1. Can property rights solve fisheries collapse? Christopher Costello* Associate Professor – Resource Economics Bren School Advisory Board Address: April 11, 2007 * Costello@Bren.ucsb.edu Photo: Environmental Defense

2. Fisheries are Declining Fisheries are Declining Ecological collapse Ecological collapse –Biodiversity –Productive capacity –Ocean health Economic collapse Economic collapse –Lost jobs –Working waterfronts –Economic value Worm et al. 2006. Science.

3. Economics 101: Incentives Open Access Fisheries Open Access Fisheries –Entry until no further incentive Managed Fisheries Managed Fisheries –Excessive investment –Race to fish –Destructive fishing technology –Short seasons –Poor quality product Stocks decline, Economic value is lost Stocks decline, Economic value is lost –Costs ~$75B to make $70B in Revenue Fishing Effort Economic Return Cost Revenue E* Max Economic Profit from fishing effort, E*

4. An Alternative: Dedicated Access Taxis in NYC… Assign “dedicated access privileges” Assign “dedicated access privileges” Securitize an asset for the fisherman Securitize an asset for the fisherman –Platform for investment, trade Economic Theory: Have your fish and eat them too Economic Theory: Have your fish and eat them too Recent reports provides strong support Recent reports provides strong support –Biodiversity, economic returns, stability, jobs –By 2015: $140B/yr revenue, $90B/yr profit

5. Catch Shares Individual Transferable Quotas Individual Transferable Quotas Can lease/sell right Can lease/sell right Scientific Challenges Scientific Challenges –Set quota –Allocate permits –Establish trading rules AK Halibut, Canada groundfish, NZ fisheries, Iceland fisheries AK Halibut, Canada groundfish, NZ fisheries, Iceland fisheries

6. Spatial Property Rights “Territorial User Rights in Fishing” (TURFs) “Territorial User Rights in Fishing” (TURFs) Incentive to preserve stock Incentive to preserve stock Scientific Challenges: Scientific Challenges: –Match ecology and economics Distinct from marine protected areas Distinct from marine protected areas Used extensively in Japan, Chile, Mexico Used extensively in Japan, Chile, Mexico James Watson: F3 Biocomplexity Vizcaino, Baja California Santa Barbara Channel, CA

7. Cooperatives Group of fishermen cooperate on: Group of fishermen cooperate on: –Harvest –Monitoring –Marketing Governance & bioeconomics Governance & bioeconomics –Co-management Lobster - Baja California Lobster - Baja California Sea Urchins – San Diego Sea Urchins – San Diego Geoduck Clam - Canada Geoduck Clam - Canada FEDECOOP: Mario Ramade

8. From Science to Solutions Sustainable Fisheries Group Sustainable Fisheries Group “Barefoot Ecology” “Barefoot Ecology” “Biocomplexity” research “Biocomplexity” research Ocean Governance - GSD Ocean Governance - GSD California’s Ocean Protection Council California’s Ocean Protection Council –California Fisheries Fund ($2M to $17M)

9. Policy Questions Privatizing the oceans? Presents a paradox: Privatizing the oceans? Presents a paradox: –More public control, less security in rights –Less security in rights, less investment Private sector investment? Private sector investment? –New financial instruments –Political viability? –Attractive to investors? Further Questions? Further Questions? Photo: Environmental Defense