Subtask 3c

Subtask 3c

Cost-Benefit Analysis on the simulated technical innovations

SubTask leader

Partners involved

A short-term economic analysis on the cost of upgrading to less fuel intensive towed gear for each of the pilot studies defined under Task 2 will be carried out through a CBA. CBA generically indicates a set of valuation techniques for investment projects based on the measurement and comparison of all costs and benefits directly and indirectly linked to the investment. 

This CBA is aimed to measure the economic impact realistically expected by a vessel owner, who wants voluntarily to implement one of the technical innovations defined under Task 2. This evaluation is based on an individual investment decision by a single vessel owner, which is assumed to have a negligible impact on the biomass of the exploited stocks. The CBA will cover a number of years sufficient to estimate the operational savings from the new gear and assess the time needed to absorb the initial economic investment. As biomass is assumed to be constant over time, this CBA can be considered as a short-term analysis. 

The use of a new gear more efficient in terms of fuel consumption would reduce fuel costs and increase fisheries profitability. However, the new gear could have an impact on the catch rates, reducing productivity in both physical and economic terms. Reductions in productivity could affect indirectly also the labour costs and other cost variables. The final impact on profitability will be measure through the CBA considering all positive and negative effects of the implementation of the new gears. 

Data for the CBA will be collected under Subtask 3a and Task 2. Subtask 3a will provide data to define the costs and revenues structure of the fleet segments representing the vessels operating in the fisheries analysed by the pilot studies under Task 2, while the pilot studies will provide data on the initial investment and the variations expected by the implementation of the technical innovation in fuel consumption, landings amount and composition by stock, and other relevant variables. 

The CBA will produce a set of profitability indicators for each pilot study, which will be presented and discussed with stakeholders.