Evaluating Externalities Using Bioeconomic Techniques: The Impact of Forestry on Aquaculture

In this paper, a bioeconomic model is used to investigate possible externalities imposed by forestry on giant-clam farming in Solomon Islands. This is of economic interest due to the rapid expansion of forestry in that country and the potential for mariculture to become an important source of cash income for village communities. Forestry may result in externalities through sediment run-off, which has a complex array of effects on the seawater in which giant clams are farmed, such as nutrient enrichment and turbidity. These effects are unknown because empirical studies in the field and experimental research in the laboratory have not been done. In the absence of this information, simulation modelling provides insight into the economic implications of the possible effects of sedimentation on the production system.