The Economics of Marine Mammals
Good for Business, Good for Wildlife
Economic incentives can, at times, be more effective than regulations in achieving conservation.
Conserving marine wildlife makes sense to America’s coastal communities. Studies have shown that certain species of marine wildlife, including whales and dolphins, are increasingly important drivers of economic growth for tourism and related industries. Marine species also have inherent value to the American public. Many people want to know that these animals exist, even if they never see them in the wild.
A recent study focused on the economic value of marine wildlife looked at public willingness to pay to downlist or delist endangered and threatened species. Three marine mammal species were included in that study—the North Atlantic right whale, North Pacific right whale, and Hawaiian monk seal. All are critically endangered species found in U.S. waters. The study estimated that U.S. households are willing to pay an average of $71.62 and $73.16, respectively, for the recovery of the two right whale species, and $66.31 for the recovery of Hawaiian monk seals. These types of studies are critical to understanding human perspectives regarding the inherent value of recovering marine species. They are also critical in helping to balance the costs and benefits of conserving marine species with the economic needs and values of coastal communities.
What is an ecosystem service?
According to the National Academy of Sciences, ecosystem services are defined as “benefits that people receive from natural resources.”
The benefits of conserving marine species stem not just from non-consumptive uses, as noted above, but also from the value of the “ecosystem services” provided by the species. For example, large whales have been shown to have a role in enhancing primary productivity of marine ecosystems by concentrating nitrogen near the surface through excretions, a process known as “the whale pump.” The enhancement of primary productivity in coastal waters is a type of ecosystem service, in this case resulting in more productive fisheries and, ultimately, increased revenues and employment in the fisheries sector. Considering the economic impact and value of marine mammals in a comprehensive, incentive-based approach to management can improve public policy, foster public interest and engagement, and lead to more informed decisions. It can also improve equity among stakeholders. Ultimately, a full valuation of the costs and benefits of conserving marine mammals can benefit managers by providing a more holistic view of how conservation efforts can enhance economic growth.
An interdisciplinary approach to the management of protected resources is critical to the success of conservation efforts. This approach is informed by analyses of the economic forces that drive and perpetuate the challenges facing our most vulnerable resources. Natural resource economists view these challenges through a unique lens and ask critical questions to understand the links between the resources themselves and the people and communities that depend on and interact with them. Understanding these linkages can help to prioritize policies based on economic incentives rather than unnecessarily burdensome regulations.
Bycatch: a case study
Economic incentives can encourage the reduction of bycatch, the largest threat to marine mammals globally. (Eric Forney, NOAA)
Bycatch, the incidental catch of non-target species in active or discarded fishing gear, is the greatest threat to marine mammals around the world. From an economist’s perspective, bycatch represents a negative externality, defined as an unintended consequence of economic activity that is not reflected in the price of the target catch. If the true cost of bycatch were incorporated into fishery operations, both fishing costs and the market price of seafood would be higher. This would provide an incentive to reduce bycatch through technological innovations and more targeted fishing practices. To encourage these changes, researchers have suggested that policy makers consider approaches like tradable bycatch quotas or credits that encourage vessels to minimize the unintended consequences of fishing in order to maximize net earnings. A new computer technology, blockchain, has the potential to revolutionize the tracking and traceability of seafood products, and to make that information available to everyone.
In addition to the costs imposed by requiring reductions in marine mammal bycatch in fishery operations, the benefits of reducing marine mammal bycatch must also be considered. Reducing marine mammal mortality could increase revenues not only for ecotourism operators, but also for the numerous businesses that benefit indirectly from the tourism industry. Research that estimates expenditures and value of marine mammal-related tourism is necessary to clearly identify and incorporate this value into future management discussions.
Bycatch, to economists, is a “negative externality.” What does that mean?
Imagine that you go fishing and catch five fish, including three that you wanted to catch and two that you caught by accident. When you sell your three fish (the target species), their price likely won’t include the effects that angling had on the two non-target fish (the bycatch in this scenario). The capture of these two individuals is a negative externality because it was an unintended consequence of catching your target species and because the effects of removing those bycatch species aren’t incorporated into the cost of the target species at market. In this scenario, the fishermen and the fisheries resource both lose. Putting a price on bycatch could internalize this cost and incentivize its reduction—a crucial step needed to achieve the sustainable management and fair use of our natural resources.
A whale of a time
Wildlife viewing contributes revenues and jobs to coastal economies and provides an unforgettable experience to countless ecotourists every year. (WDC)
Marine mammals drive local business and communities, both in the wild and in educational facilities. In 2008, nearly 5 million people went whale watching in the United States. In 2012 the whale watching industry generated approximately 2 billion dollars in revenue and supported roughly 13,000 jobs worldwide. One study found that over 1.3 million people spent a combined $12 million dollars per year in the Southern Hemisphere for tickets to view pinniped rookery and haulout sites. Ecotourism has become a vital part of coastal economies and is continuing to grow at a rate of 1.3%. Companies specializing in marine mammal viewing run daily trips up and down U.S. coastlines and around the world. Ecotourists are willing to pay over $50 for 3-4 hour trips out of Boston hoping that they will catch a glimpse of a humpback whale. In Hawaii, $100 can buy a full-day dolphin and whale cruise, and gray seal viewing can fetch a price of $29 per person for an hour and a half experience along Cape Cod. Internationally, prices are as high as $250 a day to view humpback whales in Tonga and $230 to observe gray whales in Baja California, Mexico.
Marine mammals in aquariums and zoos also contribute to local economies. In 2016, over 90 million people visited U.S. members of the Association of Zoos and Aquariums that housed marine mammals at an average admission price of $22.00. In just that one year, approximately $2 billion in expenditures supported nearly 15,000 full-time jobs, a reflection of the value of being able to see and learn more about marine mammals in the United States.
Both of these experiences foster an appreciation for marine wildlife while simultaneously providing local communities with a non-extractive, long-term source of jobs and revenues.