The Fishery as a Watery Commons: Lessons from the Experiences of Other Public Policy Areas for U.S. Fisheries Policy

Open access, combined with modern technologies of fishing, has created serious problems of overfishing and threatens the sustainability of many U.S. fisheries. The common pool problem -- the ocean version of "the tragedy of the commons" -- is the root cause of the overfishing. The major regulatory policies of the past few decades that have tried to address overfishing -- restrictions on fishing methods and inputs (in essence, "command and control" regulation) -- have largely been failures. Indeed, they have often perversely exacerbated fisheries' overfishing problems by encouraging "fishing derbies" or "races for the fish." Fisheries are not alone in facing a common pool problem. Other areas of the U.S. economy have confronted similar problems, and public policies have developed to deal with them. This paper discusses seven of these other areas: the use of the electromagnetic spectrum, the control of sulfur dioxide emissions by electric utilities, grazing on public lands, forest logging on public lands, oil-gas-coal extraction from public lands and offshore waters, hard rock mineral (metal) mining, and surface water usage.Important lessons can be gleaned from the policies that have been developed in these other areas, and this paper applies those lessons to the design of U.S. fisheries policy.

Sector Allocation: A Misguided Solution

On April 9, 2010, the National Marine Fisheries Service (NMFS) issued Amendment 16 to the New England Multispecies (groundfish) Fishery Management Plan, implementing what is known as “sector allocation.” In its simplest form, sector allocation is a method of allocating fishing privileges—the ability to harvest fish—to individual groups of fishermen, who are then able to use, buy, or sell those privileges. Sector allocation is a radical departure from traditional management practices in New England, and, after nearly three decades of pervasive overfishing, increasingly Draconian fishing regulations, and ongoing legal battles, it has the potential to signal a positive new direction for the New England groundfish fishery. Sector allocation fits within the broader category of “catch share” fishery management programs. NMFS defines “catch share” as “a general term for several fishery management strategies that allocate a specific portion of the total allowable fishery catch to individuals, cooperatives, communities, or other entities.” Generally, catch share programs contain two elements: (1) an output control—an annual limit on the total number of fish that can be harvested in a fishery, commonly referred to as the “total allowable catch”; and (2) a transferable allocation of that fishery’s annual catch limit to individual fishermen or vessels, commonly referred to as “quota.” Catch shares are part of “a global movement” in fisheries management toward a market-based approach to regulation and are deeply rooted in economic perceptions of property rights, efficiency, and stewardship. Accordingly, the theory behind catch shares is twofold: the use of output controls allows fisheries managers to directly limit fish mortality, while the allocation of transferable quota—in effect a quasiproperty interest—to individual fishermen incentivizes efficiency and stewardship through ownership of fishing privileges. The success of catch share programs is well documented. Although each individual program is unique, catch share programs have been implemented in over one hundred different fisheries worldwide. By and large, the evidence demonstrates that catch share programs effectively control overfishing, reduce overcapitalization of the fishery (generally through consolidation), and increase profits for remaining participants. Thus, there is little question as to the effectiveness of catch share programs as a fishery management tool. That success raises several issues, however. Catch share programs promote economic efficiency by creating a tradable market for quota. Almost inevitably, this entails consolidation of a fishery’s participants. But because the markets for quota are artificially designed by fisheries managers, the way in which managers initially allocate quota and dictate how that quota can be bought or sold becomes a determinative factor in how quickly and to what degree that consolidation occurs. Not surprisingly, in fisheries with a diverse array of participants, such as the New England groundfish fishery, building broad support for catch share programs is difficult. Catch shares raise other socioeconomic concerns as well. The individual allocation of fishing privileges alters the traditional perspective of viewing the seas as “commons”—a notion that still resonates with coastal New England fishing communities. Moreover, concerns over the consolidation of fishing effort and the perceived privatization of a public resource often elicit visceral reactions from fishermen, politicians, and community members who fear the loss of economic opportunity and cultural heritage from their region. These concerns have spawned significant debate as to whether the benefits of catch share programs outweigh their potential problems. Sector allocation is billed as an innovative solution to the issues raised by catch share programs, as well as an answer to the chronic overfishing of groundfish in the Gulf of Maine, for two reasons. First, sector allocation is a voluntary management program. Fishermen may choose to continue fishing under the existing regime, which regulates catch through limits on days-at-sea, or opt to join the sector program. Second, the sector program shifts the burden of determining quota allocation and implementing consolidation safeguards from the government to the fishermen. Sector members negotiate allocation through contractual agreements and are free to impose limits on consolidation of quota through those agreements; therefore, the design of the market structure is almost entirely up to the fishermen. Thus, on its face, the sector program maintains the benefits of a traditional catch share program (e.g., strict limits on fish mortality and increased economic viability) while providing flexibility for fishermen and fishing communities to find workable solutions to some of the more systemic problems of catch share programs (e.g., control over allocation and the rate at which consolidation occurs). This Comment advances the debate over catch share programs by considering whether sector allocation represents a potentially promising new direction for fisheries regulation. To do so, Part II explores the legal and historical framework that has set the stage for sector allocation and explains why fisheries managers in New England had little choice but to adopt the sector program. Next, Part III argues that sector allocation is an imperfect response crafted to accommodate a number of wellintended but poorly conceived legal constraints and, therefore, is not a promising innovation. Part IV concludes by recommending a modest reform to the sector program, while specifically addressing how the legal framework for catch share programs at the national level could be redesigned to retain its positive features while ameliorating some of its problems

Application of the Public Trust Doctrine to Modern Fishery Management Regimes

As the state of the nation’s fisheries has declined in recent decades, fishery managers have increasingly sought more effective means for managing fishing efforts to prevent overfishing. The situation is particularly dire in marine fisheries, where studies have shown that populations of large predatory fish species such as tuna, marlin, and swordfish have declined by up to 90%. Conventional explanations for this and other declines in fish populations invoke the concepts of the “tragedy of the commons” and the “race to the fish.” The tools favored by economists to solve these problems typically involve creating some form of limited private property rights, and legal commentators have called for introducing these principles into U.S. environmental laws. The creation of these property rights raises several questions regarding impact the public trust doctrine might have in the future. Specifically, does the public trust doctrine apply to fisheries, specifically to the large offshore fisheries that are located in the U.S. Exclusive Economic Zone? Does the public trust doctrine prohibit the creation of private property rights in this public resource? If private property rights are allowed, how should they be designed and created in a way that upholds the government’s responsibility to protect these public resources? This Note examines the relevance of the public trust doctrine to modern fishery management, particularly in the U.S. Exclusive Economic Zone. Part I looks at the origins and nature of the public trust doctrine. Part I.A examines the geographic scope of the public trust doctrine and discusses the open issue of whether the doctrine applies in federal waters. Part I.B covers the uses protected by the doctrine and analyzes the impact of the doctrine on fishery management. Part II then looks at LAPPs in more detail and evaluates the arguments against them based on the public trust doctrine. The remainder of Part II demonstrates how properly designed LAPPs are consistent with the public trust doctrine

Can a novel management plan for the Bering Sea and Aleutian Islands crab fisheries succeed?

Since their inception, Bering Sea/Aleutian Islands (BSAI) crab fisheries have attracted participants willing to undertake great financial and personal risks to participate in these high valued fisheries. Although entry to the fisheries is limited, excess capital and overcapacity, together with stock declines, have resulted in a race for fish. The shortest season is in the Bristol Bay red king crab fishery, which has been prosecuted for less than one week in recent years. Efforts of managers to protect declining stocks by reducing allowable catch have increased the economic stress on participants and communities that depend on these fisheries and increased pressure on participants to take greater risks. For several years, the North Pacific Fishery Management Council worked with participants to address these problems in the crab fisheries through series of working groups and management measures. In 2001, Congress stepped in, directing the Council to assess various rationalization programs for the fisheries, including individual fishing quotas (IFQs), processor shares, cooperatives, and quotas held by communities. The outcome of the Council process is a new and unique management program selected by a unanimous vote of the North Pacific Council. The program reflects the Council's desire to accommodate the interests of several groups dependent on these fisheries-vessel owners, processors, captains and crew, and communities. Under the program, harvest quota shares (QS) will be issued to vessel owners and captains. Processors will be issued processing quota shares. Under these allocations, 90 percent of harvest quota shares are designated for delivery to holders of processing quota shares. Community interests are protected by a requirement that a certain portion of the catch be landed and processed in designated regions. An arbitration program is included to resolve price disputes, which could arise because of the constraints on markets created by the dual share allocations. The result of the Council's action is one of the most complex fishery management programs to date. The attempt to satisfy many interests creates significant hurdles that must be overcome for the program to succeed economically and environmentally. This paper describes key dimensions of the proposed crab fishery management program and identifies the most substantial hurdles that the program must overcome for the Council to judge it a successful management program for the fisheries. First, managers will be challenged by program implementation. Implementation will require initial allocations of harvesting shares to vessel owners and captains and processing shares to processors. Most shares will be regionally designated based on the participant's landings history. Second, managers will face the challenge of protecting stocks as the incentives to high grade increase in the share-based fishery. Third, the markets for the harvest shares, captains shares, and processing shares must develop in a manner that facilitates coordination of harvesting and processing activity required by the share system and the regional landing and processing requirements. Lastly, market opportunities for harvest landings will be constrained by the requirement that deliveries be made to a processing share holder in a designated region. For the program to be considered a success, price formation in the market for landings must be perceived as fair. Each of these issues is described in a manner that provides the reader with a perspective of the institutional challenges faced by a program that attempts to address the concerns of several different interests. In addition, characteristics of the fisheries that contribute to the potential to overcome these obstacles are discussed.Resource /Energy Economics and Policy,

Grotius, Ocean Fish Ranching, and the Public Trust Doctrine: Ride \u27Em Charlie Tuna

Seventy percent of the world\u27s fish populations are in serious decline; some have been fished to near extinction. While domestic and international efforts are underway to curb the rate at which the remaining fish are being depleted, the demand for fish appears to be outstripping these initiatives--before they can take hold, the fish may be gone. In response to this increasingly dire situation, many countries, including the United States, have turned to fish farming in hope of taking pressure off of certain wild stocks of fish while still meeting consumer demands for them. More recently, non-U.S. fish farmers have moved the locus of their activities from land and coastal waters to the open oceans. In this country, ocean fish ranching is still at the experimental stage, but hopes are high that it could become commercially profitable in the United States\u27 Exclusive Economic Zone ( EEZ ). One problem hindering the development of a robust ocean fish ranching industry in the United States is the absence of a comprehensive regulatory program. Increasing pressure to develop the ocean fish ranching industry and the current structure of the industry, however, may mean that for the foreseeable future ocean fish ranching will happen in a regulatory vacuum. While much has been written about the adverse environmental and economic impacts of fish farming, including concerns about moving these activities offshore, little has been written about the property law implications of ocean fish ranching. Viewing ocean fish ranching through a property lens invites consideration of common law property concepts like the public trust doctrine. The public trust doctrine offers a set of useful principles that could be applied to ocean fish ranching until the government develops a suitable regulatory framework. Because the public trust doctrine traditionally applies only to coastal waters, though, extending it to the EEZ requires a new legal basis. This article proposes two such theoretical bases: one founded on the public domain status of EEZ, the other in the extension of state common law to the EEZ. Before expanding on the reasons why the public trust doctrine could and should apply to ocean fish ranching, the article provides background information on the status of the world\u27s fisheries, the growth of the fish farming industry and its movement offshore, environmental and economic concerns, and the existing regulatory picture. The second part of the article explains the concept of common pool resources and how open access has contributed to the decline in wild fish stocks and prompted the creation of property-based responses like individual fishing quotas ( IFQs ). The third section describes the public trust doctrine and develops two bases for the doctrine\u27s application to activities occurring within the EEZ: (1) the public domain nature of the EEZ to which federal common law might apply; and (2) the potential extension of state common law beyond state waters. The first basis requires an argument that there is a federal common law public trust doctrine that attaches to public lands, and the second presumes that the federal laws governing the EEZ include a role for state common law\u27s continuing regulatory presence. Professor William Buzbee\u27s work on the regulatory commons, described in the fourth part of the article, underscores the need to make these doctrinal leaps. He explains why regulatory commons are counter-productive yet self-perpetuating. In turn, this article shows how ocean fish ranching is an example of such a commons and argues that the cure for it is not privatizing the resource. The article concludes by explaining how the application of the public trust doctrine will end the ocean fish ranching regulatory commons and why applying the doctrine, until effective regulation eliminates the potential adverse environmental and economic effects of these activities, makes good policy sense, and is preferable to market-based solutions

Political Economy and Profit Maximization in the Eastern Bering Sea Fishery for Walleye Pollock

Despite their apparent economic benefits to harvesters, Individual Fishing Quotas (IFQs) have only been adopted in three U.S. fisheries: Mid-Atlantic surf clam and ocean quahog; South Atlantic wreckfish; and, North Pacific halibut and sablefish. During the 1996 reauthorization of the Magnuson-Stevens Fishery Conservation and Management Act, Congress temporarily blocked implementation of additional IFQ programs in U.S. fisheries. This Congressional action led directly to the emergence of a new institutional structure, the fishing cooperative. Cooperatives offer the advantage of eliminating production externalities that may remain under an IFQ program with relatively large owner classes. Development of IFQ programs appears to be increasingly overwhelmed by the proliferation of both equity concerns and seemingly interminable rent-seeking behavior—both issues that can effectively block adoption of IFQs. By reducing the scope of the equity issues acknowledged, the cooperative alternative narrows the pool of claimants and modifies the behavior of the remainder so as to make implementation more likely. Ironically, while IFQs are widely thought to be best designed at the local/regional level, part of the appeal of the cooperative model is that it appears to shortcut the often-protracted nature of the local/regional political process