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Markets, pooling and insurance for managing bycatch in fisheries

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  • Holland, D.S.

Abstract

Bycatch is a nearly universal problem for fisheries, and it is increasingly common to place strict limits on allowable bycatch either on individuals or an industry sector. Individual bycatch quotas strengthen individual incentives to avoid bycatch and may reduce the likelihood that the bycatch cap will limit target species catch. However, in cases where bycatch is highly uncertain and variable, individual quotas and markets may be subject to high price variability and may fail to allocate quota efficiently. In some cases such as sea turtles, marine mammals, rare seabird and certain fish species, the allowable take may be less than one per permit holder. There are a number of reasons to believe that a transferable quota market may not function effectively in these cases. I explore the implications of stochasticity and uncertainty of bycatch for valuing quota in an individual bycatch quota system. I explore the degree to which a quota market increases expected profit and reduces individual risk relative to simply having a non-transferable individual bycatch quota, and how pooling approaches and possibly market insurance can be used to reduce financial risk for fishermen associated with uncertain bycatch.

Suggested Citation

  • Holland, D.S., 2010. "Markets, pooling and insurance for managing bycatch in fisheries," Ecological Economics, Elsevier, vol. 70(1), pages 121-133, November.
  • Handle: RePEc:eee:ecolec:v:70:y:2010:i:1:p:121-133
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    References listed on IDEAS

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    1. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    2. Newell, Richard G. & Sanchirico, James N. & Kerr, Suzi, 2005. "Fishing quota markets," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 437-462, May.
    3. Boyce, John R., 1996. "An Economic Analysis of the Fisheries Bycatch Problem," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 314-336, November.
    4. Daniel S. Holland, 2007. "Managing environmental impacts of fishing: input controls versus outcome-oriented approaches," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 7(2/3), pages 255-272.
    5. Herrera, Guillermo E., 2005. "Stochastic bycatch, informational asymmetry, and discarding," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 463-483, May.
    6. Abbott, Joshua K. & Wilen, James E., 2009. "Regulation of fisheries bycatch with common-pool output quotas," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 195-204, March.
    7. Singh, Rajesh & Weninger, Quinn, 2009. "Bio-Economies of Scope and the Discard Problem in Mulitple Species Fisheries," Staff General Research Papers Archive 12839, Iowa State University, Department of Economics.
    8. Sanchirico, James N. & Holland, Daniel & Quigley, Kathryn & Fina, Mark, 2006. "Catch-quota balancing in multispecies individual fishing quotas," Marine Policy, Elsevier, vol. 30(6), pages 767-785, November.
    9. Singh, Rajesh & Weninger, Quinn, 2009. "Bioeconomies of scope and the discard problem in multiple-species fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 72-92, July.
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    Citations

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    Cited by:

    1. Aaron Hatcher, 2014. "Implications of a Discard Ban in Multispecies Quota Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(3), pages 463-472, July.
    2. Holland, Daniel S. & Jannot, Jason E., 2012. "Bycatch risk pools for the US West Coast Groundfish Fishery," Ecological Economics, Elsevier, vol. 78(C), pages 132-147.
    3. Villamayor-Tomas, Sergio, 2014. "Cooperation in common property regimes under extreme drought conditions: Empirical evidence from the use of pooled transferable quotas in Spanish irrigation systems," Ecological Economics, Elsevier, vol. 107(C), pages 482-493.
    4. Singh, Rajesh & Weninger, Quinn, 2015. "Harvest efficiency and fishery discards under harvest uncertainty and trading restrictions," Journal of Environmental Economics and Management, Elsevier, vol. 70(C), pages 72-91.
    5. Keith Evans & Quinn Weninger, 2014. "Information Sharing and Cooperative Search in Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(3), pages 353-372, July.
    6. Singh, Rajesh & Weninger, Quinn, 2012. "Harvest Efficiency and Discards under Harvest Uncertainty and Trading Frictions," Staff General Research Papers Archive 35039, Iowa State University, Department of Economics.
    7. Rajesh Singh & Quinn Weninger, 2015. "Cap-and-trade Bycatch Management with Costly Avoidance and Stock Uncertainty," Marine Resource Economics, University of Chicago Press, vol. 30(1), pages 97-119.
    8. Zhou, Rong & Segerson, Kathleen, 2014. "Individual vs. Collective Quotas in Fisheries Management: Efficiency and Distributional Impacts," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170601, Agricultural and Applied Economics Association.
    9. Guanais, José Hugo Gondim & Medeiros, Rodrigo Pereira & McConney, Patrick A., 2015. "Designing a framework for addressing bycatch problems in Brazilian small-scale trawl fisheries," Marine Policy, Elsevier, vol. 51(C), pages 111-118.

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