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Merry Christmas From the Team at M.E

We would like to take this opportunity to wish all our M.emo subscribers a very Merry Christmas and a relaxing and prosperous New Year. Our office closes on the 21st of December and re-opens on the 7th January. We look forward to sharing more of our news and views with you in 2019.



 

Wrapping up 2018 

Hector's and Maui Dolphin - Dead or Alive?

Hector’s and Māui dolphin are endemic species, being found only in New Zealand waters, the most restricted distributions of any cetacean in the world. The populations of both dolphins are in decline, with Hector’s classified as endangered and Māui classified as critically endangered by the IUCN [1]. 

Hector’s population is estimated in the range from 10,000 to 15,000 dolphins, with at least three sub-populations [2]. The Māui situation is more dire, with fewer than 100 dolphins remaining, and the ‘critically endangered’ listing denotes that it faces an extremely high risk of extinction. 

The main cause of population decline is bycatch in fisheries through entanglement in nets. According to Stats NZ, of all recorded Hector’s and Māui deaths for which cause of death could be determined, 71% was as a result of entanglement in fishing gear (mainly nets) [3]. 

The protections that have been put in place over the past two decades have resulted in a significant reduction in losses, with entanglement rates now 80% lower than in 1996 [4]. However, after years of fewer incidents, five Hector’s dolphins were entangled and died in a single incident in early 2018 – representing a loss of between 0.03% and 0.05% of the total population in one day. [5]

The ongoing losses of endangered species raise important issues especially around key trade-offs for the New Zealand community. On the one hand, there is the fish caught in nets (food supply) and livelihoods maintained by fishing. On the other, there is the community and cultural value from having two dolphin species living in our coastal waters, as well as the value of eco-tourism activity. Put bluntly, what are the relative values to the community of fishing activity compared with the risk of more dolphin deaths? 

This Memo considers parts of the overall picture, outlining some economic research relevant to the Hector’s and Māui dolphin. 

Fishing Value

Existing marine protection areas cover much of Hector’s and Māui habitat in the inner coastal areas of the South Island and the west coast of the North Island. However, the remaining outer coastal areas of the Hector’s and Māui habitats are not protected. 

During the development of the previous Threat Management Plans (TMP) the Ministry of Primary Industry [6] and New Zealand Treasury [7] assessed the economic value of commercial fishing that could be lost due to restrictions to provide greater protection of the Hector’s and Māui dolphin. 

Those studies focused on the species that are caught in nets set by commercial fisherman (mostly low value species incl. mullet, flatfish, rig, kahawai, trevally), with the results indicating that set netting contributes a relatively small value to the New Zealand economy as follows:

  • In 2012 the Ministry of Primary Industry estimated that set net fishing in the Māui’s habitat (west coast of the North Island, Pariokariwa Point to Hawera out to 4 nautical miles) was adding less than $1 million per annum to the New Zealand economy. 

  • Also in 2012, the New Zealand Treasury estimated the that set net fishing in the main habitat of the Hector’s dolphin (east coast of the South Island, Cape Jackson to Slope Point), was adding $1.9 million per annum to the New Zealand economy. 

  • We have not found any valuation of set net fishing on the west coast of the South Island. 

The official research released by the Government indicates the value of set net fishing in the Hector’s and Māui’s habitat is more than $3 million (as above) but may be significantly less than $10 million per annum, or even $5 million. 

The data on fishing effort indicates that there is little set net activity in most of the Hector’s and Māui unprotected habitats [8]. This suggests that in many locations the direct cost of further protection – in terms of further reducing set net activity and catch in order to enhance the dolphins’ protection – is likely to be low. 

Finally, Hector’s and Māui dolphins can be harmed by other fishing methods (trawling, Cray pot lines, marine farms etc.). This memo has not discussed these other fishing method, however they are likely to be covered in the review of the TMP.

Eco-Tourism Value

The Hector’s dolphin is an important focus of eco-tourism, especially in the Banks Peninsula area. New Zealand has some of the rarest and most unusual species in the world, and this attracts many tourists. The South Island is particularly fortunate, providing tourists with easy access to ocean-going species including humpback whales, royal albatross, penguins, seals and dolphins. 

As a result, the eco-tourism sector has grown rapidly. However, while there has been economic research on the value of other eco-tourism activity in the South Island (Whalewatch and Royal Albatross Centre), there has been no research on the eco-tourism value of the Hector’s and Māui dolphins.

M.E has recently completed research on the eco-tourism activity associated with Hector’s dolphins. This research shows that there are seven eco-tourism operators in Banks Peninsula that rely on the presence of the Hector’s dolphin to attract tourists. These eco-tourism businesses currently operate eight vessels that carry in the order of 60,000 to 75,000 passengers per annum and employ some 40 to 60 staff, most in permanent positions. 

In today’s terms, we estimate that Hector’s eco-tourism in Banks Peninsula (tour operators and tourist spend) generates at least $24.5 million in value added annually in the national economy and sustains the equivalent of 476 jobs (once direct and flow-on effects are taken into account). [9]

This research provides some key parameters to assist the review of the TMP. Under the current TMP there is still risk to the Māui and Hector’s populations, so there is also implied risk to the eco-tourism activity which depends on the species. 

This is because further reduction in their presence is likely to see some corresponding reduction in the dependent eco-tourism activity, and consequent impact on the economy. Most notably, a decline in the Hector’s population and therefore less chance of sighting dolphins on an eco-tour would likely reduce the quality of the experience and result in fewer visitors undertaking tours. A more extreme outcome where Hector’s became extinct would mean a corresponding loss of dependent eco-tourism activity in Banks Peninsula. 

There are also eco-tourism businesses in Kaikoura and Queen Charlotte Sound that rely on the presence of the Hector’s dolphins to attract tourists. These businesses and associated economic activity have not been assessed in our research.

Community Value

The value of these, and other species extends beyond eco-tourism. The community derives value from the existence of Hector’s and Māui dolphins which is not represented in any commercial market in the economy. Nonetheless, the non-market values are recognised in economics as being important to the community and they can be estimated in monetary terms [10] as well as represented in other non-monetary terms. The non-market values derive from option value (potential, but uncertain, future resource uses), existence value (citizens perceive value knowing that a particular environmental asset exists) and bequest value (value arising from the desire to bequeath certain resources to future generations). These are on top of non-consumptive use values realised mainly from eco-tourism and experiences of private individuals.

The non-use values are real and should not be disregarded simply because they are often intangible. For example, many New Zealanders place great value on protecting kiwi habitat, even though many are unlikely to actually observe a kiwi in the wild. Most of the value of kiwi is associated with these intangible non-use values (option, existence and bequest). If an economic assessment of the value of kiwi excluded these non-use values then the economic value of kiwi would be significantly under-stated.

Similar issues apply to Hector’s and Māui dolphins, as well as to other relatively rare or hard-to-access species, and to other parts of the natural environment including flora and ecologically valuable places. Many New Zealanders, likely the majority, will not have the opportunity to view these rare dolphins. However, a range of research indicates they are likely to place value on the dolphins, in terms of “non-use” values.

Whale and Dolphin Conservation (an international NGO) commissioned economic research in 2014 on the non-use value of Hector’s and Māui dolphins to the New Zealand community. [11]  That study estimated that the Hector’s and Māui dolphins have a non-use value of $46 million per annum to the people of New Zealand. This shows that the non-use value of the Hector’s and Māui dolphins is likely to be significant, and considerably greater than the economic impact of eco-tourism, estimated from our research. 

Cultural Value

It is also important to understand that the Hector’s and Māui dolphins have significant cultural value to iwi and hapū, especially those living in or identifying with the coastal areas of the west coast of the North Island and the entire coast of the South Island. The previous reviews of the TMP have always acknowledged the importance of this cultural value. 

However, there appears to be no publicly available research on the scale of this value. While the previous acknowledgement of cultural values indicates they will clearly be part of the considerations in the TMP review, there would be benefit in more formal assessment of those matters, as distinct from community values.

Shifts in the Evaluation Paradigm

Since the earlier TMP reviews, there has been a very relevant shift in the evaluation paradigm, in the form of the Treasury’s newly released Living Standards Framework (LSF). The comprehensive nature of the LSF, which adopts a broader view than some previous methods applied by Treasury to now encompass environmental, human, social and market capital, suggests that government officials will be better able to capture the range of relevant considerations in any review of the Hector’s and Māui dolphins TMP. 

Dead or Alive?

So what are the relative values to the community of fishing activity compared with the risk of more dolphin deaths? To be even blunter, how important are these values when a key part of the trade-off is between dolphins being dead or alive? 

It is important that in the pending review of the TMP, the weighing up of the costs of protecting Hector’s and Māui dolphins – in terms of lost fishing opportunity – as against the benefits – from preserving community and cultural values, maintaining the biophysical environment, and supporting eco-tourism – is a well-informed process, with the aim to establish the optimal level of protection. 

This weighing up is a core aspect of Welfare Economic theory – the concept of selecting policy that results in the highest or optimal outcome for society as a whole. It seems from existing available research that the value of fishing activity (less than $10 million per annum) is likely to be relatively small compared to the eco-tourism value (more than $24.5 million per annum); and also when compared with significant values to the community which are not fully quantified, but are likely to be greater than the estimated $46 million loss of value arising from annual dolphin losses.

*******

This article was written by Rodney Yeoman and Doug Fairgray. If you have any questions or comments about the article, please feel free to contact them on rodney@me.co.nz or doug@me.co.nz.

Footnotes:

  1. International Union for Conservation of Nature (2013) Red List of Threatened Species.
  2. Goetz K and Roberts J (2018) Hector’s/Māui dolphin distribution – NIWA. TMP risk assessment workshop.
  3. Stats NZ (2016) Bycatch of Protected species: Hector’s and Māui dolphins.
  4. Ibid.
  5. Radio NZ (2018) Five Hector’s dolphins killed in fisher’s net – 20th March.
  6. Ministry of Primary Industry (2012) Review of the Māui Dolphin Threat Management Plan.
  7. New Zealand Treasury (2012) Set netting in a defined area of the East Coast of the South Island.
  8. Trident Systems (2018) NZ inshore and Harbour Fisheries – Hector’s and Māui Dolphin Threat Management Plan Expert Panel Risk Assessment Workshop – July 9th.
  9. Market Economics (2018) Hector’s Dolphin Eco-Tourism – Economic Impact Assessment.
  10. For example see Ministry for the Environment (2005) Option and existence values for the Waitaki Catchment.
  11. Hoyt, E., McGrath, G., Bossley, M., Knowles, T., 2014 Assessing New Zealanders’ Willingness-to-pay to Protect the Endangered New Zealand Dolphin (Cephalorhynchus hectori): A benefit-cost analysis comparing three scenarios, Economists at Large, Melbourne, Australia and Critical Habitat Marine Protected Areas Programme, Whale and Dolphin Conservation, Chippenham, UK.
  12. Image sources: https://www.doc.govt.nz/nature/native-animals/marine-mammals/dolphins/hectors-dolphin/

Auckland Spatial Economy Model

Market Economics has recently finalised the development of an updated spatial economy framework to describe and examine business and residential activity in Auckland. The framework codes all meshblocks according to their primary Unitary Plan zone type (centres, business areas, special purpose zones, future urban zones, rural zones and residential zones). This tool provides a mechanism to understand spatially how people use the region for residential and business activity.

The first step to create the framework was to overlay the Auckland Unitary Plan zoning with meshblocks. This enabled us to classify all meshblocks according to the primary intended activity. Certain activities were given a higher level of significance than others, for example centre zonings were more important than business zonings, which in turn were more important than residential and other activity uses. The cascading priority approach has been adopted to ensure that as much of the business activity that is relevant to assessments of retail activity and impacts, urban form and function, and industrial and commercial land demands can be captured to provide a context for new or adapted land uses.

This capability allows us to join other spatial information to the framework to understand how many people, households, businesses, and employees there are in each location, to compare that activity with other locations within the region, and to look at change over time. We can also calculate standard metrics such as employment and household density and compare them by location and zone type.
The key outputs of the model are:

  • Population and households by location

  • Population and household densities by location

  • Number of businesses by industry by location

  • Number of employees by industry by location

  • Total employment density by location

  • Counts of businesses and employees by retail store type by location

  • Estimates of retail sales by store type by location

  • Estimates of retail floorspace (GFA) by store type by location.

Our experience in resource management and policy arenas has shown us that understanding the scale and composition of household and employment activity on the ground is critical to influencing future development. We expect developers and policy makers to be interested in using this tool for a wide range of activities, including understanding competitor centres to place their own performance in the wider context and to understand the potential for retail and other business activity in specific growth areas based upon regional and sub-regional averages.

If you have any questions about the Auckland Spatial Economy Model, including how you might tap into this resource, or would be interested in a similar model for your district, please contact Rebecca Foy (rebecca@me.co.nz).


   
 

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