3 THE POLICY OPTIONS AND THEIR ECONOMIC EVALUATION
The fish stocks in Scottish waters are a national resource and need to be managed with the interests of all stakeholders in mind. Given this, policy options such as the proposed 0-1 NM or 0-3 NM mobile gear prohibition have to be evaluated in terms of their impact on the public and not just the commercial fishing sector. Indeed, a failure by policy makers to embrace the interests of all groups would lead to public concern that "their" resources are improperly managed.
Resource managers tasked with delivering best value for society need to concentrate on ensuring that we produce less of the things society does not want and more of the things it does. Given this focus, it is equally important that Scotland's marine resource managers accept that society's wants are broader than just physical items which they might buy in the market place. The public's wants do of course include items, such as fish, which have market prices, but also includes other things the inshore marine environment provides, but which have no market price such as sea angling, diving and marine wildlife observation. Society's wants also include some benefit flows that arise in even in the absence of any direct use. An example would be the benefit that many individuals derive from simply knowing that the inshore marine environment is diverse and resilient and is not being compromised by damaging activities.
Being inclusive therefore means having to accept that inshore fisheries policy affects the wellbeing of very different stakeholders, often in multidimensional and complex ways. For commercial fishermen, the primary concerns are probably their own future income and continued employment, the value of their licences and preservation of fishing opportunities for family members. Members of the public who have altruistic concerns for the environment would focus on the impact of policy on the diversity and resilience of the inshore ecosystem. Sea anglers and divers would worry about the impact of fisheries policy on the quality of their angling and diving experience, whilst hoteliers and tourism businesses would consider whether policy measures would enhance the attractiveness of the local area to visitors.
Given this stakeholder heterogeneity and an explicit requirement to manage resources on behalf of the public, a coherent economic evaluation must embrace the interests of all these stakeholders, despite the inherent complexity of the task. The remainder of this Section explains the basis of the 0-1 NM and the 0-3 NM restrictions on mobile gear and how economic evaluations capture the public interest.
3.1 The Policy Options: Background
Most fisheries need to be managed to prevent excessive effort developing. Overcapacity in fisheries arises because fishermen will seek to enter fisheries which are profitable. These new entrants drive up existing operators' costs of catching fish because the new effort reduces their catch per unit of effort. Whilst it is rational for the individual to enter the fishery, the unfortunate consequence is that effort levels only stabilise when profit is competed away and entry is no longer an attractive prospect. At which point, a significantly diminished and vulnerable biomass is being exploited by excessive amounts of fishing effort. Correcting this problem often involves reducing fishing effort. This could mean labour and vessels lying idle for an uncertain period of time until the fishery hopefully recovers.
It is possible that some gear types are so inefficient that their impact on the biomass is not really a cause for concern. In discussion with fishermen, this argument has been advanced with reference to hand diving for scallops, and for static gears targeting Nephrops, crabs and lobsters. Whilst this seems a reasonable proposition for dived scallops, we know of no direct evidence to support this assertion. On the other hand, some (e.g. Beukers-Stewart et al. 2005) express concerns about the potential impact of dive fisheries on scallop stocks because they concentrate on the largest, most valuable scallops. This is a concern because larger scallops contribute disproportionally to recruitment by producing considerably greater quantities of eggs than do smaller scallops.
A reasonable starting position is to believe that there is nothing innate about creeling, dredging and trawling for shellfish which would suggest that these fisheries would be somehow immune from the endemic overfishing problem. It is therefore probably the case that they all should be managed to prevent over capacity developing. Fortunately, as described in the previous section, in Scotland there is presently a range of measure such as licensing and highly specific technical measures which mean that there are some constraints on the further expansion of fishing effort.
Although there are controls on fishing effort, it is appropriate to consider whether the existing (constrained) levels of shellfish effort are excessive. This might arise if historically fishing effort was excessive. The review of ICES shellfish advice by Barreto and Bailey (2013), presents a mixed picture. As outlined in the previous Section, with respect to lobsters, brown crabs and velvet crabs the ICES advice is that effort levels are above FMAX . With respect to scallops, the ICES advice is that some areas need to reduce fishing effort, whilst in remaining areas there should be no further increase in fishing effort. In the case of Nephrops, effort levels in the Firth of Forth area are probably excessive, whilst effort levels are probably around or below FMAX in the Clyde area North Minch, South Minch, Staton Bank and Sound of Jura. Effort levels are not excessive in the Farn Deep, Fladen Ground, Moray Firth, Farn Deep, Fladen Ground, and Moray Firth.
In those fisheries where fishing effort is above FMAX , the implication is that yields might increase if we decreased fishing mortality by reducing fishing effort. Thus reducing costs (by reducing effort) possibly results in an increase in revenue. It would seem that in some shellfishing areas we might have already reached the position where additional vessels are adding more to costs (their costs and the costs they impose on fellow operators) than they are adding to revenue.
In addition to decreasing the catch per unit of effort of other operators, shell fishermen can impact on each other through gear conflict. Irrespective of whether the contact between gears is intended or accidental, it results in a cost to those involved. It would appear that almost all gears types experience some kind conflict. From our survey of gear conflict (see Section 16) there is conflict between mobile and static gears, and between static gears types, though conflict between mobile gear types is quite rare. Thus in some locations and for some gear types, the gear conflict costs that operators impose on fellow operators should perhaps be considered.
In the context of this study, we have defined gear conflict as physical contact between gears. This is quite a restrictive definition because it excludes the costs associated with the avoidance of gear conflict. Thus mobile operators may have to regularly change their towing plans because of the presence of static gear. Similarly in shooting their gear, static operators may avoid locations where there is a higher probability of entanglement, accidental or otherwise, with other static or mobile gear. There is therefore a territorial congestion cost that should perhaps also be recognised.
Thus, even before we consider the impact of Scotland's inshore shellfish fishery on other stakeholders, there are some inshore fishery areas where perhaps some shellfishing effort should be reduced. The case for reducing effort levels become stronger once we factor in the benefits that other stakeholder groups might derive from these reductions in fishing mortality. Also, as discussed below, when other stakeholders are included, we might change our view of the Nephrop fishing effort in those areas where fishing effort is currently below FMAX .
3.2 The Impact on Other Stakeholders
The impact on other stakeholders is best considered in two stages: the first is the physical impact of fishing for Nephrops and scallops; the second is the anthropogenic consequences. It should be stressed that this discussion, particularly about the first stage, is not seeking to provide a comprehensive review of the literature, or a mapping of the actual physical impacts. The purpose of the discussion is to enable an understanding of the causal chain linking changes in the catching sector to the eventual impacts on other stakeholders. Given the policy options under consideration (0-1 NM and 0-3 NM), the implicit focus of discussion is the 0-3 NM area, which for the purpose of this document we shall term the "near-shore." For the purpose of this document the "inshore" is defined as 0-6 NM area.
3.2.1 The Physical Impact 
Of all fishing gears, Howarth & Stewart, (2014) identified king scallop dredges as the most damaging to benthic communities and seafloor habitats. This is because the dredge apparatus drags along the sea bed with the dredge teeth penetrating the seafloor. In addition, fishers tend to perform repeated tows within the same area, thereby exacerbating any impacts they have on marine ecosystems (Dare et al. 1993). Howarth and Stewart state that the use of scallop dredges causes considerable physical impacts to the seabed which cause homogenisation of the sea bed, re-suspension of sediments, and alteration of the nutrient cycle. These impacts vary with seabed type. For example, scallop dredging's impact will be less significant in high energy environments where there is on-going natural seabed disturbance. Howarth and Stewart also state that dredging can impact on mobile species through by-catch, the majority of which is discarded damaged, dying or dead. Dredging can also cause considerable levels of damage and mortality to organisms which are impacted but left uncaught on the seabed. Damage increases with the number of dredge tows performed. Howarth & Stewart (2014) conclude that there is an urgent need for better management of scallop fisheries in the UK. They present case studies where the setting aside of different areas for different fisheries has proved a successful management strategy generating unexpected conservation benefits as well as reducing gear conflicts.
The combination of dredge damage to habitat and benthic organism mortality reduces an area's capacity to support biodiversity. This can negatively impacts on local and regional commercial fishing for other species, including other shellfish and demersal fish stocks.
With respect to Nephrops trawls, in a study of catch and discard composition from Nephrops trawls in the Clyde Sea area, Bergmann et al (2002) concluded that Nephrop otter-trawls generate large amounts of unwanted by-catch. They estimated that Nephrops constituted only between 14% and 23% of the total catch volume; other invertebrates and fish accounted for the remainder of the trawl catch. On average, 9 kg of discards were produced per kilogram of Nephrops. Crustaceans and echinoderms accounted for up to 83% and 73% of the discards, respectively.
Similarly, Stratoudakis et al (2001) estimated that 36 tonnes of fish were discarded on 106 nephrop fishing trips observed over sixty research visits to the Clyde during 1998. On average, about 60 % by weight of the fish by-catch was discarded per trip. Around twenty species were usually discarded per visit. The total weight of fish discards produced in the Clyde Sea Area by the Nephrops fleet in 1997 was estimated to be at least 25000 tons (Wieczorek et al. 1999). Given a nephrops catches of between 3000 and 4000 tons in 1997, tons of fish were being discarded for each ton of nephrops. Whilst not necessarily indicative of current levels of discards, they do provide insight into the relationship between nephrop landings and discards that previously existed.
In contrast Combes and Lart (2007) report that, in 2006, discards were only 38% of the total weight of catch nephrops catch. There is a clear discrepancy between this study and earlier work cited above. This might be explained by a decreased abundance of by catch species, which itself might be a consequence of the previously much higher ratio of discards to nephrops landed. If so, provided that the changes are reversible, the discrepancy might be indicative of the benefits that might be realised from future management of mobile effort. However, the discrepancy might be explained by the use of more selective gear, or slower towing speeds or increased abundance of nephrops.
Marine Scotland provided discard data which was more recent, though unlike the studies above these data were not restricted to inshore areas.
|North Sea||West Coast|
|Discard Weight||Landed Weight||Discard as %of Landed||Discard Number||Discard Weight||Landed Weight||Discard as %of Landed||Discard Number|
Source: Personal Communication, Marine Scotland.
Some of the fish discarded will be fish for which the vessel does not have quota. The Table below combines the data for the North Sea and the West Coast and calculates the average weight of the discards. From the table below, it is clear that many millions of small fish are not managing to egress through the trawls escape panels
|Total Discard Weight||Total Discard Number||Average Weight (Grams)|
The table below is extracted from Pastoors (2014) and shows the landings and discards from Scottish vessels using TR2 (Nephrop) trawling gear in the North Sea from 2010 to 2012
Source Pastoors M (2014)
From Scottish Fisheries Statistics we obtained total Scottish landings and subsequently West Coast landings of Nephrops. Our own benchmarking tables in Section 8 below provide estimates of total nephrops catches within 12 NM, 6 NM, 3 NM and 1 NM. It is important to note that the level of nephrop fishing activity inside the 12 NM zone is much larger on the West Coast compared to the North Sea. Assuming that the number of discards is linearly related to nephrop catches we estimated the spatial distribution of the number of fin fish discarded by nephrops trawlers across Scotland  . This is shown in the Tables below.
|MF & NC||32,822||206,718||403,934||171||902||87||47,442|
|MF & NC||67,289||13,594||222,003||351||3,355||259||27,211|
What is noticeable is the number of small, high value species such as Cod and Haddock that potentially being discarded by Nephrop trawling within the 1nm and 3nm zones.
18.104.22.168 Comparing the Physical Impact of Gear Types
All forms of fishing are damaging and creels may also impact on the sea bed. However, it is not unreasonable to suggest that, compared with using creels and pots, the dragging of gear across the sea bed would appear to have a greater physical impact on the sea bed. With respect to discards, compared with mobile gear, it is reasonable to suggest that ratio of discards to landed shellfish would be less for creel operators and hand divers. This is because mobile organisms largely self select to enter a creel or pot whereas mobile gear is less discriminatory. Also, smaller individuals can more easily egress from a creel whilst on the seabed or during hauling, whereas a bigger proportion of non-target species caught by trawls or dredges can have their egress prevented through entanglement with other organic and inorganic matter in the net. Even with escape panels the TR2 Nephrops gear may still capture significant numbers of small fish (see tables above).
There may also be differences in discard survival rates with a higher proportion of mobile caught discards being returned dead or dying. This is because with mobile gear there is a greater opportunity for injury during towing and hauling and a longer time lag between being landed on deck and being returned to the sea. Finally, static gear probably causes less mortality by impacting with organisms and leaving them uncaught on the seabed. On the other hand ghost fishing is possibly a more significant issue with static gear since more static gear becomes lost, discarded and abandoned but continues to ensnare fish and shellfish.
The implication is that whilst all gear is damaging, per kg of nephrops or scallops landed, mobile gear has a greater physical impact on habitat, produces more by-catch, more discards and causes greater reductions in geodiveristy, biodiversity and the biomass of benthic species. In some inshore areas, especially nursery areas, there could be negative consequences for other species, particularly demersals, some of which might be commercially harvested, or be important for recreational activities such as recreational sea angling, snorkelling and diving.
In personal communication with fishermen it has been argued that trawling and dredging has beneficial effects through the occasional turning over of the sea bed; in much the same way that ploughing agricultural land improves crop yields. The implication being that biomass might be reduced if restrictions are imposed on trawling and dredging.
We can find no supporting scientific evidence to support this hypothesis. However it should be noted that Denderen et al (2013) produced a theoretical model where under some specific circumstances trawling (but not dredging) removed large crustaceans and shellfish. This is fortunate for smaller, softer species in the sandy seabed, such as worms, flourish with fewer predators. These smaller species tend to be the main source of food for fish and the overall effect is more marine life. Theirs was a theoretical outcome which in their model only works under highly restrictive conditions.
The conclusion we draw is that all forms of fishing impact on the environment, but that demersal trawls and dredges have a bigger impact per kg of shellfish landed compared with static gears and hand diving.
3.2.2 The Anthropogenic Impacts
The impacts on other stakeholders arise because of undesirable environmental impacts such as reductions in geodiveristy, biodiversity, and the biomass of benthos species and other stocks including other shellfish and demersal species. These undesirable impacts might be greater if the areas being trawled and dredged are nursery areas.
There are four categories of stakeholders who might be adversely affected by commercial shellfishing, and who might benefit from decreased levels of fishing activity.
a) Other Commercial Fisheries.
Other commercial fisheries might experience decreased catches which can be traced back to the undesirable impact of fishing for nephrops and scallops, particularly in nursery areas.
b) Recreational Users.
Among marine recreation interests, there is probably a spectrum of sensitivity to changes is fish populations. At one end, there are sea anglers and, to a lesser extent, marine divers whose recreational experience involves direct interaction with fish stocks. Further along the spectrum there is bird watching and marine/coastal wildlife tours and charters whose sensitivity to changes in fish stocks operates through changes in fish predator populations such as sea birds and sea mammals. At the other end of the spectrum might be sea kayakers, sailors and informal visitors to coastal areas. For these groups a decreased probability of sightings dolphins, porpoise, minke whales, seals, sea eagles, puffins etc would detract from their experience.
With respect to the well-being of participants, it is axiomatically true that their well-being would to a greater or lesser decline with a reduction in the quality of their recreational experience. As the quality of the recreational experience declines so does activity levels and expenditure and this lowers the income and employment of those supplying services, such as equipment, accommodation, food and drink, charter vessels, transport etc. Reductions in marine recreational activity might have adverse consequences other sections of society (see Section 17 for a full discussion).
c) Informal Coastal Visitors.
Visitors probably prefer a diversity of on-going activity in the coastal communities they visit, including different types of commercial fishing, more divers, more anglers, more wildlife charter vessels etc. In the long run, excessive levels of trawling and dredging might mean that there is less diversity in coastal activity.
d) Non-Users / General Public.
There is a proportion of the general public who have an altruistic or vicarious concern for the well-being of natural assets both sentient and non-sentient. These concerns are independent of the actual use or direct contact with the marine environment. Such individuals are therefore not indifferent to adverse impacts on the marine environment and, other things being equal, would prefer that these impact were not occurring. This is often known as Existence Value. In this study it is termed General Public Non-User Value ( GPNUV) (see Section 20 for a fuller discussion).
3.3 The Case for Evaluating the Policy Options
The two policy options were specified by MS and the following discussion attempts to re-create the basic argument for wanting to evaluate them. The issue here is not which option (if any) should be implemented, but the case for undertaking the evaluation in the first instance. The argument most probably rests on a suspicion that presently the flow of benefits from having mobile gear in the near shore is less than the resulting costs imposed on a range of stakeholders.
Before addressing these benefits and costs, it is appropriate to highlight the relative importance of the near shore areas. In Section 8, this study estimates that across Scotland shellfish worth £98.16 m was caught within 0-12 NM of the shore. Of this total, 38% was caught within 0-1 NM, 66% within 0-3 NM and 86% within 0-6 NM. There is some variation around the coast. For example, in the South West IFG area, the near shore shellfish catch was a bigger proportion of the South West 0-12 NM shellfish catch. Compared with Scotland as a whole, in the East Coast IFG area the 3-6 NM zone was relatively more important in terms of the spatial distribution of the areas total shellfish catch.
As a generalisation we can say that the near shore constitutes around two thirds of the Scottish shellfish fishery within 0-12 NM. In terms of Scotland inshore fishery area (0-6 NM), the 0-3 NM zone accounts for 77% of the shellfish catch.
With respect to the current flows of benefits and costs from mobile gear fishing activity, the flow of theoretical benefits from near shore areas comprises:
- Nephrops and scallops for consumption caught by mobile gear in the near shore areas
- Income and employment on trawlers and dredgers dependent on near shore access
- Income and employment on-shore dependent on employment trawlers and dredgers fishing the near shore areas.
As explained above the flow of costs from mobile gear fishing activity comprises:
Costs imposed on other Nephrop and scallop fishers, both static and mobile operators. This is because in near shore areas they catch the same target species and this drives down other fishers catch per unit of effort. In this context, it was explained above that in a few of Scotland's nephrop fisheries, effort is above FMAX. In these areas, yields and profit from the fishery might increase if fishing effort was reduced. Thus in a few areas, additional vessels might already be adding more to costs (their costs and the costs they impose on fellow operators) than they are adding to revenue.
Costs imposed on other shellfish operators (mobile and static) through gear conflict and territorial congestion in the near shore areas.
Costs arising from undesirable environmental impacts such as reductions in geodiveristy, biodiversity, and the biomass of benthos species and other fish stocks such as demersal species. As explained above there might be costs imposed on:
- · Other Commercial Fisheries.
- · Recreational Users.
- · Informal Coastal Visitors.
- · Non-Users / General Public.
In addition to the a priori considerations of costs and benefits there is some relevant historical experience.
Prior to the Inshore Fisheries (Scotland) Act 1984, inshore demersal trawling was effectively prohibited and scallop dredging effort in the near shore was a different order of magnitude. Rightly or wrongly, many stakeholders believe that much of the decline in inshore demersal stocks is a consequence of the post 1984 increase in trawling and dredging within 3 NM of the shore. There are three factors that underpin this belief.
First there is little doubt that inshore trawling and dredging inshore did increase. For example with respect to the Clyde, Ryan and Bailey (2012), state that the "opening of the Clyde to towed gears was accompanied by gear improvements that opened previously unfished areas to trawling and dredging pressure. Approximately 83% of the Clyde is now subject to fishing pressure, with many heavily fished areas being trawled multiple times in a given year."
Second, as discussed above, Nephrop trawls and scallop dredges have the potential to cause habitat damage and benthic organism mortality which could negatively impact on local and regional commercial and recreational fishing for other species. Ryan and Bailey (2012) explain that post 1984 increase in Nephrop trawling effort and scallop dredging would have damaged habitat. Depending on the nature of the sea bed, both mobile gear types can smooth the seafloor, destroy emergent epifauna, remove or bury plants, cause high mortality to maerl beds and thus may adversely affect the habitat for juvenile fish and crustaceans  . Ryan and Bailey argue that, with respect to the Clyde fishery area, these changes would compromise the area's role as a nursery for cod, herring, whiting, and scallops. In addition, the associated increased by-catch mortality of non-target fish species would also cause negative impacts on local demersal fish populations.
Third there is evidence of a notable decline in sea angling following the 1984 Act, the primary cause of which was believed to deteriorating quality of sea angling, as reflected in species diversity, weights of fish and specimen size. In 1988, the White Horse whisky sea angling shore competition produced a particularly poor return of shore caught cod  . In response to this and similar developments, the Scottish Tourist Board was concerned enough to write to all local tourist boards requesting information on sea angling. All boards reported adverse effects on sea angling related businesses (Radford et al, 2009). The Scottish Tourist Board also commissioned The Clyde Sea Angling Study (CSAS) which had both biological and economic objectives. The biological objectives were to assess the extent and cause of the decline in fish stocks. The economic objectives were to estimate the economic impact of the decline and the economic impacts associated with remedial policy initiatives. The CSAS concluded that the Clyde fish stocks declined as a result of the increased commercial fishing effort, much of which resulted directly from the 1984 Act (PIEDA Ltd, 1988). 
While it is plausible that the 1984 Act was significant, that there is no direct evidence to support an unequivocal conclusion that the 1984 Act was primarily responsible for the decline in inshore demersal stocks. For example, there is evidence that inshore demersal stocks were declining prior to 1984, and that other causal factors may have been significant. These would include eg climate change, fishing pressure further offshore, end of the 'gadoid outburst', changes to land management and water treatment practices etc. 
Taking all things into consideration, it is possible that potentially the current levels of trawling and dredging within the near shore might not always represent best value for society. This is because, in crude terms, each kilogram of Nephrops and scallops landed by mobile gear probably causes more ecosystem damage and imposes more costs on other stakeholders than the equivalent weight landed by creelers, potters and hand-divers.
A number of studies support this view. For example, Zeigler (2006) estimated that the entire Swedish west coast creel fishery affects the same seafloor area during one year as does one hour of trawling  . The same study provided the following comparative impacts for each Kg of Nephrops landed:
|Impact per Kg of Nephrops||Trawling||Creeling|
|Diesel||9.0 litres||2.2 litres|
|Area of Sea Bed Swept||33,000m2||1.8m2|
|Undersized fish and Nephrop Mortality||4.5Kg||0.15Kg|
Negative aspects of creel fisheries cited by Ziegler (2006) were: safety and working conditions onboard which in Sweden are better on the trawlers; a higher risk of ghost fishing and higher risk of recruitment overfishing because creels capture a higher proportion of berried females.
Not only do creels, pots and hand-divers appear to have less of an environmental impact, buyers are willing to pay more per kilogram for creel caught Nephrops. Creel caught Nephrops command a price differential premium of between 200% and 500% per kg  . This is because buyers will pay more for a kilogram of large Nephrops than a kilogram comprised of smaller Nephrops. They are also willing to pay more for a kilogram of live Nephrops than dead Nephrops. Nephrops landed by trawls have a higher proportion of smaller animals and the catch is generally sold dead and processed in the UK. Though more trawlers are now using tubes and landing live Nephrops. There is also a premium for hand-dived scallops.
Given both the higher value per kilogram, each £1 worth of Nephrops and scallops landed by creelers, and hand-divers probably causes less ecosystem damage and imposes fewer costs on other stakeholders than an equivalent £1 landed by mobile operators. If this is correct then a re-balancing Nephrop and scallop landings in favour of creelers, potters and hand divers might decrease the total costs which society endures as a consequence of landing each £'s worth of nephrops and scallops.
Whilst the re-balancing might reduce prices for creel or hand caught shellfish and increase prices for trawl or dredge caught, the price differential is unlikely to be eliminated  . Discussions with buyers indicated that the increased supply of Scottish creel caught live Nephrops is unlikely to significantly reduce Nephrop prices across fish markets in Spain, France, Italy and Portugal. Indeed, the current expansion into further afield high end markets such as in China is likely to help sustain current prices levels of live Nephrops  .
Support for rebalancing is provided by Leocadio et al (2012). They compared the financial viability of trawl and creel fisheries for Nephrops off the Portuguese coast, but did not include the differential environmental impacts. Despite smaller landings, the Nephrops creel fishery provides individuals of larger size and in better condition thereby obtaining higher prices per kg. Whilst trawlers provided 85% of the landings in weight, they only generated 74% in value.  In the South and South West Portuguese coast nephrops were subject to an intense fishing and Leocadio et al concluded that in these areas a rebalancing of effort between the creel and trawl fishery might be appropriate.
Given the discussion above, there would appear to be a case for
evaluating management options directed at mobile gear in Scotland's
near shore areas.
Types of Economic Evaluation
There are two kinds of economic evaluations that can be applied to the two policy options. Each type focuses on a slightly different aspect of the consequences for the public of restricting the use of mobile gear in the inshore area.
The two types of economic evaluations are the Net Economic Value / Cost Benefit Analysis ( NEV/ CBA) framework and Economic Impact Assessment ( EIA).
Net Economic Value / Cost Benefit Analysis ( NEV/ CBA)
This kind of evaluation focuses on how, within a defined society, changes in resource use affects the wellbeing of individuals, as they themselves perceive their own well-being. The defined society is usually taken to mean the entire population of Scotland (or the UK). As well as the consequences for commercial fishing, a NEV/ CBA assessment would seek to embrace effects of policy on fish consumers, anglers, divers and individuals who are concerned about conserving the Scottish inshore ecosystem.
Economic Impact Assessment ( EIA)
The basis of an EIA is an underlying judgement that in evaluating fisheries policy "what matters" is the impact on household income and employment. In other words, the scope is much narrower that the NEV/CBS approach, with the primary focus the impact of inshore fisheries policy on household income in the form of wages, self-employment, rents and profits (the sum of these is known as Gross Value Added (GVA)) and/or employment (measured in Full Time Job Equivalents ( FTEs)).
An EIA normally has to specify a geographical area, which might be an administrative region, or Scotland as a whole. An EIA would embrace the impacts on all income and employment of all stakeholders (not just the commercial fishing sector) within a geographical area. It should be noted that an EIA study whose geographical area was an IFG area would not necessarily provide insight into the economic impact for Scotland as a whole, because income and employment in the IFG area could be increasing at the expense of income and employment in other areas of Scotland.
These two types of economic evaluation are not mutually exclusive. This is because they both share a common aim of providing insights into how fishery management ultimately affects some dimension of the public's well-being.
Although not additive, taken together, the two approaches provide a rich insight into the effects of the proposed mobile gear inshore restriction on the wider public. Some of the effects of fisheries policy may not be measurable in money terms. Nevertheless, their description and articulation should help to ensure that decision makers understand and appreciate the diverse and complex values individuals and groups derive from the inshore marine environment. If these wider considerations are embraced, decision making will be seen by the public to be more legitimate and credible.
These two approaches are further explained in Sections 4 and 5.
Specifying the Underlying Change
It should also be appreciated that any economic assessment ( NEV/ CBA or EIA) must relate to some underlying change. For example, if one is assessing the total current income and employment (or total costs and benefits) associated with the entire inshore commercial fishery, one is asking the question, albeit implicitly, "how much income and employment (or costs and benefits) would be lost and what would be gained if the entire commercial fishery were to cease to exist." These types of studies can produce impressively high estimates. The closure of an entire fishery is a relatively unusual event and economic assessments of the entire flow of income and employment (or benefits and costs) should be similarly rare.
More commonly, an economic evaluation would normally relate to less dramatic changes. The proposed inshore 1 NM and 3 NM mobile gear restrictions are good examples. In these cases, only the resulting change in economic values is relevant. This is called the marginal value. Just because a particular commercial fishery currently generates a large total flow of income and employment (or surplus of benefits over costs) it does not mean that we should devote even more resources to it. It is the change in income and employment (or benefits and costs) that matter. For example, well intentioned subsidisation of profitable fisheries can simply hasten the process of stock decline and eventual migration of labour and capital  . Indeed some profitable fisheries can be made even more profitable if capacity reduction increases biomass and the sustainable catch per unit of effort of the remaining vessels.
The key point is that in undertaking an economic evaluation ( EIA or NEV/ CBA) there needs therefore to be a description of the change. The relevant comparison is between how the ecosystem would develop if there was no policy intervention (status quo trajectory) and what the inshore ecosystem would be like if mobile gear was removed from within 1 NM or 3 NM.
It is therefore necessary to make two judgements; one about the status quo and one about the impact of the policy intervention. Both are problematic because of the lack of knowledge about the causal chain linking trawling and dredging with biophysical functions and processes and anthropogenic impacts, as well as the feedback loops.
The discussion below about scenarios is necessarily general rather than specific. For example, regional variations are ignored. In some areas, such as complex and diverse ecosystems which may also be spawning and nursery areas, the damaging effects of trawls and dredges may be particularly severe. Thus, if the status quo trajectory is continued decline, the benefits from protecting and reversing this process will much greater than in other locations where mobile gear is causing less damage.
Status Quo Scenarios
With respect to the direction of travel implied by the status quo management scenario, one could speculate that, if trawling for Nephrops and dredging for scallops is allowed to continue fishing within 3 NM, there will an inexorable reduction in geodiversity, biodiversity, and the biomass of benthos species and fish stocks such as demersal species. Thus one scenario is continued decline.
On the other hand, one might argue that a stable equilibrium has now been reached because the near shore and inshore marine ecosystem has now fully adjusted to the increase in fishing effort. Moreover, further increases in fishing effort are precluded by a combination of the Cod Recovery Plan, the current licensing system, effort controls, gear controls and other measures. Thus, with this scenario, there is the prospect of a flow of ecosystem goods and services which, though less than the historic flow, will remain undiminished for the foreseeable future.
There is one further possible scenario which embraces the potential impact of the MPA network. It could be argued that the MPAs will result in restrictions on the use of mobile gear in near shore areas. In which case, there is a potential status quo scenario of improvement in the near shore which is driven by emerging MPA management plans.
It is appropriate to consider this further. The 30 MPAs announced will collectively cover an area of 62,500 Km2. Of this, we estimate only 5,996 Km2 (8.7%) is within Scottish territorial waters and 2.4% and 4.5% within 0-1 NM and 0-3 NM respectively.
The Table below presents estimates of the relative importance of MPA sites to each IFG. The East Coast IFG and Shetland are not impacted by MPA's within 3 NM.
|Areas of IFG Zones (Km2 )||Areas of MPA (Km2 )within IFG Zones|
|IFG||1nm||3nm||6nm||Within 1nm||% of 1 NM||Within 3 NM||% of 3 NM|
In the above table, the 3,086 Km2 of MPA inside 0-3 NM is only 12% of the 0-3 NM zones of the IFGs  . It should also be recognised that the presumption of MPA's is that there will be continued use, and in some areas the additional restrictions on mobile gear may be minimal. This could be because the area is already protected from mobile gear and the MPA simply ratifies restrictions already in place, or an area is not currently exploited by mobile gear, or the feature being protected does not require mobile gear to be restricted. It is also the case that an MPA management plan could recommend mobile restriction, but only in sensitive locations and not over the whole MPA. Thus only a proportion of the 12% will have any implications for mobile gear use.
The South West is the area with the greatest area of MPA relative to the size of the 0-1 NM and 0-3 NM zones. The implications for mobile gear depend on the individual MPA. For example, in the South West, the MPA area, Clyde Sea Sill, already has mobile gear restrictions. The South Arran MPA Management Plan does not necessary mean that mobile gear will be restricted across the whole of the South Arran MPA.
Given the above considerations, this study is undertaking the evaluation against a background where there are only two general status quo scenarios; a diminishing flow and a stable flow of environmental goods and services. However, If MPA derived restrictions on mobile gear near shore areas are likely to significant for individual IFG areas these should be considered on a case by case basis.
Policy Impact Scenarios
The map below provides a visual representation of the IFG areas (0-6 NM) and the 0-1 NM (yellow zone) and the 0-3 NM zone (yellow and green areas) as provided by MS.
From inspection it can be seen that the IFG areas (0-6 NM), especially on the West Coast are more than double the area covered by the 0-3 NM zone. This is because the IFG boundaries provided by MS Scotland are based on straight lines linking points 6 NM from significant headlands. The 0-1 NM and 0-3 NM zones provided by MS are based on lines drawn 1 NM and 3 NM from the coastline. These zones therefore hug the coastline capturing a proportionately smaller sea area  .
There are a number of possible scenarios that could describe the impact of the above restrictions.
As explained above, this study takes the view that the interaction of trawls and dredges with the sea bed is unlikely to be beneficial and may often be damaging to a greater or lesser extent depending on the type of fishing activity and the characteristics of the benthic habitat. Consequently, it is likely that the environment would benefit from having less rather than more or this activity. Thus, compared to any status quo scenario, we might expect a positive environmental effect over the medium to long term. As mentioned, spatially the strength of this effect would be highly variable, simply because some inshore habitats which previously supported diverse and complex ecosystems were also important nursery areas (e.g. the Clyde fishery area). It is beyond the scope of this study to develop a spatially differentiated assessment of the policy impacts and the discussion below is therefore generalised.
At one end of the spectrum, there could be a major transformative effect on inshore habitat and a significantly enhanced flow of environmental goods and services. We know the inherent capacity of the system and the flora and fauna that it could support. Up to the early 1980s the coasts of Scotland, including the Clyde system, was capable of supporting a renowned recreational fishery predicated on large specimen fish and demersal species diversity. The past should therefore not be completely discounted as an indicator of what might be possible. For example, the proposition that Scotland could attract sea anglers from all over the UK might seem fanciful. Yet in 1973 the Scottish Tourist Board declared that, " Scotland is now recognised by sea anglers as one of the most exciting sea angling countries in Europe."  Not only was Scotland an attractive proposition for sea anglers, the demersal fisheries of the Clyde were sufficient to attract anglers from England and overseas  . It is also reported that 51 charter boats had operated in the upper Clyde in the early 1980s  '  .
Therefore one scenario is that the measures would a) protect the current flow of environmental goods and services obtained from within 1 NM or 3 NM, and, b) result in a major transformative effect which delivers a significantly enhanced flow of environmental goods and services. The significantly enhanced flow is a consequence of recovery of the near shore system enhancing biomass, biodiversity and geo-diversity. Recovery of demersal fish stocks are key to increases in the quality and frequency of sea angling, sub-aqua and other marine based recreation, as well as more commercial vessels targeting demersal fin fish using lines.
A less optimistic view is that the policy impacts are enough to protect the current flow and enable an increase in the flow of environmental goods and services, but a significant increase is not possible because the ecosystem damage is not fully reversible. Biomass, biodiversity and geo-diversity might be enhanced, but unfortunately with characteristics which do not replicate the past, and never will. For example, we might have more fish but there may still be relatively few large demersal fish to be caught. Thus although there is more biodiversity and fish biomass, the flow of ecosystem goods and services is less because it does not include more sea angling, diving or commercial line fishing for demersal fish. Under this scenario, there is some enhancement of the flow of environmental goods and services.
More pessimistically, it could be argued that the post 1984 inshore expansion of the more damaging forms of fishing effort was perhaps not the principal reason for the decline in near shore demersal fish stocks. The decline in demersals could have been due to changes in water temperature, or fishing effort outside the near shore area. If so then changes in levels of inshore demersal trawling and dredging might only have a limited impact on future demersal biomass in the near shore areas. In this scenario, the impact of restrictions on mobile gear might be sufficient to protect the existing flow of environmental goods and services, whilst offering only a minimal enhancement of the flow.
The table below describes various scenarios that could be evaluated. Scenarios 1, 2 and 3 will be associated with high magnitude estimates since under these it is assumed that the policy options will prevent an inexorable decline in environmental goods and services. Scenarios 4, 5 and 6 ignore the value of the current flow of environmental goods and services and focus on the enhancement elements. This is because these scenarios assume that in the absence of the policy options the there would be no change in the current flow.
|Policy Impact Scenarios|
|Major Transformative Effect||Environmental Change not Fully Reversible||Limited Impact|
|Status quo scenarios||Continued Decline to zero||1. Current Total Value Protected plus Significantly Enhanced Flow||2. Current Total Value Preserved plus Some Enhanced Flow.||3. Current Total Value Preserved plus Minimal Enhanced Flow|
|Stability||4. Significantly Enhanced flow||5. Some Enhanced Flow||6. Minimal Enhanced Flow|
In the interests of including the full range of costs and benefits, the study embraces all these scenarios. We have previously stressed that commercial fisheries have inbuilt incentive effects which result in overcapacity which is not self-correcting. This applies to creel based fisheries and creeling effort needs to be managed. We are assuming that an effective management system will be implemented which will ensure that fishing effort is controlled and that the benefits from the Nephrops creel fishery will not be eroded over time.
Thus when we evaluate, say, recreational sea angling or diving we have two potential status quo scenarios. One scenario is where demersal stocks and other flora and fauna decline and completely compromise these activities and one where these activities would continue at their current level. For each of these scenarios we then assess each of the possible policy impacts.
3.3.1 Commercial Fishing Status Quo Scenario
When we attempted to apply this approach to commercial fishing the status quo scenarios were not realistic. With respect to shellfish the scenario of continued decline is probably unreasonable.
As explained earlier, crabs and lobsters in most areas are fished beyond Fmax. However, these are caught using creels and pots and are not specifically targeted by demersal trawls and dredges. It is possible that mobile gear induced changes in the inshore ecosystem changes are impacting on the crab and lobster fisheries. Nonetheless, it is unlikely that near shore use of demersal trawls and dredges are an important determinant of the flow of benefits from crab and lobster fisheries.
As outlined previously, there is a mixed picture with respect to scallops and Nephrops. In the absence of the near shore restrictions, there will be expansion of effective effort through technical change and there will be episodic problems with some "hot spots", but effort is not going to expand as it has in the past. This is because effort is heavily constrained through the licensing system, gear restrictions, effort control and other initiatives. This conclusion needs to be tempered through an appreciation that there is undoubtedly latent capacity in the part-time segment.
This study takes the view that the status quo scenario of a decline to zero is not sufficiently relevant for Scottish shellfish. This scenario would produce very high values for policy benefits. As stated previously, this study is seeking explicitly to avoid procedures which possibly over-estimate the policy benefits and underestimate the costs. Consequently we eschew this scenario for shellfish.
On the other hand, the decline to zero is highly relevant to demersal stocks, if they have been declining because of by-catch, discarding and the impact of trawls and dredges on inshore habitats. The problem is that whilst inshore demersal stocks are (just) sufficient for sea anglers, there is very little inshore commercial fishing for these species. Some ports do record healthy landings (e.g. Lochinver) but these are typically caught by non-Scottish vessels outside of the IFG area. In effect, inshore demersal stocks are so low that it is not worth the computational effort to apply the decline to zero scenario to commercial fishing for inshore demersals.
It is difficult to specify the precise mechanisms whereby the proposed gear restriction results in a transformation of the inshore ecosystem, or how long the process would take. In the modelling we therefore allow for assumption about the timing of response to be varied.