Georgetown Economics of Washington, DC has conducted an assessment of the New England Fisheries Management Council’s Economic Impact Report with regard to the effects anticipated from the recent scallop regulation recommendations under Framework 21.
The New England Fisheries Management Council’s (“NEFMC”) Economic Impact Study of the allocation alternatives presented under Framework 21 to the Fisheries Management Plan(“FW21”) gives too much weight to the “estimated” long-term economic benefits projected for each alternative. NEFMC’s benefit calculations do not adequately take into account the uncertainty associated with the assumptions that underlie its projections.
There is considerable risk that the NEFMC’s assumptions about future values of scallop allotments, fishing mortality, ex-vessel prices, and trip costs, which form the foundation of the NEFMC’s projections, will not be realized. Because the uncertainty associated with these projections grows exponentially over time, the comparison of the economic benefits of the allocation alternatives given in FW21[1] should be made over a shorter period. The three-year period from 2010 to 2012 is the longest timeframe for comparison that is economically meaningful. Alternately, the projections of economic benefits after 2012 can be re-weighted in the present value benefit calculations so as to adequately reflect the uncertainty of the calculations made for later years. A short term comparison shows that the No Closure F=.24 option (“NCLF24”) gives a higher cumulative present value of producer profits than the No Closure F=.20 option (“NCLF20”).
Read the complete report from Georgetown Economics [PDF]