Individual Fishing Quota - A Move To Privatization and Market Based Mechanisms

A Move To Privatization and Market Based Mechanisms

The implementation of ITQs or IFQs works in tandem with the privatization of common assets. This regulatory measure seeks to economically rationalise access to a common-pool resource so that its future availability is not compromised by current practices of exploitation. This type of management is based in the doctrine of natural resource economics. Notably the use of ITQs in environmental policy has been informed by the work of economists such as Jens Warming, H. Scott Gordon and Anthony Scott. It is theorised that the primary driver of over-fishing is the rule of capture externality. This is the idea that the fisher does not have a property right to the resource until point of capture, incentivising competitive behavior and overcapitalisation in the industry. It is theorized that without a long-term right to fish stocks, there is no incentive to conserve fish stocks for the future.

The use of ITQs in resource management dates back to the 1960s and was first seen in ‘pollution quotas’, which are now widely used to manage carbon emissions from power utilities. For both air and marine resources ITQs use a ‘cap-and-trade’ approach by setting typically annual limits on resource exploitation (TAC in fisheries) and then allowing trade of quotas between industry users.

The use of IFQs has often been related to broader processes within neoliberalism that tend to utilise markets as a regulatory tool. The rationale behind such neoliberal mechanisms situates itself in the belief that market mechanisms harness profit motive to more innovative and efficient environmental solutions than those devised and executed by states. Using market-based instruments allows for greater flexibility than command and control measures, prescribing goals for industry without dictating measures for meeting those goals. Whilst such neoliberal regulation has often been posited as a move away from state governance, in the case of privatization the state is integral in the process of creating and maintaining property rights.

Whilst the use of IFQs has in many cases enabled a rebuild in fish stocks there are often initial short-term costs to the industry. Implementing IFQs to an overexploited fishery involves reducing fishing capacity meaning the likelihood of employment in the industry will be compromised. Recovery of fish stocks may take years or decades (depending on species reproduction rate) in which time TAC may be dramatically reduced.

The use of neoliberal privatizing regimes has also often raised contradictions with the rights of indigenous communities. For example the exclusion of the Maori in the initial allocation of fishing quota in New Zealand's quota management system lead to a lengthy legal battle delaying development in national fisheries policy and resulting in a large settlement from the crown. There have also been similar legal battles regarding the allocation of fishing rights with the Mi'kmaq in Canada and the Saami in North Norway. Aboriginal fishing rights are said to pose a challenge to the authoritative claims of the state as the final arbitors in respect of access and participation in rights-based regimes.