Harmful Algal Blooms Habs! in the United States

WHOI-T-00-002 C2

WHOI-2000-11

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Estimated Annual EconomicImpacts from Harmful Algal Blooms HABs! in the United States

Donald M. Anderso'ri' Porter Hoagland Woods Hole Oceanographic Institution Woods Hole, MA 02543

Yoshi Kaortj Nanzan University...::;::::,'. Nagoya, lapan

Alan W. White MassachusettsMaritime Academy BuzzardsBay, MA 02532

September 2000

Technical Report

Fundingwas provided by the National Oceanicand Atmospheric Administration under Crants No. NA46RC0470 and NA90AA-D-SC480, the National Science Foundation under Grant No. OCE-9321244, and the Johnson Endowment of the Marine Policy Center, Approvedfor publicrelease; distribution unlimited. WHOI-2000-11

Estimated Annual Economic Impacts from Harmful Algal Blooms HABs! in the United States

by

Donald M. Anderson, Porter Hoagland Woods Hole Oceanographic Institution Woods Hole, MA 02543

Yoshi Kaoru Nanzan University Nagoya, Japan

AIan W. White Massachusetts Maritixne Academy Buzzards Bay, MA 02532

September 2000

Technical Report

Funding was provided by the National Oceanic and Atmospheric Administration under Grants No. NA46RG0470 and NA90AA-D-SG480, the National Science Foundation under Grant No. OCK-932I244, and the Johnson Endowment of the Marine Policy Center. Reproductionin whole or in part is permittedfor any purposeof the United States Government. This report should be cited as Woods Hole Oceanog.Inst. Tech. Rept., %'HOI-2000-l l.

Approvedfor public release;distribution unlimited.

Approved for Distribution:

Laurence P. Madin, Chair

Department of Biology EconomicImpact of HABsin the U.S.

ACKNOWLEDGE1VlKNTS

We extendspecial thanks to the followingpeople for theirassistance in providinginformation for this report: D. Baden Universityof Miami!; D, Blythe University of Miami!; J. Burkholder NorthCarolina State University!; R. Conn City of Sarasota,Florida!; L. Fleming University of Miami!; W, Foster Departmentof Marine Resources,State of Maine!; R, Haddock Guam Departmentof Public Health!;Y. Hokama University of Hawaii!; R. Horner University of Washington!;J. Hurst Departmentof Marine Resources,State of Maine!; C. Lobban University of Guam!; K. Lynch North CarolinaDepartment of Environment,Health and NaturalResources!; V. Paul University of Guam!; R. RaLonde University of Alaska!; W. Roihenbach City of Sarasota,Florida!; E. Todd Departmentof Healthand Welfare, Canada!; T. Tosteson University of PuertoRico!; K. Wtute Departmentof Fisheriesand Oceans, Canada!; and R. Weisrnan Florida PoisonInforination Center!.

We alsothank the following peoplefor information which they provided during the initial stages of thisproject: C. Allison AK!; S.Barker ME!; R. Barrett AK!; B. Barss OR!;T. Beardsley AK!; R. Reeker LA!; T. Bettinger AK!; E. Buskey TX!; D. Cannon OR!; K. Canty MA!; P. Chapman WA!; R. Collins CA!; E. Cosper NY!; E. Cox TX!; R. D'Arnica NY!; C. Dequillseldt NY!; B. Dewey WA!; P. DiPietro MA!; W, Donaldson AK!; B. Eisley NJ!; J. Finger CA!; A. Freudenthal NY!; J. Garrett FL!; B. Halgren NJ!; R, Hanowell WA!; D, Heil FL!; Y, Hokama HI!; R. Horner WA!; J. Hunt FL!; J. Hurst ME!; T. Johnson CA!; J. Johnson OR!; S. Kennedy FL!; G. Langlois CA!; R. Lewis ME!; R. Madiack NJ!; J. Mahoney NJ!; H. Marshall VA!; M. McCallum WA!; M. McNair AK!; J. Nelson NH!; C. Newell ME!; R, Nuzzi NY!; P. Olsen NJ!; M. Ostasz AK!; J, Paeth OR!; PierceAssociates MA!; R. Pierce FL!; H. Radtke OR!; P. Raiche NH!; T. Reisingor TX!; J. Rensel WA!; B, Roberts FL!; L. Robinson TX!; M. Ross CA!; P. Rubec TX!; ShoreAppraisals MA!; D. Simons WA!; T. Smith WA!; K. Spiller TX!; G. Stater OR!; K.Steidinger FL!; M. Street NC!; C. Strong NY!; W. Tatum AL!; P. Tester NC!; R. Usher MA!; J. Volk CT!; C. Weise AK!; T. Whitledge TX!; D. Whittaker MA!; S. Wilk NJ!; and G. Woods MA!.

We thankMs. Ellen Gately for typographicalassistance with this manuscript,and Ms. Judy Kleindinst and Ms, Kristin Gribble for their editorial efforts. This research was supported in part by NOAA NationalSea Grani CollegeProgram Office, Departmentof Commerce,under Grants No. NA46RG0470 and NA90AA-D-SG480, Woods Hole Oceanographic Institution Sea Grant ProjectsNo. R/8-150-PT and R/S-24,by NSF Grant OCE-9321244,and by the Johnson Endowtneni of the WHOI Marine Policy Center. Economic itnpact of HABs in the U.S,

EXECUTIVE SUMPclARY

Blooms of toxic or harmful microalgae,commonly called "red tides," representa significant and expandingthreat to humanhealth and fisheries resources throughout the United Statesand the world. These phenomenatake inany forms, rangIngfrom massiveaccumulations of cells that discolor the water to dilute, inconspicuous,but highly toxic populations, Ecological,aesthetic, andpublic health impacts include: mass mortalities of wild andfarmed fish andshellfish; human intoxication and death from the consumptionof contaminatedshellfish or Gsh; alterations of marine food webs through adverseeffects on larvaeand other life history stagesof commercial fish species;the noxious smell and appearanceof algaeaccumulated in nearshorewaters or depositedon beaches;and mass mortalities of marinemainmals, seabirds, and other animals.

Many harmful algal blooms HABs! havesignificant economic impacts. Shellfishclosures, wild or farmed fish mortalities, and scared consumers who avoid seafood are well-recognized impacts of major HABs, While adversehealth effects and lost sales of fish and shellfish products are direct costs, constraineddevelopment or investmentdecisions in coastalaquaculture due to the threat &om outbreaksof toxic algaeare examplesof poorly understood or poorly quantified indirect or hidden costs. Lost marinerecreational opportunities also are a significant cost of harmful algal bloom incidents.

HABs have increasedsteadily in both speciescomplexity and geographicalextent over the last severaldecades. In turn, the rangeof hmnfuI eKectsand the magnitudeof economiccosts have also widened. This report providesthe first comprehensiveestimate of the economicimpacts of HABs in the United States,focusing on both direct and indirect costs.

We estimatethe economicimpacts of HABs for events where such impacts were measurable with a fair degreeof confidenceduring the six-year interval of 1987-92 Table ES.1!. Due to reporting limitations, the selectedevents are a subset of all outbreaksthat occurred during the 1987-92 study period, and thus our ~ate economic impact underestimates the true impacts, "Economic unpact" is definedbroadly to meaneither lost grossrevenues in the relevantproduct or factor markets,expenditures for environmentalmonitoring and management, or other costs that would not have been incurred in the absenceof HABs, In general, this measure is consistent with published estimatesmade for other natural catastrophes,such as hurricanesor earthquakes, Economicmultipliers, often usedto approximatethe full ramificationsof costs or lossesas they are transferred through a local economy, are not used here. The calculation of economic multipliers in the absenceof detaileddata on market structure and interactionscan be misleading, as multipliers canbe sensitiveto local market structure characteristicsand to the quality of data that describe interactions among market sectors. Developing a description of local and regional marketsfor specific HAB eventswas beyondthe scopeof this project. Economic Impact of HABs in the U.S.

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Economic impacts are grouped into four basic categories; ! public health impacts; ! commercialfishery impacts; ! recreation and tourism impacts; and ! monitoring and managementcosts. Unless otherwise indicated, all estimatesare reported in 2000U.S. dollars.

Public Health Im acts

Human sicknessand death from eating tainted seafoodresults in lost wages and work days. Costs of medicaltreatment and investigationalso are an important part of the economicimpact causedby suchevents. Cases of sicknessand death from shellfishtoxins are probably the most clearlydocumented among the different types of HAB impacts,since these cases are recorded by public healthagencies in individual statesas well as at the federallevel.

Forthe 1987-92period, the averagepublic healthimpact due to shellfishpoisoning from HABs wasapproximately $1 miUionper year causedby paralytic,neurotoxic and amnesicshellfish poisoning,or PSP,NSP, and ASP respective1y!.This total is low becauseof highly effective state monitoring programs that detect toxic sheNish and keep contaminatedproducts off the market, Another problem causedby toxic algaeis the fish poisoning syndromecalled ciguatera, causedby dinoflagellatetoxins that move through the tropical food chain to the larger fish that then poisonhuman consumers. Ciguatera affects predominantly the residentsof, and visitors to, Florida, Hawaii, PuertoRico, the U.S. Virgin Islands, Guam, and the Marshall Islands. Over the study interval, the economicimpact of ciguaterapoisoning varied from $18 million to more than $24 million per year,averaging $21 million, Theseestimates are low since ciguaterapoisoning has occurredoutside the tropical areaslisted above due to exports of fish to other jurisdictions, Further, some seafood companies purchase insurance to cover potential ciguatera-caused liabilities, andthere are court costs associatedwith ciguatera-relatedlitigation neither of which we were able to quantify for the study interval.

The total public healthimpacts &om HABs rangedfrom a low of $18million to a highof $25 million,averaging $22 million overthe six-yearinterval. Thesefigures represent approximately 45'loof the total economicimpacts from all causes.

Commercial Fishe Im acts

Commercialfishery impactsfrom HABs includewild harvest and aquaculturelosses of fish and shellfishresources due to NSP, PSP,ASP, ciguatera,and brown tides. Annual impactsvary &om $13 to $25 million with averageannual impacts of $18 million. These figures clearly are underestimatesbecause they do not includelosses from PSPclosures in several~tes where it was not possible to documentthe ~e closed or the value of the resourcethat was not harvested.The estimationof commercialfishery impacts is complicatedfurther by the transfer of shellfishingeffort from closedareas to areasthat remainedopen and by fishermenswitching to other fishing activities. In addition,the estimatesdo not include the value of wild fish kills or of lost opportunities for harvestingsome untapped shellfish resources. Measuring the economic impactsof wild fish kills is problematicbecause many involveso-called "trash" fish that, by Economic Impact of HABs in the U,S. definition, have no market value. Also, the ultimate causesof fish kills often are unclear. For example,fish kills causedby the dinofiagellatePPesteria undoubtedly occurred in North Carolina during the six-year study interval, but stateofficials could not indicate which events were caused by Pfiesteriaand which were due to othercauses, such as low dissolvedoxygen,

Another issue is that some currently untapped fishery "resources" have values that could be realized in the absence of HAB events, but such estimates are not included here. Examples include some shellfish resources of coastal Alaska, which are permanently quarantined due to persistent PSP toxicity and the logisticsof samplingdistant or remote resources. However, in order for such"lost opportunities" to be countedlegitimately as economicimpacts in this study, these fisheries must be demonstrated to be commercially viable. A plausible alternative reason for non-exploitationis that they are not profitable fisheriesbecause there is insid5cient demand or becauseharvesting is uneconomical, The annual economicimpact estimatespresented here include losses from these untapped resources only in certain special cases e.g., surf clams in Alaskaand on GeorgesBank!.

Recreation and Tourism Im acts

In 1991, a federal study esbrnated that expenditures by recreational fishermen for travel, food, lodging and equipment were 67 percent greater than expenditures for commercial fish landings. Although many expertsargue that the impactsof HABs on.recreation and tourism are important andpotentially large, there are few availabledata describing the size of the impacts. Clearly, the economicimpacts of HABs on recreationaland tourism activities deservesubstantially more attention than they have been given to date. In Fiorich, for example, recurrent red tides have been estimatedto causeover $20 million in tourism-relatedlosses every year. These impacts, as well as similar losses in Texas and other areas, are not well documented and thus are reduced to much lower levels in this study. The total annualestimates for recreationand tourism are, onceagain, underestimates,Efforts to measurerecreation. and tourism impacts inust be undertakenat the local level because local environmental and socioeconomic conditions are critical deternuiiants of changesin recreational benefits.

Estimatesof economicimpacts on recreationand tourism during the 1987-92period rangefrom zeroto $29 tnillion. The annualaverage is $7 million.

Monitorin and Mana ement Costs

It is often the casethat water monitoring tasks, including shellfish testing for PSP, NSP, and ASP, are spreadacross different divisions of state government,making it difficult to collect data on costs. Further, monitoring activities for both HABs and other water quality testing, such as shellfish sanitation, often are conducted by the same personnel. As a result, it is difficult to factor out those costs related specifically to HAB monitoring and management, Given this qualification, annual average monitoring and management costs for HARs are estimated at $2 million, distributed among twelve states: Alaska, California, Connecticut, Florida, Maine, EconottticImpact of HABs in the U.S.

Massachusetts,New Hampshire,North Carolina,New Jersey,New YorkOregon, and Washington.These costs include the routine operation of shellfishtoxin monitoring programs, planktonmonitoring, and other management activities.

Conclusions

TableES-1 presents the annual aggregate economic impacts in millionsof 2000dollars! of HABs Ui the United Statesduring the 1987-92period. The total costsaverage $49 million per year, rangingfrom $34 million to $82million. Overthe lastseveral decades, the cumulativeimpacts thusapproach $1 billion. Publichealth impacts are the largestcomponent, representing more than45 percentof total averageimpacts. Commercialfisheries impacts are the nextlargest component,representing 37 percentof the total. Recreation/tourismimpacts account for 13 percentof the total, and monitoring/nianagementimpacts represent the remaining4 percent. Further,it is importantto notethat expendituresmade to improvemonitoring and management likely resultedin decreasesin impactsin the othercategories.

Theseestimates are highly conservativeand reflect the difhcultiesin compilingand assessing the impactsof phenomenafor which economicstudies are rare.The totals in TableES-1 do not includethe effectsof economicmultipliers, which would increasethe estimatesseveral-fold. They alsodo not includethe valueof untappedor unexploitedresources, such as someof the extensiveshellfish populationsalong Alaska's 30,000-milecoastline, presently closed to harvestingdue to PSPtoxicity. Likewise,the effectsof delayedharvesting, as with temporary beachclosures due to PSP,could not be estimatedwith any precisionand thus are not included.

We note also that outbreaksof certainblooms may causesevere economic impacts that equalor exceedthe annual averages for the selectedstudy interval, For example,a 1976New Jerseyred tide causedlosses estimated at morethan $1 billion in 2000 dollars, Similarly, the 1997 PPesteria outbreakin the ChesapeakeBay is estimatedto havecost the seafoodindustry $46 million, Thesesingle events exceed the annual average of HAB impactsfor theentire nation.

The difficultiesencountered in our efforts to generatea nationalestimate of HAB economic impactsunderscore the needto modify the mannerin which HABs are reported. At present, information on HAB events is &agmentaryand inconsistentwith respect to the level of detail provided.The duration, affected acreage or shorelinelength, average toxicity levels, and values of affectedcoastal resources should be documentedfor eachbloom in order to describethe overall economicsignificance of the incident. In addition,local and stategovernments should place muchhigher emphasis on quantificationof economicimpacts. Until local governmentsbecome capableof supplying site-specificimpact information for each bloom incident, truly comprehensiveand detailednational level aggregationof such impacts cannot be realized. Furthermore,the causesof economicimpacts and the degreeof their uncertainty should be includedin any reportsof economicimpacts. EconomicImpact of HABs in the U.S.

Overall, the economic impacts kom HABs are diverse and large within the United States. Even with the highly conservativetreatment given the impacts in this study, the annual costs are significant. Perhapsmore importantly, many are recurrent,and show signs of increasingas the number of toxic and harmful algal species grows and as our reliance on the coastal zone for aquaculture, commerce and recreation expands. Prudent investment in research and monitoring can do much to reversethis trend and to reducethe annualimpacts. Economic Impact of HABs in the U.S.

TABLE OF CONTENTS

I NTRODVCTIONeeeoeee.r ~ ~ o~ ~92 re92or eeeeeoeoeer ~ ~ corereoee92oeeeeeeee ~ ~ eeeeee~ o 1 3

METHODS .16

2.1 Definition of Economic Impacts 16 2.2 Economic Impacts are not an Ideal Measureof Social Costs. 17 2.3 Ex Ante vs. Ex Post Impacts. 19 2.4 Nonmalleable Factors 19 2.5 Other Types of Impacts. 19 2.6 Distribution of Impacts. 2.7 Usefulness of the Economic Impact Measure ...... 20 2.8 Study Interval 20 2.9 Data. 21

P VBLIC HEALTH IMPACTS e r ~ oeooeroooeeoeooeoeeoooeeeoeoeeeroeeoeroooeeeeeeeeeoc~ ~ o eoeoeoeeooree22 3.1 PSP, NSP, and ASP Illnesses. 3.1.1 Illness Costs. 22 3.1.2 Unreported Illnesses. 25 32 Ciguatera. 26

4 COMMKRCIAL FISHERY IMPACTS 28 4.1 WiM Harvest and Aquaculture Losses 28 4.1.1 Brown Tide Impactson Bay ScallopHarvests in New York 28 4.1.2 ASP Impactson RazorClam Harvestsin Washingtonand Oregon...... 31 4.1.3 Alaskan Shellfish Resources. 32 4.1.4 CiguateraImpacts on Salesof RecreationalFish in Hawaii 32 4.1.5 West Coast Harvesting Delays 32 4,1,6 InconclusiveImpacts on Shellfish Harvestsin Maine and Massachusetts 33 4.1.7 Impacts from the Application of Health Standards. 34. 4,1.8 Impactsof Wild Fish Kills. 34 4.1.9 Inconclusive Evidence of SeagrassDieoffs in Florida. 36 4.2 Untapped Fisheries, 36 4.2.1 Alaska's UntappedShellfish Resources 37 4.2.2 Georges Bank Surf Clam Fishery, 42 4.2.3 GeorgesBank Roe-OnScallop Fishery, 42 4.3 Major HAH Eventsin OtherYears. 43

RECREATION AND TOURISM IMPACTS...... 44

5.1 The 1987 North Carolina Red Tide Event 45 52 The 1991-92 Washington and Oregon ASP Event.. .45 EconomicImpact of HABs in theU.S.

5.3 Recreational Impacts - Large but Uncertain. 5.4 Laguna Madre Brown Tide....., ., 47 5.5 Property Value and Recreational Impacts of Macroalgae...... 47

6 MONITORING AND MANAGEMENT COSTS boaee eo ee 49

7 CONCLUSIONS AND FUTURE RESEARCH NEEDS...... 51

7.1 Annual Aggregate Economic Impacts. 51 72 Reasons Why Our Estimates are Conservative...... 51 7.3 Information Needs. 7.4 Overview. 55

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APPENDIX 8. .S9

10 Economic Impact of HABs in the V.S.

LIST OF FIGURES Page

Figure2.1. Economiccosts of'a HAB eventin a commercialfishery 17

Figure2.2. Economiccosts of a HABevent in a recreationalfishery

11 EconomicImpact of HABs in the U.S.

LIST OF TABLES Page

Table 3.1. Illness due to natural seafood toxins in the United States 23

Table 3.2. Shellfish poisoning impacts from harnifui algal blooms

Table 3.3. Public health impacts of ciguatera 27

Table 4.1. Commercial fishery impacts 29

Table 4.2. New York commercial bay scallop landings 980-84! 31

Table 4.3. Landed values in she116shin Maine 988 and 1992! 33

Table 4 4. Massachusetts state PSP testing results 35

Table 4.5. Status of Alaskan molluscan shellfish resources 38

Table 4.6. Estimated "net" gross revenues arising Born opening the Alaskan 41 and Georges Bank surf clam fisheries

Table 5.1. Recreation and tourism impacts

Table 5.2. Washington state recreational shellfishing trips for razor clams 46

Table 6.1, Arinual average monitoring and managementcosts 50

Table 7.1. Estimated annual economic impacts from harmful algal blooms 52 in the United States

12 EconomicImpact of HABs in the U.S.

1 INTRODUCTION

Oceanwaters are home to thousandsof speciesof microscopicalgae which together comprise the baseof the marinefood web. Most of thesespecies are harmless, and in fact arecritical to the ocean'secology and to theproduction of biomassat all levelsof themarine food web. Thereare, however,a fewdozen algal species which are associated with adverseimpacts of manydifferent types.The term "harmful algal bloom" or HAB is nowused to describethe destructive and often visible"blooms" of thesealgae that kill fish,make shellfish poisonous, and cause numerous other problemsin marinecoastal waters, The one feature uniting these diverse phenomena is that they causeharm. In thepast, the terin "red tide" wasused to describemany of thesephenomena, but theterm is potentiallymisleading and does not adequatelydescribe the many different types of harmfuloutbreaks. Some algal species produce potent toxins which accumulate in shellfishthat feedon thosealgae, resulting in poisoningsyndromes in humanconsumers called paralytic, diarrhetic,amnesic, and neurotoxic shellfish poisoning PSP, DSP, ASP, and NSP respectively!. A relatedphenomenon called ciguatera fish poisoning CFP! occurs when toxic algaeliving on coral reef seaweedsare consumedby herbivorous fish, which pass the toxins on to larger predatorswhich then deliver the neurotoxins to humanconsumers. All of thesetoxins can also altermarine ecosystem ~cture andfunction as they aretransferred through the food web, affectingfecundity and survival at multiple levels in waysthat are still largelyunquantified.

Sometoxic blooms kill wild and farmedfish populations. Others are associatedwith irritating andtoxic aerosols,due to the transportof toxinsin seaspray. Evennon-toxic algal species can causeproblems through biomass effects - shadingof submergedvegetation, disruption of food webdynamics and structure, and oxygen depletion as the blooms decay. Traditionally, the term HAB hasreferred to inicroscopicalgae, but its interpretationhas now beenbroadened to include bloomsof macroscopicalgae seaweeds!which displaceindigenous species, destroy habitat, causeoxygen depletion, and even alter biogeochemicalcycles. The causesand effects of macroalgalblooms are similar in manyways to thoseassociated with harrrifuimicroscopic phytoplankton species.

Duringthe past several decades, HAB eventshave occurred in morelocations than ever before throughoutthe UnitedStates and the world Anderson1989; Smayda 1990; Hailegraeff 1993!. Thenumber of algalspecies involved in suchevents has increased, there are more known toxins, more fisheriesresources are affected,and the economicimpacts of HAB outbreaksare larger as well. Whetheror not this globalincrease in HABs is takingplace because of enhancednutrient andpollutant loadings from anthropogenic sources has been a topicof debatewithin the scientific community e.g.,Anderson 1989; Smayda 1990!. Whateverthe reasons,virtually all coastal regionsof theUnited States are now subject to anunprecedented variety and frequency of HAH events. The United States is not alone in this respect, as nations throughout the world are increasinglyfaced with a bewilderingand disturbing array of toxic or harmfulspecies and impacts.

13 Economic Impact of HABs in the U.S,

In the United States, the inost significant economic and public health problems related to harrrdul algae during the 1987-92 interval that is the focus of this study were:

~ Paralyticshellfish poisoning PSP!,which occursin all coastalNew Englandstates as well as New York and along much of the west coast &om Alaska to California. This problemhas also extendedto offshoreareas in the Northeast,notably GeorgesBank.

~ Neurotoxicshellfish poisoning NSP!, and fish and marinemanimal mortalities in the Gulf of Mexico and, more recently, extending northward to the coast of the Carolinas.

Mortalities of farmed salmonids in the Pacific Northwest.

~ Recurrentbrown fides, causingmortalities of musselpopulations, massive recruitment failure of scallops,and reductionof eelgrassbeds around Long Island.

~ Ciguaterafish poisoning CFP!, a malady associatedwith dinoflagellate toxins accumulatedin tropical fish flesh, occurringin virtually all sub-tropical to tropical United Stateswaters, includingFlorida, Hawaii, Guam,United StatesVirgin Islands, Puerto Rico, and many Pacific Territories.

Amnesic shellfish poisoning ASP!, a sometimes fatal illness so named becauseone of its most severesymptoms is the permanentloss of short-terin memory. The ASP toxin, domoic acid, has been detectedin shellfish from both the West and East Coasts of the United States, and toxic Pseudo-nitzschia multiseries cells have been isolated from Gulf of Mexico water.

~ Diarrhetic shellfish poisonmg DSP! which some consider the most serious and globally widespread phytoplankton-related seafood illness, The first confirmed incidence of DSP in North America occurred in 1990 and 1992 in Canada. DSP- producingspecies of phytoplanktonsuch as Diriophysisacumiriata and Prorocentrum lima occurthroughout all temperatecoastal waters of the United States,though no outbreaks of DSP have yet been confirmed.

~ "Pfiesferia-like"dinoflagellates, affecting human health and fisheriesin estuariesof the southeasternUnited States,and in particular the Neuse-Pamlicoestuaries. Although Pfiesteriahad been discovered by 1992,economic impacts of fish kills causedby this organism are not included in this study becauseno data could be obtained on the fish kills conclusivelylinked to Pfiesferiaover the 1987-92interval, or of the value of the deadfish. In the laboratory,human exposure to aerosolsfrom toxic PPesteriacultures has beenlinked to short- and long-termneurotoxic symptoins. Fishermenand others working in or exposedto estuarinewaters have complainedof similar probleins,

14 Economic1mpact of HABs in the U.S.

exempli6edin the worst casesas a loss of neurocognitiveability. There are no estimatesof the economicimpacts of thesehuman health effects in this report, again because of a lack of data.

~ Bloomsof macroalgae seaweeds!, in responseto nutrientenrichment associated with coastaleutrophication. Opportunistic macroalgal species outcompete, overgrow, and replaceseagrass and coral reef ecosystems. Once established, the macroalgalblooms mayremain in anenvironment for decadesuntil nutrientsupplies decrease. Negative effects include reducedlight availability to seagrassesand reef systems, leading to lowerproductivity, habitat loss from hypoxia/anoxia,and eventual die-off of sensitive species.

In thisreport, we providea nationalestimate of the economicimpacts of HABs from eventsfor whichsuch impacts were measurable with a fairdegree of confidenceduring the interval1987-92. Unlessotherwise indicated, all estimatesare reported in 2000U.S. dollars.! Due to inadequate reporting,the eventsincluded here are onlya subsetof the HAB outbreaksthat occurred duringthe six year studyperiod. For this reasonand others discussedbelow! we believe that our aggregateeconomic impact estimates significantly underestimate the true impacts.We acknowledge that "economic impact" is notan ideal measure of economicloss, but we employthe conceptin this study becauseit is the predominantform in which damagesare reportedby coastalmanagers and by scientistsin thepublished literature. We group economic impactsinto four basiccategories: 1! public healthimpacts; 2! commercialfishery impacts;3! recreationand tourism impacts; and 4! monitoringand management costs. This is the first effort to estimateeconomic costs of HABs at the national level, so it is perhaps not surprising that in the courseof this analysis,we encounteredmany unknownsand uncertaintieswith respectto quantifying impacts.These problems are discussedbelow.

15 EconomicImpact of HA3s in the U.S.

2 METHODS

The following economic impact analysis is based mainly on a survey of experts &om individual coastal states and the literature. Formal letters requestingeconoxnic impact information were mailed in August 1992 and February 1994 to individuals in certain heavily impacted states who were either knowledgeable about HAB ixnpacts or who were likely to know others who could be contacted for more specific details. In tota1, more than 170 people were contacted by letter and by telephoneto elicit economicimpact information and to uncoverdetails about individual HAB events. After a preliminary evaluationand synthesis of thesedata, topics requiring further data or analysiswere identified. Thesewere addressedthrough a new seriesof telephone calls and correspondencein 1997-99. We havesummarized these data in the body of the report.

2.1 Definition of Econoxnic Impacts

We define"economic ixnpacts" broadly to meaneither lost grossrevenues in the relevantproduct or factor markets,expenditures for environmentalxnonitoring and management, or other coststhat would not have been incurred in the absenceof HABs. In general, this measure is consistent with published estixnatesmade for other kinds of natural catastrophes, such as hurricanes or earthquakes e.g. Pielke and Landsea 1997; Pielke and Pielke 1997!. As such, the estimates reported here representa preliminary, but admittedly rough, approximation of the economic coststo the United States&om the occurrenceof HABs. Readersshould keep the limitations of economicimpact analysis in mind, realizing that it was developed as a purely descriptive technique. Its original purpose was to describe the economic structure of a region, to help understand economic interactions and linkages axnongsectors. In particular, it is not a form of benefit-cost analysis, and it should not be used to justify normative decisions Propst and Gavrilis 1987!.

Another considerationis that we do not apply "multipliers" in this report to capture the full ramifications of economicimpacts. Multipiiers can be sensitive to local market structure characteristicsand to the quality of data that describeinteractions among market sectors Archer 1995; Propst and Gavrilis 1987!. Developing a description of local and regional markets for specific HAB eventswas beyond the scope of this project. We haveidentified somestudies of HAB impacts in which mu1tipliers have been estimated and used, such as Maine's economic ixnpactcalculation for shellfishingclosure of September1980, and we recognizethat it is possible to calculate multipliers for this kind of application Loomis 1993!. However, we believe that the calculation of economic multipliers in the absence of detailed data on market structure and interactionscan be potentiallymisleading, creating a perceptionof exaggeratedeconomic costs of HAH events e.g. Hunter 1989!. Furthermore,the occasionalxnisuse of econoxnicimpact analysis to make riormabvedecisions to justify investments,for example,is made aII the worse when impacts are xnultiplied, EconomicImpact of HABs in the U.S.

2.2 Economic Impacts are not an Ideal Measure of Social Costs

Economicimpacts as defined here are not an ideal measureof the costs of HABs to society. Under ideal circumstances, we would like to obtain a measure of lost consumer and producer surpluses in the relevant markets due, say, to shifts in demand or supply curves. We demonstratethis point in Figure2.1, which depicts supply and demandin a commercialfishery duringone season', Assume that we areconsidering the costs associatedwith the closureof a fishery due to a HAB event. In a typical case,this can be representedby a shift of the supply curve,which itself is the horizontal sum of marginalcost schedulesfor individual firms, from So to Sl. The effect is a reduction in the supply of fish to the market, from Fo to F I, and an increase in the price of fish, from Ptito Pl. Prior to the closure,the net benefits flowing from the fishery are the sum of producers' surplus E+F+G! and consumers'surplus A+8+C+D!. After the closure, producers' surplus now becomes area B+E and consumers' surplus is reduced to area A. The net economic loss associated with the closure is therefore C+D+F+G. Compare this theoreticallycorrect, but often more dificult to obtain,measure with lost grossrevenues from the closure G+I!. It should be clear that the latter is not a very close approximation of "true" economic losses. In particular, although G is a true economic loss, I represents resources that can be productivelyinvested or utilized elsewherein the economy.

Pl

Pp

Fl FP Fish Figure 2.1. Economic costsof a HAB event in a commercial fishery.

I we examine the case of the lower section of the traditional backward bending supply curve, This exampie is relevant to the case of a fishery managed to maximize economic yield.

17 EconomicImpact of HABs in the U.S.

P

DFl DF0 Days Fished

Figure 2.2 Economiccosts of a HAH eventin a recreationalfishery.

The caseof a recreationalfishery is representedin Figure 2.2. In the present study, we have estimatedeconomic impacts as the product of lost days fished, e.g., due to a fishery closure, times averagedaily recreationalexpenditures. Note that somerecreational fisheries may have a commercialcomponent, complicating the analysis.! However,this measuredoes not representa true economiccost of a HAB event because,when expendituresare not made, individual recreationalfishermen incur no costs. Nevertheless,there may be consumersurplus losses, which represent true economic costs. Assume that there exists a recreational market" demand curve M! along which fishing success i.e., catch rate! is assumedto be constant Anderson 1986!.Prior to a HAB event,gross benefits are equalto areaA+B+C+D+E and expendituresare equalto areaC+D+E. Net benefits are therefore equalto areaA+B. Now assumethat an alyQ bloom resultsin the closureof somefishing areas,causing reduced catch rates in areasthat remain open,say, due to increasedfishing pressurein the latter. Becausefishing successdeclines, aiba closureswill resultin the contractionof recreationalmarket demand for eachlevel of aggregate daysfished. for example,Mo shifts down to Mt. At the current level of fishing expendituresof

2 Other scenarios are certainly possible. For example, a bloom evetit may result in the closure of an entire recreational fishery. Closurescould be temporal,instead of spatial,limiting the total daysfished. Analysesof other scenariosshould be straightforward.

18 Economic Impact of HABETin the U.S.

P, a new equilibrium of DFI aggregatedays fished is established. Following the logic described above,net benefits at the new level of days fishe are equal to areaB. The loss in consumer surplusfrom theclosure is equalto areaA. Notethat there is no explicitmarket for daysfished. Thedemand for daysfished is a "non-market"demand. Estimation of this demand,and therefore lossesto a recreationalfishery f'rom a HAB event, requiresthe applicationof specialized economic methods.

2.3 Kx Ante vs. Ex Post Impacts

Thepoint in timeat whichimpacts are measured also must be considered.When a commercialor recreationalfishery is closedex ante, then the appropriate measure of economiceffects is the sum of lost consumerand producer surpluses, as describedin the previousparagraphs. However, if commercialfish have been harvestedalready and the product subsequentlyprevented from reachingthe market becausetoxicity exceedssafe levels, then it is appropriate to add harvest costs areaI in Figure 2.1! to the measureof economiclosses. Harvest costs are includedbecause theyare a measureof resourcesthat have been utilized to no productiveeffect. Anotherexample is the occurrenceof a HAB that affects an operating coastal aquaculturefacility that must subsequentlyincur additional depurationcosts or disposeof tainted product. In both examples, there may be additional costs, such as higher tipping fees, associatedwith the disposal of the tainted seafood.

2.4 Nonmalleable Factors

Another source of economic costs relates to the ease with which capital or labor can be transferredto other productive activities. In the economicmodels described above, we assume thatfishing vessels, processing plants, fishermen, etc. will immediatelyand costlessly switch to their next best alternative activity. In other words, capital and labor are assumedperfectly "malleable." However, when exnnining specific cases,we may find that this assumptionis not valid. Good examplesinclude empty botel rooms or slowed restaurant trade resulting kom reducedcoastal tourism during a HAB event. As anotherexample, it may be costly for fishermeii to re-rigtheir boatsor steamto anotherfishing ground when a HAB closurehas beendeclared. Often, economicimpact studieswill assumethat capitaland labor is completelynonmalleable. In this report,where feasible, we point out anymalleability assumptions m thestudies that we cite.

2.5 Other Types of Impacts

We havecollected data on other types of impacts. The economicunpacts that we measurein the form of hospitalization costs or monitoring and managementcosts are true economiccosts. These activities represent the allocation of scarce medical and managementresources that otherwise would be devoted to other health problems or public goals. Interestingly, these activities help to mitigate the larger "potential" costs of HAB events. For example, monitoring

19 Economic Impact of HABs in the U,S.

might prevent the consumption of toxic seafood, and hospitalization might reduce inortality from seafoodconsumption. As a result, there may be net benefits &om undertakingthese activities. The existence of net benefits will depend upon a comparison of the total costs and total benefits of these activities.! Our econoinicimpact analysis does not account for the benefits of these types of mitigating activities.

2.6 Distribution of Impacts

Note that some firms in the relevant market actually may benefit &om a HAB event. For example, if a fishing location is closed becauseof a HAB event, a firm fishing for the same species in a location that remainsopen may actually seean increasein price for its product, Although there is a clear net loss at the market level, local net gains or net losses may occur, and the distribution of gains and losses may not be uniforin across all localities. Unless demand is perfectly elastic with respect to price, consumerswill unambiguouslylose becauseof price increaseswhen supplyis reducedas a consequenceof a HAH event. Somewill even be unwilling to purchase the Ash or shellfish at the new higher price.

2.7 Usefulnessof the Economic Impact Measure

Even though our measure of economic impacts is not theoretically correct, it can still be useful. First, this measureis very easyto collate and calculate. To our knowledge,there are few studies that haveexainined the true econoiniccosts of HAB events,but inany have estimatedeconomic iinpacts. Second,this approachcan give an ideaof the scaleof the problem. If economicimpacts are found to be large in any particular instaiice, it indicates that we need to take a closer look at the true economic losses. Third, the geographiclocation of economic impacts can give an estimateof where local lossesoccur, and the type of iinpact can help us identify the relevant market. When combinedwith an understandingof the relevantproduct or factor market, we may be able to predict where local net gainsmight occur. Thus, economicimpact analysis can give a feel for the distributional effects of a HAB event.

2.8 Study Interval

We exaininea "window" of impactsresulting from eventsduring the six-yearperiod irom 1987to 1992 to develop an estimate of "annual" economicimpacts. There is still a great deal of uncertainty about the frequencyand spatial distribution of HAB occurrences. Becauseof this uncertainty, the choice of a shorter period could result in either under- or over-estimates of economiciinpacts, depending upon when and where HAB eventsoccurred. The six-year period was the longest period for which we could collect a consistent set of data within the constraints of the project, Although our choicesabout the timing and duration of the study period are somewhatarbitrary, we believe that it gives us a reasonableinterval within which to develop cretlibk estiinaies of the annual economic impacts of HAB events at the national level.

20 Economic Impact of HABETin the U.S.

2.9 Data

Although we madean effort to gathereconomic iinpact dataas comprehensivelyas possible, both the type and amount of available data were limited, Most coastal states have neither conducted economic analyses of HABs nor collected data that can be used to generate reliable quantitativeeconomic impact estimates. In manycases, the complexphysical and ecologicalcharacteristics of the coastalenvironment make it dif6cult to determinewhether an algalbloom is the immediateand relevantcause of certaincoastal phenomena such as fish kills, oxygendepletion, or seagrassdieoffs. Moreover, local expertsoften differ substantially in their opinions aboutthe magnitudeof economicimpacts from HABs.

In Appendix A, we summarizeHAB events reported informally by individual coastal state expertsto a "nationaloffice" of the ICES Centerfor the Exchangeof Information on Exceprional Plankton Blooms, located at the Woods Hole Oceanographic Institution. Although the data are rudimentary in nature,these are the only nationalcompilations of bloom data. In Appendix 8, we presentthe namesand aKiliations of the individualswith whom we corresponded. EconomicImpact of HABs in the U.S.

3 PUBLIC HEALTH IMPACTS

Human sicknessand death from eating tainted seafoodresults in lost wages and work days. Costs of inedicaltreatment and investigationalso are an important part of the economicimpact causedby such events. Individuals who are sick may also experiencepain and suffering. In theory, thesefeelings could be quantified in economicterms, but we makeno attempt to do so here. Casesof sicknessand deathfrom shellfishtoxins are probably the most clearly documented amongthe different types of HAB impacts. Becauseof the high level of public interest in seafoodsafety, these cases are recordedby public health agenciesin individual statesas well as at the federal level.

3.1 PSP, NSP, and ASP Illltesses

During 1978-87,paralytic shellfishpoisoning PSP! was a minor causeof seafood-borneillness in the United States,according to data on illness casesreported to the Center for DiseaseControl CDC! in Atlanta Table 3.1!. On1y two deathsdue to PSP were reported during this period. Nishitani and Chew 988! presentdata on reportedPSP cases during 1979-87in the four Pacific Coast states:Alaska, Washington,Oregon, and California. These data show that in the more recentyears there were far fewer PSPcases than in the earlieryears, especially in California. A separatereport &om the U.S.Food and Drug Administration identifies shellfish poisoning cases for the 1973-92period Rippey1994!. The reported number of PSPsiclmess cases varies widely acrossthese sources. For example,the CDC reports no PSP casesin 1987, but Nishitani and Chew 988! report seven PSP casesin Alaska in that year. Becausereports to CDC are voluntary, we believe that the CDC databaseunderestimates the number of PSP sickness cases in any year.

For the 1987-92period, we show in Table 3.2 our estimateof the public health impacts resulting from PSP,NSP, and ASP. Impactsranged from $11,098to $4.84million, with an averagecost of $1,02 million, The illness and death casespresented in Table 3.2 were compiled from the informationin AppendixA andthe tables in Nishitaniand Chew 988! andRippey 994!.

A few casesof respiratory complaintsand eye irritation are reported in Appendix A. Aerosolizedtoxins, such as those &om Gymnodiniumbreve in Florida, may well have caused someof thesecases, However, thesecomplaints are not included in Table 3.2 becauseof the difficulty in quantifyingthe numberof casesas well astheir impacts.

3.1.1 Illness Costs

We adoptthe estimatesused by Todd 995! for PSP illnesses C$1500 [1993 Canadiandollarsj per reported illness and C$1180 [1993 Canadiandollars] per unreported illness! to estimatethe costsof foodbornedisease due to PSP,NSP, and ASP in the United States.Unreported illnesses

22 EconomicImpact of HABs in the U.S.

Table 3.1: Illness Due to natural Seafood Toxins in the United States Reportedto the Center for DiseaseControl

NOTE: An outbreakis an incidentinvolving two or more sick individuals,and a caseis a single ill person. Source: F. E. Ahmed ed.!, 1991.Seafood Safety, p. 89.

23 Economic Impact of HABs in the U.S,

Table 3.2: Shellfish Poisoning Impacts from Harmful Algal Blooms

'Reportedillnesses are estimated to be 10percent of all illnessesdue to HAB events Todd, pers.comm., 1997!. Economic impacts are estimatedat $1,374 per reportedilhess, $1,0SI per unreportedillness,and $4.73 million per death000 dollars!. Pleasesee the text for references.!Values in the tableare reported in 2000 dollars.

'Includes one mortality in Alaska.

Sources: Appendix A, Nishitani and Chew 988!, and Rippey 994!. EconomicImpact of HABs in the U.S. do not, by definition,incur medicaland transportationcosts. Illnesscosts includelost productivitydue to sick days,costs of medicaltreatinent and transportation,and costs associatedwith investigationsfor the causeof the sickness. The figureswe useare downward revisionsof earlierestimates published by Todd989a, 1989b!.Because cost information is not availablespecifically for NSPor ASP illnesses,we apply the cost estimatesfor PSPcases to these illnesses. Duringthe study period, one person died &om PSP in Alaskain 1989. Our estimateof the economicimpact per deathis basedupon labor market studies of the implicit valueof life Viscusi1993!. Such studies have been used to developestimates of boththe value of life and thecosts of nonfatalillnesses from empirical data that relatewage premiums to job risks. These studiessuggest that thereis a rangeof the valueof life &om $3 to $7 milhon,and we use an estimate of $4 million for the one life lost in Alaska 993 dollars!.

3.1.2 Unreported IHnesses

We know that a substantialnumber of illnessescaused by HABs remainunreported. However, no reliablemethod has been proposed for extrapolating&om the reportedcases to estimatethe true numberof illnesses. Todd 989a! proposedmultiplying the numberof reported casesby a factor of ten to estimatethe total. Until betterinformation on unreportedillnesses is available,we believethat the most conservative way to reportour findingsis to providecost estimatesbased uponactual, reported poisoning episodes, using Todd's multiplier, without additionalarbitrary adjustments.

Our estimateof publichealth costs of unreportedillnesses is much lower than the annualPSP costsof $2.31million 000 U.S.dollars! estimated for the United Statesby Todd 989a!, who employedmuch larger estimates of costsper i11ness C$6000 in 1985Canadian dollars! during a differentperiod 978-82!. Todd'scalculation also accounts for the likelihoodthat unreported casesare very likely to be lessserious than reportedcases, implying that theremay be lower associatedmedical treatment and invesugationcosts. Following Todd's lead,we multiplied the numberof reportedcases during 1987-92 by 10,and weighted reported illnesses by the higher costper illness. Our annualaverage estimate of the publichealth impacts due to shellfish poisoningwas $1.02 million 000 U.S.dollars!, a valuethat is substantiallyless than Todd's 989a! estimate.

3 Labor market studieshave also been used to estimatethe implicit value of nonfatal injuries. These estimates fall in the rangeof $25to $50thousand Viscusi 1993!. Other methods for valuingmorbidity effects, such as survey techniques, resultin estimatesthat rangefrom $700to $3500,which aremore consistent with Todd's estimatesof illness costs e.g., Viscusi et al. !9S7!. Note, however, that survey methodsare very sensitive to perceptionsof risks.

25 EconomicImpact of HABs in the U.S.

3.2 Ciguatera

Another problem causedby toxic algaeis the syndrome called ciguaterafish poisoning CFP!, which is linked to dinoflagellatetoxins that move through the tropical food chain to the higher predators. Although ciguateratechnically is not a "blooin" phenomenon,we investigate it becauseit originateswith toxic microalgaeand has significanteconomic and public health costs e.g, Ragelis1984!. In Table 3,3, we report the number of human sicknessesdue to ciguatera poisoning in Florida Weisman, pers. comm., 1997!, Hawaii Hokama, pers. comm., 1994!, Puerto Rico Tosteson, pers. comm., 1997!, the U.S, Virgin Islands Tosteson, pers. comm., 1997!,Guam Haddock,pers. comm., 1997!,and the Marshall Islands RuQ' 1989!, We develop our own estimates of sicknessesin Palau, Micronesia, the Northern Mariana Islands, and AmericanSamoa based on the incidenceof ciguateraillnesses in the Marshall Islands. To be consistent across all regions, we adopt Todd's 995! estimate of the illness costs 993 Canadiandollars! due to ciguateraof C$1100 US$1,007 [2000 dollars]! per reported caseand C$750 US$687 [2000 dollars]! per unreported case. This may result in an overestiinateof ciguateracosts in Puerto Rico, as Tosteson pers. comm., 1997! thinks that the costs per reportedcase are lower in PuertoRico about US$532per reportedcase 000 dollars!.

Experts differ on the ratio of reported to unreportedillnesses in eachjurisdiction. We use the following ratios. 1.'4for Florida Weisman,pers.comm., 1997!; 1;10 for the Marshall Islands, Palau,Micronesia, the Northern MarianaIslands, and AmericanSamoa our own estimate!;and 1;100for Hawaii, Guam,Puerto Rico, and the U.S. Virgin Islands Tosteson, pers. comm., 1997 andour ownestimates!. The economicimpact varies from $17.72million to $24.28million per year,averaging $21.19 million on an annualbasis. It is clearthat the economicimpacts due to ciguaterapoisoning account for mostof the public healthimpacts &om toxic algae, Nevertheless, we may not be estimatingthe true scaleof the problem, Ragelis984!, for exaxnple,notes that ciguaterapoisoning often occursoutside of tropical areasdue to exports of tropical fish to other jurisdictions. Further, someseafood companies now purchaseinsurance to cover potential ciguatera-causedliabilities, and there are also court costs associatedwith ciguatera-related litigation, which has becomequite common.We have no estimatesof thesecosts, so ~ our estimates are conservative.

4 We includethe MarshallIslands, Palau, and Micronesia in our U.S.estimate because all threenations have a "compactof free association"with the United States and all three are heavily dependent upon the United States for foreign aid. The Northern Mariana Islands is a Commonwealthin political union with the United States, much like Puerto Rico. American Samoa is a territory of the United States much like the U.S. Virgin Islands. EconomicImpact of HABs in the U.S,

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27 Economic Impact of HABs in the U.S.

4 COMMERCIAL FISHERY IMPACTS

In Table 4.1, we present HAH events for which commercialfishery impact information was obtained. Most of these eventsare describedin further detail in Appendix A, Annual impacts vary from $13.82to $25.88million. Averageannual impacts are $18.95million 000 dollars!.

4.1 Wild Harvest and Aquaculture Losses

We estimate total commercial harvest lossesduring a November 1987 to February 1988 G. breve bloom in North Carolina Testeret al., 1991! to be $8,27 million. We estimatetotal impacts of $17.64million arisingfrom the deathsof farmedAtlantic salmonkilled by phytoplanktonblooms in Washingtonin 1987, 1989,and 1990by multiplying the market price of salmonby the weight of lost fish. Two commercialshellfishing interests, Taylor United and the Coast Oyster Company,estimate a combined$1.22 million loss incurred during a shellfish recall resulting Rom the detectionof PSPtoxins in WashingtonState shellfish, Severalother HAB eventsare further clarified in the following sections.

4.1.1 Brown Tide Impacts on Bay Scallop Harvests in New York

In 1985, a brown tide bloom first appearedin the Peconic Estuary, Long Island and has reappearedsince on a regularbasis. The most significanteconomic impact was the eradicationof the Peconic'snationally significant bay scallopstocks. The Suffolk County Departmentof Health Servicesestimates that the 1982 value of cornlnerciallandings of bay scallops from the PeconicEstuary was $12.55million SCDHS 1992!. A multiplier may have beenused to arrive at this estimate.! However, Tettelbachand Wenczel 993!, citing a report by Rose 987!, estimatethe value of commercialbay scallop landings &orn New York waters for the years precedingthe 1985 brown tide incident at a much lower level, averaging$2.60 million 000 dollars! Table 4.2!.' In theonly studywe areaware of that looksat lost surpluses instead of lost sales!fiom a HAB event, Kahn and Rockel 988! estimate annual total consumers'and producers'surplus losses from the elimination of bay scallop populations in Long Island waters at a verysimilar level of $3.27million 000 dollars!.

Landing values are measuredat the averageV.S, bay scallop price of $4,9I/lb. 984 dollars!. The average price was $4.46/1b.in 1985. Estimatesof lost output have been converted into 2000 dollars in the table. EconomicImpact of HABs in the V.S.

Table 4.1: Commercial Fishery Impacts*

000 $U.S,millions!

Total Estimated Annual Year Incident Type State Impacts Estimated Impacts 1987 Harvest losses of clams, NSP North Carolina 8.27 oysters,scallops, and finfish Lost sales of recreational fish CFP Hawaii 3.17 Bay scallop mortality BT New York 3.27 Farmed fish kills HAB Washington 0.75 Cypress Island! Bitter crab disease in tanner PD Alaska 0.16 crabs Closure of surf clam fishery PSP Alaska 5.72 21.33 1988 Lost sales of recreational fish CFP Hawaii 3;17 Bay scallopmortality BT New York 3.27 Bitter crab disease in tanner PD Alaska 0.16 crabs Closure of surf clam fishe PSP Alaska 8.29 14.89 1989 Farmed fish kills HAB Washington 11.01 Cypress Island! Lost sales of recreational fish CFP Hawaii 3.17 Bay scallopmortality BT New York 3.27 Closure of surf clam fishery PSP Massachusetts 0.13 Georges Bank! Lost value of unprocessed PSP, Alaska 1.49 geoducksand bitter crab PD disease in tanner crabs Closure of surf clam fishe PSP Alaska 6.15 25.27 1990 Farined fish kills HAB Washington 5.88 Central Puget Sound! Lost sales of recreational fish CFP Hawaii 3.17 Closure of surf clam fishery PSP Massachusetts -0.01 Georges Bank! EconomicImpact of HABs in the U.S.

Table 4.1: Commercial Fishery Impacts Continued!

Total Estimated Annual Year Incident Type State Impacts Estimated Impacts 1990 Bay scallop mortality BT New York 3.27 Lost value of unprocessed PSP, Alaska 1.49 geoducksand bitter crab PD disease in tanner crabs Closure of surf claxn fishery PSP -0.39 13.40 1991 Lost sales of recreational fish CFP Hawaii 3.17 Bay scallop mortality BT New York 3.27 Closure of surf clam fishery PSP Massachusetts 0.23 Georges Bank! Harvest losses of razor clams ASP Oregon 0.11 Lost value of unprocessed PSP, Alaska 1.49 geoducks and bitter crab PD disease in tanner crabs Closure of surf clam fishery PSP 8.04 16.31 1992 Lost sales of recreational fish CFP Hawaii 3.17 Bay scallop mortality BT New York 3.27 Product recall costs for one PSP Washington 1.22 firm Closure of surf clam fishery PSP Massachusetts 0.26 Georges Bank! Harvest losses of razor clams ASP Oregon 0.21 Lost value of unprocessed PSP, Alaska 1.99 geoducks; bitter crab disease PD in tanner crabs; and PSP event in Dungeness crab fishery Closure of surf clam fishery PSP 9.14 19.25

*Not included are unknown impacts f'rom unexploited resources of surf clams and tellin in the Bering Seaand roe-on-scallop from GeorgesBank see the text for more detail!. Key to type of harmful algaebloom: ASP=amnesiacshellfish poisoning; BT=brown tide; CFP=ciguaterafish poisoning; HAB=harmtul algae bloom not otherwise identified!; NS~eurotoxic shellfish poisoning;PD= paralytic dinoflagellate;PSP~aralytic shellfishpoisoning,

30 EconomicImpact of HABs in the U.S.

Table 4.2: New York Commercial Bay Scallop Landings 980-84!

Source; Tettlebach and Wenczel 993!

Becausebay scallopreseeding efforts havebeen unsuccessful, and actualbay scalloplandings between 1986 and 1991 from New York waters were negligible in comparison with landings before the brown tide incident Tettelbach and Wenczel 1993!, we assumedthe commercial fishery impact occurredevery year during our study interval. We note that althoughthe Kahn andRockel study employs the theoretically correct methodology for valuingeconomic losses, the measureof lost surpluses is not compatible with the other data on lost sales that we have collectedfor this category.In this specificcase, however, the measure of lost surplusesis almost exactlythe same size as the measureof lost sales, andwe usean estimateof $3.27million for economicimpacts in this fishery.

Brown tide also may haveaffected oyster productionin the Peconicsystem. The estimated commerciallandings of oysters in the PeconicEstuary were about $5.84 miihon in 1982, plununetingto lessthan $14,000per year in 1987 SCDHS 1992!, However, it is unclear,first, whether these losseswere due solely to brown tide and, second,whether they occurredon an annualbasis. They thereforehave not beenincluded in our tabulations.

4.1.2 ASP Impactson Razor Clam Harvestsin Washingtonand Oregon

Since the autumn of 1991, the occurrence of ASP has adversely afFectedthe primarily recreational shellfisheriesfor razor clams in Oregonand Washington.According to the OregonDepartment of Fish and Wildlife, an averageof 58,000 lbs. of razor clams at $3.65/lb.! were harvested commerciallyon an annual basis before closureswere imposed. This implies that potential annual harvest losses are $0.21 million for the commercial market 000 doIlars!. Because the

6 There is no reason to believe that this will always be the case. The relative sizes of lost surpluses and lost sales will depend upon the elasticities of demand and supply.

31 Economic Impactof HABs in the U.S.

ASP events occurred during thefall seasonof 1991, we use 50 percent of this impact estimate in 1991and the full impact estimatefor 1992. In WashingtonState, the commercialharvest of razor clams was23,103 lbs. in 1991.'

4.13 Alaskan Shellfish Resources

Ralonde 998! estimates that the cost of PSP to Alaska in terms of 1ost value in commercial fisheries,closures of recreationalshellfishing beds, and mousebioassays is on the order of $10 million per year 998 dollars!. With respectto commercialfisheries impacts, Ralondeestimates three types of costs: geoduck processing effects, bitter crab disease BCD! in tanner crabs caused by dinoflagellate parasites!, and a 1992 PSP event in Dungeness crabs. Ralonde calculates the 1996 lost value of geoducks due to the fact that they have to be processed to remove the viscera, where PSP toxin is concentrated. This reduces their value. Annual lost incomein 1996 was $1.32 million 000 dollars!. Becausethe sales of geoducksin 1996 were approximately equal to the six-year average,we use the 1996 estimate of lost sales as an annual estimatefor the period 1989-92 the fishery beganin 1989!. Ralondeestimates the lost value in 1996 of tanner crabs due to BCD at $163,209 000 dollars!. We assume that this is the annual lost value due to BCD during 1987-92. Finally, in 1992, a PSP event resulted in a $500,783 loss of salesin the Dungenesscrab fishery 000 dollars!.

4.1.4 Ciguatera Impacts on Sales of Recreational Fish in Hawaii

Ciguateraimpacts in Hawaii are estimated.at $2,75 million per year 994 dollars! basedon the dollarsper lb. of fish unmarketabledue to ciguatera Ho~ pers.comm., 1994!. This estimate representspotential lossesof retail salesfrom catchesmade mainly in sport fishing. Note that, in this case, the value of sport fishing recreation per se is not diminished, but the retail sale is lost. If the act of selling a caught fish is a valued part of the sport fishing experience,then the nonrnarket value of recreational fishing may also be reduced. It is difficult, however, to estimate the latter impact.

4.1.5 West Coast Harvesting Delays

In California, Oregon, and Washington,Nishitani and Chew 988! argue that shellfishing closuresdue to PSP have resulted mainly in harvestingdelays, and not in significant financial losses. Our discussionswith severalNew Englandcommercial shellfishing companiessuggest that short-term closures causefew operationalproblems and that long-term closures cause

7 Ko further cornrnerciai harvest information was received. However, we were toid that most of the razor clams in Washington nrc found nt public bcnchcs whcrc corntncrcinl harvests nrc prohibited.

32 EconomicImpact of HABs in the U.S. financial lossesonly infrequently,e.g., once in every ten years. However, the situation may be quite different in New England becausethere are many more independentclam diggerswho may be affectedby shellfish closures Shumwayet al, 1988!, This is a complexarea of impact needing further investigation. Although theseother impactsmay exist, the only data we have at present on commercialfishery economicimpacts &om HABs aredue mainly to exceptionalevents like those presented in Table 4.1.

4.1.6 InconclusiveImpacts on ShellfishHarvests in Maine and Massachusetts

Becauseof inconclusiveinformation, Table 4.1 doesnot present all of the potential commercial fishery lossescaused by HABs during the 1987-92period. For Maine and Massachusetts,we tried, unsuccessfully,to infer fishery impacts &om a relationship between the frequency of shellfish closures due to PSP or numbers of shellfish samples testing positive for PSP! and annualharvest values. For example,in Maine, 1988was the year with the greatestnumber of HAB closures,and 1992 was the year with the least Lewis, pers. comm., 1994!. Table 4.3 presentsthe landedvalues of the four majorshellfish species in Maine in those two years. Lowerlanded values $12.80 million! occurred in 1992than in 1988 $16.20 million!.' Clearly, in Maine, shellfishclosure frequency is not a goodpredictor of economicitnpacts.

Table 4.3: Lauded Values of Shellfish in Maine 988 and 1992! millions of dollars!

Source: Lewis, pers. comm. 994!

8 In Washington State, one shellfish grower statedthat a worst-casescenario would involve a 3-week PSP closure, costing about $27,000994 dollars!,which might happenonce every 10 years. An annualPSP closure, from 1 July to 1 November,of pink scallops that are marketed whole costs $58,000 994 dollars!, However, several other commercial fishermen indicated to us that there was not much impact from PSPclosures.

9 In Maine,sea scallops inust be processedat sea,and only the adductormuscles are landed and marketed. Because scallop adductor muscles do not accumulate PSP toxins, scallops are not affected by HAB closures.

10Total landings in theseyears exhibit the same pattern,

33 Economic Impact of HABs in the U.S.

A similar situation applies to Massachusetts.The MassachusettsDivision of Marine Fisheries provided us with data on the state'sannual PSP tests Whittaker, pers. comm., 1994!. Table 4.4 presentsthe number of shellfish samplestested, the ratio of the samples with greater than 80'.g/100gof PSP,and the annualcommercial shellfish landing values in Massachusettsfrom less than 3 milesoffshore for the 1987-92period." The years 1987-90show the highestsample proportionsof PSPcontamination, However, a comparisonwith annualshellfish landingvalues fails to reveala relationshipbetween lower landedvalues and more frequent detection of PSP contaminatedsamples. Likewise, the numbersof contaminatedsamples alone do not indicatethe severity or duration of HAB events.

Maine and MassachusettsoKcials record neither acreageclosed to shellfishing due to HAB events nor shoreline miles affected by HAB closures. Records of shellfish closures or openings are complex,including partial extensionsof closuresor the reopeningof already closed areas. Further, Maine has 50,000 acres of potential shel/fish beds, but 90 percent of the state's total clam harvestis producedon about10 percentof its acreage,Therefore, we concludethat it is not feasibleto estunatecommercial fishery impactsreliably &om closure acreageor shoreline miles affected by HABs.

Finally, the co-occurrenceof high coliform countsor of shellfish sanitation problems with HAH s makes it di%cult to factor out the economic impacts that are due solely to HAB events. For example,samples collected from certainareas in Massachusettsin 1994 showedhigh PSP levels, vmranting shellfish closures.However, the same areashad been closed already due to high coliform bacteria levels.

4.1.7 Impacts from the Application of Health Standards

Maine oyster farmersand shellfish dealerslost $0.72 million in 1988 when their shipments of oysters tested positive for DSP by The Netherlands Shumway 1990!. However, the results of further analysesof the sameshipments tested negativefor DSP. Becausethe shipments were presumably uncontaminated, this economic impact was not included in our analyses.

4.1.8 Impacts of Wild Fish Kills

Concerns are sometUnes raised in the topical literature about "indirect" commercial fishery impacts, such as wild fish kills and lost opportunities to harvest untapped shellfish resources. Wild fish kills were reported in many states Appendix A!, but for numerous reasons, measuring

ll The shellfish landing values exclude shrimps, crabs, squid and lobsters that are not usually affected by HABs. Appendix E presentsannual shellfish and finfish landing values for all coastal states.!

34 EconomicImpact of HABs in the U.S.

Table 4.4: MassachusettsState PSP Testing Results

Ratio of Total 8 of Samples Commercial Year Species Samples with PSP > Landings Tested 80'.g 00 s!

1987 Mussel 285 0.000 16,710 Surf Clam 49 0.388 Ribbed Mussel 26 0.000

1988 Mussel 361 0.047 14,834 Softshell Clam 105 0.124 Surf Clam 44 0.386 Ribbed Mussel 38 0.000 Quahog 7 0.000

1989 Mussel 371 0.070 11,765 Ribbed Mussel 76 0.000 Surf Clam 69 0.406 Softshell Clam 67 0.164

1990 Mussel 396 0.043 12,243 Softshell Clam 86 0.116 Surf Clam 78 0.513 Ribbed Mussel 58 0,000

1991 Mussel 348 0.003 12,008 Surf Clam 26 0,192 Ribbed Mussel 24 0.000 Softshell Clam 20 0.000

1992 Mussel 389 0.018 14,057 Surf Clam 48 0.083 Ribbed Mussel 24 0.000

Source: Whittaker, pers. comm. 994!

35 EconomicImpact of HABs in the U.S. the economicimpacts of such kills is problematic. First, many of these kills involve so-called "trash" fish, which have no market value by definition. Even local officials who regularly investigatefish kill events makeno attempt to estimate the economicimpacts of kills of trash fish. Second,the ultimate causes of fish kills often are unclear, malang it difficult to attribute themto an algalbloom.' Fishkills canbe the resultof oxygendepletion due to highfish populations, high temperatures,or HABs!, disease,bacteria, nutrients, chemicalspills, or some combination of these or other factors. Potential economic impacts associated with recent fish kills primarily menhaden!attributed to the dinoGageliatePfiesteria are not included in our estimates becauseof the uncertainty in attributing fish kills to this organism prior to 1992. In more recent years, the economicimpact from outbreaks of PPesteria-likeorganisins has been significant.For example,Seiling and Lipton 998! estimatedthat lost salesof Maryland seafood of all types! due to a fish kill linked to Pfiesteria during the summerof 1997amounted to $45.70 million 000 dollars!. These lost sales were due entirely to the "halo effect."

4.1.9 1monclusive Evidence of SeagrassDieoffs in Florida

Gorte 994! estimatesthat $16.10 million per year 000 dollars! is the potential income loss due to the substantial decline in pink shrimp harvests &om Florida Bay, hypothesized to be the result of a seagrass dieoff due, in turn, to blooins of blue-green algae. Using an econonuc multiplier, total impacts were estimated at $36.90 million. However, there is substantial uncertainty about the real causes of the seagrassdieoff and its linkage to blue-green algae Gorte 1994;Hunt, pers.comm., 1994!, Further,economic recession and foreign competition within the shriinp industry are other plausible reasons for the industry's decline. Here again, our loss estimates do not include these uncertain impacts.

4.2 Untapped Fisheries

Some currently untapped fishery "resources" may have potential values that could be reahzed in the absenceof HAB events. Examples include the shellfish resources of coastal Alaska e.g., Neve and Reichardt 1984! and surf clams on Georges Bank. However, in order for such "lost opportunities" to be counted legitimately as economic impacts, these fisheries must be demonstrated to be conunercially viable. A plausible alternative reason for why these resources are untapped is that they are not now profitable fisheries.These issues are discussedin more detail below.

During l980-89, NOAA found that 12 out of 22 coastal states reported more than 50 percent of all probable fish kills NOAA l991b!. Maine, New Hampshire,Massachusetts, Pennsylvania, Delaware,North Carolina and South Carolina reported between 76 and l00 percent of probable fish kills. Each fish kill event was attributed to one or more of 20 possible causes c.g., low dissolved oxygen, temperature,HABs, wastewater,and eutrophication, pesticides,among others!. During the 1980-89period, the nuinbers of tish kill events attributed at least in part to HABs were: New York !, Virginia !, Florida!, and Texas 8!. States like New Jersey, North Carolina, and Washington did not identify HAB as a direct cause for any of their fish kill events.

36 EconotnicImpact of HABs in the U.S.

4.2.1 Alaska's Untapped Shellfish Resources

Iii Table 4.5, we report on the commercialstatus of Alaskan molluscan shellfish resources, Currentyields are more than one million poundsper year generating approximately $4.33 million in grossrevenues 000 dollars!. The statusof Alaskanshellfish stocks and their commercial significancearesummarized annually by theAlaska Department of Fish and Game,' and they havebeen reviewed by Foster 997!, Schinket al. 983!, and Jewett and Feder 981!. All commercialshellfish except for the Pinto abalone,chitons, and lirnpets are threatenedby PSP cont.unination Foster 1997!. Recently, somespecies have tested positive for ASP, Yields of razor clam, weathervanescallop, and geoduck seebelow! are processedto removeportions of the ~ that may be toxic. The Pacificoyster, blue mussel,and Pacificlittleneck clam are culturedspecies for which bioassaysare conductedas they areproduced. Black katy chitons, fat gapers,gurnboot chitons, and limpets are all subsistencefisheries for which there is no major commercialmarket. Historically, significant quantitiesof butter clams946! and cockles962! wereproduced off the Alaskan coast. More recently, however,only minor harvestshave taken place,and, although small markets for thesespecies exist on the west coastof the UnitedStates, it is not clear that historical levels of production could be commercially viable Ostasz, pers.comm.,2000, 1994!. A 1977 NMFS survey of the southeastBering Searevealed significant quantitiesof greatAlaskan tellin clains Lutz and Incze 1979;Nelson er al. 1979!, but there is no known market for tellin in the United States.

The 1977NMFS surveyalso revealedpotentially exploitablequantities of the Alaskan surf clam Spisalapolynyma! in the Bering Sea. Hughesand Bourne 981! estimatean annualrrmimurn sustainableyield MSY! of 25,017metric tons for this resource. The Alaskan discovery cameat a crucialtime in the U.S. surf clam market, as the mid-Atlantic surf clam Spisrdasolidissima! resourcehad just st'ered a steep decline due to an oxygendepletion event in the New York Bight, andthe price of surf clamstripled during 1976and remainedhigh for the next ten years as the resourcerecovered. In 1979,Lutz and Incze 979! valuedthe annualpotential sustainable yield of surf clamsat $28-47 million 000 dollars!. However, only small quantitiesof Alaskan surf clams have been harvested since the 1977 stock assessment was conducted.

The reasonsfor the lack of a viable Bering Seasurf clam fishery are not completely clear, but severalhypotheses have been put forward. First, some of the surf clam resourcehas tested positivefor PSP. Neve and Reichardt984! ~ that persistent PSPwas largely responsible for the non-exploitationof this resource. However, Ostasz pers,comm.,2000!, citing Hughes and Nelson 979!, notes that only a small proportion out of 185 samples! had detectable levels of PSPtoxin in 1978,and no samplestested positive for toxin in 1977. BecauseAlaska

l3Shellfish statistics are updated annually athttp: //www.cf,adfg.state,ak.us/geninfo/shellfsh/shelhome.htmt/species.

37 EconomicImpact of HABs in the U.S.

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38 has not "classified" the Bering Sea accordingto NSSP standards,harvesting the resource is currentlyinfeasible.'

A secondplausible reason for the lack of productionmay be that the fishery is not commercially viable Foster 1997!. Certainly,production of surf cIamsat the MSY level is likely to drive price down in the U.S. surf clam market, thereby decreasingthe profitability of the fishery or even precludingits initiation. Further,the structureof the marketmay presentan entry barrierinto this fishery. With respectto the mid-Atlantic surf clam fishery, Weninger 998:755! statesthat: "It]he perishablenature of the clams, schedulingof processing activities, and the need to coordinate with downstreambuyers requires tight vertical coordination between fishers and processors." Without the establishment first of a costly processing infrastructure, and consideringthe dif5culty of distributing productBorn a remotelocation, it may be difficult for a surf clam fishery to get establishedin Alaska. Finally, Ostasz pers.comxn.,2000! suggeststhat seasonalclosures might be imposedon a potentialsurf clam fishery to protect juvenile spawning groundsfor King crab. It is possiblethat the timing or areacoverage of a closurewould increase the cost of surf clam fishing to levels that might not supporta fishery.

Fina11y,there has beenconcern expressed over the potential impacts on walrus stocks &om the harvesting of Alaskan surf clains,which are an importantfood sourcefor walrus Stoker 1979 as cited by Foster 1997!. This concern might expressitself in opposition &om environmental interests should a commercialoperation be initiated. The Alaskan EskixnoWalrus Coxnxnission hasthe responsibility for protecting surf clamresources in vtiairushabitat Ostasz, pers. comm, 2000!.

Even in the face of uncertainbusiness factors and potential environmentalopposition, reports continue to surface stating that a $50 million Alaskan surf claxnresource is precluded by HABs. We do not have critical information on the cost of producing Alaskan surf claxns,but we can hazard a rough estimateof the econoxnicimpacts associatedwith a hypothetical Bering Sea fishery. To accomplish this, we make the following assumptions:

~ The only obstacleto commercializationof the Alaskan surf clam resourceis the potential presenceof shellfishpoisoning PSPor ASP!;

~ The Alaskan surf clam is a close substitute for the Atlantic surf clam and will compete in the same market;

~ Production of the Alaskan and Georges Bank! resourcesat estimated MSY levels is likely to affect the price of surf clams in the U.S. market by driving it down!;

14 Classification might occur if significant commercial interest arose. Foster l997! notes that the turnaround time on the mouse bioassayfrom Alaska's one shellfish testing lab may be too long for a resourcethat quickly spoils.

39 ~ There is no expansionof existing demandsuch as might occur, for example, through the opening of an export market;

~ An Alaskan surf clam fishery is financially viable and will produce at MSY;

~ For the years 1989-1992, an Atlantic surf clain fishery on Georges Bank is financially viable andproduces at the 1988level of yield;

~ Fishermen in the mid-Atlantic fishery will continue to harvest the same amount of Atlantic surf clams as before.

If we multiply the current market price times the hypothetical yield of Alaskan and Georges Bank surf clams to obtain "lost gross revenues" due to PSP, the value of yields of Alaskan, GeorgesBank, and rnid-Atlantic surf clams will all be too high. To arrive at a more realistic price, we adapt and modify the specificationembodied in a demandmodel for the mid-Atlantic surfclam fishery which was developedby Armitage98S!." We fit the modelusing monthly data from 1991-98to estimate updated parametersthat describehow the price of surf clams varieswith thequantity supplied to themarket andother related variables!.'

The results of this analysis are presented in Table 4,6, Using annual yield and annual average price data for 1987-92,we estimate the price of surf clams [column D!] that would have resulted from the production of mid-Atlantic surf clams at historical levels, Alaskan surf clams at the MSY level, and GeorgesBank surf clamsat the 1988 level the latter only for the years of closure:1989-92!. We then use this price to calculatethe potential "lost" gross revenuesfor both Alaskan [column F!] and Georges Bank [column G!] surf clams due to HABs closures.

Note that the "gain" to the Alaskan and GeorgesBank surf clam fisheries actually results in a decline in gross revenues in the rnid-Atlantic fishery compare column [E] with column [C]!. In order to calculate the "net" contribution to gross revenues in the national surf clam market that resultsfrom expanded supply, we apportion'the reduced gross revenues in thernid-Atlantic

15 Armitage's 985! model is developed with quarterly data from 1976 to 1980. Note that one of our assumptions assumes that industry structure remainsunaffected. As price declines, we might expect some marginal fishermen to exit the mid-Atlantic fleet. With a change in fleet size, it is possible that less product will be harvested in the rnid-At/antic, thereby buoying the price. Further, we do not know the coststructure for an Alaskan operation. Another important considerationthat we ignore here is the radicalchange in the mid-Atlantic's managementregime in 1990 from a time-restricted,quarterly TAC regimeto an lTQ regime. As a consequence,the application of the model to the pre-1990surf clam market may be questioned.

Armitage's model is an ex-vessel "price prediction" model that does not factor out supply effects explicitly. The model tests the hypothesesthat surf clam price is a function of surf clam landings,the demandfor oceanquahogs, the deinand for hard clams, and the deinand for oysters, The modified model specification and the paraineter values used here are available from the authors upon request.

t7 The decreasein mid-Atlantic revenuesis apportionedusing the relative ratio of yield in each fishery, For example, the Alaskan share is equal to 0.97 = 25,017rntt5,017mt + 711mt!.

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41 EconomicImpact of HABs in the U,S,

fishery acrossboth the Alaskan coluinn P]! and GeorgesBank column [J]! fisheries. Note that this apportioning is conductedpurely for accountingpurposes at the national level. For example,in 1987,the gross benefit to Alaska of a surf claznfishery is roughly $23 million, but the contribution of an Alaskan fishery to the nation, given that demandis downward sloping, is only about $6 million.

In 1990,the declinein grossrevenues in the mid-Atlantic fishery is so substantial,that the "net" contributionto total U.S. grossrevenues from landings in the other fisheriesis negative. During the study period, the averageHABs-related loss in grossrevenues to the hypothetical Alaskan surf clam fishery is approximately$6.16 million and to the hypotheticalGeorges Bank surf clam fishery is $0.16 million 000 dollars!. We believethat these are much more realistic estimates than the $50 million that is typically discussed.

42.2 Georges Bank Surf Clam Fishery

The GeorgesBank surf clam fishery has been closed since 1989 due to high PSP levels. Assumingthis is a viablecommercial fishery, the opportunity costs of closingthe fishery could beviewed as an estimate of theeconomic impacts of HABs. In.1990, the combined New England andrnid-Atlantic surf clamquota allowed by NMFS was 230 metrictons, valuedat only $2.94 million 000 dollars!. Note that becauseindividual surf clam quotas are not site-specific, fishermencan switch at low cost to other regionallocations, e.g., offshore New Jersey. As explainedin section 4.2.1, we estiinate averageannual economic impacts to be $0.16 million 000 dollars!.

4.2.3 GeorgesBank Roe-On ScallopFishery

The traditional offshorescallop fishery iii the U.S. sector of GeorgesBank has not beenaffected by HABs becausethe product, the scallop adductor muscle, does not concentratePSP toxins. However,the potential may exist for the developmentof a "roe-on-scallop" fishery adductor Inusclewith the gonadattached!, because this productis highly regardedin muchof the warM. The roe can accumulatePSP toxins, so such a fishery would be affected by the presenceof the toxins. A fishery for roe-on-scallopshas existedin the Canadiansector of GeorgesBank since the late 1980s. The fishery is relativelysma11, involving about 5,000 lbs. of roe-on-scallop landingsper week K. White, pers. comm., 1998!. The fishery was closedfrom about 1992 to 1994because of highlevels of PSPtoxins. The roe-onscallops are not marketedin Canadabut are sent overseas,bringing in substantially more revenueper pound than the adductor muscle alonedoes K. White,pers.comm., 1998!,'

IS The unit price of the roe-on product is about SCI5/Ib overseas. In Canada,the exvessel value of the adductor muscle alone is about SC 8-9 lb K. White, pers. comm., I998!.

42 EconotnicImpact of HABs in the U.S.

It is unknownto what extenta similarroe-on-scallop fishery would be commercially viable in the United Statessector of GeorgesBank. There is insidncient information about the international deinandfor the productor of the logisticsand expense of toxin testingprotocols. Wetherefore do notconsider it meaningfulto assessthe economicimpact of lost opportunitiesin this fishery becauseof the lack of quantitativeinformation. Nevertheless,it is conceivablethat shellfish poisoningis restrictingthe developmentof a U.S.roe-on-scallop fishery.

43 Major HAB Eventsin Other Years

This studyfocused on the years1987-92, yet therewere a numberof significantevents in other yearsthat demonstratethe magnitudeof the impactsthat are possible. For example,in 1976, New Jerseysuffered an extensiveoxygen depletion event in which HABs were implicatedin part. A confluenceof oceanographic,hydrologic, and meteorological factors 1ed to a bloomof the dinoflagellateCeratium tripos, which resulted in anoxicconditions and the formationof hydrogen sulfide in the bottom waters of the New York Bight. The bloom affectedsedentary commercial stocksof surfclams, ocean quahogs, sea scallops, and some finfish andlobster. Lost sales&om harvestsdurIng 1976 and for five to sevenyears into the future for scallops and surf clams respectively! were estimated. The largest impacts by far occurred in the surf clam market. Impactsin thedownstream processing and marketing sectors were estimated using a multiplierof 2.5. Total lost sales in all sectors combined were estimated to be $1.33 billion in 2000 dollars Figley et al. 1979!.

In September1980, the entireMaine coastline was closedto shelifishingbecause of a bloomof the dinoflagellateAlexandriitm tamarense, a sourcefor PSPtoxins. Harvestlosses from this event were estimatedat $5.04 million, and total economicimpacts were estunatedto be $15.10 million,using a multiplierof 3 000 dollars!. Also in 1980,California, Oregon, and Washington closedoyster harvesbagfor one month due to PSP toxicity, resulting in lossesto commercial oystergrowers in thesestates of $1.31million Nishitani and Chew 1988!. In 1986, a red tide of Gymnodiniumbreve event in Texas causedthe loss of $2.22 million in oyster production, resultingin estimatedeconomic impacts of $6.00million 000 dollars! TexasShores 1987!.

In 1997, a bloom of Pfiesteria occurred in several ChesapeakeBay tributaries. The bloom resulted in the deathsof Rom 30-50,000menhaden. After medicaltesting of fishemien who complainedof an array of physical and neurologicalproblems, the Governor of Maryland acknowledgedthe humanhealth risk associatedwith Pjfesteriaand closedseveral Chesapeake tributariesto recreationand fishing Bowman 1997!. Although the statelater spent half a million dollarson a promotionaleffort to counteractthe scare,demand for seafoodfrom the stateof Marylandshrank significantly during the autumnof 1997. Lipton 999! estimates$45.70 million in lost seafood sales to Maryland producers that can be attributed directly to the 1997 Pfiesteria scare 000 dollars!. Economic impact of HABs in the U.S.

5 RECRKATION AND TOURISM IMPACTS

In 1991,a federalgovernment study estimatedthat saltwateranglers spent an averageof $562 per angler,totaling $5 billion 991 dollars! for travel, food, lodging and equipment DoI and DoC 1993,Appendix D!. When comparedwith the total U.S. domesticlandings of commercialfinfish and shellfish $3,3 billion in 1991!, total recreationalexpenditures can be seento be 67 percent greaterthan commercialfish landings. However, to date, the economicimpacts of HABs on recreational and tourism activities have been given little attention relative to the impacts on cominercial fisheries.

Although many expertsargue that the impactsof HABs on recreationand tourism are important and potentially large,there are few availabledata describingthe size of the impacts Table 5.1!, Our estimates of the economic impacts on recreation and tourism during the 1987-92 period range from zeroto $29.30million. The annualaverage is $6.63million.

Table 5.1: Recreation and Tourism Impacts 000 $U.S. millions! Economic Impact of HABs in the U.S.

5.1 The 1987 North Carolina Red Tide Event

The overall impacts from a 1987 HAB event in North Carolina have been "conservatively" estimatedat $37.57million 000 dollars! Testeret al. 1988!.This estimateincludes neither the public healthimpacts nor monitoringand management costs, Becausethe lossesto commercial fish harvests from this incident were estimated at $8.27 million, we can attribute the remaining $29,30million to recreationand tourism impacts. The estimatedtourisin and recreationimpacts of the incident amountedto on1y 1.9 percent of the $1.52 billion 000 dollars! generatedby combinedhotel, lodging, amusementand recreationservices in the entire state of North Carolina in 1986.' Nevertheless,we expectthat the ratio of economicimpacts to measuresof county productivityin the four impactedcoastal counties is muchlarger. However,as tourists redirected their vacation destinations,negative impacts that occurredin these four counties are likely to have been counterbalancedby positive impacts in other counties, in North Carolina and elsewhere,thereby mitigating aggregateimpacts at the stateor regionallevel.

5.2 The 1991-92Washiagtoa and Oregon ASP Event

Anothermajor HAB eventthat af'fected recreation and tourism activities occurred in Oregonand Washingtonduring 1991-92. In October 1991, these states closed their primarily recreational razor clam fisheries becauseof ASP contamination. In Oregon,prior to the closures,roughly 67,000trips per year were taken for recreationalshellfishing of razor clams Radke,pers. comm., 1994!.On average,recreational shellfishermen spend $30.51 per trip 000 dollars!. Therefore, we estimatethe 1992economic impacts of the razorclam shellfish closure to be $2.04million. We assumethat the 1991impacts were a little more than one-halfof this amount,$1.05 million, becausethe onsetof ASP contaminationoccurred during the fall of 1991.

In Table 5.2, we present the numbersof recreationalshellfishing trips in WashingtonState for razorclams during the springand fall seasonsbefore and after the outbreakof ASP Ayres and Simons1993, 1992!. The numberof trips in the fall of 1991fell by 21,333 comparedwith the three-yearaverage prior to the ASP event, In 1992,the combinednumber of trips madeduring the springand fall seasonswas smaller by 220,666compared with the three-yearaverage. Using anestimated average per trip expenditureof $30.51for recreationalshellfishing, we estimatethe impactson recreationand tourismto be $0.66million and $6.72 million in 1991and 1992, respectively.

>9AppendixC presents,for eachcoastal state, gross state product GSP!and the value of output trom severalindustrial sectors w>th>n that state durtng 1985-90 Trott et al. I991!.

45 EconomicImpact of HABs in the.U.S.

Table 5.2: WashingtonState RecreationalShelifishing Trips for Razor Clams beforeand after October 1991ASP event!

*Fall 1991 season was cut short. Source: Ayres and Simons 993, 1992!

5.3 Recreational Impacts - Large but Uncertain

Many experts considerthe economicimpacts of HABs on commercialfisheries to be minor in contrastwith the size of the impactson recreationand tourism. This is believed to be the casein Florida,where Habasand Gilbert 975! estimatedthe economicdamage to the tourist industry of a summer1971 Gymnodinium breve red tide event at more than $68 million in 2000 dollars!. Gymriodiniumblooms have occurredafter 1971, but there have been no attempts to estimate economicimpacts. The most significantimpacts occurredin the hotel, restaurant, amusement, and retail sectors. As with the North Carolinared tide event,we needto be careful in interpreting these damageestimates. Undoubtedly some tourists spent their monies at other tourist destinations in Florida or other states.

Whenkills of "trash" fish result from an HAB, there is no commercialfishery impact, but dead fish can substantiallyreduce the recreational"experience" of visitors to these beaches. In Texas, a severeHAB eventwas reportedduring the period &om August to October 1986. Most of the deadfish from this eventwere eithertrash or "underutilized" fish, but many of these washedup on beaches,where they decayed.According to TexasShore magazine 987!, this event resulted in economicimpacts on tourism and seafoodsales. However, the gross impact was minimized becausethe economyof many Texascoastal communities was alreadydepressed. In fact, sales tax proceedsfrom ten affectedcoastal counties for the monthsaffected by the HAB indicateonly small overall impacts when compared with tax proceeds the year before.

46 Economic Impact of HABs tn the U.S.

5.4 Laguna Madre Brown Tide

Although we expectsome level of economicimpact from an HAB event, the anecdotalevidence sometimescan be contradictory. As an example,&om May 1990 until recently, a brown tide developedand then persisted for over7 yearsin the LagunaMadre, along the southerncoast of Texas. Someprofessional sport-fishing guidesreported that they lost many customers,but others say that customersare still catchingfish by chaiigIngfishing methods to cope with a changein the water'stransparency level. Water was clear beforethe outbreak,so "sight casting" was possible!. The TexasParks and Wildlife Departmentreported that their monthly fish stock assessmentsindicate the sameabundance of adult and juvenile fish in the LagunaMadre when comparedwith the situation prior to the brown tide, and their sport harvest surveys reveal unchangedlevels of sport fisbing catches SpiUer, pers, comm,, 1994!. The Laguna Madre systemhad sufferedtwo unusuallyhard freezeseasons, causing widespread fish kills prior to the onsetof the brown tide. Sportfishermen may havebypassed the Laguna Madre becauseof poor fishing resultsat thosetimes.

5.5 Property Value and Recreational Impacts of Maeroalgae

In Massachusetts,local residents expressedseveral different opinions about the economic impacts of a slimy, dark-brown macroalgae,Pillayella litoralis. Since 1987, the recurrent accumulationof Pillayella in NahantBay and Broad Soundhas been attributed to eutrophication of MassachusettsBay by the pressand the generalpublic, but this may be more easily relatedto a unique hydrographicmechanism which carries this alga to shore and concentratesit on one particular shoreline location. Pillayella's abundant growth interferes with swimniiiig, and it generatesa sulfurous,"rotten-egg" odor as it decomposeson beaches. The property valuesof housesin the areacould be reducedby the existenceof these algaeon beachesand their smell. However, this effect was both variable and uncertain. One Nahant realtor told us that prices of someof the housesshe sold were depressedbecause of the algae. In particular, she speculated that a house that sold for $300,000 could have been worth $325-350,000 if there had been no Pillayella problem994 dollars!. A second realtor did not think property valueswere affected at all, and a third believedthat there was a negativeeffect, but that becausethe housingmarket had beendepressed for sometime, the actualsales data do not show an impact.

Macroalgaemay also negativelyaffect recreationalactivities. One local Nahant residenttold us that the presenceof Pillayella resultedin no differencesin beachattendance rates. However, observationsof identical numbersof beach-goersdoes not necessarilyimply that there has been no recreational impact, becausewhen beach or fishing conditions deteriorate, each recreationist's personal "enjoyment" may decline. Therefore, it is important to know by how much recreationists value certain environmenta1conditions, instead of focusing on only the participation rate.

47 Economic Impact of HABs in the U.S,

Efforts to measurethese types of recreationand tourism impactsmust be undertakenat the local level because local environmental and socioeconomic conditions are critical determinants of changesin recreationalbenefits. Moreover,in their valuationattempts, analysts also should incorporatethe existence of substitutebeaches or otherrecreation areas where tourists can visit. Even if certainareas are affected by HABs adversely,recreationists may be able to visit other nearbyareas that offer similar recreationalamenities. In such a case,regional economic impacts may be minimal. Economic Impact of HABs in the U.S.

6 MONITORING AND MANAGEMENT COSTS

In Table6.1, we present our findingsabout the costs of monitoringand managing HABs. Annual averagemonitoring and management costs total $2.09million 000 dollars!in the UnitedStates. We were ableto obtainannual estimates of monitoringand management costs from twelve states: Alaska,California, Connecticut, Florida, Maine and New Hampshire combined!, Massachusetts, North Carolina,New Jersey,New York, Oregon,and Washington. Many states experiencing HABs, suchas Texas,do not havea regularmonitoring programfor PSPor HABs. It is often the casethat watermonitoring tasks, including PSP testing, are spread across different divisions of stategovernment, making it difficult to collectdata on costs Langlois,pers. cornrn.,1994!. Further,monitoring activities for both HABs andother water quality testing,such as shellfish sanitation,oAen are conducted by the sameexperts. Consequently,it is difficult to factor out thosecosts related specifically to HAB monitoringand management.

In additionto the annualmonitoring and managementcosts incurred by coastalstates, we report othercategories of costsin Table6.1. For example,in Massachusetts,BlueGold Mussels, Inc. spentapproximately $6,000 per year 994 dollars!conducting PSP tests on their own shellfish products.We alsopresent other estimates of the costsof monitoringor managementrelated to one-timeor infrequent events including: survey and investigationcosts for two specific HAB eventsin New Jersey Olsen,pers. comm., 1994!; the cost estimatefor a 3-month NSP event on Florida'swest coast Roberts,pers. cormn., 1994!; and the ASP tests during the springof 1994in Washington Sirnons,pew. comm., 1994!.

Our estimatefor monitoring and rnanagernentcosts in Florida includesthe annualcosts of beach cleanupson the southwestcoast of Florida. Thesecosts are currently incurred primarily by each of theeight counties along that coast. Wehave collected recent 995-97! estimatesof the costs of beachcleanups for SarasotaCounty Conn,pers. comm., 1998!. Thesecosts average $56,592 per year current dollars!, and they apply to the cleanupof deadfish due to HAB eventsand to the collection and disposalof red seaweedthat washesup during storms. A significant portion of the annualcosts is the tipping fee. We divide this averagecost by the number of miles cleaned 7.5! in SarasotaCounty to developa permile cleanupcost, We assumethat approximately50 miles of the 200-mile southwest coast of Florida are cleanedeach year, accountingfor the patchinessof redtide eventsand the difficulty of accessingcertain areas of the coast. The result is an estimateof the cost of beachcleanups for HAB eventsand washed up seaweedof about $162,500per year 998 dollars!. Further researchwill allow us to refine that estimate.Note that Habas and Gilbert 975! estimatedthe cleanup costs for a 1971 red tide event to be approximately$755,211 in 2000dollars.

20 ..I h~sexpenditure was for the spring seasononly. Apparentlya budget shortfall precluded further ASF tests in the fall season of 1994 simous, pers.comm., 1994!.

49 EconomicImpact of HABs in the U,S,

Table 6.1: Annual AverageMonitoring and ManagementCosts 000 $U.S. thousands!

Annual State Type of Cost Average Cost $ GOO!

Estimated fees for PSP and ASP costs 320.74

California Annual monitoring 212.73

Connecticut Annual monitoring 10.11

Florida Personnel salaries and associated overhead 183.59 for monitoring and bioassaying for a 3- month Gymnodinium breve event an west coast; estimated costs for beachc1ean-ups during each year

Maine/New Hampshire Annual PSPmonitoring 291.61

Massachusetts Annual monitoring; Annual private PSP 57.79 monitoring by Blue6ald inc. t'400 samples annually at $15 per sample!

New Jersey A series of three tests for annual red tide 30.30 monitoring at $100 per test; individual response investigations by four separate agenciesfor a Jun-Aug 1988 algal bloom; intensive follow-up survey conducted in 1989 for the Jun-Aug 1988 bloom; individual response investigationsby two agenciesfor a July 1992algal bloom

New York Annual monitoring 319.10

North Carolina Annual monitoring 34.84

Oregon Annual monitoring 96.26

Washington Annual monitoring 531,83

TOTAL 2088.89

50 EconomicImpact of HABs in the U.S.

7 CONCLUSIONS AND FUTURE RESEARCH NEEDS

7.1 Annual Aggregate Economic Impacts

Table 7.1 which reproducesTable ES-1!,is a compilationof our estimatesof the annual aggregateeconomic impacts in millionsof 2000dollars! of HABsin the UnitedStates during the 1987-92period. For eachof the four maintypes of impacts,we presentboth the rangesof annualestimated impacts during the 1987-92study period and averageannual estimated impacts. Public health impacts are the largestcomponent, representing about 45 percent of total average impactsat morethan $22 million annually. Impactsfrom ciguaterapoisonings are the largest elementof those public health impacts. Commercialfisheries impacts are the next largest component,representing 37 percentof total averageimpacts at morethan $18million annually. Recreation/tourismimpacts account for 13 percentof total impactsat nearly $7 million annually. Monitoring/managementcosts represent only 4 percentof the total at morethan $2 million annually. It is important to note that expendituresmade to improve monitoring and management likely resultedin decreasesin impactsin the othercategories.

Wealso present an estimateof capitalizedimpacts. Assumethat our estimatesof impactswill occur on an annualbasis over the next 15 years. Discoundagthese annual losses at a rate of 7 percentand summing the discountedlosses results in an estimateof capitalizedimpacts. Our estimateof 15-yearcapitalized average impacts is $449million.

During the 1987-92 period, total annual impacts fluctuated widely except for monitoring/managementcosts!. This reflectsthe irregularoccurrence of HAB events, which in turn vary dramatically with respect to the magnitudeof impacts. We expect that coastal communities and industries are able to managerecurrent i.e., expected or "predictable"! outbreaks reasonably well, thereby limiting their economicimpacts Shumway et al 1988!. However, outbreaksof unexpectedor unusualblooms may tend to causemore severeeconomic impacts Bicknell and Walsh 1975;Egan 1990;Tester et al. 1988!.

7.2 ReasonsWhy Our Estimates are Conservative

The estimatesreported here representa preliminaryapproximation of the economiccosts to the United States &om the occurrence of HABs. The fact that these estimates are uncertain or approximateis not due to lack of effort, but ratherto the difficulty in assigningimpacts to many of the events that occurred due to lack of information and even to a lack of knowledge as to how to quantify certain impacts. Due to reporting inadequaciesand the large size of the US coastline,the HAB events on which this analysis is basedare a subset of all outbreaks that occurred during the 1987-92 window. Consequently, our aggregateeconomic impact underestimatesthe actual impacts.A secondqualification is that, althoughwe report on economic

51 EconomicImpact of HABs in the U,S.

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52 Economic Impact of HABs in the U.S. impacts,we did not useeconomic multiplieers. Thus, our estimatesreflect only the directeffects of HAB events,ignoring indirect and inducedeffects on other sectorsof the economy.Again, this conservativeapproach leads to underestimatesof the true impact.

Huinansickness and death from eatingtainted seafood results in lost wagesand work daysand painand suffering. Costs of medicaltreatment and investigation are also an importantaspect of the economicimpact causedby such events. We know that a substantial number of illnesses causedby HABs remainunreported. In the absenceof a reliablemethod for estimatingthe actual numberof illnesses,we adoptedconservative "rule-of-thuxnb" factors from severalexperts in the field. Further, we used estimatesdeveloped by Todd of the costs of shellfish and ciguatera poisoning estimates that are smaller, by an order of magnitude,than generic estiinates of nonfatalillness costsemerging from studiesof job risks,

Our public health impact estimatesare dominatedby ciguateraillness and treatment costs, but these estiinates are low becauseciguatera poisoning also occurred outside of the areas we surveyedas a resultof exports of tropical fish to other jurisdictions. In addition, we have been unableto includeeither the costsof insuranceto cover potential ciguatera-causedliabilities or the court costs associatedwith ciguatera-related litigation.

Commercialfisheries impacts underestimate true lossesdue to HAB eventsbecause they do not include PSP closuresin severalstates, including Maine and Massachusetts,where it was not possible to documentthe acreageclosed or the value of the resourcethat was not harvested during PSPoutbreaks. These statesare examplesof the casewhere the price of shellfish may increasewhen landingsare lowereddue to closures.Indeed, the economicimpact estimate Gom harvestingclosures basically the increasedvalue of output!, would appear to be positive a counterintuitive result. Although some shellfisherrnenmay benefit from price increases, consumersunambiguously lose, Theselosses are not included in our econoinicimpact estimates, becauseonce again, it is dif5cult to quantify them.Furthermore, our estimatesdo not include the costs of wild fish kills, becausethe value of those fish is not known in most cases.

Another factor that leadsto an underestimateof iinpacts is the econoinicloss from blooms of Pjiesteriaor Pfesteria-like organismsthat havenot beenincluded in our totals. Although recent Pfiesteriablooms have been shown to havemajor economichalo effectsin Maryland following an outbreakin 1997 Seiling and Lipton 1998!,the organisinhad not beenidentified during the early portion of our study period, and evenafter it was first linked to massivefish kills, no estimates could be obtainedof the economiclosses associated with those events.In part this reflects the difficulty in attributingcausality to pastfish kills and in assigningeconomic value to wild fish.

Yet anotherconservative aspect of this study is that somecurrently untapped fishery resources have valuesthat might be realisedin the absenceof HAB events, but such estimatesare not included here. Exainples include some shellfish resources of coastal Alaska, which are perinanentlyquarantined due to persistenttoxicity and the logistics of samplingdistant or remote resources Neve andReichardt 1984!, and a potentialroe-on scallopfishery on GeorgesBank.

53 Economicimpact of HABs in the U.S.

Finally, althoughmany expertsargue that the impacts of HABs on recreationand tourism are important and potentially large,there are few availabledata describingthe size of the impacts. For example,reduced tourism and lowered residentialreal estate values on the Gulf Coast of Florida are two types of impacts that are likely to be largebut for which we currently haveno data,

73 Information Needs

In addition to economic impact estimates, we made several important findings about the current stateof availableinformation andthe needfor improvementsin the datacollection process. First, the reporting practice of HAB events needsto be expandedand the format formalized, At present,information aboutHAB eventsis fragmentaryand incompletein its coverage.HAB data are compiledon an annualbasis by the U.S. National Office for Marine Biotoxins and Harrriful Algal Blooms at the Woods Hole Oceanographic Institution. These data are maintained by that office, and are also supplied to the ICES/IOC Working Group on Harmful Algal B1oorn Dynamics, which has entered them into an international database called HAEDAT Harmful Algal Events Database!, maintained by the IOC HAB Science and Cornrnunication Centre in Vigo Spain. However,the datacollection effort within the different reporting regionsof the US relies on volunteer efforts by academic and government scientists as well as government officials, and thus tends to be unevenin coverageand detail. Efforts are underway to standardizethe data collectionprocess, but even with those changes,it is clear that theseindividuals cannotprovide the type of information neededfor economic impact assessment.At the least, the duration, affected ~e or shoreline length, averagetoxicity levels, and values of affected coastal resources should be documented for each bloom in order to describe the overall economic significanceof the incident. In addition, local and state governmentsshould place much higher emphasison quantificationof econonucimpacts. Economicimpacts are usually specific to local environmental and socioeconomic conditions, and local of5cials are therefore the ones who need to compilethe information which can later be analyzedby economists.Until local governments becomecapable of supplying site-specific impact information for each bloom incident, tru1y comprehensiveand detailednational level aggregationof suchimpacts cannot be realized.

Second,we note that someeconomic information is availableon economicimpacts to fisheries resourcesor to human populations exposed to HABs, but there is a significant lack of available informationabout recreation and tourism impacts.This could be a significantbut highly episodic factor that is presently underestimated in our study.

Third, the causes of economic impacts and the degree of their uncertainty should be included in any study of economic impacts. For example, it may be premature to attribute the economic impacts solely to a specific HAB, becausethere are often other possible exp1anationsfor mortality events. Finally, economic factors that are used to generatethe impact estimates should

54 EconomicImpact of HABs in the U.S. bereported. These factors include whether or not aneconomic multiplier is used;local economic recessionor prosperitytrends; and foreign and domesticseafood competition factors.

7.4 Overview

Herewe offer the first effort to compile an estimateof the economicimpact of HABs in the US. The datagenerated are of interestand use, but it is also of note that the processof collecting, compiling, and analyzing that data revealed areaswhere changesare needed. This includes changesin the reporting process,as well as the developmentof new approachesto the assignmentof impactsto certaintypes of eventsor situations e.g., the evaluationof unexploited fisheries,or the lossesassociated with quarantineor harvestingrestrictions!.

Overall, the economic impacts from HABs are diverse and large, Even with the highly conservativetreatment given the impactsin this study, the annualcosts are significant. Average annualcosts also tend to maskthe signi6canceof individual HAB events,some of which greatly exceedthe annualaverage for the entire country. Perhapsmore importantly, HABs are recurrent, and show signs of increasingas the nuxnberof toxic and harmful algalspecies grows and as our reliance on the coastal zone for aquaculture,commerce and recreation expands. Prudent investmentin researchand monitoringcan do much to reversethis trend and to reducethe annual impacts.

55 Economic Impact of HABs in the U.S.

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Gorte,Ross W. 1994,The Florida bay economyand changing environmental conditions. 94435 ENR, CRS Report for Congress,Congressional Research Service, The Library of Congress. Habas,E. J., andC. Gilbert, 1975.A preliminary investigationof the econonuceffects of the HAB of 1973-1974 on the west coast of Florida. In: Proceedings of the First internationalConference on Toxic DinoflagellateBlooms, V. R. LoCicero Ed.!, The MassachusettsScience and Technology Foundation. Hallegraeff,G.M. 1993.A review of hatful algalblooms and their apparentglobal increase. Phycologia 32:79-99 Hughes,S.E. and N. Bourne.1981. Stockassessment and life historyof a newlydiscovered Alaskasurf clam Spisulapolynyma! resource in the southeasternBering Sea. Canadian Journalof Fisheriesand Aquatic Sciences380!' .1173-1181. Hughes,S.E. and R.W. Nelson. 1979, Distribution,abundance, quality, andproduction fishing studieson the surf clam, Spisulapolynyma, in the southeastBering Sea,1978, NWAFC Proc.Rep. 79-4. Anchorage,Ak.: NorthwestAlaska Fisheries Center, National Marine FisheriesService, National Oceanicand AtmosphericAdministration, U.S. Departmentof Commerce. Hunter, W.J. 1989. Economic-impact studies: inaccurate,misleading and unnecessary. Industrial Development158!; 10-16. Jewett, S.C. and HM Feder. 1981. Epifaunal invertebratesof the continental shelf of the easternBering and Chukchi Seas. In: TheEastern Bering Sed Shelf: Oceanographyand Resources.Vol. 2. D.W, Hood and J.A. Calder, Eds.!, Washington:0%ce of Marine Pollution and Assessment,National Oceanic and Atmospheric Administration, U.S. Departinentof Commerceand Bureauof Land Management,U.S. Departmentof the Interior. Kahn, J, and M. Rockel. 1988. Measuring the economiceffects of brown tides. Journal of ShellfishResearch, Vol, 7, No. 4, pp. 677-682. Lipton, D.W. 1999, Pflesteria'seconomic impact on seafoodindustry salesand recreational fishing. In: Proc, Economicsof PolicyOptions for NutrientManagement and Pj2esteria. B.L. Gardnerand L. Koch, Eds.!, CollegePark, Md.: Centerfor Agricultural and Natural ResourcePolicy, University of Maryland, College Park,pp. 35-38. Loomis,J,B, 1993.Integrated public landsmanagement: principles and applications to national forests,parks, wildlife refuges,and BLM lands. New York: ColumbiaUniversity Press, Chap. 7, pp. 171-191, Lutz, R.A. and L.S. Incze. 1979, The impact of toxic dinoflagellateblooms on the North Americanshellfish industry. In: Toxic DinoflagellateBlooms, D. Taylor and H. Sehger, Eds.!. Elsevier,New York. National Marine FisheriesService NMFS!. 1985-1992.Fisheries of the United States. Silver Spring,Md.: NOAA, U.S. Departmentof Commerce. National Oceanicand Atmospheric AdmUustration NOAA!. 1989. Selectedcharacteristics in coastalstates: 1980-2000. NOAA's CoastalTrends Series: Report 1. Silver Spring,Md,: NOAA, U.S. Departmentof Commerce October!.

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59 Economic Impact of HABs in %e U.S.

60 APPENDIX A

Harmful Algal Bloom Incidents

ThisAppendix is a suImnaryof harmfulalgal bloom incidentsreported informally from coastal states to the National Office for Marine Biotoxius and Harmful Algal Bloomsat the WoodsHole OceanographicInstitution for the l987 - 1992 period.

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APPENDIX B

List of Local Experts Contacted by Letters

89 GENERAL

Sandra E. Shumway Natural Science Division Southarnpton College, LIU Southarnpton, NY 11968 Sshumway.southampton.liunet.edu

ALASKA

Ronald K. Dearborn Craig Wiese Alaska Sea Grant College Program SeaGrant Program University of Alaska University of Alaska, Fairbanks 138 Irving II 2221 E. Northern Lights Blvd, 4110 Fairbanks, AK 99775-5040 Anchorage, AK 99508 FnrkIuaf.edu

Michael J. Ostasz Shellfish ProgramCoordinator Department of Environmental Conservation 3601 C Street, Suite 1324 Anchorage, AK 99503 Mostasz.envircon.state.ak.us

CALIFORNIA

James A. Fawcett Richard E, Danielson University of Southern California Sea Department of Health Services Grant Sanitationand Radiation Laboratory Hancock Institute for Marine Studies 2151 Berkeley Way University Park Berkeley, CA 94704 Los Angeles, CA 90089-1231 Greg Langlois James J. Su11ivan Department of Health Services California SeaGrant CollegeProgram 2151 Berkeley Way, Rm. 118 Univ. of California - SanDiego A-032 Berkeley, CA 94704 La Jolla, CA 92093 Sue Yoder Kenneth Hansgen University of Southern California Department of Health Services, EHSS University Park Sacramento Office Los Angeles, CA 90089-1231 714 P Street, Rrn. 616 Sacramento, CA 95814

90 CONNECTICUT

Edward C. Monahan James Citak Connecticut Sea Grant College Program Aquaculture Division University of Connecticut Department of Agriculture Avery Point State of Connecticut Groton, CT 06340 P.O. Box 97 [email protected] Milford, CT 06460 [email protected] Malcolm Shute Subject Line: Attention James Citak Connecticut Department of Agriculture Aquaculture Division John Volk, Director P.O. Box 97 Departmentof Agriculture Rogers Avenue State of Connecticut Millford, CT 06460 P.O. Box 97 [email protected] Milford, CT 06460 Subject Line: Attention Malcolm Deptagric@snet,net Shute Subject Line: Attention John Volk

DELAWARE

Carolyn Thoroughgood Delaware Sea Grant College Program Graduate College of Marine Studies Robinson Hall Newark, DE 19716 [email protected]

FLOMDA

James C. Cato Beverly Roberts Florida Sea Grant College Program Marine ResearchLaboratory Building 803 Florida Dept. of Natural Resources University of Florida 100 Eighth Ave., SE Gainesville, FL 32611 St. Petersburg, FL 33701-5095 Jccignv.ifas.ufl,edu [email protected]

GEORGIA

Mac Rawson Brad Williams Georgia Sea Grant College Program Shellfish Program Leader University of Georgia Georgia Department of Natural Ecology Building Resources Athens, GA 30602 1 Conservation Way [email protected] Brunswick, GA 31523-8600

91 HAWAII

Jack R, Davidson Yoshitsugi Hokama Hawaii Sea Grant College Program Department of Pathology University of Hawaii Room T-512 1000 Pope Road, Rm. 223 University of Hawaii Honolulu, HI 96822 1960 East-West Road Honolulu, HI 96822 LOUISIANA

Jack R. Van Lopik Ronald Becker Louisiana Sea Grant College Program Louisiana Sea Grant College Program 128 Wetland Resources LouisianaState University Louisiana State University Baton Rouge, LA 70803-7507 Baton Rouge, LA 70803-7507 Rbecker@lsu,edu

MAINE

Robert E. Wall Laurie Bean Maine/N.H. SeaGrant CollegeProgram Dept. of Marine Resources University of Maine Bureau of Marme Science 14 Coburn Hall West Boothbay Harbor, ME 04575 Orono, ME 04469-0114 [email protected]

Sally Sherman-Caswell John W. Hurst, Chairman Department of Marine Resources Fisheries and Health Science Division McKown Point Rd. Department of Marine Resources West Boothbay Harbor, ME 04575 West Boothbay Harbor, ME 04575 Sally.Sherman.state.me.us [email protected]

Robert Lewis Dept. of Marine Resources State House Station 21 Augusta, ME 04333-0021

MARYLAND

Chirstopher F. D'Elia Maryland Sea Grant College Program University of Maryland 0112 Skinner Hall College Park, MD 20742 [email protected]

92 MASSACHUSETTS

Chryssostomos Chryssostornidis Paul DiPietro MIT Sea Grant College Program MDC MassachusettsInstitute of Technology 6th Floor Bldg. E38, Rm. 330 20 Somerset Street 77 Massachusetts Ave. Boston, MA 02108 Cambridge,MA 02139 [email protected] Alan White Departmentof Marine Safety and E. Eric Adams Environmental Protection Departmentof Civil Engineering MassachusettsMaritime Academy Bldg. 48-325 101 Academy Drive MIT Buzzards Bay, MA 02532 Cambridge, MA 02139 [email protected] Eeadams.mit.edu Dave Whittaker Michael Hickey Division of Marine Fisheries Massachusetts Division of Marine 18 Route 6A Fisheries Sandwich, MA 02563 18 Route 6A [email protected] Sandwich, MA 02563

lVIISSISSIPPI

James I. Jones Mississippi/AlabamaSea Grant Consortium P.O. Box 7000 703 East Beach Drive Ocean Springs, MS 39564-7000

NE% H&4PSHIRK

Brian Doyle John Nelson New Hampshire/Maine Sea Grant NH Fish & Game / Region 3 College Prog, 225 Main Street Marine Program Building Durham, NH 03824-4732 University of New Hampshire Durham, NH 03824 Paul.Raiche, Supervisor [email protected] Dept. of Health and Human Services Division of Public Health Services 6 Hazen Drive Concord, NH 03301-6527

93 NEW JERSEY

William G. Gordon Paul Olsen N.J. Marine Sciences Consortium NJ Dept. of Environmental Protection Sea Grant Program Division of Water Resources Building No. 2 GeologicalSurvey CN 029 Fort Hancock, NJ 07732 Trenton, NJ 08625

NEW YORK

Anne McElroy Anita Freudenthal New York Sea Grant Institute Nassau County Dept. of Health Dutchess Hall, Rrn. 147 240 Old Country Rd. State Univ. of New York - Stony Brook Mineola, NY 11501 Stony Brook, NY 11794-5001 [email protected]

Robert Nuzzi SuQ'olk County Dept, of Health Services Riverhead County Center Riverhead, NY 11901

NORTH CAROLINA

B. J. Copeland Mike Street Univ. of North Carolina Sea Grant Dept. of EnvironmentalHealth and College Natural Resources North Carolina State University Division of Marine Fisheries Box 8605 Morehead City, NC 28557-0769 Raleigh, NC 27695-8605 Mike.Street.ncmail.net [email protected] Bob Curry JoAnn Burkholder North Carolina Wildlife Resources Department of Botany Commission Box 7612 512 N. Salisbury Str. North Carolina State University Raleigh, NC 27604-1188 Raleigh, NC 27695 Joann [email protected] Karen M. Lynch Environmental Sciences Branch Pat Tester DEHNR NO~OS State of North Carolina BeaufortLaboratory 4401 Reedy Creek Road Beaufort, NC 28516-9722 Raleigh, NC 27607 [email protected] OREGON

Robert Malouf John Johnson Oregon Sea Grant College Program Dept. of Fish and Wildlife Service Administrative Services Building - A320 2040 SE Marine Science Drive Oregon State University Newport, Oregon 97365 Covallis, OR 07331-2131 [email protected]

Debora Cannon Departmentof Agriculture Food & Dairy Division 635 Capitol Street NE Salem, OR 97310

PUERTO RICO

Manuel Hernandez-Avila Puerto Rico Sea Grant College Program University of Puerto Rico Department of Marine Sciences RUM-UPR, P.O. Box 5000 Mayaquez, PR 00708

RHODE ISLAND

Scott Nixon Joe Migliore Rhode Island Sea Grant College Prog. Senior Environmental Scientist University of RhodeIsland Rhode Island Dept. of Environmental Marine ResourcesBuilding Management Narragansett, RI 02882 Division of Water Resources [email protected] 291 Promenade Street Providence, RI 02908-5767 [email protected]

SOUTH CAROLINA

MargaretDavidson Rick Devoe South Carolina Sea Grant Consortium South Carolina Sea Grant consortium 287 Meeting St. 287 Meeting Str. Charleston, SC 29401 Charleston, SC 29401 Devoemr.muse.edu

95 TEXAS

Thomas J. Bright Terry E. Whitledge Texas Sea Grant College Program Marine Science Institute 1716 Briarcrest Drive University of Texas- Austin Suite 702 P,O. Box 1267 Bryan, TX 77802 Port Aransas, TX 78373-1267

Richard Thompson, Director Kirk Wiles Division of Shellfish Sanitation Control Texas Dept, of Health TexasDepartment of Health 1100 W. 49th Street 1100 West 49th Street Austin, TX 78753 Austin, TX 78756 Ed Buskey Eleanor Cox Marine Science Institute Department of Biology OUniversity of Texas, Austin Texas A&M University Port Aransas, TX 78373 College Station, TX 77843 Buskey@utmsi,utexas.edu [email protected]

VIRGINIA

William L. Rickards Virginia Sea Grant College Program University of Virginia Madison House - 170 Rugby Road Charlottesville, VA 22903 [email protected]

WASHINGTON

Louis S. Echols Jack Rensel WashingtonSea Grant CollegeProgram Rensel Associates University of Washington 2412 North 77th Street 3716 Brooklyn Ave., N.E. Seattle, WA 98103 Seattle, WA 98105-6716 Jackrensel.ernaikmsn.corn Echolslu.washington.edu Doug Simons Mary McCallum Dept. of Fish and Wildlife WashingtonState Dept. of Health 48 Devonshire Rd. Shellfish Office, Mail Stop LD-11 Montesano, WA 98563 Olympia, WA 98504 Simondds.dfw.wagov

96 CANADA

Ewen Todd Health Protection Branch Health and Welfare Canada Sir Frederick G. Banting Research Centre Tunney's Pasture, Ottawa Ontario Kl A OL2 Canada

97 oacvMKNT LmRARV Distribution List for TechnicalReport Zrchange July 1998

University of California, San Diego Fisheries-OceanographyLibrary SIO Library 0175C 151 OceanographyTeaching Bldg. 9500 Gilman Drive University of Washington La Jolla, CA 92093-0175 Seattle, WA 98195 Hancock Library of Biology 6z Oceanography Library Alan Hancock Laboratory R.S,M.A.S. University of Southern California University of Miami University Park 4600 Rickenbacker Causeway Los Angeles, CA 90089-0371 Miami, FL 33149 Gifts 8 Exchanges Maury OceanographicLibrary Library Naval Oceanographic Office Bedford Institute of Oceanography Building 1003 South P.O. Box 1006 1002 Balch Blvd, Dartmouth, NS, B2Y 4A2, CANADA Stennis Space Center, MS, 39522-5001 NOAA/EDIS Miami Library Center Library 4301 Rickenbacker Causeway Institute of Ocean Sciences Miami, FL 33149 P.O. Box 6000 Research Library Sidney, B C. V8L 482 U.S. Army Corps of Engineers CANADA Waterways Experiment Station National Oceanographic Library 3909 Halls Ferry Road Southampton OceanographyCentre Vicksburg, MS 39180-6199 European Way Southampton SO14 3ZH Marine Resources Information Center Building E38-320 UK MIT Cambridge, MA 02139 The Librarian CSIRO Marine Laboratories Library G.P.O, Box 1538 Lamont-Doherty Geological Observatory Hobart, Tasmania Columbia University AUSTRALIA 7001 Palisades, NY 10964 Library Library Proudman Oceanographic Laboratory Serials Department Bidston Observatory Oregon State University Birkenhead Corvallis, OR 9i331 Merseyside L43 7 RA Pell Marine Science Library UNITED KINGDOM University of Rhode Island IFREMER Narragansett Bay Campus Centre de Brest Narragansett, RI 02882 Service Documentation - Publications Working Collection BP 70 29280 PLOUZANE Texas ARM Univers,ity FRANCE Dept. of Oceanography College Station, TX 77843 Smyth-1O1 3. Recipient'sAccession No. REPORT DOCUhlENTAT!ON 1, REPORTNO. WHOI-2000-11 PAGE 4. Ti5e and Subiltle S. ReporiDate EstimatedAnnual Economic Impacts from Harmful Algal Blooms HABs! in the September2000 United States

7-/un~a!DOnald M. AnderSOn,POrter HOagland, YOShi Kaeru, Alan W. White 9. PerformingOrganizaucn Rept. No. WHOI-2000-11 9. PerformingOrganfsaficn Name and Address 19. Project/Task/WorkUnit No.

Woods Hole OceanographicInstitution 11. Coniraci C!or Grani G!No. Woods Hole, Massachusetts02543 c! NA46RG0470 G! NA90AA-D-SG480 OCE-9321244 12. SponsoringOrganiaaticn Name and Address 13.Type Of RepOri a PeriadCOVered TechnicalReport NationalOceanic and Atmospheric Administration National Science Foundation

1S.Supplementary Notes Thisreport should be cited as: Woods Hole Oceanog. Inst, Tech. Rept., WHOI-2000-11.

16.Abstract Umrc200 words! Bloomsof toxicor harmfulmicroalgae, coinmonly called "red tides," represent a significant and expanding threat to human healthand fisheries resources throughout the United States and the world. Ecological, aesthetic, and public health impacts include:mass mortalities of wild and farmedfish andsheBfish, human intoxication and death from the consumptionof contaminatedshellfish or fish,alterations of marinefood webs through adverse effects on larvaeand other life historystages of commercialfish species, the noxious smell and appearance ofalgae accumulated in nearshore waters or depositedon beaches, and mass mortalities of marine mammals,seabirds, and other animals. ln thisreport, we provide an estimate ofthe economic impacts of HABs in theUnited States from events where such impacts weremeasurable witha fairdegree ofconfidence during the interval 1987-92, The total economic impact averaged $49 million peryear, with public health impacts representing thelargest component 5 percent!.Commercial fisheries impacts were the next largest7 percentof thetotal!, while recreation/tourism accounted for 13percent, and monitoring/management impacts 4 percent, Theseestimates are highly conservative, asmany economic costs or impacts from HABs could not be estilnated.

17. DocumentAnalysis a DeSCriplOrs harmfulalgal blooms HABs! red tides economic impacts

b, klenllliers/Open-EndedTerms

c. COSAll Field/Group 21. No. of Pages 1L AvailabuitySfafemsnf 19. SecurityClass ThisReport! UNCLASSIFIED 101 Approvedfor public release;distribution unlimited. 20. SecurityClass ThisPage!

SeeANSl-239.19! OPTIONALFORM 272 .77! formerlyNTI&35! Departmentof Commerce