fishery policies and sustainable forestry

Question 1

what is the effect of raising the cost of fishing?

Answer 1

raising the cost of fishing will reduce the number of fish caught and this may induce it to the efficient level of catch but it is economically inefficient

Question 2

how can you raise the cost of fishing?

Answer 2

banning efficient technologies ( engines, thin stranded nets) , reducing the length of fishing seasons, fish- finding sonars

Question 3

what is the effect of a tax on effort on fishing?

Answer 3

the tax on effort will tilt the cost curve upwards to intersect the benefits curve at lower levels of effort and at higher stocks of fish. this will be economically efficient as it is a transfer. it discourages effort in fishing but not wasting money. the tax revenues can also be spent to compensate consumers who pay more for fish.

Question 4

what are the efficiency characteristics of individual transferable quotas on catch?

Answer 4

1. The total authorised catch divided into quotas must be efficient quantity for the entire fishery
2. Quota holders are entitled to catch their quota or to sell it to other fishing person
3. The price of the quota is set competitively to signal the value of the catching rights

Question 5

what is the effect of individual transferable quotas on catch?

Answer 5

• quotas will not limit the effort made by boats
• transferability makes sure that efficient fishing units make up higher share of total quotas
• government can auction them to best bidder to collect greatest rent

Question 6

what is the territorial user rights fisheries?

Answer 6

In this management system a species (or a group of species) can be fished in a given territory, or layer of the water column of a territory (e.g. the bottom, these urface)
The right of access to the area is given to a community,an association of fishers, or a single entity

Question 7

what are economic exclusion zone?

Answer 7

Economic exclusion zone (EEZs) are territories the access to which is given exclusively to a nation

Question 8

what does the value of TURF depend on?

Answer 8

TURFs values depend on the mobility of fish, they provide stock conservation incentives to owners

Question 9

how do ITQs compare to TURFs?

Answer 9

ITQs impose problems of timing of catch which creates an external cost with regards to the time of the catch
quota owners compete for the best time of the catch
TURFs work well when the territory matches the range of mobility of the species but many do not.
when the associations in charge of the TURFs are too large they can have coordination problems
TURFs do a good job of allocating effort over time and space

Question 10

what is aquaculture?

Answer 10

Aquaculture is breeding, raising, and harvesting fish, shellfish, and aquatic plants

Question 11

when is aquaculture feasible?

Answer 11

it is feasible when one can limit the fishery to a location through artificial or natural barriers or the species come back for breeding

Question 12

how does aquaculture solve the problem?

Answer 12

it can assign property rights to the fisheries

Question 13

what are the problems with aquaculture?

Answer 13

• some fish farming such as salmon and shrimp create massive environmental problems ( chemicals and excess nutrients from their feces can disturb flora on ocean bottom)
• diffusion of deases in the water to wild stock
• diffusion of antibiotic used to keep low bacterial charges in crowded volumes of water
• protein inefficient use ( 4-5 pounds of anchioves to produce 1 pound of salmon)
• fish farming destroys mangroves that are biodiversity hotspots and spawning grounds

Question 14

what is the effect of subsidies on fisheries?

Answer 14

subsidies on fuel have induced the over capacity of fuel vessels. when the vessel owners do not have an alternative use for their vessels they might keep on fishing even when the full cost would induce them not to without the subsidy

Question 15

how do buybacks solve the problem of overexploitation of fisheries?

Answer 15

buying back vessels prevents them from firms using the vessels that have no alternative use from fishing even when the full cost would not induce them to without the subsidy

Question 16

what does the UN convention of the law of the sea give countries?

Answer 16

The UN convention on the Law of the Sea gives countries bordering on the seas an EEZ over 200 miles from the coastline

Question 17

where are migratory fish of commerical interest usually overfished?

Answer 17

they are usually overfished in the open sea outside the economic exclusion zones

Question 18

what is the purpose of the fisheries partnership agreements?

Answer 18

the Aim is to allow EU vessels to exploit surplus resources in the third country’s exclusive economic zone (EEZ), within a regulated and legally guaranteed environment.

Question 19

what are the two different elements in which the EU countries pays the partner countries?

Answer 19

1) the payment for access rights to the EEZ and,
2) financial aid called ‘sector support’, which aims to help develop sustainable fishing in partner countries.

Question 20

what does regulating catch not do?

Answer 20

– over-fishing of untargeted species or sizes
– over-exploitation of biologically important areas (spawning grounds)
– destruction of critical habitats for commercially important species, or pivotal species on which these depend

Question 21

what are the negatives with enforcement on catch?

Answer 21

it can be costly and often fails for highly valuable migrationary species such as bluefin tuna

Question 22

what are synchronised forests?

Answer 22

it is when forest estates are divided in compounds with each compound containing trees of the same age and species. therefore the trees should all reach financially mature together and provide a steady flow of timber to mills assuring a steady flow of income over time

Question 23

what is an even aged forest?

Answer 23

a forest that contains trees of the same age and species

Question 24

where do we find even aged forests?

Answer 24

they can be either planted artificially or can occur after a catastrophic event such as a wildfire

Question 25

what are old forests?

Answer 25

they are old growth natural forests that are the product of undisturbed natural successions of plant colonisation of land. they store large volumes of valuable timber on top of extremely biodiverse communities

Question 26

what are the problems with old forests?

Answer 26

it is a store of commercially valued timber so there is an incentive by firms to sell it for profit to enable economic development
when should you start harvesting?
when should we start conserving the old forests at the cost of foregone revenue?

Question 27

what do we aim to optimise in the perspective of the private owner of even aged forests?

Answer 27

aim to maximise the present values

Question 28

what do we aim to maximise in the perspective of a social planner of old growth forest?

Answer 28

a balance between a steady flow of income from timber and conservation of amenity values

Question 29

what are examples of ameniety services?

Answer 29

– For hiking and camping
– Habitat for wildlife
– Watershed protection
– Source of option value

Question 30

how can you define the volume of timber with economic value?

Answer 30

you can define the volume of timber with economic value as a function of time Q(t). for some species growth of commercial timber volume will increase up to a given age

Question 31

what does an exponential timber volume function?

Answer 31

there is an asymptotic maximum as time goes on, but no growth decline

Question 32

what is the optimal rotation length?

Answer 32

growth period required to derive maximum value from a stand of timber

Question 33

what determines the size of each even aged plot to plant each year?

Answer 33

the optimal rotation length

Question 34

what will the stand of each area be?

Answer 34

1/ T* where T* the optimal rotation length

Question 35

what time is the first stand replanted?

Answer 35

the year T* + 1

Question 36

what does the optimal rotation length maximise when there is no planting costs and disregarding discount rates?

Answer 36

the mean annual increment Q(t)/t

Question 37

what does the derivative of T* show?

Answer 37

it shows that the marginal product in volume from waiting = the average product in volume over time

Question 38

what are the shortcomings of maximising the marginal annual increment?

Answer 38

it ignores the discounting (impatience of society), the timber prices ( signal of scarcity) , and the cost of replanting ( not needed because of natural regeneration) . this is not an economically valuable concept but only a biologically sound one when timber volume is the only goal of forestry

Question 39

what are the two parts of the problem to find the optimal commercial rotation for a forest to be perpetually replanted?

Answer 39

1) the optimal rotation solution for one forest stand to be planted only once
2) the perpetual repetion of the policy in the forest stand which leads to the famous faustmann formula

Question 40

with continuous time discounting and no replanting costs what is the net present value from cutting at time T?

Answer 40

PROFITs=pxQ(T) xe^-bt
where pxQ(T) is the future value of timber volume and e^-bt is the present value discount factor

Question 41

what is the assumption about faustman optimal rotation?

Answer 41

you have a stationary use of land whereby you imagine to be replanting the forest forever after each clean cut. therefore there is a planting cost involved

Question 42

what will the volume function for the faustman optimal rotation looklike graphically?

Answer 42

the volume function will take a saw tooth profile

Question 43

what is the profit formula for one year the faustman optimal rotation ?

Answer 43

the profit will equal = PxQ(t) - c where c is the planting cost

Question 44

what is the net present value and profit function to infinity for the faustman optimal rotation?

Answer 44

[pxQ(t) - c ] / [1 + e^-bt] = NPV = profit

Question 45

what is the first order condition for a maximum value for the faustman optimal rotation?

Answer 45

pQ`(t) = d [ pQ(t) - c] + d(profit)
where LHS is the marginal benefit and the RHS is marginal cost

Question 46

what is the marginal cost made up of in the faustmann interpretation?

Answer 46

the first is the return from the next period profit and the second is the cost of delaying all subsequent periods

Question 47

how does the optimal solution for T* for one shot forest cycle compare with the infinite repetitions ie faustamnn?

Answer 47

there is an increased cost in waiting in the faustmann rotation due to the effect of delaying all subsequent replantings and so the optimal rotation time T* tends to be shorter for the faustmann

Question 48

what do site classes provide?

Answer 48

Site classes give growth in volume at different site categories (fertility) for age classes for various species of trees

Question 49

how are site classes used?

Answer 49

Foresters use the site class of a stand of land and the tablesto fit a volume function for the specific tree species

Question 50

what are the two supply responses for the short and long term timber supply?

Answer 50

1) short run - defined as the timber supply change due to changes in rotation length. this keeps the amount of land into forestry the same and operates only on the rotation length
2) long run is the change in timber cut due to changes in average annual volume and the amount of land into forestry

Question 51

how does the marginal profit react when there is an increase in the price of timber?

Answer 51

there is an increase in the marginal profit

Question 52

how does the optimal rotation length change due to a increase in the price?

Answer 52

there is a decrease in the optimal rotation length?

Question 53

how does t the optimal rotation length change due to an increase in the cost of replanting?

Answer 53

there will be an increase in the optimal rotation length

Question 54

how does the marginal profit react when there is an increase in the cost of replanting?

Answer 54

there is a decrease on the marginal profit

Question 55

how does the short run supply react when there is an increase in the price of timber?

Answer 55

there is an increase in the short run supplu

Question 56

how does the short run supply react when there is an increase in the cost of replanting?

Answer 56

there will be a decrease in the short run suppl

Question 57

how does the volume of timber with respect to time react to an increase in price

Answer 57

there will be a decrease in the volume of timber per unit time

Question 58

how does the volume of timber with respect to time react to an increase in the cost of planting?

Answer 58

there will be an increase in the volume of timber with respect to time

Question 59

what is the formula for the total welfare flow in the forest at time t?

Answer 59

Wt = A(Xt) + Nht + d(profit) [ Yo + Xo - Xt] where A(Xt) is the amenity value Nht is the timber value and the d(profit)[Yo + Xo - Xt] is the future benefits from timber

Question 60

for trees with low rate of growth and high stored value, what is the incentive to do?

Answer 60

the balance is tilted against their conservation as the capital will be tied up for too long making the opportunity cost excessive however the economic value of these ecosystem services may tilt the balance the other way