Council Staff Discussion:

The discussion argues that the cost benefit analyses in the FW21 document considered both short and long-term economic impacts of the proposed action, including the impacts on costs, consumer benefits and net economic benefits for the nation, other published reports focused mostly on the short-term impacts for 2010 fishing year relative to the previous fishing year (2009). These short-term economic analyses do not accurately reflect the benefits and costs of the proposed action (F=0.20) or F=0.24 alternative for the following reasons:

1) The impacts on revenues were evaluated comparing projected revenues for 2010 to actual revenues from the previous years instead of to the projected revenues for no action. Different methods were applied in estimating the projected reduction in revenue relative to the previous years’ levels.

2) The impacts on fishing costs were not considered and as a result, the impacts on net revenues and profits were overestimated.

3) The impacts of the proposed action and the alternatives on scallop biomass, yield, revenues, consumer surplus, net economic benefits for the nation, regional impacts and impacts on communities beyond 2010 were not considered.

4) The impacts of exceeding the fishing mortality targets and removing an additional 8 million pounds of scallops in 2008 with an estimated F of 0.28 and 10 million pounds of scallops pounds in 2009 with an estimated F=0.30 compared to projections of catch and fishing mortality (F) from Framework 19 were not taken into account.

The discussion argues that short-term analyses completely ignore the impacts of landing 57 million pounds on revenues and on overall economic benefits in 2011 and beyond. They also overlook the impacts on regional revenues, incomes and employment of such scenario in the years following 2010. As a result, focusing on economic impacts only in 2010 or just for a three year period from 2010- 2012 (as was done in the Georgetown study submitted to NMFS by the Fisheries Survival Fund) fails to take into account the economic benefits from a risk averse action (i.e., F=0.20) compared to a F=0.24 option or compared to a option that would allocate 57 million pounds to the fishery in 2010.

Ariel Collis of Georgetown Economic Services replies:

1. The Georgetown Economic Services report does not "ignore the impacts of landing 57 million pounds on revenues and on overall economic benefits in 2011 and beyond." Rather, the Report examines the Council's projections and finds that NEFMC's economic benefit projections are not economically meaningful after 2012.

2. The Council's benefit calculations are not economically meaningful because they do not take into account the uncertainty associated with the assumptions that underlie the projections. This is especially true for the Council's projections for the years 2013-2016.

3. If a comparison of the economic benefits is made over the three year period from 2010 to 2012, then the NCLF24 option is more economically beneficial than the NCLF20 option.

Read the report here.