Model experiment on optimal size of a fish stock with environmental uncertainties

We analyze the effect of environmental uncertainties on optimal fishery management in a bio-economic fishery model. Unlike most of the literature on resource economics, but in line with ecological models, we allow the different biological processes of survival and recruitment to be affected differently by environmental uncertainties. We show that the overall effect of uncertainty on the optimal size of a fish stock is ambiguous, depending on the prudence of the value function. For the case of a risk-neutral fishery manager, the overall effect depends on the relative magnitude of two opposing effects, the 'convex-cost effect' and the 'gambling effect'. We apply the analysis to the Baltic cod and the North Sea herring fisheries, concluding that for risk neutral agents the net effect of environmental uncertainties on the optimal size of these fish stocks is negative, albeit small in absolute value. Under risk aversion, the effect on optimal stock size is positive for sufficiently high coefficients of constant relative risk aversion.

Drought risk assessment as changes in the potential stand yield classes and potential forest production for Sitka spruce, Scots pine, and pedunculate oak over the next 80 years in the Great Britain

Probabilistic climate data have become available for the first time through the UK Climate Projections 2009, so that the risk of tree growth change can be quantified. We assess the drought risk spatially and temporally using drought probabilities and tree species vulnerabilities across Britain. We assessed the drought impact on the potential yield class of three major tree species (Picea sitchensis, Pinus sylvestris, and Quercus robur) which presently cover around 59% (400,700 ha) of state-managed forests, across lowland and upland sites. Here we show that drought impacts result mostly in reduced tree growth over the next 80 years when using b1, a1b and a1fi IPCC emissions scenarios. We found a maximum reduction of 94% but also a maximum increase of 56% in potential stand yield class in the 2080s from the baseline climate (1961-1990). Furthermore, potential production over the national forest estate for all three species in the 2080s may decrease due to drought by 42% in the lowlands and 32% in the uplands in comparison to the baseline climate. Our results reveal that potential tree growth and forest production on the national forest estate in Britain is likely to reduce, and indicate where and when adaptation measures are required. Moreover, this paper demonstrates the value of probabilistic climate projections for an important economic and environmental sector.