The Problem of Overfishing
While environmentalists have clamored to take on a number of issues in recent years, the substantial issues involved in overfishing have remained relatively quiet. Overfishing is international in scope, has been ongoing since the end of the Second World War, and is generally caused by bad government policy. And it poses real problems for the world's aquaculture-dependent nations, say Iain Murray and Roger Abbott of the Competitive Enterprise Institute.
Nevertheless, government policies are contributing to the problem. Billions of dollars in subsidies bestowed on the fishing industry by many governments make overfishing profitable. At the same time, the absence of property rights over fish in most countries means that there is no incentive for any party to husband this resource. The result is the gross abuse of a scarce resource.
According to the most recent fisheries study by the United Nations Food and Agriculture Organization, 85 percent of world fish stocks for which assessment information is available are either fully exploited or overexploited, depleted or recovering from depletion.
The study found that 32 percent are classified as overexploited, depleted or recovering, thus yielding less than their maximum potential production.
This percentage is the highest that has been seen in the decades of study, indicating that the problem of overfishing is becoming more severe.
To curb this trend and to bring fisheries back to their optimal level of production, governments should consider implementing a property rights-granting system like the Individual Transferable Quota System in New Zealand.
New Zealand established a total allowable catch (TAC) for the country, and then distributed quota permits based on compliance with the TAC.
The government first released quotas in 1986, granting them for 10-year periods.
Over the years, the government used trial and error to optimize the system, eventually granting permits in perpetuity and basing quotas on a percentage of the TAC rather than tonnage.
The market for quota permits is very active, with more than 120,000 leases and 30,000 sales of quotas as of the end of the 1998 fishing year.
In 2008, researchers Christopher Costello, Steven Gaines and John Lynham found that if catch shares had been instituted globally from 1970, then the incidence of fishery collapse would have been reduced by two-thirds.
Source: Iain Murray and Roger Abbott, "Give a Man a Fish," Competitive Enterprise Institute, May 17, 2012.