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ANNEX III Workshop presentations(Cont.)

Annex III-8
ENVIRONMENTAL MANAGEMENT OF AQUACULTURE: THE ISSUES SEEN FROM THE PERSPECTIVE OF AN ECONOMIST

Ulf Wijkstrom
Project Team Leader
Chief, Development Planning Service,
Fisheries Department, FAO Rome.

1. What does environmental management mean?

For the aquaculturist
Aquaculturists have an economic interest in assuring that the environment, in particular the aquatic environment, is appropriate for their culture operations and generates as large an economic surplus as possible. For them a deterioration in the environment usually means a deterioration in their net earnings from the culture operations. Such deterioration's naturally must be compensated or, preferably, prevented. In practical terms, this means that aquaculturists should not be permitted to undertake actions that modify the environment in such a manner that the repercussions for aquaculturists is negative. Thus, from the point of view of the aquaculturist, environmental management of aquaculture means that a set of rules are established for what others may or may not do with that part of the environment which they have in common.

For the non-aquaculturist
Some of those living in the vicinity of aquaculture installations find (or believe they find) that those same installations have modified their environment. The consequence may be either that as producers they have suffered or as consumers their possibilities to consume have deteriorated, such modifications are experienced as negative. It is seldom that environmental modifications are experienced as positive. Non-aquaculturists will attempt to ensure that there are rules for what aquaculturists may or may not do with their common environment.

2. The central role of externalities

In the language of economics, the issues discussed above constitute examples of externalities. Externalities is a term used by economists. It is a common denominator for all those instances where the activities of one economic actor changes the production function1 of other economic actors, without them being compensated. The modification of the production function has its economic consequences for the producer. Thus environmental management means if not the elimination of these externalities, at least their minimisation.

3. The damage function

The more that is known about the origin of the environmental modification, the easier it will be to know who to address in order to obtain its reduction or elimination. Economists refer to this description of the relationship between the “polluting” act and the statement of its consequences in terms of modified production functions (and the economic effects of these modifications on the producers) as the damage function. It will be immediately realised that to estimate the damage function for any one individual's “act of pollution” can become very difficult indeed.

1 The production function is the quantitative relationship between output and factors of production. To produce 100 kgs of shrimps the following is needed; xxx square meters of pond area; yyy post-larvae; zzz litres of water; sss kgs of shrimp feed; ttt man-month of labour input, etc. Thus, the production function has nothing to do with values; it is a straight technological or physiological relationship. When this is modified as a result of the action of individuals outside the economic unit (which is producing according to the production function) then an externality is occurring.

4. What can be done about externalities?

To ask “what can be done about externalities in aquaculture?” is the same as to ask: “what can we do about management of environmental effects in aquaculture?”. An exhaustive reply requires that at the minimum the following three possible steps be looked into:

It should be realised that the individual who is causing the externalities will not have the same incentives to do something about them as the individual who is suffering the consequences!

4.1 Is the externality important enough?

Suffered by aquaculture: the point of view of the individual producer
From the point of view of the aquaculturist, the concern is loss of income. This loss of income needs to be compared with what it would cost him stop the modification, assuming the effect suffered is not irreversible.

The cost of doing so the economist calls “transaction costs”. They include (i) the costs incurred to obtain the information needed to establish contact with those responsible for the pollution; (ii) the cost of negotiating the agreement; and (iii) the cost of enforcing the agreement. Thus, the individual will only find it interesting to take corrective action if he expects that transaction costs are inferior to the value of the damage suffered.

Suffered by aquaculture: the point of view of government
What governments do will depend primarily on the property regimes upheld by the constitution of the country concerned.

The economists in government may want to influence the policy. They would start by comparing the value of the damage suffered by the concerned aquaculturists with the value added, generated by those causing the pollution. If the damage caused is less than the net value added, it will make economic sense for the “polluter” to compensate those who have been polluted. If the damage caused is greater than the net value added, steps should be taken to cease the productive activity of the polluter.

When deciding on these matters government officers should consider the government's transaction costs.

Suffered by non-aquaculturists: the case of the producer
The producer will want to obtain from the aquaculturists compensation for damage suffered. He will attempt to do so if he estimates his transaction costs to be less than the damage he may reasonably hope to avoid.

The government's point of view is similar to the one described for damage suffered by the aquaculturist. The action will depend on: (i) the degree to which governments want to uphold the property regimes enshrined in their constitutions; (ii) the macro-economic aspects; and (iii) the transaction costs involved.

Environmental groups, or other NGO's may want to argue that there is here an “options value”2 that is threatened. This and similar notions are used to argue in favour of maintaining bio-diversity. Economists are uncomfortable with such notions as they are values (prices) which are not derived from market transactions.

Suffered by non-aquaculturists: the case of the consumer
The consumer suffers a reduction in his income, either in cash or in kind. He suffers to the extent that he considers that his “real income” has declined because of the decline in “existence values”. Such a decline may be represented by the fact that he can no longer contemplate the paddy fields and coconut trees because they are no longer there since the land became saline -- due to nearby shrimp ponds. Or, he considers that his comfort and well-being has declined because he considers that the bio-diversity is reduced following the elimination of mangroves. Again these existence values are assigned, not derived from market transactions.

4.2 Are user rights the correct ones?

Before discussing user rights, a word about property.

Property, from the economist's point of view, is the guarantee (right) to a future stream of benefits. This expectation will come true only if others, that is in effect everyone else, accepts the duty of not interfering with these rights. Experience tells us that such duty's are not easily accepted and the polity (king, parliament, etc) must be prepared to enforce them.

There are various ways in which the allocation of user rights amongst individuals are modified. Some are acceptable (trade, legislation), others are not. Theft is amongst those that are not acceptable. The imposition of externalities (remember defined as modification of production or consumption functions, leading to modified income streams, thus by definition a modification of user rights) can be more or less acceptable. Some user rights are inalienable, that is a third person can not interfere with those rights under any circumstances. Another type of right is the one that can be modified, but only with prior consent of the holder. Finally there is the category of user rights which can be modified without your prior consent, but you have the right to demand compensation for any modification.

There are economic consequences of user rights. In general, it can be said that the fewer restrictions that are placed on the use of the environment, the larger the cost (both in terms of externalities and transaction costs) that fall on the non-perpetrator of the pollution act. The larger the degree of control on the use of the environment, the less the number and gravity of externalities and the larger the share of the transaction cost put on the perpetrator. In practical terms, a license requirement implies that the producer must assume the transaction costs, for obtaining from the rest of society agreement to a certain use of the environment. If there is no license requirement it means that negative consequences of externalities must be compensated through litigation, and settlement in or out of court, initial costs falling on those who have suffered the consequence of the externality.

4.3 Are economic instruments being used in an appropriate manner?

The instruments available to enforce environmental policy (general guidelines for the limits to imposition of externalities) can be classified into: command and control instruments, and economic instruments. Economic instruments in environmental policy are various forms of payments extracted, or made, for use of the environment. In essence they are designed so that they will reduce the incidence of externalities. There are various types. In the industrialised world the more common are:

2 By the options value they mean an estimate of what future generations might be able to obtain from the exploitation of possibly as yet unexploited natural resources.

User charges are those which are made for a particular service linked to environmental management. For example, in larger cities a charge will be made for garbage collection and for sewage treatment. Product charges are linked to the purchase of an environmentally damaging product or service. The user charge and the product charge can be either revenue raising mechanisms, or mechanisms to create disincentives, or both. It is evident to act as disincentives that charges must be high enough to have effect. The exact level of the charges will depend on the demand-elasticities for the product in question and the possibilities for substitution of the same. Tradable permits are useful when it is possible to establish an upper limit to the offending activity. Tradable permits then, through the market, will arrive at an allocation of the same which is cheaper than any administrative mechanism set up to do the same. Deposit refund systems are meant to encourage the reuse of environmentally sensitive materials.

The economic instruments can be used in isolation or combined, or in combination with command and control instruments.

Annex 9
ECONOMICS OF PLANNING FOR MULTIPLE COASTAL AND MARINE RESOURCE USES

Dr. Ruangrai Tokrisna
Department of Agricultural and Resource Economics,
Faculty of Economics, Kasetsart University,
Bangkok, Thailand.

Justification

The benefits from coastal resources are multiple in nature. They can be immediate: such as recreation; pond filling during high tide; coastal artisanal fishing; trapping juveniles for coastal aquaculture; and loading or unloading of boats. Coastal resources can be further transformed, or used in addition to other resources, for more benefits such as: commercial fishing; conversion of mangroves for shrimp farming; port development; and tourism.

Much of the development in developing countries comes from the exploitation of natural renewable resources, such as mangroves and aquatic living things in the case of coastal and marine resources. Non-renewable resources, such as offshore petroleum, are also available in some countries, but capability in exploiting such resources is still mostly limited by technology. Ecosystems are affected by development activities like road construction, coastal aquaculture development, tourism, and port development. Economic growth often creates pollution, damages natural habitats and induces excessive depletion of natural resources.

Benefits from coastal resources can be diverse. They can satisfy basic human needs such food, i.e. fish, which can either be a cheap source of protein or a luxury, high priced seafood. They can be used for leisure, such as recreational or scenic areas, while also being a source of alternative employment and income from such development.

Too often we plan for the exclusive use of coastal areas to maximise the returns from one form of activity. This effectively discounts to zero all other potential uses of an area and its resources. Most coastal ecosystems are capable of sustaining more than one activity and much greater emphasis should be given to optimising the economic and social net benefits that could be achieved with integrated planning and management of coastal resources (such as mangrove, beaches, aquatic life, minerals and coral reefs). Optimisation of the mix of sustainable uses of the flow of resources from coastal ecosystems should be adopted as a basic principle of multiple coastal and marine resource use.

Coastal and marine resources are economically important because they generate a varying flow of services, benefits or utilities to individuals and society and, as such, they must be used in the most efficient way. There is a need for sustainable, multiple-use management schemes for coastal and marine resources. Nevertheless, while coastal and marine resources are accessible to some, they may not be free and open to others. Coastal and marine resources can be enjoyed by a group of people, like a coastal community, as a common property with no one having exclusive rights. On the other hand, access rights can be granted by local or central government so that the resource can be enjoyed only by exclusive owners.

Getting information on complex coastal and marine resource systems

Developing countries have many urgent needs and objectives which can be mutually conflicting. Resource uses can be competitive. While there is a need for more employment, foreign exchange earnings, national security, and better living standards, society also requires a fine environment and conservation of natural resources. Economic development yields some gains but often leads to degradation of resources and environmental conditions. It is important then for any development project to acquire information on the impacts of resource use on the environment.

To obtain information on the complex coastal and marine resource system, three techniques can be employed: Environmental Impact Assessment (EIA), Rapid Rural Appraisal (RRA) and Rapid Appraisal of Coastal Environments (RACE).

Environmental Impact Assessment (EIA), as described by Carpenter and Maragos (1989), offers a prediction of the future state of resource and environmental conditions, with and without the proposed development project. Planners both in the public and private sector should be aware of the consequences of their actions and be responsible for their effects on society and on other projects. Coastal and marine resources are complex and inter-linked. Development projects should not be taken in isolation. A lack of understanding and appreciation of resource systems can lead to failures and disappointments. EIA can serve as one of the tools to address the consequences, favourable and unfavourable, of coastal development. EIA can be employed to identify the opportunities to use the coastal and marine resources while at the same time indicating the danger as well as negative impacts on environmental values. EIA is a tool for successful planning for the use of coastal and marine resources which underlie quite complex conflicts in resource uses. EIA addresses the following issues.

  1. Changes in ecosystem resulting from economic development. “Ecosystem” includes maintenance of habitat for wildlife, aquatic organisms, and other commercially valuable animals as well as constant provision of the flow of “services” from nature (such as a mangrove forest's protection from coastal erosion and ensuring the abundance of aquatic living things). EIA is concerned with the biological diversity and aesthetic values of the intact natural systems involved in coastal and marine resource uses.

  2. Identification of more opportunities for development from the uses of coastal and marine resources, such as unique scenic and recreation sites, archaeological or cultural sites, mineral deposits, untapped water resources, and rare wildlife species. The surveys and inventories conducted as part of EIA may reveal unexpected natural resource values.

  3. Determine the location of needed facilities and infrastructure, including human settlements. EIA identifies technical and social criteria for the selection among alternatives of locations that will best serve development having the least disruption on the other locations.

  4. Identify the economic development that can be sustained. In developing countries there are needs for immediate gains from economic development. These are mostly met by exploitation of existing natural resources, usually rich but complex in their nature. A strategy to achieve immediate economic gains while maintaining the long-term productive potential of the resource base, is required.

  5. Effective implementation of plans to utilise and manage coastal and marine resources requires a strong political will. Human health concern is a powerful supportive factor for strong political will. Human health involves a clean environment. EIA helps identify the risk to public health from development technologies and resource exploitation accompanying economic development.

EIA has some disadvantages. It is usually costly and takes time to implement which may not be affordable in developing countries at some levels.

Rapid Rural Appraisal. Late in 1980s, a new technique to produce faster and relatively accurate analysis of the complexities of farm systems called Rapid Rural Appraisal (RRA) was developed. It is a tool that costs less to obtain relatively more qualitative information. RRA offers an assessment of the development needs of a community, identifying priorities and research needs, recommendations on implementation of development actions, and monitoring those actions. RRA relies on secondary data review, direct observation, participatory interview of core groups and key persons in the community and involving them in workshops for planning local development projects. According to Mc Craken, as quoted by Pido and Chua (1992), RRA is a semi-structured activity carried out in the field, by a multi-disciplinary team and is designed to quickly acquire new information on, and new hypotheses about, rural life.

RRA can be divided into four major stages: exploration in the early stage to set hypothesis on development activities; identifying topics to answer specific key questions; participation of local people in the development planning; and finally monitoring to evaluate the impacts of development activities.

Rapid Appraisal of Coastal Environments. For coastal resource management, Pido and Chua (1992) recommended Rapid Appraisal of Coastal Environments (RACE) as an applied technique adapted from RRA. RACE includes four stages of actions starting from objective definition. The second stage is an analysis of available secondary data. If there are any inadequacies in the data needed for effective planning they can be filled up in the third stage, which provides the remaining necessary information by doing the usual formal research and survey, as often carried out in EIA. The required additional information can also be acquired by participatory process through exploration, topic identification, and monitoring the systems to evaluate the hypothesis(es) set during objective definition. The final stage is the strategic/management plan and area profile which is the concluding action of coastal development planning.

RACE differs from RRA in that it employs some aspects of statistical analysis while RRA uses none or very little. While RRA avoids formal questionnaires, these can be included in RACE. In interviewing local people and key informants, RRA uses semi-structured interviews while RACE uses semi-structured interviews and also tries immersion techniques. RACE puts more emphasis on quantitative descriptions and diagrams while RRA relies more on qualitative information. Sample size is usually larger in RACE as RRA concentrates on key informants only. Both RRA and RACE consider consulting secondary data sources and local groups through group discussions in the form of workshops and brainstorming sessions. The difference is that RACE also includes formal sessions for higher level administrator participation. Such formal sessions can encourage better political support which is one of the keys to successfully carrying out the development plan.

The Economics of Planning

Due to limited capital, manpower and natural resources, priorities must be carefully set for coastal and marine resource uses in order to achieve the socially optimum level of resource utilisation, not only for the present generation but the future as well. Economic analysis can help determine efficient allocation of limited resources, both natural and manmade. EIA, RRA and RACE are techniques in getting necessary information on the complex system of existing resources. The information is then used in economic analysis to help make decisions on optimum resource utilisation. The usual framework of economic analysis employed in determining the best resource utilisation is benefit-cost analysis.

Economic analysis is concerned with the evaluation of the total effect of the project on society. Economic analysis provides guidelines for a better multiple use of coastal and marine resources. It helps in getting higher social returns or benefits at less social cost. Often the use of a resource by one person or group of persons negatively (or rarely, positively) affects another person or group involuntarily without benefit (or cost) compensation. This is called, in economic terms, “externalities”.

Externalities can also be caused by lack of well defined property rights. When property rights are not well defined, all the users can enjoy natural resource uses while not having to be accountable or take care of the impacts of their activities. An example is the fishery resource. Since fish are products of nature, fishermen do not have to pay for costs of wild fish production. Nevertheless, fish in natural water-bodies like the ocean are common property and every fisherman has access rights to go out fishing. If the fisherman does not catch today, he may not be able to catch anything tomorrow since other fishermen are catching fish as well. There is no reason why the fishermen should catch less today since they cannot be sure of having them tomorrow. Lack of property rights leads to over-exploitation which is the external cost to future consumers. Over-exploitation of fishery resources, sooner or later, entails higher fish prices. Present over-exploitation of natural resources has adverse externalities on future users. Such exploitation is an indirect cost of resource use.

Economic analysis relies on the “net value” of the project in making an investment decision. Such values concern not only the direct costs and benefits of the investment, but also the “indirect” ones. The emphasis is on social welfare rather than the net return for individuals, as often found in financial analysis. External costs of resource utilisation will be taken into account along with external benefits.

In a well functioning market and when property right is well defined, prices are determined where supply equals demand. With natural resources, the market has been distorted in most cases. As they are produced by “nature”, costs of production have not been realised by those who exploit the natural resources. The users thus do not have to pay for these costs. As a result of the distorted market, natural resource prices are artificially lower than the level they should be. When natural resources are abundant, they are taken as “free” goods by the users who pay artificially low prices, or not at all. In this case, supply exceeds demand. The artificially low resource prices induce greater demand which can increase at a higher growth rate than the carrying capacity of the natural/environment. The result is then shortages in the supply of natural resources as they are overexploited. Demand, now exceeds supply at the distorted low price. Market mechanisms fail in the case of natural resource uses. Their prices do not reflect the true scarcity values of their services.

In some cases, natural resource services are not properly valued due to market failure. The example in this case is clearing mangrove areas for shrimp farming. Net earnings from shrimp farms are benefits that accrue to the shrimp farmers at the cost of losing mangrove which may be borne by the local people who are not involved in shrimp farming activities. Such costs can be those costs measurable in market values and those non-market values which need to be evaluated by specific means. Market values of the mangrove areas are, e.g. charcoal, poles, wood chips and aquatic catches from mangroves such as crabs, including fish and shellfish caught from adjacent fishing areas. Non-market values, which are seldom accounted for in usual financial analysis are, e.g. fuelwood, which is collected by local people for their domestic use, nursery grounds for juvenile aquatic species, feeding grounds for estuarine fish and shrimp, wildlife areas, protection from coastal erosion, buffers to storm damage, and nutrients flows. Valuation techniques are needed for these non-market values.

Valuation Techniques

For non-market values, three available techniques of economic valuation are: common valuation; surrogate market; and contingent valuation. Common valuation techniques for non-market values are changes in productivity, loss of earning, opportunity cost and preventive expenditure.

Changes in productivity can be measured from the increase (or decrease) in output as a result of project activities being valued at the market price. Loss of mangrove area may result in lower catches in adjacent fishing areas. This decrease can be observed and then valued by the market prices of those aquatic species.

Changes in resource conditions, especially degraded environmental conditions, adversely affect human health and thus a person's working capability. This leads to lower income. Such loss of earning can be accounted as a cost of the development. Examples are the development of beach resorts and industrial/mining areas that cause pollution and result in inferior environments and living conditions of local people. These may impact on the health and working capability of coastal people who don't benefit from participation in such development. Their lower income earnings can be accounted as costs of the development.

Opportunity cost is the forgone income of not using the resources measured from the loss of benefits given up because of resource preservation. An example would be the loss of net income earning from shrimp farming if the mangrove is preserved and not cleared for shrimp farming. Preventive expenditure are expenses paid to avoid negative effects on resource and environmental conditions. As it is difficult to assess the environmental effects and easy to estimate preventive expenditure on such effects, preventive expenditure can be used as a proxy for the development.

The less commonly used valuation techniques are surrogate market techniques and contingent valuation techniques. Surrogate market techniques include property values, wage differences, travel cost approach, replacement costs, and shadow prices. Property value is one of the hedonic pricing techniques. To effectively use the property value for valuation, there should be a competitive real estate market so that property values reflect the true value of property. This property value reflects the improvement or degradation in resources and environmental conditions. It can be employed as a technique of valuation for those changes incurred by the development project.

Wage differentials can be employed to reflect private valuation of health risks. To attract workers to work in polluted areas or in worse living conditions, wage offers can be raised in compensation for inferior working conditions. Again, the labour market must be competitive if this wage differential is going to be employed as a valuation technique.

The travel cost approach is often used in valuation for tourism values concerned with recreational analysis. It can also be applied in valuing “travel time” in analyses of such valuation on fuelwood and water collection. After dividing the site into concentric zones by distance variation, users are surveyed at sites as to their origins, rates of visiting the study area, costs of travelling and also some socio-economic aspects. From this information, a demand curve will be constructed related to willingness to pay for the costs of travel and visits. Consumer surplus can then be determined from this demand curve to reflect the value of visits and thus the recreational development.

Replacement costs can be used as a proxy for valuation. In this approach, the costs incurred to replace the damage on resources and environmental conditions are the proxies for valuation.

Shadow prices can also be a proxy for valuation. It can be evaluated from substitute services to compensate for the loss of resource conditions incurred by the development.

Contingent valuation is a survey-based method which is recommended as the last alternative in the absence of the common valuation and surrogate techniques. It is an attempt to obtain information on consumer preferences by asking them their willingness to pay. The process of asking can be by direct questionnaire or experimental technique. What is sought is a personal valuation in a “hypothetical” market. Criteria of success are the suitability of the hypothetical market and the co-operation of respondents. The shortcomings lie in problems of designing, implementing and interpreting questionnaires. Its applicability may be limited.

Economic Analysis

In planning for multiple coastal and marine resource uses, various economic analysis techniques have been applied. The most common is the benefit-cost analysis (BCA).

BCA was developed in the 1930s as an analytical tool to select public work projects undertaken by the government of the United States to provide jobs and stimulate the economy to recover from the Great Depression. Decision criteria is to select those projects in which benefits (to whomsoever they may accrue) are greater than the estimated costs. In applying BCA to multiple uses of coastal and marine resources, valuation techniques discussed earlier must be carried out to put the “right” prices on those planned activities and the “right” assessment of their impacts on society.

Time horizons must be carefully taken into consideration. The purpose in our economic development is to provide the present as well as our future society with the amount they can consume without improverishing themselves. The maximum amount to be consumed should be without or, at worse, “least” depleting the stock of resources in the future. Coasts and benefits occur at various times. Since money is always valued higher at present than in the future, discount rates must be applied to calculate all values in present values. The chosen discount rate can either be reflected through the opportunity cost of capital or the social rate of time preference. Through this discounting, all present and future values are expressed in terms of their present values.

 NPV=Summation over t [{Bd + Be - Cd - Ce}/(1 + r)t]
where t is 1 to n
    
Where:NPV=net present value
B=benefit
C=cost
d=direct
e=external
r=discount rate
t=year in which costs or benefits occur
n=number of years in project lifetime

Other uses of the same present value information are the internal rate of return (IRR) and the benefit-cost ratio (BCR).

 NPV=Present value of benefits - Present value of costs.
 IRR=Discount rate that results on the present value of benefits becoming equal to the present value of costs.
 BCR=Present value of benefits
Present value of costs

The NPVs from various development project plans can be compared and the one with the highest is recommended.

The other technique of economic analysis is Input-Output Analysis (I-O A). Production activities in our economic systems and, hence, resource systems are interrelated. I-O A recognises such interrelationships. Each activity acts both as suppliers offering output to other producers and final users, and as input buyers buying primary inputs from the natural resource system as well as other intermediate goods from the production system and labours.

To employ I-O A for multiple coastal and marine resource uses an Input-Output table has to be carefully constructed taking into consideration all the impacts of planned activities. The table elaborates flows between inputs in production process and outputs of the activities in monetary units. Options to be taken are evaluated by the changes in final demand pattern and/or the changes in structural relationships in the system.

For planning of multiple resource uses, the constructed I-O table is different from the usual ones as it takes into account “all” the possible activity impacts on society such as residuals, discharges and ambient environmental quality as previously identified using EIA, RRA, or RACE as described earlier in the economics of planning for multiple resource uses. This I-O table includes environmental and natural resource assets as productive assets. Costs of resource depletion and environmental degradation are input and included to indicate the “true” values of the activities involved.

A limitation of I-O A, which makes it less favourable among economists is its large data requirement. These data may be outdated by the time they are compiled. By the time it is constructed, it's fixed-coefficient production relationships may no longer truly represent the input substitution, structural changes and changes in technology. Similar to EIA, this technique of analysis is costly and may not be affordable in developing countries where there are urgent development needs but limited capital.

Conclusion

The economics of planning for multiple coastal and marine resource uses arises from their being multiple and diverse in nature. Knowledge of the complex resource system is needed and can be acquired in various ways depending on the constraints on costs of getting the information and the significance of their impacts. EIA, RRA, and RACE are the tools to get the needed information. As the market fails in reflecting the value of resource uses, these have to be evaluated. Recommended techniques include common valuation, surrogate market, and contingent valuation. In making a decision on the planning for multiple coastal and marine resource uses, BCA is recommended as the tool for economic analysis. At the more macro-level I-O A can also be useful.

REFERENCE

Carpenter, Richard A. and James E. Maragos. 1989. How to Assess Environmental Impacts on Tropical Islands and Coastal Areas. Environmental and Policy Institute, East-West Centre, Hawaii.

Pido, Michael and Chua Thia-Eng. 1992. The Application of Rapid Appraisal Techniques for Assessment of the Coastal Zone in the ASEAN. A paper prepared for ASEAN-US CRMP Regional Workshop on Integrated Coastal Zone Planning and Management in ASEAN: Lessons Learned. ICLARM. 26–30 April 1992.

Annex III-10
WORKING GROUP REPORTS
Environmental Management Options

Two working groups, one concerned with inland aquaculture and one concerned with coastal aquaculture, were convened during the workshop. The working groups, comprising workshop participants, carried out the following tasks:

  1. Prepared “options” for the environmental management of inland and coastal aquaculture; and

  2. Prepared suggestions for follow-up actions to implement the environmental management options identified under (i). The suggestions were directed at: (a) governments; (b) farmers and supporting industries; and (c) regional and international organisations.

This annex is divided into the following sections:

  1. Environmental management of inland aquaculture.

    1. Environmental impacts on inland aquaculture:

      • Pond culture systems (Table 1).

      • Cages/pens and open water culture systems (Table 2).

    2. Environmental impacts of inland aquaculture:

      • Pond culture systems (Table 3).

      • Cages/pens and open water culture systems (Table 4).

    3. Environmental impacts - General management suggestions (Table 5).

  2. Environmental management of coastal aquaculture

    1. Environmental impacts on coastal aquaculture (Table 6).

    2. Environmental impacts of coastal aquaculture (Table 7).

    3. Environmental impacts of aquaculture on aquaculture (Table 8).

    4. Suggestions for international/regional co-operation concerning environmental impacts of/on coastal aquaculture (Table 9).

Table 1. Environmental impacts on inland aquaculture (ponds).

Resources UsedProblemManagement Options
Public/Government
Management Options
Farm Level
LAND
  1. Pressure on land for alternative development leading to conflicts with other users (e.g. agriculturists).
  2. Incompatible activities (forestry, mining) causing siltation, heavy metal contamination and deterioration in water quality.
  3. Remoteness/accessibility leads to lack of adequate infrastructure for a successful venture.
  • Cross-sectoral land use planning involving zoning should be conducted to evaluate compatible land uses in development planning. The importance of aquaculture to local and national economies should be recognised.
  • Proper site selection should be undertaken with full listing and evaluation of activity conflicts.
  • The accessibility of aquaculture installations in remote locations should be improved and projects that are disadvantaged (or suffer economic difficulties) by their remoteness should be supported. Aquaculture makes an important contribution to rural economies.
Planning before investment:

  • Understanding the surrounding environment.
  • Community/farmer involvement in planning process and land use zoning.
WATER
  1. Discharges and run-off from alternative industries causing contamination with toxic chemicals, public health problems, eutrophication.
  2. Water resources development leading to reductions in dry season water supply.
  3. Clear-felling of steep sided watersheds causing siltation and reduction in aquatic productivity.
  • Improved environmental monitoring, discharge control and enforcement of aquatic pollution legislation. Zoning of aquaculture vis a vis other conflicting developments. Integrated watershed/ land use planning.
  • EIA for flood control measures. No aquaculture installations should be permitted where water resources are not adequate.
  • Prohibition of clear-felling on steep slopes without full assessment of environmental consequences.
    Integrated watershed/land use planning.
  • Site selection and treatment of inflowing water. Closed cycle culture systems. Selection of tolerant species. Form alliances with other farmers and non-aquaculturists to confront polluters
  • Storage/ conservation of water within aquaculture farm.

Table 2. Environmental impacts on inland aquaculture.

(cage and pen-open water sites)

Resources UsedProblemManagement Options
Public/Government
Management Options
Farm Level
WATER SPACE
  1. Conflicting uses of water areas.
  2. Siltation.
  3. Water quality changes, caused by, e.g., industry, urbanisation, domestic effluent, agriculture.
  4. Hydrological changes
  • Zoning of water areas for aquaculture and other “users”.
  • Promote concerns among aquaculture and other “users” concerning elaboration of an integrated management plan.
  • Promote co-operation among affected parties - including aquaculture.
  • Define objectives of use of water body and level of environmental protection required.
  • Identify pollutant sources and seek reductions in loadings.
  • Promote integrated approaches to catchment area development planning involving consensus among different “users”.
  • Pollution control measures.
  • Promote aquaculture technologies and species suitable for particular environments.
  • Environmental monitoring.
  • Identify possible conflicts and seek to resolve among concerned parties.
  • Avoid selection of culture sites in areas with intensive activities of other “users”.
  • Site selection.
  • Promote sustainable management of watersheds to avoid “downstream” impacts.
  • Identify and avoid affected sites during site selection.
  • Change culture system (stocking density/species).
  • Identify pollutant sources(s) and negotiate to reduce pollutant loadings.
  • Relocation of farm.
FEED and SEED
  1. Loss of biodiversity, including:
  • Loss of genetic resource.
  • Reduction in productivity and diversity of native stock.
  1. Introduction of pathogens, pests and predators (PPP) into aquaculture systems.
For both (1) and (2), identification and protection of aquatic species by:
  • Identification of “protected” areas.
  • Emphasise community involvement in protection of genetic resources.
  • Development of systems/ quarantine/certification legislation to control the spread of disease.
  • Research on genetic improvement for disease resistance.
  • Support improved fish health management.
  • Increase awareness among farmers of disease control mechanisms/benefits.
  • Limiting access of wild to culture systems.
  • Control of the impact of PPPs on aquaculture must have the minimum effect on the environment and human health, consistent with the maintenance of optimum aquaculture productivity.
  • Improve fish health management.

Table 3. Environmental impacts of inland aquaculture (ponds).

Resources UsedProblemManagement Options
Public/Government
Management Options
Farm Level
LANDConstruction
  1. Destruction of habitats Loss of beneficial functions of original systems.
  2. Conflicts with other users.
  3. Disturbance of habitats and human settlements due to associated infrastructure.
  4. Disposal of pond construction materials causes siltation in waterways and reduction in aesthetic values
  5. Use of saline and alkaline lands for aquaculture.
For (1) to (4):
  • Comprehensive valuation of existing resources should be subject to cost-benefit analysis.
  • Farms should not be located where alternative competing land use or environmental sensitivity makes it inappropriate.
  • Zoning, integrated land use planning. Promotion of integrated approaches to planning with community participation. Planning should incorporate EIAs and consider design and technology options.
  • Use of saline/alkaline land should be promoted through technology incentives and other policy support mechanisms.
For (1) to (3):
  • Improved site selection.





For (4)
  • Materials arising from construction should be disposed of and utilised in an environmentally sound manner, if not economically.
LANDOperational aspects
  1. Disposal of solids leading to public health and water pollution problems.
  2. Disposal of pond sediment leading to siltation of waterways.
  3. Conflicts with other industries.
For (1) to (3):
  • Legislation/enforcement related to environmentally sound disposal of solids/sediment.
  • Encourage recycling of materials (e.g. sediments on land crops).
  • Promote research into recycling of pond wastes.
For (1) to (3):
  • Proper collection, recycling and disposal of waste materials.
  • Disposal away from watercourses.
  • Explore use as fertiliser on agricultural crops.
  • Integrated culture.
WATERPhysical impacts
  1. Hydrological effects
    (lowering of water table, saline intrusion etc).


  1. Conflicts with alternative users.
  • Impose levy charge on groundwater abstraction. Groundwater abstraction should not be permitted in areas where resources are over-exploited (although in arid areas aquaculture can only function by using ground water).
  • Zoning. Aquaculture should be developed within a broader land and water use framework.
  • Develop alternative sources of freshwater.
  • Develop ways to reduce water need through improved water management or water re-use systems.
Water quality
  1. Disposal of effluent causing deterioration in receiving waters.
  2. Public health risks.
  • Define objectives for use of the water body and level of protection required.
  • Encourage the location of farms in areas where effluent disposal will cause least damage.
  • Water quality standards should also take into account any special sensitivity of the receiving waters.
  • Emphasise recycling of water for on-farm or off-farm uses.
  • Some treatment before release (e.g. constructed wetland, oxidation ponds, settling ponds).
  • Ascertain uses of receiving waters downstream.
FISH
  1. Introduction of exotics, displacement of/ competition with native species.
  2. Escape of stock and effects on stock enhancement including habitat, competition and genetic integrity.
  3. Collection of seed from wild leading to reduction in wild stocks.
  • Adequate study of potential effects of introductions. Proper EIA.
  • Farms should not be permitted in locations where it is possible that exotic fish species may escape into the wild and damage native stocks.
  • All reasonable efforts should be made to prevent escapes.
  • Development of artificial propagation and hatcheries.
  • Use of wild fry is undesirable and should be combated with the establishment of adequate hatchery facilities.
  • Promote awareness of problems associated with exotics.
  • Promote indigenous species for culture.
INPUTS Feed and fertilisers
  1. Excessive use of feed and fertiliser causing water pollution.
  2. Use of “trash” fish may impact on wild stocks.
  3. Collection of smaller species leads to disruption of ecosystems such as shortage of forage species for predatory fish.
  • See water above.




  • Research to assess impacts and alternative sources of feed.
  • Feeding practices, use high quality diets with emphasis on reducing effluent impacts.
  • Recycling of nutrients on and off farm.
  • Cultivation of forage fishes to supplement natural stocks.
Chemicals, drugs, hormones.
  1. Possible public health problems.
  • Regulation in use of potentially harmful chemicals.
  • The use of medicines, pesticides and other chemicals must be strictly controlled to prevent (a) harm to the aquatic environment; (b) harm to healthy stock and (c) contamination of aquaculture products.
  • Education and awareness of problems among farmers.

Table 4. Environmental impacts of inland aquaculture.
(Cage and pen - open water systems)

Resources UsedProblemManagement Options
Public/Government
Management Options
Farm Level
WATER SPACE
  1. Conflicting uses of water areas.
  2. Disturbance of freshwater habitat.
  • Zoning of water areas for aquaculture and other “users”.
  • Promote concerns among aquaculture and other “users” concerning elaboration of an integrated management plan. Proper EIA prior to development.
  • Proper identification and valuation of habitats, including present and future values.
  • Integrated planning, providing incentives of aquaculture in alternative locations.
  • Identify possible conflicts - seek to resolve.
  • Avoid selection of culture sites in areas with intensive activities of other “users”.
  • Relocate sites.
  • Avoid selection of culture sites in important freshwater habitats.
WATERWater quality.
  1. Effluent disposal causing a deterioration in water quality.
  • Define objectives for use of the water body and level of protection required.
  • Encourage the location of farms in areas where effluent disposal will cause least damage.
  • Water quality standards should also take into account any special sensitivity of receiving waters.
  • Impose limits to fish production in the water body.
  • Use improved feeds, better feed and farm management.
  • Promote awareness of water quality issues.
OTHER INPUTSSee inland pond culture.
(Table 3)
  

Table 5. Environmental impacts (general) for inland aquaculture.

ProblemManagement Options
Public/Government
  1. To provide for environmentally sound and sustainable aquaculture development.
  • To strengthen national policy for aquaculture development that should consider the food security, social, economic, legal and environmental implications, including future scenarios. Considerations of fiscal and monetary measures (e.g. incentives, credit, insurance) and land tenure arrangements should be included. Governments should clearly identify the responsible agency for this task with a view to promoting mechanisms for co-operation among government units and the public, including NGOs in the various stages of aquaculture planning and operations.
  • An appropriate legal framework to enhance management of aquaculture in relation to the environment and to reduce regulatory inefficiencies and eventual administrative costs for the aquaculture industry is required. The consolidation of all laws pertaining and related to aquaculture into a single enactment should also be considered to make legislation accessible, comprehensive, beneficial to all concerned and enforceable.

Table 6. Environmental impacts on coastal aquaculture.

Resources UsedDetailed ProblemManagement Options
Public/Government
Management Options
Farm Level
LAND AND WATER
  1. Conflicting uses.
Coastal resource management:
  • Detailed economic assessment: short term vs long term (including environmental impact, social value, sustainability etc).
  • Planning with legal back-up: determine specific purpose of land use zones for agriculture, industry and number of aquaculture units.
  • Elaborate appropriate legal tools for integrated coastal management (e.g. licensing, zonation, green belt requirement, preservation areas).
  • Strengthening of institutional framework including enforcement and resources support.
  • Educate all users on sustainability of the environment, foster the creation of co-operation among resource users.
Planning before investment:
  • Understand the surrounding environment. identify possible conflicts.
  • Liaise and obtain understanding through negotiation and settlement.
  1. Siltation.
  • Implementation and strict enforcement of legislation relating to deforestation and mining activities.
Study the situation and find solution, e.g.re-siting, change in culture method, reduced culture density, settlement ponds.
WATER
  1. Aquatic pollution.
Define objectives of use of waterbody and levels of environmental protection required (environmental quality objectives/criteria, emission standards vs standards for recipient waters).
Immediate actions:
  • Assist farmers in locating pollution source and provide technical advice.
  • Negotiate with the polluter for improvement of situation.
Long-term actions:
  • Monitoring of the environment (water column/seabed) to understand the actual situation.
  • Research on pollution prevention measures, treatment plants, etc.
  • Draw up pollution control measures with legal backup; set emission and quality standards.
  • Enforcement with sufficient penalties.
  • Government compensation schemes, rehabilitation arrangement etc.
  • Government strategy to promote aquaculture sustainability.
Find out possible source (s) of pollution and assess the magnitude of the problem: change location of water abstraction point, treat inflowing water or change culture system or species.
  1. Red tides and other plankton blooms.
Immediate action:
  • Establish red tide early warning and reporting network.
  • Identification of causative organisms.
  • Conduct toxicity test (toxic/non toxic).
  • Technical advice to farmers to minimise effects.
  • Ban sales/ close areas etc, if necessary (legal support).
Short to long term:
  • Collect information on causative species.
  • Monitoring of phytoplankton community changes.
  • Risk assessment of red tide and advice on site selection.
  • Shellfish toxicity monitoring system.
  • Educate farmers on health, implications and effect of red tide to obtain co-operation.
Understand the effect of red tide on the culture production:
  • Conduct appropriate monitoring at site.
  • Take measures, where and when possible, to minimise impact (e.g. aeration, towing raft to better flushed area away from tide. Stop intake water.
  • Depuration of product.
  1. Infectious disease e.g. mollusc contamination by coliforms.
  • Same as above for red tides (2).
  • as above.
SEEDSeed supply reduction due to harvesting of wild stocks.Immediate action:
  • Educate farmers on farm stocking and fry capture, handling and transport methods.
  • Identify spawning and nursery grounds.
  • Reserve a proportion of spawning and nursery grounds and protect from pollution, disturbance etc. with legal back up and ideally local community participation.
  • Stop habitat destruction.
  • Enforcement and strengthening of existing legislation.
Short term action:
  • Research on fry production of local economic important species.
  • Establish hatcheries.
Long term actions:
  • Provide appropriate legal control of fry collection, if necessary, e.g. regulation of phased restricted access to natural waters.
  • Do not overstock farm.
  • Take measures to reduce fry mortalities (e.g. acclimation, sanitation, husbandry care).
Feed and fertilisers
  1. Insufficient/ irregular supply.
  • Research on appropriate low pollution feed formulation from economic sources and efficient use of existing resources.
  • Find alternative feed supply.
  • Use of other waste e.g. shrimp head, fish meal, squid meal etc.
  • Improve storage facilities (individual /co-operative).

Table 7. Environmental impacts of coastal aquaculture.

Resources UsedProblemManagement Options
Public/Government
Management Options
Farm Level
LAND
  1. Mangrove removal.
  2. Destruction of habitats.
  3. Displacement of traditional industries or conflicts with other users.
  4. Salinisation of land and water.
  5. Land subsidence.
  • Same as Land (Table 6 above)
    In addition:
    • Land reform programme, replanting of mangrove.
    • Discourage/ prevent siting of aquaculture farms in mangrove areas. Define areas for exclusive use by aquaculture.
    • Education and training of farmers.
      • Legislation to limit abstraction in affected areas.
    • Legislation to limit abstraction in affected areas.
  • Improved site selection (high water exchange sites); avoid (potential) acid sulphate soils.
  • Encourage responsible use of groundwater.
    • Proper pond sealing and design.
WATEREffluent disposal causing:
  1. Water quality deterioration.
  2. Seabed deterioration.
Immediate actions:
  • Control activity by preventative rules (licensing, setting water quality standards, restrictions etc).
  • Licensing should allow control of location, farm design, farm management, effluent control, restrict chemical use).
  • Educate farmers of hygienic husbandry practice (can also be regulated).
  • Environmental monitoring programmes.
  • Technical advice on effective effluent treatment facilities and discharge standards.
  • Research on integrated farming systems.
  • Educate farmers on the use of drugs and chemicals.
  • Necessary infrastructure for net cleaning, effluent treatment etc..
  • Alter culture system to increase flush e.g raft construction vs long line.
  • Responsible use of chemicals.
  • Reduce stocking density.
  • Hygienic husbandry practice e.g. proper waste and refuse disposal (e.g. disposal of pond sediment/sludge, dead fish etc.).
  • Set up appropriate effluent treatment facilities.
  • Improved feeding practices.
  • Monitor water quality.
SEED
  1. Wild fry collection affects wild stock recruitment/replenishment.
  • Control areas, seasons, gear (mesh size) for wild seed collection.
  • Natural restocking.
  • Hatchery construction.
  • Improve quality of farm-reared fry.
  • Legislate against illegal trade in seed and broodstock.
  • Promote awareness among farmers of benefits of hatchery reared fry.
DISEASE
  1. Transfer of pathogens.
  • Restriction on shrimp movement by certification/quarantine/notifications ystem.
  • Support efforts to improve shrimp/fish health management.
  • Improve health management.
Feed and fertilisers
  1. Pollution due to feed wastage and metabolites.
  • Research on less polluting feed formulation.
  • Educate farmers on proper feeding/fertilising practices.
  • Educate farmers on economics of feed/fertiliser application.
  • Calculate amount of feed/fertiliser required for the stock.
  • Feed on demand (i.e. stop feeding when fish not eating).
  • Use appropriate feeds (formulation, quality) suitable to cultured species.
  • Use appropriate amounts and types of fertilisers.
ChemicalsOften used prophylactically and discharged to the environment with unknown consequences.
  • Regulation in use of potentially harmful chemicals.
    The use of medicines, pesticides and other chemicals must be strictly controlled to prevent (a) harm to the aquatic environment; (b) harm to healthy stock and (c) contamination of aquaculture products.
  • Education anda wareness of problems/alternatives among farmers.

Table 8. Suggestions for International/Regional co-operation on environmental impacts on coastal aquaculture.

Resources UsedDetailed ProblemRegional/ International Co-operation
LAND
  1. Conflicting users.

  1. Siltation.
  • Guidelines on economic assessment, particularly on the value assigned to environmental (reversible/irreversible) and social impacts affecting sustainability.
  • Support in the creation of specially protected areas.
WATER
  1. Aquatic pollution.


  1. Red tides.
  • Guidelines on ecological monitoring methodologies for different sources of pollution in coastal waters.
  • Information on research and pollution prevention and control measures, e.g. treatment measures, improved farm performance, regulatory measures, compliance control, etc.
  • Information on phytoplankton dynamics in the region, on toxicity testing methods and formulation of health standards related to PSP, DSP, NSP etc.
SEED
  1. Seed supply reduction.
  • Development of methods for rapid assessment of important spawning and nursery grounds.
  • Provide basic training on spawning and fry breeding techniques.
  • Information exchange and research co-operation in fry rearing and in quality standards for seed.
FEED
  1. Insufficient/ irregular supply.
  • Information and appropriate techniques in nutrient requirement studies for important aquaculture species in the region and in the formulation of quality standards for feed.

Table 9. Suggestions for International/Regional co-operation on environmental impacts of coastal aquaculture.

Resources UsedProblemRegional/International Co-operation
LAND
  1. Land subsidence, mangroves, wetland degradation, salinisation of land and water.
  • Guidelines on economic assessment, particularly on the value assigned to environmental (reversible/ irreversible) and social impacts affecting other coastal resource users.
WATER
  1. Water quality deterioration.
  • Assistance in development of methods suitable for assessing environmental (carrying) capacity of sites in the region.
  • Exchange of information on environmental quality control schemes.
  • Guidelines on hygienic husbandry practices.
  • Provision of information and research on effective treatment methods.
  • Provision of information and research on integrated farming systems.
SEED
  1. Affect on wild stock replenishment/ recruitment.
  • Promotion of research and development on pathogen-free seed.
  • Collate information on experiences of impact of introduced exotic aquatic species on native species and aquaculture production systems. Such information should be made available to Governments for consideration and judicious decision making.
FEED
  1. Pollution due to feed wastage etc.
  • Assistance in manufacturing low pollution feeds based on locally available ingredients.
  • Guidelines for good husbandry practices.
  • Guidelines for farm economics for aquaculturists.

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