Fisheries Management and Uncertainty

This paper explores likely changes in the types and extent of uncertainty resulting from increased regulation of fisheries. Specifically, fisheries management may be a principal source of uncertainty, and institutional uncertainty may be substituted for the uncertainty of nature.Environmental Economics and Policy, International Development, International Relations/Trade, Risk and Uncertainty,

A Note on the "Stock Effect"

The “stock effect†implies that unit operating costs will be sensitive to the size of the exploited fish stock(s). This is investigated using data for Norwegian trawlers. The results indicate that there is a significant stock effect for the two most important stocks exploited by these fisheries, haddock and cod jointly, and saithe. Two cost function specifications are used, one using catch shares as weights and another using a Taylor approximation to the cost function. The effect on operating costs is relatively small, although substantial if it is related to costs directly attributable to the stock under consideration.Fisheries economics, stock effect, Resource /Energy Economics and Policy, Q22,

The Effect of the Discount Rate on the Optimal Exploitation of Renewable Resources

Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty,

The Long and Winding Road: Norway's Approach to ITQs

Individual transferable quotas (ITQs) are primarily tools to achieve economic efficiency and do not amount to ownership of fish stocks. The 200 mile exclusive economic zone (EEZ) went a long way to establish national jurisdiction over fish stocks, and without this ITQs would not have been possible. Shortly after the EEZs were established, Norway and the neighboring countries agreed on the sharing of fish stocks in the EEZ. The road to ITQs in Norway has, however, been long and winding. The paper discusses the obstacles to ITQs in general and how they have played out in Norway in particular. Despite not being conservation tools, individual vessel quotas have been considered helpful in enforcing overall catch limits. The driving forces behind transferability are partly the capital gains quota holders can make, and partly the fleet rationalization that transferability generates. Main obstacles are controversies over initial allocation and ideological opposition against privatization and reliance on market forces.Resource /Energy Economics and Policy,

Inefficiency Through Government Regulations: The Case of Norway's Fishery Policy

The fishery is a classic example of market failure. Government intervention does not necessarily correct this, but may instead seek economically inefficient solutions, because of either a deliberate trade-off between efficiency and equity or political expediency. Norway's fishery policy is seen as a case in point. Its stated objectives put a low priority on economic efficiency, while various objectives based on equity are put in the foreground. The result is that the contribution of Norway's fisheries to the national income is slight. Norway's fishery policy consists of two largely uncoordinated parts, one concerned with maintaining fishermen's incomes and the other with managing fish stocks. Since the introduction of the 200-mile limit, most fish stocks exploited by Norway have been managed by total allowable catches (TACs). While this has prevented the depletion of fish stocks, the regulations introduced to enforce the TACs have been an economic failure. The setting of TACs has in some cases revealed a willingness to attain solutions expedient in the short term at the expense of long-term benefits.Environmental Economics and Policy, International Relations/Trade, Productivity Analysis, Resource /Energy Economics and Policy,

MARINE RESERVES: WHAT WOULD THEY ACCOMPLISH?

A marine reserve is defined as a subset of the area over which a fish stock is dispersed and closed to fishing. This paper investigates what will happen to fishing outside the marine reserve and to the stock size in the entire area as a result of establishing a marine reserve. Three regimes are compared: (i) open access to the entire area, (ii) open access to the area outside the marine reserve, and (iii) optimum fishing in the entire area. Two models are used: (i) a continuous-time model, and (ii) a discrete-time model, both using the logistic growth equation. Both models are deterministic equilibrium models. The conservation effect of a marine reserve is shown to be critically dependent on the size of the marine reserve and the migration rate of fish. A marine reserve will increase fishing costs and overcapitalization in the fishing industry, to the extent that it has any conservation effect on the stock, and in a seasonal fishery it will shorten the fishing season. For stocks with moderate to high migration rates, a marine reserve of a moderate size will have only a small conservation effect, compared with open access to the entire area inhabited by a stock. The higher the migration rate of fish, the larger the marine reserve must be in order to achieve a given level of stock conservation. A marine reserve of an appropriate size would achieve the same conservation effect as optimum fishing, but with a smaller catch.Resource /Energy Economics and Policy,

Taxes, ITQs, Investments, and Revenue Sharing

There is a presumption that individual transferable quotas (ITQs) will provide incentives to invest optimally in fishing boats. This paper shows that this is not true when the crew is paid a share of the catch value instead of a parametric wage. This system of remuneration distorts investment incentives in an ITQ system of fisheries management and leads to overinvestment, but on a much smaller scale than open access. This can be corrected with a tax on fish landings, but not with a tax on quota holdings.Fisheries economics, fishing capacity, crew share, Environmental Economics and Policy, Q22, Q28, H23,

Transnational judicial cooperation in the light of legal pluralism: a look at the relationship between the EFTA Court and the Icelandic Courts

Doctrines developed by the EFTA Court have placed considerable demands on national courts in the EFTA States. The Court now considers the EEA Agreement to form an “international treaty sui generis which contains a distinct legal order of its own.” It would thus seem that EEA law has transformed into an independent legal order, and subsequently has a claim to validity which emulates the self-legitimising presentation of the EU legal order. This, however, is not an empirically verifiable fact, but a particular understanding which arises when one adopts the viewpoint of the EFTA Court. EEA law takes place in a different realm when interpreted and applied in the national order: this realm is essentially a construction of the constitutional order. Case law shows that the Icelandic Supreme Court is far from accepting all EEA judge-made principles. This study will describe a context of legal pluralism by reference to the Icelandic legal system and its relationship with the EEA legal order. To illustrate the discussion, the most important case law relative to the interaction between Icelandic laws and EEA law will be considered in the light of legal pluralism - particularly the principles of contrapunctual law designed by Miguel Maduro. The paper argues that the Supreme Court’s internal domestic approach to the application of EEA law will inevitably become a source of fragmentation unless it takes place within an institutional framework of judicial tolerance and judicial dialogue

Fishing Capacity and Harvest Rules

In this note we consider the choice of optimum fishing capacity for fish stocks that vary at random. In models with stochastic variations of fish stocks, optimum fishing capacity is normally a decision variable separate from fishing effort. It is shown how the optimum fishing capacity depends on the price of fish, the cost of capacity, and the "harvest rule" linking the permitted catch to the size of the fish stock. Operating costs may also influence the optimum capacity through the effect of stock "thinning" on the cost per unit of fish caught and the level at which further depletion becomes unprofitable.Fisheries economics, fishing capacity, fish stock fluctuations, Environmental Economics and Policy, Production Economics,

ALLOCATION OF FISH BETWEEN MARKETS AND PRODUCT FORMS

In this paper, we investigate the suppliers' allocation decisions between different product forms and markets using supply equations derived from a translog revenue function. This is of interest based on the hypothesis that fish processors and importers respond to changes in relative prices, diverting more fish into products or to markets where the price has risen. This can also at least partially explain the strong degree of correlation between prices of different product forms and markets that is observed in many seafood markets. An empirical analysis is carried out for cod for three main producers, Canada, Iceland, and Norway. The supply of cod exhibits substantial variation, and it is processed into a number of product forms. How the landings are allocated between product forms is then of substantial interest in itself, but also with respect to the influence of new species in the whitefish market, like pollock.Resource /Energy Economics and Policy,