Economists, especially those in the Adam Smith – F.A. Hayek tradition, emphasize the importance of private ownership rights for motivating the conservation and careful use of resources. I stress this to my micro principles students every term: If we want to avoid over-use of natural resources, we must privatize them so they have owners with an incentive to conserve them.
But how can we establish enforceable private property rights to things that can’t be held down or fenced in, like fish in the open ocean?
Fortunately, for fish and humans alike, a growing group of “enviropreneurs” are figuring out how.
The most recent edition of PERC Reports (Vol. 33, Issue 1) from the Property and Environment Research Center (PERC) features a makes-you-feel-good article about the work some of its former students are doing to define enforceable property rights to fish in the open ocean.
The key innovation is what is called “catch shares.” In more and more fisheries around the world, this institution is being used in a remarkably effective kind of property rights under which fishers gain ownership not of particular fish, but of a defined proportion of the allowable catch.
The total allowable catch for a season is set by a particular fishery’s authorities according to scientific judgments of the limits necessary to maintain or rebuild fish stocks. (Even setting that catch size could be privatized, but that’s a topic for another post.) Every fisher may then catch and land his or her share of that total, or sell part or all of that share to others.
The great benefit of this arrangement is replace the incentive for over-fishing—as each fisher strives to catch as many fish as possible before someone else does—with an incentive to leave enough fish in the ocean to reproduce and make for a bigger catch—and therefore more fish per share—in seasons to come.
Author James Workman writes,
This system ends the insanity of a reckless, dumb, wasteful, and frenzied open-access “race for fish.”
First in theory, then in practice, scholars in economics and political science … have long shown the transformation that occurs when fishing communities gain secure, exclusive rights to a portion of the marine resources they harvest.
The alchemy is dramatic and fast. The value of the fish left in the sea becomes apparent. Ensuing ecological benefits generated by catch shares include less waste, cleaner harvests, faster recovery, gentler gear, fewer impacts, higher-quality products, and a reduction in the amount of unwanted and unintentionally captured animals, known as bycatch.
After a summer at PERC in 2004, [Pamela] Baker sharpened her enviropreneurial tools to build a coalition of Gulf [of Mexico] reef snapper fishers until a regional council approved rights-based quotas.
That system went live in 2007. “Everyone was holding their breath,” recalled Baker, “wondering, ‘What’s going to happen now?’ It was eerily quiet.” Days then weeks went by. The world didn’t come to an end. Finally, someone called up Baker and said, “You know, it’s just working. People are just out fishing. The overall limit was smaller than expected, but individual operating costs went down… revenue went up, and so hundreds of fishers made more money catching fewer fish.”
They “made more money catching fewer fish.” It sounds like magic, doesn’t it? It’s not; it’s just the efficiencies that characteristically arise from private ownership.
We owe our thanks to the men and women who are doing “the boring incremental policy work” that institutes private ownership—those “men and women who are literally rewriting the law of the sea.” And thanks to PERC for its tireless work on free market environmentalism.