Tag: hypoxia

Hurricane Isaac Impacts Extend Beyond the Scope of a Category 1

Source: Clean Technica <http://cleantechnica.com/2012/08/26/hurricane-isaac-has-a-wind-power-message-for-mitt-romney/>

Post Written by Lauren Martin

 

Americans anxiously anticipated the arrival of Hurricane Isaac, a Category 1 storm that killed 7 people, flooded regions of Louisiana, and dumped more than 20 inches of rain in some areas this past week. Every time there is a hurricane, CNN, MSNBC, and FOX show 24-7 coverage of what Jon Steward calls “Hurricane Porn.” Hurricane Isaac intrinsically roused memories of recent disasters in the Gulf Coast, including Hurricane Katrina and the BP Oil Spill, accentuating the media flurry that enveloped the nightly news. Natural disaster activity in the Gulf Coast over the past decade has become increasingly politically charged and particular attention to presidential nominees in this campaign season dictated a lot of what is reported on in the media. The real question at hand is if this is just voyeuristic ‘disaster porn’ or is there a substantive policy reason or set of reasons to be focused on gulf hurricanes?

DISASTER  POLITICS

So, how does Hurricane Isaac relate to Mitt Romney and President Obama’s campaign anyway? The media and general public have routinely scrutinized Presidents for their response to natural disasters. Whether it be applauding Herbert Hoover in the Mississippi Flood of 1927 or questioning why President Bush flew over the damages of Hurricane Katrina in 2005 instead of touching down, the public eye looks upon the leaders of our country with heightened awareness in times of need.

Governor Mitt Romney visited Louisiana August 31, while President Obama visited on New Orleans the following Monday. While both candidates deviated from their campaign trails to evidence their empathy for those suffering Americans in need of assistance, it gave them yet another seemingly “apolitical” topic that already attracted enough media attention that a public brawl must ensue.

Official press direct from the White House Press Secretary Jay Carney examined Isaac’s damages with barely any mention of the Hurricane with his statements: “It is worth noting that last year there was an effort to underfund the money that’s used to provide relief to Americans when they’ve been hit by disasters..and that effort was led by Congressman Paul Ryan”. The media soaked this up but Carney couldn’t revel in his condescendence of Ryan too long before representatives of the Ryan-Romney campaign refuted these claims by describing their disaster relief platform as “a critical obligation and should be treated as a high priority within a fiscally responsible budget”.

Hurricane Isaac allows candidates to temporarily elevate natural disasters as an aspect of each respective candidates’ campaign agenda. Although it can highlight the divergence between their policies, it has no lasting fortitude when people step into their offices on Monday and Hurricane Isaac crawls form front-page news to an afterthought by Friday for many Americans.

I agree that leading up to the Presidential Election, how could Hurricane Isaac not become politically charged? But, as the hurricane porn subsides, I’ll tell you what you missed. Hurricane Isaac encapsulates important economic and environmental components that should mean more to Americans that ending up in the back pages of the Wall Street Journal.

ECONOMY

Everyone loves to talk about “risk management” in our economy. Well guess what, the environment poses incredible risks to our economy. Every natural disaster impedes the intrinsic workflow of local activity. Hurricanes have economic implications that stretch far greater than their geographical regions. Paradoxically, not all of these implications negatively affect our economy, as rebuilding after the hurricane can actually be a boon for economic growth particularly in the construction industries.

However, in the short-term, analysts predict that there are damages in gas prices and economic growth. The halt of oil and natural gas production is forecasted to cause more than a $750 billion loss, which is 0.1 percent of annualized real GDP growth. The G7 called for a lift in oil production to negate this lack of supply, which bolstered up crude oil prices for a brief period.

ENVIRONMENT

There are several environmental implications of hurricanes in the gulf.   One concern is that recent perceived increases in hurricane activity are a sign of global climate change.  The United States Global Change Research Fund found that “hurricane intensity and associated storm surge will be among the most serious consequences of climate change”. (www.globalclimatechange.gov/usimpacts) These findings forecast that lower topographical regions where sea level is rising will be more frequently and intensely affected, especially on account of greater loss of land-mass, which serves as a buffer for coastal areas.

In contrast, however, some were hopeful that Hurricane Isaac could help alleviate the present nation-wide drought, affecting roughly 63% of the continental US, although it failed to sufficiently do so.

Finally, years hurricane can reduce hypoxia (low oxygen) conditions in the Gulf.   The hypoxic zone, or dead zone, in the Gulf is a seasonal phenomenon that results from nutrient runoff from Midwestern agriculture, hot summer temperatures, and lack of mixing among strata in the water column.  Hypoxia has potential impacts on shrimp and oyster harvest in the U.S.  Hurricanes cause mixing among strata in the water column which can temporarily increase oxygen levels and reduce the size of the dead zone.

So, there you have it. The real affects of Isaac in the midst of the captivating and enthralling hurricane porn you have been watching on CNN, MSNBC, and FOX

Sources:

1)   http://online.wsj.com/article/SB10000872396390444914904577623604026814924.html?KEYWORDS=drought%27s+grip+is+wide+and+deep

2)   http://blogs.wsj.com/economics/2012/08/31/hurricane-isaac-likely-caused-some-ripples-in-economy/?KEYWORDS=hurricane+isaac+likely+caused+some+ripples+in+economy

3)   http://online.wsj.com/article/SB10000872396390443618604577625712628569228.html?KEYWORDS=pace+of+isaac+cleanup+leaves+some+impatient

4)   http://online.wsj.com/article/SB10000872396390444301704577629720510935762.html?KEYWORDS=many+still+without+power+after+isaac

5)   http://online.wsj.com/article/SB10000872396390444772804577623771590036732.html?KEYWORDS=romney+visits+louisiana+obama+to+arrive+monday

6)   http://www.bloomberg.com/news/2012-08-29/hurricane-makes-campaigning-tricky-for-president-obama.html

7)   http://www.huffingtonpost.com/2012/09/03/obama-hurricane-isaac_n_1852720.html

8)   http://politicalticker.blogs.cnn.com/2012/09/03/charges-of-politics-surround-visits-to-hurricane-damage/

9)   http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCIQFjAA&url=http%3A%2F%2Fwww.gulfofmexicoalliance.org%2Fpdfs%2FPrimer_on_Hypoxia_in_the_Gulf_of_Mexico.pdf&ei=pEBKUI7qJIOu8QTt-YGQCw&usg=AFQjCNE18nJggh-x7UV78iqDypv2tN7uTQ&cad=rja

Integration of the Shrimp Market and Why Environmentalists Should Care

Frank Asche, Atle Oglend, Marty Smith and I have a new paper that looks at the determinants of prices in different shrimp markets–prices for big and small shrimp; prices for brown, white and pink shrimp; and prices for wild-caught shrimp and farmed shrimp.   In particular, we look to see whether prices for different categories of shrimp (different sizes, species, and methods of production) move in tandem.  Consumer decisions in markets are a function of relative prices of goods.   Thus, if the prices of large and small shrimp move in tandem, then the relative prices of the two sizes of shrimp do not change and consumers choices in the shrimp market should remain unaffected.  If this is true across all types of shrimp we say the market is integrated.

There are two important facts to know about the shrimp market.  First, we consume a lot of shrimp.  Shrimp is the leading seafood product by value.  In 2006, shrimp accounted for 17% of all global seafood trade (FAO 2009).  It is also the leading seafood product by weight.  Americans consume 4.2 pounds of shrimp per capita annually.  The next largest seafood product is canned tuna of which we consume only 3.3. pounds per capita (NRC 2007).  Second, the method by which shrimp is “produced” has changed dramatically over the last decade.  As you can see in Figure 1, farmed (or aquaculture) shrimp has skyrocketed in the last decade and now accounts for more than 50% of global shrimp production.

Figure 1: Shrimp Production Over Time

But why focus on prices and market integration?  There are at least four reasons why the nature of the shrimp market matters.  First, the increased competition from farmed shrimp has lead to trade disputes.  The U.S. enacted trade restrictions on shrimp from a group of countries (all in Asia or Latin America) after domestic shrimp fisherman filed anti-dumping complaints (Keithly and Poudel, 2008).  Second, diseases have been an issue for farmed shrimp, particularly white spot disease (Anderson, 2003)  Third, there are significant environmental shocks that affect the supply of domestic wild-caught shrimp.  For U.S. shrimp fishermen the  “dead zone” that occurs seasonally in the Gulf of Mexico potentially influences aggregation, production, and the size distribution of shrimp (Craig 2011; Huang, Smith, and Craig, 2010; Huang et al. 2011). Hurricanes Katrina and Rita caused significant shrimp supply disruptions through destruction of shrimp vessels and processing facilities (Buck 2005), while rising fuel prices are particularly costly for wild-caught shrimp because trawling is fuel-intensive (Ran, Keithly, Kazmierczak 2011), Moreover, costs of complying with the U.S. requirement for shrimp trawlers to use Turtle Excluder Devices decreased domestic supply (Mukherjee and Segerson 2011).

The degree of market integration affects how these environmental and economic stressors affect prices.  The impact of all of these stressors (trade, production costs, disease, and environmental) will have a strong impact on the price determination process if the markets are not integrated, while the impact will be weaker in a larger and more integrated shrimp market.

We use monthly price series data from June 1990 through December 2008 to investigate market integration.  The details of the statistical analysis are available in the paper, but Figure 2 captures the idea graphically.  In Figure 2, we plot the price trends for different sizes of brown shrimp caught in the U.S.  The graph shows remarkable co-movement in prices of different sizes.  Our statistically analysis bears out this observation.  Prices of different sizes of brown, pink, and white shrimp move in tandem.  Prices of U.S. wild-caught shrimp and imported farm shrimp move in tandem.  The shrimp market is remarkably well integrated.

Figure 2: Brown Shrimp Prices By Size Class

Why should environmentalist care?  Market integration has significant implications for how domestic wild-shrimp fisherman can respond to certain environmental supply shocks. In North Carolina (a much smaller market than Gulf of Mexico), there is evidence that hypoxia has decreased shrimp production in the range of 13% but has not increased prices (Huang, Smith, and Craig 2010; Huang et al. 2011). In the much larger Gulf of Mexico,  there is emerging evidence that hypoxia decreases the supply of large shrimp and increases the supply of smaller shrimp likely as a result of aggregation on the edge of hypoxic areas (Bennear, Kociolek, and Smith 2011; Craig 2011).  Market integration suggests that the decreased supply of large shrimp cannot be offset by an increase in price.  Rather, imports of larger farmed shrimp will increase to satisfy demand.  Similarly, domestic supply shocks from hurricanes, oil spill, or fuel price spikes cannot be offset by price increases. In particular, market integration suggests that the economic losses from a significant decrease in 2010 domestic shrimp production – assuming this decrease was caused by the Deepwater Horizon oil spill – was not likely offset by a price increase.  Market integration thus has important implications for the long-run economic viability of the U.S. shrimp fishery.  The losses from supply shocks are more consequential for producers, and the various shocks are additive as economic challenges to the fishery. But U.S. shrimp consumers are essentially unharmed.

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Anderson, J.L. 2003. The International Seafood Trade. Cambridge: Woodhead Publishing.

Bennear, L.S., E. Kociolek, and M.D. Smith. 2011. Estimating the effect of hypoxia on the Gulf Coast shrimp fishery. Selected Paper, AERE Summer Conference. Seattle, WA, June 2011.

Buck, E.H. 2005. Hurricanes Katrina and Rita: Fishing and Aquaculture Industries – Damage and Recovery. CRS Report for Congress, RS22241, Washington DC: Congressional Research Service.

Craig, J.K. 2011. Aggregation on the edge: Effects of hypoxia avoidance on the spatial distribution of brown shrimp and demersal fishes in the northern Gulf of Mexico. Marine Ecology Progress Series (in press).

FAO. 2009. The State of the World Fisheries and Aquaculture 2008. Rome: Food and Agricultural Organization of the United Nations.

Huang, L., L.A.B. Nichols, J.K. Craig, and M.D. Smith. 2011. Measuring Welfare Losses from Hypoxia: The Case of North Carolina Brown Shrimp. In Review.

Huang, L., M.D. Smith, and J.K. Craig. 2010. Quantifying the Economic Effects of Hypoxia on a Fishery for Brown Shrimp Farfantepenaeus aztecus. Marine and Coastal Fisheries: Dynamics, Management, and Ecosystem Science. 2:232-248.

Keithly, W. R. Jr., and P. Poudel. 2008. The Southeast U.S. Shrimp Industry: Issues Related to Trade and Antidumping Duties. Marine Resource Economics 23:459-83.

Mukherjee, Z. and K. Segerson. 2011. Turtle Excluder Device Regulation and Shrimp Harvest: The Role of Behavioral and Market Responses. Marine Resource Economics 26: 173-189.

Ran, T., W.R. Keithly, and R.F. Kazmierczak. 2011. Location Choice Behavior of Gulf of Mexico Shrimpers under Dynamic Economic Conditions. Journal of Agricultural and Applied Economics, 43:29–4