My thoughts on Daniel Bromley’s critique (3): Are ITQs private property rights?

In my first post in this series I argued that although open access is just about the worst property rights regime to have in a fishery, it is too simple to blame all overfishing on ‘lack of property rights’; rather, we need to go into the details of the institutional setting. In my second post I argued that asking whether private property rights can manage a fishery is a waste of time: marine ecosystems are too complicated to implement any real form of private property.

But wait a minute. Aren’t ITQs supposed to be private property? You can find many articles in the scientific literature and the press, whether they’re in favour of ITQs or against them, that present ITQs as private property. Daniel Bromley does not agree. In his Fisheries article he lists as one of the deceits of fisheries economics its claim that “ITQs are private property rights.” His objection to this idea is that the Magnuson-Stevens act (which is by far the most important fisheries law in the United States) states that ITQs are permits, which can be revoked, limited, or changed by the government without compensation to the owner of the permit.

The reply of some economists is that in practice, even American ITQs are traded between fishers, they are used as collateral for loans, and they are subject to legal disputes over divorce and inheritance, just like houses or cars are. So de jure they might not be private property rights, de facto they certainly are.

In any case, I’m a European, and in Europe we could decide to make ITQs irrevocable rights that have an unlimited life span, and cannot be changed by the government (unless in cases of eminent domain). Would they then be private property rights?

If I were a German I would say: jein. The certificate would be private property: the law can be made such that you can freely trade the certificate, the government cannot take it from you without compensation, you can use it as collatoral, and if you die your kids might fight over it in court. But that’s the certificate – not the fish. As I argued in an earlier post: owning an ITQ does not mean that there’s a fish with your name on it.

As far as I know the closest equivalent of ITQs (assuming the most extreme case of privatization) would be shares in a corporation (or LLC, PLC, SA, BV, NV, whichever country you happen to live in – I’m no legal expert). In the fishery, the ‘company’ would be the fish stock; the ‘dividend’ would be the TAC; the ‘shareholders’ would be the fishers, who, unlike regular shareholders, are supposed to come and catch their ‘dividend’ for themselves. I’m no more a business economist than I am a legal expert, so I don’t know whether I should consider a corporation private property or common property. If I strictly follow Bromley’s terminology I’d guess they are common property, because it is the shareholders who commonly own the asset and have influence – albeit sometimes limited – on the company’s management. But I’m glad I’m writing this on a blog and not in a peer-reviewed article (that’s what blogs are for, aren’t they?).

There are some interesting differences between ITQs and corporate shares, but I’ll save that for later.

My thoughts on Daniel Bromley’s critique (2): Are private property rights a silver bullet for overfishing?

From the diagnosis that missing property rights drive overfishing it’s only a small step to prescribing property rights to manage fisheries. In his Fisheries article Daniel Bromley criticizes that idea that, in his terms, “Private ownership is necessary and sufficient for socially beneficial stewardship.” He cites an article that investigates the link between catch shares (i.e. ITQs) and stock collapse. The article fits in a sequence of articles that link ‘ownership’ of a resource to ‘stewardship’:

Examining specific cases, Beddington et al. (10), Hilborn et al. (11), Grafton et al. (12), and Griffith (13) argue that rights-based fisheries reforms offer promising solutions. Rather than only setting industry-wide quotas, fishermen are allocated individual rights. Referred to as catch shares or dedicated access privileges, these rights can be manifest as individual (and tradable) harvest quotas, cooperatives, or exclusive spatial harvest rights; the idea is to provide – to fishermen, communities, or cooperatives – a secure asset, which confers stewardship incentives.
Source: Costello et al., 2008, Science

The first author of the article, Chris Costello, explains it as follows in laymen’s terms:

The difference [between rights-based management and other sorts of fisheries policy instruments] is comparable to renting an apartment versus the house you own. […] If you own something, you take care of it – you protect your investment or else it loses value. But there’s no incentive for stewardship when you don’t own the rights to it.
Source: Marine Science Institute, UCSB

The ownership-stewardship link

This link between ownership and stewardship is also made elsewhere in the literature, and it has explicitly been object of research in at least one article that I have seen. The fundamental idea here is that people must have a stake in conservation of natural assets before they support it: if they don’t have a stake in it, why would they care? This idea is also part of the rationale behind many PES schemes, or programs like CAMPFIRE.

Bromley’s arguments against this idea are twofold. First, if the interest rate is very high, the owner of the asset is better off depleting the asset and investing the proceeds in, say, a savings account. Second, other people besides the owner might also be affected by how the owner manages the asset.

To hell with Orange Roughy and the Eiffel Tower!

The reply to the first argument is that interest rates are rarely so high that it becomes optimal to deplete a resource and put the proceeds on the bank. Some species do indeed grow so slowly that leaving them in the ocean would be like leaving your money on a low-interest bank account – you would earn more by withdrawing your ‘money’ from that account and investing it somewhere else. Orange Roughy, with an annual growth rate between 4% and 6%, springs to mind. Most species, however, grow much faster than this. You could also argue that in a well-working market, if it is optimal for the owner to deplete a resource and put the value thus generated on the bank, it would be optimal for society.

But this is probably not a well-working market, and that is how we get to the second argument. People might appreciate natural assets, like fish, for more than just their consumptive value. Economists call this existence value: economic value ascribed to things just for their mere existence, like whales or pandas. But even if you don’t like this concept (it’s debated), you can still argue that living creatures should be preserved for their own sake: call it intrinsic value, or animal rights. All these are considerations why we don’t like leaving natural assets at the mercy of a small group of owners. Imagine how Parisians would react if the Eiffel Tower were sold to the highest bidder, who is allowed to sell it on the scrap market if the steel price is high enough.

But should it be private?

The question, however, is whether we need private property rights to induce stewardship. The Costello paper does not say so explicitly. Other authors do refer to ITQs as a way to privatize ocean resources, and that this is a good thing (but I have to admit I still need to read that book). But making fish resources private property, i.e. making fish stocks the property of a single person or company, is a pipe dream anyway. How do we deal with stocks that cross borders? How do we deal with interactions between species through predation or bycatch? Imagine owners of top-of-the-food-chain stocks getting sued by owners of lower species, just like dog owners are liable for what Brutus does to Fifi.

That’s why I think the whole question is moot. Private property rights – real private property rights, like owning land, or a dog – are nearly impossible to implement in a fishery. Some form of property rights, be it state property, common property, or private property, is necessary but not sufficient. Although most fish resources fall under some form of property regime, many are still overfished; nevertheless, high-seas fisheries, which are as close to open access as it gets, are managed worst of all. If you want people to support conservation, it surely helps to give them a stake in it. However, unlike Zimbabwean farmers, who have little to expect from biodiversity conservation but crop damage and sleeping sickness (which is why CAMPFIRE was developed), fishers do have a stake in good management of fish stocks – regardless of the property rights regime. So why shouldn’t they be good stewards already?

My take-home lessons from Fish In Figures 2014

Mmm… Marine biodiversity

Friday I ended my working week at a shindig in Catch By Simonis (should definitely have a seafood platter there someday!) where LEI presented the latest edition of their annual status report of the Dutch fisheries sector. My take-home lessons:

The beam trawl, which used to be by far the most important fishing gear in the Dutch demersal fishery, is disappearing rapidly. Its users were squeezed between high fuel prices, low fish prices, and public outrage at discards and disturbance of the sea bottom. So Dutch cutter fishers are lining up to use the pulse trawl, which combines bottom trawling with tiny electric pulses. The biggest advantage for the fishers is the lower cost of fuel: about 30% of revenues where the beam trawl burns about 55%. Environmental NGOs, notably Greenpeace, are less convinced, but I don’t agree with them. Yes, some species like cod and sharks might be affected (the effects are still under investigation) but it sure beats the effect of the traditional beam trawl on shellfish and other benthic life, let alone its use of fossil fuels. As for the taboo on electric fishing: pulse trawling is nowhere near what this guy tried to do.

A number of possibilities were discussed to raise prices. There is an interest in MSC certification, but people are skeptical about the price premium. This is a genuine concern as the price premium for certified fish has so far been disappointing. The main ‘advantage’ of certification seems to be that big players in the value chain (restaurant chains, supermarkets) might simply refuse to sell non-certified fish.

Another development is the involvement with fresh fish markets. This fits within a wider trend towards ‘local’ food (which is usually a bit too much romanticized, me thinks). So far it’s very small-scale but I like it. Why is it that the Dutch don’t appreciate fresh fish? Johan Baaij, a fisher who is involved in a project called Vers van de Visser (fresh from the fisher), argued that the consumer has no idea where the fish comes from, or who is involved in it. It reminded me about how many people think kibbeling is a fish species.

All in all I got the impression that the fishing sector is more or less where our farmers were, say, 15-20 years ago: financial problems, public unease with bulk production and its impact on the environment, but also a lot of creativity and entrepreneurship, and a readiness to engage with their critics.

My thoughts on Daniel Bromley’s critique (1): Is open access the problem?

In 2008 Daniel Bromley gave a keynote lecture at the biannual conference of the MARE Centre in Amsterdam where he strongly criticized economists for giving flawed adivce to policy makers (to use the more polite terms). The conference organizers must have had a hard time finding an economist willing to write a reply to his lecture, because they even contacted me – I chickened out. I felt I hadn’t been working on fisheries issues long enough yet to have a well-founded opinion on Bromley’s writings. Shortly after his keynote lecture, he published an article in Fisheries with a central message similar to that in his earlier keynote, but phrased in stronger terms – and with a lot more impact. In his Fisheries article he took a few arguments further to the point where just about every economist I know disagreed wholeheartedly (again, I’m being polite here). I discussed it with some of them, and with other fisheries scientists. I also discussed it in class once, but the students, most of whom were no native English speakers and had little economics background, had serious trouble with Bromley’s rather difficult use of vocabulary.

Lately, after coming across other work written by Daniel Bromley (and his co-author, Seth Macinko), I started reading these two articles again. Although I broadly agree with the mainstream economic analysis of fisheries management, I got the impression that perhaps he has been misunderstood by my fellow economists and it would be a shame if his ideas were ignored because of the impression his Fisheries article made on most economists (again, to put it politely). I decided to put my thoughts on his criticism of fisheries economics in a few posts.

To start with, there is the conceptual confusion on what is open access, what are commons, and whether fisheries resources fall under any of those regimes. In casual conversations with colleagues I do find that some of them present fisheries as an example of open access resources; some economics textbooks do the same. But are fisheries open access resources? In his book Environment & Economy: Property Rights & Public Policy Bromley distinguishes four property regimes, similar to the four property regimes in ancient Roman law:

  • No property (res nullius): the classical open-access regime
  • Common property (res communis): a regime where a group of people owns, manages, and uses the resource together
  • State property (latin name not given, but I believe it should be res publica): the government, as a representative of society as a whole, owns and manages the resource, and sets the rules by which citizens are allowed to use the resource
  • Private property (I believe this should be res privata but my Latin is pretty non-existent): an individual owns the resource and has the right to manage and use it as he or she pleases.

If you look at it this way you see that most fish are caught within the Exclusive Economic Zones of individual countries; in fact, only one sixth of global catch comes from the high seas. Within the EEZs aquatic resources are either private property (for example, oyster and mussel fishers own parcels, which they seed, and they have the exclusive right to harvest them) or state property (with regard to most fish species, the government sets the rules on how much to catch, and with which methods). So strictly speaking, open access is more an exception than a rule.

This doesn’t mean, however, that the open access regime is irrelevant to our understanding of fisheries problems. By looking at fisheries under open access, we lay bare the mechanisms that make fisheries policy so difficult: the individual fisher reaps the benefits of catching one more fish, whereas all fishers bear the costs to the resource, i.e. the future productivity lost because the fish is in the basket instead of the sea. In theory, state property regimes are able to deal with this problem as governments can exclude people from fishing. In reality, however, governments have problems of their own that prevent them from keeping in check the forces that lead to overfishing: many fish stocks are shared by several countries, there is lobbying by special interest groups, rent-seeking, and so on. It’s like Hobbes’s Leviathan (named after a sea monster!), which starts with how unrestrained human nature leads to a war of all against all, and then explains how this restraining of human nature should take place. To understand the regime you also need to understand the forces it is supposed to rule.

Another confusion, by the way, is that between open access resources and common property resources. The confusion started when the American ecologist Garrett Hardin wrote his Science article named The Tragedy of The Commons, where he explained how common lands will inevitably be degraded because the individual land user reaps the benefits of an extra sheep while imposing the costs of overgrazing on all users. Daniel Bromley has repeatedly argued against this article and I understand why. The problem is the choice of words: commons. Commons are owned, managed, and used by an exclusive group of users who have every possibility and motivation to make good arrangements and stick to them. In fact, researchers like Elinor Ostrom found that many commons are managed quite well. The “Tragedy” that Hardin describes takes place in open access regimes, like the high seas. Unfortunately the confusion is still omnipresent: just this week The Economist refers to the Tragedy of the Commons to discuss the problems with high seas fishing.

To me, this underlines the importance of defining your concepts well, and being wary of oversimplification. It’s too easy to use the broad brush of open access to paint all problems with resource overexploitation. We need to get into the details to really understand the matter. How are rights, priviliges, obligations, and such distributed? How do they work on paper (de jure) and how do they work in practice (de facto)? How are things like decision-making, monitoring, and enforcement organized, and what resources do they need? What is the role of official laws on one hand and unofficial norms and customs on the other hand, and where do they contradict? I feel that these questions have been overlooked in the debate that was unleashed after Bromley’s Fisheries article.

ITQs and organisational costs

There is a fair bit of controversy in fisheries science on the merits and caveats of ITQs, catch shares, or whatever you want to call them. I won’t go into the details of that debate here, but the following news caught my attention (H/T Adam Soliman/Ecology Action Center):

California fishers say quota system is all wet
(…) Commercial fishers, industry experts and government officials are among those who say that while fish populations are recovering, too few people in California are benefiting from that rebound in part because there aren’t enough qualified monitors to oversee the program. (…)

Apparently, all fishers under the California catch share system are required to have on-board observers to monitor their catch. This is quite expensive, especially for small-scale fishers. It is one of the great disadvantages of an ITQ system: how do you make sure that fishers do not catch more than their fair share? Monitoring landings, if at all possible, runs the risk of increasing discards. The latest trend in the EU is to install cameras, something which the Californian fishers in the article seem to favour as well.

Monitoring costs are part of the organisational costs of a policy instrument: you need people to do the paperwork, to decide who gets what, to monitor compliance, and so on. These costs usually depend little on the size of the transaction or the parties involved in it. That’s why the fishers complain:

Also, operators of small, family-run boats say the costs of the monitors, which are the same for them as for corporate boats, have created inequality.

I’m not sure what to say about this complaint. I don’t agree small-scale fishers or farmers should be protected for the sake of being a small-scale fisher or farmer; neither am I buying the argument that small-scale fishers are inherently more ‘sustainable’, whatever that means. Small-scale fisheries can offer valuable sources of income in developing countries, where poverty is rife and people have little to fall back on when they lose their job. California is not a developing country; although few Europeans would be impressed with its social security system, you cannot expect the local fishery to provide one. But I do believe that transaction costs usually prevent markets from finding efficient solutions, so a system that requires such heavy monitoring costs is likely to cause substantial losses in efficiency.

Bitung: Plight of the baby tuna

Meet you on the corner of skipjack street and yellowfin street

Recent news announced that Indonesia will become a full member of the Western and Central Pacific Fisheries Commission, instead of a cooperating non-member as it has been so far. This is good news, because the country is an important player in the Western and Central Pacific tuna fishery. Indonesia caught more than 900,000 tons of tuna in 2010, about a third of which was skipjack (cakalang, as the Indonesians call it), and another substantial share is yellowfin (madidihang), bigeye, and other species. What’s more, Indonesia and the Philippines are known to catch a large number of juvenile tuna:

Number of yellowfin tuna caught (vertical axis) by 2-cm size class (horizontal axis) in 2012. Blue colours indicate tuna caught by purse seines; yellow indicates tuna caught by fisheries in Indonesia and the Philippines. Yellowfin matures by about 100 cm. Source: Williams, P. and Terawasi, P. 2013. Overview of tuna fisheries in the Western and Central Pacific Ocean, including economic conditions. WCPFC Scientific Commission, Ninth Regular Session.

You can use juvenile tuna as bait, consume it yourself, or sell it. But each juvenile tuna you don’t catch may become an adult. This adult tuna would then produce more tuna. It might also fetch a higher market price, especially if it is yellowfin tuna. Granted, it may also be caught in Pacific areas outside Indonesia. In that case Indonesia would not benefit from this one juvenile tuna it leaves in the ocean, although other countries would. So the catch of juvenile tuna is one of the issues WCPFC would like Indonesia to address.

Shinta in action on a handline vessel

Shinta Yuniarta, one of our PhD candidates on BESTTuna, is currently trying to estimate the magnitude of the catch of juvenile tuna (or baby tuna, as the Indonesian fishers call it) through a survey in such ports as Bitung and Ambon. I visited Shinta last week in Bitung to learn as much as I could about the situation on the ground, and to work with her in further sharpening the survey questions and the rest of her research. It was one of those trips that stay with you long after you have boarded the airplane back home.

Everything in Bitung says “fish”. And very often, it actually says “tuna”. The hotel even smelled of fish when I arrived. It sports a picture of a bigeye tuna right above the breakfast buffet. Small eateries (warung makan as the Indonesians call them) offer pieces of yellowfin tuna in a spicy sauce, or delicious coral fish roasted on a charcoal fire. Everywhere you look there are huge fish processing plants, canneries, or fishing companies that have their own fishing wharf. The small-scale fishers land their fish at the central landing place in the port. Originally it was meant to be an auction, but for some reason the auction never really got off the ground, so fishers sell their fish directly to traders who bring the fish to local markets or to processing companies.

As far as I could see the small-scale fleet featured three main types of fishing. The most common seemed to be the handline fishery, where fishers use a single line with some bait on a hook to catch the tuna. Another important fishery is the pole-and-line fishery, where bait is simply thrown into the water (and water is also sprayed on the surface) to get the tuna into a feeding frenzy, so that it will bite anything that comes along. Fishers then only have to throw in a hook and the tuna will bite; these vessels are usually larger than the handline vessels, and employ a lot of crew. The third common method turned out to be the pajeko, or small purse seine, but this method was mainly used to catch not tuna, but small pelagic species such as anchovies and Indian Mackerel.

Special offer: room with a view in Sulawesi. Water and food not included

In all cases the Fish Aggregation Device (FAD), or rumpon as the Indonesians call it, is important. It’s an interesting system. Before I came I was wondering: when you make a FAD and place it in the sea, how do you make sure that it is used by nobody else but you? The solution turned out to be simple: you put a guard on it. Yes, every rumpon has somebody guarding it 24 hours a day. This guy lives in the small hut built on top of it, with probably some sort of radio communication, and makes sure that nobody but the owner catches the fish gathered under it unless the owner is paid a comfortable sum of money. The rumpon guard also informs the owner or his vessels of the amount of fish under it, so they won’t waste their time coming to a rumpon with no fish under it.

So what did we learn so far? First, a lot of fishers readily admit that they catch a fair amount of baby tuna. They use it as bait, consume it on board, or take it home to their families. It is not illegal to catch juvenile tuna, so they seem willing to tell us how much they usually catch. And although the weight of baby tuna may be small, the number of baby tuna caught, and the fact that each baby tuna could have become a big, valuable tuna makes that the catch of baby tuna can still be a serious problem. Second, the catch of baby tuna is by far not the only unknown in the Indonesian tuna fishery. There may be unreported or even illegal catch. Some authors argue that Indonesian ports lack sufficient staff to check the accuracy of logbook data. Third, although it was fairly easy to contact and survey small-scale fishers, it turns out to be a lot more difficult to contact large-scale fishing companies.

But perhaps the most important lesson was the reminder that “small-scale” does not necessarily mean “sustainable” or “green”. The idea of small-scale fishers tends to conjure up the idyllic images of hardy, honest folk that you see on Discovery Channel, read about in stories like Hemingway’s The Old Man And The Sea, or hear about in songs like The McCalmans’ “Five O’Clock In The Morning”. No doubt that the people we spoke to in Bitung are honest, hard-working people who must endure many hardships to scramble a meagre income for themselves and the family they support. But a lot of fishers and consumers may benefit greatly if less baby tuna were caught. It’s a difficult dilemma: a lot of very poor people depend on a fishing method that might disadvantage a lot of others.

My impressions of the 2013 ICES Annual Science Conference

My impressions after a week of presentations, discussions, and lots of delicious food:

  • Of all the interdisciplinary conferences I’ve been to so far, the ICES meeting was the most scientific (read: least political, notwithstanding ICES’s role as advisory body for fisheries policy), and the most constructive in its interaction with social scientists (read: economists). Besides EAERE (which I consider a disciplinary meeting) I was once at an ESEE meeting, and once at the European Congress for Conservation Biology. I had mixed feelings about those for their tendency to bash “mainstream economics” (whatever that may be) and to blur the line between science and activism. Perhaps it’s because those communities have the hidden assumption that nature is best left alone by man, whereas fisheries scientists investigate, by definition, a form of interference in nature.
  • Is it just me, or is there a major disconnect between textbook fisheries economics and the practice of fisheries management? Concepts we teach (notably maximum economic yield and the role of the discount rate) are nowhere to be seen – in fact, I once heard a fisheries industry representative refer to maximum economic yield as “a plaything for economists”. In our teaching we hardly pay attention to the stochastic nature of fish stocks, but these days fisheries science is all about reference points and harvest control rules – which only make sense in a stochastic context.
  • Economists can make big contributions to fisheries management by further strengthening how fisheries models describe human behaviour. So far those contributions were largely confined to modelling where fishers fish, but what about investments in gear, or boats? Let alone market structures, global developments (tilapia!), value chains, and policy-makers.
  • Iceland is like an extreme version of Norway. Thought the Norwegian landscape was rugged? Iceland has volcanoes, and geysers! And where I thought Norwegians don’t give a hoot what the rest of the world thinks of hunting and whaling, only Icelanders can serve raw whale meat and rotten shark to a crowd of foreign scientists. (And it was delicious! The whale, that is.) Neither do Icelandic pubs have qualms with playing the entire Velvet Underground & Nico, including John Cale’s ear-piercing viola solo in Heroin.

Are humans like fish?

This spaceship currently hosts about 700 fisheries scientists attending the Annual Science Conference of ICES. ICES is an international body that assembles stock assessments and other results from fisheries research in Northern Europe, Canada, and the United States. Fisheries scientists use a lot of detailed models of the marine ecosystem, which allows them (up to a point) to project how different policies affect such things as fish stocks, catches, and so on. I also entered the vessel (more accurately the Harpa conference center and concert hall in Reykjavik, Iceland) to discuss how such models can take the human factor into account. After all, humans take part in the marine ecosystem (in many cases we are the top predator), but we also develop policies with the interests of humans in mind. So if we can model fish, why not also model humans?

“It can’t be done”
A common objection against this is that human behaviour cannot be modelled. Of course, as a model-building economist I don’t agree with that. Economists have a large set of quantitative models at their disposal that describe human behaviour at several different spatial scales, from consumer choices to entire economies or even international trade. Some biologists at the meeting explained that similar objections were made when biologists started developing their own ecosystem models, but that has never stopped such models from proliferating. Why would humans be any different? The discussion set me thinking about the similarities and differences between humans and fish, and how they could make modelling human behaviour easier or more difficult than modelling animal behaviour or ecosystems.

Why humans are like fish
Basically we discussed three objections that were made against biological models, and are now made against modelling humans. First, people object that the object of the model is too complex. That’s true, but so are the global climate, the cascade of nuclear fission and fusion in a hydrogen bomb, and a horde of blood-thirsty zombies climbing over a 50 meter high wall. But that never stopped people from modelling these processes in a plausible manner (admittedly, one of these examples is fictional and no, it’s not the first one). If we don’t model these processes we will never understand them or how they interact with other processes.

In the fish tank

A second objection is that the processes are uncertain. But although uncertainty complicates matters, it can be dealt with. You can do a sensitivity analysis to assess the robustness of your results. There are methods to optimize uncertain systems, such as stochastic dynamic programming models or uncertainty analysis. Such steps are necessary, they can be difficult, but that is no reason not to try.

A third objection is that models tend to induce tunnel view, where effects that are not “in the model” are ignored. This is a fair point, and as an economist I must admit that my profession has not been immune to this effect. So we need a diverse ecosystem of theories, approaches, and models, in order to stay open-minded for arguments or effects we hadn’t thought of. Again, this objection has also been made with respect to biological models, and it has never stopped biologists from modelling.

Why humans are not like fish
This is where it gets interesting. First of all, fish don’t read. People, however, may read your report and respond. There is evidence that negative news coverage on consumer confidence further reduces that same consumer confidence. This is a typical feature of social science research: as a researcher you have an impact on your object of research (i.e. people) that goes much deeper than any quantum physicist could get. Your results could be self-fulfilling, as in the consumer confidence case. They could also be self-defeating, as some people argued was the case with Limits To Growth: the stir caused by this report inspired efforts to reduce pollution and resource use to such an extent that we evaded the environmental catastrophe predicted by the report. (I’m not sure I’m buying the argument about this particular example but you get the idea.)

Second, I would argue that humans are much better at anticipating what other humans, including governments, do. For example, a common objection against vessel buybacks is that they create an expectation among fishers that the government will buy access capital (at tax-payers’ expense) when the going gets tough for fishers – an open invitation for creating excess capacity because fishers face only part of the financial risks. Likewise, fishers may anticipate what other fishers do in their decision whether to fish, and how much to fish.

Who needs a window if you can have a view on virtual nature?

Third, many properties of humans, such as customs, habits, and technologies, are much more subject to change than those of animals. Over the 200,000 years of its existence, homo sapiens has developed sticks, houses, wheels, fish nets, purse seines, and pulse trawls. We’re the only animal with such a massive change in capability and impact. And although economists commonly assume that preferences don’t change over time, I’m not so sure. Suppose we estimate the recreational value of a natural park to be, say, €5 million, will it remain like that forever? There was a time when forests were for cutting down – they were seen as collecting grounds of villains and predators. Now we want to protect them out of love of exercise, hunting, and nature. What if our descendants develop a taste for hikes in virtual reality (or simply get glued to their iPads), and hikes in real forests fall out of fashion?

Fourth, on the bright side, we cannot communicate with fish but in social research we can do surveys and interviews to gain insight into their considerations, their lines of reasoning, and so on. These methods are not perfect (people can lie, or withhold information), but neither are biological measurement tools such as the ones used in stock assessments.

Should we? Can we? How?
The bottom line is that we can to some extent model human behaviour, and by doing so we can address a lot of pressing problems. But it will be tricky. I can’t judge whether it will be trickier than modelling fish, but it will surely be tricky in different ways. Again, that should not be an impairment to doing it.

Who’s the sucker here: Kiribati, Mauritania, or the EU?

In many developing countries with large fish stocks most of the fishing is done by fleets from rich countries such as Japan, Spain, or The Netherlands. The EU has made a few new deals recently and they make interesting case studies.

On the EU’s latest deal with Kiribati (H/T Adam Baske):

Kiribati has secured a US$1.71 million deal for 15,000 tonnes of tuna per year with the European Union. Under the agreement, the EU is now able to deploy four purse seiner and six longline vessels in Kiribati’s waters.

There are many Pacific Island Nations making such deals. It’s a classical Prisoner’s Dilemma: if those countries stick together in the negotiations they could earn a lot more than if they go it alone. No wonder the Parties to the Nauru Agreement are not amused. Dr Transform Aqorau of the PNA comments:

“Kiribati could have generated an annual income of US$11.3 million from its agreement with the EU. But as I said, countries have their own reasons for doing what they do, but you have to wonder why in the face of great need by our people, we allow our natural resources to be sold short?”

On the other side of the globe Mauritania seems to have taken the other extreme. The Dutch newspaper De Volkskrant reports (25 May 2013) that ever since Mauritania’s fishing deal with the European Union has come into force, hardly any European fishing vessel has entered Mauritanian waters. Fishing in Mauritania has become unprofitable for these vessels due to several restrictions, including the distance they are required to keep from the coast, the fee they are required to pay, and the number of Mauritanian workers they are required to hire.

European fishing in Mauritania’s waters is often portrayed as a hostile takeover of a poor African country’s resources by rich nations’ fishers, so you may be tempted to cry victory over Western imperialism. But this is no victory for Mauritania (my translation from Dutch):

According to Jedna Deida, a Mauritanian fisheries consultant, four thousand people in the port city of Nouadhibou have lost their jobs because the foreign fishing fleets stay away. A few thousand earned a living as crew. Many others worked in processing factories. “It’s a terrible situation, ” Deida says. “People can’t pay their children’s schools. It’s been like this for months.”

Many coastal (can I call Kiribati coastal?) developing countries struggle with the same question: should we allow foreign fishers in our waters? Under what conditions? Shouldn’t we develop our own fisheries? But what if we earn more from lucrative deals with big foreign vessels than from our own small-scale fleet?

(Almost) three days of (almost) night

This is as light as it gets where I was this week:

The location is Tromsø, Norway. I was there the last few days to discuss the effect of climate change on arctic fisheries. Interestingly, this effect is not necessarily negative – for the Norwegians, that is. Stocks like mackerel may move northwards, making more mackerel available to Norwegian fishers at the expense of more southern less northern fleets (like the Dutch). Other effects may be that arctic stocks become more productive, and as stocks get larger they can also be found in places where they weren’t before. So the University of Tromsø gathered together fisheries economists from Norway, Denmark and Iceland (adding a stray Dutch aspiring fisheries economist and a Mexican professor) to discuss what the economic effects may be, where these effects take place, and how economists can analyse these effects.

My highlights from this meeting:

  • Much of the research in this domain is descriptive: what is happening, and what may happen in the future? This concerns issues varying from what fishers do, where they will fish and how intensively, to the willingness of countries to cooperate in fisheries policy when stocks move northwards.
  • Prescriptive research – which routes should be kept open, where should marine protected areas be allocated – is scarce. I was one of the few participants presenting such research, and even that was about Vietnamese mangrove forests (not exactly arctic) and Dutch agri-environment schemes (not exactly marine or arctic). Juan Carlos Seijo had a very nice presentation about where to allocate a marine protected area in an ecosystem where the commercial fish originates from a particular (nursery) area. Not very surprisingly, one should protect the nursery area from fishing, but if you take into account what fishers do the effect of the allocation also depends on whether the nursery lies close to the fishing port or far away from it.
  • Norwegians are delightfully unapologetic about hunting and whaling. I can’t blame them: they have plenty of fish, minke whale and game, and as far as I can see they manage these stocks fairly well. Meanwhile, the Dutch get squeamish about whether we should cull deer (but hunting is cruel), let them starve (which is even crueler), or risk hitting them on the highway (would you like a deer in your windscreen?).
  • All the more surprising that the Dutch hunted whales, seals, and other cuddly arctic fauna on a large scale before the Norwegians did.
  • Norwegian is a very efficient language. “Hello how are you today?” is “hej”; “thank you very much” is “takk”. Why waste energy on redundant syllables?

Tromsø is a fascinating place. After Murmansk it is the largest city above the polar circle, and around this time of the year the sun does not rise – you get some twilight between 10am and 2pm, that’s it. The city is proud of its arctic hunters (like Wanny Woldstad) and explorers (like Roald Amundsen). But I admit I’m glad to have some sunlight again.