Essays in Ocean Economics

Abstract

This dissertation consists of three essays on the economics of ocean resources, with a common focus on how governance institutions shape the management of marine commons. The first chapter studies the international common-pool problem in fisheries and its interaction with climate change. Most commercial fish populations cross national borders, and climate change is expected to redistribute these populations by altering the environmental conditions that determine their ranges. Using species distribution modeling techniques, I construct a historical panel that tracks the share of each fishery under each managing country’s jurisdiction, and I document a strategic response: a one percentage point decrease in this country share decreases escapement—the biomass not caught—by 1.6%. Applying these estimates to climate projections, I find that stocks with increasing country control will increase escapement by 2.8% and stocks with decreasing country control will decrease escapement by 3.2%, accounting for nearly one-third of climate change’s combined effect on the average stock. A first-best global agreement would raise escapement by 79%; a more plausible bilateral agreement between the United States and Canada would raise it by 14% and dampen the behavioral response to climate change by two-thirds. The second chapter, co-authored with Aaron Berman, studies how China has used fishing subsidies to manage congestion in its domestic fishery. We present a model showing that the spatial effects of fuel subsidies—the most common form of fisheries subsidy—are theoretically ambiguous, and test the model using a triple-difference design that exploits a change in Chinese subsidy policy. We show that China’s fuel subsidy in fact increased domestic fishing by suppressing a 1.24% elasticity with respect to the oil price, while decreasing distant-water fishing, and that non-Chinese vessels in spatial competition with Chinese vessels reduced their effort in response. China’s subsequent shift toward spatially targeted subsidies did promote decongestion: a simple extrapolation suggests that vessels in our sample would have fished 39% more inside China’s Exclusive Economic Zone and 33% less outside it had the policy not changed. The shift reduced total fishing on net, implying a tradeoff between the environmental and global distributional consequences of disciplining fisheries subsidies. The third chapter studies how permit incentives shape the precision of biodiversity reporting in environmental impact assessments for deep-sea mining. The International Seabed Authority requires mining contractors operating in international waters to conduct biological surveys of prospectively-mined tracts, creating a public good as a byproduct of private exploration. But contractors face a principal-agent problem: they have incentives to underinvest in species detection when discoveries could create obstacles to mining approval. Using a database of biological specimen records reported to the ISA, I show that specimens from non-contract conservation zones are reported with species-level identification 46.7% of the time, while specimens collected by contractors within their own prospectively-mined tracts reach only 17.6%—a gap that persists after controlling for contractor identity, year, and environmental variables, and that survives within-sampler and within-polygon comparisons that hold scientific capacity and environmental conditions fixed. I calculate that underreporting accounts for at least 7% of the missing species-level identifications in the dataset, on the order of 8,000 to 37,000 specimens that would carry a species name absent the permit-denial mechanism. I argue that the ISA’s exploration requirement is a second-best solution to the deep sea’s public-goods problem and consider policy options to mitigate the resulting incentive distortions.