Endogenous Risk and Habitat Loss from Climate Change: An Application to Seal Management after the November Rain

The role of climate change on stochastic resource growth has yet to be analyzed in a bioeconomic setting, which is important given that increased weather variability is a key climate change feature. We construct a bioeconomic analysis in which mean and variance impacts of climate change produce multiple elements—population stochasticity, mean habitat loss, and greater habitat variability—impacting the riskiness of resource management. Our results show that change in the variance of weather events is an important consideration for managing at-risk species and may create countervailing conservation incentives relative to considering only mean impacts. We apply our analysis to North Atlantic harp seals, which are uniquely susceptible to climate change, as they require sea ice to breed and raise their pups. Harp seal conservation incentives and negative economic impacts of habitat loss are tempered when accounting for both reduced mean sea ice levels and increased sea ice variability.