International Journal of Trade, Economics and Finance, Vol. 3, No. 1, February 2012 The Environmental and Economic Benefits of Eco-Certification within the Ornamental Fish Trade M. Dykman environmental problems associated with the trade. Abstract—Trade of ornamental fish and aquarium supplies is Qualitative research techniques (case studies) are employed extensive. The environmental impacts of the trade in to examine the likely effects of MAC certification on the ornamental fish are of considerable importance. In addition to trade in ornamental fish. Case studies can be used to analyze this, the economic disparity between the importing and human activity patterns that are embedded in the real world exporting countries within the trade can have social, environmental and economic ramifications for the poorer [3], [4]. The use of case studies allows one to: (i) explain the exporting countries. The research problem explored in this main elements that govern behavior and reward, and/or (ii) paper focuses on showcasing ways in which the certification explain the phenomenon that is observed or that is likely to program initiated by the Marine Aquarium Council (MAC) can occur. In the context of sustainability, it is reasonable to be used as a framework for promoting the sustainability of argue that any notion of sustainable multiple seas use or marine ornamental fish populations and coral reef ecosystems. general use of resources of the seas will require an The MAC framework relies on consumers recognizing and supporting responsible collectors by selectively purchasing assessment of what is sustainable and/or how sustainability from these suppliers. Evidence regarding the likely economic can be achieved. benefits of the MAC system is presented using case study In this paper, attention is focused on examining the likely analysis. These case studies are used to examine the hypothesis benefits that may accrue from eco-certification of aquaria that MAC certification yields economic benefits that spread fish harvesting and trade practices. Case study research can from consumers and retailers to collectors, specifically through thus yield important evidence regarding the likely impact of greater profits for collectors and a higher quality of specimen. However, MAC certified products are generally more expensive harvesting strategies. The benefits of case study analyses, for than non-certified products. It is a requirement, therefore, that a variety of phenomena, institutions, individuals and MAC initiatives encourage consumers to prefer certified activities are widely understood [3]- [6]. Three studies ornamental fish species that are harvested in an concerning consumer choice of marine aquaria hobbyists will environmentally friendly manner. Studies of consumers’ be examined to analyze the receptivity of consumers to willingness to pay and the potential economic benefits of MAC eco-certification programs within the marine aquaria trade. certification have shown that further promotion of MAC certification and its role in guaranteeing environmental The findings of these studies point to the potential of MAC sustainability is required to ensure the competitiveness of MAC certification as a primary tool in improving sustainability and certified fish with cheaper alternatives. The general results consumer awareness within the ornamental fish trade. from these case studies have implications for the global sustainability of many other ocean resources. II. OVERVIEW OF THE TRADE Index Terms—Eco-certification, economics, MAC certification, marine aquaria trade. More than 100 countries are involved in the trade of ornamental fish, with Singapore, Hong Kong, USA, the Netherlands, and Germany representing the top five I. INTRODUCTION exporting countries in 1992 [7]. Conversely, the top five The trade in ornamental fish and aquarium supplies is a importing countries were the USA, Japan, Germany, the multi-million dollar industry that spans the globe. The United Kingdom, and France [7]. The majority of exporting worldwide import value of marine ornamental fish is countries involved in the trade of ornamental fish are in approximately US$200-330 million whereas the total global developing countries in Asia, such as Singapore, Thailand, retail value of marine ornamental fish and aquarium hobby Indonesia and the Philippines, with over 80% of the trade supplies is approximately US$500 million [1], [2]. This involving exports from the Philippines and Indonesia to the report will examine the economic aspects of the ornamental USA [1], [8]. The economic disparity between the importing fish trade and will focus on eco-certification, in particular the and exporting countries creates many imbalances in the trade, certification system developed by the Marine Aquarium which can in turn lead to social, environmental and economic Council (MAC), as a solution to the economic and ramifications that are generally shouldered by the poorer exporting countries. Approximately 1 billion ornamental fish are exported Manuscript received December 21, 2011; revised January 22, 2012.This annually, with the trade involving more than 1000 species [7]. work was supported in part by Elkana Ngwenya (University of Tasmania) In the case of Australia alone, 8-10 million ornamental fish and the Australian Maritime College. M. Dykman is with the National Centre for Marine Conservation and are imported each year [9]. Of all the ornamental fish and Resource Sustainability at the Australian Maritime College, Tasmania, invertebrates imported into the European Union in 1998, Australia (e-mail: mdykman@ postoffice.utas.edu.au). 37% were tropical freshwater fish, 28% were cold water fish, 1 International Journal of Trade, Economics and Finance, Vol. 3, No. 1, February 2012 16% were marine fish, 8% were corals and 11% were other favoring the importers. This is due to the fact that the invertebrates [8]. The majority of ornamental fish traded are importing countries generally have a buying power that freshwater and farm-bred, whereas marine ornamental fish dwarfs the financial resources of the fish collectors in species and invertebrates are mainly wild-caught [7]. developing countries, and so are largely the ones who control Aquarium animals are the highest value-added product the economics of the market [8]. This is illustrated by the harvested from coral reefs, with aquarium fish selling for an guide below, which dictates the pricing of marine ornamental average of $248 per pound compared to food fish at an fish [12]: average of $3 per pound [10]. -Cost of fish to importer (landed cost) = export price (free on board) + freight and insurance. III. ENVIRONMENTAL PROBLEMS ASSOCIATED WITH THE -Wholesale price = landed cost x 2. TRADE -Retail price = wholesale price x 2. The extractive nature of fish collecting, which often occurs in developing countries that lack adequate resources and This is again proven by the specific example of the mechanisms for reef conservation, has serious impacts upon collection of a single Naso Tang (Acanthuridae) in the the fragile coral reef ecosystems in which it occurs. The Philippines [13]: ecosystems of coral reefs are among the “most diverse and valuable ecosystems on earth” [2], supporting one million A collector gets: US$0.26 species of animals and plants and an estimated eight million The exporter price is: US$2.50 species that are yet to be discovered [2]. However, studies The shipping cost* is approximately: US$9.00 have found that 25% of coral reefs around the world have The retail price is approximately: US$53.00 already died or are severely damaged, and a further 30% are *to the USA/Canada under serious threat [11]. Overfishing, global warming, destructive fishing practices and coastal development TABLE I: PRICES PAID TO COLLECTORS FOR ORNAMENTAL FISH ALONG THE MARKETING CHAIN represent the major threats to coral reefs [11]. For example, in Honaunau, Hawaii, abundance of the top ten aquarium fish Paid to collector species has decreased by 59% over the last 20 years [2]. In Non-certified Certified Species Middle-man particular, the international trade of ornamental fish impacts exporter exporter upon reefs through overfishing and the use of destructive Banded coral shrimp 0.02 0.05 0.05 fishing practices such as cyanide poisoning and explosives Domino damsel 0.03 0.05 0.05 [2]. It is estimated that, since the 1960’s, more than one Percula clown 0.06 0.14 0.23 Spotted grunt 0.06 0.12 0.13 million kilograms of cyanide have been used on Philippine Chelmon butterfly 0.06 0.12 0.18 reefs alone [2]. In addition to this, the marine ornamental Source: [1] C. S. Shuman, G. Hodgson and R. F. Ambrose. (March 2004). trade often targets rare fish and coral species, which fetch the highest prices, placing additional pressure on these species TABLE II: PRICES CHARGED BY SELLERS FOR ORNAMENTAL FISH and their survival [2]. The fact that the trade is also highly ALONG THE MARKETING CHAIN mobile is another characteristic that is conducive to Charged by environmental degradation, in that, as soon as stocks are depleted in one area, collectors move to another area to inflict seller similar damage. This means that the trade ultimately Species Exporter Whole-saler Retailer disadvantages the environment and the communities where Banded coral shrimp 0.62 N/A 7.00 fish collecting occurs, with little incentive present for the Domino damsel 0.28 1.45 2.00 long-term sustainable use of the environment and its Percula clown 0.77 7.95 12.00 Spotted grunt 1.50 8.95 15.00 resources by a community, and few benefits passed onto local Chelmon butterfly 1.40 8.95 15.00 communities [2]. The majority of exporting countries (where Source: [1] C. S. Shuman, G. Hodgson and R. F. Ambrose. (March 2004). fish collecting occurs) are developing countries, which often lack the “institutional or financial capacity or political will” TABLE I shows the prices paid (US$) to collectors by to mitigate the damage to coral reefs that occurs as a result of middlemen and exporters along with the proposed prices to fish collecting [2].