Section 10: Renewable resources Flashcards
Why is it difficult to manage a fishery?
a) Market failure: common pool resource
b) Ecological complexity: population thresholds, biodiversity, monitoring
c) Acceptability of policy
Explain the concept of maximum sustainable yield (MSY)
MSY is the point at which the annual growth rate is maximized and fisheries can harvest as much as can be sustained
Based on the growth curve, what happens when we cross an unstable equilibrium
Extinction
In the economic model of renewable resources, what is on the x and y axes?
X-axis: Fishing effort
Y-axis: Benefits and costs
What is the shape of the total benefit curve?
What is the shape of the total cost curve?
TB: upside-down U shape
TC: linear shape sloped upwards
Where on the graph does economic efficiency occur?
Where the distance between TC and TB curves is maximized (usually less effort than the MSY)
Where on the graph do fisheries tend to operate?
At the intersection between TC and TB
How is the economic model different from the growth model?
The growth model suggests operating at the maximum sustainable yield to ensure resources aren’t depleted. The economic model suggests operating at the point where the distance between benefits and costs is maximized. This is usually less than the maximum sustainable yield.
Why are open access regulations economically inefficient policies?
This regulation increases the cost of fishing to reduce population depletion. However, increasing costs reduces the net benefit and still leads to rent dissipation
What are the 3 limited entry regulations used to manage renewable resources?
- Individual Transferable Quotas
- Fisheries cooperative (self-government)
- Exclusive spatial harvest rights (monopoly w/ property rights)
Explain how Individual Transferable Quotas (ITQs) work
ITQs allow fishers to catch a proportion of the total annual catch. The number of ITQs is based on the economically efficient catch level
Evalaute ITQ policies
Pros:
- Can be effective and efficient (equimarginal principle)
Cons:
- Equity issues with allocating permits
- Hard to administer
- Does it work for cases with ecological complexity
