Stage 1 Analysis of the Stage 1 Analysis of the Trawl IQ ProgramTrawl IQ Program

April 2006April 2006

Marcus HartleyMarcus Hartley

Presentation toPresentation to

Pacific Fishery Management Pacific Fishery Management

Council Workshop on Trawl IQsCouncil Workshop on Trawl IQs

Outline of this Presentation Scope of Work of the Stage 1 Analysis Overview of Outline Sections Purpose and Need, Goals and

Objectives Timetable for Analysis and

Implementation NEPA Guidance Direct & Indirect Effects Analysis Cumulative Effects Analysis

Scope of Work for the Stage 1 Analysis

The first stage entails the development of the introductory chapters, outline, and analytical framework for the EIS/RIR/IRFA/SIA.

It will entail the gathering of information and sufficient analysis to fully develop a detailed, specific and documented analytical framework approach to address each feature of the alternatives and their likely impacts, along with an assessment of the overall differences in impacts among the alternatives.

Scope of Work for Stage 2

The second stage will be to complete the EIS, as well as RIR, IRFA and SIA

Stage 2 will be based on the framework developed in Stage 1

Outline of this Presentation Scope of Work of the Stage 1 Analysis

Overview of Outline Sections

Purpose and Need, Goals and Objectives Timetable for analysis and

implementation NEPA Guidance Direct & Indirect Effects Analysis Cumulative Effects Analysis

Chapter 1: Introduction

Need for Action—Problems for Resolution

Background to Purpose and Need Purpose of the Proposed Actions Goals Objectives Constraints and Guiding Principles Description of Proposed

Alternatives Scoping Summary

Chapter 2: Analytical Framework

Provides a summary of the analytical framework used in the analysis.

Includes a list of affected resources along with an initial description of indicators and significance criteria.

Chapter 3: Resource and Stakeholder Profiles

Will provide (in Stage 2) summary profiles of affected resources and stakeholder groups showing historical and baseline conditions

Chapter 4: Components Analysis

The components table deconstructs the alternatives into component parts consisting of elements, options, and sub-options that combine together to create the proposed alternatives.

The components analysis will examine (in Stage 2) individual elements, options and sub-options, including some options and sub-options that have not specifically been included in the Alternatives

In this chapter options and sub-options will be examined (in Stage 2) independent from the Alternatives.

Chapter 5: Direct and Indirect Effects Analysis

The Stage 2 analysis will use a “resource-based” approach to examine direct and indirect effects of the Alternatives.

In a “resource-based” approach, a single section of the document examines and describes the direct and indirect effects of all of the alternatives assessed for a particular resource or stakeholder group.

The Alternatives will be examined holistically, as opposed to the single issue approach in the components analysis

Chapter 6: Cumulative Effects Analysis

Will contain the cumulative effects (CE) analysis.

Will explicitly take into account reasonably foreseeable future events (RFFEs)—both endogenous and exogenous—that have the potential to create effects on affected resources and stakeholders.

The CE analysis will follow the same general format as the direct and indirect effects analysis looking at the alternatives holistically from the perspective of each stakeholder/resource group.

Chapter 7: Summary of Other Environmental Management Issues Will contain a review of other

issues typically found in NEPA documents including: Short-term uses versus long-term

productivity Irreversible resource commitments and

energy requirements Conservation potential of the

alternatives

Chapter 8: Consistency with the Groundfish FMP and National Standards Will summarize the consistency

of the proposed action: with the Trawl IQ program “goals,

objectives, and constraints and guiding principles”

the Groundfish FMP goals and objectives

and the ten MSA National Standards

Chapter 9: Cross-Cutting Mandates

Will examine the Trawl IQ Alternatives for consistency with other federal laws

Other Required Chapters

Chapter 10: List of Preparers Chapter 11: Acronyms and

Glossary Chapter 12: Literature Cited Chapter 13: Index

Appendix A: RIR

Regulatory Impact Review (RIR)

Economic Analysis of the Alternatives

Initial Regulatory Flexibility Analysis (IRFA)

Appendix A: RIR (cont.)

Economic Analysis of the Alts. Net Benefits: Benefit-Cost Framework

Overall Change in B-Cs Change in Distribution of B-Cs

Regional Economic Impacts: Change in Income and Employment by

Region

Appendix A: RIR (cont.)

Initial Regulatory Flexibility Analysis (IRFA) Impacts on Small Entities

Compliance Requirements/Costs

Additional Regulatory Burden

Conflicts with Other Federal Rules

Appendix B: Social Impact Assessment Technical Appendix SIA two-pronged approach

Summary tables based on quantitative information; presented in body of EIS/RIR; focuses on distribution of sectors across communities

Detailed community context information; presented in technical appendix; focuses on community engagement and dependency

Appendix B: Social Impact Assessment Technical Appendix Balance of quantitative and

qualitative Limits of available information Range, direction, and likely order of

magnitude of social and community impacts

SIA Technical Appendix Contents

Introduction

Overview of Trawl Community Socioeconomic Profiles

Background and Methodology

SIA Technical Appendix Contents

Community Variability Location and Historical Ties to the Fishery

Community Socioeconomic Structures

Social Impact Experience with IFQ or Other Rationalization Programs Summary Review of Relevant Literature

Region-Specific Experience

SIA Technical Appendix Contents

Community Profiles Community #1

Community Demographics Local Economy and Links to the Trawl Fishery Community Revenues Summary of Recent Community Rationalization

Experience Differential Impacts of Trawl Fishery Management

Alternatives

Community #2 (and so on)

Outline of this Presentation Scope of Work of the Stage 1 Analysis Overview of Outline Sections

Purpose and Need, Goals and Objectives

Time table for analysis and implementation

NEPA Guidance Direct & Indirect Effects Analysis Cumulative Effects Analysis

Need for Action—Council Problem Statement

In summary, management of the fishery is challenged with the competing goals of: minimizing bycatch, taking advantage of the available allowable

harvests of more abundant stocks (including conducting safe and efficient harvest activities in a manner that optimizes net benefits over the short-term and long-term),

increasing management efficiency, responding to community interest.

Goals

Increase regional and national net benefits including improvements in economic, social, environmental and fishery management objectives.

Achieve capacity rationalization through market forces and create an environment for decision making that can rapidly and efficiently adjust to changing conditions.

Objectives

Provide for a viable, profitable and efficient groundfish fishery.

Minimize negative ecological impact while taking the available harvest.

Reduce bycatch and discard mortality. Promote individual accountability –

responsibility for catch (landed catch and discards).

Increase stability for business planning.

Objectives (continued)

Increase operational flexibility. Minimize adverse effects from an IFQ

program on fishing communities to the extent practical.

Promote measurable economic and employment benefits through the seafood catching, processing, distribution elements, and support sectors of the industry.

Provide quality product for the consumer.

Increase safety in the fishery.

Constraints and Guiding Principles

The Alternatives should strive to realize the goals and objectives… Taking into account the biological structure

of the stocks including such factors as populations and genetics.

Taking into account the need to ensure that the total OYs and ABC for the trawl and all other sectors are not exceeded.

Accounting for total groundfish mortality. Avoiding provisions where the primary intent

is a change in marketing power balance between harvesting and processing sectors.

Constraints and Guiding Principles (continued)

The Alternatives should strive to realize the goal and objectives… Avoiding excessive quota concentration. Providing efficient and effective monitoring

and enforcement. Designing a responsive review evaluation

and modification mechanism. Taking into account the management and

administrative costs of implementing and overseeing the IFQ program and complementary catch monitoring programs and the limited state and federal resources available.

Outline of this Presentation Scope of Work of the Stage 1 Analysis Overview of Outline Sections Purpose and Need, Goals and

Objectives

Time table for analysis and implementation

NEPA Guidance Direct & Indirect Effects Analysis Cumulative Effects Analysis

Timeline for the AnalysisPage 35

Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1) Analysis of TIQ Alternatives Stage 1 of Project Stage 2 of Project 2) Fishery Landings Data Actual Fishery Landings Data 3) Fishery Resource Information Short-term ABCs and OYs Long-range Stock Projections 4) Socioeconomic Information Population and Employment Data Short-term Projections Long-range Projections 5) Approval & Implementation Council Review and Decision Secretarial Review and Decision Implementation by NMFS 6) Fishery Regulations Fishery Under Current Reg’s 2007 – 2008 Specifications Fishing Under Am 18 Reg’s Fishing Under Am 19 Reg’s 2009 – 2010 Specifications 2011 – 2012 Specifications 2013 – 2014 Specifications 2015 – 2016 Specifications Fishing Under Preferred Alternative

Figure 2.1 Details

Stage 1 and Stage 2 analyses take place through 2nd quarter of 2007. Final Council decision in 4th Quarter 2007

Data to be used: Fishery data from 2005 will be used, along with

information from earlier years. The specifications containing ABC and OY projections

for 2007 and 2008 will be used. Population and employment estimates through 2005

Drafting of final EIS, FMP language, implementation plans, proposed rule, and the secretarial review and decision process will require at least a full year (2008).

Implementation by NMFS will require 1 year, through 2009

Fishing under IFQ Program could begin in 2010

Outline of this Presentation Scope of Work of the Stage 1 Analysis Overview of Outline Sections Purpose and Need, Goals and

Objectives Time table for analysis and

implementation

NEPA Guidance Direct & Indirect Effects Analysis Cumulative Effects Analysis

Council on Environment Quality (CEQ) Guidance on NEPA Effects include ecological (such as the

effects on natural resources and on the components, structures, and functioning of affected ecosystems), aesthetic, historic, cultural, economic, social, or health, whether direct, indirect or cumulative.

Effects may also include those resulting from actions which may have both beneficial and detrimental effects, even if on balance the agency believes that the effect will be beneficial.

CEQ: Direct and Indirect Effects “Effects” include: (a) Direct effects which are caused by the

action and occur at the same time and place. (b) Indirect effects which are caused by the

action and later in time or further removed in distance, but which are still reasonably foreseeable. Indirect effects may include growth-inducing effects and other effects related to induced changes in the pattern of land use, population density or growth rate, and related effects on air and water and other natural systems, including ecosystems.

Cumulative Impacts

Cumulative impacts are the impact(s) on the environment which result from the incremental impact of the actions when added to other past, present and reasonably foreseeable future actions regardless of what agency (federal or non-federal) or person undertakes such actions.

Cumulative effects can result from individually minor but collectively significant actions taking place over a period of time.

Outline of this Presentation Scope of Work of the Stage 1 Analysis Overview of Outline Sections Purpose and Need, Goals and Objectives Time table for analysis and

implementation NEPA Guidance

Direct & Indirect Effects Analysis

Cumulative Effects Analysis

Analytical Conditons

Historical conditions Conditions of the resources and stakeholder groups for

previous years Baseline conditons

The status of affected resources as of 2005. Status of stocks, ABCs, OYs, The numbers of vessels and processors, and ownership

interests and residences of owners. Community populations and employment reflect 2005

information. The status of other affected resources and stakeholders as

of 2005. Trends will also be examined.

Differences in the baseline conditions and historical conditions will be noted and discussed

Assessing direct/indirect effects:3-Step Process Examine & document the forces that are

likely to change the baseline conditions of affected resources Forces are the aspects of the proposed alternative and

how people will react to them Project and predict the conditions of the

affected resources after the forces from Step 1 have acted.

Document how conditions have changed from baseline conditions in the case of the No-Action Alternative, or from the No-Action Alternative in the case of Action Alternatives

Causes of indirect effects

Behavior changes of directly affected stakeholders cause indirect effects

Examples: Harvest timing shifts to a period with lower

incidental catches of overfished species, but the shift increases interactions with other species

A permit holder sells trawl QS allocation and increases effort in non-trawl fisheries

A change in product quality changes consumer willingness to pay

Assumptions under No-Action Alternative No-action Alternative assumes fishery resources

at 2007-2008 groundfish harvest specifications. All other resources, resource users and

stakeholders will be assumed to start at baseline levels.

The number of vessels and processors will mirror those seen in 2005,

2005 ex-vessel and wholesale prices, community population etc., will be used

All existing regulations as modified by actions that the Council has approved, but which have not yet been implemented by NMFS Includes Essential Fish Habitat measures Assume Sector Allocations authorized under Amendment

18 will be in place.

Direct/Indirect Effect Analysis of the No Action Alternative

Step 1: Examine the forces that are likely to create changes in the conditions of the resources

Major forces under the No-Action Alternative Overfished species constraining harvest of target

species reducing profits in the fishery No requirement to report discards so lots of

uncertainty Low harvester profit levels make it difficult for

harvesters to pay for observers/monitoring Cumulative trip limits preclude optimization of

harvesting patterns for harvesters Cumulative trip limits ensure steady flow of fish

to processors and consumer markets Lack of incentives to take individual action to

reduce incidental catch Any savings the individual makes will accrue to the entire

harvesting sector and not to the individual Other Sectors can cause seasons to end

Direct/Indirect Effect Analysis of the No Action Alternative

Step 2: Project the conditions of the affected resources after the forces from Step 1 have acted

Methods Assume continuation of recent trends

from baseline conditions Interview harvesters and processors on

other potential changes

Direct/Indirect Effect Analysis of the No Action Alternative (continued) Step 3: Document how

conditions have changed from baseline conditions

The Stage 2 analysis will show the differences between outcomes under No-Action Alternative and baseline conditions

Direct/Indirect Effect Analysis of Action Alternatives

Step 1: Examine the forces that are likely to create changes in the conditions of the resources. Changes in OYs—Stage 2 analysis will use

2007-2008 Specifications Total catch reporting Monitoring of catch with observers or

video cameras Other changes embedded in the

Alternatives

Direct/Indirect Effects—Step 1Other major forces under IFQs Allocation of QS/QP to harvesters and

(potentially to processors) grants access to an annually determined quantity of fish

IFQs allow the optimization of harvests of groundfish within the constraints of other regulations and market forces, including: markets for end products sold to consumers, markets in which harvesters sell their catches to

fish buyers and processors, and new markets for QS and QP that are created

by the program.

Direct/Indirect Effects of Action Alternatives—Step 2

Primary forces lead to behavioral changes creating direct and indirect impacts Incentives to reduce incidental catch so that

greater amounts of target species can be harvested

Spatial and temporal changes in fishing patterns Changes in the relationships between harvesters

and processors Initial allocation and consolidation will also alter

fishing patterns and distribution of activities across the harvesting and processing sectors

Direct/Indirect Effect Analysis of Action Alternatives—Step 2 (continued) How to Predict Changes

Allocations are determined by formula Compare Allocations to harvesting and processing

patterns Predicting changes in behavior patterns

Harvests are likely to shift to periods of lower incidental catch

Harvests are likely shift to areas of lower incidental catch But will processors pay the same price for fish if all

harvests take place in one period? Will processors be able or willing to purchase and

process in condensed periods of time?

Direct/Indirect Effect Analysis of Action Alternatives—Step 2 (continued) No good model to predict temporal or

spatial changes Examine Bycatch Model and observer data to

determine periods of lowest incidental catch by target strategy

Examine observer data to see differences in incidental catches by target fishery within periods.

Assess ex-vessel and processed product price elasticity to determine price changes and processor willingness to buy

Use game theory and experimental economics Interview harvesters and processors

Direct/Indirect Effect Analysis of Action Alternatives—Step 2 (continued) Predicting consolidation

Examine historical patterns—permit holders that are less dependent on fishery may be more likely to exit.

Examine cost data that are currently being collected—permit holders that are least efficient may be more likely to exit the fishery

Examine allocations to see if the permit holder will be able to continue fishing at levels that would pay fixed costs plus cost of observer/monitoring

Direct/Indirect Effect Analysis of Action Alternatives—Step 2 (continued) Predicting cost of QS/QP

What is the marginal revenue that can be earned by purchasing additional QS/QP

If the lack of QP for an incidental catch species is constraining target catches, then prices may be quite high and will be tied to the marginal revenue the target species, more than they will be tied to the value of the constraining species.

Direct/Indirect Effect Analysis of Action Alternatives—Step 3

Compare the projected conditions from Step 2 with the conditions projected from Step 2 of the analysis of the No-Action Alternative.

Direct and indirect effects are the differences between the conditions under the Action Alternative and their respective conditions for the No-Action Alternative.

Predictions and Scenarios

The Consulting Team believes that reliable and robust mathematical or theoretical models that predict behavioral changes under the action alternatives will not be possible within the Council’s time and budget constraints.

Interviews with stakeholders may produce the best predictions.

Analytical Scenarios will be a primary tool that will be used to assess direct/indirect effects.

Analytical Scenarios

The scenarios would be developed as a means to demonstrate differences in the way the various alternatives perform under plausible conditions

Scenarios are not predictions, but tools that will be used to demonstrate potential impacts

Scenarios that could be added to the No-Action Alternative Alternative Levels of Observer

Coverage on Trawl Vessels Alternative requirements for

the reporting of discards for trawl vessels

Scenarios applicable to both the No-Action and Action Alternatives High Abundance of Groundfish Species Low Abundance of Groundfish Species A stock that is currently not

overfished falls into overfished status A stock that is currently in an

overfished status is rebuilt Alternative sector allocations

Scenarios that could be added to the Action Alternatives Assume no transfers of QS occur Assume a moderate fleet consolidation: QS

are transferred and vessels drop out of the fishery such that the average vessel remaining in the industry fishes an average of 150 days per year.

Assume a high fleet consolidation such that the average vessel fishes 270 days per year

Assume a very quick transition (1-year) to a moderately consolidated fleet

Assume a relative slow transition (5-years) to a moderately consolidated fleet

Scenarios that could be added to the Action Alternatives (continued) Assume all harvests for primary target

species are made in months with lowest incidental catch rates

Assume all harvests for primary target species made in geographic areas with lowest incidental catch rates

Assume no shift in temporal/spatial distribution, but assume all catch shifts to above average incidental catch rates

Outline of this Presentation Scope of Work of the Stage 1 Analysis Overview of Outline Sections Purpose and Need, Goals and

Objectives Time table for analysis and

implementation NEPA Guidance Direct & Indirect Effects Analysis

Cumulative Effects Analysis

Framework for Cumulative Effects Analysis

CE analysis takes into account reasonably foreseeable future events (RFFEs)

Future conditions related to each of the Alternatives will be based on exogenous RFFEs and endogenous RFFEs specific to each of those alternatives.

Step-wise Process for CE Analysis

Step 1 examines and documents behavioral changing forces including those examined in direct/indirect analysis and RFFEs

Step 2 projects the future conditions of the affected resources under the alternative after the forces from Step 1 have acted

Step 3 documents how the future conditions have changed under the alternative. In the case of the No-Action Alternative, the change is

measured as the difference from the current conditions. In the case of the Action Alternatives, the change is

measured with respect to the Future Conditions under the No-Action Alternative.

Step-wise Process for CE Analysis (continued)

Step 4 documents whether the status of any of the affected resources or stakeholder groups has, as a result of the combination of past, present, and reasonably foreseeable future events or actions, changed significantly in ways that were not already apparent in the baseline conditions