Managing the Fishery How can we regulate the fishery to avoid problems of open access Why manage fisheries Otherwise open access externality of entry drives value of fishery to 0 May drive to extinction or economic extinction Non extractive values ignored Technology may destroy habitat harvest individuals that should not be harvested bycatch etc another consequence of open access Technology may improve so management must keep up How to manage fisheries Depends largely on characteristics of fishery Biology status of stocks History of extraction Commercial vs subsistence status of stocks Other values non extractive recreational fairness distributional Many failures some successes Some management alternatives Limits on catch Harvest quotas for whole fishery Individual transferable quotas ITQ IFQ Marine reserves area closures Harvest tax Notice Many of these are Limits on effort property rights solutions Season closures Ex vessel tax Regulated entry licenses Regulated efficiency gear Effort tax Internalization of externalities Cooperatives TURFs Small scale fisheries Many small multi purpose boats Difficult to enforce regulations Local management most successful Kinship rights social pressure Mainly limited entry also gear some area closures etc Often self imposed New entrants technology markets are attractive can be destructive Tax on Catch TC Total revenue pH E decreases with tax t on catch to p t H E TR Efficient fishery OA with tax Effort OA without tax Tax on catch reduces open access equilibrium right tax moves effort level to efficient amount of effort Tax on Effort TC cE Total costs increase with tax t on effort to c t E TR Efficient fishery OA with tax Effort OA without tax Tax on effort reduces open access equilibrium right tax moves effort level to efficient amount of effort Transferable quotas on catch Quota levels must be set at efficient catch level Must be transferable among fishers Value of quota is effectively the same thing as a tax on catch Efficiency requires observation of stock difficult Transferable Quotas on Effort TC TR Issue effort permits Effort OA without tax Transferable quotas on effort reduces effort to efficient level Individual Transferable Quotas Regulator sets total allowable catch TAC based on many factors Distributes quotas auction sell at fixed price give away based on historical catch or equal distribution Quota rights can be traded Some systems buy right to harvest in perpetuity as of TAC ITQs and property rights Prior to 1976 coastal nations did not have rights to marine resources in high seas 1976 Magnuson Act Law of the Sea Grants rights to coastal nations to marine resources 200 miles from shore But how to regulate within a country ITQs effectively secure property rights to fish in the ocean Lack of property rights is what causes problems with open access Potential problems with ITQs Allocation of quotas High grading incentive Enforcement administrative costs Most quotas held by largest firms privatizing the oceans How set TAC in first place TAC based on imperfectly observed stock Alaskan Halibut Historically used season closures Prior to adoption of ITQ season 1 day Poor fish quality excessive investment for harvest frozen most of year ITQ adopted 1995 free allocation to fishing vessels based on historic catch Debit cards fish tickets for enforcement A success longer season higher profits more fish bigger better quality fish Cooperatives Cooperativas Often devise own rules social pressure to abide Have exclusive rights to areas self enforce Federal management supercedes bargaining process with feds to determine management TURFs Territorial User Rights spatial property rights Good when few spatial externalities Baja California Fishing Areas Cooperativas 29 00 28 80 28 60 PNA 28 40 28 20 PUR 28 00 BP 27 80 BT 27 60 27 40 EMAN 27 20 27 00 26 80 Pa cif ic 26 60 CSI Oc ea LR PROG n PA 26 40 26 20 116 00 115 60 115 20 114 80 114 40 114 00 113 60 113 20 Resource Concessions Give exclusive access for 20 years Good chance of renewal if stewardship can be proven Same principle in reauthorization of MSFCMA Magnusson Reluctant to relinquish control Make property right insecure This induces the wrong behavior Economics of Marine Reserves Marine reserves implemented for a variety of reasons What are their economic impacts Could reserves ever increase rents to a fishery YES E g Source Sink Increasing returns to scale fecundity