This brief pertains to preliminary results of the Sunken Billions Revisited, shared in 2015. For an updated analysis and link to the final report, please see the 2017 Press Release.
In 2009 the World Bank, in collaboration with FAO, published The Sunken Billions: The Economic Justification for Fisheries Reform. By explicitly quantifying the potential economic benefit forgone in global marine fisheries, this publication underscored the urgency of improving marine fisheries governance and generated momentum toward restoring overexploited fish stocks and transforming marine fisheries into a basis for economic growth around the globe.
The World Bank is currently updating the original Sunken Billions estimate, which was based on global fisheries data from 2004. This update is based on 2012 data and uses a refined estimation methodology. The full report is forthcoming, but this brief summarizes preliminary results that have already emerged from the new study.
Estimating the Sunken Billions
The Sunken Billions Revisited is based on the same essential methodology as the original study. It consists of three components: 1) a bio-economic model of the global fishery, 2) empirical estimates of the inputs required for the bio-economic model, and 3) numerical procedures for calculating outputs of interest.
The main steps of the Sunken Billions estimation are:
- Estimate the current net economic benefits from the global marine fishery.
- Estimate the potential net economic benefits, achieved after overexploited fish stocks have recovered and fishing efforts have been adjusted to sustainable optimal levels.
- Calculate the difference between current and potential net economic benefits, which constitutes an estimate of the Sunken Billions, that is, the forgone annual economic benefit or the annual economic loss that an optimally-managed global fishery would be able to avoid.
Magnitude of the Sunken Billions
In the process of updating the Sunken Billions estimate, it was found that the original study probably underestimated the biological productivity of the ocean fish stocks and that the fish price used in the estimation was too low. Accordingly, the economic loss in 2004 was re-estimated using revised model inputs and the improved version of the bio-economic model developed for the current update. The preliminary result of re-estimation revealed that the original estimate was too conservative: the estimated Sunken Billions in 2004 is closer to US$72 billion, rather than the US$52 billion originally reported. Expressed in terms of 2012 prices, the revised Sunken Billions estimate for 2004 amounts to US$87 billion.
The preliminary Sunken Billions estimate for 2012 is about US$83 billion (in 2012 prices). This estimate, as is the case for the 2004 estimate, is naturally subject to uncertainty. Considering the uncertainty regarding the available data and bio-economic modeling assumptions, there is a reasonable degree of confidence that the true value falls between US$51 and US$105 billion.
According to the new results, the global marine fishery could achieve its maximum economic potential by reducing aggregate fishing effort by some 44 percent relative to the fishing effort in 2012. This would eventually more than double the fishable biomass and increase the sustainable global marine harvest by almost 13 percent compared to the level in 2012. The recovery of fish stocks would also increase the proportion of high-value fish in the catch, raising the average unit price of fish by about 24 percent.
As illustrated in Figure 1, the largest source of the estimated Sunken Billions of US$83 billion in 2012 is the unnecessarily high cost of fishing due to excessive fishing effort and depressed fish stocks. This single item represents over half of the total economic loss. The reduced average price of landed catch, due to disproportionately diminished landings of high-value fish and reduced quality of landed catch, represents about one-third of the loss; while reduced harvest levels due to reduced global fish populations account for the remainder.