Chapter 5 The Environment and the Selection of Aquaculture Species and Systems: An Economic Analysis

Abstract

Environmental conditions play a significant role in the economic success of aquaculture. This paper classifies environmental factors in a way that facilitates economic analysis of their implications for the selection of aquaculture species and systems. The implication of on-farm as on-site environmental conditions for this selection are considered first, using profit-possibility frontiers and taking into account the biological law of environmental tolerance. In selecting, recommending, and developing aquaculture species and systems, however, it is often unrealistic to assume the degree of managerial efficiency implied by the profitpossibility function. It is appropriate to take account of the degree of managerial inefficiency that actually exists, not all of which may be capable of being eliminated. Furthermore, experimental research and development should be geared to on-farm conditions, and the variability of these conditions needs to be taken into account. Particularly in shared water bodies, environmental spillovers between aquaculturists can be important and, as shown theoretically, can influence the socially optimal selection of aquaculture species and systems. Similarly, aquaculture can have environmental consequences for the rest of the community. The social economic implications of this for the selection of aquaculture species and systems are analyzed. Some paradoxical results are obtained. For example, if the quality of social governance of aquaculture is poor, aquaculture species and systems that cause a slow rate of environmental deterioration may be socially less satisfactory than those that cause a rapid rate of such deterioration. Socially, optimal choice of aquaculture species and systems depends not only on their biophysical characteristics and market conditions but also on the prevailing state of governance of aquaculture. Failure to consider the last aspect can result in the introduction of new aquaculture species (and systems) doing more social harm than good.