By Thamanna Vasan and David M. Kling, Department of Applied Economics, Oregon State University
Chances are that, when you go to a restaurant for oysters in the Pacific Northwest, you’ll come across a menu that features the Pacific oyster. Also known as the immigrant oyster, the Pacific oyster made its way to the Northwest in the early 1900s from Japan, and has remained a staple in aquaculture in the region due to the ease with which growers can produce the oyster and the value it holds in markets.
Over the past decade the oyster industry in the Northwest has taken a hit. Due to rapidly changing ocean conditions, a growing process that once ran like clockwork has been experiencing major glitches, and public enemy number one is ocean acidification. Ocean acidification is a byproduct of 200 years’ worth of human activities that relied on the burning of fossil fuels. These activities release carbon dioxide into the atmosphere. While some of the carbon dioxide hangs out in the atmosphere, large amounts are absorbed by the ocean. Once the ocean absorbs the carbon dioxide, the water become more acidic (lower pH) and less hospitable for shellfish. Shells become more brittle, young starter oysters (seed) become more expensive to produce, and it takes longer to get oysters to market-ready size.
We have a reasonable understanding of the effects of acidification on marine life, but the effects on communities and growers aren’t well understood. For example, oyster species are most susceptible to ocean acidification in the larval stage. In 2007 at Netarts Bay, high levels of ocean acidification wiped out a substantial number of larvae that were being grown for seed at hatcheries. The effect of the loss of seed was felt throughout the region as large-scale hatcheries were not able to provide seed to growers. In response to this major production failure, the owners of hatcheries along the coast began to adopt new technologies, and shift timing of production practices to avoid these sudden and drastic changes in the ocean’s chemistry. These forms of adaptation placed a burden on growers by increasing costs and requiring them to plant at different times of the year. Therefore, understanding the true impact of ocean acidification on communities and growers starts with understanding the value of these adaptive measures.
Using climate predictions, input from growers and hatcheries about operations impacts, and producer cost and revenue information, our team at Oregon State University’s (OSU) Department of Applied Economics, in cooperation with OSU’s Ocean Ecology and Biogeochemistry and the Geography Departments, and the Pacific Shellfish Institute, is working to understand the difference these actions can make, economically. We are calculating changes in net monetary values per acre of Pacific oyster as ocean conditions change and as growers’ implement a variety of adaptation practices.
If Pacific oyster growers in the Northwest don’t change their production practices in response to changing ocean conditions, our calculations suggest that growers will see significant decreases in net value from their operations (blue curve in Figure 1, labelled Practice A). On the other hand, if the grower continues to run their operations as is, but also adopts a new technology, such as machinery to normalize pH levels for larvae in hatcheries, they will see that their net value increase (purple curve labeled Practice A + tech). A grower could also adopt a completely new practice, such as a new variety of shellfish that is resistant to high levels of ocean acidification. This practice will have a lower net value under today’s climate conditions, but will lead to higher value down the road, as ocean conditions continue to worsen (green curve labeled Practice B).
By pairing an economic approach with fieldwork and our understanding of the biological processes, we are able to consider the long-term value of adaptation under changing conditions. Our research is helping us understand how firm’s adapt now, given uncertainty about future ocean conditions. This approach also allows us to consider both the benefits of new adaptive behavior as well as the costs. If future conditions and value are ignored it might appear that adopting new technology or developing new resistant varieties now are not worthwhile, as their value under current conditions are lower when compared to not changing anything. However, by taking into consideration how conditions might change over time in addition to how firms value these practices, we can see that adaption holds great value over the lifetime of a firm. This is valuable information about adaption for policy makers and growers to have before the effects of ocean acidification are more acutely felt.
This work is funded by a grant from the National Oceanic and Atmospheric Administration’s Ocean Acidification Program (project #NA17OAR0170165)
Reference:
Mendelsohn, Robert, William D. Nordhaus, and Daigee Shaw. 1994. “The impact of global warming on agriculture: a Ricardian analysis.” American Economic Review 84(4): 753-771. Online Access
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