As the world's marine ecosystems deteriorate due to pollution and overfishing, there is an urgent need to investigate links between the two problems. We assess the effects of improving environmental quality in the presence of such linkages, recognizing that the impact of pollution on fisheries may be complex and that efficiency benefits from pollution control may be limited in open-access fisheries. Using a dynamic bioeconomic modeling approach, we incorporate habitat quality in the presence of ecological 'regime shifts' and analyze the comparative static effects of an exogenous reduction in nutrient inputs. We apply the approach to the Black Sea anchovy fishery, where the introduction of an exotic comb jelly caused the 'regime shift.' We show that pollution abatement significantly raises catch, employment, and revenues at the long-run equilibrium of the system, but only if abatement prevents the regime shift. Ultimately, for substantial efficiency benefits to arise from nutrient abatement, the open-access problem must be addressed as well.
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