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Innovative Incentive-Based Tools in Reform of Highly Migratory

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Innovative Incentive-Based Tools in Reform of Highly Migratory Innovative Incentive-Based Tools in Reform of Highly Migratory Fisheries at Project Development and Regional Scales 2 Innovative Incentive-Based Tools in Reform of Highly Migratory Fisheries at Project Development and Regional Scales Prepared by Brad Gentner, President Gentner Consulting Group, LLC Technical Editor Vishwanie Maharaj, Lead Economics Oceans, World Wildlife Fund-US DECEMBER, 2018 WORLD WILDLIFE FUND, INC., WASHINGTON, DC 2018 ACKNOWLEDGEMENTS This report was prepared for the World Wildlife Fund, Inc. (WWF-US) under a grant from the World Bank’s Ocean Partnerships for Sustainable Fisheries and Biodiversity Conservation-Models for Innovation and Reform (OPP). This paper was prepared under the technical direction of Vishwanie Maharaj, Oceans, WWF-US. Additional contributors include Richard Barnes (University of Hull) representatives of the OPP projects (Bay of Bengal, Eastern Pacific, Caribbean and Western Central Pacific) and members of the multidisciplinary Global Think Tank (GloTT) under OPP. This report serves as a technical reference for the seminal publication arising out of GloTT deliberations on the lessons learned from developing OPP projects and insights from existing innovative incentive programs applied to highly migratory fisheries with a high seas component. iii Table of Contents ABBREVIATIONS. v Introduction . .. 1 ICM: A Response to the Common Pool Fishery Problem. .2 Push Versus Pull Incentives . 3 Market-Based Incentives. .6 RBM and the First Best . 7 Global Experience with Incentive-Compatible Management . 11 Atlantic Ocean. .11 Market/Financial-Based Tools. 23 Caribbean Pilot Projects. .24 CCSBT . 34 Bluefin Quota System in Australia. 34 Market/Financial-Based Tools. 41 Eastern Pacific Ocean. .42 Capacity Trading System. 43 Dolphin Mortality Limits. .48 Market/Financial-Based Tools. 48 Pilot Projects. .50 Other Solutions for the FAD Bycatch Problem. .55 Indian Ocean. 57 Market/Financial-Based Tools. 63 Pilot Projects. .66 Northern Pacific. 70 Western Central Pacific. .80 Parties to the Nauru Agreement and the Purse Seine Vessel Day Scheme. 80 PNA and the Longline Vessel Day Scheme. 88 Tokelau Arrangement. .91 Market/Financial-Based Tools. 94 FIPS. .96 Pilot Projects. .98 Gaps and Strengths Regional Summary . 105 General Conclusions . 113 Definitions . .113 Motivation and Cohesion . 114 Equity and Fairness . .115 Side Payments. 115 Markets and Nudging. 116 Graduality. 116 Enabling Conditions. .116 Role of NGOs. .117 continues iv Literature Cited . 119 Appendix 1—Rights Based Management . 127 First Best Resource Rights Defined. 127 Enabling Conditions and General Design Questions . 127 RBM Implementation Challenges and Criticisms. 130 Community Management and RBM. .134 Appendix 2—Summary of ISSF Capacity Transfer Workshop . 137 v Abbreviations ABNJ Area Beyond National Jurisdiction IVQ Individual Vessel Quota AIDCP Agreement on the International Dolphin IUU Illegal, Unreported or Unregulated Conservation Program LL Long Line AK Alaska MCS Monitoring, Control and Surveillance ALB Albacore MPA Marine Protected Area BET Bigeye Tuna MSY Maximum Sustainable Yield BFT Bluefin Tuna MT Metric Tons BOBP-IGO Bay of Bengal Programme Inter- NAFO Northwest Atlantic Fisheries Organization Governmental Organisation NCP Non-Contracting Party CCAMLR Convention for the Conservation of NEAFC North East Atlantic Fisheries Commission Antarctic Marine Living Resources NGO Non-Governmental Organization CCSBT Commission for the Conservation of Southern Bluefin Tuna NMFS National Marine Fisheries Service CCM Commission members, cooperating non- NOAA National Oceanic and Atmospheric members and participating territories Administration CMM Conservation and Management Measure OPP Ocean Partnerships for Sustainable Fisheries and Biodiversity Conservation – CNM Cooperating Non-Member Models for Innovation and Reform CPC Contracting Party PL Pole and Line CPUE Catch-Per-Unit-Effort PNA Parties to the Nauru Agreement CSP Coastal States Principle PO Producer Organization DAS Days at Sea PS Purse Seine DWFN Distant Water Fishing Nation RBM Rights Based Management EEZ Exclusive Economic Zone RFMO Regional Fishery Management Organization EPO Eastern Pacific Ocean SBFT Southern Bluefin Tuna EU European Union SEAFO South-East Atlantic Fisheries Organization FAD Fish Aggregating Device SEAFPO Southeast Pacific Fisheries Organization FFA Forum Fisheries Agency SIDS Small Island Developing State FQA Fixed Quota Allocations SKJ Skipjack Tuna GEF Global Environmental Facility SSRU Small Scale Research Units GFCM General Fisheries Commission for the SWO Swordfish Mediterranean TAC Total Allowable Catch GloTT Global Think Tank TAE Total Allowable Effort HCR Harvest Control Rule TIS Trade Information Scheme IATTC Inter-American Tropical Tuna Commission UK United Kingdom IBSFC International Baltic Sea Fishery Commission UN United Nations ICCAT International Commission for Conservation of Atlantic Tunas UNFSA UN Fish Stocks Agreement ICES International Council for the Exploration of UNCLOS UN Convention on the Laws of the Sea the Sea USA United States of America ICM Incentive Compatible Management VDS Vessel Day Scheme ICNAF International Convention for the Northwest WCPFC Commission for the Conservation and Atlantic Fisheries management of Highly Migratory Fish IDCP International Dolphin Conservation Stocks in the Western and Central Pacific Program WCPO West Central Pacific Ocean IOTC Indian Ocean Tuna Commission YFT Yellowfin Tuna IQ Individual Quota ITQ Individual Transferable Quota vi Introduction 1 Introduction Stocks, such as tunas, billfish, and sharks, a broader, longer-term innovative vision for that migrate between areas beyond national ABNJ management. This activity responds jurisdictions (ABNJ) and national jurisdictions to GEF’s call for knowledge that informs and present complex management challenges. influences international debates and processes Globally tuna fisheries alone produce large related to the management of shared stocks. amounts of fisheries wealth, over $10 billion1 This report will review the use of incentive- annually, and account for up to 8 percent compatible mechanisms, such as rights-based of all seafood traded internationally (Pew 2016). However, these stocks are in trouble, with one-third overexploited, 37.5 percent Management of common pool, or fully exploited, and only 29 percent not fully open access, fishery resources is a exploited. While there is biophysical data about challenge and command-and-control these resources, there is a critical need to find innovative ways to build upon and improve regulatory frameworks tend to lead management frameworks to achieve sustainable to a race to fish. The race to fish leads social, economic, and environmental outcomes. to overfishing and the dissipation The World Bank’s project Ocean Partnerships of resource rents . Incentive-based for Sustainable Fisheries and Biodiversity management shows promise in Conservation—Models for Innovation and correcting the common pool or open Reform (OPP) responds to these challenges and access problem . seeks to fill critical knowledge gaps, with a focus at both the global and regional levels. At the global level, the OPP will facilitate a collaborative management (RBM) and market measures in process across all four regional projects under use across transboundary stocks, with an eye the World Bank’s GEF ABNJ program to provide to making suggestions that will enhance future advice on sustainable management of shared implementation of these types of interventions. highly migratory fisheries and conservation of This work is but a small part of the overall work of associated marine biodiversity. the GloTT and the World Bank’s GEF ABNJ project. This is being undertaken through a small but Management of common pool, or open access, potentially influential, Global Think Tank (GloTT) fishery resources is a challenge and command- comprised of a multidisciplinary group of globally and-control regulatory frameworks tend to lead to experienced specialists, with input from each of a race to fish. The race to fish leads to overfishing the four regional projects, together with other and the dissipation of resource rents.2 Incentive- experts that can inform the deliberations to based management shows promise in correcting address project challenges and conceptualize the common pool or open access problem. More 1 All dollar amounts are U.S. dollars except as noted. 2 Resource rent can be defined simply as the price an owner of the fishery can charge users of the resource. 2 Introduction specifically, incentive-compatible management decision-making are particularly evident in the (ICM) that includes market-based tools and rights- management of straddling stocks through RFMOs. based management (RBM) has been shown to As a result, marine ecosystems are in dire straits: rationalize fishing fleets. Rationalization produces the political process has become paralyzed while smaller, more profitable fleets. Higher profits are fishery value is destroyed. Wilen (2006) posits driven by product price increases from higher that the disagreement over the right course quality products or entirely new products being of action at the commission level is driven by developed, coupled with a reduction in fishing failure to agree on the root cause of the fishery costs as the fleet shrinks. Incentives, both push problem, which is that fishery resources are and pull incentives, increase stewardship and often commonly held. As a result, players seek to ends overfishing.
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