Seismic Shifts from Regulations: Spatial Trade-offs in Marine Mammals and the Value of Information from Hydrocarbon Seismic Surveying

Maarten Punt and Brooks Kaiser

Environmental & Resource Economics, 2021, vol. 80, issue 3, No 3, 553-585

Abstract: Abstract Seismic surveys can improve estimates of net private benefits from uncertain hydrocarbon deposits. The Value-of-Information (VOI) can capture these gains. At the same time, seismic surveys impose uncertain damages from noise pollution on marine life. Arctic waters are increasingly attractive exploration locales, but ice cover temporally constrains both surveying and marine mammal species. Thus, damage mitigation requires both temporal and spatial planning. We develop a spatially explicit bio-economic model through which we can calculate the VOI from seismic surveying options alongside potential marine mammal displacements. We demonstrate the model using hydrocarbon exploration opportunities off the Western Greenlandic coast. Lacking estimates for marine mammal sound habitat conservation benefits, we use cost-effectiveness (CEA) as an alternative to weakly informed cost–benefit analysis to identify implicit thresholds as a function of regulatory choices based on different relative spatial values of marine mammal habitat conservation. We check robustness using Monte Carlo (MC) simulations. We illustrate how the combined use of VOI, CEA and MC can ease decision making when uncertainties are compounded and cost–benefit analysis is not feasible.

Keywords: Value of Information (VOI); Cost-effectiveness analysis (CEA); Marine mammals; Marine habitat; Marine noise pollution; Hydrocarbon exploration; Arctic oil and gas exploration; Evaluation of regulatory programs; Spatial bio-economic modelling; Seismic surveys (search for similar items in EconPapers)
JEL-codes: D83 Q35 Q53 Q57 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Seismic shifts from regulations: Spatial trade-offs in marine mammals and the value of information from hydrocarbon seismic surveying (2019)
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DOI: 10.1007/s10640-021-00598-2

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