Fisheries Flashcards
What are the market failures of fisheries?
Negative externalities
Improperly defined property rights
Inappropriate government intervention
What are the main policy options for managing fisheries?
Restrictions on fishing effort
Tax
Individual Transferable Quotas (ITQs)
Territorial Use Rights for Fishing (TURFs)
Common Property Resource (CPR) management
T/F - Fish stocks are both renewable and exhaustible?
True
What has changed about fisheries?
Fishing effort, demand, technology has increased, but because of less fish requires more effort to catch fish
Why are fisheries monitoring and enforcement costs for fisheries high?
No single enforcement agency, coastlines difficult to monitor illegal catch and yet enforcement needed more than ever
Describe the Gordon-Schaefer model
Bioeconomic Model represents the size of the fish stock and the growth rate of the fish. Model is simplistic and avoids a lot of the complexity of nature
Purpose of the Gord-Schaefer?
Bioeconomic model study the impact of fishing effort and catch levels on fish population.
Main problems with the GS model?
Simple and static
What is the difference between the minimum viable population and the carrying capacity?
disturbance (mortality rate, birth rate, growth of fish, etc balance out)
Minimum viable population: Below this level population growth is negative (death > birth) and if stock size is below this level it will decline and become extinct.
Carrying capacity: Natural equilibrium, the population size that would persist in absence of outside
What is the most significant factor that influences relationship between population size and growth?
ecosystem’s ability to support the fish population.
When pop growth = zero this is the carrying capacity
How can the population size be sustained whilst sustaining fishing?
any population size can be sustained as long as the catch level equals exactly the growth rate corresponding to that stock size. For example, S0 can be sustained as long as the catch level is exactly G(S0).
T/F: A catch level is said to represent a sustainable yield if it equals the growth rate of the population?
True
What is the difference between S* and G(S*)?
S* is the population size with maximum sustainable yield - This is the population size where the sustainable yield (the growth rate of the population) is the greatest.
G(S*) is the maximum sustainable yield - This is the largest yield (growth rate, catch level) that can be perpetually sustained.
What are the key costs and benefits associated with fishing and the GS model?
Fishing effort, cost of fishing effort, Benefits of fishing (revenue)
Is the net benefit (profit) from fishing the highest at the level of the Maximum Sustainable Yield?
?
What is MEY and MSY, and why may not necessarily be equal?
Maximum economic yield (MEY) is where the net benefit (profit) is maximized. The maximum sustainable yield (MSY) may not equal the maximum economic yield (MEY). MEY suggests lower levels of effort and larger fish population size than MSY.
Why would a monopoly be beneficial for a fisherie?
The sole owner would consider future profits and would have an incentive to balance the current and the future value of the resource and the current and future profits.
Why is competition bad for a fisherie?
If fisheries are open-access than the fishermen will increase catch levels till the revenue exceeds the costs (i.e. till there is a profit from the increased effort). Ec
on the far right of the curve.
There will tend to be too much effort spent on too few fish
How do Fishermen impose contemporaneous costs on each other
higher than optimal level of effort/capital investment can lead to lower levels of profit (or rate of return on effort/capital investment) for other fishermen.
How is rent dissappated in competitive fisheries?
Since access is free and open, whenever there is a producer surplus (profit) to the fishermen this will attract more fishermen.
The new fishermen will increase total costs without increasing total revenues (at least to the same amount).
Only when total costs reach total revenues will the new entry stop. But at this point the rent will be dissipated.
What are the key messages of the GS model? (!)
The Gordon-Schaefer model demonstrates the inefficiency associated with open-access, and the loss in net benefit (or profit) associated with too much effort being employed in the fishery.
The model suggests that a resource management similar to a monopoly within the fishery would prevent the inefficiency associated with open-access.
How have the priorities of fisheries changed?
Initially, maximum sustainable yield was the goal of fishery management policies howver maximum economic yield has emerged as a more desirable policy goal.
Describe the inappropriate government intervention of fisheries?
Environmental objectives were compromised in order to pursue social objectives.
The policy objective was not to maintain or recover the fish stock and thus to provide sustainable levels of catch to fishermen but to ensure fishermen make profits.
Example: credits and subsidies are provided for faster and bigger boats
What are some negative externalities of fishing?
Bycatch: Sea birds, turtles, dolphins, other fish species, etc.
Impact on habitat: Use of trawling and dynamite for fishing
Changing the composition of ecosystem: Changing the balance of species can lead to consequences below/above the food chain.
What are the improperly defined property rights of fishing
The resource is very mobile and hence it is challenging to define ordinary “private property rights”
What is technology innovations impact on fishing?
New technologies (e.g. sonar detection) typically lower the marginal cost of effort.
This results in the cost curve to rotate to the right/flatter.
As a result, over time with technological improvements there is an:
increase in effort (E)
lower stock size (S)
larger catch size (G(S))
higher net benefit for the fishery.
Technology innovations lower the cost of fishing and hence ‘flatten’ the cost curve. The effort level increases (Et), the catch size and the net benefit increases but the fish stock size decreases.
What is the impact of fishing restricitions?
regulations generally take the form of restrictions on how/which/when/where fish may be caught.
Policies that restrict the fishing effort and hence increase the cost of fishing may be represented by the increase in cost of effort.
Why are taxes more efficient than regulations?
Unlike regulations, the tax can lead to the maximum economic yield (MEY) allocation because the tax revenues represent transfer costs (from fishermen to government) and not real-resource costs.
The net benefit is captured by the society (by the government in the form of tax revenue).
For the individual fisherman, however, a tax still represents an increase in costs and for them the outcome of a tax is equivalent to regulation on technology.
What is the purpose/failure that ITQ’s aim to address? Why is this difficult?
ITQs aim to address the market failure in fisheries that property rights are improperly defined.
Mobile resource, does not respect zonal boundaries.
Has a natural birth/mortality.
How does a ITQ work?
A total allowable catch (TAC) is set by government.
ITQs are then distributed, with ITQ entitling the holder to harvest a specific weight of a specific type of fish within a specific area.
Ergo sum of ITQ’s = TAC.
ITQ’s are a freely transferable.
How are ITQs distributed?
Either through auction or grandfathering
How is the TAC chosen?
The TAC equal the optimal harvest rate and this is based on ecological models, research and catch records.
What is the importance of ITQs transferability?
transferability makes sure that the entitlement to fish flows to those gaining the most benefit from it, fish is caught by most efficient firms
those who face higher costs -> sell quotas
those who face lower cost -> buy quota
What is the importance of the exclusivity of ITQs?
Exclusive access rights gives incentives to fishermen to innovate in fishing techniques to reduce cost and increase efficiency.
Provides incentive to catch quota with fewer inputs.
Eliminates derby-style fishing and reduces safety risks.
What is the importance of the price of the ITQ?
Price of ITQ provides information about current and future biological and economic conditions in the fishery.
What is a quota buy-back? What is the problem associated with:
Method of reducing fishing levels - Those who sell their quota do so only when they feel they have been adequately compensated.
Property-rights and licenses are often very convoluted and instead of quotas the government ends up buying back capacity
What is the percentage share alternative?
Instead of owning quotas defined in terms of specific quantities of fish, the fishermen own specific percentage-share of the total allowable catch (TAC).
This approach means greater protection to the fish but more risk to the fishermen.
!!! In the two different management regimes (quota buy-back and percentage share) how is the risk distributed between
the government
the fishermen
the environment (the fish)? !!!
LECTURE
What is TURFs?
Territorial Use Rights for Fishing are area-based fishing rights:
- secure, exclusive right to harvest fish in a certain area;
may be right to specific species or all species in the area;
- typically use rights and not ownership rights
- typically assigned to a group (a community or cooperative) and not individuals.
People can manage the resource as they see fit. Typically emerge from traditional fishing rights
What is CPR? What are the benefits and problems?
Common Property Resource Mgmt (CPRs) are based on traditional arrangements that have emerged over a long period of time.
Typically, fishermen have very detailed knowledge about the fishing sites.
However, When CPR breaks down it is very difficult to rebuild
What are some positive and negative impacts of technology on CPRs
Positive impact:
Has the potential to increase productivity
Reduce catch variance
Reduce effort
Increase area and time when fishing can take place (eg. Deep water, rough water, etc.)
Storage facilities smooth price variations
Increase wealth of fishermen
Negative impact: Increase income differences Owners of new boats are trapped into having to maintain expansive gear Loss of social cohesion Risk of overexploitation