Aquaculture: Externalities and Policy Options

Frank Asche, Håkan Eggert, Atle Oglend, Cathy Roheim and Martin D. Smith

Review of Environmental Economics and Policy, 2022, vol. 16, issue 2, 282 - 305

Abstract: Global seafood supply is increasing and seafood prices are stable, despite the plateauing of global wild-caught fishery harvests and reports of collapsing fish stocks. This trend is largely due to rapid growth in aquaculture (farmed seafood), which now accounts for roughly half of the global seafood supply. Although aquaculture is a key contributor to food security, fish farming interacts closely with the surrounding ecosystem, and its rapid global growth raises many environmental concerns. Potential negative externalities include decreases in water quality, disease spillovers, genetic interactions between wild and domesticated fish, overuse of antibiotics, and pressures on fish stocks from reliance on wild-caught fish for feed. We show that the environmental externalities of aquaculture can be positive or negative, that some externalities are not true externalities because firms have incentives to internalize them, that some perceived externalities do not exist, and that the remaining externalities can be addressed primarily through spatial management. Because outcomes are strongly influenced by the management of spatial issues such as the siting of production facilities, management challenges include both commons and anticommons problems. We conclude that management should focus on spatial approaches, adaptation to climate change, and facilitating technological innovation to address externalities and encourage sustainable development of the aquaculture sector.

Date: 2022
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