Markets everywhere: fish and carbon

The Bush Administration plans to introduce tradeable quotas for fishermen.  According to the Washington Post:

The administration’s bill would be the biggest change in fisheries management in a decade. It aims to double by 2010 the number of "dedicated access privileges" programs, which allocate shares of each fishery to individual fishermen, who can then can buy and sell their shares. In Alaska, for example, fishermen are granted a portion of the allowed halibut catch and can trade these quotas among themselves; in most U.S. fisheries, regulators govern the annual catch by limiting how many days fishermen operate and how much they collect each trip.

Good. Almost every expert in fishing agrees that a property-rights based approach to reducing overfishing is exactly what is needed. Furthermore, it is good economics. Nor are there any environmental arguments against using tradable quotas as a way to deliver reductions in overfishing in the most efficient way possible. The San Francisco Chronicle reports:

Steve Murawski, chief science adviser to the Commerce Department’s National Marine Fisheries Service, said … the administration recognizes that good fishery management is based on peer-reviewed science, and that the government should help fishermen make better business decisions through the use of fishing quotas.  "In many cases they do not make market decisions that are in their own best interests and the long-term interests of the country because of this race to compete with each other," he said. "This ‘survival of the fittest’ — it generates a lot of conservation issues."

It is good to see the administration turn to peer-reviewed science for support. Now why can’t the Bush Administration apply exactly the same logic to limiting greenhouse gas emissions, by limiting carbon-dioxide emissions using tradable quotas? They could start by supporting the Clear Skies bill which desperately needs Administration support if it is to get through Congress.

<dream> One of the greatest assets that developing countries have today is that they are low emissions economies.  Wouldn’t it be great if we divided the world’s limit for greenhouse gas emissions equally, by head of population, and then let the world’s poor, who are clean, rent to the world’s rich, who are dirty, the right to use their pollution limits? </dream>

Update 22 September:  See the post on this by Jane Shaw at the Commons Blog

3 thoughts on “Markets everywhere: fish and carbon”

  1. Pingback: Juan Freire

  2. In his comment, Juan Freire notes that our enthusiasm for tradable quotas should depend on the details of the policy: what initiation endowment of quotas should there be, how are the stock units defined, and how is it enforced? He notes that any good economist should be concerned about these details as they hold the key to success or failure.

    I agree completely. It is possible to devise a scheme in which incentives are distorted and the possible benefits of tradable quotas thrown away. But I also think that, done right, a tradable quota system is exactly the right way to limit the use of scarce resources, such as fishing rights, or to ensure that limits on carbon emissions are implemented with least cost.

  3. Alaskan fisherfolk like the idea IF they are not pushed out by the huge corporate fishing industry. Before 1995 Alaskan ‘hallie fishers’ about killed themselves (some actually were killed) in the short 48 hour opens. But when the state assigned individual quotas, the insanity stopped and prices rose. Now all we have to worry about are halibut fish farms.

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