Sharing the Catch, Conserving the Fish

The mid-1990s were tough times to be a Pacific rockfish fisherman on the West Coast of the United States or a groundfish fisherman in Canada’s British Columbia. Fish populations in both regions were on the decline. Fishermen were working harder for smaller catches and smaller paydays, and talk of even stricter catch limits and fewer days at sea haunted the docks. Environmentalists and the public were almost as distressed. Today, British Columbia’s groundfish stocks are at healthy levels and fishermen enjoy profitable businesses and fish throughout the year, whereas U.S. stakeholders continue to battle over how to restore still-depleted rockfish populations and fishing seasons remain limited to a few weeks or months a year. Why the difference?

Veterans of fish fights in both countries legitimately point to complicated factors, but the key reason for these disparate outcomes is policy. In 1997, Canada’s Department of Fisheries and Oceans changed complex rules constraining how fishing was to be practiced (rules, the agency had hoped, that would indirectly achieve conservation goals) and instead held fishermen directly and individually accountable for meeting a vital conservation target: ensuring that fish catches stay within scientifically determined levels. That is, fishermen were given a “share” of the total allowable catch and given the flexibility and the accountability for meeting it. As a result, groundfish stocks rebounded and so did the fishermen. Meanwhile, fishery managers in the western United States have yet to make this key transition. Consequently, comparatively little rockfish recovery has happened off of Washington, Oregon, and California, and the fishermen have been left with declining profits.

Many other ocean fisheries in the United States continue to operate in the same away as the Pacific rockfish fishery. But federal and state fishery managers can end the inherent incentive to overfish that is created by exclusive reliance on indirect measures such as limiting how and when fishermen can work. Better systems of management that change fishermen’s behavior by giving them a share in, and responsibility for, the fishery’s take—called “catch share” programs—are the best way to end the urgent problem of overfishing in the United States.

There is an increasing interest in catch shares across the country. In 2002, the legal moratorium on some types of catch share programs was lifted. In 2006, Congress took the further step of enacting new rules to guide implementation of catch shares, and now six of the eight federal regions are working to develop catch share programs. The Bush administration has also taken some actions in support of the programs. These steps are positive, but more needs to be done. We believe that all U.S. fishery management plans must examine whether catch share programs can end overfishing faster and with less collateral damage to the environment and to fishermen that the management plans in place today.

The effects of overfishing

Even environmental experts are often surprised to learn the extent of the damage that overfishing already has caused in the oceans. Overfishing is defined as fishing that unsustainably depletes fish stocks and nonfished species or that damages the ocean environment. The term encompasses overexploitation of a target species, killing of nontargeted species (bycatch), and habitat destruction in which important physical features of the ocean environment are damaged. Globally, 90% of large fish are already gone. During the past 40 years, as stocks have disappeared, bigger boats have gone farther and deeper to find new fish. This unsustainable fishing effort has extended to the furthest reaches of the globe and down the food chain. The effects are being felt as people have less access to this important source of protein and as fish-consuming species such as seabirds and whales lose out in an intense competition with humans.

The United States manages one of the largest ocean areas of any country, and the effects of overfishing in these waters are dramatic. Of 230 fish stocks (individual species or groups of related species) under federal management, 94 are known to be unsustainably exploited. For example, cod, long the staple of many diets and a main driver of North American exploration, are severely depleted. Atlantic halibut have been hunted to commercial extinction. Bocaccio, one of several highly depleted Pacific rockfish species, have been reduced to less than 10% of their historical population size in West Coast waters. Large predatory fish, including tuna, sharks, marlin, and swordfish, are largely gone. In the Gulf of Mexico, whitetip shark populations are at 1% of what they were in the 1950s. Most of the several species of abalone in California have been harvested to near extinction. This mismanagement of fishery resources has resulted in boomand- bust cycles in individual fisheries and economic dislocation as catches collapse and regulations are tightened to protect stocks.

Additionally, overfishing has broad ecosystem impacts. For example, bottom trawling, in which boats drag gear and nets along the seafloor, can damage deepwater corals, sponges, and other features important for commercial and noncommercial species. Some types of fishing gear also cause very high bycatch, including juvenile fish and threatened or endangered animals such as whales, sea turtles, and seabirds. Large-scale biomass removals by fishermen can have unpredictable effects on ocean food chains. Ecological research suggests that kelp forest food chains have been totally changed by fishing.

Two major blue ribbon commissions, the U.S. Commission on Ocean Policy and the Pew Oceans Commission, concluded that the United States faces an ocean crisis. And although climate change is a serious threat to future ocean productivity, overfishing has had a bigger impact. The United Nations–mandated Millennium Ecosystem Assessment, the most thorough look at Earth’s ecosystems ever, concluded that overfishing is “having the most widespread and the dominant direct impact on food provisioning services, which will affect future generations.”

Few regulatory rewards

Since 1976, the beginning of modern U.S. fisheries regulations, the government has attempted to control the total capture of target and nontarget fish in individual fisheries by controlling one or more of several factors at the whole-fishery level. These factors include the amount of time that fishermen can spend fishing and the type and effectiveness of the fishing gear used. The idea is that by controlling how fishermen fish, conservation can be achieved. These indirect approaches are also coupled with actions such as closing a fishery when regulators conclude that the amount of fish caught by all boats exceeds a “total allowable catch” or too many nontarget animals have been killed.

Thirty years of overfishing later, experience shows that success in applying this approach is elusive. Even when fish population goals are met, there can be high costs for fishermen as well as marine ecosystems more broadly. The reason is simple: When regulators control catch at the level of the fishery, fishermen figure out how to maximize their individual shares of the total take. Each boat catches as fast as it can, or it will be left with too little product to sell. As the saying goes, haste makes waste, and the consequences are overharvest, bycatch, habitat destruction, bad economics for fishing businesses, unsafe working conditions for fishermen, and fishing industry resistance to conservation measures.

One of the most dramatic examples of the failure of traditional management was the Alaska Pacific halibut fishery in the 1980s and 1990s. The federal North Pacific Fishery Management Council, one of eight regional councils established by Congress, aimed to achieve a total allowable catch target by repeatedly shortening the fishing season. In 1980, regulators limited the fishing season to 65 days. But with each of 333 vessels fishing without individual limits on catch, the total catch was at 115% of the level scientists thought was safe. In response, regulators continually adjusted the season downward to account for the fishermen’s skill in catching fish. In 1990, regulators posted a six-day season. But fishermen responded by putting 100 more vessels to work, and the catch was still 106% of the safe level. By 1991, the season had shrunk to just two frantic days of “derby’’ fishing. The derby brought dramatic unintended consequences. The value of the catch dropped dramatically as the market was flooded for two days with the entire year’s catch of halibut, and fishing became incredibly dangerous as exhausted fishermen worked overloaded boats in order to grab their take before the close of the season.

In 1995, regulators changed the rules of the game and implemented a catch share program—one of the first in the United States. Under this system, fishermen can catch halibut nine months a year—as long as they catch only their share of the total allowable catch. Compliance with catch limits is now nearly 100% for individual fishermen, and overall the fishery usually winds up erring on the safe side and is under its catch limits. The success of the halibut catch share system has inspired others; there are now nine catch share programs in the United States.

Experience in other publicly owned natural resources areas, such as national forests, the atmosphere, and the electromagnetic spectrum, demonstrates that resource stewardship improves when regulators include some form of incentive-based management that better aligns the economic incentives of the users with the public policy objectives, including conservation, that must go hand in hand with granting private access to that resource. In the case of fisheries, catch limits, bycatch controls, and habitat protections—the traditional management tools—must continue. But these controls work better to promote sustainable fisheries when fishermen are accountable for catching only a dedicated percentage of the catch. Further, the value of the catch goes up when a fisherman can take his boat out when the price is right, rather than when every other boat goes out.

Worldwide, programs that incorporate a right to a share of the catch have been implemented in various guises for more than 30 years, under names such as individual fishing quotas, individual transferable quotas, and territorial use rights in fishing. Their key feature is that fishermen (individually or in cooperatives) are assigned either a percentage share of the total allowable catch or of the fishing concessions in a given bay, bank, reef, or other ocean area (a system referred to as “territorial use rights for fishing”). Where such programs are used—in most fisheries in Iceland and New Zealand and in some fisheries in Australia, Canada, Mexico, Chile, and the United States—compliance with key limits improves and fishermen have been able to make a better living. In places where catch shares have been used to address overfishing, stocks have improved.

As with some traditionally managed fisheries, catch share fisheries have a cap—the total allowable catch—that is based on a scientific assessment of the sustainable yield from the fishery. Fishermen are each allocated a specified percentage of the allowable catch, and their take is monitored. The catch shares are usually tradable, with some restrictions. Because the value of the percentage shares increases when stocks improve and managers raise the total allowable catch, catch shares create an incentive for fishermen to steward the resource. Equally important for conservation, especially in the near term, these approaches give fishermen a way to benefit financially immediately from fishing “cleaner”; that is, with less impact on the ecosystem. Consider bycatch, for instance. Bycatch saps profits. It is expensive to buy, deploy, and retrieve gear. The greater the ratio of target to nontarget species is, the higher the profits. When fishermen are not fishing against the clock, they can, and do, take the time to figure out how to increase that ratio. This is good for their bottom lines and for the marine ecosystem.

Catch share programs can be fairly simple, such as one adopted in 2007 for red snapper in the Gulf of Mexico. Fishermen voted overwhelmingly in favor of the program, aimed at saving the gulf ’s most important commercial reef fish, which had been reduced to about 3% of its historic population size. Under the program, commercial fishermen were allocated a percentage share, in pounds per year, based on their historical catch. Fishermen with greater landings received a correspondingly greater share. This means that if a fisherman’s share is 50,000 pounds, he can decide when to fish, based on the price of materials (such as gasoline), the weather, and dockside prices for his fish. When he brings fish to the dock, he must have shares in his quota account to cover the landings. He also can lease out his annual allocation, letting someone else catch his share, or buy more shares from another boat to boost his catch.

The results from the first year of the red snapper catch share program were dramatic. In just one year, there was at least a 40% drop in the waste from dead or dying snapper tossed overboard. In previous years, regulations required fishermen to throw away fish caught at the wrong time or that were the wrong size, even though most red snapper did not survive. Also, the price fishermen are getting is up 30% because fishermen are bringing fish to market when they are at their highest value. The price for a quota share reflects about three times the price of fish, showing that fishermen are optimistic that the value of the fishery will be going up.

As managers get more experience, they can deal with fisheries in which different species are caught together. The British Columbia groundfish catch share program covers 27 different species such as flounder or cod that live on or near the bottom. Fishermen need to have or buy a quota to cover all of the fish they catch. If they are short on quota, professional quota brokers are available to organize real-time trades between vessels. Because the catch share program in their fishery has reduced the race for fish, the captains of these trawlers, which may range from 50 to 100 feet in length, have been able to develop creative new approaches to maximize the value of their landed product, avoid expensive entanglements with deepwater corals and sponges, and increase the selectivity of their fishing practices for the target species.

Looking at what works

Environmental Defense recently conducted a study to examine how well catch share programs have performed in the 10 fisheries in the United States and British Columbia in which they have been implemented. (The Redstone Strategy Group performed the quantitative evaluations of the industry as a whole, as well as each existing catch share program.) The fisheries analyzed were Alaska halibut, Alaska pollock, Alaska sablefish, Alaska king crab, mid-Atlantic surf clam and ocean quahog, South Atlantic wreckfish, Pacific whiting, British Columbia sablefish, British Columbia halibut, and British Columbia groundfish caught by trawling. Our findings support earlier studies showing that catch share programs effectively end the persistent overshooting of scientific targets for safe levels of fishing while cushioning the impacts on fishermen. The study also reveals five key areas in which catch shares improve management outcomes.

Overharvesting. Under traditional management, a fishery may have an official catch limit, but fishermen do not. Because they are not held directly accountable for exceeding a limit, they will fish until told to stop. Real-world time lags in reporting and enforcement lead to overages in collective catch targets. Regulators must then allow less catch the following year if the fish population is to recover. For the group of stocks analyzed, before catch shares were introduced, annual catch targets were exceeded in half of all fishing seasons. Sometimes the excess was small, but for some British Columbia groundfish species the caps were exceeded by as much as 60%. After catch shares were introduced, overages essentially disappeared. In fact, landings were, on average, about 5% below the annual cap.

Bycatch and habitat destruction. The amount of nontarget species caught each year—not just fish, but sea turtles, dolphins, corals, and sponges—is staggering. Worldwide, about one-fourth of the total catch is thrown back, much of it dead or dying. Naturally, fisheries managers and fishermen themselves would like to eliminate this wasteful and costly inefficiency. However, when regulators attack the problem indirectly, the fishermen’s incentive is to obey the letter of the law but still find ways to catch as much as fast as possible. The result is continued bycatch, although sometimes of different kinds of sea life than before. When fishermen can reduce costs by avoiding bycatch or, even better, are held directly accountable for reducing bycatch, they do so.

Bycatch decreased in every catch share fishery examined in the study, by 40% on average, and the programs collectively prevented the waste of enough seafood to feed 16 million people in the United States for a year. The fishermen also deployed 20% less gear to catch the same amount of fish. The incentive to reduce gear use under catch shares exists because success depends on efficiency instead of speed. To fishermen, less use of gear means less capital expenditure and lower input costs in the form of bait, lost gear, and labor. For the environment, less gear means a lower likelihood of harmful interactions with habitat and wildlife.

Economics. Typical business conditions in a traditionally managed fishery consist of a boom time during the initial years, followed by economic dislocation as fishing capacity is drawn into the fishery, the stock is overfished, and managers restrict fishing operations and lower total allowable catches. Most U.S. fisheries are overcapitalized: There is too much fish-capturing ability (vessels and gear) to efficiently harvest the level of allowable catch. The fishermen are then caught in a catch-22. A fisherman might be using only, say, half of his fishing capacity and would prefer to downsize his boat or gear, thus saving money on boat financing and operating costs while catching the same amount of fish. But if other fishermen in the fleet do not do the same, their bigger capacity will scoop up the fish faster than he can in the race against the clock. The result is that our fisherman makes the best choice under a tough set of circumstances and stays in the race. To make matters worse, when the entire annual supply of fish comes to market over a short period, buyers can offer low prices. Additionally, the intense competition to land fish quickly makes it impossible for fishermen to pursue quality-oriented instead of quantity-oriented business models.

When the regulatory driver of overcapacity is removed, revenues per boat increased 80% on average in the fisheries studied. Although the total number of hours worked remained steady, there was a move from a part-time labor market to more stable full-time fishing jobs, and fishermen reported greater satisfaction with the quality of employment. Consumers also benefited from greater availability of fresh fish.

Safety. Under traditional management, regulators close the season once the annual target has been caught, creating an intense race for fish. With each boat competing to get their fish landed first, fishermen need to work quickly, sometimes in dangerous conditions like bad weather. Catch shares largely eliminate the race for fish, allowing fishermen to avoid the most dangerous conditions. The results reflect those changes: In the Alaska halibut and sablefish fishery, the annual number of search-and-rescue missions decreased by more than 70% after catch shares implementation, and fatalities dropped 15% over five years.

Fisherman/manager cooperation. A study by researchers at the University of British Columbia showed that fully rebuilt fisheries in the United States would generate almost 300% more revenue per year than the current depleted stocks. However, because fishermen are not now guaranteed a share of the eventual gains, they have been loath to agree to the immediate catch reductions, monitoring, and enforcement needed to rebuild stocks. A typical observer’s response is to question why the government does not just “make them do it.” In fact, there are success stories in which regulators have put in tough new conservation measures over fishermen’s opposition. The problem is that the political dynamics of managing fisheries are like those associated with any other major regulated business in this country. Relying exclusively on the hammer of big government is not a sustainable public policy. In fact, it runs deeply counter to the very underpinnings of the nation’s views on the ideal relationship between a people and their government.

In fisheries, the fact that the regulatory tool kit lacks tools that work with, instead of against, fishermen’s incentives has set up epic struggles among fishermen, the government, and conservation. The result has been limited progress toward reducing overfishing.

Introducing catch share programs appears to lead to a significant improvement in the dynamic between fishermen and fishery managers. Nearly three-quarters of catch share fisheries have some kind of catch-monitoring system, compared with just one-quarter of non–catch share fisheries. One reason for a fisherman’s newfound willingness to accommodate observers is because strong monitoring will decrease the chance that his competitor can cheat. Fishermen also are more cooperative in official scientific efforts. Catch shares provide an incentive for fishermen and fisheries managers to collect data on stock sizes, not least because the larger the stock, the greater (usually) the total allowable catch, and so the greater the harvest permitted to each quota holder. As one example of observed improvements, the uncertainty around biomass estimates in these fisheries dropped from an average margin of error of ±43% before the implementation of catch shares programs to ±27% after. In British Columbia, a group of forward-looking quota owners actually lobbied the Department of Fisheries and Oceans to close new areas to fishing to protect important habitat for juvenile fish.

Helpful steps

Both theoretically and empirically, catch share programs improve management outcomes in ending overfishing and raising the economic prospects of fishermen. But although the idea behind catch shares is a simple one, developing and implementing such a program in a given fishery involve complicated policy choices. Regulators must tackle issues such as how to cost-effectively monitor individual catches, how to weigh the interests of historically fishing-dependent communities, and how to allocate catch privileges among fishermen. In fact, these issues can be and increasingly have been dealt with effectively, especially in newer catch share programs, during the policy design process at the individual fishery level. Still, outdated criticisms sometimes scare fishermen and regulators away from exploring catch shares in their fisheries. This is especially unfortunate because fishermen in fisheries where catch share programs have been implemented report strongly positive experiences with the shift. Experience with catch share programs reveals some important lessons about how contentious issues can best be addressed in the policy design process.

Initial quota allocation. Among the thorniest issues is how to divide the catch among participants in the fishery. Initial shares can be extremely valuable, worth tens or hundreds of thousands of dollars per fisherman. Some economists argue that the best method for distributing shares is to auction them off. In cases in which fishermen would accept this process, auctions may well be the preferred method. But in most cases to date, managers have instead allocated shares to fishermen who have been fishing that stock locally. Determining who gets these initial rights is understandably critical to participants in a fishery. Most fisheries have based initial allocation on records of historical catches, with some consideration given to a fisherman’s current level of investment. The exact allocation formula varies, but the key is to ensure an open process that accounts for legitimate interests and maintains the conservation incentives in catch shares programs. Fishery managers have the responsibility to identify the key values and characteristics they wish to maintain in a fishery and ensure that the quota allocation rules are consistent with those overall goals.

Catch monitoring. Programs must incorporate cost-effective monitoring of catch and bycatch. Some fisheries with minimal bycatch and habitat effects, such as the mid-Atlantic surf clam and ocean quahog fishery, can be effectively monitored simply by counting product landed at the dock. More complex fisheries, such as the British Columbia groundfish trawl, require onboard observers or new technologies, such as video monitoring systems and satellite tracking, to track bycatch and discards and to prevent fishing in closed areas. However, the need for effective systems is not limited to catch shares management only: All fisheries management programs need monitoring and enforcement systems. Regulators have had success in increasing monitoring during the transition to catch shares for several reasons. Among other things, the increased revenue per boat means that fishermen have the resources and understand the benefit to them of spending some of those increased revenues on mandated monitoring improvements as part of the deal to implement catch shares. Regulators should optimize efficiency while meeting information needs for each fishery.

Socioeconomic transitions. Implementing a new catch share program can create changes in local economics that probably will need to be addressed in advance. Fishing communities built on part-time labor will need help in transitioning toward fewer, more professional (full-time) jobs. Businesses that organized around pulses of fish landings need to restructure for lower but steadier streams of higher-quality fish. There are a range of design choices that can address key socioeconomic issues while meeting a program’s goals. Some catch share fisheries, such as the recently adopted tradable quota program for red snapper in the Gulf of Mexico, have chosen to allow any individual fisherman to own no more than 6% of the total allowable catch in order to prevent excess consolidation of quota ownership.

Other successful change-management initiatives have included setting aside a percentage of quota for indigenous or historically fishing-dependent communities (several fisheries in Alaska and Canada); establishing loan funds to aid purchases of quota by new entrants (Alaska halibut and sablefish); and designating some quotas as “community development quotas” whose earnings must be used to improve communities through investments in education, infrastructure, and fisheries-related industries.

Stakeholder education. When people’s livelihoods are at stake, they need to feel secure that any proposed changes are going to be an improvement. Policymakers proposing a catch share program must make sure that the stakeholders in the fishery have access to information about experiences in other fisheries so they can better envision potential changes to their own livelihood. For many fisheries, existing pressures are already driving fishermen out of business. Thus, fishermen need to have access to realistic assessments of alternative futures: with catch shares and without. Still, fewer and fewer fisheries can expect the status quo to simply continue. Education should focus on potential benefits and pitfalls and on strategies that have worked to build successful catch share programs elsewhere.

Environmental improvement. Policy designers must have clearly articulated environmental goals. When establishing catch share programs, regulatory councils need to establish a hard limit on total catch (if such a limit does not already exist) and enforceable limits on bycatch. In addition, the process of designing a catch share program provides an excellent opportunity for all stakeholders to look at which areas within the fishery should be off limits for the long-term benefit of fishermen and the environment.

Streamlining design. In the past, the design process has often taken many years. This challenge can be solved if NOAA and each of the eight federal regional fishery management councils, which are the key decisionmakers, set clear timetables and establish small groups of representative stakeholders who are directed to design catch share systems. In addition, staff support must provide technical analyses quickly to keep the design process moving.

Revenue responsibility. Catch shares release wealth. Fishery managers must carefully consider how best to tap additional revenue generated by a catch share program to run the system, improve data collection, achieve the social objectives of particular communities, and increase the levels of monitoring, enforcement, and scientific research. At the same time, the fact is that this additional revenue is a key motivator for fishermen to embrace change. Burdening catch share programs, especially in their early years, with high fees or other revenue recovery options can be counterproductive.

Adaptive management. As new catch share programs come into being, federal and state fishery managers should continue to gather data to determine whether the systems are achieving environmental, social, and economic goals. Allowing for changes in the management system as new information and best practices emerge will be another important key for successful catch share program management.

Overfishing is a key threat to the world’s oceans, and Congress has taken strong action by mandating an end to overfishing in U.S. fisheries by 2010. Between now and then, NOAA and the regional fisheries management councils will need to put in place caps on total allowable catch, along with management plans to ensure that the caps are met. Current management approaches would meet those caps with ever more complex limitations on fishermen, as the regulators try to stay one step ahead. But experience has proven that trying to achieve these caps using current regulatory approaches results in a less efficient fishing industry, increased collateral environmental damage, and a decrease in safety in the country’s most dangerous industry.

The nation cannot afford this, and there is a better choice. The data are clear that adding catch shares to fisheries management plans is the best way to meet fishing caps and end overfishing; catch shares create clear and effective accountability built on a foundation of positive incentives for fishermen. That powerful combination of accountability and incentives should be the default option in every fishery management plan.