Application of economic tools for informing Atlantic salmon management in Norway. Opportunity cost of protection measures, valuation of ecosystem services and environmental cost-benefit analysis.

Abstract

This thesis explores various aspects of the application of economic analysis to Atlantic salmon management in Norway. The purpose and contributions are twofold. On the one hand, the thesis seeks to improve economic toolbox used to analyse environmental-economic trade-offs. On the other hand, it yields specific conclusions and recommendations for the case of Atlantic salmon management in Norway and environmental management in general. The questions investigated here concerns opportunity costs of conservation, valuation of ecosystem services and the application of cost-benefit analysis in practice. The research is largely related to the problem of “farmed-wild salmon” trade-off, where the recently introduced aquaculture regulations (“Traffic light” system) are central. The research applies both quantitative and qualitative methods. A general model for the opportunity cost in the presence of externalities is proposed and challenges in its estimation, mainly related to the complexity of ecological-economic links, are discussed. It is found that wild salmon conservation under the new regulations is both economically and ecologically inefficient. It is argued that an analysis of costs and benefits would reveal potential inefficiency at an early stage. However, the research finds that application of cost-benefit analysis is hindered by knowledge gaps, ethical, political and technical constraints. In particular, knowledge gaps concern the values of ecosystem services. The thesis investigates potential affective bias in the valuation of Atlantic salmon with stated preference methods. The bias is linked to the awareness of the good due to the public debate surrounding wild and farmed salmon controversies, and the prevalence of non-market values. Addressing the knowledge gaps would improve the applicability of economic tools. However, it is also required that other constraints are taken into account.