Course:ECON371/UBCO2009WT1/GROUP2/Article3
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Article 3: Pacific Hake Could Soon Boast Ecologically Friendly Label
Summary
Despite objections raised by the conservation group Oceana and the Monterey Bay Aquarium, the Pacific Hake fishery is close to completing certification that would allow them to advertise their fish products as Ecologically Friendly. A private London based group, the Marine Stewardship Council, is doing the certification. Opponents are arguing that Hake stocks, which have dropped 89% since the 1980's, have been over-fished and need to be protected; they worry that the certification will mislead consumers.
Pacific Hake as "Green Products"
In the last few years efforts by environmentalists, through education and moral suasion, have led to a demand for Green Products. Efforts have been quite successful and green products continue to sell better when displayed as such. In this case, opponents to this certification not only worry that it may be incorrect to label the Hake is an ecologically friendly product, but also about how that will affect demand for Pacific Hake.
The intended goal of marking products ecologically friendly is to increase demand for these products and therefore ease the demand on products that may be less ecologically stable. It can of course be argued that stocks must be allowed to recover from their great recent losses before acting in the market to increase their demand. Alternatively, if stocks are stable at their current levels, even though they may be historically low, they could be labeled ecologically friendly so long as they continue to be stable at current levels.
The Effect of this "Certification"
This situation is similar to what is called "Greenwashing" where something is sold as "Green" or "Eco Friendly" when it is either not, or has always been and is not just being marketed as green (eg. Marketing a product as 'CFC Free' when it has always been CFC free). By selling this product as ecologically friendly, producers are affecting people's evaluation of the total social cost of the product - implying that eating this fish could be more socially responsible than consuming other products not labeled as ecologically friendly. If the external cost is mis-represented, decisions are made based on poor information, and generally doesn't lead to socially efficient equilibrium.
It must also be mentioned that while this certification will likely contribute to an increase in price of the Hake, it will do so not through a slide in the demand curve, but a right side shift in demand. This is almost always followed by a shift in supply to match the newly compensated equilibrium, at a higher level of supplied Hake. After this economic shift in equilibrium, price is an irrelevant factor in providing a sustainable fishery, but rather a red herring towards the general public by transforming the thought of a simple demand curve slide concluding higher prices due to less demand and stagnant supply shifts. These outcomes are in direct contradiction of the statement made by Executive director of British Columbia Seafood Alliance, Christina Burridge: "certifiers consider not a particular year's fish population but whether management is taking steps to maintain a sustainable fishery". Clearly this "certification" has no merit in the attempts of providing sustainability to such fisheries, but rather are purely profit motivated.
Conclusions - Promoting Eco-friendly seafood products
Seafood is popular, healthy and the food of choice for millions. But the harvest of fish can also have drastic consequences for the marine environment and other ocean life. Environmentally healthy and stable levels of fishing exist, and that's the bottom line of the sustainable seafood guides that have become more popular in recent years. California's Monterey Bay Aquarium and the marine conservation group Oceana have argued the Pacific hake has been overfished. Precaution is justified in this certification as the hypothesis of a risk cannot be entirely excluded due to the lack of conclusive scientific evidence following the results of increased demand on 'stable' fisheries. It is almost certain that being labeled as Ecologically Friendly will increase the demand for Hake, which would be followed by an increase in supply. The question with this certification is how certain the Marine Stewardship Council is that the Hake stocks can take an increase in harvesting. However, if it is true that the stocks will continue to be stable, then what’s on the restaurant menu and at the fish counter in the supermarket is based on consumer preferences. So if customers ask for better seafood alternatives and spread the word amongst other seafood lovers they can make a difference in the health of the oceans, and just might find new favorite seafood in the process.
Prof's Comments
Misleading labeling, which leads to increased harvesting, does seem to go against sustainability. No mention was made of the steps being taken to make the industry sustainable, nor whether the stock decline could be due to something other than overfishing. This makes it hard to say whether the certification makes sense. You are right that when consumer demand is based on incorrect information, the resulting equilibrium will not be efficient. Whether the supply curve shifts out depends on any regulations that are in place. If there is a regulation on the amount of fishing, then the supply curve may be vertical.