Sat. Feb 4th, 2023
Fluctuations in shrimp prices help pinpoint the economic effects of pollution

Low oxygen levels are a major problem for aquatic ecosystems. When oxygen falls below two milligrams per liter, the area is classified as “hypoxic,” a condition that can be caused by pollution such as agricultural runoff. Hypoxia has an effect on marine life quite relevant to fisheries: low levels of oxygen in the environment slow the growth of individual animals, meaning populations are made up of smaller creatures.

Research published in PNAS this week, led by Martin D. Smith of Duke University, used a new method that takes a major step toward quantifying the economic impact of the pollution that hypoxia causes. The approach could provide policymakers with a better tool to understand the costs and benefits of different pollution controls. Their technique could also help researchers observe the effects of marine disturbances in other areas.

Smith and colleagues looked at data from the Gulf of Mexico, which has the world’s largest area of ​​seasonal hypoxia, peaking in the summer. The area is home to an important shrimp fishery, which is supposed to show the effects of hypoxia, but it’s not that easy to track down.

“Although studies show ecological effects of hypoxia, the economic consequences in this fishery have not been determined,” the authors write. Determining these economic impacts is an essential step in informing policy decisions. It is expensive to control pollution upstream of hypoxic areas, so knowing the economic effects of hypoxia can help you determine whether the cost is worth it on a purely economic basis.

To get a clear picture of the causal effects of hypoxia, you really need a natural experiment: an area that becomes hypoxic, where you can monitor the impact on fisheries over time; and another area that is not hypoxic to act as a control or baseline. The problem is that ships are not static – if an area produces better crops, people will move there. This makes it impossible to clearly compare the traits of hypoxic regions with non-hypoxic regions.

Where you can expect a difference is in shrimp prices. If shrimp populations in hypoxic areas have smaller individuals and smaller ones, that should make larger shrimp more scarce, which in turn will make them more expensive. Smaller shrimp will be more abundant, lowering their price. Conveniently, shrimps are generally sold by size, making this relatively easy to track, but not entirely straightforward: local shortages can be quickly met by imports, making any price fluctuations short-lived.

To see if our expectations actually reflected in the data, Smith and his colleagues looked at seasonal hypoxia, tracking shrimp prices month by month from 1990 to 2010. They found a strong relationship between prices and hypoxia: when hypoxia peaked , so did the prices of large shrimp, while the prices of smaller categories of shrimp fell.

This finding extends beyond shrimp prices from the Gulf of Mexico. The method developed by Smith and his colleagues could be used in other fisheries to determine the impact not only of hypoxia, but also of other environmental disturbances, assuming the right types of data can be found. Because the environmental impacts on fisheries go much deeper than shrimp and hypoxia alone, the cumulative economic impacts may slowly emerge through multiple analyses.

If the goal is to provide evidence that there is an economic incentive to do something about hypoxia, much more information needs to be gathered. “An ideal claim for policy analysis would be something like ‘reducing nutrient runoff X percent leads to economic benefits for shrimp (and other fisheries) of $Y,’ the authors write. At present, there is not enough data to make a to make a claim like this.

PNAS2016. DOI: 10.1073/pnas.1617948114 (About DOIs).

By akfire1

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