Knut Heen

The Invisible Resource Rent in Limited Entry and Quota Managed Fisheries: The Case of Norwegian Purse Seine Fisheries

This paper tests empirically to what extent the rent in a limited entry and quota managed fishery is capitalized in the value of a vessel license. This is done by comparing the profitability of Norwegian purse seine vessels which received their licenses for free, to the profitability of vessels whose licenses were purchased along with the vessel. In a sample of forty-three vessels, thirty-one had obtained their licenses for free when the licensing system was introduced in 1973, whereas twelve owners had bought licensed vessels later on. Costs and earnings data for 1983 and 1984 show that those vessels which received free licenses have a significantly higher profitabilty than the other vessel group. The main reason for this is that the owners who bought licensed vessels had the highest capital costs. Policy implications of these findings are indicated.

Economic impacts of global warming: A study of the fishing industry in North Norway

Abstract Several studies have been carried out on the possible physical and biological effects of global warming in the Barents Sea area. Based on these studies this paper discusses the effects global warming may have on the Barents Sea fisheries and the implications for the North Norwegian economy. The first has been studied using the multispecies, multifleet model ECONMULT, and the latter by applying an Input–Output model. A range of possible environmental scenarios based on the physical and biological studies of the effects of global warming has been examined. Both positive and negative biological growth effects have been considered, changing the current growth rates by ±25%. A more narrow range of management regimes has been applied, reflecting the current management rules and fishery policy in the region. The paper analyses the potential of global warming for changing the catches, profitability, employment impacts and income generation by the Barents Sea fisheries.

Regional economic impacts of fish resources utilization from the Barents Sea: Trade-offs between economic rent, employment and income ☆

Abstract A multi-objective programming model has been developed to investigate the trade-offs among regional employment, regional income, and economic rent of the North Norwegian cod fisheries in the Barents Sea, where all vessels are regulated by an individual quota system. Fishery managers are confronted with the problem on how best to allocate the total allowable catch (TAC) among four vessel groups. It is apparent that depending on how fishery managers view the importance of each objective, the desirable allocation of TAC will differ. Therefore, the trade-offs information can be very useful to fishery managers indicating the relative “expensiveness” of trading one objective with another. Decision maps are generated depicting how the trade-offs between two objectives are affected by the third objective. Compromise solutions taking into account all three objectives will allocate the TAC to satisfy the maximum capacity of both the factory trawlers and the small-scale vessels with the remaining TAC distributed to the coastal fleet and fresh fish trawlers.

Challenges and Successes in the Management of a Shared Fish Stock – The Case of the Russian–Norwegian Barents Sea Cod Fishery

Abstract This article discusses the Russian–Norwegian fishery cooperation in the Barents Sea. The focus is on the common management of the shared cod resource, the Northeast Arctic cod stock. The article emphasizes the historical development of the cooperation in periods of changing political environment and different challenges for the common management agreement. The political changes define two distinct periods of bilateral cooperation and joint management. The first period is from 1975, when the Soviet Union and Norway established the Joint Soviet–Norwegian Fisheries Commission, to the end of the Soviet Union in 1991. The second period is from 1992 when the Russian Federation took over the obligations of fisheries cooperation with Norway from the Soviet Union. Although significant political, institutional and economic changes took place during these periods the biological facts remained, as the growth patterns and distribution of the exploited ecosystem did not change. The Russian exclusive economic zone (EEZ) is the main feeding area for juveniles and small cod, while the Norwegian EEZ includes spawning areas and the main feeding grounds for the mature and larger cod. The trust and cooperative spirit that developed through the Joint Fisheries Commission, both among researchers and managers of the two countries, has been crucial for the development of successful annual agreements and their outcomes. The Russian–Norwegian management of the Northeast Arctic cod stock has succeeded in protecting and maintaining the cod stock in the interest of both countries.

NORWEGIAN SALMONID FARMING AND GLOBAL WARMING: SOCIOECONOMIC IMPACTS

Temperature increases in Norwegian waters are likely to influence productivity for salmonid aquaculture. As sites are experiencing different temperature regimes, the impact on productivity will vary. The spatial distribution of Norwegian salmon farming depends on both institutional and physical conditions. At present, the general location of farms is restricted by the authorities, but in the case of large productivity differences, this regime may be liberalized. This study analyzes the impact of increased temperature on the spatial distribution of production and employment. We vary temperature and management regime in four scenarios and a 30 year time span. Total production is based on linear demand growth, serving as a restriction in the subsequent model. Productivity per county is determined in a temperature-driven model, and a separate model predicts the relocation of licenses between counties. An input–output model captures the direct and indirect effects of aquaculture production. Our findings indicate substantially differing effects on the spatial distribution of production and hence value added and employment. In the baseline scenario, production growth is relatively equal among the northern, middle and southern parts of Norway. Increased temperature shifts production considerably north, both in the case of stable and liberalized management.

Impact Analysis of Multispecies Marine Resource Management

In an attempt to study the regional income and employment impact of different harvesting regimes and harvesting patterns of marine resources, this article demonstrates an approach of combining multispecies bioeconomic modeling and input-output (I-O) analysis. The applicability and usefulness of this approach is demonstrated by implementing the model with data from North Norway and the Barents Sea fisheries.

Impact Analysis with Variable Input–Output Coefficients

In this paper the assumption of a linearly homogeneous production function in the cod harvesting industry is relaxed. Scale-dependent coefficients are used where the input–output coefficients are allowed to vary with the production. The study concludes that the impact is not very sensitive to relaxing the assumption of linearly homogeneous production functions.

The employment impact of oil activity in North Norway : An application of deterministic simulation technique

Abstract The input-output model for North Norway is used to simulate the employment impact of future oil activity off the coast of North Norway. A deterministic simulation technique and sensitivity analysis is applied to identify possible constraints in the regional economy with the aim of maximizing the employment impact in the regional economy. The paper concludes that transport equipment and transport service industries are the key industries to be developed. The approach used could be a model for socio-economic impact analysis of development of new energy projects or energy sources in a region.

Profit and Resource Rent in Fisheries

ABSTRACT The difference between the concepts of profit and rent are discussed theoretically and by using aggregated data from the Icelandic and Norwegian fish harvesting industries. The former is a basic indicator for gauging the business performance of firms and industries, and the latter is important for the evaluation of the economic welfare contribution of resources and industries. The importance of distinguishing between profit and rent is greater for fisheries under strict management control, such as those with quotas and licenses, than those with more open access. It was found that profit is lower than rent in both countries. Policy implications are discussed. JEL Codes: Q22, Q28.

Regional economic impact of oil spills

This article demonstrates an approach of coupling an environmental model to I-O analysis which aims to quantify the regional economic impact of an environmental accident. The model is implemented with the data of a potential oil spill interacting with the salmon aquaculture industry in Northern Norway. The production loss in salmon aquaculture and the regional income impact is computed and discussed. The approach used in this article could be a model for estimating the regional socio-economic impact of environmental factors like water and air pollution.