Volume 26, No.4, Winter 2008

Save the Fisheries

Economist, n. a scoundrel whose faulty vision sees things as they really are, not as they ought to be. —after Ambrose Bierce

The world’s ocean fisheries are in decline. Since 1950, nearly 30 percent of all fisheries have collapsed, and some scientists project that in 40 years, all of the world’s fisheries could collapse. The problem, it is widely agreed, is a failure of humans to manage fisheries in a way that is consistent with both maximum economic benefit and longterm survival of ocean fish stocks. Important new research by Christopher Costello, Steven Gaines, and John Lynham (2008) reveals that a property rights approach to fishery management can provide a solution to this growing crisis.

The authors find that a system of catch shares called individual transferable quotas (ITQs) is stunningly successful in protecting fisheries. Where such rights have been assigned, there is no evidence of the collapse described above. In fact, the assignment of catch share rights often reverses pre-existing collapse. And, in fisheries where they are used, ITQs have permitted the return of economically viable fishing activities.

Command-and-control systems of fisheries management historically have held sway around the world. These systems limit, for example, fishing gear and season length, in an effort to keep total harvests within quotas. But even the best of them suffer from a profound misalignment of incentives: the self-interest of the individual harvester is generally inconsistent with actions that would both maximize the value of the fishery and ensure its sustainability. Because individuals lack secure rights to part of the harvest, they are motivated to “race to fish” to out compete others. The results are poor stewardship and lobbying for ever-larger harvest quotas, causing excessive harvests, reduced stocks, and eventual collapse.

In recent years the failure of command-and-control fishery management has become increasingly clear, but the question has been: is there a viable alternative? Economists have suggested that catch shares assigned to individual harvesters (such as ITQs) offer such an alternative, because property rights systems, of which ITQs are an example, are generally the most effective way to conserve resources.

Catch share systems combine two features. First, based on biological and other scientific criteria, an allowable catch size is determined. Then, members of the fishing community (individuals or cooperatives, for example) are assigned shares of the total allowable catch. These shares can then be used, or in many cases sold or leased to others; no one is allowed to harvest in excess of the amount specified in the harvester’s quota. In effect, the ITQs give fishermen de facto property rights in the catch, much as they have rights in their boats and gear. Collectively, these rights owners then have an incentive to protect and maintain the value of the fishery, just as they do to maintain their other property.

Past case studies of the use of ITQs have suggested that catch shares can dramatically improve both the biological and economic health of fisheries. Alaska, British Columbia, Iceland, and New Zealand all represent locales where ITQs are regarded as having succeeded. The new research by Costello et al has taken the study of ITQs to an entirely new level however, by examining all 121 fisheries where ITQs and other catch share systems have been implemented, and comparing the outcomes to the 11,014 fisheries around the world where such systems have not been instituted. In making this comparison the authors are able to account for factors (such as ecosystem characteristics and fish species) that might have played a role in the health and viability of the fish stocks. Thus, they conduct what amounts to a statistically controlled experiment—the results are striking.

A conventional measure of collapse for a fishery is a decline in catch to a level that is less than 10 percent of the maximum recorded catch for that fishery. By this criterion, an average of more than 50 fisheries has reached collapse each year since 1950, in a worldwide pattern that seems to be pointing toward the demise of all fisheries. But Costello et al find that once a catch share system is implemented, the process of collapse halts. Moreover, in many of the ITQ fisheries, recovery of fish stocks begins soon after implementation, even as fishermen continue to profitably catch fish.

The authors estimate that had ITQs been implemented in all fisheries beginning in 1970, the incidence of past collapse among fisheries would have been cut by two-thirds. Moreover, instead of watching fisheries collapse today, we would be seeing them getting healthier, even as they were supporting fishers and nourishing consumers. Most importantly, it appears that the power of ITQs to prevent and even reverse fishery collapse applies to species and ecosystems throughout the world.

Until now, skeptics of the property rights approach to solving environmental problems have argued that fisheries are profoundly different from other resources, somehow immune to the benefits of instituting catch shares. Such an argument is no longer viable. Catch shares are being implemented in growing numbers around the world. The findings of Costello et al imply that an expansion of ITQs and other catch share systems can lead to the recovery of fish stocks and of the profits from harvesting them—and for this both humans and fish have reason to applaud.

Costello, Christopher, S. D. Gaines, and J. Lynham. 2008. Can Catch Share Prevent Fisheries Collapse? Science 321: 1678–81.

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