Renewable Common-Pool Resources Fisheries and Other Commercially Valuable

Renewable Common-Pool Resources: Fisheries and Other Commercially Valuable Species

Growth rate (replacement) and size of the fish stock/pool • Too Small/Low Stock Size • Lower growth rate as fish can’t hook up and reproduce • Birth (replacement) less than death/harvest • Growth rate declines; species becomes extinct • Too Large Stock Size • Food sources (plankton, biomass, other fish) too small to support large # of fish • Growth rate declines

Schaffer model: Relationship between the Fish Population and Growth

How do we use this to manage the fisheries (prevent extinction) • Compare • Open Access Fishery (Tragedy of the Commons) • Everyone who has a boat can harvest as many fish as they can catch profitably • Maximum Sustainable Yield (MSY) • What is the largest stock of fish that can be sustained from one year to the next (harvest = growth rate at max stock size) • Economically Efficient • Given costs/benefits – what is the efficient harvest

3 Possible Solutions • 1. Open (unregulated) Fisheries (Ec) • Catch until total costs exceed revenues (up to zero profits) => ATC(Q) = Tot. Rev(Q) = P*Q • 2. Maximum Sustainable Yield(MSY) (Em) • Largest “harvest” that can be sustained every year (harvest = replacement rate) • Biologist solution • 3. Economically Efficient (Eo) • Maximize Economic Value MC(Q) = MR(Q)

FIGURE 14. 2 Efficient Sustainable Yield for a Fishery

Policy Options • Command Control (Regulation) • Set Quota for number of fish that can be caught • • • Ignores differences in costs/efficiency of fishermen Can lead to over capacity (too many boats, too big) Discarded catch/by-catch issues • Tradable permits (ITQs) • • • Determine optimal “harvest” and number of licenses to be issued Divide quota/target by number of license = #fish caught per license Auction or grandfather licenses Allow owners to trade (one-year, or multi-year) Multi-species/by-catch • Taxes • Per unit tax on the #fish caught

Individual Transferable Quotas (ITQs) • An efficient quota system will have the following characteristics: • The quotas entitle the holder to catch a specified volume of a specified type of fish. • The total amount of fish authorized by the quotas should be equal to the efficient catch level for that fishery. • The quotas should be freely transferable among fishermen.

• Taxes also raise the real cost of fishing, but do so in an efficient manner. • Unlike regulations, the tax can lead to the static-efficient sustainable yield allocation • For the individual fisherman, however, a tax still represents an increase in costs – internalize the externality cost

• Taxes also raise the real cost of fishing, but do so in an efficient manner. • Unlike regulations, the tax can lead to the static-efficient sustainable yield allocation because the tax revenues represent transfer costs and not real-resource costs. • Transfer costs involve the transfer of resources from one part of society to another. • For the individual fisherman, however, a tax still represents an increase in costs.

FIGURE 14. 7 Effect of Regulation

Individual Transferable Quotas (ITQs) • An efficient quota system will have the following characteristics: • The quotas entitle the holder to catch a specified volume of a specified type of fish. • The total amount of fish authorized by the quotas should be equal to the efficient catch level for that fishery. • The quotas should be freely transferable among fishermen.

TABLE 14. 1 Countries with Individual Transferable Quota Systems

Subsidies and Buy Backs • One of management options to reduce overcapacity. • Payments used to buy out excess fishing capacity are useful subsidies, but if additional capacity seeps in over time, they are not as effective as other management measures. • Coos Bay, Ore • Prior to ITQ’s existing fleet: 450 -500 vessels • Optimal – 250 vessels; buy back of excess vessels

• Marine protected areas and marine reserves areas that prohibit harvesting and are protected from other threats such as pollution. • Marine protected areas are designated ocean areas within which human activity is restricted. • Marine reserves protect individual species by preventing harvests within the reserve boundaries.