Marine Policy 153 (2023) 105661 Contents lists available at ScienceDirect Marine Policy journal homepage: www.elsevier.com/locate/marpol Everything comes at a price: The impact of eliminating harmful subsidies in the Spanish marine resources industry Alberto Roca Florido 1, Emilio Padilla Rosa * Department of Applied Economics, Autonomous University of Barcelona, Spain A R T I C L E I N F O A B S T R A C T Keywords: One of the objectives for the European Horizon 2021–2027 is completely eliminating harmful fishery subsidies. Input–output analysis Spain was the country that received the greatest amount of the previous European Marine Fishery Funds framed Harmful subsidies within EU horizon-2020. We explore the potential impacts of eliminating these harmful subsidies in the sectors Marine resource conservation related to marine resources in Spain. We address it with the novelty of applying an input–output model, dis­ European Marine Fishery Funds Overfishing aggregating marine resource activities into three sectors (fishing, aquaculture and seafood processing sector). Our results show that the subtraction of these harmful subsidies will entail significant reductions in the value- added of the analysed sectors, which will impact their supply and demand of inputs affecting the rest of the sectors of the economy. It will affect the final demand for their outputs and the sectors linked to them. We derive policy recommendations to smooth the transition to a fishery-related industry without harmful subsidies. 1. Introduction Precisely, measure 14.6 proposed eliminating all types of fishing sub­ sidies that favour overfishing, overcapacity and illegal fishing activities The subsidies for the global fishing sector were estimated to be $ 35.4 by 2020. However, the EU countries did not achieve this objective by the billion in 2018 [41]. China was the nation that allocated the most aid end of the period set. In part because they continued to grant, among during that period, representing 21% of the total, followed by the EU others, the modernisation of vessels indirectly related to exploiting with 11%, the United States and the Republic of Korea with 10% and marine resources. However, there was some progress towards entirely 9%, respectively. In the case of the EU member countries, the subsidies eliminating these subsidies, like subsidies for the construction of boats. represented around $ 3803 million [41]. More than half of these grants, In addition, the percentage of funds for other "beneficial" subsidies also about $ 2036 million (53.5%), were allocated to subsidies considered increased, as was the case with those granted to improve data collection, "harmful" [40,41]. monitoring and increase enforcement measures [38]. Some subsidies are considered "harmful" because they help the It should be noted that the "harmful" subsidy elimination alone fishing fleet to obtain "artificial" benefits by reducing their costs (by would not solve overcapacity and overfishing problems, but it would subsidising, for example, the diesel consumption of vessels). These help to a large extent to reduce them. Among other positive impacts, it subsidies contribute directly or indirectly to keep the fishing capacity of would contribute to regenerating the most threatened fish stocks and the European fleet above the reproductive capacity of marine resources. increase economic benefits in the fishing sector and the sectors related to This mismatch has accelerated the degradation of marine resources, it in the medium and long term [7,24]. Another positive effect is the even leading several fish stocks to overexploitation [14,39]. release of public funds, which could be used for more beneficial pur­ This perverse effect that subsidies have on natural resources has poses for society (among which, to mitigate the impact of the with­ become a priority problem to be solved on international agendas. One of drawal of these subsidies on employment and the incomes that depend the main initiatives was taken by the members of the United Nations, on the sectors affected). However, the true scope of the elimination of who included a specific measure to address this problem within objec­ subsidies will largely depend on the interdependence between the sec­ tive 14 (Life below water) in the Sustainable Development Goals (SDG). tors associated with marine resources and the rest of the economy [6]. * Correspondence to: Department of Applied Economics, Autonomous University of Barcelona (UAB), Edificio B, Campus de Bellaterra, 08193, Cerdanyola del Vallès, Spain. E-mail address: emilio.padilla@uab.es (E. Padilla Rosa). 1 Current institution: University of York https://doi.org/10.1016/j.marpol.2023.105661 Received 21 November 2022; Received in revised form 2 May 2023; Accepted 9 May 2023 Available online 14 May 2023 0308-597X/© 2023 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by- nc-nd/4.0/). A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Fig. 1. Total EMFF funds by country for the year 2015. Source: own elaboration with data from European Commission EC [9]. Units in €. More details in Annex 1 (Table A.1). The initial effects of its elimination would occur by reducing the gross 2. Literature review value added (GVA) of the marine resource sectors because these sub­ sidies are part of it [12]. Likewise, there would be an increase in pro­ There currently needs to be unanimity to define what a harmful duction costs in the industries where the subsidies are eliminated, which subsidy is. It occurs because each type of subsidy can have different will affect the value of the production of other sectors that require inputs economic, social and environmental impacts, depending on the cir­ from these sectors [43]. These variations in production, both in the cumstances [33]. Some authors and organisations have proposed their sectors associated with fishery resources and those indirectly affected, classification of subsidies according to their effects and how they can be will ultimately affect their demand, probably causing significant losses measured [2,23,32,33,35,44–46]. These classifications respond to in all these sectors. Therefore, the extension and scope of the effects of different criteria, such as their impact on trade and development [46] or eliminating harmful fishery subsidies is a relevant subject of analysis. the form taken by the subsidies (direct or indirect financial transfers) Since the objective of Measure 14.6 of the Sustainable Development and the value they bring to the industry [45]. To carry out this study, we Goals (SDG) was not achieved, this study investigates the potential im­ have focused on the categorisation made by Sumaila et al. [40], because pacts of the complete elimination of "harmful" subsidies as a goal of the it is simple and focus precisely on the impacts of subsidies on marine Horizon 2030 agenda. Thus, we analyse the effects of a complete resources. These authors differentiate them into three large groups, ac­ withdrawal of the funds of the previous European Maritime and Fish­ cording to the impact they have on marine resources: (i) beneficial eries Fund (EMFF) program (2013–2020) for Spain in the EMFF funds subsidies, (ii) harmful subsidies and (iii) ambiguous subsidies. In the program for 2021–2027. The analysis focuses on three sectors of the first group, for example, subsidies for research and management (gen­ Spanish industry of marine resources (fishing, aquaculture and pro­ eral services) can be considered since it is understood that they will not cessing of seafood), applying an input–output model based on the year negatively affect marine resources. Among the aids that negatively 2015. The research analyses five different scenarios; the initial (base­ affect the environment are those allocated for subsidising the diesel used line) scenario, three scenarios where subsidies are eliminated in each by vessels or those allocated for their repair or modernisation. Regarding sector and a fifth, where they are subtracted jointly. Comparing each the subsidies considered ambiguous, it refers to those that a priori may scenario with the initial one, we estimate: (i) the impacts on the GVA of seem to be beneficial for the environment, but whose effects may the industries; (ii) the forward and backward linkages of the industries; become adverse for the marine resources, leading them to their over­ and (iii) the potential monetary losses that the fall in final demand exploitation [40]. An example of this type of aid is for "license with­ would cause in each of the three sectors analysed, as well as in the rest of drawal" programs. When vessel owners retire their license in one the sectors of the economy, estimated through the price elasticity of country, they can decide to go to another country where they can demand. We intend that the results of the research serve as a guide to continue fishing. It invalidates the program’s effectiveness, and the policymakers for the design of policies that help to minimise the nega­ problem moves elsewhere. tive impacts of the subsidies reform and, thus, facilitate the transition of Input–output models have been widely used to analyse the economic the Spanish economy towards a model with a more sustainable fishing impacts of the fishing sector in different countries [8,28], including sector free from "harmful" subsidies. Spain [42]. In the Spanish case, we found an article on the aquaculture This article is structured as follows: Section 2 reviews the relevant industry that analyse subsidies [18]. Likewise, few studies are dedicated literature; Section 3 presents the context of the study; Section 4 describes to Spain’s fish product processing sector. We can cite García-del-Hoyo the sources of information and data; Section 5 shows the methods et al. [15] and, particularly, the work of Fernández-Polanco et al. [13], applied; Section 6 presents and discusses the results; Section 7 draws the which has helped us to elaborate our research. Their work analyses the conclusions of the work and some brief policy recommendations. price demand and income demand elasticities of canned fish products in 2 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table 1 Contribution and co-financing of the EMFF and the Spanish government to the objectives of the EU, technical assistance and other aid, during 2014–2020. Measure EU National TOTAL Contribution Promote fisheries that are environmentally sustainable, 1 - Articles 33, 34 and 41 (2) (Article 13 (2) of the EMFF) 82,178,128 € 82,178,128 € 164,356,256 € resource-efficient, innovative, competitive, and 2 - Financial allocation for the rest of the priority 1 of the 270,313,132 90,104,378 € 360,417,510 € knowledge-based Union (Article 13 (2) of the EMFF) € 352,491,260 172,282,506 € 524,773,766,00 € € Encourage aquaculture that is sustainable from the - 205,905,843 68,635,448 € 274,541,291 € environmental point of view, efficient in the use of € resources, innovative, competitive and based on knowledge Favour marketing and 1 - Storage aid (Article 67) (Article 13 (6) of the EMFF) 10,149,073 € 10,149,073 € transformation 2-Compensation to the outermost regions (article 70) 60,900,000 € 60,900,000 € (article 13, paragraph 5, of the EMFF) 3 - Financial allocation for the rest of the priority 5 of the 203.360.626 67.786.876 € 271.147.502 € Union (Article 13, Financial allocation for the rest of the € priority 5 of the Union (Article 13 (2) of the EMFF) 274.409.699 67.786.876 € 342.196.575 € € 832.806.802 308.704.830 € 1.141.511.632 € € Source: own elaboration with data from the EC (2018)[10]. the Spanish market. finances the Operational Program (OP) "Fisheries and Marine Extensive literature is focused on different aspects of the Spanish 2014–2020". These European funds prioritise the achievement of ob­ fishing sector using bio-economic analyses [1,31,37]. Among these pa­ jectives set by the country itself and those included in the European pers, the objective of analysis of Merayo et al. [33] is closely related to strategy "Horizon 2020". In order to achieve these objectives, a total of ours. They analyse the design of an income policy for fishers to minimise 5749.33 million euros of European funds were awarded to the EU the impact on well-being after reducing subsidies to the sector. They member states for the period 2014–2020. In this distribution, Spain conclude that if an effective income policy accompanies the elimination received the largest sum from the EMFF, € 1161.62 million (Fig. 1). of these subsidies, the welfare of the fishers is maintained while the Along with these European funds, the different governments also fishing pressure is reduced. Studies for other countries applying general contributed to co-finance the OP projects in their respective countries. In equilibrium models analyse how the fishing sector and the economy are particular, the Spanish government contributed € 396.65 million to co- affected after the elimination of fishing subsidies. In this context, Jinji finance its OP projects [9]. The Spanish authorities’ contribution and [26] analyses how the elimination of unemployment subsidies and price that provided by the EU added up to a total budget of € 1558.28 million compensation affects the different actors involved in the fishing sector. available to implement the OPs of "Fishing and Marine 2014–2020" in He concludes that, depending on the economy’s circumstances, elimi­ Spain. nating these aids may cause fishers to increase the levels of fishing In order to carry out the different measures adopted in the OP pressure to compensate for their loss of income. Carvalho et al. [6] focus (Table 1) for the three sectors analysed, 524.49 million were allocated to on removing harmful subsidies in the case of the Azores Islands. They the fishing sector (352.49 from European funds and 172.28 from the conclude that the economy benefits in a general way after the elimina­ Spanish government); 342.19 million to the processing sector (274.40 tion of these subsidies, while both exports and employment are nega­ from European funds and 67.78 from Spanish funds); and the aquacul­ tively affected. ture sector received 274.54 million (205.90 million from European This paper contributes to the literature by providing an analysis of funds and 68.63 million from Spanish funds). It represented a total of € the economic impacts of the elimination of harmful subsidies from the 1141.51 million (€ 832.80 million from European funds and 308.70 fishing-related sectors in Spain. The paper fills this gap in the literature million € from Spanish funds) (Table 1) [9]. The rest of the funds that applying an input–output model, which allows us to consider adequately complete the total budget of PO "Fishing and Marina 2014–2020", € the interdependencies between the different productive sectors of the 416.76 million, were allocated to the rest of the priorities.2 It should be economy. The findings of this research will help policymakers to design noted that for this study, only the subsidies assigned to the three sectors effective policies that avoid unnecessary costs in the transition towards a under study (fishing, aquaculture and seafood processing) are more sustainable marine resource industry. considered. It is estimated that, between 2013 and 2019, the EU countries allo­ 3. Study context cated, including European and national funds, 54% of these funds to "beneficial" subsidies, 6% to ambiguous subsidies, and the remaining Spain stands out for being the major fishing country in the EU. It has 40% to those classified as "harmful" [41]3 (Annex 1, Table A.3). Spain around 8000 km of coastline and key geographical points, giving it a was the only EU country that appears as one of the countries that comparative advantage over other European countries. This leading granted most subsidies during that period worldwide. In addition, it position is reflected by its almost one million tonnes of fish caught or presented percentages very different to the European average (18% of raised annually [9]. Of that amount, 882 thousand tons, with a market value of 1982 million euros, were caught by the fishing fleet through its 19,720 vessels, and total employment was estimated at 31,166 full-time 2 They were allocated to the implementation of the Common Fisheries Policy; equivalents in 2013 [9]. That same year, the aquaculture sector obtained increase employment and territorial cohesion; favour the development and a production value of 501 million euros, employing 27,180 workers, of execution of the Integrated Maritime Policy; and technical assistance. More which 6639 (24.42%) were full-time. In contrast, the seafood processing details in Table A.2 of the Annex ([10], p. 163). 3 sector employed 18,391 workers, 17,702 (96.25%) were full-time [9]. $ 1523 million to “harmful” subsidies; $ 2036 million to “beneficial” sub­ sidies; and $ 244 million to those classified as “ambiguous”. Estimates calcu­ The EMFF is a European restructuring and investment program that lated from 2013 to 2019, in current $ 2018 [41]. 3 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table 2 period. Of the total amount of the EMFF, € 832,807,052 were allocated Percentages of total EMFF and national funds by sector over total EMFF and to the three sectors analysed, representing 71.69% of the total. Likewise, national funds for the three sectors for 2014–2020. of the total national funds, € 308,704,830 were allocated to these sec­ EMFF National funds tors, representing 77.83% (Table 1). Regarding funds allocated to Fishing 42.33% 55.81% finance OPs objectives for 2015, we only know those granted by the EU, Aquaculture 24.72% 22.23% €161,257,387, which is 13.88% of the total EMFF for 2014–2020. Processing 32.95% 21.96% However, we do not have the exact amount of national funds for 2015. Source: Own estimates based on EC data (2016)[9] Assuming it was the same percentage (13.88%), the estimate of these funds is € 55,064,723.61. To calculate the amount allocated to the three sectors during the funds allocated to "beneficial" subsidies, 1% to ambiguous ones, and whole year 2015, the share of the total amount of European funds 81% to "harmful" subsidies). In the ‘harmful’ category, three primary allocated for the entire period for the three sectors (832,807,052 €) over items of subsidies stood out: exemption from fees, fishing access and the total EMFF funds for the same period (€ 1161,620,889) (71.69%) is subsidies for fuel, which were the ones that received the most resources applied over € 161,257,387.00, obtaining an estimate of € (Annex 1, Table A.4). 115,611,871.04. In addition, to calculate the national funds for the three Approximately 20% of the total funds were allocated to the European sectors in 2015, we follow the same criteria. In this case, we apply the aquaculture sector, around 1725 million euros ([11], Regulation (EU) percentage (77.83%) that represents the amount allocated to the three No 508/2014). The Spanish sector was the most subsidised (274.5 sectors for 2014–2020 (€ 308,704,830) over the total national funds for million euros), followed by the Polish (269 million), Italian (221 this same period (€ 396,659,864) on the amount of total national funds million), French (118.4 million) and Romanian (112.3 million). These assigned for 2015 (€ 55,064,723.61), which gives a value of € five countries received more than 80% of total aid, although they only 42,854,716.81. (Table 2). represented 51% of total production [18]. The principal purpose of these Finally, according to Sumaila et al. [41], around 81% of subsidies in grants was to promote technological development, improve the working Spain are considered harmful, and 1% are ambiguous (Annex 1, conditions of employees and the performance of SMEs, protect and Table A.3). Based on these percentages, we estimate for Spain a total of conserve biodiversity, and facilitate knowledge and new skills for 82% of the EMFF budget for 2015, including national co-financing, workers [18]. However, some subsidies favour the expansion of the assuming that ambiguous subsidies can also cause adverse effects (col­ sector’s production. It implies a more intensive use of marine resources umn 5, Table 3). to meet the new requirements of such expansion (for example, increased demand for fish and other foods for fish farms) so that they can ulti­ 4.3. Price elasticities of demand mately endanger marine resources [3]. Canned fish has established itself as one of the top products in the The data to calculate the price elasticity of demand in Spain is Spanish diet [30]. The Spanish seafood processing sector was the second extracted from Santiago and Surís-Regueiro [42]. They constructed their most important among the EU member states in 2015, being 15% of the data from different sources of information detailed in their article. They total value of this EU production [9]. The EU allocated 274 million euros differentiate five categories, assigning three different values to the in subsidies to this sector in Spain and 67 million provided by the elasticities for each product category in different scenarios (low elas­ Spanish government [9], representing 17% of the total EMFF funds ticity, reference, and high). We have taken the value assigned in the allocated to this sector. It is estimated that practically all the aid was reference scenario. Moreover, as data are not available for all the in­ allocated to "harmful" subsidies during 2014–2020 [38]. An example is dustries (such as Coal mining; Oil and gas extraction; Metallurgy; Ma­ subsidies aimed at increasing storage capacity. This type of investment, chinery; Other Manufacturers; Electricity; Gas manufacturing, Hot which promotes the vertical expansion of the sector, can indirectly harm water supply; Water purification and distribution; Finance sector; fishery resources since the increase in storage capacity gives more room Business services; Education; and Health care sector), we took the for an increase in fishing pressure [3]. missing elasticity values from Ogarenko and Hubacek [36]. For those sectors that did not match in both classifications, we assigned the elas­ 4. Data description ticity value of a closely related sector; that is, the value assigned to a sector classified under the same SIC code. 4.1. Input–output tables Table 4 shows the price elasticity of demand for the different sectors considered. We can observe that two out of the three sectors analysed in The information in the Spanish input–output tables is collected by this research, the fishing and the seafood sectors, show the lowest ab­ the National Institute of Statistics of Spain [25]. The industrial sectors in solute value in their elasticities among all sectors, 0.5 each, while the the input–output table are initially grouped into 68 industries and coded aquaculture sector exhibits a slightly higher absolute value, 0.75. These up to 3 NACE digits. For this study, we used this level of disaggregation, low absolute values of the elasticities are mainly explained because but we reduced the number of industries to 38 to adjust to the object of these sectors produce basic consumer goods. analysis of this article. This reduction in the number of sectors has an effect known in the literature as “aggregation bias” (more details in 5. Input–output model [20]). We disaggregate the sectors related to marine resources as fol­ lows: we divide fish and other fishery products; aquaculture products; Input–output models are considered a stylised form of a general fishing support services (NACE 03) into Marine Fisheries (NACE 031), equilibrium model that allows analysing of the effects of external shocks Aquaculture (NACE 032) and processing and conservation of fish, within an economy [17]. Leontief’s input–output model is a matrix crustaceans and molluscs (NACE 102). The latter includes the sector for model that allows monitoring of the interactions between industrial processing fish, crustaceans and molluscs (NACE 1021) and the sectors after a shock from supply or demand [36]. The Leontief pricing manufacturing of canned fish (NACE 1022). model is an appropriate analysis tool for our analysis. First, the model allows us to analyse the effects of relative changes in the prices of the 4.2. Subsidies products demanded due to the variation in the prices of primary inputs. In addition, another great advantage is that it allows knowing the Initially, € 1558,280,753 was allocated (€ 1161,620,889 from Eu­ short-term consequences that may come from the political reform of the ropean funds and € 396,659,864 from national funds) for the 2014–2020 elimination of subsidies. Consequently, it enables anticipating them and 4 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table 3 Estimates of harmful subsidies for Spain by sector in 2015. Sector Budget 2014–2020 2015 * 82% Harmful [41] Total HFS per sector Total HFS Fishing EMFF 352,491,260.00 € 48,933,512.26 € 40,125,480.06 € 59,736,954.11 € 129,942,715.87 € National 172,282,506 € 23,916,431.78 € 19,611,474.06 € Aquaculture EMFF 205,905,843.00 € 28,584,243.74 € 23,439,079.87 € 31,252,074.58 € National 68,635,448 € 9528,042.33 € 7812,994.71 € Processing EMFF 274,409,949.00 € 38,094,115.03 € 31,237,174.32 € 38,953,687.17 € National 67,787,876 € 9410,381.53 € 7716,512.85 € Source: Own estimates based on data from EC (2016) [9] and Sumaila et al. [41]. * The percentage that represents the amount allocated for the three sectors over the total EMFF for 2014–2020, 71.69%, has been applied to estimate the amount that is allocated for European funds for 2015. Making the same approximation, in this case 77.83%, we calculated the amount of national aid for the year 2015. adopting strategies to reduce their impacts [36]. Table 4 This model shows that a production unit’s total price is equal to its Price elasticity of demand. production’s total cost, including the value of intermediate and primary Industrial sector Price elasticity of inputs. We start from the standard algebraic formulation of the price demand model that is commonly presented in the literature as: Agriculture and forestry -0.50 Fishing -0.50 p’ = v’ (I - A)-1 = v’ L (1) Aquaculture -0.75 Mining and quarrying -0.50 Where p’ represents the 1 x n vector of prices of the outputs produced Manufacture of food products, beverages and tobacco -0.50 by industries; v’ is the 1 x n vector of the prices of primary inputs; I is the products identity matrix; A is the n x n matrix of technical coefficients; (I-A)-1 Seafood processing -0.50 Manufacture of textiles, wearing apparel, leather and related -0.75 inverse Leontief matrix, represented as L, which includes the direct and products indirect requirements of inputs produced by industry i for each unit of Manufacture of wood and paper products, and printing -0.75 final output produced by industry j. Manufacture of coke, and refined petroleum products -0.25 Apart from the intermediate inputs necessary for the production Manufacture of chemicals and chemical products -0.75 process, the industries require primary inputs that have their prices. Manufacture of pharmaceuticals, medicinal chemical and -0.75 botanical products Therefore, the total GVA of the industries is composed of the workers’ Manufacture of rubber and plastics products, and other non- -0.75 wages, business surplus and subsidies net of taxes [12]. Expression (2) is metallic mineral products used to capture how the variation of the price of any GVA component Manufacture of basic metals and fabricated metal products, -0.75 affects the sectoral interactions. except machinery and equipment Manufacture of computer, electronic and optical products -0.75 Δp’ = Δv’ L (2) Manufacture of electrical equipment -0.75 Manufacture of machinery and equipment n.e.c. -0.75 Eq. (2), Δp’ refers to the variation in the price vector, while Δv’ is the Manufacture of transport equipment -0.75 Other manufacturing, and repair and installation of -0.75 vector that includes the variations in the price of primary inputs. In our machinery and equipment study, removing subsidies will modify the GVA vector (Δv’), which will Electricity, gas, steam and air-conditioning supply -0.50 change prices (Δp’). Water supply, sewerage, waste management and remediation -0.50 As we will see in the results section, the effects of changes in the activities prices of primary inputs (v), where subsidies are included, will entail a Construction -0.75 Wholesale and retail trade, repair of motor vehicles and -0.75 series of dispersion effects on the value added of the industries. These motorcycles will involve an increase in costs that will be transferred to the “buyer” Transport and storage -0.50 sectors via an increase in the price of inputs. Moreover, these same Accommodation and food service activities -1.25 “buyer” sectors will increase the prices of their production to assume Publishing, audiovisual and broadcasting activities -0.75 Telecommunications -0.75 these increases in their costs and so forth [34]. IT and other information services -0.75 Financial and insurance activities -0.75 5.1. Forward and backward linkages Real estate activities -0.75 Legal, accounting, management, architecture, engineering, -0.75 The variation in the industry’s production has two possible effects on technical testing and analysis activities Scientific research and development -0.75 the rest of the industries. First, when sector j increases its production, Other professional, scientific and technical activities -0.75 this same sector will demand inputs from other sectors to carry out this Administrative and support service activities -1.00 increase. It means a causal effect in the demand model known as Public administration and defence, compulsory social security -1.00 backward linkages and indicates the connection of a specific sector with Education -1.00 others (upstream) from which it acquires inputs. Second, the increase in Human health services -1.00 Residential care and social work activities -1.00 the sector j’s production also implies that other industries use more Arts, entertainment and recreation -1.00 product j as input. The relationship between a sector and those it sells its Other services -1.25 production (downstream) is called forward linkages, the causal direction Activities of households as employers; undifferentiated goods- -1.25 in the supply model. and services-producing activities of households for own use Activities of extra-territorial organisations and bodies -1.25 Backward linkages measure the degree of dependence of the pro­ duction of sector j on the inputs that come from other industries i. Source: Elasticities computed based on data from Ogarenko and Hubacek [36], Estimating the direct and indirect effects throughout the economy is Santiago and Surís-Regueiro [42] and Eurostat [12]. done through the total sums of the columns of the requirements matrix, L = [lij], the measure of total backward linkages. 5 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table 5 Table 6 GVA reductions by scenario compared to Scenario 1. Top 10 GVA reduction compared to Scenario 1. Sector Sc.2-Sc.1 Sc.3-Sc.1 Sc.4-Sc.1 Sc.5-Sc.1 # Sc. 2 (Fishing) GVA # Sc. 3 (Aquaculture) GVA Reduction Reduction Fishing -58.092 -0.097 -0.003 -58.192 Aquaculture -0.459 -30.336 -0.001 -30.795 1 Manufacture of -6.5606 1 Manufacture of -1.0461 Seafood processing -0.202 -0.032 -37.894 -38.128 food products, food products, Three marine resource sectors -58.753 -30.466 -37.897 -127.116 beverages and beverages and Total -72.777 -32.702 -38.896 -144.374 tobacco products tobacco products Indirect * -14.024 -2.236 -0.998 -17.258 2 Accommodation -4.4366 2 Accommodation -0.7074 and food service and food service Source: estimates of the authors of this study based on data from INE [25]. * In activities activities the GVA of the rest of the industries. Scenario (Sc.) Units: million euros 3 Education -0.4815 3 Fishing -0.0973 4 Aquaculture -0.4585 4 Education -0.0768 ∑ n 5 Agriculture and -0.3811 5 Agriculture and -0.0608 BL(t)j = lij (3) forestry forestry i=1 6 Seafood processing -0.2022 6 Seafood processing -0.0322 7 Residential care -0.1836 7 Residential care -0.0293 The forward linkages measure the capacity of each industrial sector and social work and social work to induce the use of its production as input for other industrial sectors activities activities [5]. Their estimation used to rely on the sum of coefficients of the rows 8 Wholesale and -0.1495 8 Wholesale and -0.0238 retail trade, repair retail trade, repair of L, the inverse Leontief matrix. However, this estimate is taken with of motor vehicles of motor vehicles scepticism for conceptual reasons (to learn more, see [34]), so the co­ and motorcycles and motorcycles efficients of the Ghosh model4 were suggested as a more appropriate 9 Public -0.1207 9 Public -0.0192 alternative [4,27]. Thus, "total" forward linkages are estimated through administration and administration and defence, defence, the sum of the rows of the inverse Ghosh matrix, G= [gij], which are compulsory social compulsory social represented as: security security ∑ n 10 Arts, entertainment -0.1158 10 Arts, entertainment -0.0185 FL(t)i = gij (4) and recreation and recreation j=1 # Sc. 4 (Seafood GVA # Sc. 5 (all sectors) GVA The interest of this study is to know the effects in the three sectors of processing) Reduction Reduction the fishing industry that we have disaggregated. Thus, elements in the 1 Manufacture of -0.5123 1 Seafood processing -38.1282 food products, diagonal in A or L that correspond to the three sectors were omitted. It beverages and allows knowing the ’net’ impacts derived from these sectors’ forward tobacco products and backward linkages with the rest of the industries (as suggested in 2 Accommodation -0.1957 2 Aquaculture -30.7953 [34]). and food service activities 3 Agriculture and -0.0831 3 Manufacture of -8.1191 forestry food products, 5.2. Elasticities beverages and tobacco products Productive sectors need more time to react and adapt their produc­ 4 Manufacture of -0.0209 4 Accommodation -5.3398 textiles, apparel, and food service tion in the short term. Despite being one of the limitations of leather and related activities input–output models, this fact is quite in line with reality since the products technical adjustments necessary to adapt their techniques of production 5 Manufacture of -0.0181 5 Education -0.5761 to new demand usually take more than a year. Consequently, it is the wood and paper consumers who end up assuming the costs via prices [36]. products, and printing In order to capture the effect, it has on final household demand, we 6 Education -0.0178 6 Agriculture and -0.5249 propose to follow the methodology of Ogarenko and Hubacek [36]. forestry Specifically, they relate the variation obtained in the Leontief price 7 Manufacture of -0.0157 7 Residential care -0.2174 model, and the changes in the quantities demanded: chemicals and and social work chemical products activities Δqp 8 Wholesale and -0.0152 8 Wholesale and -0.1886 ε= (5) retail trade, repair retail trade, repair qΔp of motor vehicles of motor vehicles In expression (5), ε represents the demand-price elasticity, while Δp and motorcycles and motorcycles and Δq express the variations in prices and quantities, respectively. 9 Arts, entertainment -0.0080 9 Public -0.1462 and recreation administration and From this expression, it is possible to estimate the change in quantities, defence, Δq, due to price fluctuations, using: compulsory social security ε qΔp Δq = (6) 10 Human health -0.0072 10 Manufacture of -0.1444 p services textiles, apparel, leather and related Adapting (6) in matrix terms, we obtain: products p̂ Δy = Δ̂ ε y0 (7) Source: authors’ estimates based on INE data (2020) [25]. Scenario (Sc.) Units: million euros We use the prices obtained in the price model (2) and diagonalise 4 The Ghosh model is a supply-side oriented input–output model which captures the impacts of primary inputs on industry prices downstream the production process [21]. 6 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table 7 Table 8 Total backward linkage and forward linkage multipliers in the Spanish economy Total backward linkage multipliers by analysed sector (top 10 sectors and ma­ (top 10 sectors and marine resource sectors). rine resource sectors). # Backward linkage Multiplier # Forward linkage Multiplier # Fishing sector Multiplier # Aquaculture sector Multiplier multipliers multipliers 1 Wholesale and 0.0525 1 Wholesale and 0.0162 1 Construction 2.3003 1 Electricity, gas, 2.6414 retail trade, repair retail trade, repair steam and air- of motor vehicles of motor vehicles conditioning and motorcycles and motorcycles supply 2 Transport and 0.0491 2 Transport and 0.0151 2 Transport and storage 2.1618 2 Manufacture of 2.4168 storage storage food products, 3 Electricity, gas, 0.0235 3 Fishing 0.0080 beverages and steam and air- tobacco products conditioning supply 3 Manufacture of 2.0960 3 Manufacture of 2.2997 4 Other 0.0209 4 Electricity, gas, 0.0072 pharmaceuticals, basic metals and manufacturing, and steam and air- medicinal chemical fabricated metal repair and conditioning supply and botanical products, except installation of products machinery and machinery and equipment equipment 4 Accommodation and 2.0797 4 Manufacture of 2.2228 5 Administrative and 0.0203 5 Other 0.0064 food service activities coke, and refined support service manufacturing, and petroleum activities repair and products installation of 5 IT and other 2.0171 5 Construction 2.1786 machinery and information services equipment 6 Manufacture of 2.0162 6 Manufacture of 2.1594 6 Manufacture of 0.0200 6 Administrative and 0.0062 electrical equipment wood and paper coke, and refined support service products, and petroleum products activities printing 7 Manufacture of 0.0192 7 Manufacture of 0.0061 7 Manufacture of 2.0100 7 Manufacture of 2.0759 basic metals and coke, and refined chemicals and chemicals and fabricated metal petroleum products chemical products chemical products, except products machinery and 8 Publishing, 1.9998 8 Manufacture of 2.0524 equipment audiovisual and rubber and 8 Manufacture of 0.0186 8 Manufacture of 0.0059 broadcasting plastics products, transport basic metals and activities and other non- equipment fabricated metal metallic mineral products, except products machinery and 9 Manufacture of 1.9930 9 Publishing, 2.0440 equipment rubber and plastics audiovisual and 9 Financial and 0.0167 9 Manufacture of 0.0057 products, and other broadcasting insurance activities transport non-metallic mineral activities equipment products 10 Water supply, 0.0143 10 Financial and 0.0051 10 Manufacture of 1.9793 10 Water supply, 2.0332 sewerage, waste insurance activities computer, electronic sewerage, waste management and and optical products management and remediation remediation activities 19 Seafood processing 1.6720 32 Fishing 1.4759 28 Aquaculture 0.0032 38 Seafood processing 0.00002 36 Fishing 1.4032 38 Aquaculture 1.1441 38 Seafood processing 0.0001 40 Aquaculture 1.1303 39 Seafood 1.0435 # Seafood processing Multiplier processing 1 Manufacture of food products, beverages and tobacco products 0,0135 Source: own estimation based on INE data (2020) [25]. Units: euros. 2 Agriculture and forestry 0,0081 3 Fishing 0,0035 4 Wholesale and retail trade, repair of motor vehicles and 0,0032 them, Δ ̂p ; y0 represents the final demand vector of households, and ̂ε motorcycles is the diagonal vector of the matrix of elasticities obtained from the 5 Transport and storage 0,0019 study of Santiago and Surís-Regueiro [42] (Table 4). Finally, using 6 Administrative and support service activities 0,0015 7 Manufacture of wood and paper products, and printing 0,0013 expression (7), we estimate the change that will suffer the final demand 8 Electricity, gas, steam and air-conditioning supply 0,0012 of the sectors of marine resources by households. 9 Manufacture of chemicals and chemical products 0,0012 10 Aquaculture 0,0011 6. Results and discussion Source: estimates of the authors of this study based on INE data (2020) [25]. Units: euros 6.1. Total GVA and net impacts eliminating harmful subsidies in each sector separately and, as a whole, As specified in expression (2) in the methodology section, we esti­ with that of the initial situation (Annex 1, Table A.5). mate the total (net) impacts on GVA in the sectors analysed. To do this, we simulate five different scenarios, including an initial reference sce­ 6.1.1. Scenario 2 nario without modifying the subsidies, Scenario 1. Scenario 2 refers to When we compare the impacts of each of the scenarios to the initial the elimination of subsidies in the fishing sector. Scenario 3 refers to the situation (Scenario 1), we see that Scenario 2 would entail total losses of elimination of subsidies in the aquaculture sector. Scenario 4 refers to € 72.77 million (58.75 million in the three sectors analysed and 14.02 the elimination of subsidies in the seafood processing industry. Finally, million in the other sectors), with the fishing sector being the most Scenario 5 refers to removing subsidies in the three marine resource affected (€ 58.09 million) (Table 5). The next most affected is the sector sectors. These scenarios will allow us to compare the effects of of the manufacture of food products, beverages and tobacco products, 7 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table 9 Table 10 Total forward linkage multipliers by analysed sector (top 10 sectors and marine Impacts on demand (absolute values). resource sectors). # Sc. 2 Demand # Sc. 3 Demand # Fishing sector Multiplier # Aquaculture sector Multiplier reduction reduction 1 Transportation and 0.0738 1 Transportation and 0.0224 1 Accommodation 4.4690 1 Aquaculture 2.5100 storage storage and food service 2 Wholesale and 0.0513 2 Wholesale and 0.0155 activities retail trade, repair retail trade, repair 2 Fishing 3.2588 2 Accommodation 0.7126 of motor vehicles of motor vehicles and food service and motorcycles and motorcycles activities 3 Manufacture of 0.0382 3 Manufacture of 0.0116 3 Manufacture of 2.3693 3 Manufacture of 0.3778 food products, food products, food products, food products, beverages and beverages and beverages and beverages and tobacco products tobacco products tobacco products tobacco products 4 Electricity, gas, 0.0319 4 Electricity, gas, 0.0097 4 Education 0.0777 4 Education 0.0124 steam and air- steam and air- 5 Seafood processing 0.0738 5 Seafood processing 0.0118 conditioning supply conditioning supply 6 Wholesale and 0.0669 6 Wholesale and 0.0107 5 Administrative and 0.0267 5 Administrative and 0.0081 retail trade, repair retail trade, repair support service support service of motor vehicles of motor vehicles activities activities and motorcycles and motorcycles 6 Manufacture of 0.0248 6 Manufacture of 0.0075 7 Residential care 0.0564 7 Residential care 0.0090 coke, and refined coke, and refined and social work and social work petroleum products petroleum products activities activities 7 Other 0.0223 7 Other 0.0068 8 Real estate 0.0486 8 Real estate 0.0077 manufacturing, and manufacturing, and activities activities repair and repair and 9 Arts, entertainment 0.0472 9 Arts, entertainment 0.0075 installation of installation of and recreation and recreation machinery and machinery and 10 Other services 0.0453 10 Other services 0.0072 equipment equipment # Sc. 4 Demand # Sc. 5 Demand 8 Financial and 0.0205 8 Financial and 0.0062 reduction reduction insurance activities insurance activities 1 Seafood processing 13.8333 1 Seafood processing 13.9189 9 Mining and 0.0188 9 Mining and 0.0057 2 Accommodation 0.1971 2 Accommodation 5.3787 quarrying quarrying and food service and food service 10 Manufacture of 0.0180 10 Manufacture of 0.0054 activities activities transport transport 3 Manufacture of 0.1850 3 Fishing 3.2644 equipment equipment food products, 28 Aquaculture 0.0025 20 Fishing 0.0025 beverages and 34 Seafood processing 0.0012 34 Seafood processing 0.0004 tobacco products # Seafood processing Multiplier 4 Manufacture of 0.0078 4 Manufacture of 2.9322 1 Manufacture of food products, beverages and tobacco products 0.0145 textiles, wearing food products, 2 Agriculture and forestry 0.0082 apparel, leather and beverages and 3 Wholesale and retail trade, repair of motor vehicles and 0.0031 related products tobacco products motorcycles 5 Agriculture and 0.0074 5 Aquaculture 2.5480 4 Transportation and storage 0.0028 forestry 5 Administrative and support service activities 0.0018 6 Wholesale and 0.0068 6 Education 0.0930 6 Electricity, gas, steam and air-conditioning supply 0.0017 retail trade, repair 7 Manufacture of wood and paper products, and printing 0.0012 of motor vehicles 8 Manufacture of chemicals and chemical products 0.0011 and motorcycles 9 Manufacture of rubber and plastics products, and other non- 0.0010 7 Arts, entertainment 0.0033 7 Wholesale and 0.0844 metallic mineral products and recreation retail trade, repair 10 Financial and insurance activities 0.0009 of motor vehicles 33 Fishing 0.0001 and motorcycles 36 Aquaculture 0.0001 8 Education 0.0029 8 Residential care 0.0667 and social work Source: estimates of the authors of this study based on INE data (2020 [25]). activities Units: euros 9 Real estate 0.0028 9 Real estate 0.0591 activities activities 10 Other services 0.0024 10 Arts, entertainment 0.0580 with € 6.56 million. Then the sector related to accommodation and food and recreation service activities with a reduction of 4.43 million € (Table 6). Source: own estimation based on data from Ogarenko and Hubacek [36]; San­ 6.1.2. Scenario 3 tiago and Surís-Regueiro [42]; INE [25]. Scenario (Sc.) Units: million euros Scenario 3 simulates the elimination of subsidies in the aquaculture sector. This scenario would imply a reduction in the GVA of all sectors of € 32.70 million (€ 30.46 million would be in the three sectors analysed Table 11 and € 2.23 million in the GVA of the rest of the industrial sectors). The Impact on the final demands of aggregate and individual sectors by scenario. most significant impact would be in the GVA of the aquaculture sector, € Sector Sc.2 Sc.3 Sc.4 Sc.5 30.33 million (Table 5), followed by the sector of the manufacture of Fishing 3.2588 0.0055 0.0001 3.2644 food products, beverages and tobacco products (€ 0.51 million) and Aquaculture 0.0379 2.5100 0.0001 2.5480 accommodation and food service activities (€ 0.19 million) (Table 6). Seafood processing 0.0738 0.0118 13.8333 13.9189 Marine resource sectors analysed 3.3705 2.5273 13.8335 19.7313 (total) 6.1.3. Scenario 4 Total impact on economy 10.7576 3.7052 14.2620 28.7248 In Scenario 4 the total losses would represent € 38.89 million, most of Indirect * 7.3871 1.1779 0.4285 8.9935 which would be assumed by the three sectors studied (€ 37.90 million), Source: own estimation based on INE data (2020) [25]. * In the demand of the the seafood processing sector being the most affected (€ 37.89 million), rest of the industries. Scenario (Sc.) Units: million euros 8 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table 12 6.2. Backward and forward multipliers Differences between impacts on GVA and amount of subsidies eliminated. Sc.2- Sc.3- Sc.4- Sc.5- Table 7 shows the productive sectors with highest multipliers. The Sc.1 Sc.1 Sc.1 Sc.1 multipliers for the backward linkages are shown in the left column, Three marine resource sectors -58.753 -30.466 -37.897 -127.116 while the multipliers for the forward linkages are indicated in the right Subsidies 59.736 31.252 38.953 129.942 column. With the backward multipliers calculated through expression Net differences in the three 0.983 0.786 1.056 2.826 (3), we can identify which sectors are essential buyers of other sectors. sectors The sectors that present the highest multipliers of this type are consid­ By sector -58.092 -30.336 -37.894 - Subsidies 59.736 31.252 38.953 - ered “driving” sectors of the economy; that is, they require the pro­ Net differences 1.644 0.916 1.059 - duction of other sectors to be able to carry out theirs. They are the Total economy -72.777 -32.702 -38.896 -144.374 construction sector (2.30); transportation and storage (2.16); manufac­ Subsidies 59.736 31.252 38.953 129.942 ture of pharmaceutical, medicinal chemical and botanical products Net differences -13.041 -1.45 0.057 -14.432 (2.09). Source: own estimate based on INE data (2020) [25]. Scenario (Sc.) Units: Using expression (4) we can extract the forward linkage multipliers, million euros. as shown in the right column (Table 7). The first positions are occupied * Sector where subsidies are eliminated by the electricity, gas, steam and air conditioning supply (2.64); manufacture of food products, beverages and tobacco (2.41); and and implying reductions in GVA in the rest of the sectors of € 0.99 manufacture of basic metals and fabricated metal products, except ma­ million (Table 5). This reduction in the GVA of other sectors is the chinery and equipment (2.29). The outputs of these three industries are smallest of the three scenarios analysed so far. It is striking that both the GVA of the fishing sector, in the 33rd position, and that of the aqua­ culture sector, in the 40th, is not among the most affected by the sub­ Table A.2 traction of these subsidies. In this scenario, the impacts on GVA are also Rest of EMFF funds. less significant in those sectors related to the activity of marine resource EU National TOTAL sectors (Table 6). Contribution Favour the application of the 79,041,351 € 19,760,338 € 98,801,689 € 6.1.4. Scenario 5 CFP 67,174,603 € 7463,845 € 74,638,448 € Finally, as expected, Scenario 5 is the one that would have the most 9738,751 € 4173,751 € 13,912,502 € impact on the three sectors analysed and the rest of the industries of the Increase employment and 107,673,734 19,001,248 € 126,674,982 territorial cohesion economy. In this scenario, total losses in all industries GVA would be € € Favour the development and 5334,672 € 17,605,526 € 22,940,198 € quantified in approximately € 144.37 million, of which € 127.11 million execution of the Integrated would correspond to the sectors related to the fishing industry. Being the Maritime Policy GVA of the extractive fishing sector, the most affected (€ 58.19 million), Technical assistance 59,850,976 € 19,950,326 € 79,801,302 € 328,814,087 87,955,034 € 416,769,121 but also significant the reduction in aquaculture (€ 30.79 million) and € € seafood processing (€ 38.12 million) GVA. In addition to causing a total reduction in the GVA of the rest of the sectors of € 17.25 million Source: EC (2018) [10] (Table 5). Table A.1 EMFF Program Budgets for 2014–2020. 2014 2015 2016 2017 2018 2019 2020 Total BE 5722,130.00 5795,229.00 5848,204.00 5942,991.00 6081,279.00 6122,861.00 6233,357.00 41,746,051.00 BG 12,071,289.00 12,225,498.00 12,337,253.00 12,537,214.00 12,828,942.00 12,916,663.00 13,149,763.00 88,066,622.00 CZ 4263,975.00 4318,446.00 4357,922.00 4428,555.00 4531,602.00 4562,588.00 4644,927.00 31,108,015.00 DK 28,559,270.00 28,924,111.00 29,188,510.00 29,661,596.00 30,351,790.00 30,559,328.00 31,110,815.00 208,355,420.00 DE 30,100,054.00 30,484,577.00 30,763,242.00 31,261,850.00 31,989,281.00 32,208,016.00 32,789,256.00 219,596,276.00 EE 13,840,012.00 14,016,816.00 14,144,946.00 14,374,205.00 14,708,679.00 14,809,253.00 15,076,507.00 100,970,418.00 IE 20,231,798.00 20,490,256.00 20,677,561.00 21,012,701.00 21,501,645.00 21,648,669.00 22,039,349.00 147,601,979.00 EL 53,289,776.00 53,970,543.00 54,463,896.00 55,346,644.00 56,634,503.00 57,021,756.00 58,050,796.00 388,777,914.00 ES 159,223,336.00 161,257,387.00 162,731,468.00 165,369.007.00 169,216,972.00 170,374,037.00 173,448,682.00 1161,620,889.00 FR 80,594,423.00 81,624.003.00 82,370,140.00 83,705,190.00 85,652,923.00 86,238,597.00 87,794,897.00 587,980,173.00 HR 34,629,786.00 35,072,176.00 35,392,777.00 35,966,420.00 36,803,321.00 37,054,974.00 37,723,684.00 252,643,138.00 IT 73,642,561.00 74,583,332.00 75,265,111.00 76,485.002.00 78,264,728.00 78,799,884.00 80,221,941.00 537,262,559.00 CY 5443,762.00 5513,306.00 5563,703.00 5653,880.00 5785,440.00 5824,999.00 5930,119.00 39,715,209.00 LV 19,167.006.00 19,411,862.00 19,589,309.00 19,906,810.00 20,370,021.00 20,509,307.00 20,879,427.00 139,833,742.00 LT 8694,653.00 8805,725.00 8886,220.00 9030,247.00 9240,371.00 9303,555.00 9471,451.00 63,432,222.00 HU 5358,928.00 5427,387.00 5477.000.00 5565,770.00 5695,280.00 5734,223.00 5837,705.00 39,096,293.00 MT 3101,540.00 3141,162.00 3169,876.00 3221,253.00 3296,208.00 3318,746.00 3378,637.00 22,627,422.00 NL 13,915,788.00 14,093,559.00 14,222,391.00 14,452,906.00 14,789,211.00 14,890,336.00 15,159,053.00 101,523,244.00 AT 954,693.00 966,888.00 975,727.00 991,541.00 1014,613.00 1021,551.00 1039,987.00 6965.000.00 PL 72,814,233.00 73,744,422.00 74,418,532.00 75,624,702.00 77,384,410.00 77,913,547.00 79,319,610.00 531,219,456.00 PT 53,797,969.00 54,485,229.00 54,983,288.00 55,874,453.00 57,174,593.00 57,565,539.00 58,604,393.00 392,485,464.00 RO 23,085,512.00 23,380,425.00 23,594,150.00 23,976,562.00 24,534,471.00 24,702,232.00 25,148,019.00 168,421,371.00 SI 3400,584.00 3444,026.00 3475,509.00 3531,839.00 3614,022.00 3638,734.00 3704,400.00 24,809,114.00 SK 2163,649.00 2191,290.00 2211,321.00 2247,162.00 2299,451.00 2315,174.00 2356,953.00 15,785.000.00 FI 10,197,069.00 10,327,335.00 10,421,739.00 10,590,653.00 10,837,087.00 10,911,188.00 11,108,097.00 74,393,168.00 SE 16,469,779.00 16,680,178.00 16,832,654.00 17,105,477.00 17,503,503.00 17,623,188.00 17,941,225.00 120,156.004.00 UK 33,327,114.00 33,752,863.00 34,061,403.00 34,613,468.00 35,418,887.00 35,661,073.00 36,304,629.00 243,139,437.00 EU27 (*) 788,060,689.00 798,128,031.00 805,423,852.00 818,478,098.00 837,523,233.00 843,250,018.00 858,467,679.00 5749,331,600.00 Source: EC (2016)[9]. Units: € million 9 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table A.3 in this sector generates € 1.476 in the economy, followed by the aqua­ Amount of funds allocated to the different categories of subsidies. culture sector (€ 1.144). Table 9 shows the highest impacts that the Country Beneficial Harmful Ambiguous Total sectors analysed have on their ‘client’ industries for each monetary unit of production. In this case, every euro produced in the fishing sector China 434 5.886 941 7.261 UE 1523 2036 244 3803 indirectly generates € 0.073 in the sector of transportation and storage; € USA 2187 1136 106 3429 0.051 in wholesale and retail trade, repair of motor vehicles and mo­ Rep. Korea 1635 1,5 50 3185 torcycles; and € 0.038 in the production of food products, beverages and Japan 534 2111 215 2,86 tobacco products. As regards the aquaculture sector, every euro indi­ Russian Federation 295 1162 54 1512 Thailand 74 1069 6 1149 rectly produces € 0.022 in the transport and storage sector; € 0.015 in Canada 388 194 271 853 wholesale and retail trade, repair of motor vehicles and motorcycles; Norway 278 527 41 846 and € 0.011 in the production of food products, beverages and tobacco. Spain 150 683 11 844 Finally, every euro in the seafood processing industry indirectly pro­ Taiwan 69 708 10 787 duces € 0.014 in the sector manufacture of food products, beverages and Source: Sumaila et al., [41]. Units: Millions of $ tobacco products; and € 0.008 in the agricultural sector. Of the top 10 industries with the highest multiplier suppliers to customers, five belong to the services sector, three to the industrial sector and two to the pri­ Table A.4 mary sector. It indicates the remarkable dependence they have on the Total estimate of subsidies granted in Spain by category, 2013–2019. tertiary sector. Category Type Constant 2018 USD 6.3. Variations in final demand Beneficial Fisheries management 25,413,428.31 Beneficial Fishery R&D 36,118,031.01 Beneficial MPAs 88,665,450.12 In this section, we present the variations in final demand due to the Capacity-enhancing Boat construction & renovation 4823,053.74 elimination of subsidies. The values presented in Tables 10 and 11 were Capacity-enhancing Fisheries dev, projects 16,033,494.34 calculated with expression (7). It can be observed that the greatest re­ Capacity-enhancing Fishing port development 7675,249.92 Capacity-enhancing Market, & storage infrastructure, 16,243,693.93 ductions in demand occur in the sectors for which subsidies are elimi­ Capacity-enhancing Tax exemption 461,545,847.80 nated, except for Scenario 2, where the accommodation and food Capacity-enhancing Fishing access 90,588,507.18 services sector is the most affected. Capacity-enhancing Fuel subsidies 85,922,565.74 Due to the withdrawal of subsidies, the industries analysed will also Ambiguous Fisher assistance 3622,852.51 experience a reduction in the demand for their products. It can be Ambiguous Vessel buyback 7000,077.80 Ambiguous Rural fisher communities 0.00 observed in Table 11 that Scenario 5 involves a reduction in final de­ mand of all sectors as a whole of € 28.72 million. This scenario would Source: estimates by the authors of this study based on data from Sumaila et al. cause a € 19.73 million loss in demand from sectors related to fishing [41]. Units: millions of $ (constant 2018 $). activity and a significant decrease in the seafood processing sector (€ 13.91 million). This fall is 0.62% greater than this sector in Scenario 4. in high demand by other industries for their production processes. As Likewise, in Scenario 5, the decrease in demand in the rest of the pro­ seen in both classifications, none of the three marine resource sectors ductive sectors reaches € 8.99 million. analysed is among the top ten positions (Table 7), which indicates that It should be noted that, after Scenario 5, it is in Scenario 2 where they do not stand out as suppliers or buyers within the Spanish economy. there is the most significant reduction in demand from the rest of the Expression (3) allows us to analyse the multipliers of the three sec­ sectors (€ 7.38 million). Actually, this is the sector where the largest tors considered in their input producers. We see that the fishing sector is amount of subsidies is subtracted (€ 59.73 million). Finally, Scenario 4 the one that generates the most significant impact among its suppliers. presents the most significant impacts compared to scenarios 2 and 3 (€ Thus, for every euro produced, a total economic impact of € 1.406 is 14.26 million), being the most significant reductions in the sector where generated in the economy, followed by the aquaculture sector with € subsidies are removed, the seafood processing sector (€ 13.83 million). 1.131 (Annex 1, Table A.6). Analysed individually (Table 8), the sector that receives the greatest indirect impacts from the fishing and aqua­ 6.4. Discussion of the results culture sectors is the sector wholesale and retail trade, repair of motor vehicles and motorcycles; € 0.053 and € 0.016, respectively. The impacts The economic activity of the marine resource sectors can be affected on the sector transport and storage sector are also important, € 0.049 by shocks of different kinds. They can occur due to natural causes and € 0.015, respectively. They also make significant use of supplies (weather events), new regulations (reductions in TACs), as well as from the electricity, gas, steam and air conditioning supply sector, shocks in demand for their products [42]. In our case, it is interesting to generating significant indirect impacts (€ 0.023 from the fishing sector see that the impacts of the regulation of subsidies occur in the sectors and € 0.007 from the aquaculture sector). Although it stands out that the analysed and extend to other sectors. aquaculture sector has the fishing sector among one of its principal As shown in Table 12, as Scenario 5 is the aggregation of scenarios 2, suppliers, generating € 0.008 indirectly. 3 and 4, it has, as expected, the most significant implications in terms of As regards the seafood processing sector, it has its highest indirect the total reduction in GVA in the three marine resource sectors (€ 127.11 multipliers over its suppliers in the sector of food products, beverages million). This is less than the total amount added by all the subsidies and tobacco products (€ 0.013); agricultural and forestry (€ 0.008); and, subtracted in the three sectors (€ 129.94 million). It indicates that thirdly, the fishing sector (€ 0.003). As can be seen, the fishing sector eliminating the subsidies considered in the three sectors would release a appears as one of the main sectors for aquaculture and seafood pro­ bulk of public resources higher than the impact caused in the GVA of the cessing, where more significant indirect economic impacts are generated three marine resource sectors, approximately € 2.82 million (though it (Table 8). will also have some negative impacts on the GVA of the rest of sectors of With expression (4) we calculate the total individual impacts that the the economy that should be considered). This situation would also occur supplier industries produce on the buyer industries. Doing the analysis in the other scenarios, although these net differences are lower than individually, shown in Table A.7 (Annex 1), we highlight that the fishing those mentioned before. For example, in Scenario 2, the reduction in the sector shows the most significant impact on the Spanish economy, total GVA of the three marine resource sectors (€ 58.75 million) is less despite all three sectors presenting similar impacts. Every euro invested than the total sum of the subsidies removed in the fishing sector (€ 59.73 10 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table A.5 GVA reductions by sector and by scenario with respect to the initial scenario. SC1GVA SC2GVA SC3GVA SC4GVA SC5GVA Agriculture and forestry 48131.8158 48131.4347 48131.7550 48131.7327 48131.2909 Fishing 16097.9870 16039.8948 16097.8897 16097.9844 16039.7949 Aquaculture 4958.4048 4957.9463 4928.0688 4958.4040 4927.6095 Mining and quarrying 21586.6134 21586.5906 21586.6098 21586.6113 21586.5848 Manufacture of food products, beverages and tobacco products 69098.7434 69092.1828 69097.6972 69098.2310 69090.6243 Seafood processing 2098.2304 2098.0283 2098.1982 2060.3367 2060.1023 Manufacture of textiles, apparel, leather and related products 28738.5116 28738.4051 28738.4946 28738.4906 28738.3672 Manufacture of wood and paper products, and printing 31733.7274 31733.6331 31733.7124 31733.7093 31733.6000 Manufacture of coke, and refined petroleum products 17221.3493 17221.3132 17221.3436 17221.3433 17221.3014 Manufacture of chemicals and chemical products 41301.1664 41301.0582 41301.1492 41301.1507 41301.0252 Manufacture of pharmaceuticals, medicinal chemical and botanical products 23300.1756 23300.1354 23300.1692 23300.1718 23300.1252 Manufacture of rubber and plastics products, and other non-metallic mineral products 39402.1896 39402.1260 39402.1795 39402.1825 39402.1088 Manufacture of basic metals and fabricated metal products, except machinery and equipment 29056.4296 29056.4050 29056.4256 29056.4268 29056.3983 Manufacture of computer, electronic and optical products 31587.0408 31586.9967 31587.0337 31587.0362 31586.9851 Manufacture of electrical equipment 31442.8829 31442.8492 31442.8776 31442.8798 31442.8407 Manufacture of machinery and equipment n,e,c, 15677.6927 15677.6818 15677.6909 15677.6917 15677.6791 Manufacture of transport equipment 34191.9560 34191.9318 34191.9521 34191.9536 34191.9257 Other manufacturing, and repair and installation of machinery and equipment 34567.5862 34567.5599 34567.5820 34567.5842 34567.5537 Electricity, gas, steam and air-conditioning supply 49526.2428 49526.2082 49526.2373 49526.2389 49526.1988 Water supply, sewerage, waste management and remediation 33530.3459 33530.3170 33530.3413 33530.3432 33530.3097 Construction 93343.2925 93343.2400 93343.2841 93343.2869 93343.2261 Wholesale and retail trade, repair of motor vehicles and motorcycles 141505.2101 141505.0605 141505.1862 141505.1949 141505.0215 Transportation and storage 97150.2042 97150.1091 97150.1891 97150.1977 97150.0874 Accommodation and food service activities 116894.3073 116889.8707 116893.5999 116894.1116 116888.9676 Publishing, audiovisual and broadcasting activities 50549.5583 50549.5107 50549.5507 50549.5548 50549.4997 Telecommunications 40277.4337 40277.3970 40277.4278 40277.4308 40277.3883 IT and other information services 61835.3814 61835.3183 61835.3714 61835.3765 61835.3033 Financial and insurance activities 71360.2133 71360.1820 71360.2083 71360.2110 71360.1747 Real estate activities 238516.1561 238516.0763 238516.1434 238516.1515 238516.0590 Legal, accounting, management, architecture, engineering, technical testing and analysis 63329.9331 63329.8814 63329.9248 63329.9303 63329.8704 activities Scientific research and development 23672.4939 23672.4686 23672.4899 23672.4921 23672.4627 Other professional, scientific and technical activities 45051.5901 45051.5100 45051.5773 45051.5855 45051.4927 Administrative and support service activities 60384.0797 60384.0257 60384.0711 60384.0764 60384.0138 Public administration and defence, compulsory social security 82636.8202 82636.6996 82636.8010 82636.8139 82636.6740 Education 81849.8847 81849.4032 81849.8079 81849.8668 81849.3085 Human health services 65863.9307 65863.8196 65863.9130 65863.9235 65863.7946 Residential care and social work activities 22550.8740 22550.6904 22550.8447 22550.8695 22550.6566 Arts, entertainment and recreation 38340.0055 38339.8897 38339.9871 38339.9975 38339.8632 Other services 37778.7677 37778.6620 37778.7508 37778.7621 37778.6396 Activities of households as employers; undifferentiated goods- and services-producing 37900.1154 37900.0539 37900.1056 37900.1116 37900.0402 activities of households for own use Activities of extra-territorial organisations and bodies 0.0000 0.0000 0.0000 0.0000 0.0000 Source: estimates of the authors of this study based on INE data (2020) [25]. Units: millions of € Note: Scenario 1 includes the initial values of the GVA before eliminating the subsidies. The rest of the scenarios (2, 3, 4 and 5) represent the variations that occur after subtracting subsidies. million). Likewise, Scenario 3 presents a net difference of € 0.78 million, also be noted that the impacts on final demand in Scenario 4, as it while Scenario 4 would entail positive net impacts of € 1.05 million. happens in each scenario, are mainly given in the sector where subsidies However, if we only compare the individual impacts on the GVA of each are eliminated. However, the effects on the seafood processing sector specific sector where the subsidies are removed with the total amount of demand are substantially higher than in the fishing and aquaculture subsidies extracted, these net differences are obviously greater sectors. In any case, the total impact in any analysed scenario will also (Table 12), particularly in Scenario 2 (where it is a 67% higher, reaching depend on the use of the public resources released, which is beyond the € 1.64 million). scope of this paper. However, when considering the impacts of a withdrawal of subsidies, The three sectors analysed allocate most of their production to final policy makers must consider the impact of this withdrawal on all the consumers, or it is exported. However, one of the leading sectors sectors of the economy, not just the three marine resource sectors. If we demanding its production is the transport and storage sector; and the compare total economic impacts with the amount of subsidies removed, production of food products, beverages and tobacco products. This fact we observe that scenarios 2 and 5 present similar net impacts, € − 13.04 shows that reducing the supply of inputs to these industries could impact and € − 14.43 million, respectively. It is crucial to remember that, other sectors that depend on them. It is also interesting to note that the despite both net differences being quite similar, the former amount is multipliers that the extractive fishing sector has as a supplier of inputs to given only in one sector (fishing). This result indicates the need for other industries are much higher (five times greater) than the aquacul­ designing concrete plans to mitigate the impacts of removing the sub­ ture sector and almost seven than the seafood processing sector. It points sidies of the fishing sector, without neglecting the impacts on the rest of out its importance in the supply chain and potential consequences on the sectors. Contrary to the rest of the scenarios, Scenario 4 is the only one production of their "client" companies. where the amount of subsidies subtracted is greater than the total sum of We can do a similar reading when any of the three sectors analysed is impacts on the economy, € 0.05 million. It happens because the impacts in the role of the ’client’ of other sectors. In this case, by reducing its on the entire economy (€ − 38.89 million) are mainly concentrated in the input demands, mainly from the transportation and storage; wholesale seafood processing sector (€ − 37.89 million). That is, contrary to Sce­ and retail trade; repair of motor vehicles and motorcycles; and supply of nario 2, a vast part of impacts is concentrated in just one sector. It should electricity, gas, steam and air conditioning sectors, these will also see 11 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table A.6 Backward multipliers. # Fishing Aquaculture Seafood processing 1 Fishing 1.0106 Aquaculture 1.0024 Seafood processing 1.0004 2 Wholesale and retail trade, repair of 0.0525 Wholesale and retail trade, repair of 0.0162 Manufacture of food products, beverages 0.0135 motor vehicles and motorcycles motor vehicles and motorcycles and tobacco products 3 Transport and storage 0.0491 Transport and storage 0.0151 Agriculture and forestry 0.0081 4 Electricity, gas, steam and air- 0.0235 Fishing 0.0080 Fishing 0.0035 conditioning supply 5 Other manufacturing, and repair and 0.0209 Electricity, gas, steam and air- 0.0072 Wholesale and retail trade, repair of 0.0032 installation of machinery and equipment conditioning supply motor vehicles and motorcycles 6 Administrative and support service 0.0203 Other manufacturing, and repair and 0.0064 Transport and storage 0.0019 activities installation of machinery and equipment 7 Manufacture of coke, and refined 0.0200 Administrative and support service 0.0062 Administrative and support service 0.0015 petroleum products activities activities 8 Manufacture of basic metals and 0.0192 Manufacture of coke, and refined 0.0061 Manufacture of wood and paper 0.0013 fabricated metal products, except petroleum products products, and printing machinery and equipment 9 Manufacture of transport equipment 0.0186 Manufacture of basic metals and 0.0059 Electricity, gas, steam and air- 0.0012 fabricated metal products, except conditioning supply machinery and equipment 10 Financial and insurance activities 0.0167 Manufacture of transport equipment 0.0057 Manufacture of chemicals and chemical 0.0012 products 11 Water supply, sewerage, waste 0.0143 Financial and insurance activities 0.0051 Aquaculture 0.0011 management and remediation activities 12 Construction 0.0143 Water supply, sewerage, waste 0.0044 Manufacture of basic metals and 0.0010 management and remediation activities fabricated metal products, except machinery and equipment 13 Manufacture of chemicals and chemical 0.0142 Construction 0.0044 Manufacture of rubber and plastics 0.0009 products products, and other non-metallic mineral products 14 Manufacture of textiles, wearing apparel, 0.0128 Manufacture of chemicals and chemical 0.0044 Financial and insurance activities 0.0008 leather and related products products 15 Legal, accounting, management, 0.0114 Manufacture of textiles, wearing apparel, 0.0039 Water supply, sewerage, waste 0.0008 architecture, engineering, technical leather and related products management and remediation activities testing and analysis activities 16 Manufacture of rubber and plastics 0.0110 Legal, accounting, management, 0.0035 Legal, accounting, management, 0.0008 products, and other non-metallic mineral architecture, engineering, technical architecture, engineering, technical products testing and analysis activities testing and analysis activities 17 Telecommunications 0.0099 Manufacture of rubber and plastics 0.0034 Construction 0.0007 products, and other non-metallic mineral products 18 Manufacture of wood and paper 0.0092 Telecommunications 0.0030 Other professional, scientific and 0.0005 products, and printing technical activities 19 Agriculture and forestry 0.0062 Manufacture of wood and paper 0.0028 Other manufacturing, and repair and 0.0005 products, and printing installation of machinery and equipment 20 Other professional, scientific and 0.0056 Agriculture and forestry 0.0019 Telecommunications 0.0004 technical activities 21 Manufacture of electrical equipment 0.0051 Other professional, scientific and 0.0017 Manufacture of transport equipment 0.0004 technical activities 22 Real estate activities 0.0050 Manufacture of electrical equipment 0.0016 Manufacture of machinery and 0.0003 equipment n.e.c. 23 Other services 0.0047 Real estate activities 0.0015 Real estate activities 0.0003 24 Mining and quarrying 0.0041 Other services 0.0014 Manufacture of electrical equipment 0.0002 25 Manufacture of machinery and 0.0036 Mining and quarrying 0.0013 Manufacture of coke, and refined 0.0002 equipment n.e.c. petroleum products 26 Education 0.0033 Manufacture of machinery and 0.0011 IT and other information services 0.0002 equipment n.e.c. 27 Aquaculture 0.0032 Education 0.0010 Education 0.0002 28 IT and other information services 0.0028 IT and other information services 0.0009 Mining and quarrying 0.0002 29 Manufacture of computer, electronic and 0.0024 Manufacture of computer, electronic and 0.0007 Manufacture of textiles, wearing apparel, 0.0002 optical products optical products leather and related products 30 Human health services 0.0023 Human health services 0.0007 Manufacture of computer, electronic and 0.0001 optical products 31 Manufacture of food products, beverages 0.0022 Manufacture of food products, beverages 0.0007 Human health services 0.0001 and tobacco products and tobacco products 32 Accommodation and food service 0.0015 Accommodation and food service 0.0005 Other services 0.0001 activities activities 33 Publishing, audiovisual and broadcasting 0.0012 Publishing, audiovisual and broadcasting 0.0004 Accommodation and food service 0.0001 activities activities activities 34 Manufacture of pharmaceuticals, 0.0011 Manufacture of pharmaceuticals, 0.0003 Arts, entertainment and recreation 0.0001 medicinal chemical and botanical medicinal chemical and botanical products products 35 Arts, entertainment and recreation 0.0009 Arts, entertainment and recreation 0.0003 Manufacture of pharmaceuticals, 0.0001 medicinal chemical and botanical products (continued on next page) 12 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table A.6 (continued ) # Fishing Aquaculture Seafood processing 36 Public administration and defence, 0.0005 Public administration and defence, 0.0002 Publishing, audiovisual and broadcasting 0.0001 compulsory social security compulsory social security activities 37 Scientific research and development 0.0004 Scientific research and development 0.0001 Public administration and defence, 0.0000 compulsory social security 38 Residential care and social work 0.0001 Residential care and social work 0.0000 Scientific research and development 0.0000 activities activities 39 Seafood processing 0.0001 Seafood processing 0.0000 Residential care and social work 0.0000 activities 40 Activities of households as employers; 0.0000 Activities of households as employers; 0.0000 Activities of households as employers; 0.0000 undifferentiated goods- and services- undifferentiated goods- and services- undifferentiated goods- and services- producing activities of households for producing activities of households for producing activities of households for own use own use own use 41 Activities of extra-territorial 0.0000 Activities of extra-territorial 0.0000 Activities of extra-territorial 0.0000 organisations and bodies organisations and bodies organisations and bodies TOTAL 1.4046 1.1307 1.0464 Source: estimates of the authors of this study based on INE data (2020) [25]. Units: euros their demand reduced. As we have seen, some of its main suppliers are significantly influence the results. among the Spanish economy’s ten most relevant strategic sectors. Regarding the methodology, the input–output models imply a series Therefore, reducing demand for these key sectors may drag down other of assumptions. First, they assume constant returns to scale (the inputs sectors, spreading the impacts through the Spanish productive sectors. It purchased are proportional to the output obtained); there is no possi­ can be seen, for example, when we analyse the percentage represented bility of substituting some inputs for others (there are fixed technology by the inputs demanded by the fishing and aquaculture sectors from coefficients); and the supply of inputs is unlimited (this implies that the these sectors. In the case of the fishing sector, in 2015, the intermediate necessary amounts of employment, raw materials and natural resources inputs demanded by these three sectors represented 21.34% of their cost are available to cover the demand of the industrial sectors) [34]. structure. In aquaculture, expenses represented 26.91% of intermediate Furthermore, our methodology analyses the impact on the economy of consumption expenses [29]. In contrast, the seafood processing sector the elimination of subsidies in the sectors studied but does not consider acquired inputs from the agricultural and forestry sector; wholesale and the impact that the alternative use of these public resources may have. retail trade in the repair of motor vehicles and motorcycles; and trans­ Finally, another limitation of the study is due to the inherent static portation and storage, the amount of which represented 31% of its in­ feature of the input–output model and our assumptions of complete termediate consumption [16]. removal in each scenario, as subsidies will likely be removed gradually Regarding the reductions that demand would experience, it is and not entirely in one year. necessary to highlight the repercussion that the three analysed sectors have with a common sector: accommodation and food service activities. 7. Conclusions and policy recommendations The connection with this sector can be seen in the four scenarios ana­ lysed. In particular, the demand in this sector is very elastic and sensitive The protection of marine resources is a priority issue for the EU. One to price increases. This buying behaviour may be conditioned mainly by way to help them is by eliminating "harmful" fishing subsidies, included the wide range of restaurants and accommodations since Spain is one as a priority objective of Horizon Europe (2021–2027). By applying an country that attracts the most tourists in the world.5 In addition, an input–output model, this study simulates the potential economic im­ essential attraction that this sector has is, among others, the gastronomic pacts of removing these subsidies in Spain, in the context of the EMFF offer. It can include various seafood and fish dishes (including those from 2013 to 2020. It should be noted that both addressing this problem sourced from fish farms). Therefore, variations in the prices of fish in the Spanish case, and doing it through the methodology applied in products (fresh or processed) can, in turn, condition the consumer’s this study, represent novel contributions to the literature. The applica­ choice of accommodation or restaurant. In the case of the seafood pro­ tion of the input–output analysis has empirically shown us the magni­ cessing sector, the significant reduction that would occur is justified tude of the negative shock that the elimination of harmful subsidies for because the demand for this type of product in the Spanish market is the different sectors of the Spanish economy will entail. The breakdown relatively elastic, unlike what occurs in most European countries [19]. of the input–output table has provided a more detailed exploratory When interpreting the results, some limitations of the methodology analysis of the impacts in the three sectors analysed and how other and the data used should be pointed out. Regarding the data, only part of productive sectors connected to them are affected. the subsidies included in the EMFF is considered. In addition, the reli­ We have shown to what extent the elimination of harmful fishing ability of the work will depend on how close to reality the assumption subsidies will affect the GVA of the industries related to marine re­ made about the national allocation of funds to the different sectors, as sources. This analysis gives us a first picture of which sectors will be well as the estimates (following [41]) of the distribution of total funds most affected. Likewise, we have estimated the shocks that could occur between types of subsidies. In some cases, we also find minor differences in the supply chain from producing industries to client industries and in the information collected to carry out the disaggregation of the sectors vice versa due to the withdrawal of these subsidies. The results show us analysed (for example, the value of intermediate consumption or the to what extent the impacts can be expanded throughout the Spanish final value of production). They may be due to the differences in the data productive sectors. Finally, the incidence of the political reform of collection and analysis methodology used by the different sources con­ subsidies in the last link of the supply chain (final household demand) is sulted [22]. In any case, these differences were minimal, so they cannot also shown. These three analyses’ perspectives allow us to offer esti­ mates that give policymakers a broad view to evaluate the most convenient alternatives to smooth the impacts of the complete with­ drawal of "harmful" subsidies. 5 It was the second most visited country in the world in 2018. Source: UN Scenario 5, which shows the whole elimination of harmful subsidies World Tourism Organization (UNWTO) (report published in November 2019 on is, obviously, the one with presents higher impacts. Moreover, while the data from 2018.) 13 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table A.7 Forward multipliers. # Fishing Multiplier Aquaculture Multiplier Seafood processing Multiplier 1 Fishing 1.0081 Aquaculture 1.0007 Seafood processing 1.0004 2 Transportation and storage 0.0738 Transportation and storage 0.0224 Manufacture of food products, beverages 0.0145 and tobacco products 3 Wholesale and retail trade, repair of 0.0513 Wholesale and retail trade, repair of 0.0155 Agriculture and forestry 0.0082 motor vehicles and motorcycles motor vehicles and motorcycles 4 Manufacture of food products, beverages 0.0382 Manufacture of food products, beverages 0.0116 Wholesale and retail trade, repair of 0.0031 and tobacco products and tobacco products motor vehicles and motorcycles 5 Electricity, gas, steam and air- 0.0319 Electricity, gas, steam and air- 0.0097 Transportation and storage 0.0028 conditioning supply conditioning supply 6 Administrative and support service 0.0267 Administrative and support service 0.0081 Administrative and support service 0.0018 activities activities activities 7 Manufacture of coke, and refined 0.0248 Manufacture of coke, and refined 0.0075 Electricity, gas, steam and air- 0.0017 petroleum products petroleum products conditioning supply 8 Other manufacturing, and repair and 0.0223 Other manufacturing, and repair and 0.0068 Manufacture of wood and paper products, 0.0012 installation of machinery and equipment installation of machinery and equipment and printing 9 Financial and insurance activities 0.0205 Financial and insurance activities 0.0062 Manufacture of chemicals and chemical 0.0011 products 10 Mining and quarrying 0.0188 Mining and quarrying 0.0057 Manufacture of rubber and plastics 0.0010 products, and other non-metallic mineral products 11 Manufacture of transport equipment 0.0180 Manufacture of transport equipment 0.0054 Financial and insurance activities 0.0009 12 Legal, accounting, management, 0.0121 Legal, accounting, management, 0.0037 Legal, accounting, management, 0.0009 architecture, engineering, technical architecture, engineering, technical architecture, engineering, technical testing and analysis activities testing and analysis activities testing and analysis activities 13 Manufacture of chemicals and chemical 0.0116 Manufacture of chemicals and chemical 0.0035 Manufacture of basic metals and 0.0007 products products fabricated metal products, except machinery and equipment 14 Manufacture of basic metals and 0.0111 Manufacture of basic metals and 0.0034 Other professional, scientific and 0.0006 fabricated metal products, except fabricated metal products, except technical activities machinery and equipment machinery and equipment 15 Manufacture of textiles, apparel, leather 0.0108 Manufacture of textiles, apparel, leather 0.0033 Real estate activities 0.0005 and related products and related products 16 Manufacture of rubber and plastics 0.0101 Manufacture of rubber and plastics 0.0030 Construction 0.0004 products, and other non-metallic mineral products, and other non-metallic mineral products products 17 Telecommunications 0.0092 Telecommunications 0.0028 Mining and quarrying 0.0004 18 Real estate activities 0.0087 Real estate activities 0.0026 Other manufacturing, and repair and 0.0004 installation of machinery and equipment 19 Agriculture and forestry 0.0084 Agriculture and forestry 0.0025 Telecommunications 0.0003 20 Construction 0.0082 Construction 0.0025 Water supply, sewerage, waste 0.0003 management and remediation 21 Other professional, scientific and 0.0076 Fishing 0.0025 Manufacture of coke, and refined 0.0003 technical activities petroleum products 22 Manufacture of wood and paper products, 0.0068 Other professional, scientific and 0.0023 Manufacture of machinery and 0.0003 and printing technical activities equipment n.e.c. 23 Water supply, sewerage, waste 0.0064 Manufacture of wood and paper products, 0.0021 Accommodation and food service 0.0002 management and remediation and printing activities 24 Other services 0.0052 Water supply, sewerage, waste 0.0019 Education 0.0002 management and remediation 25 Education 0.0035 Other services 0.0016 IT and other information services 0.0002 26 IT and other information services 0.0031 Education 0.0011 Arts, entertainment and recreation 0.0001 27 Accommodation and food service 0.0029 IT and other information services 0.0009 Human health services 0.0001 activities 28 Human health services 0.0027 Accommodation and food service 0.0009 Manufacture of electrical equipment 0.0001 activities 29 Aquaculture 0.0025 Human health services 0.0008 Manufacture of textiles, apparel, leather 0.0001 and related products 30 Manufacture of machinery and 0.0019 Manufacture of machinery and 0.0006 Other services 0.0001 equipment n.e.c. equipment n.e.c. 31 Manufacture of electrical equipment 0.0019 Manufacture of electrical equipment 0.0006 Manufacture of computer, electronic and 0.0001 optical products 32 Manufacture of computer, electronic and 0.0017 Manufacture of computer, electronic and 0.0005 Manufacture of transport equipment 0.0001 optical products optical products 33 Arts, entertainment and recreation 0.0016 Arts, entertainment and recreation 0.0005 Fishing 0.0001 34 Publishing, audiovisual and broadcasting 0.0013 Publishing, audiovisual and broadcasting 0.0004 Publishing, audiovisual and broadcasting 0.0001 activities activities activities 35 Seafood processing 0.0012 Seafood processing 0.0004 Manufacture of pharmaceuticals, 0.0000 medicinal chemical and botanical products 36 Public administration and defence, 0.0006 Public administration and defence, 0.0002 Public administration and defence, 0.0000 compulsory social security compulsory social security compulsory social security 37 Manufacture of pharmaceuticals, 0.0005 Manufacture of pharmaceuticals, 0.0001 Aquaculture 0.0000 medicinal chemical and botanical medicinal chemical and botanical products products (continued on next page) 14 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table A.7 (continued ) # Fishing Multiplier Aquaculture Multiplier Seafood processing Multiplier 38 Residential care and social work activities 0.0000 Residential care and social work activities 0.0000 Residential care and social work activities 0.0000 39 Scientific research and development 0.0000 Scientific research and development 0.0000 Scientific research and development 0.0000 40 Activities of households as employers; 0.0000 Activities of households as employers; 0.0000 Activities of households as employers; 0.0000 undifferentiated goods- and services- undifferentiated goods- and services- undifferentiated goods- and services- producing activities of households for producing activities of households for producing activities of households for own use own use own use 41 Activities of extra-territorial 0.0000 Activities of extra-territorial 0.0000 Activities of extra-territorial 0.0000 organisations and bodies organisations and bodies organisations and bodies TOTAL 1.4759 1.1441 1.0435 Source: estimates of the authors of this study based on INE data (2020)[25]. Units: euros Table A.8 Impacts on demand. Sectors Impact Sectors Impact Scenarios 2 and 3 SC2 SC3 Accommodation and food service activities 4.4690 Aquaculture 2.5100 Fishing 3.2588 Accommodation and food service activities 0.7126 Education 0.0777 Education 0.0124 Seafood processing 0.0738 Seafood processing 0.0118 Wholesale and retail trade, repair of motor vehicles and motorcycles 0.0669 Wholesale and retail trade, repair of motor vehicles and motorcycles 0.0107 Residential care and social work activities 0.0564 Residential care and social work activities 0.0090 Real estate activities 0.0486 Real estate activities 0.0077 Arts, entertainment and recreation 0.0472 Arts, entertainment and recreation 0.0075 Other services 0.0453 Other services 0.0072 Manufacture of textiles, wearing apparel, leather and related products 0.0399 Manufacture of textiles, wearing apparel, leather and related products 0.0064 Aquaculture 0.0379 Fishing 0.0055 Agriculture and forestry 0.0339 Agriculture and forestry 0.0054 Human health services 0.0253 Human health services 0.0040 Activities of households as employers; undifferentiated goods- and services- 0.0188 Activities of households as employers; undifferentiated goods- and services- 0.0030 producing activities of households for own use producing activities of households for own use Administrative and support service activities 0.0096 Administrative and support service activities 0.0015 Telecommunications 0.0079 Telecommunications 0.0013 Manufacture of chemicals and chemical products 0.0075 Manufacture of chemicals and chemical products 0.0012 Transport and storage 0.0075 Transport and storage 0.0012 Financial and insurance activities 0.0074 Financial and insurance activities 0.0012 Manufacture of pharmaceuticals, medicinal chemical and botanical products 0.0072 Manufacture of pharmaceuticals, medicinal chemical and botanical products 0.0011 Manufacture of coke, and refined petroleum products 0.0061 Manufacture of coke, and refined petroleum products 0.0010 Electricity, gas, steam and air-conditioning supply 0.0057 Electricity, gas, steam and air-conditioning supply 0.0009 Manufacture of transport equipment 0.0057 Manufacture of transport equipment 0.0009 Manufacture of food products, beverages and tobacco products 0.0039 Manufacture of food products, beverages and tobacco products 0.0006 Manufacture of wood and paper products, and printing 0.0038 Manufacture of wood and paper products, and printing 0.0006 Manufacture of computer, electronic and optical products 0.0031 Manufacture of computer, electronic and optical products 0.0005 Other manufacturing, and repair and installation of machinery and 0.0029 Other manufacturing, and repair and installation of machinery and 0.0005 equipment equipment Water supply, sewerage, waste management and remediation activities 0.0027 Water supply, sewerage, waste management and remediation activities 0.0004 Publishing, audiovisual and broadcasting activities 0.0026 Publishing, audiovisual and broadcasting activities 0.0004 Construction 0.0023 Construction 0.0004 Manufacture of electrical equipment 0.0020 Manufacture of electrical equipment 0.0003 Manufacture of rubber and plastics products, and other non-metallic mineral 0.0016 Manufacture of rubber and plastics products, and other non-metallic mineral 0.0003 products products Public administration and defence, compulsory social security 0.0011 Public administration and defence, compulsory social security 0.0002 Legal, accounting, management, architecture, engineering, technical testing 0.0008 Legal, accounting, management, architecture, engineering, technical testing 0.0001 and analysis activities and analysis activities Manufacture of basic metals and fabricated metal products, except 0.0007 Manufacture of basic metals and fabricated metal products, except 0.0001 machinery and equipment machinery and equipment Other professional, scientific and technical activities 0.0005 Other professional, scientific and technical activities 0.0001 Manufacture of machinery and equipment n.e.c. 0.0002 Manufacture of machinery and equipment n.e.c. 0.0000 Mining and quarrying 0.0000 Mining and quarrying 0.0000 IT and other information services 0.0000 IT and other information services 0.0000 Scientific research and development 0.0000 Scientific research and development 0.0000 Activities of extra-territorial organisations and bodies 0.0000 Activities of extra-territorial organisations and bodies 0.0000 TOTAL 8.3922 3.3280 Scenarios 4 and 5 SC4 SC5 Seafood processing 13.8333 Seafood processing 13.9189 Accommodation and food service activities 0.1971 Accommodation and food service activities 5.3787 Manufacture of textiles, wearing apparel, leather and related products 0.0078 Fishing 3.2644 Agriculture and forestry 0.0074 Aquaculture 2.5480 Wholesale and retail trade, repair of motor vehicles and motorcycles 0.0068 Education 0.0930 Arts, entertainment and recreation 0.0033 Wholesale and retail trade, repair of motor vehicles and motorcycles 0.0844 (continued on next page) 15 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Table A.8 (continued ) Sectors Impact Sectors Impact Education 0.0029 Residential care and social work activities 0.0667 Real estate activities 0.0028 Real estate activities 0.0591 Other services 0.0024 Arts, entertainment and recreation 0.0580 Human health services 0.0016 Other services 0.0549 Residential care and social work activities 0.0014 Manufacture of textiles, wearing apparel, leather and related products 0.0541 Activities of households as employers; undifferentiated goods- and services- 0.0012 Agriculture and forestry 0.0467 producing activities of households for own use Manufacture of chemicals and chemical products 0.0011 Human health services 0.0309 Manufacture of coke, and refined petroleum products 0.0010 Activities of households as employers; undifferentiated goods- and services- 0.0230 producing activities of households for own use Manufacture of wood and paper products, and printing 0.0007 Administrative and support service activities 0.0117 Manufacture of pharmaceuticals, medicinal chemical and botanical products 0.0007 Manufacture of chemicals and chemical products 0.0098 Electricity, gas, steam and air-conditioning supply 0.0007 Telecommunications 0.0098 Telecommunications 0.0006 Transport and storage 0.0092 Administrative and support service activities 0.0006 Financial and insurance activities 0.0091 Manufacture of transport equipment 0.0005 Manufacture of pharmaceuticals, medicinal chemical and botanical products 0.0090 Financial and insurance activities 0.0005 Manufacture of coke, and refined petroleum products 0.0081 Transport and storage 0.0005 Electricity, gas, steam and air-conditioning supply 0.0073 Manufacture of computer, electronic and optical products 0.0003 Manufacture of transport equipment 0.0072 Manufacture of food products, beverages and tobacco products 0.0003 Manufacture of wood and paper products, and printing 0.0051 Water supply, sewerage, waste management and remediation activities 0.0002 Manufacture of food products, beverages and tobacco products 0.0049 Construction 0.0002 Manufacture of computer, electronic and optical products 0.0039 Other manufacturing, and repair and installation of machinery and 0.0002 Other manufacturing, and repair and installation of machinery and 0.0035 equipment equipment Publishing, audiovisual and broadcasting activities 0.0002 Water supply, sewerage, waste management and remediation activities 0.0033 Manufacture of electrical equipment 0.0002 Publishing, audiovisual and broadcasting activities 0.0032 Manufacture of rubber and plastics products, and other non-metallic mineral 0.0002 Construction 0.0029 products Fishing 0.0001 Manufacture of electrical equipment 0.0025 Manufacture of basic metals and fabricated metal products, except 0.0001 Manufacture of rubber and plastics products, and other non-metallic mineral 0.0021 machinery and equipment products Aquaculture 0.0001 Public administration and defence, compulsory social security 0.0013 Public administration and defence, compulsory social security 0.0001 Legal, accounting, management, architecture, engineering, technical testing 0.0010 and analysis activities Legal, accounting, management, architecture, engineering, technical testing 0.0000 Manufacture of basic metals and fabricated metal products, except 0.0008 and analysis activities machinery and equipment Other professional, scientific and technical activities 0.0000 Other professional, scientific and technical activities 0.0006 Manufacture of machinery and equipment n.e.c. 0.0000 Manufacture of machinery and equipment n.e.c. 0.0002 Mining and quarrying 0.0000 Mining and quarrying 0.0000 IT and other information services 0.0000 IT and other information services 0.0000 Scientific research and development 0.0000 Scientific research and development 0.0000 Activities of extra-territorial organisations and bodies 0.0000 Activities of extra-territorial organisations and bodies 0.0000 TOTAL 14.0773 25.7975 Source: estimates of the authors of this study based on data from INE [25]. Units: millions of € impact on the GVA of the three marine resource sectors is € 2.82 million impacts, which indicates that it is the marine ’key’ sector for other below the subsidies subtracted, the impacts on the whole economy are € industries. 14.43 million above the amount of subsidies removed (Table 12). Interrupting the supply chain in any direction, either from the ma­ Nevertheless, looking at each scenario when subsidies are eliminated rine industries’ client side or the seller side, has consequences not only individually, Scenario 4 is the only one that produces positive net dif­ among the involved industries but also for the rest of the Spanish in­ ferences between the subsidies subtracted and the impact on the three dustries. This knock-on effect will be more significant when the sector is marine resource sectors (€ 1.05 million) and on the whole economy (€ more strategically linked to economic development. Even though the 0.05 million). Moreover, all economic losses are concentrated in the processing sector presents the highest dependency on these key sectors, seafood processing sector (€ 37.89 million), with hardly any impacts on the fishing sector, with less dependency on them, presents the highest the rest sectors (around € 1 million). Therefore, in this case policy efforts backward and forward multipliers. Therefore, both arguments should be could just be focused on mitigating impacts on the processing sector by clear to policymakers and put them together when designing the sub­ using part of the released funds, and the rest of funds could be allocated sidies removal policy. to address the economic difficulties of the industries that were also Policy makers should also focus on the impact of the removal of affected. Therefore, while the impacts of the subtraction of subsidies in subsidies in the demand of the different sectors. Our results highlight the the processing sector seem more manageable with an appropriate use of important impact of the subtraction of subsidies on the demand of the the released subsidies, the authorities should be more careful with the seafood processing sector, while the subtraction of fishing sector sub­ design of the subtraction of subsidies in the other sectors. sidies would have the greatest impacts on the demand of the rest of Regarding indirect impacts on other sectors’ GVA, in particular, the sectors of the economy. manufacture of food products and accommodation service sectors are Finally, although it goes beyond the scope of this study, it should also the most affected by removing subsidies in Scenario 4, € 6.56 million and be investigated the possible impact of the use of public resources € 4.43 million (Table 6). Total combined losses in those sectors are released by eliminating subsidies. These resource allocations could be almost five times greater than those given in Scenario 2 and 3 jointly (€ directed to other, more beneficial uses for the marine industry [38]. This 2.46 million). This offers valuable information to policymakers. More­ recycling of resources could help offset the possible social impacts of the over, the extractive fishing sector has the most substantial indirect withdrawal of subsidies and the economic impacts we have analysed. 16 A. Roca Florido and E. Padilla Rosa Marine Policy 153 (2023) 105661 Funding [15] J.J. García-del-Hoyo, R. Jiménez-Toribio, P. Guillotreau, A demand analysis of the Spanish canned tuna market, Mar. Policy 86 (2017) 127–133. [16] García-Negro M.C. 2003. “Táboas input-output pesca-conserva galegas 1999.” This work was supported by the Spanish Ministry of Science and Santiago de Compostela: Xunta de Galicia, Consellería de Pesca e Asuntos Innovation (Ministerio de Ciencia e Innovación) (grant number: Marítimos. 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