16. Right based V2

Question 1

According to economic theory, what are property rights necessary for?

Answer 1

• According to economic theory, it is necessary for economic efficiency:
• High level of production
• Economic growth

Question 2

What are the key properties of strong property rights in fisheries?

Answer 2

The key properties of strong property rights in fisheries include exclusivity, durability, security, and tradability.

Question 3

What is the open access/common pool arrangement of harvesting in fisheries?

Answer 3

• Everyone can enter, but no one has explicit property rights. The fish is yours if you capture it

Question 4

What are the consequences of weak property rights in fisheries?

Answer 4

• Elimination of fish stocks
• Damage to the marine ecosystem
• Miss out on economic benefits

Question 5

What are the instruments for rights-based management in fisheries?

Answer 5

The instruments for rights-based management in fisheries include
1) TURFs,
2) ITQs,
3) Fishery cooperatives

Question 6

What is TURF?

Answer 6

• Territorial Use Rights in Fisheries (TURF)
• They Do: Gives exclusive access to specific areas or territory of fishing (space-based rights). Creates a sense of ownership/property rights.

Question 7

History of TURF

Answer 7

• Been used in the South Pacific for centuries
• But challenging to establish it in nearshore and offshore marine environments due to difficulty of fencing the ocean

Question 8

Implementation of (successful) TURF: step by step

Answer 8

1. Identification of a closed class of users (exclusivity)
2. Boundary enforcement (exclusivity):
3. Internal rules and/or coordination mechanisms to provide users with proper incentives
4. Duration and security of rights (durability and security)

Question 9

Implementation of (successful) TURF: FULL STEP BY STEP

Answer 9

1. Identification of a closed class of users (exclusivity):
   The government identifies specific communities or groups of fishers that are allowed to fish in the designated TURF zones. By granting exclusive rights to these fishers, it prevents overfishing by limiting access to the fishery.
2. Boundary enforcement (exclusivity):
   To ensure that the exclusive rights are respected, the government establishes boundaries for each TURF zone. This can be done through monitoring systems, such as GPS tracking devices on fishing boats or regular patrols by fishery officers.
3. Internal rules and/or coordination mechanisms to provide users with proper incentives:
   Within each TURF zone, the fishers need to have a set of rules and mechanisms to manage their fishing activities sustainably. This can include fishing quotas, gear restrictions, or seasonal closures. Incentives could be created through profit-sharing arrangements or community-based management plans. For example, the fishing community might agree to use only certain types of fishing gear or to limit their fishing during certain times of the year to allow fish stocks to recover.
4. Duration and security of rights (durability and security):
   For the TURF system to be effective, fishers must have confidence that their rights will be protected over a long period. This means granting TURF rights with an appropriate duration (e.g., 10-20 years or even indefinitely) and ensuring that the government will support and enforce the rights.

Question 10

Japans TURF system and innovations?

Answer 10

• One of the oldest and most well-developed in the worlds
  Innovations in Japan’s TURF system include:
  1. Zoning and allocation of space among different gears and marine uses:
  2. Micro-decisions about managing effort, such as rotation
  3. Limiting harvest to maximize price
  4. Harvest or revenue pooling

Question 11

Japans innovations FULL?

Answer 11

1. Zoning and allocation of space among different gears and marine uses:
   In a coastal area, various fishing techniques and marine activities may coexist, such as trawling, longlining, recreational boating, and seaweed farming. To minimize conflicts and promote efficient use of marine resources, Japan’s TURF system divides the coastal area into zones, allocating specific spaces for different fishing gears and marine uses. This ensures that each activity has its designated area without negatively affecting others.
2. Micro-decisions about managing effort, such as rotation:
   In the TURF system, fishers make smaller-scale decisions to manage their fishing efforts sustainably. For example, they may use a rotation system, where different sections of the TURF zone are fished at different times, allowing fish stocks in the unfished areas to recover. This approach helps maintain a healthier marine ecosystem and ensures the long-term sustainability of fish stocks.
3. Limiting harvest to maximize price:
   Japan’s TURF system also aims to maximize the revenue fishers can earn from their catch. Fishers monitor market conditions and adjust their harvest strategies accordingly. For example, if there is an oversupply of fish in the market, fishers may decide to limit their harvest temporarily, allowing fish prices to recover. This strategy helps fishers earn more for their catch while reducing pressure on fish stocks.
4. Harvest or revenue pooling:
   To promote cooperation and collective decision-making among fishers, Japan’s TURF system encourages harvest or revenue pooling. In this arrangement, fishers within the same TURF zone pool their catch or revenue, and then distribute the earnings equally among themselves. This fosters collaboration and incentivizes fishers to manage their TURF zone sustainably, as they all share the benefits of good management practices.

Question 12

Challenges with TURF?

Answer 12

1. (Correct Geographical Area): Matching the scale of the TURF to the species range: To effectively manage a fishery, the size of the TURF must be appropriate for the species being managed. This can be a challenge, especially for migrating species that move across large distances. In such cases, it is difficult to design a TURF that covers the entire range of the species.
2. Balancing the scale with transaction costs: Ideally, the size of a TURF should be small enough to minimize transaction costs associated with managing the area. Smaller TURFs are generally easier to manage and coordinate among stakeholders. However, making the TURF too small might not be effective for managing the target species, particularly if they have a larger range or migrate frequently.

In simpler terms, TURFs face challenges in finding the right balance between covering the appropriate range of the target species and keeping the size small enough to manage effectively and reduce transaction costs.

Question 13

What are ITQs?

Answer 13

• Individual Transferable Quotas (ITQs)
• Give rights to harvest a certain volume of fish. Held by individual agents and are tradable.

q (i, t) = a(i, t) * TAC(t)
Agents quota at time t = quota share * TAC

TAC = Total Allowable catch

Question 14

What are the perfect ITQ system?

Answer 14

• Security: Ability for the holder to hold on the property under challenges like theft
• Tradability: Ability to sell the property rights
• Exclusivity: Property holder can utilize the property, and prevent others from using it
• Durability: Time span of property rights

Question 15

Overview of development of ITQ

Answer 15

• Success of ITQ:
• Rapid adoption of ITQ systems around the word suggest relative success in
• Overcoming the common property problem
• Improving the economics of fishery
• Stock improvements

Question 16

Example of how ITQs improve efficiency.

Answer 16

1) Quality over Quantity (Security)
- Quota system limits the amount of fish that can be caught. Can fish at own pace without hard “open-access-competition” from others. This reduces overcapitalization of fishing vessels and gear as fishermen no longer need to invest in more equipment to catch more fish within the limited time frame.
- The quota system also encourages fishermen to use the most efficient fishing methods and gear, as they can focus on quality rather than quantity.
2) Tradeable Quotas (Tradability)
- Those who are most efficient at catching fish can buy more quotas and vice versa.
3) Long-term planning (Duration)
- The tradability encourages long-term planning and investment.

Question 17

What are some inherent limitations of (perfect) ITQs?

Answer 17

• Efficient fishing activity: Even when perfect, does not guarantee efficient fishing activity.
• Biomass: May not ensure that fish stock biomass are optimal
• Marine Ecosystems and Habitat: May not address impact of fishing gear on marine ecosystems and habitats
• Interactions: Typically single-species based. May not account for interections between different species.

Question 18

What are some of the imperfect applications of ITQS?

Answer 18

1. Reduced quality property rights
2. Discrete TAC periods
3. Aggregate quotas
4. Inappropriate TACs
5. Inadequate enforcement

Question 19

What are some of the imperfect applications of ITQS? FULL

Answer 19

1. Reduced quality property rights:
   Security: Gives the user a TAC. Can be restrictions on duration or tradability. For example, if ITQs are only valid for a short time (like a year), fisheries may not have long term SECURITY to invest in sustainable fishing practices.

Tradability: If there are limitations on trading or leasing quotas, it may hinder efficient transfers.

2. Discrete TAC periods
   Typically set annually, which not always aligns with natural fluctuations and life cycles of the targeted fish species. For example, with a quick increase in population, the annual TAC might not be adjusted quickly enough to allow for sustainable exploitation.

Conversely, if population goes down, the annual TAC might be to high, leading to overfishing.

3. Aggregate quotas:

In some cases, ITQs may be set for groups of fish stocks, cohorts (age groups), or geographical areas rather than individual species. This can create problems if some species or sub-stocks within these groups are more vulnerable to overfishing than others.

For example, if an ITQ is set for a group of species, fishers may focus their efforts on the most valuable species within the group, leading to depletion of that particular species while others remain underexploited.

4. Inappropriate TACs:
   Optimal TAC depends on accurate information about fish stock and ecosystem. Data on fish stocks can be uncertain, and incentives can drive decision.

For instance, political pressures or short-term economic interests might lead to TACs being set too high, resulting in overfishing. On the other hand, overly cautious TACs might lead to underutilization of the resource and economic inefficiencies.

5. Inadequate enforcement:
   Effective ITQ systems rely on the ability to monitor and enforce compliance with quotas. However, in some cases, enforcement may be inadequate due to a lack of resources, insufficient monitoring systems, or the vastness of the fishing area.
   As an example, illegal, unreported, and unregulated (IUU) fishing may occur if there is weak enforcement, undermining the ITQ system and leading to overfishing or unfair competition

Question 20

What is a Fishery Cooperative?

Answer 20

• association by fishers
• collectively holds rights to control some or all of its members fishing activities
• These cooperatives aim to promote sustainable and efficient management of marine resources, and often work in conjunction with Territorial Use Rights Fisheries (TURFs) systems.

Question 21

Relationship between Cooperatives and TURFs:

Answer 21

Fishery Cooperatives and TURFs often blend together. In some cases, a coastal community may claim exclusive rights over a marine resource and form an association (i.e., a Fishery Cooperative) to manage the resource within the TURF.

Question 22

Fisheries management objectives:

Answer 22

a) Ecological
* Ecosystem effects: Management measures should minimize negative impacts on the marine ecosystem, such as habitat destruction, bycatch, or trophic cascades.
* Target stock condition: Fisheries management should maintain fish stocks at sustainable levels to ensure the long-term health of the resource.

b) Economic objectives:
* Fishing community welfare: Management measures should aim to enhance the welfare of fishing communities, such as by providing stable income and improving living standards.
* Target stock harvest: The management approach should maximize the long-term yield of the target species while considering economic and ecological factors.
* Profitability: The fishery should be managed to maximize profitability for fishers while ensuring sustainable resource use.
* Employment: Fisheries management should also aim to support employment opportunities in fishing communities.

c) Management objectives:
* Management cost (monitoring and enforcement): Fisheries management should be cost-effective, balancing the costs of monitoring and enforcement with the benefits derived from sustainable resource management.

Question 23

How do strong property rights promote economic efficiency in fisheries?

Answer 23

Strong property rights promote economic efficiency in fisheries by providing exclusivity, durability, security, and tradability, which can lead to a high level of production and economic growth.

Question 24

Why are property rights important in fisheries management?

Answer 24

Property rights are important in fisheries management as they ensure economic efficiency, a high level of production, and economic growth.

Question 25

What is the structure (formula) of ITQs?

Answer 25

The structure of ITQs includes a Total Allowable Catch (TAC) and individual shares of quota (q(i,t)), which are multiplied by the TAC to determine the quota for each agent (a(i,t)).

q (i, t) = a(i, t) * TAC(t)
Agents quota at time t = quota share * TAC

Question 26

How many fishing nations have adopted ITQ systems?

Answer 26

By the end of 2010, 222 fishing nations, including the US, Canada, Chile, Peru, Iceland, Norway, New Zealand, Australia, and some EU countries have adopted ITQ systems.

Question 27

What are the relative successes of ITQ systems?

Answer 27

The rapid adoption of ITQ systems around the world suggests relative success in overcoming the common property problem, improving the economics of fisheries, reducing excessive fishing effort and capital use in over-exploited fisheries, significantly increasing the unit value of landings, and halting and even reversing the previous long-term decline of fish stocks.

Question 28

How do TURFs compare to ITQs?

Answer 28

TURFs grant collectives the right to use the marine ecosystem, which promotes a systemwide cooperative, while (imperfect) ITQs cannot deal with marine ecosystem problems or conflicting marine uses due to internal coordination problems among individual holders/quota systems and spatial-temporal missallocation of individual species.

Question 29

How do TURFs and Fishery cooperatives blend together?

Answer 29

TURFs and Fishery cooperatives often blend together when a coastal community claims exclusive rights over a marine resource and forms an association.

Question 30

Why is there no one-size-fits-all solution in fisheries management?

Answer 30

There is no one-size-fits-all solution in fisheries management because each tool is most effective when aimed at solving specific problems and applied to a subset of ecological and economic settings. Thus, it is necessary to identify and match appropriate solutions to the specific political, economic, and ecological problems in a particular fishery.