Overfishing is Getting Filleted by Markets
Overfishing is a serious threat to the nearly 200 million people who depend on the world’s oceans for sustenance. After all, nearly one in five people around the world consume fish as their primary source of protein and overfishing has deleterious cascade effects on other marine ecosystems.
Illegal and excessive fishing are to a degree inevitable because oceans, rivers and many lakes are publicly administered. This gives fishermen an incentive to take from them as much as is legally possible. Yet, market-based resource management is offering a concrete solution to this “tragedy of the commons” and has already begun alleviating strains on U.S. fish stocks.
The U.S. economy is intertwined with the fate of the high seas. By conservative estimates, commercial and recreational fishing alone account for 1.3 million jobs and nearly $60 billion in economic activity. Overfishing has pernicious effects on Americans’ livelihoods: commercial anglers can lose out on up to 80 percent of potential revenue when local fish species see drastic population decline, as was the case in New England when cod, flounder, and halibut populations were unexpectedly low in 2009.
With market-based resource management, data from September 2015 show that the total number of wild stocks placed on the “overfishing” watch list has fallen to its all-time lowest level since 1997. Since the 2007 reauthorization of the Magnuson-Stevens Act, annual catch limits (ACLs) have allowed the National Oceanic and Atmospheric Administration (NOAA) to reduce the number of overfished U.S. stocks by nearly 75 percent since 2007 alone (from 41 in 2007 to only 10 in 2014). ACLs create total tonnage allotments based on a series of population growth factors specific to certain fish species.
To enforce these legal catch limits, the eight Regional Fishery Management Councils that are scattered along coastal regions have continued to turn toward market-based, catch share programs, which create tradable rights to catch a fixed percentage of the annual limit. In practice, this system functions similar to a stock-trading system in which commercial and recreational fisherman can purchase and secure loans for transferable catch quotas. Today, nearly half of all fish harvested in the U.S. are caught under the legal rubric of a catch share system.
Scientific evidence weighs heavily in favor of catch limits and catch share arrangements. David Festa, Vice President of the Environmental Defense Fund, and his fellow researchers found that catch share systems return fish populations to environmentally sustainable levels. Using rigorous regression analysis, researchers at the University of California at Santa Barbara and the University of Hawaii showed that catch share systems significantly lower the likelihood of fishery collapse over time.
Additionally, University of Washington professor Trevor Branch has found that, by requiring fishermen to pay attention to the weight of their harvest, catch shares have combated the practice of passively catching low-quality fish and then discarding them, a technique that intensifies overfishing’s harms. Branch also found that in localities where catch shares are utilized catch-limits are easier to enforce and that commercial companies routinely request that annual catch limits be lowered, showing that catch shares align incentives so that companies are interested in the long-term stewardship of fish stocks.
Catch share systems are also far better than other strategies such as time restrictions and technology bans. Specifically, prior to the gradual introduction of catch share systems around 2000, commercial fishermen were often forced to maintain outdated equipment so that they could not catch as many fish. This so-called “solution” was more or less impossible to enforce given the rate of technological advancements in areas such as GPS tracking and sonar. It was also based on unsound economics, as it assumed society can somehow benefit from inefficiency. It is inherently nonsensical to force anglers to use fishing rods instead of nets so that less fish are caught just as it would be absurd to ask construction workers to use spoons instead of shovels just to “create” more jobs.
Time restrictions are similarly irrational and dangerous. Before catch limits became mainstream, fishermen often had to engage in deadly free-for-all competitions in which they were given short-periods to catch as many fish as possible. While these bans made for exciting television programs, such as Discovery Channel’s Deadliest Catch, prior to state reforms they put boat crews under extremely high pressure to bring in their annual catch in as little as 10-days with very little sleep.
The largest criticism of catch shares centers on the exaggerated fear that small fisherman would be displaced. However, catch share quotas are usually given to incumbent fishermen, which allow them to sell their share at a profit if they no longer believe they are as competitive as larger commercial companies. Moreover, Judd Boomhower, a postdoctoral fellow at the Stanford Institute for Economic Policy has found that catch share systems create more full-time work positions to replace the part-time jobs that are lost in addition to increasing anglers’ incomes. Furthermore, the United Nations Food and Agriculture Organization has found that, globally, smaller producers are naturally less efficient because of “post-harvest fish losses,” where fish that have been caught are not successfully brought to market in time for purchase.
While the World Bank predicts that fish farms will produce 62 percent of the world’s edible fish supply by the year 2030, it is important to recognize that aquaculture alternatives (fish farms) are still greatly dependent on ordinary commercial fishing since the diets of farmed fish such as tuna and salmon depend on wild fish such as anchovies and herring. Traditionally, ancillary fish meat has comprised 30 to 50 percent of the diets of farmed, carnivorous fish, yet NOAA remains optimistic that alternatives like farmed phytoplankton may make aquaculture less reliant on fish captured in the wild.
Quasi-market structures remain the best alternative to alleviate strains on fish stocks, aligning environmental goals with the inescapable profit-motive of those who fish U.S. waters.
James Davis is a contributor to Economics21. He’s also vegan, which is kind of a fun fact given the context of this article.
Interested in real economic insights? Want to stay ahead of the competition? Each weekday morning, e21 delivers a short email that includes e21 exclusive commentaries and the latest market news and updates from Washington. Sign up for the e21 Morning eBrief.