CHALLENGES OF MARINE BIODIVERSITY

Resource /Energy Economics and Policy,

One Last Chance: The Economic Case for a New Approach to Fisheries Management in New England

Documents the decline of the New England fishing industry as a result of mismanagement, presents examples of successful and sustainable fisheries, and examines the viability of proposed community-based, fishermen-run cooperatives as a solution

Stochastic Bioeconomics: A Review of Basic Methods and Results

Basic bioeconomic models which incorporate uncertainty are reviewed to show and compare the principal methods used and results reported in the literature. Beginning with a simple linear control model of stock uncertainty, we proceed to discuss more complex models which explicitly recognize risk preferences, firm and industry behavior, and market price effects. The effects of uncertainty on the results of bioeconomic analysis are rarely unambiguous, and in some instances differ little from corresponding deterministic results. This review is presented to enhance readers' appreciation of the papers to follow in this and the next issue of the journal.Environmental Economics and Policy, International Development, Resource /Energy Economics and Policy, Risk and Uncertainty,

A Laboratory Assessment of Tradable Fishing Allowances

Transferable allowance management systems are receiving increased attention from fishery managers and stakeholders alike. We use a laboratory experiment in which human subjects play the role of fishers to evaluate the promised economic efficiency of tradable allowance systems. In an experiment designed to parallel the most common rules for trading allowances, we find that allowance prices are only weakly associated with the value of the fishing right it provides. Instead, we find a high degree of price variability, consistent with field experiences. In the lab, this variability hampers convergence and supports speculation, leading to average prices much higher than the equilibrium value of allowances. During this protracted price discovery, allowances are misallocated and efficiency falls. Modifications to the market institutions used in most tradable allowance systems to improve price discovery and enhance efficiency are discussed.fishery management, ITQs, tradable fishing rights, transferable allowances, experiments, asset markets, Resource /Energy Economics and Policy, Q22, Q28, G12,

A New Zealand ITQ Fishery with an In-Season Stock Externality

Abstract This paper explores the economic performance of a fishery that operates under an individual transferable quota (ITQs) management system and that is subject to an in-season stock externality. While Boyce (1992) and others have established theoretically that ITQ management is not fully efficient under all conditions, this is the first study that empirically estimates the efficiency losses due to an in-season stock externality in an actual fishery. We study the New Zealand southern scallop fishery, which has been under ITQ management since 1992. Our analysis provides evidence of a race-to-fish in the fishery, and estimates that individual firm profits were approximately $2,300 and$2,000 (20% and 10%) less in 1996 and 1997, respectively, than they would have been under optimal management. We recommend modifications in the ITQ policy to improve the economic performance of the fishery.Fisheries management, individual quotas, stock depletion, New Zealand, scallops., Livestock Production/Industries, Q220, Q280, Q570, Q580,

Consequences of Recovering Enforcement Costs in Fisheries

The recovery of fishery management costs from the fishing industry is becoming increasingly common among the fishing nations of the world. Countries such as Australia, Canada, and New Zealand have led the way in applying user charges and other cost recovery mechanisms in their commercial fisheries. The United States and other countries have increased their use of cost recovery for fisheries management in recent years. Although some aspects of cost recovery mechanisms are well studied and documented, there remain some important consequences for fisheries policy that have not been adequately studied. To partially address this gap in knowledge, this paper investigates how cost recovery in the form of a user charge influences producers’ behavior and optimal policy for managing a fishery. This is done by extending our earlier economic analysis of fisheries law enforcement to examine the economic and policy consequences of using a royalty on production to recover the costs of enforcement services for fisheries management. We find that who pays and how they pay for governance services influences economic performance of a fishery, as well as the nature and extent of governance expenditures

The Political Economy of Natural Resource Use: Lessons for Fisheries Reform

This report discusses key lessons drawn from reform experience in the wider natural resource sector that might inform successful reform in fisheries. This report is a compilation of 12 papers prepared by acknowledged international experts in the fields of fisheries and wider natural resource reform which were reviewed at a workshop convened by the Property and Environment Research Center (PERC) in May 2009.The report forms an important initial input into an ongoing enquiry into the political economy of fisheries reform initiated by the World Bank in partnership with the Partnership for African Fisheries (a United Kingdom Department for International Development funded program of the New Partnership for African Development (NEPAD))

Major Challenges for Fishery Policy Reform: A Political Economy Perspective

A political economy perspective of fisheries governance is presented in this paper. In most countries, formal and informal linkages exist among four components of the governance system. The legislature passes laws that authorise the implementation of policies and programmes by a fisheries agency. The fisheries agency establishes a fisheries management authority. Stakeholders often have a formal role – from advising to decision-making – in the management plan development process and approved plans are implemented by the fisheries agency. In general, governance failure (that is, undesirable public policy outcomes) has been attributed to special interest effects, rational voter ignorance, bundling of issues, shortsightedness, decoupling of costs and benefits, and bureaucratic inefficiencies. No studies demonstrate whether private interests significantly influence fishery policies and regulations, but evidence from other sectors suggests that this is very likely. One of the features that distinguishes the fishing industry from other regulated activities is that often there are no strong property rights, and regulation seeks to prevent overexploitation of a common pool resource (CPR). Fishers, in effect, impose costs on each other rather than on consumers, in the absence of regulation. A laboratory experiment was designed to simulate lobbying to influence regulation of a CPR. Results show that competition for fishery earnings weakens the incentive to effectively lobby for regulations that maximise group well-being. More experienced participants believe that their contributions to changing a regulation are not worthwhile. Instead, they focus more on competing for earnings from their use of the CPR. Correcting or mitigating government failure in fisheries might be assisted by the introduction of strong property rights, the devolution of rights and responsibilities to user groups, the use of the cost recovery and sustainable financing mechanisms, and for shielding fishery managers from the shortsighted tendencies of elected officials. But these recommendations may have difficulty in being implemented in the face of strong opposition from private interests in the fishery. Les grands défis de la réforme de la pêche : Économie politique de la réforme Une analyse de la gouvernance des pêcheries sous l’angle de l’économie politique est présentée dans ce document. Dans la plupart des pays, il existe des liens formels et informels entre les quatre composantes du système de gouvernance. Le Parlement vote des lois autorisant les autorités compétentes de la pêche à mettre en œuvre des politiques et des programmes. Ces autorités compétentes de la pêche établissent un organisme de gestion des pêches. Les parties prenantes jouent souvent un rôle officiel — variant du conseil à la prise de décision — dans le processus d’élaboration des plans de gestion ; les plans approuvés sont mis en œuvre par les autorités compétentes de la pêche. En général, les échecs de gouvernance (à savoir les résultats indésirables des mesures adoptées par les pouvoirs publics) sont mis sur le compte des intérêts particuliers, de l’ignorance des électeurs, du regroupement des problèmes, de l’absence de vision, du découplage des coûts et des avantages et de l’inefficacité bureaucratique. Bien qu’aucune étude n’ait démontré que les intérêts privés influaient sensiblement sur les politiques et la réglementation de la pêche, ce que l’on a pu observer dans d’autres secteurs laisse à penser que cette influence est très vraisemblable. Le secteur de la pêche se distingue d’autres activités réglementées notamment par l’absence fréquente de droits de propriété solidement établis et par le fait que la réglementation tente d’éviter la surexploitation de ressources communes. En l’absence de réglementation, les pêcheurs font en fait peser des coûts les uns sur les autres plus que sur les consommateurs. Une expérience en laboratoire a été conçue pour simuler les activités de groupes de pression destinées à influer sur la réglementation des ressources communes. Les résultats de l’expérience montrent que la compétition entre pêcheurs pour réaliser le maximum de profits diminue leur volonté de faire pression en faveur de règlements qui maximiseraient le bien-être du groupe. Des participants plus expérimentés estiment que leur contribution à la modification de la réglementation ne présente aucun intérêt. Ils s’attachent en fait davantage à se disputer les profits de l’exploitation de la ressource commune. L’introduction de droits de propriété solidement établis, la délégation des droits et des responsabilités aux groupes d’utilisateurs, le recours à la récupération des coûts et à des mécanismes durables de financement et la protection des gestionnaires des pêches contre la tendance des élus à raisonner à court terme pourraient contribuer à corriger et à réduire l’échec des pouvoirs publics. Néanmoins, ces recommandations risquent de ne pouvoir être mises en œuvre aisément face à la forte opposition des intérêts privés dans le secteur de la pêche.