Optimal management with potential regime shifts

We analyze how the threat of a potential future regime shift affects optimal management. We use a simple general growth model to analyze four cases that involve combinations of stock collapse versus changes in system dynamics, and exogenous versus endogenous probabilities of regime shift. Prior work in economics has focused on stock collapse with endogenous probabilities and reaches ambiguous conclusions on whether the potential for regime shift will increase or decrease intensity of resource use and level of resource stock. We show that all other cases yield unambiguous results. In particular, with endogenous probability of regime shift that affects system dynamics the potential for regime shift causes optimal management to become precautionary in the sense of maintaining higher resource stock levels.     

Coalition formation in fisheries with potential regime shift

A system can undergo rapid regime shift in which the growth of natural resources suddenly and permanently declines. We examine how the threat of such a shift alters the strategic management of a common pool renewable resource. We consider exogenous and endogenous threats and examine their effects on both incentives to join a coalition and harvest decisions. We find that an exogenous threat of reduced resource growth may cause the coalition to grow in size, and, perhaps of most interest, we identify conditions under which members of the stable coalition reduce harvest while non-members increase harvest in response to the threat. In contrast, an exogenous threat of total stock collapse may destabilize coalitions, resulting in higher harvest from former members, but reduced harvest by non-members. When the threat of either type of shift is endogenous, the threat of regime shift can induce stable coalitions with more than two members. In particular, we identify cases in which the first best (full cooperation) is sustained as an equilibrium outcome. Finally, we find that the relation between the magnitude of the shift and the size of stable coalitions may be negative.     

Intertemporal quota arbitrage in multispecies fisheries

In the management of natural resources, regulation often induces behavioral responses by resource users that ultimately undermine stated policy objectives. Examples of these unintended consequences have been associated with regulations ranging from the Endangered Species Act to laws governing clean air. In this paper we investigate an unintended behavioral response that can be triggered by conservation measures in multispecies fishery management, which leads to increased targeting of the species the conservation measures are meant to protect. Harvest is subject to stochastic variation, with output partially determined by the probability of encountering species of interest, either due to targeting or avoidance. Given the right conditions, an intertemporal arbitrage opportunity arises due to the fact that by targeting a stock in the current period, the probability of encountering that stock in the next period, when announced conservation measures are implemented, decreases. We present an empirical case study that supports the findings of the theoretical model. The results indicate that, by targeting so called weak stocks, some New England fishermen are willing to trade off increased costs today for increased expected profits in the future. To prevent the potentially harmful effects of this behavioral response, a manager may adopt precautionary provisions at the time a quota reduction is announced, or alternatively allow the industry to bank part of its current season's quota in order to alleviate the consequences of the reduction in the ensuing period. These results highlight the challenge of developing effective conservation strategies.     

Entry Deterrence and Signaling in a Nonrenewable Resource Model

We analyze a nonrenewable resource model in which an incumbent firm faces potential entry from a rival firm. The incumbent has private information about its stock size but the rival can observe extraction. With observable extraction and unobservable stock, the rival can use extraction as a signal about stock, from which it can infer whether entry is likely to be profitable. We characterize the necessary conditions for pooling and separating perfect Bayesian equilibria in a signaling game of resource extraction and provide examples of each. We show that the incumbent will often prefer pooling to separating even though welfare is higher in separating equilibrium.     

A density projection approach for non-trivial information dynamics: Adaptive management of stochastic natural resources

We demonstrate a density projection approximation method for solving resource management problems with imperfect state information. The method expands the set of partially-observed Markov decision process (POMDP) problems that can be solved with standard dynamic programming tools by addressing dimensionality problems in the decision maker's belief state. Density projection is suitable for uncertainty over both physical states (e.g. resource stock) and process structure (e.g. biophysical parameters). We apply the method to an adaptive management problem under structural uncertainty in which a fishery manager's harvest policy affects both the stock of fish and the belief state about the process governing reproduction. We solve for the optimal endogenous learning policy—the active adaptive management approach—and compare it to passive learning and non-learning strategies. We demonstrate how learning improves efficiency but typically follows a period of costly short-run investment.     

A dynamic programming implemented resource competition game theoretic model

Resource competition is commonly occurred in animal populations and studied intensively by researchers. Previous studies have applied game theoretic model by finding Nash equilibrium to investigate this phenomenon. However computation of the Nash equilibrium requires an understanding of the payoff matrix that allocates the rewards received by players when they adopt each of the strategies in the game. In our study we present a dynamic programming implemented framework to compute 2 × 2 intraspecific finite resource allocation game's payoff matrix explicitly. We assume that two distinct types of individuals, aggressive and non-aggressive, are in the population. Then we divide the entire animal development period into three different stages: initialization, quasilinear growth and termination. Each stage for each type of players is specified with their own development coefficient, which determines how resource consumption could convert into strength as reward. Each player has equal and finite resource at the beginning of their development and fights against other players in the population to maximize its own potential reward. Based on these assumptions it is reasonable to use backward induction dynamic programming to compute payoff matrix. We present numerical examples for three different types of aggressive individuals and compute the payoff matrices correspondingly. Then we use the derived payoff matrices to determine the Nash equilibrium and Evolutionary Stable Strategy. Our research provide a framework for future quantitative studies on animal resource competition problems and could be expanded to n-players interspecific stochastic asymmetric resource allocation problem by changing some settings of dynamic programming formulation.     

Exhaustible Resource Allocation in an Overlapping Generations Economy

This paper analyzes competitive allocations of an exhaustible resource in an overlapping generations economy. Conditions are given for the existence of equilibrium extraction rules such that both extraction and investment in future stocks are increasing and continuous in the current stock. The paper then considers the time paths of equilibrium allocations and shows that there are economies where equilibrium resource extractions and prices exhibit nonclassical behavior. This is illustrated through a finite horizon example in which extractions increase and prices decrease over the entire time horizon and an infinite horizon example where there are persistent cycles in extractions and prices and multiple equilibria. The paper concludes by examining welfare issues.     

Changes in size and trends of North American sea duck populations associated with North Pacific oceanic regime shifts

Broad-scale multi-species declines in populations of North American sea ducks for unknown reasons is cause for management concern. Oceanic regime shifts have been associated with rapid changes in ecosystem structure of the North Pacific and Bering Sea. However, relatively little is known about potential effects of these changes in oceanic conditions on marine bird populations at broad scales. I examined changes in North American breeding populations of sea ducks from 1957 to 2011 in relation to potential oceanic regime shifts in the North Pacific in 1977, 1989, and 1998. There was strong support for population-level effects of regime shifts in 1977 and 1989, but little support for an effect of the 1998 shift. The continental-level effects of these regime shifts differed across species groups and time. Based on patterns of sea duck population dynamics associated with regime shifts, it is unclear if the mechanism of change relates to survival or reproduction. Results of this analysis support the hypothesis that population size and trends of North American sea ducks are strongly influenced by oceanic conditions. The perceived population declines appear to have halted >20 years ago, and populations have been relatively stable or increasing since that time. Given these results, we should reasonably expect dramatic changes in sea duck population status and trends with future oceanic regime shifts.     

Theorising pathways to sustainability

Using a Pathways approach, controversies over environmental and natural resource management are viewed as expressions of alternative, or competing, pathways to sustainability. This supports deeper understanding of the underlying causes of natural resource management controversies. The framework is composed of two elements: the STEPS (Social, Technological, and Environmental Pathways to Sustainability) Pathways approach and frame analysis. Many sustainable development dilemmas are played out in specific places and consequently, the Pathways approach is integrated with a place-based frame analysis. The resulting framework guides empirical investigation in place-based contexts. This theorising about sustainability science can be used to cast light on contested natural resource management issues, in this case mining in northern Sweden. By exposing the range of alternative Pathways to critical norms of sustainable development, we ascertain whether action alternatives are compatible with sustainable futures. The framework provides a way in which sustainability science can better understand the origins of natural resource management conflicts, characterise the positions of the actors involved, identify the potential for cooperation between stakeholders leading to policy resolution and judge what Pathways help or hinder the pursuit of sustainable development. In addition, it can enhance sustainability science by guiding integrative sustainability research at the project scale.     

On the sustainability of common property resources

We provide a model where a common property resource is managed by two types of agents, cooperators and non-cooperators, who adjust their extraction strategies in response to persistent differential payoffs. In our model, the social approval of cooperators works as a reward mechanism which, as we show, favors both the pervasiveness of cooperative behavior and the sustainable management of natural resources. Specifically, we show that in the presence of such a reward mechanism a stable equilibrium can be reached with both strategies being practiced simultaneously and a decentralized and sustainable management of common property resources is possible.     

Fish wars and cooperation maintenance

In this paper, a discrete-time game model related to a bioresource management problem (fish catching) is considered. We divide a fishery into regions, which are exploited by single players. The center (referee) shares a reservoir between the competitors. The players (countries), which harvest the fish stock are the participants of this game.We assume that there are migratory exchanges between the regions of the reservoir. Therefore, the stock in one region depends not only on the previous stock and catch in the region, but also on the stock and catch in neighboring regions. We derive the Nash and cooperative equilibria for an infinite planning horizon.We consider two ways to maintain the cooperation: incentive equilibrium and time-consistent imputation distribution procedure. We investigate the cooperative incentive equilibrium in the case when the center punishes players for a deviation.Also we consider the case when the center is a player and find the Shapley value and time-consistent imputation distribution procedure. We introduce a new condition which offers an incentive to players to keep cooperating.     

Can incomplete information lead to under-exploitation in the commons?

This paper analyzes the protection of a common pool resource (CPR) through the management of information. Specifically, we examine an entry deterrence model between an incumbent perfectly informed about the initial stock of a CPR and an uninformed potential entrant. In our model, the appropriation of the CPR by the incumbent reduces both players' future profits from exploiting the resource. In the case of complete information, we show that the incumbent operating in a high-stock common pool overexploits the CPR during the first period since it does not internalize the negative external effect that its first-period exploitation imposes on the entrant's future profits. This inefficiency, however, is absent when the commons totally regenerate across periods. Under incomplete information, we identify an additional form of inefficiency. In particular, the incumbent operating in a low-stock CPR underexploits the resource in order to signal the low available stock to potential entrants, deterring entry.     

Early warnings of unknown nonlinear shifts: a nonparametric approach

Early warning signals (EWS) of regime shifts are challenging in cases where the true natural data-generating process is uncertain. Nonparametric drift-diffusion-jump models address this problem by fitting a general model that can approximate a wide range of data-generating processes. Drift measures the local rate of change. Diffusion measures relatively small shocks that occur at each time step. Jumps are large intermittent shocks. Total variance combines the contributions of diffusion and jumps. Nonparametric methods are well suited to emerging technology for automated, high-frequency sensors. Total variance is the most precisely measured indicator. Jump intensity appears to be a useful EWS. Estimates of the drift are highly uncertain unless long time series with many regime shifts are available. EWS computed from drift estimates (such as autocorrelation coefficients or return rates) have low precision and should be used with caution. Nonetheless, in the current state of knowledge, it is premature to disregard any potential EWS.     

Depressed resilience of bluefin tuna in the western atlantic and age truncation

Following intense overfishing in the 1970s, the western stock of Atlantic bluefin tuna (Thunnus thynnus) experienced a long period of depressed abundance, which has been attributed to failure of the population to periodically produce large numbers of juveniles, the western stock mixing with the more highly exploited eastern stock (fisheries in the Northeast Atlantic Ocean and Mediterranean Sea), and regime shift in the population's ecosystem resulting in lower replacement rates. To evaluate the presence of relatively strong years of juvenile production, we analyzed age structure from a recent sample of otoliths (ear stones) collected from the western stock (2011–2013, North Carolina, U.S.A., winter fishery). Mixing levels for the recent sample were analyzed using otolith stable isotopes to test whether age structure might be biased through immigration of eastern stock bluefin tuna. Age structure from historical samples collected from United States and Canadian fisheries (1975–1981) was compared with more recent samples (1996–2007) to examine whether demographic changes had occurred to the western stock that might have disrupted juvenile production. Relatively high juvenile production occurred in 2003, 2005, and 2006. Otolith stable isotope analysis showed that these recruitments were mostly of western stock origin. However, these high recruitments were >2‐fold less than historical recruitment. We found substantial age truncation in the sampled fisheries. Half the historical sample was >20 years old (mean age = 20.1 [SD 3.7]; skewness = ?0.3), whereas <5% of the recent sample was >20 years old (mean age = 13.4 [SD 3.8]; skewness = 1.3). Loss of age structure is consistent with changes in fishing selectivity and trends in the stock assessment used for management. We propose that fishing, as a forcing variable, brought about a threshold shift in the western stock toward lower biomass and production, a shift that emulates the regime shift hypothesis. An abbreviated reproductive life span compromised resilience by reducing the period over which adults spawn and thereby curtailing the stock's ability to sample year‐to‐year variability in conditions that favor offspring survival (i.e., storage effect). Because recruitment dynamics by the western stock exhibit threshold dynamics, returning it to a higher production state will entail greater reductions in exploitation rates.     

Strategic exploitation with learning and heterogeneous beliefs

We study the effect of learning with heterogeneous beliefs on the exploitation of a renewable common-pool resource. To that end, we extend the Great Fish War model of Levhari and Mirman (1980) to a learning environment in which several agents interact strategically and learn about the distribution of the stochastic evolution of the resource. We find that the effect of anticipation of learning with heterogeneous beliefs is twofold. First, the anticipation of learning makes future payoffs more uncertain, which induces the agents to decrease present exploitation due to the precautionary motive. Second, under heterogeneity of beliefs, there is a differential informational externality that induces the agents to increase or decrease present exploitation. We also perform a comparative analysis on the Cournot–Nash equilibrium with learning by studying the effect of optimism and riskiness on resource exploitation.     

Competing land uses and fossil fuel,and optimal energy conversion rates during the transition toward a green economy under a pollution stock constraint

We study the transition to a carbon-free economy in a model with a polluting non-renewable resource and a clean renewable resource. Transforming primary energy into ready-to-use energy services is costly and more efficient energy transformation rates are more costly to achieve. Renewable energy competes with food production for land and the food productivity of land can be improved at some cost. To avoid catastrophic climate damages, the pollution stock is mandated to stay below a given cap. When the economy is not constrained by the cap, the efficiency of energy transformation increases steadily until the transition toward the ultimate green economy; when renewable energy is exploited, its land use rises at the expense of food production; food productivity increases together with the land rent but food production drops; the food and energy prices increase and renewables substitute for non-renewable energy. During the constrained phase, the economy follows a constant path of prices, quantities, efficiency rates, food productivity and land rent, a phenomenon we call the ‘ceiling efficiency paradox’.     

Combining Power Analysis and Population Viability Analysis to Compare Traditional and Precautionary Approaches to Conservation of Coastal Cetaceans

Abstract: Traditionally, marine resources have been managed such that controls on new developments are implemented only when harmful effects on other environmental or economic interests can be demonstrated. This approach poses particular problems for the conservation of coastal cetaceans because potential threats to their populations are diverse and likely to interact, individual threats may result from multiple sources, and the problems inherent in studying cetaceans result in considerable scientific uncertainty and low statistical power to detect any effects. Consequently, many countries are adopting integrated coastal management programs and precautionary management principles. In practice, however, issues continue to be dealt with within traditional frameworks that require demonstration of harm. Because cetaceans are long-lived, they demand long-term studies, and populations could decline to dangerously low levels before management action is taken. We illustrate these problems using a case study from the Moray Firth, Scotland. This inshore area will soon be designated and managed as a "special area of conservation" to protect bottlenose dolphins (   Tursiops truncatus ) under the European Community's Habitats Directive. The population is small and isolated, and it faces a wide range of potential threats, but there remains considerable uncertainty over the magnitude of each threat. We combined power analysis and population viability analysis to explore the relative consequences of adopting either traditional or precautionary approaches to management. In this case, our results reaffirm the need for precautionary management. More generally, we illustrate how this approach can be used to provide a more scientific basis for determining the level of precaution required to address particular management issues in this and other marine systems.     

Resolving structural uncertainty in natural resources management using POMDP approaches

In recent years there has been a growing focus on the uncertainties of natural resources management, and the importance of accounting for uncertainty in assessing management effectiveness. This paper focuses on uncertainty in resource management in terms of discrete-state Markov decision processes (MDP) under structural uncertainty and partial observability. It describes the treatment of structural uncertainty with approaches developed for partially observable resource systems. In particular, I show how value iteration for partially observable MDPs (POMDP) can be extended to structurally uncertain MDPs. A key difference between these process classes is that structurally uncertain MDPs require the tracking of system state as well as a probability structure for the structure uncertainty, whereas with POMDPs require only a probability structure for the observation uncertainty. The added complexity of the optimization problem under structural uncertainty is compensated by reduced dimensionality in the search for optimal strategy. A solution algorithm for structurally uncertain processes is outlined for a simple example in conservation biology. By building on the conceptual framework developed for POMDPs, natural resource analysts and decision makers who confront structural uncertainties in natural resources can take advantage of the rapid growth in POMDP methods and approaches, and thereby produce better conservation strategies over a larger class of resource problems.     

Pastoralists' responses to variation of rangeland resources in time and space.

We explore the response of pastoralists to rangeland resource variation in time and space, focusing on regions where high variation makes it unlikely that an economically viable herd can be maintained on a single management unit. In such regions, the need to move stock to find forage in at least some years has led to the evolution of nomadism and transhumance, and reciprocal grazing agreements among the holders of common-property rangeland. The role of such informal institutions in buffering resource variation is well documented in some Asian and African rangelands, but in societies with formally established private-property regimes, where we focus, such institutions have received little attention. We examine agistment networks, which play an important role in buffering resource variation in modern-day Australia. Agistment is a commercial arrangement between pastoralists who have less forage than they believe they require and pastoralists who believe they have more. Agistment facilitates the movement of livestock via a network based largely on trust. We are concerned exclusively with the link between the characteristics of biophysical variation and human aspects of agistment networks, and we developed a model to test the hypothesis that such a link could exist. Our model builds on game theory literature, which explains cooperation between strangers based on the ability of players to learn whom they can trust. Our game is played on a highly stylized landscape that allows us to control and isolate the degree of spatial variation and spatial covariation. We found that agistment networks are more effective where spatial variation in resource availability is high, and generally more effective when spatial covariation is low. Policy design that seeks to work with existing social networks in rangelands has potential, but this potential varies depending on localized characteristics of the biophysical variability.     

Assessing Conservation Management's Evidence Base: a Survey of Management-Plan Compilers in the United Kingdom and Australia

Abstract:  Conservation management is becoming increasingly resource intensive as threats to biodiversity grow through habitat destruction, habitat disturbance, and overexploitation. To achieve successful conservation and sustainable use of natural resources, we need to scientifically evaluate the effectiveness of conservation interventions and provide an efficient framework through which scientific evidence can be used to support decision making in policy and practice. We conducted the first formal assessment of the extent to which scientific evidence is used in conservation management through a questionnaire survey and follow-up interviews of compilers of protected-area management plans from major conservation organizations within the United Kingdom and Australia. Our survey results show that scientific information is not being used systematically to support decision making largely because it is not easily accessible to decision makers. This, in combination with limited monitoring and evaluation of effectiveness of management interventions, results in the majority of decisions being based on experience rather than on evidence. To address this problem we propose using an evidence-based framework adapted from that used in the health services and explain how we are currently putting an equivalent framework into practice by establishing review and dissemination units to serve the conservation sector.