In this video, fishing boat Captain Mark Lundsten explains how catch shares changed his life as a fisherman.
World Oceans Day brings more of the good news that "keeps rolling in about the performance of fisheries managed with secure fishing rights."
Around the world, the introduction of property rights in marine fisheries has helped populations of overfished species recover from decades of heavy commercial take. Collectively known as "catch shares," property rights in fisheries entitle each quota holder to catch a specified percentage of the total allowable catch (TAC) per season. Where they have been introduced, individual fishing quotas (IFQs) and individual transferable quotas (ITQs) generate higher incomes for fishermen, improve product quality, and restore the health of depleted fisheries.
Working with the Environmental Defense Fund and others, PERC has played an instrumental role in injecting rights-based solutions into ocean overfishing problems. As EDF's Chief Oceans Scientist, Doug Rader, says, "the evidence is clear that secure fishing rights is a powerful tool to make fisheries sustainable for the long-term."
Kate Bonzon, a 2003 alum of PERC's Enviropreneur Institute, wrote the book on designing catch-share systems. Her step-by-step manual is online at EDF's Fishery Solutions Center. Following her lead, several other PERC-trained offshore enviropreneurs have devoted their careers "to fencing off living portions of the ocean."
From Alaska to Namibia, catch share systems continue to illustrate the importance of property rights in managing our natural resources.
The evidence suggests that Florida’s coral reefs are in serious trouble. Coral coverage in the Keys has diminished from 55 percent in 1975 to less than 5 percent today, despite the creation of the Florida Keys National Marine Sanctuary in 1990 and extensive regulations enacted to protect corals. Since 1995 reef-based recreation has dropped about 20 percent.
Marine conservation is typically funded by government tax dollars and charitable giving, but these funding sources are unpredictable and uncertain. For example, consider the one-time multi-million dollar coral restoration grant included in the American Recovery and Reinvestment Act (ARRA). These funds advanced active restoration technology, which entails raising corals in nurseries and then transplanting them on damaged reefs in the Keys, but the funding was cut by approximately 70 percent when ARRA grants came to an end in 2012. Ongoing funding is uncertain.
Markets offer a more stable funding source for reef restoration. Through leases or zoning, state and federal agencies could create limited access areas where non-profit and for-profit organizations invest in active reef restoration projects. Those organizations could recoup their restoration investments with user fees willingly paid by reef recreationists and conservationists to enjoy healthier, restored reefs.
With a clear incentive to steward the reefs, these groups could also monitor for and prevent actions that destroy reef resources, such as careless anchoring. The idea is to avoid the tragedy of the commons by creating an ownership interest in the reefs and harnessing financial incentives for reef restoration.
Florida has a major constituency of recreationists and dive shop operators who are used to accessing reefs at little to no cost. Even if market-based restoration were implemented, free access could still be available in non-restored areas. In essence, reef recreationists, visitors, and their guides would have a choice of whether to visit a restored reef for an additional fee or a continually degraded, but open-access commons for free. Those willing to pay a restoration premium would not only observe, but also contribute to Florida’s reef recovery. The idea of charging user fees for outdoor recreation is a proven concept; it’s neither absurd nor fringe, as quotes in the January article suggested. In fact, user fees are pervasive throughout the National Park system including at Dry Tortugas National Park located approximately 70 miles from Key West. User fees help to fund facility improvements, natural and cultural resource preservation, and interpretation of park resources. Fees allow visitors to contribute to the stewardship of the natural resources that they so dearly value.
Recognizing that current approaches are not achieving the desired level of reef conservation, NOAA is currently considering changes to the Florida Keys National Marine Sanctuary rules and boundaries. User fees combined with private investment in and management of the resource could slow and eventually reverse further degradation of Florida’s coral reefs. It is an idea worth serious consideration and, at the very least, a fair presentation in the media.
In light of the challenges reefs face, it seems unwise to prematurely dismiss the suite of market-based approaches that have been highly effective on land. We should forge ahead on all fronts: protected areas, regulated activities, active restoration efforts and, yes, even fee-based approaches, if they can halt the decline of reefs and help restore them to a semblance of their former glory.
Michael Arbuckle, a senior fisheries specialist at the World Bank, is visiting PERC this week to attend our workshop on "Tackling the Global Fisheries Challenges." Arbuckle is working with PERC's Donald Leal on rights-based fisheries reform in developing countries with an emphasis on artisanal fisheries. Watch the video interview above or read a more detailed interview below. For more PERC Q&As, visit the series archive.
Q: What do you see as the biggest challenge facing global fisheries?
A: It’s a tragedy that worldwide the wealth of fish is being squandered. More than 200 million people in developing countries depend on fisheries and aquaculture for their livelihood, and fish account for 50 percent of the protein needs for the 400 million poorest people.
Each year, poor governance costs the fishing industry at least $50 billion. Yet more than $100 billion of market gains are possible when sustainable net benefits are considered.
This is bad for American markets, but it is an even greater tragedy for developing countries where wealth is needed most. The global challenge is to help recover the lost wealth in developing country fisheries and reinvest it.
Q: What do you hope to accomplish with the PERC workshop on global fisheries challenges?
A: Forms of property rights are not well recognized in most developing countries. Furthermore, the capacity of governance or the rule of law is often weak or non-existent.
So Donald Leal and I have not just been looking into whether we need property rights or what are the characteristics of these property rights, but how do you introduce them. The development of property right institutions must come from the bottom up. The importance of property rights are further emphasized in this manner because they empower users to manage their resources responsibly.
Q: What are a few lessons we can learn from the bottom-up management approach to some of the fisheries you have been examining in the developing world?
A: Often bottom-up property right institutions are the only entry point for reform in such countries. We are seeing a growing list of examples including Mexico, Bangladesh, Indonesia, Chile, etc., where bottom-up property right arrangements have helped develop more stable fisheries.
We are learning more and more about the characteristics of such systems. We now know it’s dangerous and often counter productive to invest in value chain improvements without reliable property rights, but we also know that if property rights are established a variety of gains are possible.
In addition, we know that one size does not fit all and the particular arrangement of property rights is unique. This is something that must be considered as we take away lessons from successful property rights regimes—the misalignment of property rights to the political economy of the country can easily undermine the rights that are being established.
Q: What is your vision for the future of fisheries and aquaculture?
A: Looking to the future, the supply of fish will be dominated by aquaculture and this will be up for meeting future demand. It will be critical, therefore, to not see fisheries as an end in itself, but also as a foundation for aquaculture development.
An important objective for the World Bank and PERC is to help identify and implement the property right institutions that will enable such innovations in the oceans.
The PERC workshop on "Tackling the Global Fisheries Challenges" is a good opportunity to examine high seas property rights issues from a clean platform, without thinking about the current constraints of the institutions in place. The workshop gives the participants a chance to think about fisheries from a theoretical perspective, consider some specific examples, and think innovatively about how to move forward.
Founded 30 years ago in Bozeman, Montana, PERC—the Property and Environment Research Center—is the nation’s oldest and largest institute dedicated to improving environmental quality through property rights and markets.
The goal of PERC’s programs is to fully realize the vision of establishing “PERC University,” where scholars, students, policy makers, and others convene to expand the applications of free market environmentalism.
PERC's fellowships share a common goal of exposing new scholars, students, journalists, and policy makers to free market environmentalism, as well as enable scholars already familiar with FME to explore new applications.