8 Externalities in Aquaculture
253
One way to account for the impact on human welfare of changes in the quantity or quality of environmental assets is to assign a monetary value to them.
Many criticisms have arisen among those who consider such an approach unethical, but this is to miss the point. Monetary valuation is essentially a means of
measuring the social importance of the marine environment in a way that enables
choices to be made. To take an aquaculture example, deciding whether or not to
impose (say) an effluent charge on salmon growers as a way of ‘internalising’ the
externalities of nutrient release logically requires the decision-maker to know
what economic costs such emissions impose on society. If it were shown that
nitrate and phosphate release from fish farms represented a significant external
cost to society, the legitimacy of imposing such a measure on the polluters would
be upheld. Conversely, if the external cost were estimated to be trivial, the legitimacy of imposing an effluent charge would be called into question. Monetary
valuation is thus a way of bringing the environment into the reckoning of cost–
benefit analysis, which may then be used by decision-makers to evaluate policy
options in a rational and consistent manner. This raises the question of how easy
it is in practice to estimate such values, and what progress has been made in valuing the environment. To date, empirical studies related to the valuation of marine
resources have focused primarily on wetlands or on particular resources (such as
mangrove and coral) adjacent to the coast, and only rarely on ocean resources. A
study by Costanza et al. (1997) on the value of the world’s ecosystem services
and natural capital estimates the value of marine systems to be US$20.9 trillion
annually (63% of total ecosystem services and natural capital) within which
coastal systems contribute some 50%. Although these are quite crude estimates
and the authors themselves point out the limitations of their study, what is clear
is that marine resources have an economic value, which can be affected by environmental disturbance of anthropogenic origin.
8.3 Interaction between Aquaculture and the Marine
Environment
Aquaculture is affected by the externalities created by other activities, and is itself
a contributor to such externalities. In this section we look more closely at these
interactions and their socio-economic significance. The key linkages are illustrated
in Fig. 8.1, which is based on the DPSIR framework. We may start by considering
the operating performance of commercial aquaculture in terms of a number of
standard indicators (e.g., productivity, costs, prices and profits), which for a given
production system are determined by the prevailing technology and market conditions. If these conditions alter, which they will if any of the economic drivers (e.g.,
subsidies to aquaculture) change, production will adjust as firms respond to new
opportunities and pressures. Figure 8.1 also suggests that operating performance of
fish farms may be impacted by various types of perturbation, which can be thought
of as a particular type of external driving force, and given what we know of their
253
One way to account for the impact on human welfare of changes in the quantity or quality of environmental assets is to assign a monetary value to them.
Many criticisms have arisen among those who consider such an approach unethical, but this is to miss the point. Monetary valuation is essentially a means of
measuring the social importance of the marine environment in a way that enables
choices to be made. To take an aquaculture example, deciding whether or not to
impose (say) an effluent charge on salmon growers as a way of ‘internalising’ the
externalities of nutrient release logically requires the decision-maker to know
what economic costs such emissions impose on society. If it were shown that
nitrate and phosphate release from fish farms represented a significant external
cost to society, the legitimacy of imposing such a measure on the polluters would
be upheld. Conversely, if the external cost were estimated to be trivial, the legitimacy of imposing an effluent charge would be called into question. Monetary
valuation is thus a way of bringing the environment into the reckoning of cost–
benefit analysis, which may then be used by decision-makers to evaluate policy
options in a rational and consistent manner. This raises the question of how easy
it is in practice to estimate such values, and what progress has been made in valuing the environment. To date, empirical studies related to the valuation of marine
resources have focused primarily on wetlands or on particular resources (such as
mangrove and coral) adjacent to the coast, and only rarely on ocean resources. A
study by Costanza et al. (1997) on the value of the world’s ecosystem services
and natural capital estimates the value of marine systems to be US$20.9 trillion
annually (63% of total ecosystem services and natural capital) within which
coastal systems contribute some 50%. Although these are quite crude estimates
and the authors themselves point out the limitations of their study, what is clear
is that marine resources have an economic value, which can be affected by environmental disturbance of anthropogenic origin.
8.3 Interaction between Aquaculture and the Marine
Environment
Aquaculture is affected by the externalities created by other activities, and is itself
a contributor to such externalities. In this section we look more closely at these
interactions and their socio-economic significance. The key linkages are illustrated
in Fig. 8.1, which is based on the DPSIR framework. We may start by considering
the operating performance of commercial aquaculture in terms of a number of
standard indicators (e.g., productivity, costs, prices and profits), which for a given
production system are determined by the prevailing technology and market conditions. If these conditions alter, which they will if any of the economic drivers (e.g.,
subsidies to aquaculture) change, production will adjust as firms respond to new
opportunities and pressures. Figure 8.1 also suggests that operating performance of
fish farms may be impacted by various types of perturbation, which can be thought
of as a particular type of external driving force, and given what we know of their