Fisheries management and tipping points: Seeking optimal management of Eastern Baltic cod under conditions of uncertainty about the future productivity regime

Historical patterns of the Eastern Baltic cod stock recruitment show a shift from a regime with high reproductive potential before the early 1980s to a regime with low reproductive potential since then. This shift can be attributed to increasingly unfavorable environmental conditions for cod reproduction at that time: critical salinity and oxygen levels, needed for successful egg and larval development, deteriorated. Yet, significant inflows of salt‐ and oxygen‐rich water from the North Sea or improved eutrophication management might trigger a shift back to a more productive regime. Coupling a statistical recruitment model to a state‐of‐the‐art, age‐structured bio‐economic model of the Eastern Baltic cod fishery, we study how optimal management depends on the uncertainty about the future productivity regime. We extend the predominantly theoretical literature on optimal management of a natural resource with a potential regime shift by analyzing an empirical model of age‐structured population dynamics and by allowing for the possibility of a back‐shift from a “bad” into a “good” regime. We find that with a higher probability of a shift back to the more productive regime the optimal management of the fishery becomes more conservative in the short run. We conclude that these benefits for the fishery warrant strong action reducing eutrophication to increase the probability of a regime shift back to high reproductive potential of the Eastern Baltic cod fishery.