DISCARD BEHAVIOR, HIGHGRADING AND REGULATION: THE CASE OF THE GREENLAND SHRIMP FISHERY

A formal economic analysis of the discarding problem is presented, focusing on the individual fisherman and the effect of different regulations on the fisherman's incentives to discard. It is shown that in a nonregulated fishery, either multispecies or single species/multisize, where the only constraints are the hold capacity and the length of the season, the fisherman may have rational incentives to discard/highgrade, if the marginal trip profit of an extra fishing day is greater than the average trip profit. Regulation by TAC does not change the incentives to discard. However, under INTQs and ITOs, the incentives to discard increase. The incentives to discard decrease under ITQs compared to INTQs, if the unit quota price is smaller than the shadow price of the quota. The model is applied to the Greenland shrimp fishery, where it demonstrates the reported discard behavior in the fishery. Finally, different regulations of discard are applied and discussed in the model. The analysis suggests that regulation of fishing days could be a promising alternative to usual suggested measures like tax/subsidies and landings obligations.Resource /Energy Economics and Policy,

A Bioeconomic Analysis of the Greenland Shrimp Fishery in the Davis Strait

This paper presents a bioeconomic analysis determining the resource rent and optimum effort of the shrimp (Pandalus borealis) fishery in the Davis Strait, taking into account the discard behaviour of the fleet. It is demonstrated that, from an economic point of view, the shrimp stock in the Davis Strait is substantially overfished. In order to obtain the maximum economic yield, the effort must be reduced by at least 40% compared to the effort level of 1991. The gain in resource rent by reducing effort is estimated to be at least 20% compared to the resource rent of 1991.Bioeconomics, rent, discard, shrimp, Greenland, Environmental Economics and Policy, Production Economics,

Moral Hazard Problems in Fisheries Regulation: The Case og Illegal Landings

This paper treats illegal landings as a moral hazard problem that arises, since individual catches are unobservable to society and hence private information. A tax/subsidy mechanism taking into account the asymmetric information problem is formulated as a solution to problems with illegal landings. The incentive scheme uses fish stock size as the tax variable, and can be seen as an alternative to a control policy. Rough estimates from a simulation study suggest that the incentive scheme is potentially useful. The incentive scheme also has potential application as an instrument to the solution of by-catch and discard problems.

Assessing Risk and Uncertainty in Fisheries Rebuilding Plans

This paper deals with risk and uncertainties that are an inherent part of design-ing and implementing fisheries rebuilding plans. Such risk and uncertainties stem from a variety of sources, biological, economic and/or political factors, and are influenced by external factors like changing environmental conditions. The aim of this paper is to characterize such risks and uncertainties and to as-sess the importance of it in relation to the performance of fisheries rebuilding plans, to give some examples where uncertainties have negatively affected the ability of rebuilding plans to reach their intended targets and to give some guidelines how to deal with risk and uncertainties. The conclusion is that when designing fisheries rebuilding plans, it should be taken into account the availability of relevant information, such that progress is (indisputable) measurable, and causes of potential failure can be clarified. Rebuilding plans need to consider biological, economic and distributional consequences in order to reduce uncertainties and to ensure successful implementation of the plan. Risk communication is also valuable in the process, since it gives transparency of the objectives and means to meet these objectives, elucidates crucial information from stakeholders and legitimates the whole process of designing and implementing the rebuilding plans, which is essential for the success of these plans. To that end the plans should be as simple and realistic as possible. It is recommended to apply risk analysis and to use the precautionary principle only in cases where large uncertainties exists and/or potentially high costs exits of ignoring the uncertainty cannot be resolved. Two fisheries rebuilding plans are analysed and how they address risk and uncertainties are evaluated. This study was done under contract with the OECD. The authors are grateful to Gunnar Haraldsson and Saba Khwaja for comments and advise.

Ratcheting in Renewable Resources Contracting

Real life implies that public procurement contracting of renewable resources results in repeated interaction between a principal and the agents. The present paper analyses ratchet effects in contracting of renewable resources and how the presence of a resource constraint alters the “standard” ratchet effect result. We use a linear reward scheme to influence the incentives of the agents. It is shown that for some renewable resources we might end up both with more or with less pooling in the first-period compared to a situation without a resource constraint. The reason is that the resource constraint implies a smaller performance de-pendent bonus, which reduces the first-period cost from concealing information but at the same time the resource constraint may also imply that second-period benefits from this concealment for the efficient agent are reduced. In situations with high likelihood of first-period pooling, the appropriateness of applying lin-ear incentive schemes can be questioned.Political support function, political economy, environmental regula-tion, lobbyism, rent-seeking, taxation, auction, grandfathering, emission trad-ing, European Union, interest groups, industry, consumers, environmentalists