No abstract

Agriculture and municipal wastewater are the principal sources of eutrophying nutrients in many water ecosystems. We develop a model which considers the characteristics of agricultural and municipal nutrient abatement. The model explicitly accounts for the investment needed to set up wastewater treatment facilities, and makes it possible to determine the optimal timing of investment as well as the optimal agricultural and municipal abatement levels. We apply the model to the Finnish coastal waters of the Gulf of Finland. Our results indicate that substantial savings in abatement costs and the damage associated with eutrophication could be obtained by constructing the facilities needed to process all the wastewaters entering the coastal ecosystem. The optimal timing of investment is shown to hinge on both the economic and ecological characteristics of the ecosystem.

The paper puts forward a model of the Atlantic salmon fishery in the Baltic Sea that integrates the salient biological and economic characteristics of migratory fish stocks. Designed to be compatible with the framework used for actual stock assessments, the model accounts for agestructured population dynamics, the seasonal harvest and competing harvesting by commercial and recreational fishermen. It is calibrated using data and parameter estimates for the Simojoki River stock. The socially optimal policy for maximizing discounted net benefits from the fishery within an uncertain environment is determined using a dynamic programming approach and numerical solution method. Our results indicate that substantial economic benefits could be realized under optimal management without compromising stock sustainability.

\W_e examine cooperative harvesting in a sequential fishery with stochastic shocks in recruitment. Two fleets harvest in a stochastic interception fishery. We analyze cooperative management as a non-cooperat ive game, where deviations from cooperative harvesting are deterred by the threat of harvesting at non-coopera tive levels for a fixed number of periods whenever the initial stock falls below a trigger level. We illustrate the sequential harvesting game with an application to the Northern Baltic salmon fishery. Cooperative harvesting yields participants substantial gains in terms of expected payoffs. The greatest gains accrue to the fleet harvesting the spawning stock, the actions of which are not observed by the competitor. An explanation for the prevalence of fish wars is provided in that even if a cooperative agreement is reached, shocks in recruitment trigger phases of non-cooperativ e harvesting. Further, the cooperative solution can only be maintained when stock uncertainty is not too prevalent.

No abstract