8 Externalities in Aquaculture
261
Responses such as these may not, however, produce an optimal outcome as far
as aquaculture development is concerned. Even assuming a correct assessment of
the externalities, the most obvious difficulty is that actions designed to mitigate the
environmental problems of aquaculture may simply be inadequate. This is the fate
most likely to befall voluntary schemes based on best management practice, as
shown by the general failure to adopt reduced water exchange amongst shrimp
farmers in Asia and Latin America (Stanley 2000). In other circumstances, regulatory ‘capture’ by large producer interests may result in government agencies effectively acting on the side of the very groups they are supposed to be controlling.
There is anecdotal evidence suggesting that this may have happened in some
shrimp exporting countries where aquaculture producers are politically influential.
However, quite the reverse kind of problem may occur where there is an overreaction to the perceived environmental damage caused by aquaculture. Within the
DPSIR framework, the ways institutions respond is a function of the information
that they receive, and if that information is inadequate or unbalanced the response
will be misdirected. The messages emanating from some of the environmental
groups concerning the supposed ‘unsustainability’ of aquaculture testifies to the
fact that information in this area is far from objective, and if such messages are listened to and acted upon they carry the risk that decisions made by government
agencies or consumers may be inappropriate. While almost all forms of aquaculture
will impact on the environment, that in itself is not ipso facto evidence of social
harm. This is the whole point about trying to measure externalities, because the
monetary valuation of such effects provides a metric by which we can assess their
severity and take appropriate action (Muir et al. 1999). A specific example of this
rationale concerns the use of economic incentives such as taxes as charges in order
to ‘internalise’ the externalities of aquaculture caused by pollution. The introduction of a tax or charge based on an estimate of the pollution damage would give an
incentive to fish farmers to change their behaviour in a way which should lead to
reduced pollution levels. For instance, the imposition of an effluent charge on production (e.g., at the rate of so many € per unit of nitrogen), would alter the cost
structure of producers and confront them with the fact that pollution damage could
no longer be disregarded. Their decisions and actions would then reflect not only
their own private costs but all relevant costs including those attributable to nitrogen
emissions. However, for this to happen, a reasonably reliable estimate of the pollution damage needs to be obtained.
These considerations underscore the important role of sustainability indicators,
chosen and constructed so that unbiased and essential information can be communicated to policy makers. Several suggestions have been made on how such indicators might be applied to coastal resources, including fisheries and aquaculture
(Bowen and Riley 2003; Caffey et al. 2001; Garcia et al. 2000; Grieve et al. 2003;
Liu et al. 2005; Muir 2005), and it is generally agreed that socio-economic as well
as environmental dimensions of sustainability need to be accounted for. It is our
contention that, in the case of aquaculture, the set of socio-economic indicators
should include some measure of the external costs where these can reliably be
assessed. Where these cannot be quantified in monetary terms then some attempt
261
Responses such as these may not, however, produce an optimal outcome as far
as aquaculture development is concerned. Even assuming a correct assessment of
the externalities, the most obvious difficulty is that actions designed to mitigate the
environmental problems of aquaculture may simply be inadequate. This is the fate
most likely to befall voluntary schemes based on best management practice, as
shown by the general failure to adopt reduced water exchange amongst shrimp
farmers in Asia and Latin America (Stanley 2000). In other circumstances, regulatory ‘capture’ by large producer interests may result in government agencies effectively acting on the side of the very groups they are supposed to be controlling.
There is anecdotal evidence suggesting that this may have happened in some
shrimp exporting countries where aquaculture producers are politically influential.
However, quite the reverse kind of problem may occur where there is an overreaction to the perceived environmental damage caused by aquaculture. Within the
DPSIR framework, the ways institutions respond is a function of the information
that they receive, and if that information is inadequate or unbalanced the response
will be misdirected. The messages emanating from some of the environmental
groups concerning the supposed ‘unsustainability’ of aquaculture testifies to the
fact that information in this area is far from objective, and if such messages are listened to and acted upon they carry the risk that decisions made by government
agencies or consumers may be inappropriate. While almost all forms of aquaculture
will impact on the environment, that in itself is not ipso facto evidence of social
harm. This is the whole point about trying to measure externalities, because the
monetary valuation of such effects provides a metric by which we can assess their
severity and take appropriate action (Muir et al. 1999). A specific example of this
rationale concerns the use of economic incentives such as taxes as charges in order
to ‘internalise’ the externalities of aquaculture caused by pollution. The introduction of a tax or charge based on an estimate of the pollution damage would give an
incentive to fish farmers to change their behaviour in a way which should lead to
reduced pollution levels. For instance, the imposition of an effluent charge on production (e.g., at the rate of so many € per unit of nitrogen), would alter the cost
structure of producers and confront them with the fact that pollution damage could
no longer be disregarded. Their decisions and actions would then reflect not only
their own private costs but all relevant costs including those attributable to nitrogen
emissions. However, for this to happen, a reasonably reliable estimate of the pollution damage needs to be obtained.
These considerations underscore the important role of sustainability indicators,
chosen and constructed so that unbiased and essential information can be communicated to policy makers. Several suggestions have been made on how such indicators might be applied to coastal resources, including fisheries and aquaculture
(Bowen and Riley 2003; Caffey et al. 2001; Garcia et al. 2000; Grieve et al. 2003;
Liu et al. 2005; Muir 2005), and it is generally agreed that socio-economic as well
as environmental dimensions of sustainability need to be accounted for. It is our
contention that, in the case of aquaculture, the set of socio-economic indicators
should include some measure of the external costs where these can reliably be
assessed. Where these cannot be quantified in monetary terms then some attempt