a Weisman (pers. comm. 1997) estimates that only one in four ciguatera cases in Florida are reported.
^b We assume only one in 100 ciguatera cases are reported in these jurisdictions, base upon Tosteson’s (pers. comm. 1997) estimate for Puerto Rico.
^c Tosteson (pers. comm. 1997) estimates reported ciguatera cases are 0.6 percent of the population during 1987-89 and 0.5 percent of the population during 1990-92.
^d Ruff (1989) estimates that only one in ten ciguatera cases are reported in the Marshall Islands.
^e We estimate that one in ten ciguatera cases are reported in these jurisdictions, based upon Ruff’s (1989) estimate for the Marshall Islands. We use also the average incidence of ciguatera in the Marshall Islands as a hazard rate for these jurisdictions.
^f Todd (pers. comm. 1997) estimates ciguatera illness costs of Can$1100 (1993 dollars) per reported case and Can$750 (1993 dollars) per unreported case.

In Table 4.1, we present HAB events for which commercial fishery impact information was obtained. Most of these events are described in further detail in Appendix A. Annual impacts vary from $13.82 to $25.88 million. Average annual impacts are $18.95 million (2000 dollars).

We estimate total commercial harvest losses during a November 1987 to February 1988 G. breve bloom in North Carolina (Tester et al., 1991) to be $8.27 million. We estimate total impacts of $17.64 million arising from the deaths of farmed Atlantic salmon killed by phytoplankton blooms in Washington in 1987, 1989, and 1990 by multiplying the market price of salmon by the weight of lost fish. Two commercial shellfishing interests, Taylor United and the Coast Oyster Company, estimate a combined $1.22 million loss incurred during a shellfish recall resulting from the detection of PSP toxins in Washington State shellfish. Several other HAB events are further clarified in the following sections.

In 1985, a brown tide bloom first appeared in the Peconic Estuary, Long Island and has reappeared since on a regular basis. The most significant economic impact was the eradication of the Peconic’s nationally significant bay scallop stocks. The Suffolk County Department of Health Services estimates that the 1982 value of commercial landings of bay scallops from the Peconic Estuary was $12.55 million (SCDHS 1992). (A multiplier may have been used to arrive at this estimate.) However, Tettelbach and Wenczel (1993), citing a report by Rose (1987), estimate the value of commercial bay scallop landings from New York waters for the years preceding the 1985 brown tide incident at a much lower level, averaging $2.60 million (2000 dollars) (Table 4.2).⁵ In the only study we are aware of that looks at lost surpluses (instead of lost sales) from a AB event, Kahn and Rockel (1988) estimate annual total consumers’ and producers’ surplus losses from the elimination of bay scallop populations in Long Island waters at a very similar level of $3.27 million (2000 dollars).

Table 4.1: Commercial Fishery Impacts*
(2000 $U.S. millions)

* Not included are unknown impacts from unexploited resources of surf clams and tellin in the Bering Sea and roe-on-scallop from Georges Bank (see the text for more detail). Key to type of harmful algae bloom: ASP = amnesiac shellfish poisoning; BT = brown tide; CFP = ciguatera fish poisoning; HAB = harmful algae bloom (not otherwise identified); NSP = neurotoxic shellfish poisoning; PD = paralytic dinoflagellate; PSP = paralytic shellfish poisoning.

Source: Tettlebach and Wenczel (1993)

Because bay scallop reseeding efforts have been unsuccessful, and actual bay scallop landings between 1986 and 1991 from New York waters were negligible in comparison with landings before the brown tide incident (Tettelbach and Wenczel 1993), we assumed the commercial fishery impact occurred every year during our study interval. We note that although the Kahn and Rockel study employs the theoretically correct methodology for valuing economic losses, the measure of lost surpluses is not compatible with the other data on lost sales that we have collected for this category. In this specific case, however, the measure of lost surpluses is almost exactly the same size as the measure of lost sales,⁶ and we use an estimate of $3.27 million for economic impacts in this fishery.

Brown tide also may have affected oyster production in the Peconic system. The estimated commercial landings of oysters in the Peconic Estuary were about $5.84 million in 1982, plummeting to less than $14,000 per year in 1987 (SCDHS 1992). However, it is unclear, first, whether these losses were due solely to brown tide and, second, whether they occurred on an annual basis. They therefore have not been included in our tabulations.

Since the autumn of 1991, the occurrence of ASP has adversely affected the primarily recreational shellfisheries for razor clams in Oregon and Washington. According to the Oregon Department of Fish and Wildlife, an average of 58,000 lbs. of razor clams (at $3.65/lb.) were harvested commercially on an annual basis before closures were imposed. This implies that potential annual harvest losses are $0.21 million for the commercial market (2000 dollars). Because the ASP events occurred during the fall season of 1991, we use 50 percent of this impact estimate in 1991 and the full impact estimate for 1992. In Washington State, the commercial harvest of razor clams was 23,103 lbs. in 1991.⁷

Ralonde (1998) estimates that the cost of PSP to Alaska in terms of lost value in commercial fisheries, closures of recreational shellfishing beds, and mouse bioassays is on the order of $10 million per year (1998 dollars). With respect to commercial fisheries impacts, Ralonde estimates 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 income in 1996 was $1.32 million (2000 dollars). Because the sales of geoducks in 1996 were approximately equal to the six-year average, we use the 1996 estimate of lost sales as an annual estimate for the period 1989-92 (the fishery began in 1989). Ralonde estimates the lost value in 1996 of tanner crabs due to BCD at $163,209 (2000 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 sales in the Dungeness crab fishery (2000 dollars).

Ciguatera impacts in Hawaii are estimated at $2.75 million per year (1994 dollars) based on the dollars per lb. of fish unmarketable due to ciguatera (Hokama, pers. comm., 1994). This estimate represents potential losses of retail sales from catches made 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 nonmarket value of recreational fishing may also be reduced. It is difficult, however, to estimate the latter impact.

In California, Oregon, and Washington, Nishitani and Chew (1988) argue that shellfishing closures due to PSP have resulted mainly in harvesting delays, and not in significant financial losses. Our discussions with several New England commercial shellfishing companies suggest that short-term closures cause few operational problems and that long-term closures cause financial losses only infrequently, e.g., once in every ten years.⁸ However, the situation may be quite different in New England because there are many more independent clam diggers who may be affected by shellfish closures (Shumway et al. 1988). This is a complex area of impact needing further investigation. Although these other impacts may exist, the only data we have at present on commercial fishery economic impacts from HABs are due mainly to exceptional events like those presented in Table 4.1.

Because of inconclusive information, Table 4.1 does not present all of the potential commercial fishery losses caused by HABs during the 1987-92 period. For Maine and Massachusetts, we tried, unsuccessfully, to infer fishery impacts from a relationship between the frequency of shellfish closures due to PSP (or numbers of shellfish samples testing positive for PSP) and annual harvest values. For example, in Maine, 1988 was the year with the greatest number of AB closures, and 1992 was the year with the least (Lewis, pers. comm., 1994). Table 4.3 presents the landed values of the four major shellfish species⁹ in Maine in those two years. Lower landed values ($12.80 million) occurred in 1992 than in 1988 ($16.20 million).¹⁰ Clearly, in Maine, shellfish closure frequency is not a good predictor of economic impacts.

Table 4.3: Landed Values of Shellfish in Maine (1988 and 1992)
(millions of dollars)

Source: Lewis, pers. comm. (1994)

A similar situation applies to Massachusetts. The Massachusetts Division of Marine Fisheries provided us with data on the state's annual PSP tests (Whittaker, pers. comm., 1994). Table 4.4 presents the number of shellfish samples tested, the ratio of the samples with greater than 80 µg/100g of PSP, and the annual commercial shellfish landing values in Massachusetts from less than 3 miles offshore for the 1987-92 period.¹¹ The years 1987-90 show the highest sample proportions of PSP contamination. However, a comparison with annual shellfish landing values fails to reveal a relationship between lower landed values and more frequent detection of PSP contaminated samples. Likewise, the numbers of contaminated samples alone do not indicate the severity or duration of HAB events.

Maine and Massachusetts officials record neither acreage closed to shellfishing due to AB events nor shoreline miles affected by HAB closures. Records of shellfish closures or openings are complex, including partial extensions of closures or the reopening of already closed areas. Further, Maine has 50,000 acres of potential shellfish beds, but 90 percent of the state's total clam harvest is produced on about 10 percent of its acreage. Therefore, we conclude that it is not feasible to estimate commercial fishery impacts reliably from closure acreage or shoreline miles affected by HABs.

Finally, the co-occurrence of high coliform counts or of shellfish sanitation problems with HABs makes it difficult to factor out the economic impacts that are due solely to HAB events. For example, samples collected from certain areas in Massachusetts in 1994 showed high PSP levels, warranting shellfish closures. However, the same areas had been closed already due to high coliform bacteria levels.

Maine oyster farmers and shellfish dealers lost $0.72 million in 1988 when their shipments of oysters tested positive for DSP by The Netherlands (Shumway 1990). However, the results of further analyses of the same shipments tested negative for DSP. Because the shipments were presumably uncontaminated, this economic impact was not included in our analyses.

Concerns are sometimes 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

Source: Whittaker, pers. comm. (1994)

the economic impacts 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 investigate fish kill events make no attempt to estimate the economic impacts of kills of trash fish. Second, the ultimate causes of fish kills often are unclear, making it difficult to attribute them to an algal bloom.¹² Fish kills can be the result of oxygen depletion (due to high fish populations, high temperatures, or HABs), disease, bacteria, nutrients, chemical spills, or some combination of these or other factors. Potential economic impacts associated with recent fish kills (primarily menhaden) attributed to the dinoflagellate Pfiesteria are not included in our estimates because of the uncertainty in attributing fish kills to this organism prior to 1992. In more recent years, the economic impact from outbreaks of Pfiesteria-like organisms has been significant. For example, Seiling and Lipton (1998) estimated that lost sales of Maryland seafood (of all types) due to a fish kill linked to Pfiesteria during the summer of 1997 amounted to $45.70 million (2000 dollars). These lost sales were due entirely to the "halo effect."

Gorte (1994) estimates that $16.10 million per year (2000 dollars) is the potential income loss due to the substantial decline in pink shrimp harvests from Florida Bay, hypothesized to be the result of a seagrass dieoff due, in turn, to blooms of blue-green algae. Using an economic multiplier, total impacts were estimated at $36.90 million. However, there is substantial uncertainty about the real causes of the seagrass dieoff and its linkage to blue-green algae (Gorte 1994; Hunt, pers. comm., 1994). Further, economic recession and foreign competition within the shrimp industry are other plausible reasons for the industry’s decline. Here again, our loss estimates do not include these uncertain impacts.

Some currently untapped fishery "resources" may have potential values that could be realized in the absence of AB 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 commercially viable. A plausible alternative reason for why these resources are untapped is that they are not now profitable fisheries. These issues are discussed in more detail below.

In Table 4.5, we report on the commercial status of Alaskan molluscan shellfish resources. Current yields are more than one million pounds per year generating approximately $4.33 million in gross revenues (2000 dollars). The status of Alaskan shellfish stocks and their commercial significance are summarized annually by the Alaska Department of Fish and Game,¹³ and they have been reviewed by Foster (1997), Schink et al. (1983), and Jewett and Feder (1981). All commercial shellfish except for the Pinto abalone, chitons, and limpets are threatened by PSP contamination (Foster 1997). Recently, some species have tested positive for ASP. Yields of razor clam, weathervane scallop, and geoduck (see below) are processed to remove portions of the animal that may be toxic. The Pacific oyster, blue mussel, and Pacific littleneck clam are cultured species for which bioassays are conducted as they are produced. Black katy chitons, fat gapers, gumboot chitons, and limpets are all subsistence fisheries for which there is no major commercial market. Historically, significant quantities of butter clams (1946) and cockles (1962) were produced off the Alaskan coast. More recently, however, only minor harvests have taken place, and, although small markets for these species exist on the west coast of the United States, it is not clear that historical levels of production could be commercially viable (Ostasz, pers. comm., 2000, 1994). A 1977 NMFS survey of the southeast Bering Sea revealed significant quantities of great Alaskan tellin clams (Lutz and Incze 1979; Nelson et al. 1979), but there is no known market for tellin in the United States.

The 1977 NMFS survey also revealed potentially exploitable quantities of the Alaskan surf clam (Spisula polynyma) in the Bering Sea. Hughes and Bourne (1981) estimate an annual maximum

sustainable yield (MSY) of 25,017 metric tons for this resource. The Alaskan discovery came at a crucial time in the U.S. surf clam market, as the mid-Atlantic surf clam (Spisula solidissima) resource had just suffered a steep decline due to an oxygen depletion event in the New York Bight, and the price of surf clams tripled during 1976 and remained high for the next ten years as the resource recovered. In 1979, Lutz and Incze (1979) valued the annual potential sustainable yield of surf clams at $28-47 million (2000 dollars). However, only small quantities of Alaskan surf clams have been harvested since the 1977 stock assessment was conducted.

The reasons for the lack of a viable Bering Sea surf clam fishery are not completely clear, but several hypotheses have been put forward. First, some of the surf clam resource has tested positive for PSP. Neve and Reichardt (1984) argued that persistent PSP was largely responsible for the non-exploitation of this resource. However, Ostasz (pers. comm., 2000), citing Hughes and Nelson (1979), notes that only a small proportion (2 out of 185 samples) had detectable levels of PSP toxin in 1978, and no samples tested positive for toxin in 1977. Because Alaska

has not "classified" the Bering Sea according to NSSP standards, harvesting the resource is currently infeasible.¹⁴

A second plausible reason for the lack of production may be that the fishery is not commercially viable (Foster 1997). Certainly, production of surf clams at the MSY level is likely to drive price down in the U.S. surf clam market, thereby decreasing the profitability of the fishery or even precluding its initiation. Further, the structure of the market may present an entry barrier into this fishery. With respect to the mid-Atlantic surf clam fishery, Weninger (1998: 755) states that: "[t]he perishable nature of the clams, scheduling of processing activities, and the need t o coordinate with downstream buyers requires tight vertical coordination between fishers and processors." Without the establishment first of a costly processing infrastructure, and considering the difficulty of distributing product from a remote location, it may be difficult for a surf clam fishery to get established in Alaska. Finally, Ostasz (pers. comm., 2000) suggests that seasonal closures might be imposed on a potential surf clam fishery to protect juvenile spawning grounds for King crab. It is possible that the timing or area coverage of a closure would increase the cost of surf clam fishing to levels that might not support a fishery.

Finally, there has been concern expressed over the potential impacts on walrus stocks from the harvesting of Alaskan surf clams, which are an important food source for walrus (Stoker 1979 as cited by Foster 1997). This concern might express itself in opposition from environmental interests should a commercial operation be initiated. The Alaskan Eskimo Walrus Commission has the responsibility for protecting surf clam resources in walrus habitat (Ostasz, pers. comm. 2000).

Even in the face of uncertain business factors and potential environmental opposition, reports continue to surface stating that a $50 million Alaskan surf clam resource is precluded by HABs. We do not have critical information on the cost of producing Alaskan surf clams, but we can hazard a rough estimate of the economic impacts associated with a hypothetical Bering Sea fishery. To accomplish this, we make the following assumptions:

• The only obstacle to commercialization of the Alaskan surf clam resource is the potential presence of shellfish poisoning (PSP or 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)resources at estimated MSY levels is likely to affect the price of surf clams in the U.S. market (by driving it down);
• There is no expansion of existing demand such 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 clam fishery on Georges Bank s financially viable and produces at the 1988 level 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, Georges Bank, and mid-Atlantic surf clams will all be too high. To arrive at a more realistic price, we adapt and modify the specification embodied in a demand model for the mid-Atlantic surf clam fishery which was developed by Armitage (1985).¹⁵ We fit the model using monthly data from 1991-98 to estimate updated parameters that describe how the price of surf clams varies with the quantity supplied to the market (and other related variables).¹⁶

The results of this analysis are presented n 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 Georges Bank surf clams at the 1988 level (the latter only for the years of closure: 1989-92). We then use this price to calculate the potential "lost" gross revenues for both Alaskan [column (F)] and Georges Bank [column (G)] surf clams due to HABs closures.

Note that the "gain" to the Alaskan and Georges Bank surf clam fisheries actually results in a decline in gross revenues in the mid-Atlantic fishery (compare column [E] with column [C]). In order to calculate the "net" contribution to gross revenues n the national surf clam market that results from expanded supply, we apportion¹⁷ the reduced gross revenues in the mid-Atlantic

Table 4.6: Estimated "Net" Gross Revenues Arising from Opening he Alaskan and Georges Bank Surf Clam Fisheries
(2000 dollars; gr rev = gross revenues)

fishery across both the Alaskan (column [I]) and Georges Bank column [J]) fisheries. Note that this apportioning is conducted purely for accounting purposes at the national level. For example, in 1987, the gross benefit to Alaska of a surf clam fishery is roughly $23 million, but the contribution of an Alaskan fishery to the nation, given that demand is downward sloping, is only about $6 million.

In 1990,the decline in gross revenues in the mid-Atlantic fishery is so substantial, that the "net" contribution to total U.S. gross revenues from landings in the other fisheries is negative. During the study period, the average HABs-related loss in gross revenues to the hypothetical Alaskan surf clam fishery is approximately $6.16 million and to the hypothetical Georges Bank surf clam fishery is $0.16 million (2000 dollars). We believe that these are much more realistic estimates than the $50 million that is typically discussed.

The Georges Bank surf clam fishery has been closed since 1989 due to high PSP levels. Assuming this is a viable commercial fishery, the opportunity costs of closing the fishery could be viewed as an estimate of the economic impacts of HABs. In 1990, the combined New England and mid-Atlantic surf clam quota allowed by NMFS was 230 metric tons, valued at only $2.94 million (2000 dollars). Note that because individual surf clam quotas are not site-specific, fishermen can switch at low cost to other regional locations, e.g., offshore New Jersey. As explained in section 4.2.1, we estimate average annual economic impacts to be $0.16 million (2000 dollars).

The traditional offshore scallop fishery in the U.S. sector of Georges Bank has not been affected by HABs because the product, the scallop adductor muscle, does not concentrate PSP toxins. However, the potential may exist for the development of a "roe-on-scallop" fishery (adductor muscle with the gonad attached), because this product is highly regarded in much of the world. The roe can accumulate PSP toxins, so such a fishery would be affected by the presence of the toxins. A fishery for roe-on-scallops has existed in the Canadian sector of Georges Bank since the late 1980s. The fishery is relatively small, involving about 5,000 lbs. of roe-on-scallop landings per week (K. White, pers. comm., 1998). The fishery was closed from about 1992 to 1994 because of high levels of PSP toxins. The roe-on scallops are not marketed in Canada but are sent overseas, bringing in substantially more revenue per pound than the adductor muscle alone does (K. White, pers. comm., 1998).¹⁸

It is unknown to what extent a similar roe-on-scallop fishery would be commercially viable in the United States sector of Georges Bank. There is insufficient information about the international demand for the product or of the logistics and expense of toxin testing protocols. We therefore do not consider it meaningful to assess the economic impact of lost opportunities in this fishery because of the lack of quantitative information. Nevertheless, it is conceivable that shellfish poisoning is restricting the development of a U.S. roe-on-scallop fishery.

This study focused on the years 1987-92, yet there were a number of significant events in other years that demonstrate the magnitude of the impacts that are possible. For example, in 1976, New Jersey suffered an extensive oxygen depletion event in which HABs were implicated in part. A confluence of oceanographic, hydrologic, and meteorological factors led to a bloom of the dinoflagellate Ceratium tripos, which resulted in anoxic conditions and the formation of hydrogen sulfide in the bottom waters of the New York Bight. The bloom affected sedentary commercial stocks of surf clams, ocean quahogs, sea scallops, and some finfish and lobster. Lost sales from harvests during 1976 and for five to seven years into the future (for scallops and surf clams respectively) were estimated. The largest impacts by far occurred in the surf clam market. Impacts in the downstream processing and marketing sectors were estimated using a multiplier of 2.5. Total lost sales in all sectors combined were estimated to be $1.33 billion in 2000 dollars (Figley et al. 1979).

In September 1980, the entire Maine coastline was closed to shellfishing because of a bloom of the dinoflagellate Alexandrium tamarense, a source for PSP toxins. Harvest losses from this event were estimated at $5.04 million, and total economic impacts were estimated to be $15.10 million, using a multiplier of 3 (2000 dollars). Also in 1980, California, Oregon, and Washington closed oyster harvesting for one month due to PSP toxicity, resulting in losses to commercial oyster growers in these states of $1.31 million (Nishitani and Chew 1988). In 1986, a red tide of Gymnodinium breve event in Texas caused the loss of $2.22 million in oyster production, resulting in estimated economic impacts of $6.00 million (2000 dollars) (Texas Shores 1987).

In 1997,a bloom of Pfiesteria occurred in several Chesapeake Bay tributaries. The bloom resulted in the deaths of from 30-50,000 menhaden. After medical testing of fishermen who complained of an array of physical and neurological problems, the Governor of Maryland acknowledged the human health risk associated with Pfiesteria and closed several Chesapeake tributaries to recreation and fishing (Bowman 1997). Although the state later spent half a million dollars on a promotional effort to counteract the scare, demand for seafood from the state of Maryland shrank significantly during the autumn of 1997. Lipton (1999) estimates $45.70 million in lost seafood sales to Maryland producers that can be attributed directly to the 1997 Pfiesteria scare (2000 dollars).

In 1991, a federal government study estimated that saltwater anglers spent an average of $562 per angler, totaling $5 billion (1991 dollars) for travel, food, lodging and equipment (DoI and DoC 1993, Appendix D). When compared with the total U.S. domestic landings of commercial finfish and shellfish ($3.3 billion in 1991), total recreational expenditures can be seen to be 67 percent greater than commercial fish landings. However, to date, the economic impacts of HABs on recreational and tourism activities have been given little attention relative to the impacts on commercial fisheries.

Although many experts argue that the impacts of HABs on recreation and tourism are important and potentially large, there are few available data describing the size of the impacts (Table 5.1). Our estimates of the economic impacts on recreation and tourism during the 1987-92 period range from zero to $29.30 million. The annual average is $6.63 million.

Table 5.1: Recreation and Tourism Impacts
(2000 $U.S. millions)

The overall impacts from a 1987 HAB event in North Carolina have been "conservatively" estimated at $37.57 million (2000 dollars) (Tester et al. 1988). This estimate includes neither the public health impacts nor monitoring and management costs. Because the losses to commercial fish harvests from this incident were estimated at $8.27 million, we can attribute the remaining $29.30 million to recreation and tourism impacts. The estimated tourism and recreation impacts of the incident amounted to only 1.9 percent of the $1.52 billion (2000 dollars) generated by combined hotel, lodging, amusement and recreation services in the entire state of North Carolina in 1986.¹⁹ Nevertheless, we expect that the ratio of economic impacts to measures of county productivity in the four impacted coastal counties is much larger. However, as tourists redirected their vacation destinations, negative impacts that occurred in these four counties are likely to have been counterbalanced by positive impacts in other counties, in North Carolina and elsewhere, thereby mitigating aggregate impacts at the state or regional level.

Another major HAB event that affected recreation and tourism activities occurred in Oregon and Washington during 1991-92. In October 1991, these states closed their primarily recreational razor clam fisheries because of ASP contamination. In Oregon, prior to the closures, roughly 67,000 trips per year were taken for recreational shellfishing of razor clams (Radke, pers. comm., 1994). On average, recreational shellfishermen spend $30.51 per trip (2000 dollars). Therefore, we estimate the 1992 economic impacts of the razor clam shellfish closure to be $2.04 million. We assume that the 1991 impacts were a little more than one-half of this amount, $1.05 million, because the onset of ASP contamination occurred during the fall of 1991.

In Table 5.2, we present the numbers of recreational shellfishing trips in Washington State for razor clams during the spring and fall seasons before and after the outbreak of ASP (Ayres and Simons 1993, 1992). The number of trips in the fall of 1991 fell by 21,333 compared with the three-year average prior to the ASP event. In 1992, the combined number of trips made during the spring and fall seasons was smaller by 220,666 compared with the three-year average. Using an estimated average per trip expenditure of $30.51 for recreational shellfishing, we estimate the impacts on recreation and tourism to be $0.66 million and $6.72 million in 1991 and 1992, respectively.

Table 5.2: Washington State Recreational Shellfishing Trips for Razor Clams
(before and after October 1991 ASP event)

* Fall 1991 season was cut short.
Source: Ayres and Simons (1993, 1992)

Many experts consider the economic impacts of HABs on commercial fisheries to be minor in contrast with the size of the impacts on recreation and tourism. This is believed to be the case in Florida, where Habas and Gilbert (1975) estimated the economic damage to the tourist industry of a summer 1971 Gymnodinium breve red tide event at more than $68 million (in 2000 dollars). Gymnodinium blooms have occurred after 1971, but there have been no attempts to estimate economic impacts. The most significant impacts occurred in the hotel, restaurant, amusement, and retail sectors. As with the North Carolina red tide event, we need to be careful in interpreting these damage estimates. Undoubtedly some tourists spent their monies at other tourist destinations in Florida or other states.

When kills of "trash" fish result from an HAB, there is no commercial fishery impact, but dead fish can substantially reduce the recreational "experience" of visitors to these beaches. In Texas, a severe HAB event was reported during the period from August to October 1986. Most of the dead fish from this event were either trash or "underutilized" fish, but many of these washed up on beaches, where they decayed. According to Texas Shore magazine (1987), this event resulted in economic impacts on tourism and seafood sales. However, the gross impact was minimized because the economy of many Texas coastal communities was already depressed. In fact, sales tax proceeds from ten affected coastal counties for the months affected by the HAB indicate only small overall impacts when compared with tax proceeds the year before.

Although we expect some level of economic impact from an AB event, the anecdotal evidence sometimes can be contradictory. As an example, from May 1990 until recently, a brown tide developed and then persisted for over 7 years in the Laguna Madre, along the southern coast of Texas. Some professional sport-fishing guides reported that they lost many customers, but others say that customers are still catching fish by changing fishing methods to cope with a change in the water's transparency level. (Water was clear before the outbreak, so "sight casting" was possible). The Texas Parks and Wildlife Department reported that their monthly fish stock assessments indicate the same abundance of adult and juvenile fish in the Laguna Madre when compared with the situation prior to the brown tide, and their sport harvest surveys reveal unchanged levels of sport fishing catches (Spiller, pers. comm., 1994). The Laguna Madre system had suffered two unusually hard freeze seasons, causing widespread fish kills prior to the onset of the brown tide. Sport fishermen may have bypassed the Laguna Madre because of poor fishing results at those times.

In Massachusetts, local residents expressed several different opinions about the economic impacts of a slimy, dark-brown macroalgae, Pillayella litoralis. Since 1987, the recurrent accumulation of Pillayella in Nahant Bay and Broad Sound has been attributed to eutrophication of Massachusetts Bay by the press and the general public, but this may be more easily related to a unique hydrographic mechanism which carries this alga to shore and concentrates it on one particular shoreline location. Pillayella’s abundant growth interferes with swimming, and it generates a sulfurous, "rotten-egg" odor as it decomposes on beaches. The property values of houses in the area could be reduced by the existence of these algae on beaches and their smell. However, this effect was both variable and uncertain. One Nahant realtor told us that prices of some of the houses she sold were depressed because 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 problem (1994 dollars). A second realtor did not think property values were affected at all, and a third believed that there was a negative effect, but that because the housing market had been depressed for some time, the actual sales data do not show an impact.

Macroalgae may also negatively affect recreational activities. One local Nahant resident told us that the presence of Pillayella resulted in no differences in beach attendance rates. However, observations of identical numbers of beach-goers does not necessarily imply that there has been no recreational impact, because when beach or fishing conditions deteriorate, each recreationist’s personal "enjoyment" may decline. Therefore, it is important to know by how much recreationists value certain environmental conditions, instead of focusing on only the participation rate.

Efforts to measure these types of recreation and tourism impacts must be undertaken at the local level because local environmental and socioeconomic conditions are critical determinants of changes in recreational benefits. Moreover, in their valuation attempts, analysts also should incorporate the existence of substitute beaches or other recreation areas where tourists can visit. Even if certain areas are affected by HABs adversely, recreationists may be able to visit other nearby areas that offer similar recreational amenities. In such a case, regional economic impacts may be minimal.

In Table 6.1, we present our findings about the costs of monitoring and managing HABs. Annual average monitoring and management costs total $2.09 million (2000 dollars) in the United States. We were able to obtain annual estimates of monitoring and 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, such as Texas, do not have a regular monitoring program for PSP or HABs. It is often the case that water monitoring tasks, including PSP testing, are spread across different divisions of state government, making it difficult to collect data on costs (Langlois, pers. comm., 1994). Further, monitoring activities for both HABs and other water quality testing, such as shellfish sanitation, often are conducted by the same experts. Consequently, it is difficult to factor out those costs related specifically to HAB monitoring and management.

In addition to the annual monitoring and management costs incurred by coastal states, we report other categories of costs in Table 6.1. For example, in Massachusetts, BlueGold Mussels, Inc. spent approximately $6,000 per year (1994 dollars) conducting PSP tests on their own shellfish products. We also present other estimates of the costs of monitoring or management related to one-time or infrequent events including: survey and investigation costs for two specific AB events in New Jersey (Olsen, pers. comm., 1994); the cost estimate for a 3-month NSP event on Florida's west coast (Roberts, pers. comm., 1994); and the ASP tests during the spring of 1994 in Washington (Simons, pers. comm., 1994).²⁰

Our estimate for monitoring and management costs in Florida includes the annual costs of beach cleanups on the southwest coast of Florida. These costs are currently incurred primarily by each of the eight counties along that coast. We have collected recent (1995-97) estimates of the costs of beach cleanups for Sarasota County (Conn, pers. comm., 1998). These costs average $56,592 per year (current dollars), and they apply to the cleanup of dead fish due to HAB events and to the collection and disposal of red seaweed that washes up during storms. A significant portion of the annual costs is the tipping fee. We divide this average cost by the number of miles cleaned (17.5) in Sarasota County to develop a per mile cleanup cost. We assume that approximately 50 miles of the 200-mile southwest coast of Florida are cleaned each year, accounting for the patchiness of red tide events and the difficulty of accessing certain areas of the coast. The result is an estimate of the cost of beach cleanups for AB events and washed up seaweed of about $162,500 per year (1998 dollars). Further research will allow us to refine that estimate. Note that Habas and Gilbert (1975) estimated the cleanup costs for a 1971 red tide event to be approximately $755,211 in 2000 dollars.

Table 6.1: Annual Average Monitoring and Management Costs
(2000 $U.S. thousands)

Table 7.1 (which reproduces Table ES-1), s a compilation of our estimates of the annual aggregate economic impacts (in millions of 2000 dollars) of HABs in the United States during the 1987-92 period. For each of the four main types of impacts, we present both the ranges of annual estimated impacts during the 1987-92 study period and average annual estimated impacts. Public health impacts are the largest component, representing about 45 percent of total average impacts at more than $22 million annually. Impacts from ciguatera poisonings are the largest element of those public health impacts. Commercial fisheries impacts are the next largest component, representing 37 percent of total average impacts at more than $18 million annually. Recreation/tourism impacts account for 13 percent of total impacts at nearly $7 million annually. Monitoring/management costs represent only 4 percent of the total at more than $2 million annually. It is important to note that expenditures made to improve monitoring and management likely resulted in decreases in impacts in the other categories.

We also present an estimate of capitalized impacts. Assume that our estimates of impacts will occur on an annual basis over the next 15 years. Discounting these annual losses at a rate of 7 percent and summing the discounted losses results in an estimate of capitalized impacts. Our estimate of 15-year capitalized average impacts is $449 million.

During the 1987-92 period, total annual impacts fluctuated widely (except for monitoring/management costs). This reflects the irregular occurrence of HAB events, which in turn vary dramatically with respect to the magnitude of impacts. We expect that coastal communities and industries are able to manage recurrent (i.e., expected or "predictable") outbreaks reasonably well, thereby limiting their economic impacts (Shumway et al. 1988). However, outbreaks of unexpected or unusual blooms may tend to cause more severe economic impacts (Bicknell and Walsh 1975; Egan 1990; Tester et al. 1988).

The estimates reported here represent a preliminary approximation of the economic costs to the United States from the occurrence of HABs. The fact that these estimates are uncertain or approximate is not due to lack of effort, but rather to the difficulty in assigning impacts 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 inadequacies and the large size of the US coastline, the AB events on which this analysis is based are a subset of all outbreaks that occurred during the 1987-92 window. Consequently, our aggregate economic impact underestimates the actual impacts. A second qualification is that, although we report on economic

Table 7.1: Estimated Annual Economic Impacts from Harmful Algal Blooms (HABs) in the United States
(Estimate is of 1987-1992 period, reported in 2000 dollars)

impacts, we did not use economic multipliers. Thus, our estimates reflect only the direct effects of HAB events, ignoring indirect and induced effects on other sectors of the economy. Again, this conservative approach leads to underestimates of the true impact.

Human sickness and death from eating tainted seafood results in lost wages and work days and pain and suffering. Costs of medical treatment and investigation are also an important aspect of the economic impact caused by such events. We know that a substantial number of illnesses caused by HABs remain unreported. In the absence of a reliable method for estimating the actual number of illnesses, we adopted conservative "rule-of-thumb" factors from several experts in the field. Further, we used estimates developed by Todd of the costs of shellfish and ciguatera poisoning -- estimates that are smaller, by an order of magnitude, than generic estimates of nonfatal illness costs emerging from studies of job risks.

Our public health impact estimates are dominated by ciguatera illness and treatment costs, but these estimates are low because ciguatera poisoning also occurred outside of the areas we surveyed as a result of exports of tropical fish to other jurisdictions. In addition, we have been unable to include either the costs of insurance to cover potential ciguatera-caused liabilities or the court costs associated with ciguatera-related litigation.

Commercial fisheries impacts underestimate true loss is due to HAB events because they do not include PSP closures in several states, including Maine and Massachusetts, where it was not possible to document the acreage closed or the value of the resource that was not harvested during PSP outbreaks. These states are examples of the case where the price of shellfish may increase when landings are lowered due to closures. Indeed, the economic impact estimate from harvesting closures (basically the increased value of output), would appear to be positive -- a counterintuitive result. Although some shellfishermen may benefit from price increases, consumers unambiguously lose. These losses are not included in our economic impact estimates, because once again, it is difficult to quantify them. Furthermore, our estimates do not include the costs of wild fish kills, because the value of those fish is not known in most cases.

Another factor that leads to an underestimate of impacts is the economic loss from blooms of Pfiesteria or Pfiesteria-like organisms that have not been included in our totals. Although recent Pfiesteria blooms have been shown to have major economic halo effects in Maryland following an outbreak in 1997 (Seiling and Lipton 1998), the organism had not been identified during the early portion of our study period, and even after it was first linked to massive fish kills, no estimates could be obtained of the economic loss s associated with those events. In part this reflects the difficulty in attributing causality to past fish kills and in assigning economic value to wild fish.

Yet another conservative aspect of this study is that some currently untapped fishery resources have values that might be realised 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 toxicity and the logistics of sampling distant or remote resources (Neve and Reichardt 1984), and a potential roe-on scallop fishery on Georges Bank.

Finally, although many experts argue that the impacts of HABs on recreation and tourism are important and potentially large, there are few available data describing the size of the impacts. For example, reduced tourism and lowered residential real estate values on the Gulf Coast of Florida are two types of impacts that are likely to be large but for which we currently have no data.

In addition to economic impact estimates, we made several important findings about the current state of available information and the need for improvements in the data collection process. First, the reporting practice of HAB events needs to be expanded and the format formalized. At present, information about HAB events is fragmentary and incomplete in its coverage. HAB data are compiled on an annual basis by the U.S. National Office for Marine Biotoxins and Harmful 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 Bloom Dynamics, which has entered them into an international database called HAEDAT (Harmful Algal Events Database), maintained by the IOC HAB Science and Communication Centre in Vigo Spain. However, the data collection effort within the different reporting regions of the US relies on volunteer efforts by academic and government scientists as well as government officials, and thus tends to be uneven in coverage and detail. Efforts are underway to standardize the data collection process, but even with those changes, it is clear that these individuals cannot provide the type of information needed for economic impact assessment. At the least, the duration, affected acreage or shoreline length, average toxicity levels, and values of affected coastal resources should be documented for each bloom in order to describe the overall economic significance of the incident. In addition, local and state governments should place much higher emphasis on quantification of economic impacts. Economic impacts are usually specific to local environmental and socioeconomic conditions, and local officials are therefore the ones who need to compile the information which can later be analyzed by economists. Until local governments become capable of supplying site-specific impact information for each bloom incident, truly comprehensive and detailed national level aggregation of such impacts cannot be realized.

Second, we note that some economic information is available on economic impacts to fisheries resources or to human populations exposed to HABs, but there is a significant lack of available information about recreation and tourism impacts. This could b a significant but 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, because there are often other possible explanations for mortality events. Finally, economic factors that are used to generate the impact estimates should be reported. These factors include whether or not an economic multiplier is used; local economic recession or prosperity trends; and foreign and domestic seafood competition factors.

Here we offer the first effort to compile an estimate of the economic impact of HABs in the US. The data generated are of interest and use, but it is also of note that the process of collecting, compiling, and analyzing that data revealed areas where changes are needed. This includes changes in the reporting process, as well as the development of new approaches to the assignment of impacts to certain types of events or situations (e.g., the evaluation of unexploited fisheries, or the losses associated with quarantine or harvesting restrictions).

Overall, the economic impacts from HABs are diverse and large. Even with the highly conservative treatment given the impacts in this study, the annual costs are significant. Average annual costs also tend to mask the significance of individual HAB events, some of which greatly exceed the annual average for the entire country. Perhaps more importantly, HABs are recurrent, and show signs of increasing as 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 reverse this trend and to reduce the annual impacts.

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This Appendix is a summary of harmful algal bloom incidents reported informally from coastal states to the National Office for Marine Biotoxins and Harmful Algal Blooms at the Woods Hole Oceanographic Institution for the 1987-1992 period.

ALABAMA

ALASKA

* Events of only water discoloration and toxicity detection at uncertified areas without any adverse effects were excluded.

CALIFORNIA

* Toxin levels below the alert level (80 µg/100g) or high levels within the California annual quarantine period (May 1-Oct 31) were excluded. These events did not lead to any special management actions.

* Water discoloration events were not entered.

CONNECTICUT

FLORIDA

* Sep, 1992: Dead fish (from Pinellas to Lee Co.) on beaches (mostly grunts, pinfish and grouper) and 1/4 to 8 miles offshore (catfish, flounder, hogfish, eels, grouper, pinfish, grunts, spadefish, filefish, damsels, angelfish, silver trout, batfish, and other baitfish).

* Nov, 1992: Dead fish - Sarasota and Manatee Co. beaches.

MAINE

MASSACHUSETTS

* The important offshore scallop fishery (Georges Bank) has not been affected by the PSP toxicity problem because this fishery utilizes only the adductor muscle, which remains toxin free, or nearly so.

* Georges Bank is an open ocean environment, 100-200 miles from the nearest land (Cape Cod).

NEW HAMPSHIRE

NEW JERSEY

* Nuisance blooms have occurred only occasionally (usually localized) at Shark River, a relatively small estuary. Occasional red tides in the adjacent coastal waters have had greater adverse impact (i.e., complaints of respiratory irritation by bathers)--occurrences were in 1968, 1972, and 1980-82.

* Water discoloration incidents were excluded.

NEW YORK