FISHERIES MANAGEMENT: HOW MUCH RISK IS OK?

Let’s start out by accepting one fact:  Nothing is certain. 

Thanks to the financial crisis of 2008, we’ve all now heard of “black swan events,” which have been defined as

“an extremely negative event or occurrence that is impossibly difficult to predict…events that are unexpected and unknowable.”

In his 2001 book, Fooled by Randomness, Wall Street trader Nassim Nicholas Taleb wrote that a black swan event is one that is unpredictable, results in severe and widespread consequences and, after it occurs, people will claim had, in fact, been predictable.

A website dedicated to black swan events—named, not illogically, blackswanevents.org—explains that

“A Black Swan event is an event in human history that was unprecedented and unexpected at the point in time it occurred.  However, after evaluating the surrounding context, domain experts (and in some cases laymen) can usually conclude: ‘it was bound to happen…’

“The term Black Swan originates from the (Western) belief that all swans are white because these were the only ones accounted for.  However, in 1697 the Dutch explorer Willem de Vlamingh discovered black swans in Australia.  This was an unexpected event in (scientific) history and profoundly changed zoology.  After the black swans were discovered, it seemed obvious that black swans had to exist just as other animals with varying colors were known to exist as well…”

Putting that in a fisheries context, the existence of black swan events, and the unavoidable fact that even highly improbable events can occur, means that even the best thought-out management measures may, on occasion, fail to achieve their goals.

To even approach management certainty—say, a 99 percent probability of success—would require fishery managers to impose extremely strict management measures, that would unreasonably restrict landings out of the fear that a very unlikely event would, in fact, happen.

So the question that managers must address, in every managed fishery, is how risk-averse harvest restrictions need to be in order to provide reasonable protection for the managed stock, while not unnecessarily restricting fishermen’s catch.

In federal fisheries, there is a clear legal answer, established by the 2000 United States Court of Appeals for the D.C. Circuit when it decided Natural Resources Defense Council v. Daley.  For a federal fishery management measure to pass legal scrutiny, such measure must have at least a 50 percent probability of achieving its statutorily required goal.

That means, of course, that a management measure with a 50 percent probability of failure is, from a legal perspective, good enough for government work, at least when the feds are involved.  

The Atlantic States Marine Fisheries Commission, as well as individual states managing fish in their own waters, aren’t even bound by that modest standard, and may legally adopt measures more likely to fail than succeed. 

That happened earlier this year at the ASMFC, when its Atlantic Striped Bass Management Board approved state measures intended to implement Addendum VI to Amendment 6 to the Atlantic Striped Bass Interstate Fishery Management Plan.  Amendment VI was intended to end overfishing and reduce fishing mortality to or below the target level, yet the ASMFC approved management measures that had only a 42 percent probability—in other words, a 58 percent probability they would be incapable—of achieving the latter goal. 

In approving such questionable measures, the ASMFC seemed willing to accept an inordinate amount of risk, given that the striped bass stock is already overfished.

Which brings us back to the basic question:  How much risk is OK?

In many cases, the regional fishery management councils have merely adopted the 50 percent standard from NRDC v. Daley, accepting a 50 percent probability of failure in exchange for a larger current harvest.  In ASMFC and state-level fisheries, the risk appetite has historically been even larger, with short-term economic considerations, and the demands of various special interest groups, making probabe long-term failure a too-frequently acceptable option. 

In Louisiana, where speckled trout have been overfished for a number of years, managers talked about how they

“walk a tightrope between getting full public use out of a renewable resource and harming a fishery at least in the short term,”

and try to keep harvest just low enough to prevent recruitment overfishing, and avert a stock collapse.

When managers “walk a tightrope,” risk “harming a fishery at least in the short term,” and “try to keep harvest just low enough to…avert a stock collapse,” you can be sure that they’re accepting high levels of risk, and making themselves extremely vulnerable to black swan events.

Accepting risk that managers know could result in harm to a fishery, and might, if they get something wrong, lead to a stock collapse is, to be blunt, irresponsible.

But where, short of that, should the line be drawn?

Many management bodies take an ad hoc approach to risk, setting levels that seem appropriate at the time, or at least appropriate enough, to enough of the managers present, to pass on a sometimes close vote.  However, at least two management organizations, the Mid-Atlantic Fishery Management Council and the ASMFC, have attempted to take a more ordered approach to risk management.  

Their efforts to date, and the contrasts between them, are worth a closer look

The Mid-Atlantic Council came first, establishing a risk policy and Acceptable Biological Catch control rule in 2011.  According to the Council,

“A risk policy specifies the Council’s acceptable probability of overfishing associated with the current biomass level compared to the biomass target.”

Thus, the amount of risk that the Council is willing to accept is directly related to the health of the stock, as compared to established biomass reference points.  That risk level is then part of the calculation made to determine the Acceptable Biological Catch.  As the Council explains,

“…When making an [Acceptable Biological Catch] recommendation, the [Scientific and Statistical Committee] applies the ABC control rule that accounts for scientific uncertainty as well as the Council’s risk policy.  Because the ABC cannot exceed the [Overfishing Limit] estimate, the ABC control rule generally specifies the amount by which the ABC should be reduced from the [Overfishing Limit]…  [emphasis added]”

It should be noted that the Mid-Atlantic Council’s risk guidelines are strictly scientific in nature; they are structured around the health of the fish stock, preventing overfishing, and accounting for scientific uncertainty.  However, in 2019, the Council renewed its effort to examine its risk policy, in a process that

“should assess the short and long term trade-offs between stock biomass protection, fishery yield, and economic benefits.”

That process has been completed, and the upshot is a proposed change to the Council’s risk policy that is still essentially science-based, although it does liberalize harvest a bit, particularly when stock abundance rises well above the biomass target.  The National Marine Fisheries Service will be accepting public comments on the proposal through November 26, and explains that it is considering the action

“to adjust the Council’s risk policy by accepting a higher level of risk…for stocks that are healthy and either at or above biomass targets.  For stocks not subject to a rebuilding plan that have a [biomass below the biomass target, the maximum probability of overfishing] would decrease linearly from a maximum value of 45 percent until [such probability] becomes zero [when biomass is 10 percent or less of the biomass target].  For stocks with biomass that exceeds [the biomass target, the probability of overfishing] would increase linearly from 45 percent to a maximum of 49 percent when [biomass is at or above 150 percent of the biomass target].”

That represents a substantial liberalization at higher levels of abundance, as the current risk policy caps the probability of overfishing at 40 percent, even when the biomass exceeds the biomass target by a substantial amount.  While the wisdom of such liberalization can be debated—and anyone who has an opinion on the subject probably should submit a comment before the deadline—the virtue of the revised risk policy is that it is still closely tied to stock health; while it might be intended to provide greater socioeconomic benefits when fish are abundant, it will still provide for strong protections should abundance show a potentially dangerous decline.

The ASMFC’s risk policy, which is currently being developed, takes a different tack, and if adopted, will not necessarily scale risk to the health of a fish stock.  And while the Council’s risk policy is intended to be applied across all stocks in the same manner, the ASMFC is contemplating an approach to risk which can be amended by each individual species management board.

Instead of creating the sort of omnibus policy adopted by the Mid-Atlantic Council, the ASMFC is trying to build what it calls a “risk management tool.”  A document distributed at the ASMFC’s August meeting, which described the ASMFC’s proposed risk management approach, stated that

“…The purpose of the Commission’s Risk and Uncertainty Policy is to provide a consistent yet flexible mechanism to account for both scientific and management uncertainty in the Commission’s decision-making process in order to protect all Commission-managed stocks from the risk of overfishing, while minimizing any adverse social, economic, or ecosystem effects…”

Unlike the Council, the ASMFC isn't legally required to set a harvest limit that avoids overfishing or, if necessary, allows an overfished stock to rebuild.  Thus, unlike the Council, which places primary emphasis on the health of fish stocks, the ASMFC's risk policy will again try to achieve the often mutually exclusive goals of maintaining stock health while minimizing short term economic impacts, the same path that has led it to consistently fail to rebuilding and then maintain fish stocks at sustainable levels in the long term. 

To make its risk assessment, the ASMFC contemplates using a “Risk & Uncertainty Decision Tool” that will consider various biological, social, and economic factors, give a set weight to each, and then return a value intended to inform the relevant species management board about how much risk it ought to assume.  

Such factors will include the status of the stock relative to biological reference points such as biomass and fishing mortality, scientific and management uncertainty, and the role that the stock plays in the coastal ecosystem.  However, it will also consider commercial and recreational short-term and long-term “economic and social considerations;” a comment in the document notes that

“The [relevant species Management] Board can adjust the weightings of short-term and long-term socioeconomic considerations in order to indicate their relative preference for mitigating short-term negative impacts versus ensuring long-term sustainability.”

Thus, while even the Mid-Atlantic Council’s proposed, less restrictive risk policy is ultimately intended to maintain healthy fish stocks that are sustainable in the long term, the ASMFC’s proposed approach to risk will allow that management body to continue making the same old mistakes in a new, more formal way, and continue to accept risk levels adverse to the long-term interests of fish stocks in order to maintain short-term economic gains.

Thus, there is no consensus on the level of risk to the long-term healt of fish that stocks managers should routinely assume. 

The Mid-Atlantic Council has developed a logical and structured approach to the question that places the highest priority on the health of fish stocks, although the Council is still trying to determine, at least in the case of a healthy stock, how much risk might be acceptable.

The ASMFC, on the other hand, is still having problems setting priorities, and has not yet come to the conclusion that there is some point at which economic concerns no longer justify exposing a troubled stock to elevated levels of risk.

But that’s a decision that not only the ASMFC, but all fisheries managers, will ultimately be forced to make.  Risk will always be part of the management equation, and the sort of uncertainty that hatches black swans will never be entirely purged from the management process.  In such an environment, excepting too much risk, in order to maintain short-term profits, is a near-certain way to assure that, in the long term, something bad will happen, and both the fish and the fishermen will suffer as a result.