=DOCUMENT (accessed November 28, 2011).

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The vermilion snapper, as Figure 1 shows, has not always been subject to overfishing. However,

Figure 1 also shows that the fishery status has been trending upwards since the mid 70’s with a

precipitous increase starting in the mid 80’s. The SA vermilion snapper was subject to overfishing for the

first time in the mid to late 80’s. Since the 80’s, the fishery status has been up and down. Although

currently it is trending upwards, and may surpass the high in the late 80’s high without regulation.

Figure 1- Fishery Status of the Vermilion Snapper48, 49

The second important indicator of species health looks at biomass50. To get this second indicator,

scientists estimate a biomass MSY (BMSY), and then they estimate the biomass that remains in the

geographical location (South Atlantic) after the fish have been caught. Figure 2 shows the biomass

estimates of the vermilion snapper from the early 1940’s to 2007.

Biomass has clearly gone down since the 50’s. It was a slow decline at first, but starting in the

mid 70’s the biomass started declining at a much more rapid rate. The biomass decreased as the number

of fish caught in the 70’s and 80’s went up as shown in Figure 1. To make matters worse, in the mid

48 Ibid., p.30 49 The status of the SA vermilion snapper is still considered as being subject to overfishing, but these numbers are highly uncertain given the lack of robustness on some model assumptions. Ibid., p. 32 50 A biomass indicator looks at the total mass of any given specie in a predefined area.

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2000’s the total biomass dropped below the BMSY for the first time. It is also still trending downwards.

This provides more evidence that the vermilion snapper has been subject to overfishing over the course of

many years and is suffering from tragedy of the commons.

Figure 2- Vermilion Snapper Biomass Estimates51

The third and most important species health indicator looks at spawning stock52. In order for

species to survive, their spawning stock needs to be high enough to replenish the lost stock. When looking

at spawning stock, the scientists estimate three important figures. First, they estimate the total spawning

stock biomass (SSB). Second, they estimate the SSB maximum sustainable yield (SSBMSY). Last, they

estimate the minimum spawning stock threshold (MSST). If SSB gets below MSST, the fish is considered

to be overfished. Figure 3 shows the spawning stock of the vermilion snapper from the early 1940’s to

2007.

Figure 3 follows the same pattern as Figure 2. There is a slow decline starting in the 40’s, but the

rate of decline increases in the 70’s and 80’s. There is an increase in spawning stock from the late 80’s to

late 90’s, but the spawning stock decreases from the late 90’s onward. The trend is still downwards, and

51 Ibid., p.29 52 This is the number of fish alive that can still reproduce to maintain sustainable level of fish.

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within a few years may cross the MSST for the first time. It crossed the SSBMSY for the first time in the

mid 2000’s and has stayed below this line since then. This provides more evidence that the vermilion

snapper has been subject to overfishing for many years but is not overfished, which is the official status of

the SA vermilion snapper according to NOAA53.

Figure 3- Spawning Stock of the Vermilion snapper.54

Historical Analysis of Property Rights and the Vermilion Snapper

Before the creation of current international fishing law, the ocean operated under a freedom of-

the-seas doctrine created in the 17th century, which limited a country’s jurisdiction over resources found

in the ocean near their shore55. This created many problems given that the most lucrative fishing grounds

are found within 200 nautical miles of shore, and many foreign fleets were extracting large amounts of

fish from these grounds56. The freedom of-the-seas doctrine changed when Peru and Chile, worried about

foreign vessels extracting resources near their shore, passed a law that gave them control of all water and

53Ibid. 54 Ibid., p.29 55 “The United Nations Convention on the Law of the Sea (a Historical Perspective).” United Nations Conventions on the Law of the Sea. http://www.un.org/depts/los/convention_agreements/convention_historical_perspective.htm (accessed January 10, 2012). 56 Ibid.

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resources found within 200 nautical miles (exclusive economic zone, EEZ) of their shore57. The US

followed suit and created their own EEZ in 1976 with the passing of the Magnuson-Stevens Fishery

Conservation and Management Act. Under the same pressure from foreign fleets, the US government

declared its right to all resources found within their EEZ58. In 1982 the UN passed the UN Convention on

the Law of the Sea, which established international law on the EEZ59.

The creation of the EEZ was the first policy governments used to try to limit access to their

fisheries. They limited access to their fisheries for two reasons. First, they wanted to keep profits in the

country because fishing is very lucrative. Second, they wanted better management of the fisheries60. From

a tragedy of the commons perspective, open access fishing was not working and many species of fish

were starting to be overfished. The fishermen were acting rationally and extracting as many of the fish as

they could to increase their profits while minimizing the profits of their competition. The passage of the

Magnuson-Stevens Fishery Conservation and Management Act was the United States’ first attempt to end

tragedy of the commons by assigning property rights to the US government.

The Magnuson-Stevens Fishery Conservation and Management Act also created 8 regional

fishery management councils to manage all fish resources in their region61. While the act created the first

fishing property rights for the federal government, the act also distributed decision making property rights

for the first time to these regional councils. The federal government still holds all of the property rights,

but the councils still make most of the regulatory decisions on commercial and recreational fishing. This

was the first time that decision making property rights were dispersed to more localized organizations.

While not exactly what co-management and property rights supporters want, these regional councils have

57 Ibid 58 “Protecting Ocean Fisheries,” Department of Justice, http://www.justice.gov/enrd/4688.htm (accessed January 17, 2012). 59 “The United Nations Convention on the Law of the Sea (a Historical Perspective).” United Nations Conventions on the Law of the Sea. http://www.un.org/depts/los/convention_agreements/convention_historical_perspective.htm (accessed January 10, 2012). 60 Ibid. 61 “Protecting Ocean Fisheries,” Department of Justice, http://www.justice.gov/enrd/4688.htm (accessed January 17, 2012).

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in some instances given property rights to individual fishermen or co-managed fisheries. There are

currently 16 species of fish that operate under a property rights regime or in cooperatives62.

The  South  Atlantic  Vermilion  Snapper  and  CPR  Management  Models  

Government Model

The government model is the model that has been used in the SA vermilion snapper fishery since

the government obtained the property rights. The South Atlantic Fishery Management Council (SAFMC),

which has the decision making rights, limits the size of the catch, sets trip limits, and limits total

allowable catch (TAC). The current size limit is 12” total length (TL) with 1,500 pounds gutted weight

(GW) limit per trip and a total seasonal limit of 618,046 pounds GW63.

The new allowable catch limit was implemented in 2009, but it has not been very successful since

implementation. The two years for which there are data, show that fishermen have fished beyond the

TAC. In 2009 and 2010, fishermen fished around 100,000 pounds GW per year over the TAC64. This is

not the only case where government intervention has failed to stop overfishing the TAC. Governments in

some cases have exacerbated the problem65,66. One recent study looked at all of the TACs around the

world and found that 75-85% of all species under a TAC had a reduced biomass and recruitment under

the TAC67. This is not just a third world country problem. In the US alone, 54% of TACs were exceeded

62 “Catch Shares- Programs by Region.” National Oceanic and Atmospheric Administration. http://www.nmfs.noaa.gov/sfa/domes_fish/catchshare/catchshare_region.htm (accessed January 17, 2012). 63 South Atlantic Fishery Management Council, “South Atlantic Snapper Grouper Complex Commercial Regulations,” South Atlantic Fishery Management Council, http://www.safmc.net/LinkClick.aspx?fileticket=hCYZ2q8q86A%3d&tabid=248 (accessed December 8, 2011). 64 Caplo Group. “Overview of the Commercial Fishing in the South Atlantic Snapper Grouper Fishery,” Caplog Report 3 (April 3, 2011): 1-31. 65Rögnvaldur Hannesson, Fisheries Mismanagement: the Case of the North Atlantic Cod (Oxford: Wiley-Blackwell, 1996). 66 A. Christopher Finlayson, Bonnie J. McCay. “Crossing the Threshold of Ecosystem Resilience: The commercial Extinction of Northern Cod.” In Linking Social and Ecological Systems: Management Practices and Social Mechanisms for Building Resilience, Edited by Fikret Berkes and Carl Folke. (Cambridge: Cambridge University Press, 1998) 311-334. 67Villasante, Sebastian, Marcia de Carme Garcia-Negro, Fernando Gonzalez-Laxe, and Gonzalo Rodriguez Rodriguez. “Overfishing and the Common Fisheries Policy: (un)successful Results from Tac Regulation?” Fish and Fisheries 12 (2011): 34-50.

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by at least 2%68. The vermilion snapper was subject to overfishing by around 18% in 201069. Government

intervention has not worked in the fishery because the TAC has been exceeded. The government can

spend more money to enforce regulations or lower the TAC more to adjust for the exceeded TAC. Both of

these options are more expensive in terms of financial cost and lost revenue from decreasing the catch

which makes this policy solution even less attractive because government intervention is supposed to be

least expensive policy option for governments.

Co-Management Model

There is no history of co-management in this fishery, so this section will look at the theory behind

co-management implementation. Co-management needs 6 criteria before it can be ideally implemented.

First, the resource needs to be monitored and verified for a fairly low cost70. No fishery monitoring is

inexpensive, but this does not exclude co-management as a viable option. Second, rates of change in user

populations, the resource, and technology are relatively stable71, 72. Third, communication is easy to

increase trust among users73, 74. Fourth, it is relatively easy to restrict access to the resource75. Like point

one, it is never easy or inexpensive, but it is doable and this should not exclude co-management as a

viable option. Fifth, users support regulation and monitoring76. Sixth, users involved have homogenous

68 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 647. 69 I figured this out by looking at the TAC (618,046) and dividing it by total catch (750,000). I then subtracted this number from 100 to get the percentage overfished. 70 Edella Schlager and Elinor Ostrom, “Property-Rights Regimes and Natural Resources: A Conceptual Analysis,” Land Economics 68, no. 3 (August 1992): 249-62. 71 Lance H. Gunderson and C. S. Holling, eds., Panarchy: Understanding Transformations in Human and Natural Systems (Washington, DC: Island Press, 2002). 72 Marco A. Janssen, Complexity and Ecosystem Management: the Theory and Practice of Multi-Agent Systems (Northhampton, MA: Edward Elgar Pub, 2003). 73 Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (Lanham, MD: Touchstone Books by Simon & Schuster, 2001). 74 Robert H. Frank, Passions Within Reason: The Strategic Role of the Emotions (New York: W. W. Norton & Company, 1988) 75 Elinor Ostrom, Governing the Commons: the Evolution of Institutions For Collective Action (Cambridge: Cambridge University Press, 1990). 76 Dr. Joanna Burger PhD et al., eds., Protecting the Commons: a Framework For Resource Management in the Americas (Washington, D.C.: Island Press, 2001).

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costs, discount rates, and production objectives77, 78.The first four points apply to the SA vermilion

snapper fishery. However, points five and six do not apply to the SA vermilion snapper fishery.

Users have not supported regulation up to this point, and they have exceeded the TAC in the past

2 years, which are the only two years for which there is data. Co-management succeeds or fails on the

willingness of the fishermen to monitor and support regulation. Fishermen have not followed the

government established TAC. Theoretically, if fishermen are part of the decision making process

cooperation with regulations may increase, but fishermen are already involved in the decision making

process, and it has not increased compliance. SA fishermen currently serve on the SAFMC Advisory

Panels, actively attend fisheries meetings, and work with Fishery Management Council members and the

National Marine Fisheries Service Staff79. This is not the ideal co-management set up, but it is a

consultative set up. Fishermen have a voice, but they are not the real decision makers.

Another problem is that the fishery is too diverse, as Table 3 suggests. Table 3 below shows the

number of boats that catch different amounts of vermilion snapper. The SA vermilion snapper fishermen

do not have homogenous costs and production objectives. Some get most of their income from the

vermilion snapper; others get hardly any. This could breed contention among the fishermen as some want

more freedom and others want less. This is a divided fishery in terms of catch. While most boats catch

between 1,000 pounds and 5,000 pounds of vermilion snapper, there is almost an equal amount, on

average of boats that catch over 5,000 pounds of vermilion snapper. Additionally, there are many boats

that catch less than 1,000 pounds. On average, 72 boats catch less than 1,000 pounds per year80. The

fishery is divided almost equally between fishers that catch between 1,000 and 5,000 GW (95), more than

5,000 pounds GW (92), and those that catch less than 1,000 pounds GW (72). It will be hard to get all of

77 Ibid. 78 Jean-Marie Baland and Jean-Phillipe Platteau, Halting Degradation of Natural Resources: Is There a Role For Rural Communities? (Great Britain: Oxford University Press, USA, 2000). 79 Matt Ruby, “Stop Congress from Holding Atlantic Fishermen Back,” Southern Catch, http://www.southerncatch.com/news.cfm?id=60&page=16 (accessed January 26, 2012). 80 Ibid.

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the fishermen on the boats to agree on regulations, catch limits, and monitoring because the group is so

diverse. As a result, co-management may be difficult implement in this fishery.

Table 3- The Number of Boats that Catch Different Levels of Vermilion Snapper81

Boats 2001 2002 2003 2004 2005 2006 Average

All Boats that landed VS

295 274 248 255 252 232 259

1,000+ lbs of VS GW

118 106 91 84 91 80 95

5,000+ lbs of VS GW

17 72 53 56 53 45 49

10,000+ lbs of VS GW

62 53 27 44 38 33 43

Property Rights

Like co-management, this section will look at a theoretical framework to implement a property

rights regime because this method has not been tried on the SA vermilion snapper fishery. First, property

rights in fisheries are only as good as government enforcement, which has not been good so far. However,

enforcement with property rights is different than under command and control. The very nature of a

property right changes how a government monitors a fishery. Instead of guessing when the TAC will be

reached, the government monitors each fisherman’s quota right. This is why monitoring is much more

expensive with property rights managed fisheries. It is estimated that at the very least enforcement and

monitoring will cost an extra $320,000 per year82. They estimate that $50,000 will go to keep the records

and the last $270,000 will go to increased port visits and landings verification83.

81 “Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012). 82 R. Q. Grafton and A. McIlgorm, “Ex-Ante Evaluation of the Costs and Benefits of Individual Transferable Quotas: A Case-Study of Seven Australian Commonwealth Fisheries,” Marine Policy 33 (2009): 717. 83 Ibid., p. 717.

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Statistically, property rights managed fisheries have been successful in the US84 and around the

world85. However, success in other fisheries does not guarantee success in the SA vermilion snapper

fishery. There are four important factors that should be present before the property rights model can be

run effectively. First, the TAC needs to be binding to ensure that the property right has real value86.

Second, there needs to be flexibility in the reconciliation of the quota to make sure that there is not higher

discard rates and dumping of less valuable fish87. Third, the system needs to be set up to make sure that

fishermen do not leave the vermilion snapper fishery in favor of less regulated fish88. Fourth, science

needs to consider annual biomass variability when setting the TAC because it is hard to make in season

adjustments89.

The two problems with the SA vermilion snapper and a property rights managed fishery are the

potential for increased discard rates or highgrading, and fishermen leaving this fishery for another fishery.

Highgrading is discarding a lower valued fish in favor of a higher value fish to increase the value of the

per unit quota (property right)90, 91, 92, 93. Management wants to minimize discards because a discarded fish

has a 70% probability of dying after release94, so increasing discard rates could create a biased estimates

84 Christopher Costello, Steven D. Gaines and John Lynham, “Can Catch Shares Prevent Fisheries Collapse?” Science 321 (2008): 1678-81. 85 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 644-57. 86 R. Q. Grafton and A. McIlgorm, “Ex-Ante Evaluation of the Costs and Benefits of Individual Transferable Quotas: A Case-Study of Seven Australian Commonwealth Fisheries,” Marine Policy 33 (2009): 717. 87 Dale Squires et al., “Individual Transferable Quotas in Multispecies Fisheries,” Marine Policy 22, no. 2 (March 1998): 135-59. 88 D. P. Dupont and R. Quentin Grafton, “Multi-Species Individual Transferable Quotas: The Scotia-Fundy Mobile Gear Groundfishery,” Marine Resource Economics 15 (2001): 205-20. 89 Tom Kompas, Tuong Nhu Che and R. Quentin Grafton, “Fisheries Instrument Choice under Uncertainty,” Land Economics 84 (November 2008): 652-66. 90Ragnar Arnason, “On Catch Discarding in Fisheries,” Marine Resource Economics 9 (1994): 189-207. 91L. Anderson, “Highgrading in ITQ Fisheries,” Marine Resource Economics 9 (1994): 209-226. 92 David B. Sampson, “Fishing Tactics in a Two-Species Fisheries Model: The Bioeconomics of Bycatch and Discarding,” Canadian Journal of Fisheries and Aquatic Sciences 51 (1994): 2688-2964. 93 Niels Vestergaard, “Discard Behavior, Highgrading and Regulation: The Case of the Greenland Shrimp Fishery,” Marine Resource Economics 11 (1996): 247-66. 94 Kevin McCarthy, “Discards of Spanish Mackerel and Vermilion Snapper Calculated For Commercial Vessels with Federal Fishing Permits in the Us South Atlantic,” National Oceanic and Atmospheric Administration, http://www.sefsc.noaa.gov/sedar/download/SEDAR17-

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of total death within the fishery95, 96, 97. The evidence on highgrading is mixed where some studies show

the existence of highgrading and others have not seen evidence of it98. This makes it difficult to estimate

whether the SA vermilion fishermen will highgrade. Highgrading is minimized in fisheries where (1)

there is not a big price difference because of size and quality, (2) the season is short so keeping the fish is

important, (3) the gear used effectively targets the specie of the preferred size, or (4) there are gear

restrictions to which limit the catch of small fish99, 100, 101. Numbers 1 and 2 present problems, but given

that fishermen can target the SA vermilion snapper according to length, these problems are minimized.

NOAA performed a study in 2004, and they found that fishermen can target to the length of the vermilion

snapper102. Fishermen can avoid some vermilion snapper with hook size, which may limit some

highgrading103. Most importantly, the TAC is set at a low enough level to allow for high levels of discards

and still stay under the MSY104. Highgrading can be overcome.

SA vermilion snapper fishermen could easily switch fisheries, and fish another specie. This is

only a problem if the additional fishermen in the new fishery put pressure on this new specie. There are

DW10%20Discards%20of%20Spanish%20mackerel%20and%20vermilion%20snapper%20for%20coml%20vessels%20permitted%20in%20USSA%20final.pdf?id=DOCUMENT (accessed March 2, 2012). 95 Parzival Copes, “A Critical Review of the Individual Quota as a Device in Fisheries Management,” Land Economics 62 (1986): 278-91. 96 Parzival Copes, “Problems with Itqs in Fisheries Management, with Tentative Comments On Relevance For Faroe Islands Fisheries,” Discussion Papers 1 (1995): 585-606. 97 Rick O. Boyd and Christopher M. Dewees, “Putting Theory Into Practice Individual Transferable Quotas in New Zealand's Fisheries: Individual Transferable Quotas in New Zealand's Fisheries Putting Theory Into Practice,” Society and Natural Resources 5, no. 2 (1992): 179-98. 98 Dale Squires et al., “Individual Transferable Quotas in Multispecies Fisheries,” Marine Policy 22, no. 2 (March 1998): 135-59, 138. 99 B. Muse, “Survey of Individual Quota Programs,” Commercial Fishery Entry Commission, June 1991. 100 B. Muse, K Schelle, “Individual Fishermen’s Quotas: A Preliminary Review of Some Recent Programs,” Commercial Fishery Entry Commission, June 1991. 101 L. Sutinen et al., “An Overview of Individual Transferable Quotas,” Appendix to Consideration of the Potential Use of Individual Transferable Quotas in U.S. Fisheries, eds. L. Anderson (Maryland: NMFS, 1992). 102 Patrck J. Harris and Jessica Stephen, “Final Report Characterization of Commercial Reef Fish Catch and Bycatch Off the Southeast Coast of the United States.,” National Marine Fisheries Service, 2004, p. 3. http://www.sefsc.noaa.gov/sedar/download/SEDAR%2015-RD07.pdf?id=DOCUMENT (accessed January 23, 2012). 103 Southeast Data, Assessment, and Review, “Stock Assessment Report South Atlantic Vermilion Snapper,” Southeast Fishery Science Center of the National Atmospheric and Administration, p.12 http://www.sefsc.noaa.gov/sedar/download/S17%20VS%20SAR%202.pdf?id=DOCUMENT (accessed November 28, 2011). 104 Ibid., p 12

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three solutions being worked on in US property rights managed fisheries. Governments can: limit the

number of licenses sold in every fishery, not sell quotas to any fishermen with less than 50% of the

revenue coming from the managed specie, or prohibit vermilion snapper fishermen from fishing in other

fisheries105. In the short-term it will be hard to prohibit fishermen from catching other species because

there are so many different species of fish that are managed in the SA fishery. There are 75 species of fish

that the SAFMC manages and 60 of those fish are in the SASG fishery, which is the same fishery as the

vermilion snapper106. It will be incredibly hard for the government to prohibit fishermen from fishing in

these other fisheries. In the long-term, almost all if not all species in the SASG fishery will have TACs,

which will de-incentivize switching species107. However, one benefit of allowing fishermen to switch

fisheries is that it will decrease job loss and therefore resistance from fishermen to government regulation.

If all species are regulated, any decrease in allowable catch will lead to job loss among fishermen, and

therefore, it will increase resistance from the fishermen.

While there are problems with the property rights model in the SA vermilion snapper fishery,

these problems affect the costs of the policy such as increasing discards or increasing pressure on another

fishery. This is not the case with co-management or government control. The problems with co-

management and government control are whether the policy can be implemented properly to create a

sustainable fishery.

Stakeholders and the Vermilion Snapper Fishery

The four stakeholders involved in most fisheries are the fishermen/fishermen organizations,

environmentalists, the government, and scientists. Fishermen/fishermen organizations split on how to fix

the problem. Some believe that all government regulation is bad and not needed, while others believe that 105 Dale Squires et al., “Individual Transferable Quotas in Multispecies Fisheries,” Marine Policy 22, no. 2 (March 1998): 135-59, 147. 106“Fishery Management Plans and Amendments,” South Atlantic Fishery Management Council, http://safmc.net/Library/FisheryManagementPlansAmendments/tabid/395/Default.aspx (accessed March 3, 2012). 107 Caplog Group. “Overview of the Commercial Fishing in the South Atlantic Snapper Grouper Fishery.” Caplog Group, April 2011. p.13. http://www.caploggroup.com/www.caploggroup.com/Publications_files/Overview%20of%20Commercial%20Fishing%20in%20the%20SASG%20Fishery.pdf (accessed December 8, 2011).

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property rights hold the key to sustainable fishing practices and the future of the industry. Currently, these

are the two most discussed policy options by the fishermen and fishermen organizations. The South

Atlantic Fishermen’s Association believes that property rights management offers hope to fisheries108. On

other hand, the Coastal Conservation Association (CCA) opposes property rights management for

fisheries109. Interestingly, the CCA does not dislike property rights management for property rights in the

commercial sector; they do not like any catch limit that affects the recreational sector. This paper does

not address the recreational sector, but current regulations divide the vermilion snapper TAC between the

two sectors. Currently, 68% of the TAC goes to the commercial sector, and 32% goes to the recreational

sector110. The CCA prefers any model that does not limit the recreational sector.

Environmentalists prefer the property rights model to any other management model. The

Environmental Defense Fund believes that property rights offer a promising solution to the commons

problem111. The following quote states a common sentiment among many environmentalists.

Under catch shares [property rights] management, financial interests can be aligned with management and conservation interests. … Conservation is akin to pushing a boulder uphill; it requires constant energetic activity to overcome gravity. Conservationists would do well to tilt the field toward environmental protection, and align conservation with the natural forces of human motivation instead of against them112.

Conservationists feel that conservation should be the primary goal and profits should be a

secondary goal of natural resource management. Property rights management put profits and conservation

on equal terms. In some cases this has been effective. For example, the New Zealand rock lobster, the

Canadian sablefish, and the Tasmanian abalone fishermen lobbied their leaders to cut the TAC to help 108 Matt Ruby, “Statement By Matt Ruby, President, SAFA On U.S. House Natural Resources Committee Legislating Hearing On Proposals To Amend Magnuson-Stevens Act,” South Atlantic Fisherman’s Association, http://www.southerncatch.com/news.cfm?id=65&page=4 (Accessed on January 18, 2012). 109 “Coastal Conservation Association Comments For the Safmc Public Hearings and Scoping Meetings January / February 2011,” Coastal Conservation Association, http://www.joincca.org/media%20room/South%20Atlantic/SAFMC%20Public%20Hearings%202011%20-%20ws.pdf (accessed January 19, 2012). 110 Southeast Data, Assessment, and Review, “Stock Assessment Report South Atlantic Vermilion Snapper,” Southeast Fishery Science Center of the National Atmospheric and Administration, p.12. 111 “How Catch Shares Work: A Promising Solution Reviving Fisheries and Fishing Communities,” Environmental Defense Fund, http://www.edf.org/oceans/how-catch-shares-work-promising-solution (accessed January 19, 2012). 112 Rod Fujita and Kate Bonzon, “Rights-Based Fisheries Management: An Environmentalist Perspective,” Reviews in Fish Biology and Fisheries 15 (2005): 312. Italics added.

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keep these species strong113. These fishermen chose long-term financial sustainability over short term

economic profits. The opposite has also occurred. Fishermen have changed scales to allow themselves to

catch more than their allotted right114. In the end, some conservationists believe: “There is little solid

evidence that catch shares (property rights managed fisheries) do indeed shift fishers’ mindsets toward

stewardship”115. If there is no change in the mindset of the fishermen then there is no guarantee that they

will always have the specie at the heart of all of their decisions. Like the fishermen, environmentalists are

split, but there has been a big push by well known environmental organizations, like the Environmental

Defense Fund who have their own website teaching how to create a rights based fishery116. Organizations

like these have a lot of influence.

The two most important governmental organizations involved in the SA fishery are the SAFMC

and NOAA. SAFMC has historically supported catch shares, but terminated all work on developing catch

shares for all SASG fish species in Amendment 21117. This is a result partly due to recreational fishermen

opposing Amendment 21118. NOAA supports rights based management for commercial fishing119. In

general, the government supports property rights management.

Scientists prefer either property rights or co-management. Property rights is the most popular

model right now, and there is an accelerated trend towards greater usage of property rights to manage

CPRs120. A recent survey discovered that tradable permits, like those used in catch shares, were used 9

times to control air pollution, 75 times in fisheries, 3 times in water use control, and 5 times in land use

113 Sharon Levy, “Catch Shares Management,” Bioscience 60, no. 10 (November 2010): 781. 114 Ibid., p. 781 115 Ibid., p. 781, Italics added. 116 “Catch Share Design Center,” Environmental Defense Fund, http://www.edf.org/oceans/catch-share-design-center (accessed January 19, 2012). 117 Mike Wilson, “Safmc Votes to Terminate Development of Catch Shares,” 2Coolfishing.net, http://2coolfishing.net/ttmbforum/showthread.php?t=331734 (accessed January 19, 2012). 118“Noaa Policy Encourages Catch Shares to End Overfishing and Rebuild Fisheries.” National Oceanic and Atmospheric Administration. http://www.noaanews.noaa.gov/stories2010/20101104_catchshare.html (accessed January 19, 2012). 119 “Catch Shares,” National Oceanic and Atmospheric Administration, http://www.nmfs.noaa.gov/sfa/domes_fish/catchshare/index.htm (accessed January 19, 2012). 120Gary D. Libecap, “The Tragedy of the Commons: Property Rights and Markets as Solutions to Resource and Environmental Problems,” The Australian Journal of Agricultural and Resource Economics 53 (2009): 133.

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control121. Still, there has been a rediscovery of co-management as a viable policy option, and many

scientists support cooperative work between fishermen and governments122.

Methods  The CBA will look at three different policies, and the success or failure of these policies will be

measured in three ways. The first way to measure the success of a policy is looking at the net present

value (NPV) of each of the policies. To pass this criterion, a policy has to provide more benefits than

costs. If there is only one policy that creates more benefits than costs then the decision is easy. If more

than one policy creates a positive NPV and the values are close, then the policies will be measured with

the probability of actually creating a sustainable fishery. This is a subjective measure, but it is important

to look at which policy has the highest probability of creating a sustainable fishery. This measure is based

off of the theoretical analysis from above. Catch shares have the highest probability of creating a

sustainable fishery. Two statistical studies have shown the success of catch shares123,124. Co-management

has the second highest probability of creating a sustainable fishery. The biggest problem with co-

management is that the fishermen have such different production goals, as shown in Table 3, that will

create difficulties in creating and following the decided upon rules. The status quo or centralized

government control has lowest probability of creating a sustainable fishery. History in this same fishery

has shown that fishermen have not obeyed the TAC, and therefore, they have not created a sustainable

fishery. There is a chance, although small, that none of the three policies have a positive NPV. In this

case, a qualitative analysis of the future potential of creating a sustainable fishery will be estimated. The

121 Tom Tietenberg, “Tradable Permits in Principle and Practice,” in Moving to Markets in Environmental Regulation: Lessons from Twenty Years of Experience, eds. Jody Freeman and Charles D. Kolstad (Oxford University Press: New York): 63-94, 69. 122 Paul Nadasdy, Adaptive Co-Management Collaboration, Learning, and Multi-Level Governance. “Adaptive Co-management: Collaboration, Learning, and Multi-Level Governance. Eds. Derek Armitrage, Fikret Berkes, and Nancy Doubleday. (Vancouver: University of British Columbia Press, 2007), 208-28. 123 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 644-657. 124 Costello, Christopher, Steven D. Gaines, and John Lynham. “Can Catch Shares Prevent Fisheries Collapse?” Science 321:5896 (2008): 1678-81.

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order of the policies will stay the same as listed above. This is one of the weaknesses of this paper. There

is no guarantee that any of these policies create a sustainable fishery.

The CBA has two important parts to it. First, there are two sectors of the vermilion snapper

fishery, the commercial sector and the recreational sector. This policy memo will only look at the

commercial fishing sector because each policy is meant to regulate the commercial and not the

recreational sector. Limiting the policy to the commercial sector will decrease opposition to property

rights management or co-management. Second, the analysis will be divided into three 5 year time periods.

The three 5 year time periods are important because a recent study done on catch share programs in US

fisheries found that, within a five and ten year time frame, TAC allotment to fishers increases125. The five

year time frame is also important in co-management because it takes about 5 years to set up a

cooperative126,127. The 15 year time period gives each 5 year period the same time to accrue the potential

benefits. A different study on international catch share management says that it takes about ten years to

increase the TAC allotted to fishermen128. This study will be dealt with in the sensitivity analysis.

Most of the data for the vermilion snapper commercial fishery will come from NOAA. With

every new amendment to current SASG commercial regulation, NOAA estimates the biological, social,

administrative, and economic effects of the policies. This makes obtaining most of the data easy and

accurate. The number of fish that have been caught, the TAC, administrative costs, the 10 year average

catch rates, and past and current prices all come from NOAA documents. Also, a study published in

Marine Policy has quantified the benefits of all of the catch share programs across the US and British

125 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 644-657. 126James M. Acheson, Terry Stockwell, and James A. Wilson, “Evolution of the Maine Lobster Co-Management Law,” Marine Policy Review 52 (Fall 2000): 53-63, 55. 127K. Kuperan et al., “Measuring Transaction Costs of Fisheries Co-Management,” Coastal Management 36, no. 3 (2008): 235. 128 John F. Caddy and DJ Agnew, “An Overview of Recent Global Experience with Recovery Plans For Depleted Marine Resources and Suggested Guidelines For Recovery Planning,” Review in Fish Biology and Fisheries 14 (2004): 43-112.

P a g e | 27

Colombia. This study provided the most reliable and accurate numbers on the 5 and 10 year estimates.

This is the strength of the data.

On the other hand, some of the costs and benefits have either been hard to quantify or have not

been quantified previously. Some social and administrative costs have not been quantified. The

monitoring and enforcement costs of the vermilion snapper fishery have not been quantified, so it is

unknown how much the US government spends to monitor the vermilion snapper fishery129. That will

bias the costs downward. This also favors catch shares which have the highest monitoring and

enforcement costs. However, one monitoring cost has been included in the catch share CBA. One study

estimated the yearly cost of switching from a TAC to a catch share program, so that cost is included to

pick up some of the extra costs of running a catch share.

Fishermen revenue and processor and wholesaler revenue are quantified as gross revenue and not

net revenue. It was impossible to find consistent estimates on the net revenue as a percentage of gross

revenue for the fishermen. I contacted the SAFMC and they directed me to documents that they thought

would address net revenue percentages of the fishermen, but the documents contained no data on net

revenue percentages130. There are no consistent estimates on net revenue for the processors and

wholesalers.

Estimates of TAC increases, discard decreases, lives saved, and cost savings are the results of a

study on catch shares in different fisheries. There are no comparable studies in co-management or

centralized control management, so the estimates from above have been applied the latter two. This is one

of the biggest weaknesses with the data.

129 “Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, p. 5-7 http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012). 130 Iverson, Kim. Interviewed by Michael Stephens. Phone interview. Interviewed on April 5, 2012.

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Proposed  Solutions  Current  Regulation-­‐  TAC  

There are three important regulations that limit what fishermen can do in the SA vermilion

snapper fishery. Currently no fish can be taken that is smaller than 12” total length (TL)131. Size limits are

important to ensure that the specie has an opportunity to reproduce before being caught. Vermilion

snapper are mature at 2 years old or about 8” long132. Along with size limits, fishermen cannot dock more

than 1,500 pounds GW of vermilion snapper per trip133. The purpose of trip limits is to extend the fishing

season. The SA vermilion snapper fishing season the past three years has grown shorter and shorter. The

shortened season decreases the price of the fish because fish are sometimes sold frozen instead of fresh

year round. Figure 4 shows the number of fishing days in the SA vermilion snapper fishery.

Figure 4- Numbering of Fishing Days for the SA Vermilion Snapper134

131 South Atlantic Fishery Management Council, “South Atlantic Snapper Grouper Complex Commercial Regulations,” South Atlantic Fishery Management Council, http://www.safmc.net/LinkClick.aspx?fileticket=hCYZ2q8q86A%3d&tabid=248 (accessed December 8, 2011). 132 “Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012). 133 Ibid., p. 2 134 Caplog Group. “Overview of the Commercial Fishing in the South Atlantic Snapper Grouper Fishery.” Caplog Group, April 2011. p.13. http://www.caploggroup.com/www.caploggroup.com/Publications_files/Overview%20of%20Commercial%20Fishing%20in%20the%20SASG%20Fishery.pdf (accessed December 8, 2011).

0  

50  

100  

150  

200  

250  

300  

350  

400  

2008   2009   2010  

Fishing  Days  

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The TAC was implemented in 2009. In 2008 they fished around 365 days. The first year the TAC

was implemented, fishing days were cut to a little over 250 days. The same TAC in 2010 cut fishing days

to about 175. In each year, 2009 and 2010, the fishermen fished over 150,000 pounds GW above the

TAC. Imagine how short the fishing days would be if they followed the TAC. Lastly, the government can

limit the amount fishermen can catch. This number is currently 618,046 pounds GW135.

Alternative  1-­‐  Catch  Shares  

The first alternative is a catch shares system. A catch shares gives the right to a certain amount of

fish to each fisherman/vessel based off of a historical catch average136. At times, governments sell the

rights to the fishermen instead of giving them away. Governments that sell the rights use the proceeds to

pay for the monitoring. This is a great option to pay for the increased monitoring costs of a catch share,

but given the cut in allowable fish catch, for at least the first 15 years the shares will be given to the

fishermen. After 15 years, the issue will have to be revisited looking at the profits of the fishermen.

Fishermen can catch their allotted quota, catch part of their quota and sell the rest of their shares, or sell

all of their shares.

The TAC will remain the same under this catch share system. The 618,046 pounds GW is the best

scientifically estimated sustainable catch for the SA vermilion snapper fishery. The size limit will also

remain because this is the best scientifically estimated size limit available to protect the health of the

specie. However, the trip limit will be repealed. One of the benefits of a catch share system is that there is

no race for fish. Fishermen are now able to fish at their pace and at the most productive areas of the

fishery. Limiting how much they can catch per trip is an unnecessary burden placed on the fishermen

given the efficiency of fishermen under a catch share system. Studies done by the NOAA have found that

135 South Atlantic Fishery Management Council, “South Atlantic Snapper Grouper Complex Commercial Regulations,” South Atlantic Fishery Management Council, http://www.safmc.net/LinkClick.aspx?fileticket=hCYZ2q8q86A%3d&tabid=248 (accessed December 8, 2011). 136 Dubbink, Wim, and Martijn van Vliet. “Market Regulation Versus Co-Management?: Two Perspectives On Regulating Fisheries Compared.” Marine Policy 20, no. 6 (1996): 499-516, 505.

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the most abundant flocks of vermilion snapper occur at depths between 18 and 122 meters137. Fishermen

know this and can use their knowledge to catch more in less time at sea. This will decrease the costs and

increase the revenue of the fishermen. A study on catch shares in the US and British Columbia estimate

that on average fishermen profits double in five years, which is in part due to increasing catch

efficiency138. Trip limits minimize this knowledge because they cannot catch as much as possible they

have to stop after they reach their limits.

The success or failure of this policy is dependent on reliable TACs and good enforcement. The

current TAC is as reliable as it is going to get until the next analysis of SA vermilion snapper. While there

is no guarantee about the reliability of the TAC, US catch share systems have been effective and

successful139, which provides evidence the US scientists are good at predicting TACs. The enforcement of

the TAC is dependent on how much money the government is willing to spend on monitoring and

enforcement. Current monitoring efforts will not suffice. There needs to be better enforcement and

monitoring. However, it is easier to track a catch share system as opposed to a pure TAC system as

explained previously.

Alternative  2  -­‐  Co-­‐management  

Co-management is an interesting alternative because of how inexpensive it is to monitor and

enforce regulation once the cooperative is established. At the same time, it is incredibly difficult to

quantify before it is implemented. Co-management is a process of negotiation between scientists,

fishermen, environmentalists, and the regional councils. No one knows what regulations will come from

137 “Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012). 138 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 644-657. 139Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 644-657.

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these negotiations. They could get rid of the trip limits, size limits, or both. They could increase or

decrease the trip limits, size limits or both. They could implement a seasonal closure. They could keep the

TAC as is, or they could raise it. If they do raise it, do they raise it a little bit or a lot? These are just some

of the unknowns with co-management, which make it difficult to quantify.

In order to quantify the costs and benefits of co-management, some assumptions need to be made.

The first assumption is that cooperative will get rid of the trip limits, but keep the size limits. These are

pretty safe assumptions for the reasons specified under the catch shares alternative. A co-management

system can have one of three types of property rights. It can be a community right, personal right, or a

decision making right. It is impossible to know what type of property right would come from the co-

management meetings, so the second assumption is that no matter what right is assigned to the fishermen,

the fishermen honor the right. This is a huge assumption because the success or failure of the policy is

found in the ability of the fishermen to negotiate fairly and monitor equitably. This assumption assumes

success of the policy. A meta-analysis on CPR resources found two things. First, they found that in

situations where the individuals do not know one another and cannot communicate effectively,

agreements, norms, and sanctions do not work and the rational actor assumptions discussed previously are

very applicable140. In the same study, they also found that when the individuals can communicate

effectively cooperatives have the capacity to overcome overexploitation141. Communicating effectively

does not refer to ease of communication; it refers to the point made above about similar production goals.

This is a pretty big assumption, which is why a co-management system is considered the second best

policy to create a sustainable fishery. However, given the alternative of government controlled TACs or a

catch shares, the fishermen may be more cooperative together. This assumption is also important in order

to quantify the costs and benefits of co-management. The third, assumption is that the TAC set from the

meetings can be known or estimated with any amount of confidence. The TAC cannot be known, but it

140William Bloomquist et al., Regularities from the Field and Possible Explanations ed. Elinor Ostrom, Roy Gardner, and James Walker (Ann Arbor: University of Michigan Press, 1994), 301-18. 141 Ibid.

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may be estimated. In order to quantify the TAC under co-management scenario, two different values will

be used to provide a range of costs and benefits. There will be a low-level estimate and a high-level

estimate. The low level estimate will remain the same as the current TAC. The high level will be 800,000

pounds GW, which is about half way between the ten year average and the current TAC. It is difficult to

imagine the scientists and government settling for a TAC this high, but with this value, we can get a range

of possible costs and benefits.

Cost-­‐Benefit  Analysis     The assumptions made to complete the CBA as well as the formulas used to calculate the

following values are found in Appendix A. This will make it easier to explain each and every indicator

used in the CBA. Table 5 shows the benefits of the policies and Table 6 shows the costs of the policies.

Also, the NPV is found in Table 6.

Co-management high offers the most net present benefits (NPB) at $77 million. This is result of a

higher TAC starting in year 6. It is almost 200,000 pounds GW over the catch share and status quo TAC.

However, the TAC is probably higher than the cooperative meetings will allow. In Amendment 16, the

SAFMC wanted to start the TAC at 385,002 pounds GW142. Instead, they came out with 618,046 pounds

GW. The 800,000 pounds GW is 400,000 pounds over the preferred Amendment 16 TAC. The co-

management low and high estimates provide a range possible of values. The catch share policy provides

the second most benefits at $66 million NPB. This is $11 million less than co-management high.

However, it offers almost $8 million more than the co-management low. Averaged out, co-management

offer more benefits than a catch share program. Unsurprisingly, from the theoretical perspective, the

current policy provides the least amount of benefits at $54 million, even when assuming a sustainable

142 “Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012), 4-82.

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fishery. A TAC by itself does not stop the race for fish, so it does not offer benefits other than sustainable

income and a sustainable fishery.

Table 5- Benefits    

Limited  Catch  (SQ)   Catch  Share  

Co-­‐management  low  

Co-­‐management  high  

Fishermen                  Stable  Income   $29,266,256.36   $29,266,256.36   $28,026,656.67   $37,161,584.96  

Lives  Saved   $0.00   $327,332.90   $190,798.52   $190,798.52  Cost  Savings   $0.00   $10,794,378.61   $6,314,580.02   $9,348,542.60  

                   Community                  

Less  Discards   $0.00   $890,624.43   $467,083.33   $558,631.46  Sustainable  Fishery   $25,013,894.33   $25,013,894.33   $23,954,407.42   $30,637,445.54                      State/Federal                    

None   $0.00   $0.00   $0.00   $0.00                      

Net  Present  Benefits   $54,280,150   $66,292,486   $58,953,525   $77,897,003  

Co-management low is the most expensive policy at $46 million and co-management high is the

least expensive policy at $34 million. It is important to note that all three estimates underestimate the

actual value of monitoring and enforcing the regulations, but co-management will most likely be the

cheapest over time with the lower costs of monitoring. This means that co-management high could

produce even less costs than estimated. It is interesting that the co-management high and the status quo

have the lowest costs, but the cost savings come from different measures. The status quo offers the least

expensive policy to run by almost $4 million. Co-management high, on the other hand, reduces costs by

increasing the TAC. This in turn reduces processor, fishermen, and tax revenue loss.

Co-management high offers the highest NPV at over $43 million. The problem with co-

management is that it provides the highest and the lowest NPVs. It is either the best policy or the worst

policy in terms of NPV. If this policy could guarantee a TAC of 800,000 pounds GW with a sustainable

fishery, then this would be the best policy. However, there is no guarantee that the TAC will be that high.

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Given current science and past efforts on TACs, this estimate may be too high. If the co-management

TAC increases at the same rate as the catch share policy TAC then the catch share policy will provide a

higher NPV. The costs to run the program, according to Table 6, are similar, yet the benefits of decreasing

discards, saving lives, and costs savings do not accrue until at the very earliest year 6. Therefore, catch

shares would have a higher NPV even if the TAC increases by the same amount under co-management.

Therefore, catch share is the best policy to pursue strictly off of the quantitative CBA. The next section

will look at the unquantifiable aspect of the CBA.

Table 6- Costs    

Limited  Catch  (SQ)   Catch  Share  

Co-­‐management  low  

Co-­‐management  high  

Fishermen                  Lost  Income   $10,227,566.73   $10,227,566.73   $12,018,978.05   $7,370,477.94  

Other  Fishermen   $9,728,705.66   $9,728,705.66   $10,285,037.76   $8,946,964.96                      Community                  Lost  income  for  Fish  

Processor   $11,538,395.92   $11,538,395.92   $13,558,498.05   $8,316,572.39                      State/Federal                    

Lost  Tax  Revenue   $170,344.48   $170,344.48   $182,886.35   $130,760.51  Cost  to  run  Program   $6,015,687.08   $9,848,694.00   $9,972,755.00   $9,972,755.00  

                   Net  Present  Costs   $37,680,699.87   $41,513,706.79   $46,018,155.20   $34,737,530.80                      

NPV $16,599,450 $24,778,779 $12,935,370 $43,159,472

Qualitative  CBA    

The CBA only measured the economic value of the SA vermilion snapper, but the value of a

specie is worth more than just what economic value humans can get from the specie. At the same time, it

is incredibly difficult to measure the total value of the SA vermilion snapper. There has not been one

study done on the total value of the SA vermilion snapper, and given financial and time restraints, I could

not go to the area and conduct a willingness to pay survey to quantify the value of the fishery. Also, the

P a g e | 35

NPV for all policy options are positive and the total value of the SA vermilion snapper will impact all

three policy options equally. Therefore, it will not change which policy option I choose.

At the same time, the value of species diversity cannot be underestimated. A meta-analysis

looked at the importance of diversity on collapsed fisheries. They found a negative correlation between

the two. As species richness went up, the number of fish as percentage collapsed/overfished decreased143.

This was a statistically significant result at the .0001 level144. They also found a statistically significant

relationship between species richness and percent increase in productivity of fishermen catch, percent

recovery, and the number of taxa that are allowed to be caught145. Some of these results, like the number

of taxa allowed to be caught and the productivity of fishermen, are directly related to the fishermen.

These results are not dependent on just the SA vermilion snapper, but they are dependent on all fish

species being caught sustainably, the SA vermilion snapper being a part of the whole. It is incredibly

difficult to pinpoint exactly how much influence the SA vermilion snapper has on other species, suffice it

to say that the vermilion snapper is worth more than just its pure economic value.

The costs of unemployment on fishermen was also not quantified. However, there are drastic

effects of unemployment on fishermen that go beyond the economic effects of job loss. Job loss increases

the symptoms of anxiety and depression, which can and often does increase violence and alcohol and

drug abuse146. Job loss also increases feelings of shame that go with a loss of confidence and self-

143 Worm, Boris, Edward B. Barbier, Nicola Beaumont, J. Emmett Duffy, Carl Folke, Benjamin S. Halpern, Jeremy B. C. Jackson, Heike K. Lotze, Fiorenza Micheli, Stephen R. Palumbi, Enric Sala, Kimberly A. Selkoe, John J. Stachowicz, and Reg Watson. “Impacts of Biodiversity Loss On Ocean Ecosystem Services.” Science 314 (November 2006): 787-90. 144 Ibid., p. 789 145 Ibid., p. 789 146Robert Caplan, “Making Unemployment Work for the Jobless.,” Forward, http://cache.zoominfo.com/cachedpage/?archive_id=0&page_id=520049450&page_u rl=%2f%2fwww.forward.com%2fissues%2f2003%2f03.10.31%2foped2. html&page_last_updated=10%2f30%2f2003+2%3a07%3a14+AM&firstName=Robe rt&lastName=Caplan (accessed April 7, 2012).

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esteem147. These are some of the symptoms that all people face after losing a job. A study done on

fishermen job loss confirmed the results of previous studies. Dr. Steward Allen concluded that:

fishermen report increased anxiety, depression, sense of hopelessness, frustration, anger, and identity loss associated with unemployment and job loss. There is evidence that these conditions can manifest themselves in increased violence or violent outbursts, alcoholism, drug addiction, suicide, and a variety of other problems that places stress on all aspects of family and social life148.

As mentioned above, there are no job loss numbers on the SA vermilion snapper fishery.

It is hard to know how many fishermen will be affected by these symptoms, but there are some

serious costs to decreased TACs, which can potentially increase job loss. There is only the

potential for job loss because fishermen may start fishing a different specie.

Sensitivity  Analysis  

A catch share system would be the best policy available given the CBA above. However, the

CBA does not look at the sensitivity of the calculations. Maybe the TAC increases slower or quicker than

estimated. This section will cover the what-ifs of the catch share program. All of the calculations and

formulas to calculate the values will be shown in Appendix B.

The first sensitivity analysis looks at what happens to the estimates as people value the future

monetary policy benefits less or more as compared to the CBA above. The table below looks at a lower

(.03) and higher (.07) social discount rates (SDR). The EPA uses both of these discount rates when

calculating the costs and benefits of different environmental policies, so a .03 and a .07 SDR should

provide a very accurate range of expected values149.

The .07 SDR still keeps the catch share policy above the co-management low estimate by around

$5 million NPV, but the low SDR does not make it as high as the co-management high estimate by

147Ibid. 148 Ibid. 149“Inflation and Discounting Factors,” Environmental Protection Agency, http://www.epa.gov/oppt/coi/pubs/appa.pdf (accessed April 9, 2012).

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around $13 million NPV. This is not necessarily bad. These new estimates show a range of probable

values given different SDRs. Neither estimate is extremely high or low.

Table 7- Sensitivity Analysis Social  Discount  Rate  .03   Social  Discount  Rate  .07  

Benefits   $78,254,232.58   Benefits   $54,435,151.16  Costs   $47,578,235.59   Costs   $36,561,607.31  

NPV   $30,675,996.98   NPV   $17,873,543.84  

The next table looks at what happens if the TAC is lower and higher than the value TAC

estimated in the CBA by 5%. There is no specific reason for 5%; it is just a good mid range value for

increasing and decreasing the TAC. Five percent was also used because the last sensitivity analysis deals

with a 0% increase in TAC in years 6-10. All three values will provide a low, a medium, and a high

estimate. Table 8 below shows the results.

Table 8- Sensitivity Analysis -­‐5%   +5%  

Benefits   $62,133,983.08   Benefits   $69,306,701.33  Costs   $42,938,925.07   Costs   $40,179,515.61  

NPV   $19,195,058.01   NPV   $29,127,185.71  

The results are similar to Table 7. There is less variability when increasing and decreasing the

TAC. The NPV swings between $19 and $29 million. Both of these sensitivity analyses show some

consistency in the NPV. This is good because it provides more evidence and confidence in the results

obtained in the CBA. The low is $17 million and the high is $29 million. This means that the average

between the high and low is $23 million NPV or about $1 million off of the CBA estimate. The true NPV

probably lies somewhere between $17 and $29 million, and could be close to the CBA estimated NPV.

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The last sensitivity analysis looks at what happens if it takes 10 years and not 5 years to start

seeing an increase in the TAC. I did this because one study estimates that it takes about 10 years to see an

increase in allowable catch150. Table 9 below shows the results.

Table 9- Sensitivity Analysis 10  Years  

Benefits   $59,837,519.19  Costs   $44,024,969.37  

NPV   $15,812,549.82  

The $15 million NPV is not a surprising. This is basically the same estimate as co-management

low because it takes ten years to increase the TAC and not five. The co-management low NPV in the

CBA is $12,935,370, or less than $3 million dollars less than the co-management low estimate. The

difference between the two policies is that the catch share policy starts to decrease discards and increase

cost savings from year 1; whereas, co-management low begins to accrue these same benefits in year 6.

This is an important NPV because this provides good evidence that a catch share policy really is the best

policy given the assumptions made in the CBA.

Politics  of  Catch  shares  

The politics of fisheries management are not split along party lines. The division lies between

jobs and economic development, and conservation. Many senators and representatives cross party lines in

support or opposition to fisheries management. Limiting and decreasing fish catch can cause job loss.

When NOAA put Jane Lubchenco in charge of NOAA, 12 Republicans and 7 Democrats wrote the House

Appropriations Committee and Subcommittee on Commerce and Finance to prevent NOAA from creating

150 Costello, Christopher, Steven D. Gaines, and John Lynham. “Can Catch Shares Prevent Fisheries Collapse?” Science 321:5896 (2008): 1678-81.

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any new catch shares in the Atlantic Ocean151. They say that, “The tragedy is that these job losses are

totally unnecessary to protect fish stocks; when solid science shows that harvest reductions in a fishery

are needed, there are far better options than catch shares for achieving these reductions"152. At the same

time, another bipartisan commission of representatives wrote NOAA asking them to help them decide if a catch

share program is good for some of their fisheries153.

Both of these letters were written by bipartisan commissions. There is no party line split on this issue. The

difference between the two letters come from the trust they have in ability of catch shares to prevent future

overfishing and stop current overfishing. Catch shares are an interesting policy because they are conservation

focused, but free market minded. It brings in people from both parties to solve a CPR problem.

Weaknesses  and  Limitations   There are many weaknesses in the quantitative analysis. Some of the weaknesses in the

theoretical estimates and assumptions come with ex-ante CBA on fisheries policy. All of the figures used

to calculate the increase or decrease of the indicators are theoretical. The sensitivity analysis for catch

shares looks at some of the variability, but the most important estimate, TACs, can: Increase quicker than

estimated, increase slower than estimated, not increase over the first 5 to 10 years, or decrease. With all of

these unknowns it is hard to know what figures to use and the amount of confidence the reader can place

on these estimates. However, there is no way to get around this in fisheries management. Uncertainty is

part of the process because researchers can never know exactly if the indicators will increase, and if they

do increase, they can never know how much the indicators will increase.

To go along with the unknown estimates, the assumptions needed to complete the CBA weaken

the analysis. The big assumptions come mainly in co-management, but each policy has at least one

assumption. In co-management, assuming 800,000 pounds GW is sustainable is against current scientific 151Richard Gaines, “Sides Gear up For Catch Share Spending Fight,” Gloucester Times, November 3, 2011, page nr. http://jones.house.gov/sides-gear-catch-share-spending-fight (accessed April 9, 2012). 152Ibid. 153Ibid.

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knowledge. At the same time, the CBA has to account for the extra fishermen knowledge. Without

assuming sustainability, the co-management CBA is stuck with the one estimate because anything higher

than 618,046 pounds GW is assumed to be unsustainable. Remember, one of the criteria for success is

that the policy creates a sustainable fishery. In order to get a range of values, sustainability had to be

assumed. The status quo TAC was also assumed to be sustainable. This is another big assumption given

the fact that the fishermen have not followed the prescribed catch limit. Sustainability was assumed to

provide an estimate of the potential benefits. Sustainability is possible under the status quo, but

enforcement and monitoring costs may have to go up in order to enforce sustainability.

Enforcement and monitoring costs are not known for the SA vermilion snapper, which is the last

big weakness in the analysis. The second biggest cost in each policy was the cost to run and enforce the

policy. It is the second biggest cost without including the monitoring and enforcement costs.

Understanding and including these costs would give a more complete picture of the costs and NPV. The

low co-management estimate accumulated the lowest NPV, but after five years the co-management cost

of monitoring and enforcement would be half of the cost of running a catch share and a government

enforced TAC. There is the potential that co-management would become the policy with the highest NPV

over a 15 year period.

Strategic  Recommendation   A catch share program is the best policy for the SA vermilion snapper. Theoretically, a catch

share program has the fewest implementation problems. It also offers the most consistent NPV from $17

to $29 million with a CBA estimate of just over $24 million. It is not as high as co-management high, but

it is also not as low as co-management low. The co-management estimates varied too much to provide

any confidence in the actual value of a co-managed program. Also, co-management takes too long to

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create and implement the program. This means that the fishermen get anywhere from 4154 to 8155 years of

unsustainable harvesting if the current trend continues. This may decrease what scientists feel will create

a sustainable harvest and may decrease the TAC when implemented. The SAFMC has already considered

a much lower TAC than the current one. Therefore, the quicker implementation of a catch share may, at

the very least, keep current catch levels into the future.

While catch shares have extra monitoring costs that go along with them this monetary burden will

be lessened as the SAFMC creates multispecies catch shares. This was attempted for all SASG fish

species with SAFMC Amendment 21156. This amendment was overturned, but the SAFMC is starting to

consider multispecies fisheries. Multispecies fisheries are good because it costs the same to monitor one

specie of fish as it does to monitor numerous co-occurring species because all of these species are docked

together. In the long-term there is potential cost savings as more species are added to catch shares.

Catch shares have also proven, statistically, to be very efficient options for natural resource

managers. One study looked at all of the catch shares currently operating in the US and British Colombia

and found that they have been very efficient policy tools in increasing TACs and profits for fishermen157.

One study looked at catch shares internationally and found the same thing158. While no policy is

guaranteed success, both within and without the US, catch shares have been proven to be successful, and

therefore I feel this is a very safe but efficient policy option for policy makers.

154 It took 5 years to implement the Maine lobster cooperative. James M. Acheson, Terry Stockwell, and James A. Wilson, “Evolution of the Maine Lobster Co-Management Law,” Marine Policy Review 52 (Fall 2000): 53-63, 55. 155 It took around 8 years to fully implement the Pilipino co-management system. K. Kuperan et al., “Measuring Transaction Costs of Fisheries Co-Management,” Coastal Management 36, no. 3 (2008): 235. 156 Mike Wilson, “Safmc Votes to Terminate Development of Catch Shares,” 2Coolfishing.net, http://2coolfishing.net/ttmbforum/showthread.php?t=331734 (accessed January 19, 2012). 157 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 644-57. 158 Costello, Christopher, Steven D. Gaines, and John Lynham. “Can Catch Shares Prevent Fisheries Collapse?” Science 321:5896 (2008): 1678-81.

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Appendix  A  Status  Quo:  Total  Allowable  Catch    

I will go through each indicator individually mentioning all of the assumptions and resources used to calculate the values in the CBA. Each policy will also be divided into a benefits and costs section. The discount rate in all of the CBA calculations is .05. I assumed for this status quo policy option that the TACs would increase as if the status quo was a catch share. It is the only estimate I could find that provided a set percentage increase if TACs were followed159.

 Stable income- Stable income is calculated in the same manner for every policy option. Stable income refers to the fact that fishing sustainably will insure sustainable income into the future. I wanted to pick up the extra income of sustainable fishing practices along with the revenue that they would maintain even after limiting catch. The TAC increases in years 6-10 by 13% and 19% in years 11-15160. The yearly price increase was 6 cents which was the average price increase over the 42 year period between 1965 and 2007161. The prices in 2018 and 2023 prices were increased by the same percent as the TAC because SA vermilion snapper prices are highly elastic162. Also, stable income was calculated to be 17% of a person’s income163. I used government job security because government work is known for their job security. It is estimated that a private worker has a 20% chance of being fired, and a government employee has a 6% chance of being fired164. Basically, the equation adds the gross revenue of the fishermen with the value of stable income.

((Yn*Py)/(1.05)^Y) + (((Yn*Py*.17)/(1.05)^Y)))  Sustainable Fishery- This refers to the economic value that the vermilion snapper provides to the community. I did total economic value because there were no estimates on the goodwill or asset value. The equation below shows how I calculated the value. (Yn*Py)/(1.05)^Y

159 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 644-57. 160 Ibid. 161 Southeast Data, Assessment, and Review, “Stock Assessment Report South Atlantic Vermilion Snapper,” Southeast Fishery Science Center of the National Atmospheric and Administration, p.36 http://www.sefsc.noaa.gov/sedar/download/S17%20VS%20SAR%202.pdf?id=DOCUMENT (accessed November 28, 2011). 162“Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, p 3-40 http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012). 163Andrew G. Biggs and Jason Richwhine, “The Public Worker Gravy Train,” American Enterprise Institute, http://www.aei.org/article/economics/fiscal-policy/labor/the-public-worker-gravy-train/ (accessed March 2, 2012). 164 Ibid.

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Benefits Fishermen Community State/Federal

Years  Price  (P)   (Y)   Stable  Income  

Sustainable  Fishery   None  

2013   2.93   618046   $2,017,831.90   $1,724,642.65   $0.00  2014   2.99   618046   $1,961,097.80   $1,676,151.96   $0.00  2015   3.05   618046   $1,905,191.36   $1,628,368.69   $0.00  2016   3.11   618046   $1,850,162.42   $1,581,335.40   $0.00  2017   3.17   618046   $1,796,054.16   $1,535,089.03   $0.00  2018   3.58   698392   $2,182,892.51   $1,865,720.09   $0.00  2019   3.64   698392   $2,113,787.90   $1,806,656.33   $0.00  2020   3.70   698392   $2,046,314.82   $1,748,987.02   $0.00  2021   3.76   698392   $1,980,474.57   $1,692,713.31   $0.00  2022   3.81   698392   $1,911,248.26   $1,633,545.52   $0.00  2023   4.04   735475   $2,032,604.36   $1,737,268.68   $0.00  2024   4.10   735475   $1,964,563.38   $1,679,114.00   $0.00  2025   4.16   735475   $1,898,393.42   $1,622,558.48   $0.00  2026   4.22   735475   $1,834,070.56   $1,567,581.68   $0.00  2027   4.28   735475   $1,771,568.95   $1,514,161.49   $0.00   NPB Total       $29,266,256.36   $25,013,894.32   $0.00   $54,280,150.68

In the costs section, “Y” in column 3 represents the lost catch due to the TAC. This number was estimated by subtracting the TAC from the 10 year average catch rate of 959,046 pounds GW165. Lost Revenue- This looks at the revenue lost due to a decrease in allowable catch, which is shown in the formula below.

((Yn*Py)/(1.05)^Y) Other Fishermen- This looks at the lost revenue that other fishermen suffer from a TAC. NOAA estimated that under the preferred TAC $1.64 million would be lost to other fishermen. However, the preferred alternative that they quantify is not what the TAC ended up being. The preferred alternative that they quantified is 385,002 pounds GW166. The TAC ended up being 618,046 pounds GW. The current TAC is 62% higher than the quantified value, so I multiplied the $1.64 million by .62 which gives me the total gross revenue lost with the current TAC. I did the same thing with the other estimated TACs. These numbers are shown in the “New loss with new TAC” column from the table below. ((New Y)/(1.05)^Y)

165Southeast Data, Assessment, and Review, “Stock Assessment Report South Atlantic Vermilion Snapper,” Southeast Fishery Science Center of the National Atmospheric and Administration, p.20 http://www.sefsc.noaa.gov/sedar/download/S17%20VS%20SAR%202.pdf?id=DOCUMENT (accessed November 28, 2011). The figure was estimated using whole weight figures, which were then converted to gutted weight figures from 1998-2007. 166“Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, p 4-82http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012).

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Costs Fishermen

Years  Price  (P)   (Y)   Lost  revenue  

New  Loss  with  New  

TAC  Damage  to  

other  fishermen  2013   2.93   341,000   $951,552.38   1016800   $968,380.95  2014   2.99   341,000   $924,798.19   1016800   $922,267.57  2015   3.05   341,000   $898,434.29   1016800   $878,350.07  2016   3.11   341,000   $872,484.20   1016800   $836,523.88  2017   3.17   341,000   $846,968.28   1016800   $796,689.41  2018   3.58   260,654   $696,324.42   902000   $673,086.29  2019   3.64   260,654   $674,280.63   902000   $641,034.56  2020   3.70   260,654   $652,757.28   902000   $610,509.10  2021   3.76   260,654   $631,754.80   902000   $581,437.24  2022   3.81   260,654   $609,672.18   902000   $553,749.75  2023   4.04   223,571   $528,098.03   852800   $498,614.50  2024   4.10   223,571   $510,420.06   852800   $474,870.95  2025   4.16   223,571   $493,228.21   852800   $452,258.05  2026   4.22   223,571   $476,516.27   852800   $430,721.95  2027   4.28   223,571   $460,277.51   852800   $410,211.38  Total       $10,227,566.73       $9,728,705.66  

Processor Loss- I used the average loss of catch (Y) to calculate how many fish the processors and wholesalers would not get to sell. I found a vermilion snapper price at $6.25 (SP) per pound GW167, which is 47% higher than the price at which the fishermen sell the fish. To calculate future values, I multiplied the fishermen price by .47 to get the new price in every future year. Lastly, I subtracted the price which the fishermen paid to get the fish from the price that they sold the fish at, which is the “PD” value in the table below.

((Y*PD)/(1.05)^Y) Decreased Tax Revenue- It is important to note that only North Carolina charges a 2% tax on fish sales, and they only tax the processors and wholesalers168,169,170. I used the Y, which is the number of fish that will not be fished and I multiplied it by the new sold price or (SP).

((Y*SP*.02)/(1.05)^Y)

Cost to Run Program- NOAA figured out the administrative costs of a TAC to be 450,000171. I inflation adjust this value using used an online inflation calculator that runs off of the US CPI172. (Cost/(1.05)^Y 167 “Fresh Florida Vermilion Snapper, Price Per Pound.,” Dockside Fillets, http://shop.docksidefillets.com/Fresh-Florida-Vermilion-Snapper-Price-per-pound-WHVS.htm (accessed March 2, 2012). 168 Laws of North Carolina, G.S. 105-264 (2002). 169 South Carolina Code, 12-36-2120(75), (2007). 170 “Florida State Tax,” Tax Laws, http://tax.laws.com/florida-state-tax (accessed April 4, 2012). 171 “Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, p. 5-7 http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012). 172 “Tom's Inflation Calculator,” Halfhill.com, http://www.halfhill.com/inflation.html (accessed March 15, 2012). This calculator does use the US CPI.

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Reset TAC- This number was estimated to be around $320,000173. It is the cost to set up a catch share in Australia. This is the most accurate number I could find. The cost was also inflation adjusted using the same calculator as above. This cost only occurs once every five years.

(Cost/(1.05)^Y

Catch  Shares:  Individual  Transferrable  Quotas  

I am only going to look at the calculations that have not already been explained previously. The sustainable income and the sustainable fishery are calculated in the same ways as previously explained. I assumed a 13 and 19% increase in the TAC as mentioned above174.

Lives Saved- This calculates the value of a life of fishermen that is saved if the race for fish ends. The value of a statistical life of a fisherman was found to be $4.38 million175. I found the number of fishermen deaths to be 10 over a 9 year period, or .9 deaths per year in the SASG fishery not the vermilion snapper fishery176. I then multiplied the .9 times the .7 or the decrease in fishery search and rescues177. This gives the number .63 or the number of fishermen who are saved every year from a catch share. However, the .9 deaths per year is in the SASG fishery, so I took .63 and divided it by 88 to give me .0072, which is the number of lives saved in the SA vermilion snapper fishery. (4.38 million *((.9 *.7)/88)/ (1.05)^Y

173Neer, Julie. Interviewed by Michael Stephens. Phone interview. April 5, 2012. 174Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 644-57. 175 Schnier, Kurt E., Horrace, William C. and Felthoven, Ronald G., The Value of Statistical Life: Pursuing the Deadliest Catch (October 1, 2009). Center for Policy Research Working Paper No. 117. Available at SSRN: http://ssrn.com/abstract=1807236 or http://dx.doi.org/10.2139/ssrn.1807236 176 Devin Lucas and Jennifer Lincoln, “U.s. Commercial Fishing Fatalities Regional Summary: Mid,” National Department for Occupational Safety and Health, http://www.ntsb.gov/news/events/2010/fishing_vessel/Background/NIOSH%20Mid%20South%20Atlantic%20Data.pdf (accessed March 4, 2012). 177 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 650.

Years Price  (P) (Y)Price  sold  at  

(SP)

Difference  between  

bought  and  sold  (PD) Processor  Loss

Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 341,000 6.25                                           4.02                                               $1,078,209.52 $15,502.50 $434,142.86 $0.002014 2.99 341,000 6.36                                           3.37                                               $1,042,857.53 $15,028.16 $420,498.37 $0.002015 3.05 341,000 6.49                                           3.44                                               $1,013,128.03 $14,599.74 $407,282.70 $0.002016 3.11 341,000 6.62                                           3.51                                               $983,865.16 $14,178.05 $394,482.39 $0.002017 3.17 341,000 6.74                                           3.57                                               $955,091.89 $13,763.41 $382,084.37 $0.002018 3.58 260,654 7.62                                           4.04                                               $785,216.90 $11,698.00 $372,259.34 $376,918.802019 3.64 260,654 7.74                                           4.10                                               $760,359.01 $11,327.67 $362,686.96 $0.002020 3.70 260,654 7.87                                           4.17                                               $736,088.00 $10,966.09 $353,360.72 $0.002021 3.76 260,654 8.00                                           4.24                                               $712,404.34 $10,613.25 $344,274.30 $0.002022 3.81 260,654 8.11                                           4.30                                               $687,502.67 $10,242.27 $335,421.54 $0.002023 4.04 223,571 8.60                                           4.56                                               $595,514.80 $9,076.11 $329,032.56 $248,602.382024 4.10 223,571 8.72                                           4.62                                               $575,580.07 $8,772.29 $322,765.27 $0.002025 4.16 223,571 8.85                                           4.69                                               $556,193.52 $8,476.82 $316,617.36 $0.002026 4.22 223,571 8.98                                           4.76                                               $537,348.13 $8,189.60 $310,586.55 $0.00

2027 4.28 223,571 9.11                                           4.83                                               $519,036.34 $7,910.52 $304,670.62 $0.00 NPCTotal 11,538,395.92 $170,344.48 $5,390,165.90 $625,521.18 $37,680,699.87

State/FederalCommunityCosts

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Cost Savings- This looked at how much money the fishermen would save under a catch share. With no race to fish, the fishermen can fish more efficiently. One study found that on average the profits of the fishermen almost doubled178. However, I did not use a doubling figure; I used .65 and .45 to look at the increase in revenue from cost savings. I did this because one of the reasons costs go down is from decreased discards. To not double count, I looked at how much revenue the discards count as a percentage of the total revenue and then subtracted it from .9 (the almost doubling figure), which are the .65 and .45 figures. I used the .65 figure for years 2-5 because on average year one saw no change, and the .45 for years 6-15 the discards decreased more and as a percentage of net revenue from years 6 -15 which is why the value is smaller. ((Yn*Py*.65)/(1.05)^Y)   ((Yn*Py*.45)/(1.05)^Y)    Decreased Discards- This looked at the value of the fish lives that would be saved from decreasing discards. The number of discards is estimated by NOAA over a four year average to be 38,963179. About 70% of all discards were majority dead when re-released back into the ocean180. I multiplied 38,963 by .7 to get 27,904, or the number of dead discards. I then multiplied this number by .31 for years 1-5 and .66 for years 6-15, which are the amounts that catch shares decrease discards181. I then multiplied this number by the mean weight of vermilion snapper in 2007 which is 1.7 pounds to get the years 2-5 as 14,705 pounds and years 6-15 as 31,309 pounds saved for future fishing182. ((D*Py)/(1.05)^Y)

178 Ibid., p. 650 179“Final Snapper Grouper Amendment 16 (gag and Vermilion Snapper) Including a Final Environmental Impact Statement, Initial Regulatory Flexibility Analysis, Final Regulatory Impact Review, and Final Social Impact Assessment/fishery Impact Statement,” South Atlantic Fishery Management Council, p 4-180. http://www.safmc.net/Portals/6/Library/FMP/SnapGroup/SnapGroupAmend16FINAL.pdf (accessed January 18, 2012). 180 Kevin McCarthy, “Discards of Spanish Mackerel and Vermilion Snapper Calculated For Commercial Vessels with Federal Fishing Permits in the Us South Atlantic,” National Oceanic and Atmospheric Administration, http://www.sefsc.noaa.gov/sedar/download/SEDAR17-DW10%20Discards%20of%20Spanish%20mackerel%20and%20vermilion%20snapper%20for%20coml%20vessels%20permitted%20in%20USSA%20final.pdf?id=DOCUMENT (accessed March 2, 2012). 181 Grimm, Dietmar, Ivan Barkhorn, David Festa, Kate Bonzon, Judd Boomhower, Valerie Hovland, and Jason Blau. “Assessing Catch Shares’ Effects: Evidence from Federal United States and Associated British Columbian Fisheries.” Marine Policy 36 (2012): 648. 182 Southeast Data, Assessment, and Review, “Stock Assessment Report South Atlantic Vermilion Snapper,” Southeast Fishery Science Center of the National Atmospheric and Administration, p.50 http://www.sefsc.noaa.gov/sedar/download/S17%20VS%20SAR%202.pdf?id=DOCUMENT (accessed November 28, 2011).

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Cost to Run Program- This is the only difference in the catch share cost section. One study estimated that it would take an extra $320,000 dollars yearly to switch from a TAC to a catch share183, so the total to run the program is $770,000. All of the numbers are inflation adjusted with the same calculator184.

(Cost/(1.05)^Y  

Co-­‐management  Low  

There are no new formulas in co-management, so all of the formulas to calculate the values are the same. However, the prices, TAC, and decrease discards all have different values in the calculations. I also used the same assumptions I did with catch shares for TAC increases, decreases discards, cost savings, and human lives saved. I did this because there was no great study on the effects of co-management on these figures. I also figure that co-management does the same thing as a catch share 183 Costello, Christopher, Steven D. Gaines, and John Lynham. “Can Catch Shares Prevent Fisheries Collapse?” Science 321:5896 (2008): 1678-81. 184 “Tom's Inflation Calculator,” Halfhill.com, http://www.halfhill.com/inflation.html (accessed March 15, 2012). This calculator does use the US CPI.

State/Federal

Years Price  (P) (Y) Stable  Income Lives  Saved Cost  SavingsSustainable  Fishery

Number  of  Decreased  Discards  (D)

Decreased  Discards None

2013 2.93 618046 $2,017,831.90 $30,034.29 $1,249,134.03 $1,724,642.65 0 $0.00 $0.002014 2.99 618046 $1,961,097.80 $28,604.08 $1,156,202.78 $1,676,151.96 14705 $39,880.23 $0.002015 3.05 618046 $1,905,191.36 $27,241.98 $1,069,754.36 $1,628,368.69 14705 $38,743.33 $0.002016 3.11 618046 $1,850,162.42 $25,944.75 $989,386.58 $1,581,335.40 14705 $37,624.28 $0.002017 3.17 618046 $1,796,054.16 $24,709.28 $914,716.03 $1,535,089.03 14705 $36,523.95 $0.002018 3.58 698392 $2,182,892.51 $23,532.65 $733,008.60 $1,865,720.09 31309 $83,640.46 $0.002019 3.64 698392 $2,113,787.90 $22,412.05 $676,003.32 $1,806,656.33 31309 $80,992.63 $0.002020 3.70 698392 $2,046,314.82 $21,344.81 $623,261.89 $1,748,987.02 31309 $78,407.31 $0.002021 3.76 698392 $1,980,474.57 $20,328.39 $574,484.21 $1,692,713.31 31309 $75,884.55 $0.002022 3.81 698392 $1,911,248.26 $19,360.37 $528,003.29 $1,633,545.52 31309 $73,232.05 $0.002023 4.04 735475 $2,032,604.36 $18,438.45 $534,789.75 $1,737,268.68 31309 $73,955.12 $0.002024 4.10 735475 $1,964,563.38 $17,560.42 $492,274.08 $1,679,114.00 31309 $71,479.49 $0.002025 4.16 735475 $1,898,393.42 $16,724.21 $453,041.35 $1,622,558.48 31309 $69,071.94 $0.002026 4.22 735475 $1,834,070.56 $15,927.82 $416,848.62 $1,567,581.68 31309 $66,731.59 $0.00

2027 4.28 735475 $1,771,568.95 $15,169.36 $383,469.73 $1,514,161.49 31309 $64,457.50 $0.00 NPBTotal $29,266,256.36 $327,332.90 $10,794,378.61 $25,013,894.32 $890,624.43 $0.00 $66,292,486.62

Benefits Fishermen Community

Years Price  (P) (Y) Price  sold  at  (SP)

Difference  between  bought  and  sold  (PD) Processor  Loss Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 383,004 6.25                                               4.02                                               $1,078,209.52 $15,502.50 $742,866.67 $0.002014 2.99 383,004 6.36                                               3.37                                               $1,042,857.53 $15,028.16 $719,519.43 $0.002015 3.05 383,004 6.49                                               3.44                                               $1,013,128.03 $14,599.74 $696,905.96 $0.002016 3.11 383,004 6.62                                               3.51                                               $983,865.16 $14,178.05 $675,003.20 $0.002017 3.17 383,004 6.74                                               3.57                                               $955,091.89 $13,763.41 $653,788.81 $0.002018 3.58 302,658 7.62                                               4.04                                               $785,216.90 $11,698.00 $636,977.10 $376,918.802019 3.64 302,658 7.74                                               4.10                                               $760,359.01 $11,327.67 $620,597.69 $0.002020 3.70 302,658 7.87                                               4.17                                               $736,088.00 $10,966.09 $604,639.47 $0.002021 3.76 302,658 8.00                                               4.24                                               $712,404.34 $10,613.25 $589,091.59 $0.002022 3.81 302,658 8.11                                               4.30                                               $687,502.67 $10,242.27 $573,943.52 $0.002023 4.04 265,575 8.60                                               4.56                                               $595,514.80 $9,076.11 $563,011.26 $248,602.382024 4.10 265,575 8.72                                               4.62                                               $575,580.07 $8,772.29 $552,287.24 $0.002025 4.16 265,575 8.85                                               4.69                                               $556,193.52 $8,476.82 $541,767.48 $0.002026 4.22 265,575 8.98                                               4.76                                               $537,348.13 $8,189.60 $531,448.10 $0.00

2027 4.28 265,575 9.11                                               4.83                                               $519,036.34 $7,910.52 $521,325.28 $0.00 NPCTotal 11,538,395.92 $170,344.48 $9,223,172.80 $625,521.18 $41,513,706.77

Costs Community State/Federal

P a g e | 48

program. It stops the race for fish, so it should get the decreased discard, cost savings, and human lives saved benefits. Also following the TAC should increase the TAC by a similar amount with or without a catch share program. However, lives saved, cost savings, and decreased discards do not accrue until year 6 because it takes at least 5 years to implement a co-managed system.

The years 1-10 have a TAC of 618,046 (Y) pounds GW. Remember it takes 5 years to implement a new co-management program. I assume that the lowest TAC after the cooperative meetings will be 618,046. Years 11-15 have a TAC of 698,392, or a 13% increase. This changes the all of the indicators below because the prices also adjust accordingly. The table below shows all of the new NPB estimates.

(Y) changes to 341,00 pounds GW for years 1-10 and to 302,658 from years 11-15. “New Loss with New TAC” changes to 1,016,800 from year 1-10 and 902,000 for the years 11-15.

Costs Fishermen

Years  Price  (P)   (Y)   Lost  revenue  

New  Loss  with  New  

TAC  Damage  to  other  

fishermen  2013   2.93   341,000   $951,552.38   1016800   $968,380.95  2014   2.99   341,000   $924,798.19   1016800   $922,267.57  2015   3.05   341,000   $898,434.29   1016800   $878,350.07  2016   3.11   341,000   $872,484.20   1016800   $836,523.88  2017   3.17   341,000   $846,968.28   1016800   $796,689.41  2018   3.58   341,000   $821,904.02   1016800   $758,751.82  2019   3.64   341,000   $797,306.28   1016800   $758,751.82  2020   3.70   341,000   $773,187.45   1016800   $688,210.26  2021   3.76   341,000   $749,557.69   1016800   $655,438.35  2022   3.81   341,000   $726,425.14   1016800   $624,227.00  2023   4.04   260,654   $781,552.50   902000   $527,380.72  2024   4.10   260,654   $755,728.61   902000   $502,267.35  2025   4.16   260,654   $730,591.91   902000   $478,349.86  2026   4.22   260,654   $706,135.51   902000   $455,571.29  2027   4.28   260,654   $682,351.61   902000   $433,877.42  Total       $12,018,978.05       $10,285,037.76  

State/Federal

Years Price  (P) (Y) Stable  Income Lives  Saved Cost  SavingsSustainable  Fishery

Number  of  Decreased  Discards  (D)

Decreased  Discards None

2013 2.93 618046 2017831.898 $0.00 $0.00 $1,724,642.65 $0.00 0 $0.002014 2.99 618046 1961097.80 $0.00 $0.00 $1,676,151.96 0 0.00 $0.002015 3.05 618046 1905191.36 $0.00 $0.00 $1,628,368.69 0 0.00 $0.002016 3.11 618046 1850162.42 $0.00 $0.00 $1,581,335.40 0 0.00 $0.002017 3.17 618046 1796054.16 $0.00 $0.00 $1,535,089.03 0 0.00 $0.002018 3.58 618046 $1,969,481.23 $23,532.65 $955,277.19 $1,683,317.29 0 0.00 $0.002019 3.64 618046 $1,910,539.06 $22,412.05 $882,559.89 $1,632,939.37 14705 34382.37 $0.002020 3.70 618046 $1,852,744.50 $21,344.81 $815,106.76 $1,583,542.31 14705 33342.29 $0.002021 3.76 618046 $1,796,121.89 $20,328.39 $752,567.52 $1,535,146.91 14705 32323.30 $0.002022 3.81 618046 $1,740,690.67 $19,360.37 $694,611.50 $1,487,769.80 14705 31325.75 $0.002023 4.04 698392 $1,972,229.97 $18,438.45 $518,904.91 $1,685,666.64 31309 71758.44 $0.002024 4.10 698392 $1,907,063.96 $17,560.42 $477,866.06 $1,629,969.20 31309 69387.41 $0.002025 4.16 698392 $1,843,632.07 $16,724.21 $439,972.85 $1,575,753.91 31309 67079.48 $0.002026 4.22 698392 $1,781,916.90 $15,927.82 $404,995.10 $1,523,005.90 31309 64834.01 $0.00

2027 4.28 698392 $1,721,898.79 $15,169.36 $372,718.24 $1,471,708.37 31309 62650.28 $0.00 NPBTotal $28,026,656.67 $190,798.52 $6,314,580.02 $23,954,407.42 $467,083.33 $0.00 $58,953,525.97

Benefits Fishermen Community

P a g e | 49

Cost to Run Program- I made some adjustments to these figures. A study found that it is actually more expensive to set up a cooperative than a catch share or centralized government program. I assumed it would take 5 years to set it up185. I used the figures in the study that compared the costs of a regular government program to the cooperative. This study shows that regular government control is only 34% of the set up costs of a cooperative186. I divided $450,000 by .34 and got $1,323,529 per year for the first five years. This estimate includes the opportunity cost of not fishing while setting up the program. These numbers are inflation adjusted.    

Co-­‐management  High  

Like co-management lows the TAC is different, so the prices are different. This changes all of the benefit values. The tables below show how the figures have been adjusted according to the TAC. Years 6-10 have a TAC of 800,000 and the years 11-15 have a TAC of 904,000. The lives saved, cost savings and decreased discards do not accrue until year 6 for the same reasons mentioned above.

185James M. Acheson, Terry Stockwell, and James A. Wilson, “Evolution of the Maine Lobster Co-Management Law,” Marine Policy Review 52 (Fall 2000): 53-63, 55. 186 K. Kuperan et al., “Measuring Transaction Costs of Fisheries Co-Management,” Coastal Management 36, no. 3 (2008): 235.

Years Price  (P) (Y) Price  sold  at  (SP)

Difference  between  bought  and  sold  (PD) Processor  Loss Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 341,000 $6.25 $3.32 $1,078,209.52 $15,502.50 $1,276,890.35 $0.002014 2.99 341,000 $6.36 $3.37 $1,042,857.53 $15,028.16 $1,236,759.51 $0.002015 3.05 341,000 $6.49 $3.44 $1,013,128.03 $14,599.74 $1,197,889.93 $0.002016 3.11 341,000 $6.62 $3.51 $983,865.16 $14,178.05 $1,160,241.96 $0.002017 3.17 341,000 $6.74 $3.57 $955,091.89 $13,763.41 $1,123,777.22 $0.002018 3.58 341,000 $6.87 $3.64 $926,827.94 $13,356.11 $372,259.34 $376,918.802019 3.64 341,000 $7.00 $3.71 $899,090.06 $12,956.39 $362,686.96 $0.002020 3.70 341,000 $7.13 $3.78 $871,892.23 $12,564.45 $353,360.72 $0.002021 3.76 341,000 $7.26 $3.85 $845,245.91 $12,180.46 $344,274.30 $0.002022 3.81 341,000 $7.38 $3.91 $819,160.26 $11,804.56 $335,421.54 $0.002023 4.04 260,654 $8.34 $4.42 $881,325.16 $10,036.17 $329,032.56 $248,602.382024 4.10 260,654 $8.47 $4.49 $852,204.60 $9,704.56 $322,765.27 $0.002025 4.16 260,654 $8.60 $4.56 $823,858.96 $9,381.77 $316,617.36 $0.002026 4.22 260,654 $8.72 $4.62 $796,280.46 $9,067.72 $310,586.55 $0.00

2027 4.28 260,654 $8.85 $4.69 $769,460.33 $8,762.30 $304,670.62 $0.00 NPCTotal $13,558,498.05 $182,886.35 $9,347,234.17 $625,521.18 $46,018,155.55

Costs Community State/Federal

State/Federal

Years Price  (P) (Y) Stable  Income Lives  Saved Cost  SavingsSustainable  Fishery

Number  of  Decreased  Discards  (D)

Decreased  Discards None

2013 2.93 618046 2017831.898 $0.00 $0.00 1724642.648 $0.00 $0.002014 2.99                   618046 1961097.798 $0.00 $0.00 1676151.964 0 $0.00 $0.002015 3.05                   618046 1905191.362 $0.00 $0.00 1628368.686 0 $0.00 $0.002016 3.11                   618046 1850162.416 $0.00 $0.00 1581335.398 0 $0.00 $0.002017 3.17                   618046 1796054.16 $0.00 $0.00 1535089.025 0 $0.00 $0.002018 3.90                   800000 2860183.918 23532.64875 $1,387,303.63 2328192.038 0 $0.00 $0.002019 3.96                   800000 2765892.141 22412.04643 $1,277,684.14 2251438.454 14705 $41,384.25 $0.002020 4.04                   800000 2687398.809 21344.80612 $1,182,309.24 2187544.818 14705 $40,209.81 $0.002021 4.10                   800000 2597438.736 20328.38678 $1,088,315.91 2114317.245 14705 $38,863.79 $0.002022 4.16                   800000 2509952.414 19360.36836 $1,001,580.48 2043103.308 14705 $37,554.79 $0.002023 4.70                   904000 3051821.719 18438.44606 $802,951.63 2484185.363 31309 $86,036.90 $0.002024 4.76                   904000 2943601.091 17560.42482 $737,598.25 2396093.684 31309 $82,985.95 $0.002025 4.82                   904000 2838766.958 16724.21411 $677,456.43 2310758.615 31309 $80,030.47 $0.002026 4.88                   904000 2737242.196 15927.82297 $622,121.99 2228117.376 31309 $77,168.28 $0.00

2027 4.94                   904000 2638949.346 15169.35521 $571,220.89 2148106.916 31309 $74,397.21 $0.00 NPBTotal $37,161,584.96 $190,798.52 $9,348,542.60 $30,637,445.54 $558,631.46 $0.00 $77,897,003.07

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The “Y” value is the different in years 6-10 and 11-15 because of the increased TAC. The new values are shown in the tables above. This also adjusted the “New Loss with New TAC” and the “After Net Revenue Factor (New Y)” figures as shown in the table above.

Costs Fishermen

Years   Price  (P)   (Y)   Lost  revenue  

New  Loss  with  New  

TAC  

Damage  to  other  

fishermen  2013   2.93   341,000   951552.381   1016800   968380.9524  2014                      2.99     341,000   924798.1859   1016800   922267.5737  2015                      3.05     341,000   898434.2944   1016800   878350.0702  2016                      3.11     341,000   872484.2015   1016800   836523.8764  2017                      3.17     341,000   846968.2802   1016800   796689.4061  2018                      3.90     159,046   462862.0385   787200   587420.7602  2019                      3.96     159,046   447602.8504   787200   559448.3431  2020                      4.04     159,046   434900.3164   787200   532807.9458  2021                      4.10     159,046   420342.1257   787200   507436.1388  2022                      4.16     159,046   406184.2609   787200   483272.5132  2023                      4.70     55,046   151266.0039   705200   412315.8347  2024                      4.76     55,046   145901.9612   705200   392681.7473  2025                      4.82     55,046   140705.7729   705200   373982.6165  2026                      4.88     55,046   135673.6162   705200   356173.9205  

2027                      4.94     55,046   130801.6519   705200   339213.2576  

Total       $7,370,477.94       $8,946,964.96  

The “SP” figure has been adjusted because of the percent increase in the TAC. The price adjustments are shown in the “SP” and “PD” columns. Tax revenue has been adjusted according to the new “SP” prices. The other costs are the same and explained above.

Years Price  (P) (Y) Lost  revenueNew  Loss  with  

New  Tac

Damage  to  other  

fishermenPrice  sold  at  

(SP)

Difference  between  bought  and  sold  (PD) Processor  Loss Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 341,000 951552.381 1016800 968380.9524 $6.25 $3.32 $1,078,209.52 $15,502.50 $1,276,890.35 $0.002014 2.99                   341,000 924798.1859 1016800 922267.5737 $6.36 $3.37 $1,042,857.53 $15,028.16 $1,236,759.51 $0.002015 3.05                   341,000 898434.2944 1016800 878350.0702 $6.49 $3.44 $1,013,128.03 $14,599.74 $1,197,889.93 $0.002016 3.11                   341,000 872484.2015 1016800 836523.8764 $6.62 $3.51 $983,865.16 $14,178.05 $1,160,241.96 $0.002017 3.17                   341,000 846968.2802 1016800 796689.4061 $6.74 $3.57 $955,091.89 $13,763.41 $1,123,777.22 $0.002018 3.90                   159,046 462862.0385 787200 587420.7602 $8.30 $4.40 $521,950.81 $8,465.33 $372,259.34 $376,918.802019 3.96                   159,046 447602.8504 787200 559448.3431 $8.43 $4.47 $504,743.64 $8,186.25 $362,686.96 $0.002020 4.04                   159,046 434900.3164 787200 532807.9458 $8.60 $4.56 $490,419.51 $7,953.94 $353,360.72 $0.002021 4.10                   159,046 420342.1257 787200 507436.1388 $8.72 $4.62 $474,002.82 $7,687.68 $344,274.30 $0.002022 4.16                   159,046 406184.2609 787200 483272.5132 $8.85 $4.69 $458,037.57 $7,428.75 $335,421.54 $0.002023 4.70                   55,046 151266.0039 705200 412315.8347 $10.00 $5.30 $170,576.56 $3,858.53 $329,032.56 $248,602.382024 4.76                   55,046 145901.9612 705200 392681.7473 $10.13 $5.37 $164,527.74 $3,721.71 $322,765.27 $0.002025 4.82                   55,046 140705.7729 705200 373982.6165 $10.26 $5.44 $158,668.21 $3,589.16 $316,617.36 $0.002026 4.88                   55,046 135673.6162 705200 356173.9205 $10.38 $5.50 $152,993.65 $3,460.80 $310,586.55 $0.00

2027 4.94                   55,046 130801.6519 705200 339213.2576 $10.51 $5.57 $147,499.74 $3,336.52 $304,670.62 $0.00 NPCTotal $7,370,477.94 $8,946,964.96 $8,316,572.39 $130,760.51 $9,347,234.17 $625,521.18 $34,737,531.15

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P a g e | 51

Appendix  B  Social  Discount  Rate  (.03)  Sensitivity  Analysis  

None of the equations have been changed to complete these analyses. Only the values used to calculate the values have been changed. These changed values will be highlighted in the text and in the tables.

The only thing that changes with these next tables are the social discount rates. The actual social discount rates are not shown in the table themselves, but the first set of tables on the benefits and costs show the calculations for the .03 social discount rate.

State/Federal

Years Price  (P) (Y) Stable  Income Lives  Saved Cost  SavingsSustainable  Fishery

Number  of  Decreased  Discards  (D)

Decreased  Discards None

2013 2.93 618046 $2,030,641.14 $30,617.48 $1,281,472.56 $1,758,130.85 0 -­‐ $0.002014 2.99 618046 $2,011,868.19 $29,725.70 $1,232,646.17 $1,741,877.22 14705 $41,444.01 $0.002015 3.05 618046 $1,992,466.14 $28,859.91 $1,185,202.70 $1,725,078.91 14705 $41,044.33 $0.002016 3.11 618046 $1,972,487.57 $28,019.33 $1,139,144.28 $1,707,781.44 14705 $40,632.78 $0.002017 3.17 618046 $1,951,982.51 $27,203.23 $1,094,468.22 $1,690,028.15 14705 $40,210.38 $0.002018 3.58 698392 $2,418,471.19 $26,410.90 $911,444.20 $2,093,914.45 31309 $93,870.44 $0.002019 3.64 698392 $2,387,382.75 $25,641.65 $873,522.29 $2,066,998.05 31309 $92,663.78 $0.002020 3.70 698392 $2,356,053.60 $24,894.81 $836,950.71 $2,039,873.25 31309 $91,447.77 $0.002021 3.76 698392 $2,324,524.15 $24,169.72 $801,699.39 $2,012,575.02 31309 $90,223.99 $0.002022 3.81 698392 $2,286,830.46 $23,465.75 $765,727.48 $1,979,939.79 31309 $88,760.95 $0.002023 4.04 735475 $2,479,258.40 $22,782.28 $805,981.06 $2,146,544.07 31309 $91,377.88 $0.002024 4.10 735475 $2,442,795.21 $22,118.72 $770,997.33 $2,114,974.21 31309 $90,033.96 $0.002025 4.16 735475 $2,406,352.85 $21,474.48 $737,374.14 $2,083,422.38 31309 $88,690.81 $0.002026 4.22 735475 $2,369,961.03 $20,849.01 $705,070.55 $2,051,914.31 31309 $87,349.52 $0.00

2027 4.28 735475 $2,333,647.72 $20,241.76 $674,045.85 $2,020,474.22 31309 $86,011.12 $0.00 NPBTotal $33,764,722.90 $376,474.72 $13,815,746.93 $29,233,526.32 $1,063,761.71 $0.00 $78,254,232.58

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Costs Fishermen

Years  Price  (P)   (Y)   Lost  revenue  

New  Loss  with  New  

TAC  

Damage  to  other  

fishermen  2013   2.93   341,000   970029.1262   1016800   987184.466  2014   2.99   341,000   961061.363   1016800   958431.5204  2015   3.05   341,000   951793.0828   1016800   930516.0392  2016   3.11   341,000   942249.3992   1016800   903413.6303  2017   3.17   341,000   932454.2177   1016800   877100.612  2018   3.58   260,654   781491.1648   902000   755410.7995  2019   3.64   260,654   771445.4195   902000   733408.5432  2020   3.70   260,654   761321.8959   902000   712047.1294  2021   3.76   260,654   751133.6469   902000   691307.8926  2022   3.81   260,654   738953.5207   902000   671172.7112  2023   4.04   223,571   652510.2868   852800   616080.8647  2024   4.10   223,571   642913.6249   852800   598136.7618  2025   4.16   223,571   633322.4437   852800   580715.3027  2026   4.22   223,571   623744.565   852800   563801.2648  2027   4.28   223,571   614187.3506   852800   547379.8687  Total       $11,728,611.11       $11,126,107.41  

Social  Discount  Rate  (.07)  Sensitivity  Analysis  

These next set of tables show the benefits and costs of the higher social discount rate, or the .07 social discount rate. Again nothing changed in the formulas. Only the social discount rate changed, which in turn changes the estimates.

Years Price  (P) (Y)Price  sold  at  

(SP)

Difference  between  bought  and  sold  (PD) Processor  Loss Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 341,000 6.25                               4.02                                   $1,099,145.63 $15,502.50 $757,291.26 $0.002014 2.99 341,000 6.36                               3.37                                   $1,083,750.05 $15,028.16 $747,733.22 $0.002015 3.05 341,000 6.49                               3.44                                   $1,073,298.58 $14,599.74 $738,295.80 $0.002016 3.11 341,000 6.62                               3.51                                   $1,062,536.56 $14,178.05 $728,977.51 $0.002017 3.17 341,000 6.74                               3.57                                   $1,051,490.93 $13,763.41 $719,776.82 $0.002018 3.58 260,654 7.62                               4.04                                   $881,255.99 $11,698.00 $714,885.13 $376,918.802019 3.64 260,654 7.74                               4.10                                   $869,927.81 $11,327.67 $710,026.69 $0.002020 3.70 260,654 7.87                               4.17                                   $858,511.93 $10,966.09 $705,201.27 $0.002021 3.76 260,654 8.00                               4.24                                   $847,023.05 $10,613.25 $700,408.64 $0.002022 3.81 260,654 8.11                               4.30                                   $833,288.01 $10,242.27 $695,648.58 $0.002023 4.04 223,571 8.60                               4.56                                   $735,809.47 $9,076.11 $695,648.58 $248,602.382024 4.10 223,571 8.72                               4.62                                   $724,987.70 $8,772.29 $695,648.58 $0.002025 4.16 223,571 8.85                               4.69                                   $714,172.12 $8,476.82 $695,648.58 $0.002026 4.22 223,571 8.98                               4.76                                   $703,371.53 $8,189.60 $695,648.58 $0.00

2027 4.28 223,571 9.11                               4.83                                   $692,594.25 $7,910.52 $695,648.58 $0.00 NPCTotal 13,231,163.61 $170,344.48 $10,696,487.81 $625,521.18 $47,578,235.59

Costs Community State/Federal

P a g e | 53

Costs Fishermen

Years  Price  (P)   (Y)   Lost  revenue  

New  Loss  with  

New  Tac  

Damage  to  other  

fishermen  2013   2.93   341,000   $933,766.36   1016800   $950,280.37  2014   2.99   341,000   $890,549.39   1016800   $888,112.50  2015   3.05   341,000   $848,990.61   1016800   $830,011.68  2016   3.11   341,000   $809,058.00   1016800   $775,711.85  2017   3.17   341,000   $770,716.67   1016800   $724,964.35  2018   3.58   260,654   $621,791.46   902000   $601,040.69  2019   3.64   260,654   $590,852.85   902000   $561,720.27  2020   3.70   260,654   $561,301.10   902000   $524,972.21  2021   3.76   260,654   $533,087.18   902000   $490,628.24  2022   3.81   260,654   $504,837.48   902000   $458,531.06  2023   4.04   223,571   $429,116.57   852800   $405,159.14  2024   4.10   223,571   $406,999.61   852800   $378,653.40  2025   4.16   223,571   $385,939.91   852800   $353,881.68  2026   4.22   223,571   $365,893.79   852800   $330,730.54  2027   4.28   223,571   $346,818.75   852800   $309,093.97  Total       $8,999,719.73       $8,583,491.94  

State/Federal

Years Price  (P) (Y) Stable  Income Lives  Saved Cost  SavingsSustainable  Fishery

Number  of  Decreased  Discards  (D)

Decreased  Discards None

2013 2.93 618046 $1,954,729.32 $29,472.90 $1,187,452.39 $1,692,406.34 0 $0.00 $0.002014 2.99 618046 $1,864,259.72 $27,544.76 $1,058,405.82 $1,614,077.68 14705 $38,403.31 $0.002015 3.05 618046 $1,777,261.33 $25,742.77 $943,003.52 $1,538,754.39 14705 $36,611.16 $0.002016 3.11 618046 $1,693,667.14 $24,058.66 $839,858.86 $1,466,378.48 14705 $34,889.14 $0.002017 3.17 618046 $1,613,404.11 $22,484.73 $747,717.64 $1,396,886.67 14705 $33,235.74 $0.002018 3.58 698392 $1,924,250.47 $21,013.77 $576,994.20 $1,666,017.72 31309 $74,687.78 $0.002019 3.64 698392 $548,551.54 $19,639.04 $153,724.65 $1,583,121.31 31309 $70,971.52 $0.002020 3.70 698392 $1,737,051.69 $18,354.24 $454,940.96 $1,503,940.86 31309 $67,421.86 $0.002021 3.76 698392 $1,649,738.41 $17,153.49 $403,806.77 $1,428,344.94 31309 $64,032.88 $0.002022 3.81 698392 $1,562,314.41 $16,031.30 $357,390.64 $1,352,653.17 31309 $60,639.61 $0.002023 4.04 735475 $1,630,458.35 $14,982.53 $348,578.56 $1,411,652.25 31309 $60,093.71 $0.002024 4.10 735475 $1,546,423.44 $14,002.36 $308,983.73 $1,338,894.75 31309 $56,996.44 $0.002025 4.16 735475 $1,466,405.63 $13,086.32 $273,827.79 $1,269,615.27 31309 $54,047.23 $0.002026 4.22 735475 $1,390,238.98 $12,230.20 $242,621.39 $1,203,670.12 31309 $51,239.96 $0.00

2027 4.28 735475 $1,317,762.07 $11,430.10 $214,927.93 $1,140,919.54 31309 $48,568.68 $0.00 NPBTotal $23,676,516.61 $287,227.18 $8,112,234.84 $21,607,333.50 $751,839.03 $0.00 $54,435,151.16

Benefits Fishermen Community

P a g e | 54

Decreasing  TAC  Sensitivity  Analysis  

The prices change because of the elasticity and a smaller increase in the TAC will show lower costs than the costs estimated in the CBA. This means that the price will increase by a smaller amount. The new prices are shown in column (P). Also, the new TAC values are found in column (Y).

The new prices are also shown in the table below. Number of lost catch (Y) in the table below has changed. Since the TAC does not increase as much as in the CBA, the (Y) values, or the number of fish that are not caught, are higher than in the CBA estimates. The damage to other fishermen values have also changed because the loss of revenue to these fishermen have gone up because of the smaller increase in the TAC. All of the values are shown below.

Years Price  (P) (Y)Price  sold  at  

(SP)

Difference  between  bought  and  sold  (PD) Processor  Loss Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 341,000 6.25                               4.02                                   $1,058,056.07 $15,502.50 $728,981.31 $0.002014 2.99 341,000 6.36                               3.37                                   $1,004,236.55 $15,028.16 $692,872.89 $0.002015 3.05 341,000 6.49                               3.44                                   $957,372.39 $14,599.74 $658,553.01 $0.002016 3.11 341,000 6.62                               3.51                                   $912,342.00 $14,178.05 $625,933.10 $0.002017 3.17 341,000 6.74                               3.57                                   $869,106.03 $13,763.41 $594,928.94 $0.002018 3.58 260,654 7.62                               4.04                                   $701,169.10 $11,698.00 $568,796.54 $376,918.802019 3.64 260,654 7.74                               4.10                                   $666,280.87 $11,327.67 $543,812.02 $0.002020 3.70 260,654 7.87                               4.17                                   $632,956.56 $10,966.09 $519,924.95 $0.002021 3.76 260,654 8.00                               4.24                                   $601,140.86 $10,613.25 $497,087.13 $0.002022 3.81 260,654 8.11                               4.30                                   $569,284.82 $10,242.27 $475,252.46 $0.002023 4.04 223,571 8.60                               4.56                                   $483,897.40 $9,076.11 $457,486.01 $248,602.382024 4.10 223,571 8.72                               4.62                                   $458,957.01 $8,772.29 $440,383.73 $0.002025 4.16 223,571 8.85                               4.69                                   $435,208.83 $8,476.82 $423,920.79 $0.002026 4.22 223,571 8.98                               4.76                                   $412,603.63 $8,189.60 $408,073.28 $0.00

2027 4.28 223,571 9.11                               4.83                                   $391,093.49 $7,910.52 $392,818.21 $0.00 NPCTotal 10,153,705.63 $170,344.48 $8,028,824.36 $625,521.18 $36,561,607.31

Costs Community State/Federal

State/Federal

Years Price  (P) (Y) Stable  Income Lives  Saved Cost  SavingsSustainable  Fishery

Number  of  Decreased  Discards  (D)

Decreased  Discards None

2013 2.93 618046 $1,991,962.26 $30,034.29 $1,233,119.49 $1,724,642.65 0 -­‐ $0.002014 2.99                   618046 $1,935,955.52 $28,604.08 $1,141,379.67 $1,676,151.96 14705 $39,880.23 $0.002015 3.05                   618046 $1,880,765.83 $27,241.98 $1,056,039.56 $1,628,368.69 14705 $38,743.33 $0.002016 3.11                   618046 $1,826,442.39 $25,944.75 $976,702.14 $1,581,335.40 14705 $37,624.28 $0.002017 3.17                   618046 $1,773,027.82 $24,709.28 $902,988.90 $1,535,089.03 14705 $36,523.95 $0.002018 3.42                   667489 $1,967,507.56 $23,532.65 $660,682.99 $1,703,469.75 31309 $79,902.34 $0.002019 3.48                   667489 $1,906,690.70 $22,412.05 $609,772.27 $1,650,814.46 31309 $77,432.51 $0.002020 3.56                   667489 $1,857,640.64 $21,344.81 $565,795.94 $1,608,346.87 31309 $75,440.54 $0.002021 3.62                   667489 $1,798,999.22 $20,328.39 $521,842.92 $1,557,575.09 31309 $73,059.06 $0.002022 3.68                   667489 $1,741,730.37 $19,360.37 $481,172.11 $1,507,991.66 31309 $70,733.32 $0.002023 3.86                   698392 $1,820,481.44 $18,438.45 $478,979.01 $1,576,174.40 31309 $70,660.09 $0.002024 3.92                   698392 $1,760,741.98 $17,560.42 $441,201.16 $1,524,451.93 31309 $68,341.37 $0.002025 3.98                   698392 $1,702,563.91 $16,724.21 $406,307.70 $1,474,081.31 31309 $66,083.25 $0.002026 4.04                   698392 $1,645,934.01 $15,927.82 $374,088.83 $1,425,051.09 31309 $63,885.22 $0.00

2027 4.10                   698392 $1,590,836.73 $15,169.36 $344,348.85 $1,377,347.82 31309 $61,746.67 $0.00 NPBTotal $27,201,280.38 $327,332.90 $10,194,421.54 $23,550,892.10 $860,056.17 $0.00 $62,133,983.08

Benefits Fishermen Community

P a g e | 55

Costs Fishermen

Years   Price  (P)   (Y)   Lost  revenue  

New  Loss  with  New  

Tac  

Damage  to  other  

fishermen  2013   2.93   341,000   $951,552.38   1016800   $968,380.95  2014                      2.99     341,000   $924,798.19   1016800   $922,267.57  2015                      3.05     341,000   $898,434.29   1016800   $878,350.07  2016                      3.11     341,000   $872,484.20   1016800   $836,523.88  2017                      3.17     341,000   $846,968.28   1016800   $796,689.41  2018                      3.42     291,557   $744,069.98   951200   $709,800.09  2019                      3.48     291,557   $721,070.33   951200   $676,000.08  2020                      3.56     291,557   $702,520.62   951200   $643,809.60  2021                      3.62     291,557   $680,343.68   951200   $613,152.00  2022                      3.68     291,557   $658,685.80   951200   $583,954.29  2023                      3.86     260,654   $588,260.12   902000   $527,380.72  2024                      3.92     260,654   $568,956.25   902000   $502,267.35  2025                      3.98     260,654   $550,156.92   902000   $478,349.86  2026                      4.04     260,654   $531,857.85   902000   $455,571.29  2027                      4.10     260,654   $514,054.03   902000   $433,877.42  Total       $10,754,212.91       $10,026,374.58  

The (SP) or the price at which processors and wholesalers sell the price, and therefore the (PD) or price difference also change. This is due to the changed prices from the smaller increase in the TAC.

Years Price  (P) (Y)Price  sold  at  

(SP)

Difference  between  bought  and  sold  (PD) Processor  Loss Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 341,000 6.25 3.32 $1,078,209.52 $15,502.50 $742,866.67 $0.002014 2.99                   341,000 6.36                                         3.37                               $1,042,857.53 $15,028.16 $719,519.43 $0.002015 3.05                   341,000 6.49                                         3.44                               $1,013,128.03 $14,599.74 $696,905.96 $0.002016 3.11                   341,000 6.62                                         3.51                               $983,865.16 $14,178.05 $675,003.20 $0.002017 3.17                   341,000 6.74                                         3.57                               $955,091.89 $13,763.41 $653,788.81 $0.002018 3.42                   291,557 7.28                                         3.86                               $839,057.64 $12,316.12 $636,977.10 $376,918.802019 3.48                   291,557 7.40                                         3.92                               $813,121.86 $11,935.42 $620,597.69 $0.002020 3.56                   291,557 7.57                                         4.01                               $792,204.11 $11,628.38 $604,639.47 $0.002021 3.62                   291,557 7.70                                         4.08                               $767,196.06 $11,261.30 $589,091.59 $0.002022 3.68                   291,557 7.83                                         4.15                               $742,773.35 $10,902.81 $573,943.52 $0.002023 3.86                   260,654 8.21                                         4.35                               $663,357.16 $9,882.56 $563,011.26 $248,602.382024 3.92                   260,654 8.34                                         4.42                               $641,588.96 $9,558.26 $552,287.24 $0.002025 3.98                   260,654 8.47                                         4.49                               $620,389.72 $9,242.44 $541,767.48 $0.002026 4.04                   260,654 8.60                                         4.56                               $599,754.59 $8,935.02 $531,448.10 $0.00

2027 4.10                   260,654 8.72                                         4.62                               $579,677.94 $8,635.92 $521,325.28 $0.00 NPCTotal 12,132,273.53 $177,370.07 $9,223,172.80 $625,521.18 $42,938,925.07

Costs Community State/Federal

P a g e | 56

Increasing  TAC  Sensitivity  Analysis  

The prices change because of the elasticity and a larger increase in the TAC than what was estimated in the CBA. This means that the price will increase by a smaller amount. The new prices are shown in column (P). Also, the new TAC values are found in column (Y).

The new prices are also shown in the table below. Number of lost catch (Y) in the table below has changed. Since the TAC does increases more than as in the CBA, the (Y) values, of the number of fish that are not caught because of the TAC, are lower than in the CBA estimates. The damage to other fishermen values have also changed because the loss of revenue to these fishermen have gone down because of the larger increase in the TAC. All of the values are shown below.

Costs Fishermen

Years   Price  (P)   (Y)   Lost  revenue  

New  Loss  with  New  

TAC  

Damage  to  other  

fishermen  2013   2.93   341,000   951552.381   1016800   968380.9524  2014                      2.99     341,000   924798.1859   1016800   922267.5737  2015                      3.05     341,000   898434.2944   1016800   878350.0702  2016                      3.11     341,000   872484.2015   1016800   836523.8764  2017                      3.17     341,000   846968.2802   1016800   796689.4061  2018                      3.74     229,752   641202.3545   869200   648610.4228  2019                      3.80     229,752   620465.7364   869200   617724.2121  2020                      3.86     229,752   600250.0608   869200   588308.7735  2021                      3.92     229,752   580552.7359   869200   560294.07  2022                      3.98     229,752   561370.2354   869200   533613.4  2023                      4.18     192,669   470875.2191   820000   479437.0171  2024                      4.24     192,669   454889.7081   820000   456606.6829  2025                      4.30     192,669   439358.8825   820000   434863.5075  2026                      4.36     192,669   424275.6872   820000   414155.7215  2027                      4.42     192,669   409632.7081   820000   394434.0204  Total       $9,697,110.67       $9,530,259.71  

State/Federal

Years Price  (P) (Y) Stable  Income Lives  Saved Cost  SavingsSustainable  Fishery

Number  of  Decreased  Discards  (D)

Decreased  Discards None

2013 2.93 618046 $1,991,962.26 $30,034.29 $1,233,119.49 $1,724,642.65 0 $0.00 $0.002014 2.99                   618046 $1,935,955.52 $28,604.08 $1,141,379.67 $1,676,151.96 14705 $39,880.23 $0.002015 3.05                   618046 $1,880,765.83 $27,241.98 $1,056,039.56 $1,628,368.69 14705 $38,743.33 $0.002016 3.11                   618046 $1,826,442.39 $25,944.75 $976,702.14 $1,581,335.40 14705 $37,624.28 $0.002017 3.17                   618046 $1,773,027.82 $24,709.28 $902,988.90 $1,535,089.03 14705 $36,523.95 $0.002018 3.74                   729294 $2,350,825.71 $23,532.65 $789,400.05 $2,035,346.94 31309 $87,378.58 $0.002019 3.80                   729294 $2,274,799.52 $22,412.05 $727,495.90 $1,969,523.39 31309 $84,552.74 $0.002020 3.86                   729294 $2,200,683.24 $21,344.81 $670,279.07 $1,905,353.46 31309 $81,797.89 $0.002021 3.92                   729294 $2,128,467.39 $20,328.39 $617,413.08 $1,842,828.91 31309 $79,113.68 $0.002022 3.98                   729294 $2,058,139.02 $19,360.37 $568,583.47 $1,781,938.54 31309 $76,499.62 $0.002023 4.18                   766377 $2,163,308.41 $18,438.45 $569,178.73 $1,872,994.29 31309 $76,517.93 $0.002024 4.24                   766377 $2,089,867.32 $17,560.42 $523,672.34 $1,809,408.93 31309 $73,920.26 $0.002025 4.30                   766377 $2,018,515.15 $16,724.21 $481,707.76 $1,747,632.17 31309 $71,396.47 $0.002026 4.36                   766377 $1,949,219.51 $15,927.82 $443,019.74 $1,687,635.94 31309 $68,945.43 $0.00

2027 4.42                   766377 $1,881,946.31 $15,169.36 $407,361.76 $1,629,390.75 31309 $66,565.93 $0.00 NPBTotal $30,523,925.41 $327,332.90 $11,108,341.65 $26,427,641.05 $919,460.33 $0.00 $69,306,701.33

Benefits Fishermen Community

P a g e | 57

The (SP) or the price at which processors and wholesalers sell the price, and therefore the (PD) or price difference also change. This is due to the changed prices from the larger increase in the TAC.

Increased  Time  Sensitivity  Analysis  

The prices change because of the elasticity and the wait to increase the TAC decreases the prices at which the fish are sold. This means that the price will increase by a smaller amount over the period of the calculations. The new prices are shown in column (P). Also, the new TAC values are found in column (Y).

The new prices are also shown in the table below. Number of lost catch (Y) in the table below has changed. Since the TAC waits an extra five years before any TAC increase the (Y) values do not increase as much as in the CBA. The damage to other fishermen values have also changed because the loss of revenue to these fishermen have gone up because of the time to increase the TAC. All of the values are shown below.

Years Price  (P) (Y)Price  sold  at  

(SP)

Difference  between  bought  and  sold  (PD) Processor  Loss Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 341,000 6.25                                         3.32                               $1,078,209.52 $15,502.50 $742,866.67 $0.002014 2.99                   341,000 6.36                                         3.37                               $1,042,857.53 $15,028.16 $719,519.43 $0.002015 3.05                   341,000 6.49                                         3.44                               $1,013,128.03 $14,599.74 $696,905.96 $0.002016 3.11                   341,000 6.62                                         3.51                               $983,865.16 $14,178.05 $675,003.20 $0.002017 3.17                   341,000 6.74                                         3.57                               $955,091.89 $13,763.41 $653,788.81 $0.002018 3.74                   229,752 7.96                                         4.22                               $723,057.97 $10,973.01 $636,977.10 $376,918.802019 3.80                   229,752 8.09                                         4.29                               $699,674.13 $10,618.14 $620,597.69 $0.002020 3.86                   229,752 8.21                                         4.35                               $676,877.73 $10,272.19 $604,639.47 $0.002021 3.92                   229,752 8.34                                         4.42                               $654,665.85 $9,935.10 $589,091.59 $0.002022 3.98                   229,752 8.47                                         4.49                               $633,034.52 $9,606.83 $573,943.52 $0.002023 4.18                   192,669 8.89                                         4.71                               $530,986.95 $8,297.92 $563,011.26 $248,602.382024 4.24                   192,669 9.02                                         4.78                               $512,960.73 $8,016.22 $552,287.24 $0.002025 4.30                   192,669 9.15                                         4.85                               $495,447.25 $7,742.53 $541,767.48 $0.002026 4.36                   192,669 9.28                                         4.92                               $478,438.54 $7,476.73 $531,448.10 $0.00

2027 4.42                   192,669 9.40                                         4.98                               $461,926.25 $7,218.68 $521,325.28 $0.00 NPCTotal 10,940,222.06 $163,229.19 $9,223,172.80 $625,521.18 $40,179,515.61

Costs Community State/Federal

State/Federal

Years Price  (P) (Y) Stable  Income Lives  Saved Cost  SavingsSustainable  Fishery

Number  of  Decreased  Discards  (D)

Decreased  Discards None

2013 2.93 618046 $1,991,962.26 $30,034.29 $1,233,119.49 $1,724,642.65 0 $0.00 $0.002014 2.99                   618046 $1,935,955.52 $28,604.08 $1,141,379.67 $1,676,151.96 14705 $39,880.23 $0.002015 3.05                   618046 $1,880,765.83 $27,241.98 $1,056,039.56 $1,628,368.69 14705 $38,743.33 $0.002016 3.11                   618046 $1,826,442.39 $25,944.75 $976,702.14 $1,581,335.40 14705 $37,624.28 $0.002017 3.17                   618046 $1,773,027.82 $24,709.28 $902,988.90 $1,535,089.03 14705 $36,523.95 $0.002018 3.23                   618046 $1,720,558.77 $23,532.65 $577,758.35 $1,489,661.27 31309 $75,463.32 $0.002019 3.29                   618046 $1,669,066.30 $22,412.05 $533,778.42 $1,445,079.05 31309 $73,204.87 $0.002020 3.35                   618046 $1,618,576.38 $21,344.81 $492,982.29 $1,401,364.83 31309 $70,990.40 $0.002021 3.41                   618046 $1,569,110.29 $20,328.39 $455,158.12 $1,358,537.05 31309 $68,820.83 $0.002022 3.47                   618046 $1,520,685.02 $19,360.37 $420,105.91 $1,316,610.41 31309 $66,696.90 $0.002023 3.92                   698392 $1,848,779.08 $18,438.45 $486,424.28 $1,600,674.53 31309 $71,758.44 $0.002024 3.98                   698392 $1,787,692.11 $17,560.42 $447,954.24 $1,547,785.38 31309 $69,387.41 $0.002025 4.04                   698392 $1,728,230.71 $16,724.21 $412,432.94 $1,496,303.64 31309 $67,079.48 $0.002026 4.10                   698392 $1,670,378.57 $15,927.82 $379,644.61 $1,446,215.21 31309 $64,834.01 $0.00

2027 4.16                   698392 $1,614,117.27 $15,169.36 $349,388.10 $1,397,504.13 31309 $62,650.28 $0.00 NPBTotal $26,155,348.32 $327,332.90 $9,865,857.01 $22,645,323.22 $843,657.74 $0.00 $59,837,519.19

Benefits Fishermen Community

P a g e | 58

Costs Fishermen

Years   Price  (P)   (Y)   Lost  revenue  

New  Loss  with  New  

TAC  

Damage  to  other  

fishermen  2013   2.93   341,000   $951,552.38   1016800   $968,380.95  2014                      2.99     341,000   $924,798.19   1016800   $922,267.57  2015                      3.05     341,000   $898,434.29   1016800   $878,350.07  2016                      3.11     341,000   $872,484.20   1016800   $836,523.88  2017                      3.17     341,000   $846,968.28   1016800   $796,689.41  2018                      3.23     341,000   $821,904.02   1016800   $758,751.82  2019                      3.29     341,000   $797,306.28   1016800   $722,620.78  2020                      3.35     341,000   $773,187.45   1016800   $688,210.26  2021                      3.41     341,000   $749,557.69   1016800   $655,438.35  2022                      3.47     341,000   $726,425.14   1016800   $624,227.00  2023                      3.92     260,654   $597,404.06   902000   $527,380.72  2024                      3.98     260,654   $577,664.76   902000   $502,267.35  2025                      4.04     260,654   $558,450.74   902000   $478,349.86  2026                      4.10     260,654   $539,756.73   902000   $455,571.29  2027                      4.16     260,654   $521,576.77   902000   $433,877.42  Total       $11,157,470.98       $10,248,906.72  

The (SP) or the price at which processors and wholesalers sell the price, and therefore the (PD) or price difference also change. This is due to the changed prices from the smaller increase in the TAC.

Years Price  (P) (Y)Price  sold  at  

(SP)

Difference  between  bought  and  sold  (PD) Processor  Loss Lost  Tax  Revenue Run  Program Reset  TAC

2013 2.93 341,000 6.25                                         3.32                               $1,078,209.52 $15,502.50 $742,866.67 $0.002014 2.99                   341,000 6.36                                         3.37                               $1,042,857.53 $15,028.16 $719,519.43 $0.002015 3.05                   341,000 6.49                                         3.44                               $1,013,128.03 $14,599.74 $696,905.96 $0.002016 3.11                   341,000 6.62                                         3.51                               $983,865.16 $14,178.05 $675,003.20 $0.002017 3.17                   341,000 6.74                                         3.57                               $955,091.89 $13,763.41 $653,788.81 $0.002018 3.23                   341,000 6.87                                         3.64                               $926,827.94 $13,356.11 $636,977.10 $376,918.802019 3.29                   341,000 7.00                                         3.71                               $899,090.06 $12,956.39 $620,597.69 $0.002020 3.35                   341,000 7.13                                         3.78                               $871,892.23 $12,564.45 $604,639.47 $0.002021 3.41                   341,000 7.26                                         3.85                               $845,245.91 $12,180.46 $589,091.59 $0.002022 3.47                   341,000 7.38                                         3.91                               $819,160.26 $11,804.56 $573,943.52 $0.002023 3.92                   260,654 8.34                                         4.42                               $673,668.41 $10,036.17 $563,011.26 $248,602.382024 3.98                   260,654 8.47                                         4.49                               $651,409.20 $9,704.56 $552,287.24 $0.002025 4.04                   260,654 8.60                                         4.56                               $629,742.32 $9,381.77 $541,767.48 $0.002026 4.10                   260,654 8.72                                         4.62                               $608,661.84 $9,067.72 $531,448.10 $0.00

2027 4.16                   260,654 8.85                                         4.69                               $588,161.04 $8,762.30 $521,325.28 $0.00 NPCTotal 12,587,011.35 $182,886.35 $9,223,172.80 $625,521.18 $44,024,969.37

Costs Community State/Federal