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Cap-and-trade Bycatch Management with Costly Avoidance and Stock Uncertainty

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  • Singh, Rajesh
  • Weninger, Quinn

Abstract

Regulations to reduce bycatch of non-marketed marine species often impose gear restrictions, reductions in harvest of the target species, and/or spatial and temporal closures of the fishing ground. These regulations can exact significant social costs in commercial fisheries. We evaluate performance of a cap-and-trade bycatch management policy. Harvest of a target fish species, costly avoidance of the bycatch species, and harvesting efficiency are examined in a stochastic production environment with and without at-sea observability of bycatch, and with and without trade in harvest quotas and bycatch caps. Our results suggest that precise implementation of a socially optimal management plan is possible only if bycatch is observable and trade in fish quotas and bycatch cap is frictionless. Conditions exist in which quota/permit trading raises bycatch relative to a no-trade environment. The results offer useful guidance for designing cap-and-trade bycatch management programs.

Suggested Citation

  • Singh, Rajesh & Weninger, Quinn, 2015. "Cap-and-trade Bycatch Management with Costly Avoidance and Stock Uncertainty," ISU General Staff Papers 201501010800001061, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201501010800001061
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    References listed on IDEAS

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    1. 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.
    2. Naresh Pradhan & PingSun Leung, 2008. "Sea turtle interactions with Hawaii's longline fishery: an extended multi-objective programming model incorporating spatial and seasonal dimensions," Applied Economics, Taylor & Francis Journals, vol. 40(16), pages 2121-2134.
    3. Pascoe, Sean & Innes, James & Holland, Dan & Fina, Mark & Thébaud, Olivier & Townsend, Ralph & Sanchirico, James & Arnason, Ragnar & Wilcox, Chris & Hutton, Trevor, 2010. "Use of Incentive-Based Management Systems to Limit Bycatch and Discarding," International Review of Environmental and Resource Economics, now publishers, vol. 4(2), pages 123-161, October.
    4. 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.
    5. Turner, Matthew A., 1997. "Quota-Induced Discarding in Heterogeneous Fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 186-195, June.
    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. Holland, D.S., 2010. "Markets, pooling and insurance for managing bycatch in fisheries," Ecological Economics, Elsevier, vol. 70(1), pages 121-133, November.
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    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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