Catch–quota matching allowances balance economic and ecological targets in a fishery managed by individual transferable quota

Maartje Oostdijk (), Conor Byrne, Gunnar Stefánsson, Maria J. Santos and Pamela J. Woods
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Maartje Oostdijk: Department of Life and Environmental Sciences, University of Iceland, 101 Reykjavík, Iceland; Environment and Resource Dynamics Group, Department of Physical Geography, Stockholm University, 114 19 Stockholm, Sweden
Conor Byrne: Department of Environment and Natural Resources, University of Iceland, 101 Reykjavik, Iceland
Gunnar Stefánsson: Science Institution, University of Iceland, 107 Reykjavik, Iceland
Maria J. Santos: University Research Priority Program in Global Change and Biodiversity, University of Zurich, 8057 Zurich, Switzerland; Department of Geography, University of Zurich, 8057 Zurich, Switzerland
Pamela J. Woods: Demersal Division, Marine and Freshwater Research Institute, 220 Hafnafjörður, Iceland

Proceedings of the National Academy of Sciences, 2020, vol. 117, issue 40, 24771-24777

Abstract: Fishers with individual catch quota, but limited control over the mix of species caught, depend on trade and catch–quota balancing allowances to fully utilize their quota without discarding. However, these allowances can theoretically lead to overfishing if total allowable catches (TACs) are consistently exceeded. This study investigates usage of balancing allowances by the Icelandic demersal fleet over 2001–2017, for over 1,900 vessels. When a vessel’s demersal catch exceeds owned and leased quota for a given species, the gap can be bridged by borrowing quota from the subsequent fishing period or transforming unutilized quota in other species, restricted by limits. Conversely, excess quota can be saved or transformed into quota for species where there is a shortfall. We found evidence that balancing behavior is frequently similar across the fleet. Transformations are consistent with indicators of a general quota shortage and potential for arbitrage caused by differences in conversion ratios used for transformation and lease prices. Larger companies contribute more to these patterns. Nevertheless, TAC overages are generally modest especially in recent years—key reasons appear to be the tightening of vessel transformation limits and the central role of Atlantic cod, which is the main target species but cannot be persistently overfished due to a specific prohibition on positive transformations into the species. These results show how the tailored design of the Icelandic catch–quota balancing system has helped in balancing economic and ecological goals of management. We suggest policy changes that could further reduce ecological risks, e.g., prioritizing between-year transfers over transformations.

Keywords: catch–quota balancing; fisheries management; incentives (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:nas:journl:v:117:y:2020:p:24771-24777

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