Investigating the impact of alternative regulation strategies on the development of the marine sector in Ireland and addressing ways of mitigating the negative impacts is the principal thrust of this project. It will carry out an overview of the whole sector and then examine in depth the fishing sector.

The impact of regulation on the development of the marine sector: an overview

The Marine sector is comprised of three sub-sectors, Marine Services, Marine Resources and Marine Manufacturing. All of these sectors are affected by regulation of some sort or other. These regulations derive primarily from concerns about the environment, in broad terms. For example, there are quotas on fish landings and a ban on salmon netting due to concerns about destroying fish stocks; there is regulation regarding aquaculture due to concerns over pollution; and there is regulation on hydrocarbon exploration and gas production due to environmental concerns.

These constrain the development of the Marine sector, by constraining innovation and development in terms of existing and new commercial activities. However, there is a contrary viewpoint, which suggests that, in response to regulation, firms engage in innovative actions to offset the impact of regulation on output and profits and that the end result is significant increase in output and profits and environmental improvements.

This sub-section of Work Package 1 will identify those sectors where particular regulations have a significant impact on development and where further research would be justified in order to mitigate those negative impacts.

The impact of regulation on the development of the fishing industry: A Portfolio Theory (PT) approach to environmental and fisheries management issues with specific reference to ecosystem-based fishery management and Integrated Coastal Zone Management Approaches

The Common Fisheries Policy (CFP) is the European Union's instrument for the management of fisheries and aquaculture. The CFP was finally negotiated in 1983 and underwent a radical reform in 2002. It is aimed at ensuring the sustainable development of fishing activities from an environmental, economic and social point of view. The main focus has been to ensure sustainable exploitation of living aquatic resources.

Although fostering the sustainable development of fisheries coastal areas was also an objective of the CFP, this has received less attention. The economic fragility of remote rural settlements and island communities makes it even more important that marine and coastal interests are well integrated to maximise employment and safeguard natural capital in such areas.

The lack of clear focus on the impact of the CFP on coastal communities has seen certain communities under serious threat as a result of a decline in the fishing sector due to quota restrictions on fish catch and due to environmental regulations on fishing activities and acquaculture. New regulatory approaches in the fishing industry have recently been discussed. Two new approaches in particular that are emerging are 1. To apply the concept of “spatial planning” to coastal zones as part of an Integrated Coastal Zone Management (ICZM) strategy and 2. An ecosystem-based fishery management (EBFM) approach.

ICZM would provide special rights to the inhabitants of coastal communities, which would extend beyond the land space and include water space as well. This could come into conflict with the CFP, but herein is the particular interest, to see if and to what extent, coastal communities could be exempted from the general regulation of the CFP, for example in the designation of exclusive zones, in the interests of social sustainability of the local community. In the second approach, marine scientists and policymakers are encouraging ecosystem-based fishery management (EBFM), but there is limited guidance on how to operationalise the concept. Ecosystem management (EM) is defined as integrated management of human activities based on knowledge of ecosystem dynamics to achieve sustainable use of ecosystem goods and services, and maintenance of ecosystem integrity (SGEAM, 2000).

Within this project it is proposed to use financial portfolio theory (PT) as a method for EBFM that accounts for species interdependencies, uncertainty, and sustainability constraints. The use of the method will be illustrated with routinely collected data available from the International Council for the Exploration of the Sea (ICES), where we will demonstrate the gains from taking into account variances and covariances of gross fishing revenues in setting species total allowable catches. Regional and local case studies will also be used to provide information to carry out the PT approach on which to base ICZM decision making. The case studies will use stakeholder participation to determine risks and returns to marine resources.

This project will investigate the implications of regulation on the fishing industry and in particular on its impact on coastal communities and their sustainability, by employing a Portfolio Theory (PT) approach. It will look at best practices in the EU, within the constraints of the Common Fisheries Policy and also best practices in other part so the world where the livelihood of coastal communities is seen as a priority. These investigations will be explored against a background canvas of “spatial planning” of coastal zones using ICZM and also ecosystem-based fishery management approaches.

People involved:

Stephen Hynes