Search and destroy: a bioeconomic analysis of orange roughy fisheries on seamounts in New Zealand

This paper develops a bioeconomic model that captures the underlying incentives driving the serial depletion of pristine seamounts. The determinants under New Zealand's Quota Management System relate to unit cost savings from bottom trawling for orange roughy on seamounts, where catch rates are high, for a constrained yearly catch, yielding superior rent and driving the continued search for pristine seamounts. Despite known patterns of seamount depletion, catch and effort data collected by the New Zealand Ministry of Fisheries lack information on the bathymetry of harvesting locations. We provide descriptive statistics of the Ministry's data on catch, effort and location between 2001 and 2010, which examine associations between high catch rates and pristine seamounts. The bioeconomic model formalises the expected gains of unit cost reductions and shows that bottom trawling activity on pristine seamounts ceases only when the expected reduction in harvest costs is equal to the search cost per unit of harvest. We contend that New Zealand's policies to date to protect seamounts do not address the spatial determinants of rent appropriation under the quota system and that the imposition of a 'seamount' fee levied on the bottom trawlers' harvest activities may provide a way to internalise the cost of seamount destruction more effectively. Such a policy has a number of advantages, the most important of which is that the fee ties the impacts of habitat destruction to the choice of fishing method, thereby providing an impetus to develop and adopt more selective fishing practices.