Cap-and-trade Bycatch Management with Costly Avoidance and Stock Uncertainty

Abstract

Regulations to reduce bycatch of non-marketed marine species often impose gear restrictions, reductions in harvest of the target species, and/or spatial and temporal closures of the fishing ground. These regulations can exact significant social costs in commercial fisheries. We evaluate performance of a cap-and-trade bycatch management policy. Harvest of a target fish species, costly avoidance of the bycatch species, and harvesting efficiency are examined in a stochastic production environment with and without at-sea observability of bycatch, and with and without trade in harvest quotas and bycatch caps. Our results suggest that precise implementation of a socially optimal management plan is possible only if bycatch is observable and trade in fish quotas and bycatch cap is frictionless. Conditions exist in which quota/permit trading raises bycatch relative to a no-trade environment. The results offer useful guidance for designing cap-and-trade bycatch management programs. KeywordsCap-and-trade bycatch management, costly bycatch avoidance, uncertainty BioOne (www.bioone.org) is a nonprofit, online aggregation of core research in the biological, ecological, and environmental sciences. BioOne provides a sustainable online platform for over 170 journals and books published by nonprofit societies, associations, museums, institutions, and presses.Your use of this PDF, the BioOne Web site, and all posted and associated content indicates your acceptance of BioOne's Terms of Use, available at www.bioone.org/page/terms_of_use.Usage of BioOne content is strictly limited to personal, educational, and non-commercial use. Commercial inquiries or rights and permissions requests should be directed to the individual publisher as copyright holder. Cap-and-trade Bycatch Management with Costly Avoidance and Stock UncertaintyRajesh Singh and Quinn Weninger, Iowa State University A B S T R A C TRegulations to reduce bycatch of non-marketed marine species often impose gear restrictions, reductions in harvest of the target species, and/or spatial and temporal closures of the fishing ground. These regulations can exact significant social costs in commercial fisheries. We evaluate performance of a cap-and-trade bycatch management policy. Harvest of a target fish species, costly avoidance of the bycatch species, and harvesting efficiency are examined in a stochastic production environment with and without at-sea observability of bycatch, and with and without trade in harvest quotas and bycatch caps. Our results suggest that precise implementation of a socially optimal management plan is possible only if bycatch is observable and trade in fish quotas and bycatch cap is frictionless. Conditions exist in which quota/permit trading raises bycatch relative to a no-trade environment. The results offer useful guidance for designing cap-andtrade bycatch management programs.

Teaching fisheries bycatch: Exploring economic and behavioral drivers of bycatch through a classroom game

“…Time permitting is possible to extend the above discussion to explore the efficacy of different market-based instruments to reduce bycatch and its discarding. A few suggested readings are Miller and Deacon (2017) and Lent and Squires (2017) for an overview of regulation versus market instruments, Mukherjee and Segerson (2011) and Chan and Pan (2016) for a discussion of the regulatory approaches to protect sea turtles, Singh and Weninger (2015) for a model of a cap-and-trade bycatch avoidance policy, and Larson, House, and Terry (1996) for an illustration of efficient quotas using a linear-programming framework.…”

Mitigating Bycatch: Novel Insights to Multidisciplinary Approaches

“…Individual transferable quotas (ITQs) for bycatch (Boyce, 1996;Bisack and Sutinen, 2003;Gjertsen et al, 2010;Hannesson, 2010;Singh and Weninger, 2014;Hall et al, 2017;Miller and Deacon, 2017) are another incentive-based policy instrument, where bycatch reduction and selling or otherwise transferring ITQs confers a benefit and positive incentive through revenues earned and buying ITQs to cover bycatch not covered by quota creates a cost and negative incentive. Trade of bycatch ITQs may be tailored and when applied to weak stock species each fisher may be required to hold sufficient rights to cover any bycatch (Miller and Deacon, 2017).…”