Abstract

Fuel use is a main contributor to the environmental impacts of fisheries, accounting for about 1.2% of global oil consumption and resulting in 130 million tons of CO2 emissions. Since fisheries are exempted from fuel taxes and existing trading systems for CO2 emission rights, the incentives to reduce fuel consumption are smaller than justifiable from a climate perspective. This results in higher fuel use than is optimal. But emission levels are also determined by fisheries policies such as stock sizes and fleet efficiency. This report uses models that integrate economics and biology to analyze how CO2 emissions, fleet structure, economic performance and employment opportunities are affected by efficient fisheries policies and by imposing fuel taxes or CO2 trading schemes in Nordic fisheries.

Four different scenarios for imposing the costs of CO2 emissions on fisheries are analyzed. The first scenario in the project is a "baseline" scenario in which the fuel tax concessions are maintained,1 but the stock and fleet sizes are managed in order to generate the maximum economic outcome. In the second scenario ("EU") the fishery is assumed to be part of the EU trading system for CO2 emission rights, and the additional cost of fuel is thus the cost of buying emission rights in the market. In the third scenario ("Stern") a tax corresponding to the cost of CO2 emissions, as calculated in the Stern report, is imposed on the fisheries, and in the fourth scenario ("National") fuel is taxed in the same way for fishers as for private citizens in the country.

To get a representative view of the Nordic fisheries, the analysis contains case studies from all the Nordic countries: Sweden, Denmark, Norway, Iceland, Greenland, the Faroe Islands and Finland. All data is from 2010. The 18 fleet segments analyzed range from coastal small-scale trap nets for salmon in Finland, with a total turnover of about EUR 0.2 million, to large off-shore Norwegian and Icelandic trawlers, with a turnover of more than EUR 325 million. The three models usedhere are all well established in the literature. They differ in how they model the fisheries, the time frame, the interaction between fishing and stock development, etc. and thus contribute different dimensions to the analysis. In all, the report models 7 countries, 18 fleet segments, 25 fish stocks, one full-scale national fishery (Sweden), and one extension where the processing industry is included in the analysis (Greenland).

Currently, several of the analyzed fisheries have negative economic outcomes, and paying for CO2 emission rights or fuel taxes will further reduce their economic viability. Others are more robust to increased fuel costs and will still be able to generate income to society. Still, managing Nordic fisheries in an economically optimal way will increase both economic viability and fuel efficiency substantially compared to the present management systems. Optimal fisheries management implies that the fleet size is set to an efficient level, and that stocks are rebuilt to maximize the economic performance of the sector. This would reduce fuel consumption from 473 to 336 thousand m3 (29%) decrease the analyzed fishing fleet from 1,345 vessels to 737 vessels (45%), and improve economic performance by over 100%.

Introducing fuel taxes or an emission trading system in an optimally managed fishery will have limited effects on CO2 emissions, fleet size, economic performance, and employment opportunities. Imposing fuel taxation corresponding to national fuel tax levels on the optimally managed fishery would imply a reduction of the fleet by approximately 80 vessels in total, and a reduction in fuel consumption of 39 thousand m3. Thus, the well managed fishery is robust to changes in fuel prices and the fishery will be able to pay its external costs for CO2 emissions.

The increase in fuel efficiency in optimal management is due to healthy stock levels and fishing fleets without over capacity, and is obtained without investments in new gear technology or management measures restricting fuel-intense fishing methods. However, the analysis also shows that an optimal fishery in some cases might imply increased use of fishing techniques with higher fuel use per volume caught. This is the case for the Icelandic fishery, which is already run with high efficiency.

To summarize, the analysis shows that optimizing the fishery by stock recovery and reducing excess fleet capacity is an efficient instrument to both reduce the climate impact of the sector and improve the economic outcome. Introducing fuel taxes or an emission trading system in the optimized fishery will have small effects on CO2 emissions, fleet size and employment opportunities.

Published in

TemaNord
2014, number: 2014:533
ISBN: 978-92-893-2783-1
Publisher: Nordic Council of Ministers

SLU Authors

• Waldo, Staffan

  • Department of Economics, Swedish University of Agricultural Sciences
    

Sustainable Development Goals

Conserve and sustainably use the oceans, seas and marine resources for sustainable development
Take urgent action to combat climate change and its impacts


UKÄ Subject classification

Economics


Publication identifier

DOI: https://doi.org/10.6027/TN2014-533

Permanent link to this page (URI)

https://res.slu.se/id/publ/53559