The Tragedy of the Cod

| Tue May 12, 2009 4:28 PM EDT

Guess what?  Cap-and trade isn't just for limiting carbon emissions.  Here's Jonathan Adler on the destruction of our fisheries:

Protecting fishery resources requires keeping fish catches to sustainable levels. The most effective way to do this is through so-called "catch-share" policies, a property-based conservation regime often called "IFQs" or (as some now say) "cap-and-trade for fish," which allocate tradeable shares of the catch among fishery participants.

....Greenwire reports that the Administration's budget request for NOAA includes a dramatic increase in funding for catch-share management. According to Greenwire, the request "indicates a major push from the administration" to push the adoption of catch-share systems in the nation's fisheries. If so, this will be very good news for fish, and a significant step toward sustainable management of marine resources.

But remember the lesson of Iceland!  Bored, rich fishermen can eventually become a problem:

[In the early 70s] the Icelandic government took radical action: they privatized the fish. Each fisherman was assigned a quota, based roughly on his historical catches. If you were a big-time Icelandic fisherman you got this piece of paper that entitled you to, say, 1 percent of the total catch allowed to be pulled from Iceland’s waters that season.....Your percentage of the annual haul was fixed, and this piece of paper entitled you to it in perpetuity.

....It was horribly unfair: a public resource — all the fish in the Icelandic sea — was simply turned over to a handful of lucky Icelanders. Overnight, Iceland had its first billionaires, and they were all fishermen. But as social policy it was ingenious: in a single stroke the fish became a source of real, sustainable wealth rather than shaky sustenance....Since its fishing policy transformed Iceland, the place has become, in effect, a machine for turning cod into Ph.D.’s.

But this, of course, creates a new problem: people with Ph.D.’s don’t want to fish for a living. They need something else to do.

Unfortunately for Iceland, "something else" turned out to include lots of insane investment schemes.  Perhaps periodic auctions of long-term leases would be a better idea than outright privatization.

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