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APPENDIX I Resource Dependency and Community Vulnerability Resources of great commercial, subsistence, and natural value are at risk from spills of oil and other hazardous substances in the Aleutian Islands. These resources have economic and other significance for the people of the Aleutians, Alaska, the United States, and, arguably, the world. In some cases their value is easy to measure economically; an example is the Bering Sea–Aleutian Islands whitefish fishery, the largest in the world. The method used to calculate this value, called market valuation, is based on the use of market prices. Other values are more difficult to capture in economic terms, and so-called “nonmarket” value estimation techniques must be used. For exam- ple, the nutritional and cultural values of subsistence fisheries and other marine resources are difficult to reduce to dollars and cents, as those heavily engaged in subsistence activity have “income” of a nonmarket variety and enjoy other difficult-to-quantify benefits of cultural significance. The Alaska Maritime National Wildlife Refuge encompasses many of the region’s extraordinary resources of natural and bio- diversity value. The importance of these resources can be mea- sured by the calculation of an “existence” value. Existence values are derived through random sample surveys employing appropriately framed questions to identify individuals’ willingness to pay for the resources in question. This valuation technique, known as contin- gent valuation, was used to estimate the economic value of dam- ages caused by the Exxon Valdez oil spill. Those studies estimated 216

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Resource Dependency and Community Vulnerability • 217 that the “aggregate lost passive use value” (the American public’s willingness to pay to prevent another Exxon Valdez–type spill under the scenario laid out in the survey) ranged from $2.8 billion to $7.19 billion (in 1990 dollars) (Carson et al. 2003). The relatively wide variation of such estimates underscores the uncertainty inher- ent in decisions about which models to use in extrapolating survey results to conclusions about values of the general population through techniques such as contingent valuation. It is also important to consider future or potential values that have not yet been assigned to the natural resources of the region. Biodiversity harbored in the marine waters of the Aleutian Islands may have future economic value that is not understood today. For example, yet-to-be-discovered compounds extracted from marine organisms could have value in treating human disease. Indeed, new species continue to be discovered in Aleutian waters not yet explored, some of them close to shore (Dutch Harbor Fisherman 2007). Because such future values are uncertain today, economists call them option values. They are not distinct from the other types of values described above, but they have resonance with people today that depends on how future conditions are likely to affect the avail- ability of the resources, as well as people’s income level and attitudes about risk (NRC 2004). Common today is the practice of recognizing “ecological goods and services” provided by particular ecosystems or resources as essential to supporting human life and thereby having economic value. As the recent United Nations–sponsored Millennium Ecosystem Assessment showed, the planet’s ecosystems are sources of numerous essential ecological goods and services of value to humankind in supporting life (MEA 2005). Thus the Aleutians are not only rich in biodiversity but also relatively unexplored, and they could provide economic and other benefits to society that as yet are undiscovered. The region’s commercial fishery is by far its greatest source of stan- dard economic value. The Bering Sea–Aleutian Islands groundfish fishery has an estimated wholesale value of more than $2 billion per year, while the crab fishery represents an additional $300 million to $500 million per year. Together they make up the largest fish- ery in the world, with hundreds of thousands of tons landed per year (Sepez et al. 2003). As noted in Chapter 3, landings in Dutch Harbor had a value in 2006 of $162 million, the second-highest value and the highest volume of landing of any U.S. fishing port, and gen-

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218 • Risk of Vessel Accidents and Spills in the Aleutian Islands erated thousands of jobs in the seafood industry. The dominance of seafood-related employment, however, is not limited to Dutch Harbor; a significant portion of the ownership of Bering Sea– Aleutian Islands vessels and fish processing is based in Seattle. Thus, catastrophic events affecting Dutch Harbor would likely have much broader consequences in the northwest Pacific, and indeed in the nation. In addition, the income derived by migrant laborers from fish processing is of great value in the foreign nations from which many of these workers come. The phenomenon of circular migration is of substantial economic importance to many developing nations. Because of the diversity and geographic distribution of fisheries in the Aleutians, there is considerable economic and subsistence value dispersed throughout the region. On the commercial side, valuable individual quotas are held in the halibut fishery, and a system of com- munity development quotas (CDQs) in the crab, pollock, halibut, and Pacific cod fisheries provides a mechanism for allocating income to shareholders in participating coastal communities through desig- nated CDQ groups. Again, because a high proportion of local harvest vessels and processing facilities is owned by interests out- side of Alaska, incidents that harm the industry are likely to have reverberations far beyond the Aleutian region. In addition, the fish- ing industry provides revenues that support a high quality of life in Unalaska and Dutch Harbor, one that would be threatened in the event of a spill resulting in the closure of fisheries, as was evident in the Exxon Valdez oil spill of 1989 (Ritchie and Gill 2007). Even if there is no contamination, fisheries can be closed, with substantial loss of income due solely to the perception of contamination (Alaska Oil Spill Commission 1990). The above discussion illustrates a high level of resource depen- dency on commercial and subsistence fisheries in the Aleutians— conditions that translate into local populations that are highly vulnerable, both socially and economically. Events such as oil spills can threaten the resource base on which community health and well- being depend, creating social vulnerability. Vulnerability refers to “inherent characteristics of a system that create the potential for harm but are independent of the probabilistic risk of occurrence of any particular hazard or extreme event” (Sarewitz et al. 2003, 805). It is important to consider vulnerability separately from risk. The concept highlights the importance of considering both event risk

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Resource Dependency and Community Vulnerability • 219 (e.g., the occurrence of large spills) and outcome risk (e.g., the loss of access to important subsistence resources or the closure of seg- ments of commercial fisheries on which the whole community or significant subgroups depend). Communities reduce their vulnerability by investing in strong social institutions with the capacity for learning and adaptation. Robust institutions have the ability to facilitate major transforma- tion should this become necessary to lessen resource dependency and enhance community resilience (Adger 2000). Subgroups within a resource-dependent community with little political influence (entitlement) or few resources (endowment) may prove less adapt- able than the community at large, possibly leading to social justice concerns. Ritchie and Gill (2006) illustrate the many ways in which unfortunate events such as oil spills can result in outcomes that lower community resilience. An important finding in social studies of com- munities that experience natural or technology-induced disasters is that under some circumstances, communitywide patterns of stress can develop that permanently alter a community’s sense of itself. Such impacts are difficult to quantify and easily overlooked. REFERENCES Abbreviations MEA Millennium Ecosystem Assessment NRC National Research Council Adger, N. 2000. Social and Ecological Resilience: Are They Related? Progress in Human Geography, Vol. 24, No. 3, pp. 347–364. Alaska Oil Spill Commission. 1990. Spill, the Wreck of the Exxon Valdez: Implications for Safe Transportation of Oil. Final report. Juneau. Carson, R. T., R. C. Mitchell, M. Hanemann, R. J. Kopp, S. Presser, and P. A. Ruud. 2003. Contingent Valuation and Lost Passive Use: Damages from the Exxon Valdez Oil Spill. Environmental and Resource Economics, Vol. 25, pp. 257–286. Dutch Harbor Fisherman. 2007. Divers Find New Species in Aleutian Waters. Vol. 15, No. 49, Nov. 8, p. 16. MEA. 2005. Ecosystems and Human Well-Being: Biodiversity Synthesis. NRC. 2004. Valuing Ecosystem Services: Toward Better Environmental Decision- Making. National Academies Press, Washington, D.C. Ritchie, L., and D. Gill. 2006. The Selendang Ayu Oil Spill: A Study of the Renewable Resource Community of Dutch Harbor/Unalaska. Quick Response Report 181. Natural Hazards Center, University of Colorado, Boulder.

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220 • Risk of Vessel Accidents and Spills in the Aleutian Islands Ritchie, L., and D. Gill. 2007. Social Capital Theory as an Integrating Framework for Technological Disaster Research. Sociological Spectrum, Vol. 27, pp. 1–26. Sarewitz, D., R. Pielke, Jr., and M. Keykhah. 2003. Vulnerability and Risk: Some Thoughts from a Political and Policy Perspective. Risk Analysis, Vol. 23, No. 4, pp. 805–810. Sepez, J. A., B. D. Tilt, C. L. Package, H. M. Lazrus, and I. Vaccaro. 2003. Community Profiles for North Pacific Fisheries: Alaska—Sec. 4.3.1 Alaska Peninsula/Aleutian Islands Sub-Regional Introduction. National Oceanic and Atmospheric Administration Technical Memorandum NMFS-AFSC-160. U.S. Department of Commerce, Seattle, Wash. AFSC-TM/NOAA-TM-AFSC-160/NOAA-TM-AFSC-160.pdf.