Economic analysis of controversial halibut plan easier said than done

Homer News

Comments being made about the halibut catch sharing plan currently under consideration by the National Oceanic and Atmospheric Administration for Area 3A, the central Gulf of Alaska including Cook Inlet and Homer, frequently identify the need for an economic impact analysis.

• A vote by the Homer Chamber of Commerce and Convention Center's general membership directed Executive Director Monte Davis to submit a comment to the National Marine Fisheries Service to include a request for an economic impact analysis using current data;

• The Kenai Peninsula Tourism Marketing Council's board of directors asked its executive director to submit a comment to include "the need for an economic impact study to be conducted using current data to inform CSP allocations;"

• An ad run by the Alaska Charter Association asked for "an updated economic analysis to replace the 13-year old data referenced in the proposed rule;"

• In a "Point Counterpoint" column in Saturday's Anchorage Daily News, Jim Martin, West Coast regional director of the Recreational Fishing Alliance, wrote, "This decision needs to be based on optimizing the economic value of the resource to the nation. That is why the charter fishing industry is insisting on accurate economic data on the value of the fishery to the economy."

"A very difficult task" is how Jim Calvin of the McDowell Group, a research and consulting firm with offices in Anchorage and Juneau, summed up an economic impact analysis of this nature.

"If the idea is to measure the economic consequences of reduced harvest levels, the challenge is recognizing that catching fish is part of the experience that people pay for when they hire a charter operator," said Calvin. Unlike commercial halibut fishing, with a direct connection between buyer and seller, multiple factors must be taken into consideration when attempting to understand the value of a charter-caught halibut, said Calvin.

"More important are reasonable methods of understanding the value of a halibut to a sport fisherman who lives in, say, Pennsylvania and comes up here," said Calvin. "How do you measure the value of that fish to him ... to Alaska's economy?"

For individuals who come to Alaska specifically to catch halibut, the economic impact of travel, lodging and food are closely related to the fishing experience, rather than the number of halibut caught, said McDowell. The economic consequences are reduced and more complicated, however, when taking into consideration an individual coming to Alaska on a cruise ship and going out on a half-day charter.

Preparing an economic impact analysis of the catch-sharing plan is no small request, said Gunnar Knapp with the University of Alaska Anchorage Institute of Social and Economic Research.

"The problem is, it's obviously a devilishly difficult situation for the people potentially affected by this, the operators and communities and so on, and a number of complicated questions that it raises aren't entirely obvious," said Knapp.

For starters, such a study would need to identify the people impacted: who are they and how many exist? What businesses are impacted — direct and spin-offs — and how many exist?

Creating a comprehensive list of areas to be addressed is just the tip of the iceberg.

"The challenge from an economic study point of view is always what's the alternative? What are you assuming?" said Knapp. "In other words, the economic impact of some management action presumes a change compared with what you would have had otherwise."

For the CSP, there is the status quo: two halibut per day per person in Area 3A. The preferred alternative of the National Marine Fisheries Service includes different scenarios based on the catch limit set annually by the International Pacific Halibut Commission. Each scenario comes with its own economic analysis. Among them are a two-fish-a day limit with one fish less than 32-inches in length and a one-fish-a-day limit.

"I'm sure that a lot of charter operators would like to save what they have and don't want a change, but when it comes to the issue of leaving things the way they are, what does that mean about the sustainability of the resource? What does it mean about who else would have to cut back and what are the impacts of that?" said Knapp.

The area to be analyzed expands further when resource allocations are shared by commercial and charter halibut fishermen.

While Knapp considered an economic impact analysis of the CSP "complicated," he also viewed it as a "useful" way to answer questions being raised.

"But on a highly polarized issue like this, unfortunately an economic study can be viewed as biased one way or the other," said Knapp. "The ideal study be one looks at the overall, entire (issue), all the uses of halibut and how they all effect the economy and what are overall changes and implications to each group and the options."

The complexity of an economic analysis can be found in the North Pacific Fishery Management Council's June 23 environmental assessment, regulatory impact review and initial regulatory flexibility analysis for a CSP regulatory amendment. A section addressing the economic impact to communities turns to data from a 10-year-old University of Alaska Fairbanks angler survey and a 14-year-old Alaska Department of Fish and Game angler survey used to estimate economic data for the Kenai Peninsula Borough.

The results indicated 197,556 saltwater sportfishing trips in 1997 generated $28.5 million in expenditures, $12 million in personal income and 822 jobs. However, impact to halibut charters is over-estimated because the numbers included both guided and non-guided fishing trips.

Financial and time constraints of a thorough analysis also are raised in that same section. Referring to information on expenditures by limited entry permit holders by community, the report states, "Collecting that information would be both expensive and time consuming, and is outside the scope of this amendment."

As Knapp pointed out, a thorough economic analysis is a difficult task.

"It takes a long time and ultimately doesn't solve the underlying political issue," he said.

11/09/2016 - 8:52pm