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TASK 20: Catch Share Allocation Handbook

Award Period: 

Monday, January 1, 2018 to Monday, December 31, 2018

Award Amount: 

$115 000

Agency Name: 

The Nature Conservancy

Award Number: 

SB150143-Task20

PI First Name: 

Christopher

PI last name: 

Costello

Co-PI: 

Gary Libecap

MSI Person: 

Area/s of Research: 

Abstract: 

Catch share programs, such as individual transferable quotas (ITQs), are quickly becoming one of the most ubiquitous fishery management institutions, particularly in industrial-scale fisheries, which generate most of the food and profits that come from global marine fisheries. Among the many known effects that these programs can have on the economic and biological status of fisheries, they have almost unanimously been shown to increase the profitability of the fisheries in which they are implemented. Because they typically assign a type of property right as a secure area or share of the Total Allowable Catch (TAC) in a fishery, they appear to change time horizons for fishers and associated incentives to preserve the stock and the related ecosystem. Many of these programs are granted as temporary or not defined use rights, subject to reallocation by the granting government.  Catch share programs are predominantly distributed via grandfathering, but other allocation methods as auction and equal share rules are also possible. Reallocation could involve a change in the allocation mechanism. Recognizing the tremendous economic value produced by these programs, some governments are beginning to explore options for tapping into these benefits as (1) a source of government revenue, and/or (2) a funding source for fishery science and management. Whether and how governments choose to tap into these benefits can have significant implications for the incentives fishers face in a specific catch share program or their participation in a proposed system. If fishery profits are expropriated in reallocation and the security and time frame of the assigned use right called into question, then incentives for long-term investment in the fishery and the related stock and ecosystem could change. Under these circumstances the economic, ecological, and social benefits that these programs are designed to generate could be jeopardized.

In collaboration with The Nature Conservancy, the Sustainable Fisheries Group at the University of California, Santa Barbara will develop a user-friendly handbook on catch share allocation. This project will build on previous work we have conducted synthesizing relevant information on design, quota allocation, term and security of the quota, taxation in the industry in different types of catch share programs as ITQs, Individual Quotas (IQs), Individual Vessel Quotas (IVQs), and effects on biological, economic and social outcomes and will include additional modeling work to explore outcomes of various allocation methods. Users of the handbook can assess how quota might be allocated and/or reallocated and what theory and data indicate are the likely effects of different policies. No publicly available handbook of this kind currently exists, and as these systems expand, fishers and policy makers can benefit from a rigorous, neutral assessment of allocation options. In light of this information gap, we recognize the potential value of this product for NGOs, industry representatives, government officials, and scientists, all of whom play a key role in designing, implementing, and managing fisheries.