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SSC Review of CDFG CEQA analysis of Marine Reserves for CINMS

PFMC Meeting June 2002

Exhibit F.1.c Supplemental SSC Report
June 2002

SCIENTIFIC AND STATISTICAL COMMITTEE REPORT ON REVIEW OF PROPOSAL FOR MARINE RESERVES IN STATE WATERS OF THE CHANNEL ISLANDS NATIONAL MARINE SANCTUARY

BACKGROUND

At the April 2002 Council meeting, the State of California requested that the Council review a draft environmental document (DED) being prepared by the California Department of Fish and Game (CDFG) to evaluate eight alternatives for the establishment of marine protected areas (MPAs) at the Channel Islands National Marine Sanctuary (CINMS). The Scientific and Statistical Committee (SSC) offered to have its Ad-Hoc Marine Reserve Subcommittee provide a technical review of the document. Because the SSC is accustomed to conducting reviews in the context of federal regulatory requirements and the DED was intended to meet requirements of the California Environmental Quality Act (CEQA), the SSC requested guidance from the Council regarding the criteria that should be considered in reviewing the DED. The SSC was instructed to conduct a general technical review of the DED, keeping in mind any distinctions between the requirements of CEQA and the National Environmental Policy Act (NEPA).

In late May, the SSC received the DED, which was prepared by Messrs. John Ugoretz and David Parker of the CDFG and entitled “Draft Environmental Document - Marine Protected Areas in NOAA's Channel Islands National Marine Sanctuary,” dated May 2002. The SSC also received a CD-ROM copy of an untitled, undated document co-authored by Dr. Vernon Leeworthy and Mr. Peter Wiley (NOS) that provided a socioeconomic analysis of MPA alternatives at CINMS. Information from the socioeconomic document was referenced extensively in the DED, and having the original socioeconomic analysis was helpful to the SSC.

The SSC Ad-Hoc Marine Reserve Subcommittee met on June 10-11, 2002 in Portland, Oregon to review the DED. Mr. John Ugoretz (CDFG), Dr. Satie Airame (CINMS), Mr. Peter Wiley (NOS), Dr. Steve Gaines (University of California, Santa Barbara) and Mr. Jim Seger (Council staff) also participated in the meeting. Several other people participated or observed by speaker phone, including Mr. LB Boydstun (CDFG), Ms. Rene Hawkins (CDFG General Counsel) and Ms. Stephanie Campbell (NOAA General Counsel). The SSC appreciates the contributions of all participants to the meeting discussions.

At the meeting, Ms. Rene Hawkins provided the Subcommittee with a useful table (pages 10 through 12) that compared CEQA and NEPA in terms of their respective informational, analytical and procedural requirements. As indicated in the table, one notable difference between CEQA and NEPA is that CEQA “does not require any consideration of social or economic effects, except where any such impact has a direct or indirect effect on the environment.” While a socioeconomic analysis is not strictly required under CEQA, the DED includes extensive socioeconomic content and is apparently intended to do more than meet CEQA requirements. As stated in the DED, “The DED evaluates the important social, economic and environmental effects that may result from the proposed action” (p. 2-15). With regard to the rationale for going beyond CEQA requirements, the DED states, “... in the forum of the PFMC, socioeconomic constraints would be considered along with scientific recommendations. This mirrors the process that occurred within the Department in developing the proposed project and is demonstrated through the socioeconomic analysis in Chapter 5.4” (p. 5-17). The SSC reviewed the DED in its entirety, including analyses pertaining to both environmental and socioeconomic effects.

MANAGEMENT ALTERNATIVES

Eight management options are discussed in the DED. The preferred alternative (referred to as the “proposed project”) and alternatives 1-5 represent alternative MPA configurations at CINMS. Alternative 6 is to defer the decision to establish MPAs at CINMS to the Marine Life Protection Act (MLPA). Alternative 7 is the “no action” alternative.

Proposed project and alternatives 1-5: The ecological characteristics and socioeconomic effects of the proposed project are discussed in Chapter 5 of the DED, and alternatives 1-5 are discussed in similar fashion in Chapter 6. To facilitate its discussion of the six MPA alternatives, the SSC constructed several tables to facilitate side-by-side evaluation of all alternatives. The tables (labeled SSC-1 through SSC-3) are attached to this statement.

The DED characterizes CINMS as consisting of three major biogeographical regions (Oregonian bioregion, Californian bioregion and a transition zone where the two bioregions converge) and various habitat types (sandy and rocky coast, soft and hard sediment, emergent rocks, submarine canyons, kelp forest, eelgrass, surfgrass). Representation of the three biogeographic regions under the preferred project is described in Table 5-3 (p. 5-2) for state waters and in Table 5-4 (p. 5-34) for state and federal waters combined. Similar tables are not included in the DED for alternatives 1-5. However, the DED does include separate tables for each of the six MPA alternatives that describe the extent to which representative and unique/vulnerable habitats are represented under each alternative. Table SSC-1 (attached) provides a side-by-side comparison of the alternatives in terms of habitat representation. The column totals in the table represent the total number of square nautical miles and the total percentage of CINMS waters set aside in no-take reserves under each alternative. In terms of the MPA alternatives for state waters, the area held in reserves ranges from 68.7 to 136.6 square nautical miles (nm2 ), comprising 6% to 12% of CINMS waters. In terms of state and federal waters combined, the area held in reserves ranges from 140.8 to 390.2 nm2, comprising 12% to 34% of total CINMS waters. The proposed project covers 279.0 nm2 or 25% of CINMS waters (114.4 nm2 in state waters, 164.6 nm2 in federal waters).

Alternative 6 (defer to MLPA): Alternative 6 is briefly discussed in the Executive Summary of the DED.

Alternative 7 (“no action” alternative): The “no action” alternative is described in Chapter 4 in terms of characteristics of the physical, biological and human environment. The biological environment is described largely in terms of habitat types and species of interest. The human environment is described largely in terms of commercial fishing and consumptive and non-consumptive recreational activities.

EFFECTIVENESS OF THE DRAFT ENVIRONMENTAL DOCUMENT IN ADDRESSING CEQA REQUIREMENTS

The SSC has the following comments regarding the DED as it relates to CEQA requirements:

CEQA requires that a baseline description be provided of the physical environment in the vicinity of the proposed project. Chapter 4 of the DED provides such a description.

CEQA requires preparation of an Environmental Impact Report which considers a range of reasonable alternatives that achieve the objectives of the project; the range of alternatives must include the “no project” alternative. The SSC notes the following regarding the alternatives:

The DED evaluates the proposed project and five other MPA alternatives relative to the “no project” alternative (i.e., status quo). However, the DED provides little if any information regarding the effect of the status quo relative to the goal of the project (i.e., what would happen if the project did not occur). If the intent of the proposed project is simply to establish marine reserves, then the DED should state that the status quo is by definition inconsistent with that goal. If the goal is something else, then a more extensive discussion is required to establish the inadequacy of the status quo for achieving the goal.

The DED rejects alternative 6 on the following basis: “The Department feels that deferring a decision would not change the proposed project and there is a potential to underestimate local economic and environmental impacts by combining them with those of the entire State....a timely decision would provide needed insight and experience in the implementation of reserves before the MLPA suggests MPAs for the entire State. Furthermore, biological and economic monitoring will contribute more information to the biological and fishery effects of reserves thus helping to refine future MPA decisions like the MLPA” (pp. E-3 and E-4). The rationale for rejecting this alternative is not clear to the SSC. Given that one of the MLPA goals is “to ensure that the state's MPAs are designed and managed, to the extent possible, as a network” (p. A1-5), it is possible that deferring the establishment of reserves at CINMS to the MLPA process could cause the proposed project to change when viewed in the context of a statewide network of reserves. It is also not clear why local impacts would be “underestimated” if combined with the MLPA.

CEQA requires that the proposed project be evaluated in terms of potentially adverse effects on the environment - including direct, indirect and cumulative effects - and that feasible mitigation measures be adopted to address significant adverse effects. A relevant issue in this regard is whether effort displacement from reserve areas causes adverse environmental effects outside reserves. Specifically, to what extent would effort displacement adversely affect the physical and natural habitat by intensifying the effects of fishing operations outside reserves? To what extent would effort displacement exacerbate existing pressure on fishery resources outside reserves?

The DED does not consider the possibility of habitat effects associated with effort displacement to outside areas. Moreover, the DED refers only in positive terms to effort that might be attracted to the vicinity of the reserves after their establishment. Specifically, the DED cites behavior such as “fishing the line” as “compelling evidence” of fishery benefits associated with spillover of adult fish from reserves into open areas (p. 1-9) but does not consider the possibility of negative impacts on the physical habitat associated with "fishing the line".

With regard to the effects of effort displacement on fishery resources outside reserves, the DED acknowledges that “this displacement could cause congestion of effort and a potential negative environmental impact outside MPAs” (p. 5-1). However, in terms of the need for measures to mitigate adverse environmental impacts, the DED is ambiguous. On the one hand, the DED concludes that “Because no significant adverse environmental impacts would result from the proposed project, no measures to mitigate impacts are proposed” (p. 5-57). However, other language in the DED suggests a need for mitigation. For instance, the DED notes that “The proposed project attempts to limit this potential [for adverse environmental impacts] by specific area choices limiting the direct impacts to fishing activities. Potential displacement of effort may also be offset by the potential beneficial effects caused by increased production and spillover from the proposed MPAs. In addition, existing harvest controls (e.g., size limits, bag limits, seasons) will continue to control take outside MPAs and other regulatory processes limiting total effort of fisheries in the area are underway” (p. 5-1). The DED also cites the Nearshore Fishery Management Plan (FMP), the Squid FMP and effort reduction in the spot prawn trap fishery as examples of long term management plans that are expected to reduce effort or fleet size, and concludes that “the net effect of reducing effort, while closing some areas to fishing, should limit the possibility for congestion outside MPAs” (p. 5-18).

With regard to references in the DED to existing harvest controls and pending management plans for the nearshore, squid and spot prawn fisheries, the SSC notes that these management actions are being developed independently of whatever happens at CINMS. Existing and pending programs are part of baseline conditions and provide a context within which potential mitigation measures for displacement from CINMS should be considered. Baseline conditions may affect the nature and severity of mitigation measures required. For instance, effort displaced to depleted stocks would need to be dealt with more restrictively than effort displaced to less than fully utilized stocks. However, the baseline conditions themselves cannot be claimed as mitigative measures unless they are modified to deal specifically with CINMS displacement.

The SSC realizes that an evaluation of the effects of effort displacement on the physical and natural habitat outside reserves is not possible; however, it is important that the potential for such effects be at least acknowledged in the DED. With regard to the effects of effort displacement on fishery resources outside reserves, the SSC notes that the DED provides some information regarding the extent of effort displacement among consumptive recreational users. For instance, 63,322 person days of consumptive recreation would be displaced from reserve areas under the proposed project and an additional 14,586 days would be displaced in the federal phase of the project (Table 5-10, p. 5-50). Total state-federal displacement under the proposed project comprises 18% of the 437,908 person days of such activity that occur with the CINMS (Table 4-30, p. 4-163).

Displacement of commercial fisheries is expressed in the DED in terms of ex-vessel revenues, not fishing effort. Specifically, $3.3 million in harvest would be displaced from reserve areas under the proposed project and an additional $200,000 in the federal phase of the project (Table 5-5, p. 5-45). Total state-federal displacement would account for 16% of the $22.4 million in revenues generated by commercial fishing activities in CINMS (Table 4-20, p. 4-147). While the revenue estimates are categorized by species, the SSC notes that revenues are not necessarily indicative of the amount of effort displaced, as average revenue per unit effort can vary widely among fisheries. While it is not possible to predict precisely what would happen to displaced effort, fish ticket data could be used to obtain approximate estimates of the number of trips displaced and the specific CINMS fisheries from which they would be displaced. Such information can provide policy makers with a starting point from which to evaluate potential effects on fisheries outside reserves and to anticipate what types of specific management actions (if any) might be required to mitigate the effects of displacement. Lack of such information precludes a substantive discussion of this issue.
CEQA requires that agencies determine whether the proposed project has potentially adverse significant effects on the environment according to locally adopted “thresholds of significance.” The DED provides an explicit ranking system for evaluating how well a habitat is represented in reserves. According to the system, the inclusion of 30%+ of a habitat in MPAs is characterized as “well represented”, 20-29% as “adequately represented,” 10-19% as “inadequately represented” and 0-9% as “poorly represented” (p. 5-12). The DED characterizes most habitats to be “adequately represented” by the proposed project, which incorporates at least 20% representation for most (12 of 17) habitats (see Table 5-3, p. 5-20). Thus 20% habitat representation appears to be the threshold of significance in the DED. The SSC notes that the DED's threshold is lower than the SAP's reserve size recommendation of 30-50%, suggesting that factors other than those considered by the SAP are reflected in the threshold. While CEQA gives agencies broad latitude in defining the threshold of significance, it would be helpful if the criteria underlying the threshold were documented in the DED.

EFFECTIVENESS OF THE DRAFT ENVIRONMENTAL DOCUMENT IN EVALUATING NON-CEQA RELATED EFFECTS OF MPA ALTERNATIVES

While CEQA requires that significant adverse environmental effects of the proposed project be identified and mitigated, it does not require an evaluation of the environmental benefits or socioeconomic effects of the proposed project or other alternatives. Thus the SSC's comments regarding those aspects of the DED are provided here separately from the comments pertaining to CEQA requirements.

Biodiversity Benefits Within Reserves

Based on the extent of habitat representation and other ecological criteria, the DED concludes that “Protecting the MPAs in the proposed project could contribute to increasing biomass, individual size, and reproductive potential of organisms within the reserve areas, particularly for species with low dispersal and high reproduction. The proposed project would likely achieve the goal for conservation of ecosystem biodiversity established by the MRWG because the reserve areas include all habitat types in all bioregions, encompassing at least some portion of the ranges of most species of interest” (p. 5-32). The SSC considers the choice of reserve size to be a policy decision. However, beyond the issue of size, the SSC notes that habitat representation is a fundamentally sound approach to determining which areas to place in reserves to protect biodiversity.

Fisheries Benefits Outside Reserves

The DED provides a graph (Figure 6-1, p. 6-68) that attempts to show how biodiversity conservation and fisheries benefits change with reserve size. According to the DED, “Localized fisheries benefits are not expected unless MPAs are large enough to contribute to productivity in fished areas through export of larvae and spillover of adults. The maximum fisheries benefits are likely to occur when 40 percent of the suitable habitat or the fished population are protected in reserve areas” (p. 6-67).

The SSC notes that, due to the relatively small scale of the CINMS relative to the full distribution of the most of the fishery resources that inhabit CINMS, substantial fisheries benefits on a stock-wide scale are unlikely to result under any of the MPA alternatives at CINMS. More specifically, the SSC notes that the arguments for expected fisheries benefits (pp. 6-66, 6-67 and Figure 6-1) are technically weak and not compelling.

Socioeconomic Effects

The DED includes an extensive discussion of socioeconomic effects of the MPA alternatives. The approach to the socioeconomic analysis, the comparison of alternatives and the conclusions regarding socioeconomic effects contained in the DED are largely taken from the SEA. The socioeconomic analysis covers both economic impacts and economic value. Economic impacts (as reflected in estimates of income and employment impacts) pertain to effects of MPAs on local (i.e., county) economies. Economic value estimates (as reflected in estimates of consumer and producer surplus) pertain to values held by consumptive and non-consumptive users of CINMS, as well as non-use value (i.e., the value that the public attaches to reserves at CINMS, regardless of whether they ever utilize or even see any of the amenities at CINMS). While economic impact analysis sheds light on the distributional effects of MPAs, it is the economic value estimates that comprise the elements of cost-benefit analysis. The SSC notes that the socioeconomic analysis does a commendable job of making the appropriate conceptual distinction between economic impacts and economic value.

For purposes of the economic analysis, the baseline against which the MPA alternatives were compared was the 1999 level of activity for recreational activities and the average annual level of activity during 1996-1999 for commercial fishing activities. The reason for using a multi-year average for commercial fisheries is to ensure a more representative level of fishing activity than 1999, which was a record year for squid landings (p. 5-39). The SSC agrees that 1996-1999 is a reasonable baseline period for commercial fisheries.

According to Table 4-18, the baseline level of commercial and recreational activities in CINMS generates $172 million in income impacts (Table 4-18, p. 4-138) and 4,888 jobs (Table 4-19, p. 4-138) within the designated southern California seven-county area. As noted in the DED, CINMS activities account for less than 1% of total income and employment in those counties (p. 4-137). The SSC agrees with this assessment and notes that - given the large size and diversity of the local economies within the seven-county area - the relative contribution of CINMS to local economies is not likely to change much from the status quo regardless of how much area is set aside in marine reserves.

The analytical approach used to evaluate socioeconomic effects involved consideration of so-called “Step 1” and “Step 2” effects (p. 5-36). The Step 1 analysis involved quantitative estimation of consumptive activities that would be displaced from reserve areas. For commercial fisheries, Step 1 provides estimates of ex-vessel value and income and employment impacts. For consumptive recreational activities, Step 1 provides estimates of person days; direct sales, wages/salaries, and employment; income and employment impacts; and consumer surplus and profits. While these quantitative estimates are characterized as “maximum potential losses”, the DED also notes that “In cases where congestion effects occur due to displacement and relocation of fishing effort, actual losses could exceed estimates of maximum potential loss or losses may be overestimated where offsetting factors such as effort reduction are instituted” (p. 5-36).

As part of the Step 1 analysis, three socioeconomic surveys of commercial and recreational use at CINMS were conducted specifically for the purpose of evaluating MPA alternatives at CINMS. The surveys provided valuable information regarding the spatial distribution of commercial and recreational activity and contributed significantly to the evaluation of alternatives. The spatial distribution information for party/charter and for-hire recreational operations is likely quite reliable, as it is based on a census of operators in CINMS. Given the reluctance of the industry to provide precise location of catch information, the commercial fisheries data are less precise; nevertheless the analysis does a commendable job of making use of the available data in a reasonable way. The estimates of private boat consumptive recreation are subject to fairly serious data limitations and based on a number of unsubstantiated assumptions regarding similarities between party/charter and private boat recreational activities; those estimates are subject to considerable uncertainty. As indicated in the DED, data on private boat non-consumptive activity are not available at all, resulting in underestimation of total non-consumptive recreation at CINMS.

For the consumptive recreational sector, aggregate consumer surplus is estimated by multiplying the number of person days by a value of $11.58 per person day. The consumer surplus estimates were based on results from Wegge (1986) and Rowe (1985). Wegge and Rowe provides a range of consumer surplus estimates derived from various model specifications. The SSC recognizes the challenges associated with translating estimates derived from different models under different assumptions into a single estimate of consumer surplus per person day and requests that documentation be added to the DED (or at least the SEA) regarding how this was done.

The Step 2 analysis focused on potential benefits of MPAs to consumptive and non-consumptive users and to the public in the form of non-use value. The estimates of potential losses to consumptive users and potential gains to non-consumptive recreation are summarized for each alternative in Tables SSC-2 and SSC-3 respectively. The SSC has the following comments regarding the Step 2 analysis:

Estimates of profits for the party/charter and for-hire recreational sector were based on data collected from a census of operators in CINMS and used as a proxy for producer surplus. The SSC considers these estimates to be quite reliable.

Given the lack of available information on consumer and producer surplus for commercial fisheries in CINMS, the DED assumes a value of $8 million per year - based on estimates of consumer and producer surplus for commercial fisheries at the Tortugas Ecological Reserve in the Florida Keys National Marine Sanctuary. It is not clear to the SSC why the value of fisheries at Tortugas should be a reasonable proxy for the value of fisheries at CINMS.

The estimates of benefits to non-consumptive users are based on assumptions regarding increases in “quality” (10%, 50%, 100%) that are likely to occur as a result of reserves, where “quality” is defined as “a composite attribute that takes into consideration the range of benefits that would have an impact on the non-consumptive recreation experience. This includes such attributes as diversity of wildlife, abundance of fish and invertebrates, the decrease in the density of users, and the increase in water quality” (p. 5-54). A parameter referred to as the “value elasticity of quality” (defined as the percentage increase in consumer surplus associated with a 1% increase in quality) was used to link hypothesized changes in quality to subsequent changes in value. Alternative assumptions regarding quality changes (10%, 50%, 100%), combined with alternative estimates of the value elasticity of demand (0.04, 1.0 and 4.5) were then used to provide a range of estimates for the increase in non-consumptive recreation associated with each alternative. Table SSC-3 summarizes the changes associated with the various combinations of quality changes and value elasticities under each MPA alternative.

As indicated in Table SSC-3 - as well as Table 6-59 of the DED (p. 6-71) - the change in consumer surplus associated with the proposed project can range anywhere from $332 to $372,969; similar thousand-fold differences between low and high estimates were also indicated for the other MPA alternatives. The SSC considers the underlying basis of these estimates to be questionable. The increases in non-consumptive recreational quality (10%, 50% and 100%) included in the analysis are assumed and not substantiated. The SEA indicates that the value elasticities (0.04, 1.0 and 4.5) are based on results of a meta-analysis of recreational travel cost models conducted by Smith and Kaoru (1990). The SSC notes that the Smith/Kaoru paper focuses on an entirely different parameter - the price elasticity of demand. In order to apply the Smith/Kaoru results to the analysis of MPA alternatives at CINMS, it is necessary to assume that the value elasticity of quality for CINMS is similar in value (though necessarily opposite in sign) to Smith/Kaoru's price elasticity estimates - a significant assumption that is not substantiated in the DED or the SEA.
The non-use values cited in the DED for marine reserves at CINMS are based on the assumption that 1% of U.S. households have positive non-use value for marine reserves at CINMS, and that the value per household ranges from $3 to $5 to $10 per year. The basis for these assumptions is described in the DED and in greater detail in the SEA as follows:

According to national surveys conducted in the late 1980s and early 1990s regarding attitudes toward the environment and more recent national and California surveys regarding attitudes toward ocean health and marine sanctuaries, a high percentage of respondents express positive attitudes toward environmental protection. Based on the results of these surveys and a poll indicating that 8% of U.S. households contributed to environmental organizations in 1990, it was deemed reasonable to assume that 1% of U.S. households are willing to pay some positive amount of money for establishment of MPAs in CINMS. This 1% was characterized as a “conservative lower bound estimate” (SEA, p. 103).

Nineteen studies were conducted in the 1980s and early 1990s that included estimates of non-use value. The studies estimate the public's willingness-to-pay for a wide variety of environmental goods - including whooping cranes, bald eagles, striped shiners, grizzly bears, bighorn sheep and Atlantic salmon; visibility at the Grand Canyon; nature preserves in Australia, Illinois and Colorado; potable groundwater supplies in Cape Cod, Massachusetts; water quality in specific river basins in Colorado, Pennsylvania and Montana; water quality in all rivers and lakes in the U.S.; and prevention of future oil spills off the Washington/British Columbia coast and Prince William Sound in Alaska. Given that willingness-to-pay for environmental goods was higher than $10 per household in almost all these studies, values of $3, $5 and $10 per household per year were assumed to represent a “probable lower bound set of estimates” for willingness-to-pay for MPAs at CINMS (SEA, p. 102).

The SSC has the following reservations regarding the estimation of non-use values at CINMS: The connection between the percentage of respondents who express positive attitudes about environmental protection and the percentage of households who would be willing to pay for marine reserves at CINMS is tenuous. The survey research literature indicates that attitudinal surveys are not a reliable indicator of willingness to pay. With regard to the assumption that 1% of U.S. households are willing to pay for reserves at CINMS, that percentage could just as well be 0.1% or 2% (or any number of other percentages). While the differences among 0.1%, 1% and 2% may appear quite small, the effect of choosing a particular percentage is magnified by the fact that the percentage is multiplied by the total number of U.S. households. The assumption that $3, $5 and $10 represent a “probable lower bound” on the public's willingness-to-pay is arbitrary as well.

The DED repeatedly notes the uncertainties in the cost-benefit analysis. For instance:

“Overall, the socioeconomic analysis is not a comparison of potential costs and benefits because there are limited data and scientific studies related to consumptive and non-consumptive values of the project area” (p. 5-35).

“It is important to note that the Socioeconomic Panel did not conduct a comprehensive comparison of all potential costs and benefits that may be associated with the establishment of MPAs with project area. As a consequence, the socioeconomic analysis is limited by a degree of uncertainty with respect to the potential social and economic costs and benefits of MPAs” (p. 5-35).

“All the benefits and costs of MPAs cannot be quantified, and so a formal benefit-cost analysis was not conducted” (p. 5-36).

The DED further characterizes the evaluation of non-use benefits at CINMS as a “general qualitative overview on potential benefits to non-use or passive use values” (p. 5-36).

Despite these caveats, the DED goes on to provide quantitative estimates of benefits and costs - including estimates of non-use benefits. While these non-use benefits were initially characterized as a “qualitative overview,” they were in fact quantified and were pivotal to the conclusion of the analysis. Specifically, based on the size of the non-use benefit estimates, the DED concludes that “..one can conclude that there would be net national benefits from adopting any of the marine reserve alternatives for the Sanctuary, even when estimates for consumptive users are biased upwards and we compare then with the lowest potential non-use or passive use economic values” (p. 6-77). While the SSC considers non-use value to be an essential component of cost-benefit analysis of MPAs at CINMS, the estimates in the DED are ad-hoc and not properly validated and should not be treated as quantitative estimates.

In terms of making the cost-benefit analysis more complete, the SSC notes that the analysis should acknowledge the potential benefits that monitoring and scientific research may provide over the long term. The analysis should also reflect the costs associated with biological and economic monitoring, enforcement of reserve boundaries and any incremental management responsibilities that may be associated with mitigating effects of effort displacement outside the reserves. While some of these elements are difficult (perhaps impossible) to measure, it is important that all relevant cost and benefits be at least acknowledged in the DED.

The SSC also notes that the cost-benefit analysis provided in the DED is a static analysis and does not consider how costs and benefits might change over time. The choice of a time frame, the temporal distribution of costs and benefits and the assumed discount rate can have a significant effect on the conclusions of a cost-benefit analysis. Given existing uncertainties regarding the likelihood and timing of potential benefits and costs (e.g., benefits to non-consumptive users within reserves, benefits to fisheries outside reserves, changes in non-use values over time), it is understandable why a dynamic analysis was not attempted . However, static analysis provides too incomplete a picture to be useful for policy decisions. Given its reservations regarding the derivation of the cost and benefit estimates, the SSC concludes that it is not possible to draw any conclusions regarding the relative costs and benefits of marine reserves at CINMS.

SUMMARY OF SSC CONCLUSIONS REGARDING THE DRAFT ENVIRONMENTAL DOCUMENT

The DED is intended to address the CEQA requirement to identify and mitigate significant adverse environmental impacts associated with the proposed project. While CEQA does not require that alternatives be evaluated in terms of their environmental benefits or socioeconomic effects, the DED also provides an analysis of such effects. The SSC reviewed the DED in all its aspects.

In terms of addressing CEQA requirements, the DED does not demonstrate whether or not the proposed project would have significant adverse effects on the physical and natural habitat or on fishery resources outside the reserve. The SSC realizes that a definitive evaluation of adverse environmental impacts is not feasible. However, the possibility of habitat impacts should at least be acknowledged in the DED. Further evaluation of the extent of effort displacement and its potential affect on outside fisheries should be done. While the DED provides some estimates of effort displacement for recreational consumptive activities, similar information is also needed for commercial fisheries.

The issue of effort displacement is critical to evaluating the effects of reserve size. While larger reserves provide greater opportunity to enhance biodiversity inside the closed area, they are generally accompanied by increases in the amount of effort displaced from reserves. In considering what happens to this displaced effort, it is important to recognize the trade-off between short-term economic losses borne by those displaced from reserves and the potential for adverse environmental effects in the open area. Minimal short-term losses imply the existence of opportunities for displaced fishermen to offset their losses in outside areas, but also require consideration of the effects of displaced effort on habitats and fishery resources in those outside areas and management measures to mitigate habitat effects and prevent localized depletion of fishery resources. Conversely, maximum short term economic losses imply few offsetting opportunities and therefore little need to consider adverse environmental effects outside reserves.

Given the small scale of reserves at CINMS and the fact that most of the 119 species of concern identified by the Marine Resources Working Group have distributions that extend well outside CINMS boundaries, the SSC considered habitat representation to be an appropriate way to designate areas for inclusion in reserves at CINMS. Given this approach to reserve design, biodiversity benefits may accrue in reserve areas. The small scale of reserves at CINMS is not expected to yield stock-wide benefits. As indicated above, the trade-off between benefits inside reserves and potentially adverse environmental and socioeconomic effects associated with effort displacement outside reserves is an important factor to consider in policy deliberations regarding reserve size.

The socioeconomic evaluation of alternatives involved “Step 1” and “Step 2” analyses. The Step 1 analysis (quantification of existing commercial and recreational activity in proposed reserve areas) was generally well done, given the limitations of the data. However, the Step 2 analysis (predicting costs and benefits associated with the MPA alternatives) draws quantitative conclusions that cannot be substantiated. Given the deficiencies in some of the data and analysis and uncertainties regarding the effects of reserves at CINMS, it is not possible to determine whether economic benefits associated with establishment of reserves outweigh the costs.

OTHER SSC COMMENTS

SSC comments regarding the DED are generally applicable to MPA alternatives at CINMS, regardless of whether the alternatives pertain to state or federal waters. However, this SSC statement does not address all federal regulatory requirements. Evaluation of MPA alternatives in federal waters at CINMS will require consideration not only of NEPA but other regulatory requirements (e.g. the Regulatory Flexibility Act) that were not considered in this review.

The SSC offers the following caveats regarding the potential applicability of the approach to MPA design used at CINMS to large-scale MPAs:

The methodology used to design MPAs at CINMS required a relatively rich set of habitat maps. The SSC notes that habitat maps at the CINMS level of detail will likely not be available for most areas of the West coast. Thus the habitat-based MPA siting algorithm used at CINMS may not be as feasible for other areas.

MPAs at CINMS were designed to ensure approximately equal representation of each habitat type. While equal habitat representation may be reasonable for MPAs on the scale of those at CINMS, the SSC recognizes that all habitat types are not equal with respect to their importance to marine organisms. A more detailed approach to evaluating species-specific interactions between organisms and habitat may be applicable in cases where larger scale MPAs are considered.

For Council-managed species, whatever is done at CINMS is likely to have negligible stock-wide impacts. The situation may be quite different for large scale reserves. Large scale reserves may also require reconsideration of how stock assessments are done.

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06/19/02