2. TOOLS AND METHODS

2.1 INSTITUTIONAL AND STAKEHOLDER ANALYSIS

2.1.1 Institutional analysis

Institutional analysis is an essential part of any new planning and management initiative, especially where a greater degree of integration is sought. The nature and operation of institutions, and their mode of decision making, will have major implications for the implementation of any strategy or planning related to the promotion of sustainable development. The nature of the existing institutions should therefore be assessed, and new institutions, or frameworks for institutional collaboration and joint decision making, should be established if necessary. Great care should be taken with "model" institutional frameworks for more integrated planning. An institutional structure transformed to a new cultural context is unlikely to operate in the same way.

Institutional analysis related specifically to aquaculture and fisheries has been reviewed by Townsley (1996), Pido et al. (1996), and Scialabba (1998). Only a brief summary will be provided here.

Institutional analysis covers both formal and informal institutions. Formal institutions are those such as government agencies, and they typically have a legally defined role, structure, and in some cases, sets of procedures. Informal institutions are those such as business, social or family networks or associations. The latter also have structure and sets of procedures, although these may have no legal or written basis. In either case institutional analysis requires that both structure and procedures are described and analysed. In essence this requires that the following questions be addressed in relation to any planning issue (such as land or water use):

• What are the rules?

• Who decides, and how (i.e. process and decision criteria)?

• Who implements, and how?

• How and when is progress assessed?

• What are the relationships between different institutions (formal and informal)?

The main types of institution which are likely to be relevant to planning and management of aquaculture are:

• Local, district, provincial and national government (formal);

• Agencies and advisors of government;

• Formal and informal business associations;

• Non-governmental organizations (NGOs);

• Religious institutions;

• Town, village or commune decision making structures (formal and informal).

Townsley (1996) presents a summary of the institutions and levels to be considered and the specific tools which can be used to analyse them (Table 2.1). These tools are described in more detail below (Section 2.2.1).

Pido et al. (1996) present a set of guide questions which can be used as a framework for research, and as a basis for discussions and interviews.

2.1.2 Stakeholder analysis

Stakeholder Analysis is related to institutional analysis, but places far more emphasis on individual motivation and/or collective interest, than on structures and procedures. It may be summarized as an approach to understanding a system, and changes in it, by identifying key actors or stakeholders, and assessing their respective interests in that system. It is of particular importance where competition for, or depletion of natural resources is an issue, and is therefore of great relevance to planning for sustainable aquaculture development. It is a necessary starting point for any kind of public involvement, since it will help to define who needs to be involved, and how.

Stakeholders are all those who have interest in the issues being addressed - as measured in terms of welfare or utility. Some are active - they affect the system; some are passive - they are affected by it.

They may be considered in detail because of their:

• importance - as possible beneficiaries of development;

• influence - their power over the success of project;

• or because they can be identified as winners or losers in the development process.

Stakeholder analysis seeks to:

• identify, assess and compare their sets of interest;

• examine inherent conflicts and/or compatibilities, and

• describe and explore trade-offs.

Exploring trade-offs (e.g. short term benefits of income from habitat destruction and conversion, versus long term benefits of biodiversity, storm protection etc.) as perceived by different stakeholders, is of particular importance, and is discussed further in Sections 2.9 and 2.10. It can be used as one method for assigning values and/or ranking objectives and development or management alternatives.

2.2 PUBLIC INVOLVEMENT

The widest possible range of stakeholders should be consulted or actively involved in the planning process, ideally following on from a stakeholder analysis. At minimum, the following should be actively involved:

• existing and potential fish farmers and other aquaculture industry representatives;

• the administering (sectoral) agency;

• the people, individuals or groups in local (affected) communities;

• specialist government agencies;

• NGOs and technical specialists;

• others, such as donors, banks, development agencies, academics

Whatever the particular mix of techniques used (Box 2.1) which may be suitable according to local circumstances, it is important that some basic principles are adhered to (adapted from UNEP, 1996a):

• sufficient relevant information should be provided in a form that is easily understood by non-experts early in the planning process;

• sufficient time should be allowed for stakeholders to read, discuss and consider the information and its implications;

• sufficient time should be allowed to enable stakeholders to present their views;

• the selection of venues and the timing of events should encourage maximum attendance and a free exchange of views by all stakeholders (including those that may feel less confident about expressing their views); and

• responses should be provided to issues/problems raised or comments made by stakeholders, so that confidence in the public involvement and planning process can be maintained.

• provisions should be made for updating the public and providing feedback on progress with the planning;

• more formal planning and management procedures should be integrated with more traditional decision making processes where possible

A variety of relatively standard techniques are available to collect information, identify issues and possible conflicts, and encourage participation and "ownership".

2.2.1 Rapid rural appraisal and participatory rural appraisal

Rapid rural appraisal (RRA), and participatory rural appraisal (PRA) have been widely promoted as tools for promoting more sustainable development, and especially rural development. They have been described in detail, particularly as they relate to aquaculture and fisheries, by Campbell (1996), Townsley (1996), Campbell and Townsley (1996) and Pido et al. (1996). Although their use may follow on from institutional and stakeholder analysis, they may also contribute to such analyses.

The key features of these approaches are the use of a variety of tools and techniques to facilitate the exchange of information and opinion between stakeholders, researchers and planners, and in particular to synthesise information about resource use, exchange and interactions. They include the use of:

• simple maps and transects showing resource use and exchange;

• matrices to show interactions and exchanges between activities, or the allocation of resources through time;

• "history lines" to explore key events or decisions in the past;

• "venn diagrams" to illustrate the nature of, and relationships between, institutions or social groupings;

• ranking exercises to gain insights into perceptions, values and priorities;

• decision trees to discuss and explore the way that complex decisions are made;

• flow charts to exchange information or ideas about processes.

In almost all cases, flexible check lists rather than rigid questionnaires are used to structure the interactions.

The line between rapid appraisal and participatory appraisal is blurred, and many of the tools used are common to both. The key difference is that while RRA seeks to provide the researcher with a thorough understanding of local resources and stakeholders, with a view to more informed and rational decision making at a higher level, PRA implies direct participation of stakeholders in the decision making process, and the tools are used to empower and develop local decision making capacity.

Where comprehensive PRA across all the various stakeholders is not possible, more effective participation of coastal resource users may be facilitated through the establishment of user groups or organisations to represent particular interests in the higher level decision making processes. Care should be taken to ensure that all interests are adequately represented by such organisations.

2.2.2 Socio-economic survey

In some circumstances it may be appropriate to undertake a detailed socio-economic survey. There is a large literature on socio-economic survey techniques and questionnaire design, as well as training manuals (e.g. Miller, 1983; UN, 1989; Weber and Tiwari, 1992), and these should be consulted prior to any major survey initiative.

Full-scale social survey however should be approached with some caution. It is expensive and time consuming, and may be rather inefficient in terms of issues identification compared with the more flexible and participatory techniques described above. It is therefore best used to clarify or explore in more detail important issues that have been raised or identified using RRA or PRA.

2.3 REMOTE SENSING AND GEOGRAPHIC INFORMATION SYSTEMS

Description and mapping is a basic starting point in the identification of many issues, especially with regard to resource use and allocation, and may also form the basis for specific planning interventions related to site selection criteria, and in some cases zoning.

In recent years advances in Remote Sensing (RS) have greatly enhanced our ability to describe and understand natural resources and human activity. In parallel with these developments in information collection, the rapid development of Geographic Information Systems (GIS), has greatly enhanced our ability to store, analyse and communicate this information.

The use of GIS and RS in planning for aquaculture development has been reviewed by Meaden and Kapetsky (1991), Beveridge et al. (1994), Kapetsky and Travaglia (1995), and particular examples are provided by Kapetsky et al., (1987; Costa Rica); Kapetsky et al., (1988; catfish); Kapetsky (1989; aquaculture development in Johore State, Indonesia), Ali et al. (1991; carp culture in Pakistan), Ross et al. (1993; cage culture of salmonids in Scotland), Aguilar-Manjarrez and Ross (1995; Mexico); McPadden (1993; shrimp farming in North Sumatra), Bohra (1996; shrimp farming in Thailand), Kapetsky et al. (1990; Ghana).

The scope of GIS is usually restricted to physical parameters, but attempts have been made to extend it to financial and economic parameters (Hambrey, 1993).

There is little doubt that RS and GIS are useful tools, but they have sometimes been "technically driven" and taken a disproportionate share of the resources allocated to sector and integrated planning initiatives (see for example Part 1, Box 1.10). They also have some limitations. Important factors which are commonly not taken into account in GIS and macro level site appraisal are the availability and cost of land (the major factor in site selection in practice), "micro" site features such as site water supply (canals, dykes, groundwater etc), and the diversity of soil conditions within broader soil type zones.

For local or enhanced sectoral initiatives the use of existing maps, field visits and "rapid appraisal" will be the most cost effective approach. RS and sophisticated GIS are usually more suitable as higher level planning and management tools (for example as part of more ambitious ICM initiatives) where their cost can be effectively spread across sectors, and where the mechanisms for their maintenance can be set in place.

2.4 ASSESSMENT OF ENVIRONMENTAL CAPACITY AND LIMITS TO CHANGE

This topic is dealt with in some detail here because of its potential as a tool for integrating aquaculture into broader coastal management initiatives.

Environmental capacity (sometimes referred to as absorptive capacity or assimilative capacity) is:

"a property of the environment and its ability to accommodate a particular activity or rate of an activity...without unacceptable impact" (GESAMP, 1986)

In practice and in relation to aquaculture, this may be interpreted (GESAMP, 1996a) as:

• the rate at which nutrients are added without triggering eutrophication; or

• the rate of organic flux to the benthos without major disruption to natural benthic processes.

The concept may also be extended to such matters as impacts related to reduction of natural habitat, and impacts on amenities such as scenic value.

The use of environmental capacity and methods of application to aquaculture and environment issues have been discussed by GESAMP (1991a) and by Barg (1992).

Estimation of environmental capacity allows assessments of cumulative or combined impacts and of acceptable levels of environmental change compatible with the goals of coastal management. The estimate of total capacity can be allocated among different uses of the environment (aquaculture, other human users and components of the natural ecosystem) and among users within each category of use (GESAMP, 1996a). The approach provides a potential solution to the "tyranny of small decisions" (Odum, 1982), and the problems of cumulative impact discussed elsewhere in this report. There are some examples of its use for aquaculture, both to estimate the amount of aquacultural production that an area can accommodate, and to allocate this capacity among different users. In general, however, the approach has not so far been widely implemented in relation to aquaculture, no doubt largely because of the lack of quantitative information about causal links between aquacultural wastes and their environmental effects, and the large cost of obtaining and applying such information.

Ideally, the environmental capacity of the whole coastal resource system, including effects of all the various economic development activities, should be addressed within the framework of Integrated Environmental Impact Assessment (Chua, 1997; GEF/UNDP/IMO, 1996).

Quantifying environmental capacity in relation to scenic or habitat quality is at least partly subjective, and should be dealt with as part of environmental target setting (see Section 2.6.1). The following Section deals mainly with the estimation of environmental capacity for nutrient assimilation, which can be calculated more objectively.

2.4.1 General approach to estimating environmental capacity

To be cost-effective, estimation of environmental capacity should only be applied to those forms of environmental impact likely to occur in a given situation. In principle, it need only be applied to the form that becomes limiting first. In practice this may be difficult to determine. A scoping exercise can identify relevant forms of impact with respect to the environment and technologies in question. In the case of intensive finfish and crustacean aquaculture for example, these will normally include the impacts of nitrogen, phosphorus, organic matter, and certain chemicals. In the case of shellfish (especially molluscs) they would include the reduction in the phytoplankton food source.

Once this has been done, prediction of capacity follows in three phases:

• define acceptable limits of environmental change for a particular area or zone (see Section 2.11) in terms of measurable variables ("measurement variables");

• define, and if possible quantify, the relationship between aquaculture (and ideally other activities) and measurement variables;

• calculate the maximum rate or level of activity which will not breach acceptable limits.

Establishing acceptable minimum or maximum limits for measurement variables (such as nitrogen concentration) should ideally be based on quantitative predictions of environmental consequences of the changes in these variables, such as destruction of organisms or habitats, eutrophication, or resource depletion to a level at which it becomes limiting to other users. Environmental standards related to these broader environmental features should have been agreed as a part of setting planning objectives and associated targets. Back-calculations can then be made to give acceptable levels for measurement variables. These are known as "effects based" standards.

In practice the relationship between measurement variables and environmental quality of relevance to the various stakeholders is often difficult to establish, and the measurement variables themselves are commonly used directly as the basis for environmental standards. These environmental quality criteria (in reality indicators) may already exist, derived for other purposes of environmental protection, but which must be adhered to for legal reasons.

If effects-based standards cannot be established, and existing standards are not available or relevant, it may be necessary to start with conservative values, which will provide a reasonable level of protection. These can be refined progressively once the procedure has been applied and its success monitored, as discussed below. Ideally they should be widely discussed and agreed with the stakeholders.

Clarifying the relationships between aquaculture activities (such as feeding), the measurement variables, and the environmental consequences, will depend on an understanding of physical, chemical and ecological processes including:

• the dispersal of nutrients (or other substances) in receiving water;

• the dilution of these substances in the receiving water;

• the degradation or breakdown of these substances in the water column or sediments;

• the adsorption of these substances by sediments;

• the assimilation of these materials by plants or animals;

• the effects of these materials on different components of the ecosystem

In practice the last four of these (discussed in more detail below) are complex and often ignored or approximated, while the first two are addressed using mass balance and dispersal models. These may be relatively simple or rather complex, depending on local hydrology. Some worked examples of the simpler ones (essentially dilution models) are presented in GESAMP (1996a). Simple computerised settling and dispersion models for aquaculture have been developed specifically in relation to cage culture (Gowen et al., 1994) and are also discussed further below. More sophisticated computer models are available to deal with more complex patterns of settling and dispersion (for example those produced by the Danish Hydraulic Institute).

Environmental capacity represents the difference between the maximum or minimum limits of the measurement-variables (calculated or agreed) and current values - the ‘spare’ capacity. It can be converted into units of discharge (e.g. nitrogen) using dilution or dispersion models.

Capacity in terms of discharge can then be allocated among the various uses. Existing uses may have been included in current values of the measurement-variable, or may be separated out to allow reallocation of capacity. Within each use, the total share of capacity for that use is allocated among the various users (i.e., farms). The allocation (e.g. of nutrient loading) can be converted for convenience into units of production, or use of inputs (such as feed) using industry production parameters. If production parameters change (e.g. through the development of better quality feed, technology or management practices) acceptable production can be increased. This serves as an incentive for the development and application of environment friendly technology and management.

The final and, given the large uncertainty generally associated with estimates of limits of acceptable change, crucial stage is the monitoring of aquaculture activity, the measurement-variables, and associated environmental changes. This assesses the suitability of the environmental quality standards (for example, whether those based on measurement variables are suitable indicators for higher levels of environmental quality), and the success of the estimation of capacity, or whether it has been exceeded or under-used. The role of monitoring is summarised below in Section 2.13 (see also GESAMP, 1996a)

2.4.2 Models of phytoplankton dynamics and environmental capacity

Much of the modelling of the ability of coastal areas to support populations of bivalves has approached the question from an aquacultural perspective. The objective of such modelling has been to estimate how many animals can be grown in the area without inducing a reduction in individual growth and a net reduction in productivity of the stock. More sophisticated types of models, however, include various ecosystem-components (physical, chemical and biological) and interactions among them, which permit predictions of impacts of farmed stock on other parts of the system, such as natural populations of filter-feeding animals. Most published studies are more concerned with the effects of natural components on the farmed stock.

The simplest models involve correlations between observed growth-rates of stock and single or multiple environmental variables (Grant et al., 1993). Long-term sets of data for particular parts of the coast can be used to identify the relationship between the total biomass of farmed stock and their growth-rate (e.g. Heral, 1993). This relationship generally describes a curve of decreasing growth-rate with increasing numbers of animals. The trade-off between yield and number of animals can also be expressed as a change in survival of individual animals, or in the time taken for individuals to grow to market-size. Such models are discussed by Heral (1993). Extrapolation from this curve can be used to estimate the capacity of the environment for aquaculture but, since it does not involve quantification of the factors responsible, it does not readily allow other uses to be incorporated.

Partial ecosystem budgets provide an alternative approach to assessing the suitability of an area for aquaculture and, more importantly in the present context, allow prediction of the environmental capacity of an area for aquaculture. These budgets can be based on phytoplankton abundance or productivity, or on other suitable variables such as carbon, nitrogen or energy. Inputs of the limiting variables to the system are balanced against consumption by the farmed stock, natural populations of organisms, burial within the sediments, and loss to adjacent water-bodies, the atmosphere or other neighbouring habitats. In the case of nutrients and phytoplankton, inputs may include regeneration and renewal within the system (from decomposition of organic matter and recycling of the nutrients, reproduction of phytoplankton, etc.) in addition to replenishment through water-movement. The relative contributions of these sources and sinks is site-specific, but the degree of specificity depends on the sophistication of the model, its purpose (how generic it is intended to be) and the amount of information which is available or obtainable to define the parameters of the model. The output from such a model is a prediction of the concentration of the relevant variable (nitrogen, carbon, phytoplankton, etc.) under the conditions of input and output set out in the model. It provides an indication of the relative importance of different sources and sinks, including farms. By altering the sizes of these, predictions can be made of the ability of the system to support larger numbers of farms.

Carver and Mallet (1990) estimated the carrying-capacity of a coastal inlet in Nova Scotia for blue mussels, based on the supply of food. Rosenberg and Loo (1983) made similar calculations for a blue-mussel farm in Sweden based on energy-flow. Fréchette et al. (1991) calculated the flux of suspended organic material into an aquaculture site in France in relation to consumption by the stock, and concluded that stocking-density could be increased and the distance between farms decreased without adverse effects on rates of growth. From a similar perspective of maximising the yield of cultivated stock, Rodhouse and Roden (1987) estimated the potential maximum yield from a harbour in Ireland on the assumption that the stock could utilise all the carbon currently being consumed by zooplankton. Clearly, in such a situation it must be assumed that there will be some ecological consequences and that such a yield is, therefore, probably not sustainable.

The budget-approach to prediction of environmental capacity can be extended to incorporate feedback-loops. For example, abundance of phytoplankton depends on the availability of nitrogen, and affects the rate of growth of mussels. The mussels, in their turn, influence the abundance of phytoplankton both directly, through feeding, and indirectly, through the excretion of nitrogen. More sophisticated models are required in order to incorporate this kind of feedback. As with the budget-models, the ecosystem is divided into ‘boxes’ representing those components of the system relevant to the variables of interest (referred to as ‘state variables’). In the case of a model of the food-supply for mussel-growth, there would be boxes representing the farmed mussels, the natural populations of filter-feeders, the sediments, the water-column, etc. Depending on the level or resolution required, each of these boxes can be resolved into smaller units, such as filter-feeding shellfish and filter-feeding worms on the seabed, filter-feeders encrusting the structures of the farm and filter-feeding zooplankton. Components can also be resolved into smaller spatial units, such as dividing the water-body up into different areas on the basis of their relative flushing-times. Different variables can be linked by sub-models so that, for example, the movement of nitrogen through the system can be linked to the abundance of phytoplankton by a sub-model which estimates production of phytoplankton in relation to the availability of nitrogen, as described in the example of Big Glory Bay, New Zealand (Box 2.3)

In these ‘simulation’ models, flows of energy or materials between compartments are estimated from ‘internal biological fluxes’, such as feeding or sedimentation, modified by external ‘forcing functions’, such as temperature, light or salinity (i.e. factors which are taken as fixed and not subject to feedback). Changes in the variables are then calculated using sets of differential equations. The terms that are included in the equations relating to a particular variable are based on their assumed importance. Subsequent testing of the predictions of the model against experimental data then allows refinement of these equations (by removal or addition of terms) and adjustment of coefficients of the model that determine the fluxes.

Simulation models of populations of blue mussels (Mytilus edulis) have been developed by Brylinsky & Sephton (1991), Smaal (1991) and Grant et al. (1993), for populations of Pacific oysters (Crassostrea gigas) by Bacher (1991), Bacher et al. (1991) and Raillard and Ménesguen (1994) and for populations of American oysters (Crassostrea virginica) by Hofmann et al. (1994). Herman and Scholten (1990) described a simulation model of carbon-flow in the Oosterschelde Estuary, Netherlands, in which blue mussels played a significant role.

The effects of increasing the size of the farmed stock on other biological components of the system, such as the probability of phytoplankton-blooms, can be estimated by changing either the inputs of nutrients via food (e.g., finfish-farming) or the biomass of bivalves (e.g., mussel-farming). Predictions derived from models are sensitive to 'boundary conditions', the values of the state variables at the edges of the system and/or the fluxes across these edges (such as the movement of water and associated nutrients into the system from the adjacent open coast).

Models for allocation may or may not include contributions from natural sources. In general, although the incorporation of these sources is logical, it adds an extra dimension of complexity while contributing rather little to management. Marginal approaches may therefore be more appropriate in most cases.

2.4.3 Models of the input of organic matter to the seabed

Although there are numerous empirical and mechanistic models available for predicting the input of organic matter from marine farms to the seabed, quantitative connections between input and ecological changes have not yet been developed (GESAMP, 1996a). Changes in the benthic fauna caused by accumulations of aquacultural wastes have often been found to fit the general responses to gradients of organic pollution, described by Pearson and Rosenberg (1978). The descriptions by Findlay et al. (1995) of changes in the benthic fauna below salmon-cages in Maine, USA, which did not fit patterns described by Pearson & Rosenberg’s model, however, illustrate the way that temporal and spatial variability can obscure predicted patterns. As a consequence, even though rates of input of wastes (and the nutrients they contain), rates of accumulation of waste (input minus decomposition and resuspension), rates of release of sulphides and nutrients, and even rates of microbiological activity can be predicted, consequent changes in the benthic fauna are only predictable, at best, in broad terms.

Toxicological data on effects of decreased concentrations of oxygen or increased concentrations of microbial metabolites (e.g., sulphides, ammonium) on benthic organisms provide a potential guide to maximum levels of organic input consistent with protection of benthic communities. The reliability of such data, usually obtained from laboratory studies, in the natural environment is, however, open to question. Studies in British Columbia showed increased but variable toxicity of sediments from below fish cages to a range of species of invertebrates (EAO, 1997b).

Various guidelines for maximum rates of input of organic matter have been estimated on theoretical grounds taking into account factors such as rates of dispersion, resuspension and microbial decomposition (e.g., Hargrave, 1994). Findlay and Watling (1994, 1997) estimated theoretical maximum rates of assimilation of organic carbon by sediments based on the ability of local water currents to supply enough oxygen to prevent the overlying water from becoming anoxic. They used this model to predict situations where sediments would become anoxic and mats of anaerobic bacteria would develop. Empirical data have also been used to develop guidelines, such as correlations between rates of input and loss of diversity of the benthic fauna (EAO, 1997b). Most of these estimates have been developed for cold-temperate regions of the world and are unlikely to be directly transferable to warmer climates (e.g. Angel et al., 1995).

Aure and Stigebrandt (1990) used a similar approach to model capacity in terms of level of input of organic waste consistent with maintaining levels of dissolved oxygen, as an adjunct to the LENKA system in Norway (previously summarized in Box 1.2 of Part 1). Inputs of nutrients and organic waste to the fjord from excretion by the stock and from waste food were estimated and used to predict depth-profiles of concentrations of nutrients and dissolved oxygen. Environmental loading of organic matter and nutrients from fish-farming was estimated from published data on excretion rates of nutrients by the stock, and rates of deposition and microbial decay (about 10% per year). Estimates of rates of consumption of oxygen by the sediments were also made from these figures, including that consumed in the water column by oxidation of ammonium released from the sediments. For a given loading of nutrients or organic waste, the response of different systems may be quite different, depending on local factors such as the surface area and volume of the water body, rate of flushing and vertical stratification. The supply of oxygen to the sill-basin of fjords is dominated by the inflow of new water from outside, rather than by vertical mixing within the fjord, with the time-scale for renewal of oxygen being the same as that for renewal of water. The rate of inflow of new water is, in turn, dependent on the rate of change of water density in the sill-basin. As this water becomes less dense, it rises and is replaced by oxygen-rich water drawn in over the sill from outside the fjord. The rate of reduction in density, R (hence the name of the so-called ‘R-model’), relative to the rate of consumption of oxygen determines the minimum concentration of dissolved oxygen that is likely to occur in the sill-basin.

The predictions presented by Aure and Stigebrandt were based on the assumption that the farm was sited over a depositional (rather than erosional) area of seabed. In erosional areas, wastes are likely to be dispersed further and, therefore, more thinly and, since rates of oxygen consumption by the waste is proportional to its depth, oxygen will be consumed at a larger rate. The converse of this assumption is that, in areas where flushing rates of water are rapid, dispersion of waste will reduce its rate of accumulation and, hence, its environmental impact.

Aure and Stigebrandt modelled the exchange of water between the fjord and the adjacent coast, and the environmental effects in the surface and intermediate layers of the water column in the fjord caused by fish-farming using a numerical, time-dependent model of the fjord. The model was horizontally-integrated but had high vertical resolution. The state variables (i.e. the variables that were modelled) were salinity, temperature, concentrations of oxygen, nutrients, suspended particulate organic matter and dead organic matter on the seabed. Application of the model requires time-series data from outside the fjord on salinity, temperature, nutrients and suspended organic matter at several depths down to below the level of the sill. Time series of daily meteorological and hydrological data are also required. The model predicts the vertical distribution of organic matter in the water column and the input of organic matter to the sill-basin, among other factors. It suggested that release of nutrients in bio-available form into the surface waters by the caged fish would stimulate production of phytoplankton inside the fjord. This material would not, however, sink down into the sill-basin because exchange of water between the fjord and the adjacent coast was sufficiently rapid that this material would be transported out of the fjord. Lack of sufficient light would prevent additional production by phytoplankton in the sill-basin, despite the availability of nutrients released from the sediments. Nutrient-fluxes in the water-column above the sill-basin were dominated by exchange between the fjord and the adjacent coast. Consequently, concentrations of nutrients were similar between these two bodies of water, despite inputs to the fjord from land drainage, the fish farms and from vertical mixing of nutrient-enriched water from the sill-basin.

As a means of predicting effects of nutrient enrichment from inputs of organic matter, Aure and Stigebrandt’s model can be extended to other systems than fjords and to other sources of input than finfish-farms. Application to other systems would require estimation of terms in the model relating to vertical mixing and horizontal exchange of water appropriate to the system in question.

2.4.4 Tropical versus temperate systems

Most of the work on environmental capacity has related to marine cage culture and shellfish culture in temperate regions. Although the same overall approach can be taken, there are likely to be significant differences in tropical systems. For example, measurements of organic matter decomposition in sediments under fish cages in the Gulf of Aqaba suggested that the capacity of sediments to absorb organic matter loadings may be 3-4 times greater in warm than in temperate waters (Angel et al, 1995). There has also been some work relating to shrimp farms in Latin America (Chamberlain, 1997).

The further development of models or suitable guidelines which could assess in a broad way the capacity of coastal environments for different forms of coastal aquaculture, or for nutrient/chemical assimilation in general, would be useful to government planners, as well as investors and insurers, who could assess the risks to environmental sustainability and plan accordingly.

2.4.5 Relation to other components

Environmental capacity estimates are closely related to technology assessment, which should assess among other things waste emissions per unit production (Section 2.5). Since environmental capacity must be defined in terms of some environmental index or change, which may be partly subjective, the majority of stakeholders must agree the nature of allowable or acceptable change (Section 2.6.1). As noted above, environmental capacity estimates may be directly associated with activities within a defined zone (Section 2.11).

2.4.6 Conclusions and recommendations

1. Environmental capacity assessment can be important in clarifying and operationalizing environmental targets and objectives, and may serve as the basis for a range of planning and management tools and interventions;

2. Significant uncertainty is associated with environmental capacity estimates, which may cause over or under-protection. Risk analysis may be used to address these issues;

3. In view of these uncertainties, the process for assessing capacity must be made both public and transparent;

4. Estimates of environmental capacity should be used alongside other techniques to inform the process of setting objectives and targets, and developing incentives and constraints, rather than to define them;

5. The process should be iterative, starting with simple, conservative methods and rough estimates that are progressively refined (estimate, monitor, refine), including information from other sources. This is of particular importance in developing countries where finance and capacity to undertake more sophisticated assessments may be lacking;

6. Feasibility and utility will vary with amount and quality of information available, scale, and availability of resources;

7. The value of accurate assessments of environmental capacity will depend upon the likelihood of environmental standards being breached. Where these are unlikely to be breached because of social and economic constraints to development, accurate environmental capacity assessment may not be cost effective.

2.5 TECHNICAL AND ECONOMIC ASSESSMENT

A comprehensive description of the technical, economic and resource use characteristics of different technical production systems or species is a prerequisite for the rational appraisal and comparison of the sustainability of different development options. It is basic information needed for any kind of integrated and strategic planning or market intervention.

Ideally such an assessment would include:

• screening for technically feasible development options;

• description of location and site requirements;

• market assessment;

• standard financial analysis, investment appraisal and sensitivity analysis;

• profile of resource use and waste output;

• profile of socio-economic characteristics;

• risk analysis;

• synthesis - comparative economics and technical appraisal of different options; sustainability profile

2.5.1 Screening

Basic information should be collected on a range of feasible development options, based on successful existing activities or technologies, appraisal of potential new developments/technologies, or technologies which are successful elsewhere and which might be transferred to the area in question.

The main criteria for preliminary screening should be comparative advantage; i.e. does the area in question have any obvious advantage in pursuing a development or technical option in terms of:

• suitable natural environment and resources (e.g. temperature, water quantity and quality, soils, elevation, topography, etc);

• price, quality, and consistent availability of inputs;

• skills and labour costs;

• access to processing facilities and markets; and

• infrastructure and support services

While screening on the basis of suitable natural environment is often done very thoroughly for aquaculture, the other criteria are often given far too little weight, and development money is often wasted as a result. It is essential that all of the above criteria are considered as early as possible in the planning process.

2.5.2 Location and siting requirements

The requirements of different activities or technologies in terms of suitable or optimal sites (micro level) or locations (macro level) are key considerations for assessing comparative advantage, and may form the basis of planning interventions related to location. Poor siting and location has been a significant factor in the failure of aquaculture in some areas, and excessive environmental impacts in others. Any technical and economic assessment of aquaculture and other activities in the coastal zone should therefore address site selection criteria. Site selection issues for aquaculture in general have been discussed by Huguenin and Colt (1989) and Barg (1992).

Aquaculture is highly diverse with radically differing requirements in terms of site characteristics. However, water quality is generally the key. Most species grow better in high quality water, and some cannot survive without it. Some species have very particular requirements in terms of both water quality and salinity. Upstream and land-based activities and pollution must therefore be taken into consideration. At the same time, the effects of aquaculture on downstream activities should be considered.

Actual site requirements are species and technology dependent, but can be divided into two main groups:

• those aquaculture practices that require the conversion of existing uses or natural ecosystems (e.g. conversion of agricultural land or wetland for coastal shrimp or fin-fish ponds);

• those that do not require conversion (e.g. floating cages and rafts for fish or shellfish in bays and estuaries; cockles on mangrove mudflats; giant clams amongst seagrass or corals).

Brackishwater ponds

The requirements for brackishwater ponds are demanding, and success depends critically on site quality (Boyd, 1995; Yoo and Boyd, 1994; Hayek and Boyd, 1994; Simpson and Pedini, 1985). Sites or areas to be avoided include the following:

• sandy soil, rocky soil, or both;

• sites with large trees;

• areas with intense acid sulphate soils and containing too high organic matter (peaty soil); and

• areas near industrial or highly populated zones.

Sites that are rocky or sandy are generally considered to be unsuitable because they are difficult or expensive to work. There are technologies for developing aquaculture ponds in sandy soils (pond liners, soil amendment techniques) which may be economically feasible in some areas under some conditions.

Forested sites with old and big trees are common in many tropical swamplands, especially as they become more elevated owing to yearly accretion and silting. Although these sites can be developed under a long-range programme, the expense involved in thoroughly preparing them for aquaculture may be great. They may also have significant alternative value in terms of biodiversity.

Coastal areas with acid sulphate soil are common in tropical regions. Although they are not usually suitable for shrimp ponds, some areas, where the acidity is not too intense, can be used for brackishwater farms after reconditioning the pH of the water by liming and/or flushing and various forms of soil treatment. A good example of aquaculture development in an acid sulphate area is the Rangsit area of Thailand. Areas with peaty soils and high acidity (such as Tamban Laur in Kalimantan) are not suitable for aquaculture development.

Industrial wastes from industrial complexes, and domestic wastes from highly populated areas alter the coastal environment significantly, making it unsuitable for aquaculture. There are two types of adverse effects resulting from industrial and domestic wastes: the direct effect, which is the toxicity of the wastes themselves; and the indirect effect such as oxygen depletion. Additionally, such wastes may result in the eutrophication of coastal waters, possibly causing red tides, which are detrimental to cultured species.

For extensive ponds location on the mid to upper tidal range is preferable. Those sited too high will require much excavation work to bring them to a workable elevation for effective water management. Additionally, even if excavation can be conveniently done, the question of where to dump the extra soil arises. Extra soil can sometimes be used to build big main bunds, and pumps may be used to bring the needed water, but this can lead to high costs of operation.

There are many areas in the world where the daily and annual ranges of tides are very great, so that tidal (generally extensive) shrimp pond construction would be impractical. Areas where the daily or monthly range usually reaches as much as 5 meters or more are not generally suitable. In some areas, the absolute range of tides during the year may reach as much as 10 m. Under these circumstances, extremely big bunds requiring much soil will be needed both to withstand pressure from outside during a very high tide, and to prevent total drainage during a very low tide. Any mistake in the water management by the shrimp or fish farmer in such circumstances can produce disastrous results.

Intensive shrimp and finfish farms are generally best sited just above the tidal range, to allow for complete drainage of ponds during harvest and conditioning. This necessarily implies the use of pumped seawater.

A detailed example of resource appraisal for the identification of suitable areas for brackishwater aquaculture development is provided by McPadden (1993).

Marine cage culture

There is a significant literature on site selection for marine cage culture (see, for example, Beveridge, 1996; Huguenin, 1997; Levings et al., 1995). Critical considerations are:

• adequate shelter;

• moderate current (too strong creates problems with the set of nets, anchoring, and may be excessive for the fish; too weak and oxygen or metabolites may become limiting);

• adequate depth (to keep nets at a minimum distance from decaying organic matter and to ensure high water quality);

• ease of access for the operator;

• minimal security (poaching) problems;

• minimal predator problems;

• minimal fouling;

• suitable salinity regime (dependent upon species);

• access to a reliable supply of reasonably priced inputs;

• access to dealer distributor networks and markets;

• distance from other operators (especially where disease is a problem)

A review by Washington State provides guidelines on siting and management of salmon net-pen culture (Washington State Department of Ecology, 1986) and contains empirically-based rules of thumb on the depth and current speed required to minimise benthic impacts of waste below farms.

Shellfish culture

The Ministry of Agriculture, Fisheries & Food in British Columbia has developed a system for appraisal of sites for shellfish farming (Cross and Kingzett, 1992). Many of the criteria listed above for cage culture are relevant, but in addition, the quality and abundance of naturally occuring planktonic food is critical for success, and in some cases a local supply of wild seed is also necessary.

2.5.3 Market assessment

Market assessment is increasingly important as aquaculture becomes more competitive. Lack of attention to markets and marketing has had severe impacts on the development of both new and established aquaculture industries, and should form a major component in any planning exercise. Market assessment and marketing has been thoroughly dealt with elsewhere (Chaston 1989, Bjorndal 1990, and Shaw, 1990) and will not be further reviewed here.

2.5.4 Financial analysis

Preparing a financial profile (estimates of capital costs, operating costs, revenue) for a particular type of enterprise, or a partial budget related to a specific technology or management practice, is relatively straightforward (see for example Shang 1990). If necessary a more comprehensive economic/project appraisal can be undertaken for any major components of a plan (see e.g. Gittinger, 1982).

There are rather few examples where simple financial analysis has been used to compare a range of development options, technologies, or species, and such an approach has only rarely been incorporated in ICM initiatives in a developing country context. In practice this is relatively simple, using the kind of format presented in Table 2.2, which can be used to generate indicators of financial performance such as those summarised in Box 2.4.

2.5.5 Risk assessment

Agricultural and aquaculture projects are particularly vulnerable to the uncontrollable externalities of weather, disease, and world markets. Aquaculture development is littered with examples of failed projects that fell foul of one or more unexpected problems. Any technical-economic profile of aquaculture must include a thorough risk assessment. This is rarely done in practice, especially for small scale developments.

It is important to distinguish between risk and uncertainty. If an undesirable event may or may not happen, there is a risk associated with it. If the probability of this event is known, then the risk is quantifiable. If the probability of the event is unknown, then we are dealing with uncertainty, which (by definition) cannot be quantified. For example, the probability of achieving a particular food conversion rate on an intensive farm could be estimated from industry surveys, and the probability of feed costs could be calculated. Disease, which can drastically affect returns, is much less easy to predict, and is therefore associated with great uncertainty.

The risks associated with aquaculture can be reduced but not eliminated through good siting, design and management. The risk of disease is likely to be higher where there are many aquaculture enterprises in the same area.

There are many different measures and indicators of risk and risk exposure. Whenever these are used or quoted, the actual nature of the risk should always be discussed.

Time to market is the simplest measure of financial risk. The longer it takes to make a product or grow a crop, the higher the working capital requirements (see below), the greater the likelihood of crop loss due to climate or disease, and the greater the risk and uncertainty associated with the costs of inputs and the value of the output (market price).

Working capital^[22] requirements/crop/ha is a relatively simple measure of risk exposure. Combined with the probability of crop failure or low performance, this gives an indication of the likelihood and scale of potential losses on an individual production cycle, which may cause serious cash flow problems and jeopardise project viability.

Break-even production rates (i.e. the output or production required to just cover operating costs) can be compared with the actual distribution of production rates in the sector (locally or elsewhere) to give an indication of risk and scale of losses.

Sensitivity analysis involves assessing the sensitivity of the financial model to changes in key variables and parameters such as the cost of labour or inputs, or the rate of production. For example, the sensitivity to feed costs might be calculated as the percentage increase in production cost for a 10% increase in feed price. Alternatively, the percentage increase in feed price that would result in zero profit might be estimated, and the likelihood of such an increase might be estimated. This can be done for both prices/costs and production parameters, and may be presented in a comprehensive table. If possible, the probability associated with a change in parameter value should be indicated or discussed.

The risks relating to market prices may be judged by price elasticity (if this information is available) combined with sensitivity analysis as above. If price is elastic, it declines rapidly as total production increases; inelastic prices on the other hand are relatively stable despite significant changes in production.

Table 2.2: Example of financial model or profile with resource use indicators: Cage Seabass farm, Thailand

2.5.6 Resource utilization and the generation of goods and services

Resource utilization

Planning for sustainable development is all about promoting more efficient utilisation (and in some cases distribution) of resources. Indeed, the efficiency of resource utilisation and conversion is one of the few objective and simple criteria for assessing sustainability. Profiles of the resource characteristics of different technologies or development options, which can be realistically compared, are therefore essential.

Indicators for sustainable resource utilization could be:

- the efficiency of conversion of nutrients and raw materials into usable product; or

- the quantity of raw materials or nutrients used per unit product, or per unit land.

Food conversion efficiency is the classic example of the former.

In practice this is only part of the story, since it ignores absolute quantity and economic efficiency (Hambrey, 1998). Although a process may be relatively efficient in terms of converting one material into another, if the scale of activity required to meet social and economic objectives is very high, then the absolute quantity of waste may also be high. Conversely, a process or technology may be rather inefficient in terms of resource conversion, but the returns may be so high that the scale needed to meet social and economic objectives is very small, and the absolute level of waste production is low. In order to take account of this, the following general economic indicator of resource use efficiency (and therefore sustainability) may be used:

- resource use, or waste production, per unit economic or social benefit

Specific indicators of this kind include a wide range of simple ratios, which may include both environmental and social elements. For example:

• land/unit income;

• land/unit profit;

• land/NPV^[23]

• nutrient waste/unit income;

• nutrient waste/unit profit;

• land/employment;

• investment/employment;

• nutrient use/employment;

• nutrient waste/employment;

• annual cost of raw materials/employment.

In the case of aquaculture and agriculture for example, it may be informative to calculate and compare income generated per kg of nitrogen consumed, per kg nitrogen discharged, or per kg protein consumed. The relative weights given to these various indicators will depend on local conditions in terms of nitrogen supply, nitrogen pollution, or protein shortage.

There is also a range of more specifically social-economic indicators. The potential for increased wage income from different types of enterprise can be assessed using return on labour (the cost of labour that would reduce profit from an enterprise to zero). If land is in short supply, this figure can be divided by the corresponding land requirement to give potential for increased earnings per unit area of land.

As noted above, all of these indicators can be simply generated from a standard financial analysis so long as quantity as well as price/value of the various inputs and outputs are included. An outline analysis which generates some of these indicators is presented in Table 2.2, and a summary of a comparison between a range of model enterprises is presented in Table 2.3. This type of analysis typically raises many questions and provides a useful framework for discussing sustainability issues. As with all such analyses, much depends on the assumptions made in setting the levels for variables and production parameters.

Table 2.3: Example of a summary of financial and resource use indicators for a range of model coastal enterprises (Hambrey, 1998)

Assumptions/parameters:

- Seabass: 30 hanging cages; 30MT production; trash fish.

- Intensive shrimp: 3ha; 7.5mt/ha/yr (1.5 crops); pellet.

- Milkfish: 4mt/ha/yr (2 crops); fertilizer + feed supplement.

- Rice 1: intensive; 6mt/ha/crop; 2 crops pa.

- Rice 2: improved traditional; 3mt/ha/crop; 2 crops pa.

In addition to these "efficiency" indicators, temporal and seasonal patterns of resource use associated with particular enterprise or technologies should be described, and in particular, seasonality related to labour use.

Value of goods and services

It is also important to describe, and if possible quantify and value, all the goods and services generated by an activity, over and above those which accrue to the operator/farmer. In other words to examine the externalities. This is discussed further in Section 2.7 (Environmental Assessment), and Section 2.8 (Cost Benefit Analysis). A useful example of such an analysis, applied to a range of management options in the coastal zone (including aquaculture), is provided by Gilbert and Janssen (1997).

2.5.7 Socio-economic characteristics

As noted above, the financial analysis can be used to generate some simple but useful socio-economic ratios or indicators, such as employment potential and wage potential, either in absolute terms, or in relation to natural and human resources. In addition, development options should be described in terms of:

• overall potential net income generation to the local economy;

• the likely distribution of income within the local economy;

• barriers to entry (for example requirements in terms of skills, capital, access to natural resources);

2.5.8 Sustainability profile

Ideally the technical and economic assessment as described above should be summarised in the form of overall "sustainability" profiles of alternative development options and technologies, so that rational comparisons can be made, trade-offs assessed, and planning and management decisions made. This information is essential for any kind of environmental assessment, cost benefit analysis, or participatory decision making (Sections 2.7, 2.8, 2.9)

2.5.9 Technology assessment of aquaculture in practice

It is beyond the scope of this report to summarize the technical, economic and environmental profile of different forms of coastal aquaculture. However, the environmental profile is particularly important in terms of the integration of aquaculture into coastal management, and, despite the enormous range of variation in species and systems, some general points can be made:

• shellfish (bivalve mollusc) culture does not involve the use of feed inputs, and therefore does not lead to a net addition of nutrients or organic matter to the wider environment. However, it does lead to a local accumulation of nutrients through the deposition of faeces and pseudofaeces, and the regeneration of nutrients such as ammonia;

• the use of "trash fish" for finfish culture results in highly variable food conversion ratios, but usually in the range of 4 to 8 (wet weight). In other words, for every kg of finfish produced, the equivalent of 3-7kg will be dispersed to the environment in the form of nutrients and organic matter;

• the use of "trash fish" for lobster culture (fattening) in the tropics may result in very poor food conversion (up to 30);

• the use of chopped trash fish, as opposed to small whole fish, will have a significantly greater polluting effect;

• pollution related to the use of moist pellet, which may include a fresh fish component, is highly variable depending on the quality of the pellet;

• pollution from the use of dry pelleted feed for salmon has been reduced radically as a result of better feed formulation and pelleting technology. Food conversion ratios have been reduced steadily from around 1.5 to less than 1; phosphorus content of feeds has also been reduced;

• the quality of dry pellets available for tropical marine finfish is much lower, and food conversion ratios correspondingly higher;

• shrimp generally are given a high protein diet and are rather poor converters of dry pelleted feed, with conversion rates typically between 1.5 and 2. This is expected to decrease as feed management and feed formulations develop and improve, similar to the reductions seen in the commercial salmon industry over the past twenty years.

Detailed discussions of resource use and waste output can be found, for example, in the following publications:

• tropical marine finfish cage culture (Angel et al., 1995);

• salmon cage culture (Brown et al., 1987; NCC, 1989; Washington Department of Fisheries, 1990; Ackefors and Enell, 1994; Beveridge, 1996; EAO, 1997a);

• shellfish culture (NCC, 1989);

• shrimp culture (Chua et al., 1989; Briggs and Funge Smith, 1994)

• brackishwater finfish culture (de la Cruz, 1995)

2.6 TARGETS AND STANDARDS

A significant part of strategic planning is the setting of targets relating to particular sectors or activities. Sector targets may be set in terms of total output, or total allocation of resources (e.g. land/water). They may be set in relation to an entire coastal area, or in relation to specific zones.

Output targets have commonly been associated with planning in centrally planned economies to meet social and economic objectives, with rather little emphasis on land or resource use, or environmental consequences. In contrast, they have generally had a minor role in integrated coastal management, where the emphasis has usually been on environmental objectives. Ideally sector targets should be informed by a joint consideration of economic, social, and environmental objectives. The way in which environmental capacity may be used to define sector targets (or limits) has already been discussed above in Section 2.4.

2.6.1 Environmental targets

If environmental objectives are to be achieved, there must be agreed criteria for measuring progress, and associated targets or standards to work towards or stay within. Environmental targets may be of two kinds: area based or quality based. Area related environmental targets (such as natural reserves) have been widely used, and are normally realised through some form of zoning (Section 2.11). Output or quality based targets are generally more difficult to define, and have been rather little used. However, they offer a potentially powerful tool for coastal management, since they allow for cross boundary effects.

The most commonly used quality based targets are water quality standards (e.g. acceptable nitrogen, phosphorus, BOD, COD, oxygen concentration etc). These have been defined for most developed countries in relation to particular areas or uses of water and are widely quoted in the literature. For planning and regulatory purposes they have often been applied to individual enterprises in the form of discharge consents. Unfortunately, their application is sometimes rather arbitrary, with limited analysis of the relationship between the standards in effluents and receiving waters, the wider environment and other resources. This is particularly the case in developing countries, where standards derived from temperate countries are sometimes applied indiscriminately to very different climatic, physical and ecological systems.

However, applied at a broader level (e.g. in relation to a bay, lagoon or estuary) these standards may serve as a starting point for calculating environmental capacity, which can then itself be used as the management tool. This approach takes as its starting point the overall quality of the wider environment, and is therefore more likely to meet environmental and sustainability objectives.

Another simpler approach is to set targets for the reduction of pollutants which are known to reduce environmental quality. While ideally this reduction should be based on environmental capacity, in practice this may be difficult, and arbitrary targets for reduction may be taken as a starting point. An example is presented in Box 2.5.

Monitoring the measurement criteria (such as water quality) in parallel with development activity will not only allow for objective measurement of progress against objectives, but will also allow for a steady refinement of understanding of the relationship between different activities and overall environmental quality and productivity.

2.7 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT

Environmental assessment in its various forms is an important tool (or rather suite of tools) in planning for more sustainable development, and in particular as a basis for assessing and comparing alternative development options. Its application in general terms, and specifically the important distinction between sector level and farm level assessments, has been discussed in Part 1 (Section 1.5.8).

It is beyond the scope of this report to cover EA methodology in detail, nor is this necessary. Excellent general reviews and up to date guidelines are available (e.g. ADB, 1991; UNEP, 1996a; UNEP, 1996b), as well as those specifically designed for aquaculture (UNEP, 1990; UNEP, 1988; GESAMP, 1991a; Barg, 1992; NORAD, 1992; GESAMP, 1996a; Hambrey et al., 2000).

2.8 COST BENEFIT ANALYSIS (CBA)

Despite being an important planning and development tool, cost benefit analysis has been rather little used in relation to aquaculture development, and it is therefore worth reviewing it briefly and assessing its potential.

There are four component stages to cost benefit analysis:

1. the delineation of the boundary of the analysis (e.g. regional aquaculture development project);

2. the identification of costs and benefits (e.g. provision of infrastructure (cost); increased fish supply (benefit));

3. the valuation of the costs and benefits in two stages:

a) financial evaluation (based on market prices for commodities);

b) conversion of financial to economic values (e.g. expressed in terms of opportunity costs, to allow for market imperfections in the allocation of resources between alternative uses);

4. Comparison of economic costs and benefits over time under various alternative scenarios to assess the net economic benefit (value) returned.

There is a variety of approaches to the valuation of non-traded goods and services ("intangibles"). Some are based on surrogate market techniques, such as the effect of an environmental feature or change on property values, or the transport costs incurred in accessing an environmental benefit. Others - generally known as contingent valuation - are based on the creation of a hypothetical market, in which peoples willingness to pay (WTP) or willingness to accept (WTA) is estimated using interview or questionnaire techniques. The latter may be used in respect of environmental quality and biodiversity issues. These approaches have been widely described in the literature (e.g., Pearce and Turner, 1990; Dixon and Scura, 1994; Grigalunas and Congar, 1995; Kahn, 1998), and in relation to the valuation of ecosystem function reviewed recently by Costanza et al. (1997).

It is worth noting that valuation of intangibles is commonly done in company accounting. These may be simply stated as intangible benefits with no economic value attached or, as in the case of brand names and goodwill, an economic value can be negotiated or assigned.

The performance of enhanced sectoral or integrated coastal management can be evaluated in terms of the achievement of particular objectives. In the case of an objective related to optimal allocation this will be defined in terms of the achievement of multiple objectives (environmental, economic and social). Economic analysis can be used to assess the outcome of resource allocation based on multiple objective criteria.

Where comprehensive CBA is not used, economic analyses can nonetheless be used to shed light on specific issues such as the "costs" of pollution or habitat degradation associated with particular activities. Where actual costs are difficult to estimate, the "opportunity costs" associated with not developing or polluting resources can be estimated, and compared with the possible negative impacts. In other words it can provide information on the nature of "the trade-off" between competing uses of coastal resources, which is vital for economically sound and well informed decision making.

Recent texts on cost benefit analysis, which increasingly emphasise environmental costs and benefits, include Johansson, 1993; Hanley and Splash, 1998; Brent, 1996; and Dinwoody and Teal, 1996.

2.8.1 Experience review

From the literature, there are indications that economic approaches such as CBA are increasingly used in coastal zone management, but mainly in developed countries. A typical example would be in the assessment of coastal engineering schemes. Experience and application in developing countries are much less. World-wide, the economic investigation of aquaculture within the context of broader coastal management initiatives has been minimal.

Ruitenbeek (1992) provides an example relating to conservation and development of coastal resources in Iryan Jaya. Hambrey (1993) provides examples of economic calculations relating to the economic "trade-offs" between shrimp farming, alternative uses of mangrove areas, the nursery function of mangrove, and mangrove conservation in Indonesia. Other recent examples of resource valuation in the coastal zone include Gren and Soderqvist (1994), and Gilbert and Janssen (1997)

2.8.2 Strengths and weaknesses

The strength of CBA lies in the unifying nature of the analysis, and the rigour which is implicit in the identification of costs and benefits. The perceived weakness is the application of theoretical and often abstract economic concepts to real world situations. Crucially, the issue of valuation, especially in respect of non-traded goods and services, is one that has generated much debate and controversy. Contingent valuation and related techniques are generally costly, and are associated with a variety of limitations and theoretical problems.

2.8.3 Conclusions and recommendations

1. economics provide a key perspective and set of methodologies for the establishment and assessment of optimal resource allocation in the coastal zone, and should be used whenever possible;

2. economic methodologies are increasingly used in the coastal zone, but mainly in developed countries. This should be expanded to developing countries.

Contingent valuation techniques should be treated with caution. However they are important evolving tools and their weaknesses can be addressed in various ways:

3. the limitations of the techniques and their implications for the reliability of the results must be understood by practitioners and decision makers (this becomes more difficult with broader participation in decision making);

4. they should be used in association with other forms of analysis (e.g. qualitative participatory approaches as described below) to provide corroboration and additional perspectives;

5. efforts should be made to test and improve methodologies.

2.9 CONSULTATIVE AND PARTICIPATORY APPROACHES TO ALLOCATION DECISIONS

Several authors have suggested alternatives to valuation and CBA as a basis for decision making. These include the estimation of trade-offs with alternative activities that can be valued (for example what would be the opportunity cost of conserving bio-diversity rather than clearing an area for development?) and damage schedule approaches (Knetsch, 1994; Chuenpagdee, 1996). The latter are forms of multi-criteria decision analysis (MCDA) and are usually based on a series of pair-wise comparisons of alternative objectives, strategies or specific developments, in order to identify overall preferences or make allocation decisions. These and other techniques for decision analysis have recently been described in detail by Rios (1994) and Lootsma (1999). Most of these techniques depend upon expert and/or community estimates of relative (rather than cash) value of different allocation decisions.

Community involvement is a key feature of all these approaches. The various participatory techniques described above under "issues identification" (see Table 1.2) are equally applicable to decision making.

One weakness of these approaches, especially where levels of public participation are high, is that the outcome will depend to a great extent on the quality of information available to those involved in the decision making process. Those lacking technical expertise or practical experience will find technical information difficult and inaccessible. These approaches must therefore be undertaken in parallel with increased accessibility and exchange of information. This implies significant expense.

A second limitation relates to the problem of minority interests. These techniques imply decision making related to majority preference, and may take little account of specific interests. The responsibility for taking these interests into account must still rest with government and its representatives.

2.10 CONFLICT IDENTIFICATION AND RESOLUTION

The process of promoting greater co-ordination and consultation between government departments, agencies and stakeholders during the planning process may lead to reduced or increased conflict. Areas of common interest, or conflicting interest, are likely to be revealed during issues identification and objective/target setting, and during the application of specific tools such as Cost Benefit Analysis and EIA.

There are four main approaches to resolving conflict:

• Litigation (court judgement);

• Arbitration (binding 3rd party solution; parties agree on third party (arbitrator));

• Mediation (3rd party (mediator) facilitates agreement; agreement may be contractual);

• Negotiation (discussion and agreement between parties)

The nature and strengths and weaknesses of the four approaches to conflict resolution are discussed in detail in Scialabba (1998) and will only be summarized here.

If an integrated planning initiative leads to litigation, it has clearly failed, since one of the objectives of more integrated planning is to resolve or pre-empt resource use conflict. Indeed, it is arguable that the whole process of more integrated planning is a form of mediation between the various coastal resource users and government sectoral interests. Litigation will not therefore be discussed further here.

2.10.1 Arbitration

Arbitration is "a process in which a neutral outside party or panel meets with the parties to a dispute, hears presentations from each side, and makes an award or decision. Such a decision may be binding on the parties if they have previously agreed that it should be" (Scialabba, 1998).

The advantages of this process are that the parties themselves can choose the arbitrator and agree the rules, and are therefore more likely to be satisfied with the outcome than they would be under litigation.

The disadvantage to the parties is that they relinquish control over the final decision. Much depends on the competence of the arbitrator, and there is rarely any opportunity of appeal.

2.10.2 Mediation

Mediation is a process... "in which an outside party oversees the negotiation between two disputing parties" (Scialabba, 1998). The mediator is neutral and makes no judgement, but rather facilitates the process of reaching agreement.

The mediator may be able to restore communication between alienated parties, and help them discover common interests and objectives, particularly in relation to the conflict. The mediator can also generally facilitate by focussing on promising solutions and stimulating ideas, or offering an unbiased interpretation of information or research, or helping to identify research needs and approaches.

Mediation can lead to more creative solutions than arbitration, which are fully supported by both parties, and may lead to genuine long-term improvements in relations between different interests.

2.10.3 Negotiation

Negotiation is the process in which the parties to a dispute meet to try to achieve a mutually acceptable solution.

The disadvantage relative to mediation is that issues may rapidly polarize in the absence of a neutral third party.

2.10.4 Techniques

Various techniques can be used to enhance the chances of success in all cases. These include:

• clear identification of interests;

• joint fact finding;

• informed dialogues;

• joint/creative problem solving and identification of alternatives;

• identifying opportunities for mutual gain; and

• clear identification of implementation procedures for agreed solutions.

2.10.5 Pre-conditions

Conflict - in the long term - is likely to be resolved only if the following conditions prevail:

• an impartial mediator (where one is used);

• equal status and access to information and support services for the various parties;

• the option of withdrawal at any time;

• no forced agreement

Arbitration and mediation both require great inter-personal and problem solving skills.

2.11 ZONING

The diverse information relating to natural and human resources, coupled with the assessment and comparison of different development or technical alternatives, should provide a sound basis for the identification of zones which are particularly suited (or unsuited) to aquaculture development. Criteria for the identification or designation of such zones might include, for example, existing uses, land-use capability, conservation value, demographic and social characteristics and trends, hydrographic and physiographic features.

Zoning may be used either as a source of information for potential developers (for example by identifying those areas most suited to a particular activity); or as a planning and regulating tool, in which different zones are identified and characterised as meeting certain objectives. Zoning of land (and water) for certain types of aquaculture development may help in controlling environmental deterioration at the farm level, and in avoiding adverse social and environmental interactions. Conflict between different resource use activities can be avoided. By creating exclusive zones, a sense of ownership and heightened responsibility for environmental management may be created in the user community.

Zoning for aquaculture may be particularly beneficial for small-scale shrimp farmers, who can be provided with proper water supply/drainage infrastructure, avoiding the ad hoc water supply and drainage systems resulting from uncoordinated development of individual farms (ADB/NACA, 1996).

2.11.1 Main applications

Zoning is an important and powerful tool for coastal planners and has a wide range of specific applications and uses.

Where zones are delineated on the basis of site suitability, they can be used:

• as a basis for the communication and exchange of ideas about aquaculture development, as a part of wider ICM initiatives;

• to encourage aquaculture development in the most suitable areas;

• to define areas which may benefit from infrastructure schemes specifically aimed at promoting aquaculture and related activities;

• to facilitate the establishment of environmental quality standards and targets appropriate for aquaculture development;

• to promote increased responsibility for environmental quality on the part of users;

• to provide a focus for research or monitoring on such issues as environmental capacity;

• to define environmental capacity in relation to aquaculture and other uses;

• to develop area based certification, or quality/environmental labelling schemes;

• as a basis for sectoral EIA or CBA related to a particular area.

Where zones are established on the basis of a rational appraisal of all alternative development activities, they may provide the basis for:

• wider consultation in respect of coastal development issues;

• a set of incentives and constraints designed to lead to:

  Þ optimal allocation of resources to different kinds of development activity;

  Þ minimization of conflict between different users.

2.11.2 Main approaches

In the case of aquaculture, the expertise of aquaculture practitioners is used to identify, demarcate and inventory zones that are potentially suitable for different kinds of aquaculture. Typical criteria for site selection are provided in Section 2.5.2. However, it must be remembered that such zones are indicative rather than rigid boundaries.

Ideally however, if the objectives of more integrated coastal management are to be met, this information should be assimilated within a wider GIS framework (Section 2.3) taking account of land and water potential for other types of enterprise. On the basis of this information, and the technical-economic and environmental assessment of different types of development activity, planning zones (precise designations of water, shore and land) may be identified with different sets of development and management objectives. In the case of a zone demarcated as a priority area for aquaculture, issues related to water quality and environmental capacity might figure significantly in these objectives. A set of incentives and constraints (economic, administrative, or a mixture) would then be designed to meet these objectives.

2.11.3 Main attributes

Aquaculture within specified zones may be subject to a wide range of voluntary or statutory procedures, incentives and constraints (Bodero and Robadue, 1995; Phillips and Barg, 1999), for example:

Voluntary, co-operative and infrastructure initiatives:

• voluntary codes of practice;

• co-operative marketing schemes;

• co-operative user/owner management of the zone, its resources and facilities;

• best management practice initiatives (possibly associated with environmental and product quality certification and labelling);

• infrastructure (for example water supply, treatment and drainage facilities for more intensive farms) provided by government or through co-operation between farmers themselves.

Regulation:

• lists of allowable and non allowable activities;

• a regulatory procedure for issuing and enforcing permits;

• permit conditions (such as farm design, management practices, and effluent standards or total pollution limits);

• sanctions for violating the terms of permits

Particular attention should be given to:

• the need to ensure that farming within designated zones is kept within the assimilative capacity of the environment;

• the need to streamline permitting/licensing procedures and minimise bureaucracy;

• the explicit establishment of policies and procedures for giving variances to the zone or to non-conforming uses.

In addition, a variety of economic incentives and constraints (see 2.12.2 and 2.12.3) may be associated with a zone, or graduated/differential incentives may be associated with a series of zones with differing objectives.

2.11.4 Experience

In Malaysia, government policy is to identify specific coastal aquaculture zones, compatible with existing land use patterns. In Korea, Japan, Hong Kong and Singapore (FAO/NACA, 1995), there are well developed zoning regulations for water based coastal aquaculture operations (marine cages, molluscs seaweeds). For example, Hong Kong has 26 designated Marine Fish Culture Zones within which all marine fish culture activities are carried out (Wong, 1995). In the State of Hawaii, best areas for aquaculture have been identified, some of which may be designated as aquaculture industrial parks (Rubino and Wilson, 1993). In Thailand zones suitable for the development of seawater irrigation schemes have been identified with a view to facilitating the development of sustainable aquaculture.

Zoning can also be designed in ways to encourage multiple use if appropriate, following agreed allowable and non-allowable uses, promoting optimal and balanced coastal resource use. In Ecuador, local zoning plans have been agreed between shrimp farmers and local residents, allowing for shrimp farming to continue, alongside mangrove planting and traditional uses (Bodero and Robadue, 1995). In British Columbia, the Ministry of Agriculture, Fisheries and Food, proposed that areas demonstrating high capability for aquaculture of 2 or more species and lying within land-use areas designated as high intensity areas should be defined as aquaculture priority area (APA) (Truscott, 1994). In the APA, other uses would be allowed if demonstrably compatible with aquaculture. In areas designated as lower intensity land-use, aquaculture significant areas (ASA) and aquaculture interest areas (AIA) would be defined as sites of high capacity for one species, sites not yet assessed, or sites where potential exists for species not yet commercially cultivated. All zones would be subject to management designed to protect environmental quality, biological diversity, critical wildlife and fish habitat, as well as cultural and recreational features. Management would use environmental monitoring and progressive refinement of predictive modelling to develop intensity of resource-use up to maximum sustainable levels (i.e., consistent with the carrying or assimilative capacity). Targets for implementation of APA and ASA would be reviewed at regular intervals to accommodate improved assessment capability, including development of new methods of culture and new species.

2.11.5 Strengths and weaknesses

The strength of zoning lies in its simplicity, its clarity, and its potential in terms of streamlining procedures. For example, once a zone is established and objectives defined, then developments that meet the objectives and general conditions for the zone may need no further assessment (such as EIA). What is allowed and what is not allowed is clear, and developers can plan accordingly.

Its weakness lies in its rigidity. No zone is perfect, assessment may have been inadequate, boundaries are frequently arbitrary, and conditions may change. There may exist small pockets of high potential for aquaculture, which were not recognised in the resource assessment process, are not part of an aquaculture zone, and which are therefore prevented or subject to severe regulation. Furthermore, it may actually be undesirable to encourage a concentration of aquaculture in one particular area, however suitable it may be, because of the increased risk of disease spread.

2.11.6 Recommendations

1. A strategic planning process based on zoning is a useful first step towards more integrated coastal management;

2. A regional coastal zoning scheme may be used to identify areas potentially suitable or incompatible with coastal aquaculture;

3. Aquaculturists, as stakeholders, should be involved in decision processes related to zoning;

3. The cumulative impact of individual aquaculture projects must be addressed; zones provide a workable framework for such an analysis;

4. Where zoning schemes are used as a component of coastal management, decisions on site selection for aquaculture should be related to such schemes.

2.12 PLANNING INSTRUMENTS: INCENTIVES AND CONSTRAINTS

The implementation of any kind of strategic plan requires some form of intervention. A set of incentives and constraints (planning instruments) must be developed to encourage activities most likely to meet strategic objectives and specific targets (whether or not they relate to specific zones) and to discourage those that do not. These instruments may be classified as economic, administrative (Whitmarsh et al., 1993), and institutional (OECD, 1989).

Economic approaches recognise that market failure, brought about by unrestricted access to un-priced resources, is a major cause of problems within the coastal zone. The resultant intensification of the use of the coastal zone leads to the generation of externality effects (e.g. pollution). The economic approach attempts to "internalise" these externalities, with the ultimate aim of attempting to allocate resources in the most socially efficient manner.

Administrative approaches, by contrast, do not explicitly recognise the problem of market failure, rather they tend to adopt "command and control" mechanisms to coastal management. Typically, a regulatory authority would make decisions on which activities are allowed to take place in the coastal zone, including the nature of participating organisations, and the extent and nature of the operations. Such decisions may be preceded by public discussion with interested groups, and may be accompanied by educational programmes in support of the aims and objectives of the policy.

In most countries, if not all, there is a firm tradition of command and control, with significant bureaucratic processes, and resistance to economic instruments, which are often seen as giving too much leeway. On the other hand, administrative approaches can become ineffective and burdensome. There is a general feeling with a growing number of users and greater intensity of usage of the coastal zone, that economic approaches offer an effective and powerful option for the future.

The two approaches are not completely interchangeable, since certain problems can only be resolved by the use of particular techniques, such as the sale or allocation of rights to land or water use. If the rights are non-tradable this is primarily an administrative or regulatory approach; if they are tradable this becomes an economic approach.

It is important to recognise the strengths and weaknesses of the two approaches, and the actual extent to which they are employed. These have been reviewed in Part 1, and also by OECD (1989) in the case of environmental protection. To date there is relatively little experience of the application of economic approaches to aquaculture development planning.

2.12.1 Administrative instruments

Education and communication

The explanation and justification of management plans and particular management provisions should be key elements in the development of any integrated management plan. An ICM initiative in Ecuador (Robadue, 1995) placed great emphasis on communicating the rationale for any regulatory measures, to the extent of developing manuals to explain and justify particular measures. Clearly, stakeholder participation in the drawing up of regulations will greatly facilitate this process. The effective communication and exchange of information is also major tool in conflict resolution.

Infrastructure

The quality of infrastructure may be a major factor in the success or failure of aquaculture, especially in developing countries, and is commonly under-emphasised in site selection. Infrastructure may be used as a tool to directly improve productivity, product quality, and farm gate value, as well as to reduce environmental impacts.

Sea-water irrigation and waste-water treatment

Many of the problems associated with coastal aquaculture development in developing countries are related to poor water supply and poor wastewater disposal. Although large scale operators may be able to invest in appropriate infrastructure directly, small scale and poor operators are usually dependent on existing canals and water supplies. The result is a mixing of influent and effluent water supplies between a large number of farms, along with the exchange of effluent, chemicals and disease. Although associations of small farmers may be able to develop their own infrastructure and/or water management schemes, this is extremely difficult, and government intervention is normally required. Once in place, there are strong arguments for user charges and taxes to cover the costs of such infrastructure. In the case of shrimp farming the increased revenue resulting from better water quality and less disease is likely to easily cover the infrastructure costs. It may also be possible to develop product quality or "green" certification and labelling directly associated with a particular scheme and its constituent farmers. Thailand is actively developing such schemes at the present time.

Communications, markets and processing

The farm-gate value of any aquaculture product will be linked to the ease of access to lucrative markets. Any interventions which result in improved communications, closer markets and processing facilities, will stimulate aquaculture. This may be used strategically by governments to attract operators away from areas or zones where aquaculture is considered undesirable, to those areas where it is a specific development objective.

Regulatory approaches

Regulation has been commonly used in an attempt to manage the development of aquaculture and its impacts. This has succeeded in many instances, especially in developed countries, but has a rather poor record in developing countries where the enforcement of regulation may be particularly difficult.

Regulation may include any or all of the following:

• some form of registration to facilitate or provide a framework for further intervention and regulation;

• restrictions on location. For example some zoning schemes may explicitly bar certain types of development or activity in particular areas;

• restrictions on the importation and/or transfer of cultured species

• prohibition of specific activities, materials or technologies;

• requirements for specific activities, technology or design;

• effluent standards;

• receiving water standards.

These may be stand-alone regulations or may be directly linked to registration, licensing or the issue of permits.

Experience review

Shrimp farm registration has been a success in Thailand, in the sense that most farms are registered. This is due to its relation with free technical services from government agencies and the district fisheries office (the authorised office), which is usually located in culture areas for the convenience of farmers.

Regulation of routine effluent discharge quality is difficult if not impossible to implement for large numbers of small operators. In practice routine effluents from aquaculture systems are in any case of relatively high quality and regulation is not usually necessary.

Government regulation of sludge disposal is also almost impossible. However, in some areas of Thailand, groups of farmers are self-policing in this regard, since they need to avoid causing severe water quality problems for each other.

Size thresholds for the application of regulations are problematic. In Thailand, for example, the vast majority of farms are less than 8 hectares, so that some important regulations do not apply to most shrimp farming. On the other hand, enforcement would not be feasible for a large number of small farms. Clearly an alternative approach is required to influence the behaviour of small farmers.

Conclusions and recommendations

1. farmers understanding of, and co-operation with regulations can be enhanced through appropriate communication and training;

2. regulation is likely to be more successful where farmers or their representatives have been closely involved in their design;

3. successful enforcement can be facilitated via farm co-operative areas or farmer associations;

4. regulations should be simple and easy for small scale farmers to practice;

5. preparation of technical advice on best farm management practice should be distributed together with regulations.

Codes of practice for farm management (Best Management Practices)

As discussed above, many regulations are difficult to implement in practice, and may lead to an attitude of limited responsibility in practice. Where the rationale for regulation is clear, and particularly when it relates to the interests of farmers themselves, every effort should be made to promote self-regulation through codes of practice. These may be reinforced through peer pressure, and in some cases actually enforced by associations of farmers themselves.

Codes of practice, including best management practice may be used as a basis for certification and quality labelling (see Section 2.12.3).

The following is proposed as a set of basic of criteria for success of best management practice:

• high survival rate;

• low FCR (Feed Conversion Ratio);

• low waste discharge to the wider environment;

• high rate of return or profitability.

In the case of coastal pond culture, success can be promoted through the following (generic) best management practice:

• good site selection (e.g. in terms of soil quality, elevation, distance from prime mangrove areas and water pollution sources);

• well trained and experienced labour;

• high feed quality;

• efficient feeding practices;

• skilled water quality management;

• pond soil management to maximize water quality and minimize sludge discharge;

• membership of a co-operative or farmer association.

These would need to be developed in detail for specific locations and circumstances.

Experience review

Codes of practice and management guidelines are well established for some aquaculture industries and are attracting interest world-wide (e.g. FAO Fisheries Department, 1997; Huntington and Dixon 1997; GAA, 1998; FAO, 1998, 1999). Implementation and compliance tends to be high for large scale operations, since these have the skills and resources to implement, and because they are subject to greater scrutiny and regulation. Small and medium scale farmers may lack the knowledge, skills, resources and incentive to comply with such codes.

Some codes developed at higher (e.g. national) levels may be very difficult to implement at a local level, especially by small farmers. For example, while a farmer with 10 hectares may find the loss of two hectares for effluent treatment acceptable, a small farmer with only one hectare might find the loss of 20% of his production area unacceptable. Furthermore, depending on technology, management and local environmental conditions, such a practice may be unnecessary to meet environmental objectives.

Conclusions

It is very difficult to set anything other than very general codes of practice at international, national or regional level. Indeed, it is arguable that only principles of operation should be established at these higher levels. Technology, scale of enterprise and local social and environmental conditions are enormously diverse. More locally appropriate codes of practice need to be developed. Ideally these would refer to specific zones with particular environmental objectives and standards, as defined in the planning process.

Farmer associations and/or operation within a designated zone, may provide a framework for the dissemination and exchange of information relating to good practice, and could also form the basis for the development of linked marketing schemes, which might provide a financial incentive for compliance (2.12.3).

Recommendations

1.Codes of practice set at international or national levels should be framed around objectives and principles of operation rather than detailed prescriptions;

2. More detailed and practical codes of practice should be developed at local/district level, preferably in relation to a specific zone with defined development and environmental objectives and targets (ideally also with an environmental capacity assessment);

3. All farmers should be encouraged to be members of an aquaculture association or producer group;

4. Farmers should have easy access to high quality technical advisory material on best management practice, design and technology.

2.12.2 Economic instruments

In recent years, increasing dissatisfaction with administrative approaches to environmental management in the coastal zone has led to widespread interest in economic approaches (Garrod and Whitmarsh, 1994). Administrative approaches are now often viewed as providing little more than the legislative framework for control, and the regulatory instruments themselves are often seen as ineffective. Attempts at regulating aquaculture through administrative means have failed in many developing countries, and have been strongly resisted in developed countries.

Economic (market-based) instruments typically "...affect estimates of costs and benefits of alternative actions open to economic agents, with the effect of influencing decision-making and behaviour in such a way that alternatives are chosen that lead to an environmentally more desirable situation than in the absence of the instrument. Economic instruments, as opposed to direct regulations, leave actors free to respond to certain stimuli in a way they themselves think more beneficial" (OECD, 1989).

Economic instruments have been widely studied with respect to pollution control in coastal areas, and there are important lessons for their more widespread use in the regulation of activities such as aquaculture in a broad sense (e.g. to influence production levels, industry structure etc).

For pollution control, OECD (1989) has classified economic instruments into 5 types:

1.Charges;

2. Subsidies;

3. Deposit refund systems;

4. Market creation;

5. Financial incentives;

Charges

Charges can be considered as the "price" for pollution, with both incentive and redistributive impacts. Effluent charges include, for example, a charge per kg of nitrogen released to the environment, or a charge per unit volume of effluent. Product charges include, for example, taxes on polluting inputs such as phosphorus in feeds. In Norway and Sweden fertilisers and pesticides are taxed for this reason. Administrative charges include permit fees related to design or operation parameters - with a higher fee for higher effluents, or higher permit fees to pay for environmental regulation. For example, in Norway license fees have been used to fund sector environmental assessment. User charges may be levied for access to, or use of, seawater irrigation systems, or waste treatment. Tax concessions may be made for using particular sites or technologies.

The overall impact is to enter the cost of pollution into private cost-benefit calculations. Differential charges according to location may be used to influence siting. Charges or taxes levied may also be used for environmental improvements - such as water supply or wastewater treatment.

The effectiveness of product charges depends the relative cost of the product as part of overall operating costs, and the price and availability of substitutes. For example, feed is often a very high cost in aquaculture, and low pollution diets can be produced. A charge or tax levied on polluting feeds is therefore likely to have a significant effect.

Setting the level for these charges can be very difficult. Too low will have insignificant effect; too high may cripple the industry. Rough estimates must be made and the effect monitored closely, before adjusting to achieve the desired mix of objectives.

Subsidies

Subsidies are a form of financial assistance (e.g. grants, soft loans, tax allowances) which act as an incentive for polluters to alter their behaviour, or which are given to firms facing problems in complying with imposed standards. Subsidies may be provided for specific environment friendly technology or practice, or to siting in preferred zones. The provision of infrastructure is a common example of subsidy, and this may be used to reduce environmental impact. An example is government or aid funded seawater irrigation systems.

Although subsidies have been provided to aquaculture in many parts of the world they have rarely been linked to environmental management in practice.

The main weakness of subsidy is that it implies a net cost to government. Ideally therefore any subsidy should be matched by a tax (for example on a polluting product). A second weakness is that it provides no incentive for innovation, or reduced inputs.

Deposit refund systems

In this case a surcharge may be laid on the price of potentially polluting products or activities. When pollution is avoided by returning (recycling) these products or its residuals to a collection system, a refund of the surcharge is made. Alternatively a deposit or bond may be required prior to developing a site, especially in environmentally sensitive areas. If and when the operation closes, the site must be fully restored to previous use or value if the bond is to be returned (for example by removing or breaking pond dykes and replanting mangrove). Bonds or deposits may also be applied to operations. In this case the bond is only returned once a water treatment system is operational, or where there is demonstrated use of low pollution diets, or demonstrated low pollution load.

Bonds offer an incentive to minimise the cost of environmental protection and are therefore likely to stimulate innovation.

Market creation

Markets are created where actors might buy rights for actual or potential pollution, or where they sell their "pollution rights" or their process residuals. This approach could be applied to environmental capacity, a portion of which, for a particular estuary, lagoon or bay, could be sold or allocated for aquaculture, and subsequently traded freely. In theory, operators will buy permits until the price of the permit rises to equal the cost of treatment for the same amount of pollution. This provides a strong incentive to improve operation/technology: those without good technology/management will be unable to afford the larger permit required. This approach has many advantages in so far as it is cost effective (the cost associated with pollution and its treatment is set by the market), it generates revenue, and allows continuing economic growth without increased pollution. Emissions trading relating to heavy industry has been very effective in the USA and has resulted in substantial cost savings.

However, there are problems with this approach for aquaculture, especially in relation to small-scale operations. As for more regulatory approaches, there needs to be some means of policing to ensure that operators are keeping within their permit/allocation. One possible approach is to use feed records (cross-checked between the operator and the supplier). Another is to restrict a permit to only a part of operations. For example, in the case of pond culture, checking might be restricted to the time of harvest, when the bulk of any pollution is likely to take place. It is also essential to be able to track changes in ownership, and this requires significant administration, especially for small permits.

There are also generic problems with permit trading, including manipulation by powerful operators. For example, they may purchase a large number of permits (more than they need) while the price is low, so that there is then little need to improve technology and performance. If permits are originally allocated free of charge, there may be widespread profit taking. In other words these approaches suffer from some of the classic inadequacies of free markets, and some control may be required.

Financial incentives

This type may also be considered as legal instruments: non-compliance is "punished" either ex ante (by requiring a payment returnable upon compliance) or ex post (by charging a fine when non-compliance occurs). A variation of this is liability insurance, where polluters are made legally liable for damage (for example to fish nursery grounds). This will encourage the establishment of insurance schemes, the premium of which will be related to the risks of environmental damage caused by the operator, offering an incentive for improved design, technology and management.

In practice this is only likely to be effective in the case of relatively extreme environmental impacts, and is less suitable for the more subtle and diffuse impacts associated with most agriculture and aquaculture. Proof is notoriously difficult in the case of environmental impact. It would be very difficult to prove, for example, that steady low level pollution, or the occasional dose of chemicals, had been the cause of a failure of recruitment to a fishery. It would also be difficult to prove that it was not. If the burden of proof were to be laid on the fish farmer (in line with the precautionary principle and the polluter pays principle), this would probably result in most aquaculture being stopped. If the burden of proof were to lie with the complaintive, there would be few if any convictions, although the number might increase if legal aid were provided for such claims (as is the case for example in some States in Australia).

Liability is likely to work best where the risk is high but the information poor. It may be linked to a performance bond (i.e. if the bond is drawn on for damages).

Experience

The main examples of economic approaches to aquaculture have been positive incentives - grants and subsidies to encourage the development of aquaculture, especially in remoter or less developed regions. Grants, subsidies and low interest loans played a significant role in the rapid development of salmon culture in Scotland and Norway in the 80’s, and fin-fish culture in the Mediterranean in the ‘90s.

There are rather few examples of the use of such instruments to regulate the impacts of aquaculture on the environment or other resource users. The use of deposit refund systems, or restoration bonds tied to the issue of licenses or lease of land has been proposed (for example in India) as a means of ensuring that shrimp farming does not lead to lasting environmental damage, but it is too early to assess the success of such schemes in practice.

Pollution charges have been widely applied in the USA and Europe, and coupled with specific regulations they have almost eliminated pollution from freshwater aquaculture in Denmark. However, in this case they have significantly constrained the development of the industry.

Legal liability on the part of fish farmers for environmental damage is in place in several countries, including Korea and Australia.

Strengths and weaknesses

Strengths:

• implementation of the polluter/user pays principle: polluter or user pays in proportion to amount of pollution or full social and environmental costs of resource use;

• less need for "enforcement" in some of its forms;

• usually offers an incentive for innovation (since less pollution = lower cost);

• flexibility and efficiency in economic terms;

• may not need information on operation or discharge from individual farms (particularly important for non-point sources such as cages);

• partly addresses cumulative problems;

• generates government revenue for environmental management.

Weaknesses:

• effects not so predictable as regulatory approaches;

• may need sophisticated institutions (to monitor, enforce; adjust, adapt etc);

• not popular with government agencies - less control;

• not popular with industry - extra costs.

Conclusions

Economic approaches have many attractive features, including the prospect of paying for monitoring and compliance, and in many cases the provision of strong incentives for innovation in terms of less environmentally damaging technology. However, especially in the case of small scale operations, most of them do not overcome the problems of compliance, and implementation may be at least as complex as for regulatory measures.

Both the flexibility aimed at by economic approaches and the certainty of effectiveness sought by direct regulation, might be realised by an open-minded approach to the creative search for new instruments for environmental policy, or new combinations of existing instruments (Soley et al., 1992; OECD, 1989).

Recommendations

1. Economic approaches deserve more attention as possible approaches to the planning and management of aquaculture, probably in combination with regulatory and market approaches;

2. Farmer groups or associations may allow for more effective application to small farmers.

2.12.3 Markets and labelling

There is currently significant interest in the possibility of tying best practice or codes of practice (siting, design, technology, operation/management) to labelling schemes, on the assumption that some consumers will pay a premium for environmentally friendly goods. This will then serve as a major incentive to adhere to codes of practice. Impartial certification (i.e. certification by a body without a financial interest in the outcome) is required, and this is more or less difficult and costly dependent upon the degree of variation in the technology and the complexity of the marketing and distribution networks. A key requirement is that the location of production must be known. Furthermore there must be solid consumer trust in the process if the product is to command a significant premium. Detailed discussion of the role of labelling in the promotion of sustainable shrimp farming can be found in Clay (1996, 1997).

Products such as shrimp, other crustaceans, and high quality finfish are particularly suited to such schemes, since they are already marketed as quality products, subject to existing quality classifications, to discerning consumers.

Many such schemes have been launched in respect of "sustainable forestry", and initiatives are also underway to apply them to fisheries. Initiatives are underway in Thailand at the present time to link the establishment of seawater irrigation schemes for aquaculture with ISO14000 certification. The government hopes that the higher value of a certified product may be (partially) taxed to provide funds for investment in further infrastructure designed to improve the sustainability of aquaculture.

One problem with these initiatives is that the benefits may accrue largely to the wholesaler or retailer rather than the producer, and directly linking farm gate price to environmental management will not be easy.

Quality labelling and environmental standards may in some cases work against small scale producers. While vertically integrated corporate aquaculture can control and certify both management practice and quality at almost all stages of production and marketing, this becomes far more difficult and costly for small scale producers. Furthermore, the environmental standards may be more difficult to meet. If, for example, western importers were to require a guarantee that shrimp were not produced in mangrove areas to allow them to apply an environmental friendly label to their product, this would automatically exclude the poorest producers in Asia. Many poor families farm in mangrove areas for lack of available land elsewhere, or because of the prohibitive costs of pumping water to areas above the tidal range.

A possible solution is to use a graduated labelling scheme, where producers may be awarded "stars" for different kinds of quality or environmental benefit (e.g. low or zero food input; low or zero fish meal input; zero destruction of prime mangrove within a certain distance from creeks etc.). Consumers themselves can balance their choice with their personal social and environmental priorities.

Associations of small farmers are likely to be able to exploit the potential of labelling schemes far more effectively than individual farmers.

Strengths

• offers a simple financial incentive for improved environmental performance;

• may be linked to codes of practice, zoning, existence of ICM;

• works through steady pressure rather than a sudden blow to producers, and can be "graduated" (e.g. star system) to allow for steady improvement;

• will ultimately reflect the environmental values of consumers rather than regulators.

Weaknesses

• certification will usually be more difficult and costly for smaller and more isolated producers - who may already be at a disadvantage in terms of ability to comply (e.g. with siting requirements);

• a significant part of the premium may go to the wholesaler, thus reducing the incentive for the producer;

• the certification criteria will reflect the environmental and social values of consumers (who may live on the other side of the world) rather than local people.

Conclusions and recommendations:

1. quality and "green" labelling schemes associated with codes of practice offer considerable potential in terms of encouraging farmers to farm in certain areas or operate in particular ways;

2. ideally such schemes should be "graduated", offering flexibility and a variety of standards, suited both to different consumer values, and also to the ability of farmers to comply;

3. associations of farmers should be encouraged, to facilitate access to such schemes by small farmers;

4. the criteria for certification should be drawn up in consultation with local people as well as consumers, NGO’s, industry representatives etc

2.13 MONITORING AND FEEDBACK

As has been discussed in earlier Sections of this report, development of aquaculture should take place within a management framework designed to minimise adverse impacts on the environment, both human and natural. Developing such a framework depends on prediction of significant potential effects at scales appropriate to the scale of the proposed aquacultural activity. These predictions are inevitably subject to uncertainty. Monitoring is, therefore, an integral part of the regulatory process, and its main objective is to verify that changes associated with aquaculture are within the predetermined, acceptable limits.

Monitoring is of limited use if it is not linked to a pre-determined management response in the event that the monitored variables are found to lie outside their acceptable limits. There should be a priori agreement about the action that will be taken if impacts exceed predicted levels. As Cairns and Dickson (1995) have pointed out, any useful definition of the term ‘monitoring’ must include an explicitly-stated management action if the data fall outside previously-established limits. This action might take the form of a reduction (where monitoring indicates that environmental capacity has been exceeded) or increase (where capacity is under-utilised) in stocking density or number of farms (GESAMP, 1996a). Reduction could extend to temporary or permanent resting of the affected site. This feedback-loop from prediction to monitoring to management provides the mechanism for optimal use of resources. Data from monitoring also allows methods for predicting impacts to be refined for use in the future.

GESAMP (1996a) provides a detailed discussion of monitoring in the context of ecological impacts of coastal aquaculture wastes, and Schmitt and Osenberg (1996) provide guidance and discussion of principles of monitoring.

2.13.1 Ecological monitoring

General principles and aims of ecological monitoring and impact assessment are set out in several reviews, such as those of Green (1979) and Schmitt & Osenberg (1996). Detailed discussion of monitoring in the context of ecological impacts of aquaculture is provided by Barg (1992) and GESAMP (1996a and b), including examples of variables commonly measured in monitoring studies for aquacultural impacts, several examples of their use, and evaluation of their use in interpreting changes.

The role and value of ecological monitoring in relation to a management plan are described in Part 1. Ecological monitoring can also indicate trends in environmental quality and determine whether individual farms are meeting regulatory requirements (Barg, 1992).

Because monitoring programmes should aim to test specific predictions derived from the assessment of potential impacts, they should be adapted to the size, type and location of the aquaculture operation in question, and the sensitivity of the receiving environment. It is not, therefore, appropriate to recommend standard monitoring procedures, and the references cited above should be consulted for guidance on the design of monitoring programmes.

Design of monitoring studies should carefully consider the selection of appropriate reference sites (see GESAMP, 1996a), standardisation of sampling and analytical procedures and analysis and interpretation of the data, and the selection of appropriate and cost-effective variables to measure. Given the often large variability of natural systems, the design of a cost-effective monitoring programme requires ensuring that it has adequate statistical power to detect important differences or changes (e.g., Peterman, 1990; Fairweather, 1991; GESAMP, 1996a). There should be more than one reference site whenever possible. This important point derives from the fact that any two places may differ for a wide range of reasons, most of which may be unrelated to the presence or absence of a fish farm. Impacts of the farm may, therefore, be confounded or obscured by other, perhaps unmeasured, differences between the farm and reference sites (Underwood, 1992, 1993).

The causal link between aquacultural activity and environmental change is greatly strengthened by including a baseline survey although, in theory, impacts can be detected by monitoring and comparison of the impacted location and a sufficient number of reference locations after aquaculture has commenced (Glasby, 1997). By providing data on conditions prior to the start of aquaculture, a baseline survey allows the coincidence of aquaculture and the onset of environmental change to be established, and obscuring effects of natural variation among farm and reference sites to be reduced (Glasby, 1997). Baseline data also provide information for use in the design of the monitoring study.

A general discussion of the selection of variables for monitoring is given by Keough and Quinn (1991). Examples of variables commonly measured in monitoring studies for aquacultural impacts, including several examples of their use, and evaluation of their value in interpreting changes are given by Barg (1992) and GESAMP (1996a, Table III). They may include concentrations and rates of output of contaminants, the extent and rate of physical modification of the environment, and changes in targets exposed to these changes, such as natural populations or communities of plants or animals. Barg (1992) points out that it is important to distinguish between output and consumption by aquaculture and their related ecological effects. The former are potential, but not necessarily actual, mechanisms for the ecological impacts that should be the real area of concern.

2.13.2 Social and economic monitoring

Many economic, social and welfare indicators are routinely collected by government agencies and local government as routine input to policy decisions. These may include such indicators as employment, GDP, per capita product, education, health, health and education provision, average wage etc. Coupled with specific data on the financial and economic profiles of particular enterprises or user groups, monitoring and assessment is relatively straightforward. Monitoring issues such as conflict is more difficult, and can only be assessed on the basis of long-term consultation and participation.

Local and provincial government commonly has expertise in social and economic monitoring, and existing capacity should be strengthened rather than substituted under any new initiative.

2.13.3 Conclusions and recommendations

1. Strategic coastal planning depends on assessing or predicting the impact of any development or activity, in social, economic or environmental terms. These assessments are inherently inaccurate or uncertain. Monitoring and feedback is required to refine the assessments and improve the quality of the interventions;

2. To be of any value, monitoring must be linked to a pre-determined management response in the event that the monitored variables are found to lie outside their acceptable limits.

3. Monitoring programmes should aim to test specific predictions derived from the assessment of potential impacts, and they should be adapted to the size, type and location of the aquaculture operation in question and the sensitivity of the receiving environment.

4. Given the often large variability of natural systems, the design of a cost-effective monitoring programme requires that it has adequate statistical power to detect important differences or changes.

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2.15 GLOSSARY

Selected Terms^[24] are defined here in the sense that they are used in this report. They are described here to provide interested readers with additional explanations, comments or background information.

Command and control policy instruments

Policy measures that seek to directly control or restrict activities

Conservation

Protection, maintenance, rehabilitation, restoration and enhancement of populations and ecosystems.

Cost-benefit analysis

The identification and valuation of all the direct and indirect costs and benefits (financial, economic, social and environmental) associated with a particular action, project or programme. These costs and benefits can then be aggregated in the form of a benefit/cost ratio providing a simple decision criteria for decision makers. In practice it is extremely difficult to identify and value (in cash terms) all the costs and benefits, although economists use a range of tools to facilitate this process, and adjust values to allow for market imperfections.

Decision tree

A branched diagram starting from a single point which illustrates the possible consequences of different sets of sequential decisions or actions, taken under different external circumstances. Probabilities related to different outcomes may be assigned. Decision trees can be effective tools to aid discussions related to the possible long term effects of different decisions or sets of decisions.

Deposit refund system

A command and control policy instrument (see above) in which a surcharge is levied on the price of products leading to resource depletion or pollution which is then refunded if the product (or its residuals) are re-cycled.

Diversity

The number of different species, and their relative abundance, and the number of habitats existing in a particular area. Diversity is a measure of the complexity of an ecosystem, and often an indication of its relative age, measured in terms of the number of different plants and animal species (often called species richness) it contains, their distribution and the degree of genetic variability within each species. Biodiversity is the term used to designate the variety of life in all its forms, levels and combinations and includes ecosystem, species and genetic diversity.

Earth (Rio) Summit

The United Nations Conference on Environment and Development (UNCED), Rio de Janeiro, Brazil, 3-14 June 1992. Texts of agreements negotiated by more than 178 Governments at the Conference were Agenda 21 (the Programme of Action for Sustainable Development), the Rio Declaration on Environment and Development, and the Statement of Forest Principles. The Conference also presented the Conventions on Biological Diversity and Climate Change,

Economic policy instruments

Policy or planning instruments which create financial incentives for individuals to behave in specific ways, or increase/decrease their economic activity.

Ecosystem: A natural entity (or a system) with distinct structures and relationships that liaise biotic communities (of plants and animals) to each other and to their abiotic environment. The study of an ecosystem provides a methodological basis for complex synthesis between organisms and their environment.

Efficiency: In general, efficiency is the ratio of a system’s output (or production) to input, as in the useful energy produced by a system compared to the energy put in the system. In ecology, it is the percentage of useful energy transferred from one trophic level to the next (as in the ratio of production of herbivores to that of primary producers). Used in the context of production, efficiency is the ratio of useful work performed to the total energy expended, thus avoiding waste generation. In the context of the allocation of resources, efficiency is the condition which would make at least one person better off and no one worse off. This implies that some may get richer and others not improve their status.

Environmental capacity

A property of the environment and its ability to accommodate a particular activity or rate of an activity...without unacceptable impact" (GESAMP, 1986). In practice this may be measured as, for example, a specific quantity of nutrient or pollutant which can be assimilated by a lagoon system without exceeding a water quality standard.

Environmental economics

A set of tools and procedures that have been developed to assign a value, in monetary terms, to non-traded environmental goods and services.

Environmental Impact Assessment (EIA): A sequential set of activities designed to identify and predict the impacts of a proposed action on the biogeophysical environment and on man’s health and well being, and to interpret and communicate information about the impacts, including mitigation measures that are likely to reduce impacts. Sector environmental assessment applies the process to a whole sector (such as aquaculture) with a view to identifying industry level mitigation measures, such as development zones and/or environmentally friendly technology and practices. Integrated environmental assessment applies this process across a range of activities for a specific region or area, with a view to identifying higher level (e.g. planning interventions) mitigation measures, and promoting a mix of activities which will minimise environmental impact while maximising socio-economic benefit.

Environmental quality standards (EQS)

Agreed standards for environmental quality. Typically these standards are set in relation water or air at national or international levels. However, it is desirable that they should also be set in relation to specific planning objectives and targets, and relating to specific natural resource systems. EQS are important for the determination of environmental capacity, and for measuring progress against planning objectives.

Externality(ies)

Social, economic and environmental benefits and costs which are not included in the market price of goods and services being produced. These costs are not born by those who occasion them, and benefits are not paid for by the recipients. Some economists suggest that externalities should be internalised, that is, they should be included in the accounting of those activities which generate them.

History line

A communication and synthesis tool sometimes used in participatory rural appraisal. During discussions between researchers and stakeholders (especially resource users), a line is drawn, against which key events of the past are indicated. In this way the sequence of events and their possible causal relations can be analysed.

Indicators

Indicators are defined as signals - of processes, inputs, outputs, effects, results, outcomes, impacts, etc - that enable such phenomena to be judged or measured. Both qualitative and quantitative indicators are needed for management learning, policy review, monitoring and evaluation.

Institutions

Institutions are the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction. Institutions can be formal (e.g. a government agency) or informal (e.g. socially transmitted conventions and codes of behaviour).

Institutional analysis

The analysis, in relation to a specific issue or problem, of relevant formal and informal institutions and their relationships, and the structure and procedures (e.g. decision making, implementing, review) of these institutions.

Integration

The process of bringing together separate components as a functional whole that involves co-ordination of interventions. In ICM, integration may take place at three levels, system, functional and policy. Systems integration refers to the physical, social and economic linkages of land and water uses and ensures that all relevant interactions and issues are considered. Functional integration ensures that programmes and projects are consistent with ICM goals and objectives; and policy integration ensures that management actions are consistent with other development and policy initiatives. Vertical integration refers to integration between local level and national or international activities and policies. Horizontal integration refers to integration between different sectors (such as fisheries and forestry).

Integrated Coastal Management.

In its ideal form this is a multi-sectoral planning and management process for a specified coastal area which takes account of impacts and interdependencies within and between sectors, through improved understanding of ecosystem functions and economic systems, and through the development of institutional capacity.

Key informant

An individual with exceptional knowledge related to a specific issue, or able to direct the researcher to other key sources of information.

Non-Governmental Organisation: Any organisation that is not a part of federal, provincial, territorial, or municipal government. Usually refers to non-profit organisations involved in development activities.

Non-compliance fees: "Additional" prices to be paid for not complying with environmental requirements to meet the social costs arising from environmental damages.

Objective: Expresses the object of an action or what is intended to be achieved. Any objective will include explicit statements against which progress can be measured, and identify which things are truly important and the way they inter-relate. Quantified objectives are referred to as targets.

Open access:

A situation in which access to a natural resource (e.g. a fishery or grazing) is free, unlimited and available to everyone. The situation arises either where no one is legally entitled to deny others access (e.g. many high seas fisheries) or where the owner or manager of the resource fails to control access.

Participatory (rural) appraisal (PRA)

An approach to understanding and exchanging views about social, cultural and resource use issues, as the basis for increased participation of ordinary people in the planning and decision making process. Key features of this approach are the use of a variety of tools and techniques (often graphic) to facilitate the exchange of information and opinion, and in particular to synthesise information about resource use, exchange and interactions

Performance bonds: Similar to a deposit refund system (see above), a bond is placed equal to the estimated social costs of possible environmental damage as a surety for complying with environmental requirements and is forfeit if these requirements are not met.

Plan: Amplification of a strategy showing the precise means by which objectives will be reached: the policy instruments to be employed; the financial and human resources required; and the time frame for implementation. Rolling (plan): the practice of preparing a plan for a number of years in annually sequentially less detail, revising the plan annually and maintaining the number of years covered by the plan.

Planning: The plotting of a course of action (involving executive action or enforcement) which is proposed to carry-out some proceeding, devising the relative positions and timing of a set of actions.

Planning instrument

A specific form of action designed to influence development activity. This might be regulatory (e.g. a production limit) or economic (e.g. a tax or bond).

Policy

The course of action for an undertaking adopted by a government, a person or another party. Instruments that exist to support policy and tools used to achieve policy objectives include some or all of the following: societal instruments, economic and command and control instruments, direct government involvement and institutional and organisational arrangements.

Polluter pays principle

The re-allocation of the social costs of environmental degradation by regulating to ensure that such costs are borne by the parties to the transaction rather than by society at large. The principle therefore internalises externalities (see externalities above). The price charged may be levied directly (e.g. as taxes on the process which generates pollution) or as purchase price of licences which entitle the holder to generate specific quantities of pollution.

Protected area

A geographically defined area which is designed and managed to achieve specific conservation objectives

Ranking

Arranging objectives, criteria, or activities in order of importance or value. When absolute cash or numeric values cannot be assigned to costs or benefits associated with any particular activity or course of action, ranking can be used to assign relative value, and in some cases to assign an imputed numeric value.

Rapid appraisal

A rapid assessment of social, economic, environmental and resource use issues through discussions and interviews with a range of "key informants" and randomly selected ordinary people. Some of the techniques typically used in participatory appraisal may be used in this process.

Socio-economic survey

Formal survey of social and economic conditions using sophisticated sampling techniques, questionnaires and/or formal and standardized interviews.

Stakeholders

The individuals and groups of individuals (including governmental and non-governmental institutions, traditional communities, universities, research institutions, development agencies and banks, donors, etc.) with an interest or claim (whether stated or implied) which has the potential of being impacted by or having an impact on a given project and its objectives. Stakeholder groups that have a direct or indirect "stake" can be at the household, community, local, regional, national, or international levels.

Stakeholder analysis

An approach to understanding a system through the identification of all key actors or stakeholders, and describing their specific interests, motivations, and associations relating to that system.

Strategy: A statement involving the projections of actions, including the direction of means, to achieve an objective.

Sustainable development: "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (Bruntland Report; WCED, 1987) or "..the management and the conservation of the natural resource base and the orientation of the technological and institutional change in such a manner as to ensure the attainment and continued satisfaction of human need for present and future generations. Such sustainable development in the agriculture, forestry and fishery sectors concerns land, water, plant and animal genetic resources, is environmentally non-degrading, technically appropriate, economically viable and socially acceptable." (FAO Fisheries Department, 1997)

Technically driven

An activity which is driven by technical interests rather than actual need in relation to objectives.

Tradable permits

An economic policy instrument under which rights to discharge pollution or exploit resources can be exchanged or traded through either a free or a controlled "permit" market. Examples include Individual Transferable Quotas in fisheries, tradable depletion rights to mineral concessions, and marketable discharge permits for water-borne effluents.

Transect

A cross sectional diagram of a resource or economic system, with notes or symbols indicating physical features, vegetation, land use, and economic activity. Such diagrams are particularly useful for indicating resource use, flow and exchange.

Trade-off

The value of something which has to be given up in order to get something else which is desired (e.g., the environmental cost incurred to obtain economic development). Trade-off patterns between resources are determined by the different properties of a system, and their importance to different groups. The understanding of social dynamics and resource-use systems and the evaluation of related trade-offs, in terms of equity, productivity, resilience, and environmental stability, are useful to envision alternative development scenarios.

Venn diagram

Discrete or overlapping circles of differing sizes arranged in two dimensions to illustrate the nature of, and interactions between, institutions or social groups. Typically the relative sizes of circles are used to illustrate relative size or power of institutions or social groups; the degree of overlap illustrates the degree of interaction or the extent of overlapping interest; and the arrangement in space illustrates the overall pattern and strength of relationships between different groups. The diagrams may be developed with text or arrows to better illustrate the nature important interactions.

Zoning

The delineation of land or water areas with specific characteristics relevant to development activities. These zones may be used for information purposes (e.g. as an aid to site selection) or as a strategic planning tool, in which development or conservation objectives are defined for specific zones. These objectives may be promoted through the use of a range of planning instruments taylor-made for specific zones.