Optimal Harvesting Policies in a Depleted Fishery with Habitat Effect

Fishery managers face an ongoing challenge in managing commercial fisheries in a way which enables the short-term delivery of economic benefits to commercial fishers while also ensuring those benefits do not compromise the ability of fish stocks to deliver benefits into the future. This challenge is complicated by fishing effort negatively impacting the habitats which support commercial fish stocks and so undermining sustainability of the resource. Depletion of fish stocks and subsequent rebuilding efforts have necessitated the development of harvest policies which dictate harvesting rules and harvest control mechanisms. In this paper, we explore the economically optimal design of these harvest policies for a fishery depleted by overfishing and where the fishing effort results in a negative habitat externality. We assume the control mechanisms include a harvest control rule and a no-take marine reserve and find that the economically optimal recovery of the stock will always incorporate both mechanisms, although the relative weight put on each will change according to biological and economic conditions. We find that, the HCR will achieve similar fishery outcomes as the optimal paths, except where the fishery habitat is severely impacted or where the environment is exceptionally slow to recover from degradation