Aquaculture as a Method to Insulate Fishery Markets from Oil Spill Shocks

Resource extraction from wild fisheries is and continues to be a behemoth of an industry both in the US and worldwide. Indeed, wars have been fought over such resources, and many communities have become dependent upon the oceans to provide their primary industry. Oil spills are an ecological disaster that serve to uproot these quintessential pillars of these communities, and lead to externalities that are difficult to quantify. As oil spills occur, fishery harvests cease as toxic chemicals infect the water surrounding these communities, effectively leaving them in deep recessions. In this paper, aquaculture is examined as a potential alternative to wild fishing within these communities in order to mitigate the volatility caused by frequent oil spills and other pollution within the ocean. The effects of the Deepwater Horizon oil spill in the Gulf of Mexico are compared to the effects of the recent Sanchi oil spill within China to analyze the effectiveness of aquaculture as an insulating factor that could protect the fisheries industry from volatility due to oil spills