THE PUBLIC POLICY: Go Fish

...Industrialized fisheries typically reduced [fish] community biomass by 80% within 15 46 THE AMERICAN SPECTATOR MAY 2006 G. TRACY MEHAN, I I I years of exploitation," said Ransom Myers and Boris Worm, authors of the report...

...Under Phase I of the program, which began in 1995 for coal-burning electric utility plants, emissions at these units alone were reduced by almost 40 percent below their required levels...

...The act is the nation's primary fisheries management law...

...Environmental Protection Agency...

...Some fish stocks are completely depleted...

...includes IFQs in its definition...

...The idea is simple but powerful...

...Governments also aggravate the problem by subsidizing the fishing industry to the detriment of the fisheries and the industry itself...

...If you don't own it-land, animals, water, or air-you will overexploit it since you have no reason to use the resources sustainably or exercise stewardship over the long haul...

...Recent scholarship has revealed that traditional societies have been able to self-regulate, through custom or traditional authority, at the level of the tribe, the clan, or the village...

...The lead-in-gasoline phase-down program in the U.S...

...But government policies that "cap" the total harvest of fish, while allocating to individual fishermen a portion of the catch, which they are free to "trade" or transfer, offer the promise of preserving a way of life, an economic livelihood, and the bounty of the sea...

...Fisheries managers are coming to the same conclusion...

...Scientists expressed frustration at being ignored by government and ridiculed by industry when they had predicted overfishing and loss ofthe fisheries...

...Use it or lose it" was the principle, enshrining a legal imperative of resource exploitation without many constraints...

...He is now an environmental consultant with the DAP, IFQ, limited access privilege-all these Cadrnus Oroup in Arlington, Virginia...

...If you don't use it, you lose it to someone more aggressive than you are...

...This approach achieved environmental goals more rapidly and efficiently than a conventional command-and-control regulation...

...The Office of Management and Budget (OMB) cites this program as having the largest, quantified human health benefits (not including ecological benefits), amounting to over $70 billion annually...

...Fortunately, the Senate Commerce Committee, chaired by the powerful Senator Ted Stevens of Maska, approved a Magnuson-Stevens reauthorization bill before recessing for the winter break...

...RECENT MANIFESTATION OF THE HYBRID ap/L~ proach to resource management is the boom X...

...These "cap-and-trade" policies are often called "individual fishing quotas" (IFQs), "dedicated access privilege" (DAP) programs, or, in newly proposed legislation, a "limited access privilege...

...The effect of IFQs, or similar property-based approaches, is to change the incentives relative to the use and exploitation of the resources...

...The government officials, mostly fisheries experts, maintained a stoic neutrality given the fact that other branches of the government had subsidized commercial fishing without regard to the sustainability of the harvest, year in and year out...

...There is near unanimity in policy circles on the means of, if not the need for, greenhouse gas reduction...

...In other words, society maintains its interest in protecting the resources while allowing individuals discrete, defensible rights to their sustainable use and exploitation, short of permanently damaging or destroying them...

...tion uses another term to describe the same con- G. Tracy Mehan, III was assistant administrator for cept: "limited access privilege," which explicitly water at the U.S...

...Jonathan H. Adler, an assistant professor at Case Western Reserve University School of Law and a long-standing advocate for a property rights approach to managing shared resources, has written, "Marine fisheries the world over are in trouble...

...For instance, fishing the year round, without fear of losing out on the last fish, allows them to adapt to market and weather conditions thereby cutting harvesting costs...

...The bill, which incorporates the new provisions, now goes to the full Senate and then to the House for consideration...

...There appears to be growing support for this market-based approach to marine fisheries management in Washington as evidenced in the reauthorization of the Magnuson-Stevens Fishery Conservation and Management Act...

...are pursuing trading programs and carbon markets as the preferred approach...

...I had been invited to provide lessons learned from the Great Lakes basin, where I was working at the time, on managing a complex ecosystem in the hope of assisting the assembled experts in the restoration of the marine fisheries that were in crash mode in the maritime provinces...

...Donald R. Leal, a senior fellow at PERC and author of Fencing the Fishery and other publications on rights-based fishing tools, describes these new approaches as analogous to putting a fence around the fish, like putting a brand on cattle...

...48 THE AMERICAN SPECTATOR MAY 2006...

...The proposed legislation seeks to bring eight new fisheries under market-based management programs, in addition to the eight already established...

...Again, the new legisla...

...But that is hard to pull off in the context of modern industrial societies with large or growing urban populations...

...Because IFQs are transferable, current holders can adjust the size of their fishing operations by buying and selling quotas...

...Krupp and his colleagues are particularly impressed with the flexibility, efficiency, and value provided by DAPs to the fishermen, allowing them to create economic value through better management of the fisheries and their own businesses...

...Yet, it is a valid metaphor for creating private property rights in the sustainable use of publicly owned resources...

...Dozens of municipal treatment plants participate in this program, which is expected to save over $200 million in control costs due to trading efficiencies that allow one pollution source to meet its regulatory obligations by using the reductions of another source that has lower control costs...

...The Bush administration is on record in support of this legislation...

...EPA's annual allowance auctions are actually conducted by the Chicago Board of Trade...

...F'-~I~_HE NATIONAL OCEANIC and Atmospheric Administration (NOAA) claims that fishermen have enjoyed higher profits, lower costs, longer fishing seasons, and a safer, more stable industry in the eight fisheries where DAPs have been implemented since 1990...

...The power of these concepts came home to me several years ago on a trip north of the border...

...Modern environmental law, and the growth of, say, the recreation industry, has modified this approach considerably...

...Water trusts, similar to land trusts, are beginning to buy up water rights for the protection of fishing interests...

...In the area of water quality, the Connecticut Nitrogen Credit Exchange is an impressive effort designed to reduce hypoxia, i.e., oxygen-depletion, in MAY 2006 THE AMERICAN SPECTATOR 47 THE PUBLIC P OLICY Long Island Sound through pollutant reductions of 58 percent...

...This paradigm, cited by both proponents of environmental regulation as well as advocates of market-based or incentive-based resource management policies, was first articulated by Garrett Hardin in 1968...

...This is a descriptive rather than a normative statement...

...These programs are sometimes called "dedicated access concepts embody the essential idea of a private right in a public good, regulated for the benefit of a shared resource and those who depend on it...

...On a very cold December day in 1997, I arrived at a meeting of government, academic, and industry representatives of the Canadian fishing industry in Moncton, New Brunswick...

...Moreover, regulatory regimes seem to fall prey to political interventions or lobbying that undercut their effectiveness in limiting the catch to sustainable levels...

...Industry folks wanted subsidies to carry them through the hard times or, even better, promises of a buy-out by the government to make them whole if conditions turned out to be terminal...

...The Clean Air Act Amendments of 1990 established an acid rain trading program...

...utilized emissions trading to reduce ambient lead in the atmosphere, coming from gasoline, by 99 percent...

...privilege" (DAP) programs...

...According to PERC, the Property and Environment Research Center, "IFQs give fisherman a right to a percentage of the total allowable catch within a fishery...

...Courts in states like Colorado have recognized, say, kayaking or white-water rafting as a kind of non-consumptive use of the water, which satisfies the "use it" requirement and avoids the "lose it" penalty...

...IFQs are a market or rights-based system that has been implemented in New Zealand, Australia, and for some fisheries in the United States such as the Alaska halibut fishery...

...This bipolar approach to the tragedy of the commons ignored a hybrid solution: maintain a public or communal ownership but grant a usufruct interest, subject to reasonable regulation, e.g., overall limits on exploitation...

...Environmental Defense, one of the biggest environmental groups in the country with 400,000 members, understands incentives and the efficacy of market-based mechanisms in fisheries management: "The status quo is not working, and innovative fishery management tools that align economic and environmental incentives are needed to save our failing fisheries and keep fishermen in business," said its president, Fred Krupp...

...The water quality standards remain the same, but efficiency is increased and costs decreased...

...It is a question of relying on the best means to serve common and individual ends...

...This is the best of any federal regulatory program in the last ten years with a benefit/cost ratio of 40:1...

...These rights can be bought and sold, carrying with them the right to exclude others from intruding upon them...

...THAT I WAS WITNESSING, amidst impeccable ! ~ / ~ / Canadian good manners and the techmcal V' ~/ discussions, was a bad hangover from what is commonly referred to as "The Tragedy ofthe Commons...

...In many cases, fish populations have declined by 90 percent from their pre-industrial levels...

...Large predatory fish-tuna, blue marlins, swordfish, and othersappear to be in dramatic decline in five ocean basins according to a study reported in the journal Nature (May 2003...

...This image may jar some people's sensibilities...

...The logic of common ownership of resources is: fish the last fisI , graze the last blade of Jmss pollute with abandon If .~f...

...The logic of common ownership of resources is: fish the last fish, graze the last blade of grass, pollute with abandon...

...o ,, iyc, u don't, sc)meone else will...

...In policy discussions across the land, the solutions settled upon usually came down to either privatizing the resources or, more often, regulating the hell out of them...

...No longer is there a mad dash to catch the last fish...

...While encumbered with controversy over the science of climate change, the Europeans and several northeastern states in the U.S...

...It recognizes a kind of property right in whoever first appropriates the water (first in time, first in right...

...l k i n cap-and-trade systems for managing common resources...

...The General Accounting Office projects the allowance trading system could save as much as $3 billion per year--over 50 percent-compared to conventional command-and-control regulation...

...Now the fisherman has a stake in protecting and improving the fishery, subject to the new regime that combines elements of regulation (the cap) and privatization (the trade, or portion of the catch in this case...

...Originally, though, there wasn't much of a limit on use or the protection of minimum stream flows...

...Western American water law, the doctrine of prior appropriation, is a partial example...

...Indeed, the plight of the oceans' fisheries is recognized by all commentators-left, right, and center...

...those wishing to enter a fishery can buy or lease quotas from current holders...

...My northern colleagues were most civil and hospitable to me, personally, but I detected an underlying tension in the room throughout the day's deliberations...

...THE PUBLIC POLICY G. TRACY MEHAN, B J l Go Fish A Market Approach to Restoring Marine Fisheries ISHERIES THROUGHOUT THE OCEANS of the world are at risk due to overfishing and the absence of any incentives for fishermen to conserve, rather than exploit, these common resources...

...If you don't, someone else will...