5.3  Fishing rights

The solutions discussed above are not, of course, limited to pollution problems. Similar approaches can be, and have been, applied to conservation issues such as ocean resources or endangered species.

A common example is fisheries. Historically fisheries have been either in sole ownership (by individuals or groups), which is generally only possible in freshwater fisheries where non-owners can be readily excluded, or open access, for inshore or deepwater fisheries. Aquaculture is also usually in sole ownership, although access to space to undertake it is a distinct issue.

It had historically been argued that fishing had no effect on fish populations or even that thinning out the population allowed the remaining fish to grow faster. More recently, it was suggested that fish catch diminished as catch effort increased, not just because of the law of diminishing returns but also “because of the effect of catch upon the fish population” (Gordon, 1954, p129). The collapse of the North Atlantic cod fishery (Kurlansky, 1997) among others has demonstrated the fallacy of the earlier views.

The fishing problem is a version of the tragedy of the commons referred to earlier. With ownership of fish determined by capture, no one has a property right until the fish are caught, so fishers race to catch the fish first and no one has a secure property right in future catches, so no one has an incentive to conserve.[35] Because there is no alternative means of converting the communal right to fish into a private right, fishers “must incur the larger social cost of depleting the stock of animals” (Alchian and Demsetz, 1973, p23). [36]

Initial attempts to resolve the excessive competition which was causing depletion, focused on administrative control of access through number of vessels or fishers, or constraints on types of gear or time spent fishing. These effort control measures tended to exacerbate the race for fish resulting in excess investment, higher operating costs and greater risk without necessarily reducing catches (see Table 10). Fishers tended to game the rules; eg, by increasing boat size or keeping boats at sea longer.

In the Pacific halibut fishery for example, the season dropped from six months in 1933 to 26 days in one region in 1952 as bigger and faster boats caught the available fish earlier at higher cost. Such regulatory approaches ignored the input cost of fishing (Gordon, 1954). The licensing process did, however, begin to create perceived rights in fishing which may have helped to bridge the gap to an individual rights approach (Scott, 1988).

Creating exclusive trading rights increases the value of existing rights, allowing compensation for any loss eg, for conservation reasons or traditional rights, while leaving rights holders still better off than before. Remaining users of the common resource have an incentive to conserve for the future, operate more efficiently (rather than race to extract their share of the resource before it is exhausted) and help enforce the quotas.

The typical structure for such an approach involves defining a fishing zone, determining a Total Allowable Catch (TAC) and allocating Individual Transferable Quota (ITQ) within that TAC to fishers or communities. Compared to previous licensing arrangements the ITQ tends to offer greater duration, exclusivity, transferability and divisibility.

ITQ also offers administrative advantages as it makes allocation of reductions in TAC straightforward, allows for handling of by-catch by allowing fishers to buy or rent quota to cover it, allows fishers to choose between specialisation or mixed catches, and removes the need for control over gear other than to manage impacts of fishing on fish-stock composition or for environmental reasons; eg, to reduce seabird deaths (Scott, 1988).