How portfolio diversification can enhance social-ecological resilience along the Northeastern Coast of

PICES 2019 Annual Meeting Raphael K. Roman, Tomoaki Goto and Gakushi Ishimura. Portfolio Approach to Fisheries Management

❏ Origin from “Modern Portfolio Theory”, pioneered by Markowitz (1952) Stabilizing financial returns by pooling individual assets together

❏ A portfolio approach to fisheries management can improve the resilience of a system and help buffer against: (1) Environmental uncertainty Climate change Species alternation, migration

(2) Economic volatility (prices, markets, consumer behavior…)

q Why Japan? Productive fishing grounds, quality data, muti-species fisheries (…) Scope – Iwate, Miyagi and Fukushima

岩手 (Iwate)

宮城 (Miyagi)

福島 (Fukushima) 2011 Great East Japan Disaster – Socioeconomics (1)

q Unemployment rate 60% , q 260 small fishing harbors destroyed, q Iwate lost 14,000 fishing boats, Miyagi’s fleet 42%.

Kesennuma city Iwate Miyagi Fukushima (Miyagi) Credit: Toshifumi Kitamura 15

-43% Employment 10

5 Number of employees ('000s) Number of employees

0 1995−98 2000−03 2007−10 2011−14 1995−98 2000−03 2007−10 2011−14 1995−98 2000−03 2007−10 2011−14 Average periods (4yrs) 2011 Great East Japan Disaster – Socioeconomics (2) q Raw inputs are getting smaller and more scarce, q Physical capital has been severely damaged, q Current trend towards innovation & adaptation.

Iwate Miyagi Fukushima Ofunato (Iwate)

1000 -47%

Infrastructure 500 (# plants) Number of processing plants Number of processing

0 1995−98 2000−03 2007−10 2011−14 1995−98 2000−03 2007−10 2011−14 1995−98 2000−03 2007−10 2011−14 Average periods (4yrs) Total Catch (1964-2015) q 70 commercially exploited species, Compiled Data q ~ 84% of landings value along the coast. Total Catch (1964-2015) q 70 commercially exploited species, Compiled Data q ~ 84% of landings along the coast. regime (1980s-1990s)

Prefectures’ catch (Sardinops melanostictus) Return-Risk Fisheries Portfolios

Iwate Miyagi Fukushima 20 Bigeye Pacific nei Bigeye tuna

15

Pacific saury

Swimming Resilience Amberstripe scad Very low Low Medium Largehead hairtail 10 Smelt High Red−eye round NA

Flathead grey

Whitebait smelt Mean Revenue in real 2010$ (log − transformed) Mean Revenue 5 Smelt

Whitebait smelt 0 2 4 6 0 2 4 6 0 2 4 6 Catch variability Species Covariances Matrix

Red rock fish Blue marlin Righteye seabass Japanese tuna Yellowfin tuna Bigeye Broadbanded thornyhead Striped marlin sandlance Pacific urchin nei Mackerels Sea tuna bluefin Pacific herring Pacific Surf clam carpetJapanese shell Japanese flying Japanese sardine Japanese Alaska Skipjack tuna jack Japanese amberjack Yellowtail spanish mackerel Japanese Bastard saury Pacific Pacific salmon Pacific Iwate 1 Red rock fish ● ● ● Blue marlin ●

Righteye flounder ● ● Japanese seabass ● ● ● 0.8 Yellowfin tuna ● Bigeye tuna

Broadbanded thornyhead ● 0.6

Trout ● ●

Striped marlin ● Pacific sandlance ● ● 0.4 Mackerels nei ● ● Abalone ● ● ● 0.2 ● Swordfish ● ● ● 0 Pacific herring ● ●

Surf clam ● ● ● ● Japanese carpet shell ● ● Japanese anchovy ● ● −0.2

Japanese flying squid ● ● ● ●

Japanese sardine ● ● ● ● ● ● ● ● ● ●

Alaska pollock ● ● ● ● ● ● ● ● −0.4

Skipjack tuna ● ● ● ● ● ● ● ●

Japanese jack mackerel ● ● ● ● Yellowtail amberjack ● ● ● ● ● −0.6 Japanese spanish mackerel ●

Bastard halibut ● ● ● Pacific saury ● ● −0.8 Pacific salmon ●

Octopus ● ● ● −1 Species Covariance Matrix

Red rock fish Blue marlin flounder Righteye seabass Japanese tuna Yellowfin tuna Bigeye Broadbanded thornyhead Trout Striped marlin sandlance Pacific Sea urchin nei Mackerels Abalone Sea cucumber Swordfish tuna bluefin Pacific herring Pacific Surf clam carpetJapanese shell anchovy Japanese flying squid Japanese sardine Japanese Skipjack tuna jack mackerel Japanese amberjack Yellowtail spanish mackerel Japanese Bastard halibut saury Pacific cod Pacific salmon Pacific Octopus Iwate 1 Red rock fish ● ● ● Blue marlin ●

Righteye flounder ● ● Japanese seabass ● ● ● 0.8 Yellowfin tuna ● Bigeye tuna

Broadbanded thornyhead ● 0.6

Trout ● ●

Striped marlin ● Pacific sandlance ● ● 0.4 Sea urchin Mackerels nei ● ● Abalone ● ● ● 0.2 Sea cucumber ● Swordfish Pacific bluefin tuna ● ● ● 0 Pacific herring ● ●

Surf clam ● ● ● ● Japanese carpet shell ● ● Japanese anchovy ● ● −0.2

Japanese flying squid ● ● ● ●

Japanese sardine ● ● ● ● ● ● ● ● ● ●

Alaska pollock ● ● ● ● ● ● ● ● −0.4

Skipjack tuna ● ● ● ● ● ● ● ●

Japanese jack mackerel ● ● ● ● Yellowtail amberjack ● ● ● ● ● −0.6 Japanese spanish mackerel ●

Bastard halibut ● ● ● Pacific saury ● ● −0.8 Pacific cod Pacific salmon ●

Octopus ● ● ● −1 Risk vs. Diversity – Moving Averages

Iwate Miyagi Fukushima

4 5 years

2 10 years Catch Variability Catch 20 years

0 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010

15

10

5 Catch Diversity (Shannon Index) Diversity Catch 0 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 Year Risk vs. Diversity – Moving Averages

Iwate Miyagi Fukushima

4 5 years

2 10 years Catch Variability Catch 20 years

0 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010

15

10

5 Catch Diversity (Shannon Index) Diversity Catch 0 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 Year Risk vs. Diversity – Moving Averages

Iwate Miyagi Fukushima

4 5 years

2 10 years Catch Variability Catch Catch Variability is inversely 20 years

0 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010

15

10

5 Related to catch diversity Catch Diversity (Shannon Index) Diversity Catch 0 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 1970 1980 1990 2000 2010 Year Portfolio Effect – Stabilization? … N

(1) Total Catch (2) Total Revenue

Fukushima

Miyagi Prefecture Prefecture

Iwate

0 1 2 3 4 5 6 0 1 2 3 4 5 6 Portfolio Effect (PE) Portfolio Effect (PE) Looking Forward – Next Steps

❏ Compile and analyze catch + revenue data at the community and vessel levels (available for Iwate);

❏ Investigate other diversification strategies,

❏ How does each individual species react to environmental variability such as climate change?

❏ Measuring other benefits

Social Ecosystem & Existence Seasonality welfare human health value Key Takeaways 1. Portfolio analysis shows catch diversification brings stability to fisheries production and associated revenues through time,

2. A portfolio approach to fisheries management in Northeastern Japan can streamline post-2011 recovery process,

3. Thinking in portfolio terms can help preserve biodiversity and support the livelihoods of coastal communities in Japan. Thank you for your attention

ありがとうございました

Contact: [email protected] @RaphGenf