The economic value of environmental data: a notional insurance scheme for the European anchovy

ICES Journal of Marine Science ICES Journal of Marine Science (2016), 73(4), 1033– 1041. doi:10.1093/icesjms/fsv268 Editor’s Choice The economic value of environmental data: a notional insurance scheme for the European anchovy Margarita Marı́a Rincón 1*, John D. Mumford 2, Polina Levontin 2, Adrian W. Leach 2, and Javier Ruiz 1 Department of Coastal, Ecology and Management, Instituto de Ciencias Marinas de Andalucı́a, Consejo Superior de, Investigaciones Cientı́ficas ICMAN-CSIC, Puerto Real, Cádiz 11510, Spain 2 Centre for Environmental Policy, Imperial College London, Silwood Park Campus, Ascot SL5 7PY, UK *Corresponding author: tel: +34956832612 (ext. 255); fax: +34956834701; e-mail: Rincón, M. M., Mumford, J. D., Levontin, P., Leach, A. W., and Ruiz, J. The economic value of environmental data: a notional insurance scheme for the European anchovy. – ICES Journal of Marine Science, 73: 1033 – 1041. Received 16 November 2015; revised 9 December 2015; accepted 14 December 2015; advance access publication 2 February 2016. Anchovy population dynamics in the Gulf of Cádiz are governed by environmental processes. Sea surface temperature, intense easterly winds, and discharges from the Guadalquivir River have been identified as key factors determining early life stage mortality in this anchovy stock. We have constructed an environment-based recruitment model that simulates the abundance of juveniles under alternative parameters representing plausible biological hypotheses. We are able to evaluate how modelling environment-based recruitment can affect stock assessment and how responding to environmental information can benefit fishery management to allow greater average catch levels through the application of harvest control rules (HCRs) based on environmental conditions. While the environment-based rules generally increase allowable catch levels the variance in catch levels also increases, detracting from the improved value based only on average yield. In addition to changes in revenue, the probability of stock collapse is also reduced by using environmental factors in HCRs. To assess the value of these management systems we simulate a notional insurance scheme, which applies a value to both average yields and uncertainty. The value of the information-driven rules can be determined by comparing the relevant premiums payable for equal levels of insurance cover on revenue within each specific management regime. We demonstrate the net value of incorporating environmental factors in the management of anchovies in the Gulf of Cádiz despite the increased variability in revenue. This could be an effective method to describe outcomes for both commercial fisheries and ecosystem management policies, and as a guide to management of other species whose dynamics are predictable based on in-season observations. Keywords: Gulf of Cádiz and European anchovy, harvest control rule, insurance, risk. Introduction The state of European anchovy (Engraulis encrasicolus) in the Gulf of Cádiz is described by ICES (2012) as “not known precisely because of the inadequacy of the available information to evaluate the spawning stock or fishing mortality relative to risk” of overfishing. Data limitations are compounded by large interannual fluctuations in abundance and the high dependence upon recruitment which is unpredictable using traditional stock –recruitment relationships that do not account for variability in environmental factors (Ricker or Beverton–Holt models). The great variability of the stock has led to several attempts to understand the mechanisms that govern anchovy population dynamics. Important results were presented by Ruiz et al. (2006) reiterating the importance of environmental forcing when modelling small pelagic fisheries dynamics (Fréon et al., 2005) and identifying the sea surface temperature (SST), intense easterly winds and discharges from the Guadalquivir River as the main influences on early life stage mortality for the Gulf of Cádiz anchovy stock. Ruiz et al. (2009) describe a Bayesian population model that links environmental covariates to anchovy recruitment dynamics. Using that population dynamics structure, it is possible to evaluate different harvest control rules (HCRs) by simulating long series of catches under diverse environmental scenarios. This approach is a form of management strategy evaluation (MSE), pioneered by the International Whaling Commission (Kirkwood, 1997; Butterworth and Punt, 1999; Kell et al., 1999, 2005), which has # International Council for the Exploration of the Sea 2016. All rights reserved. For Permissions, please email: 1 1034 (EHCR). A more complete description of the model is found in Appendix. Environmentally forced population dynamics To simulate anchovy dynamics, it is necessary to understand the environmental processes behind early-stages anchovy survival in the Gulf of Cádiz (Figure 1). Before recruitment, stock dynamics are mainly driven by the variable environment, and after that it is mainly determined by fishing mortality (Ruiz et al., 2006, 2009). Prerecruit survival is highly affected by the wind and the discharges from the Guadalquivir River (Ruiz et al., 2006) while spawning depends mainly on SST (Garcı́a and Palomera, 1996; Motos et al., 1996). Spawning can be assumed to follow a weekly time-scale taking place when a minimum of 168C SST is reached and an increase of at least a quarter of a degree occurs from one week to another, consistent with the increase of a degree per month considered by Ruiz et al. (2009). These conditions hold with higher probability from May to September when individuals from 9 to 24 months old could spawn up to four times per month. When spawning occurs the eggs and larvae can be advected by the effect of easterly winds on currents, which have a negative impact on survival (Ruiz et al., 2006). The effect of advection is considered negligible on juveniles more than 3 months of age, when the first juveniles are able to swim and better control their position. These first juveniles are affected by freshwater regulation in the Alcalá del Rı́o reservoir during the following two months of development, with a positive effect on survival when discharges are close to an optimum value of 100 hm3 per month, major deviations in either direction affect survival negatively (Ruiz et al., 2009). This response to river discharges and wind is a consequence of the different habitats the anchovy occupy during their life cycle. In the egg and larval stages individuals are very vulnerable to currents that advect them from the favourable conditions of the shelf towards offshore waters where survival is poor. In the northern shelf of the Gulf of Cádiz, these strong currents are the result of intense easterly events (Ruiz et al., 2006). With further development, juvenile stages of anchovy are able move towards the estuary or its Material and methods The main step of the MSE process is to construct a sim (...truncated)