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“Scaring the Fish” Center for Ecological Economic and Ethical Education 19 November 1999 “SCARING THE FISH” A Critique of the NRC’s Justification for Individual Transferable Quotas (ITQs) and A ‘Systems Analysis’ of Their Likely Effects prepared at the request of Niaz Dorry Greenpeace, U.S. Oceans Campaign by Frederic B. Jennings, Jr., Ph.D. Center for Ecological Economic and Ethical Education I. Introduction In the 1996 Sustainable Fisheries Act (SFA), amending the 1976 Magnuson-Stevens Fishery Conservation and Management Act (M-S Act), Congress asked the National Academy of Sciences (NAS)1 to examine the notion of individual fishing quotas (IFQs) as an approach to fisheries management. Then, “not later than October 1, 1998, the NAS, in consultation with the Secretary of Commerce (SC) and the Regional Fishery Management Councils (RFMCs), shall submit to the Congress a comprehensive final report on IFQs, which shall include recommendations to implement a national policy with respect to IFQs.”2 According to the SFA mandate, this report, called Sharing the Fish,3 “shall include a detailed analysis of IFQ programs 1 The NAS, chartered in 1863, is “a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare,” with “a mandate that requires it to advise the federal government on scientific and technical matters,” according to the National Research Council (NRC) Report, Sharing the Fish: Toward a National Policy on Individual Fishing Quotas (Washington, DC: National Academy Press, 1999), p. vi (henceforth to be identified as “Sharing the Fish”). 2 Section 108(f)(1) of the M-S Act, a “legislative mandate from the SFA,” cited in Sharing the Fish, Appendix A, p. 243. 3 Cf. note 1 above for full reference. -1- Center for Ecological Economic and Ethical Education 19 November 1999 already implemented in the United States”4 and “shall identify and analyze alternative conservation and management measures, including other limited access systems…”5 This SFA amendment to the M-S Act also required that: The SC shall, in consultation with the NAS, the RFMCs, the fishing industry, affected States, conservation organizations and other interested persons, establish two IFQ review groups to assist in the preparation of the report, which shall represent: (A) Alaska, Hawaii, and the other Pacific coastal States; and (B) Atlantic coastal States and the Gulf of Mexico coastal States. The SC shall, to the extent practicable, achieve a balanced representation of viewpoints among the individuals on each review group. The review groups should be deemed to be advisory panels under section 302(g) of the M-S Act, as amended by the SFA.6 The National Research Council (NRC), “organized by the NAS in 1916 to associate the broad community of science and technology with the NAS’s purposes of furthering knowledge and advising the federal government, … has become the principle operating agency of the NAS and the National Academy of Engineering (NAE) in providing services to the government, the public, and the scientific and engineering communities.”7 The NRC, through its Ocean Studies Board (OSB), appointed a Committee to Review Individual Fishing Quotas (IFQRC), made up of fifteen members and three staff.8 The IFQRC issued a draft report for review and discussion in late 1998, and then produced a final report, Sharing the Fish, in early 1999. This report, Sharing the Fish, was reviewed by an independent panel of eight individuals9 selected by the NRC for “their diverse perspectives and technical expertise … to ensure that the report meets institutional standards for objectivity, evidence and responsiveness to the study charge.”10 Also acknowledged for their input, and thanked for their “diligence and interest,” was an alphabetical list of 144 individuals, along with staff from various state and federal organizations. “Special thanks” were also accorded to “the National Oceanic and Atmospheric Administration (NOAA) Advisory Panels set up by Congress to ‘assist in the preparation of the report,’” under the National Marine Fisheries Service (NMFS), with respect to their fifteen representatives each from the east and west coasts. These panels met twice with the IFQRC, and their “inputs were very helpful.”11 They also issued a brief nine-page report in May 1999, summarizing members’ comments.12 4 M-S Act, Section 108(f)(2), as quoted in Sharing the Fish, p. 244. 5 M-S Act, Section 108(f)(3), as quoted in ibid., p. 245. 6 M-S Act, Section 108(f)(4), as quoted in ibid., p. 245. 7 Sharing the Fish, p. vi. 8 Twelve of those fifteen members were practicing academics, with expertise in the following fields: marine sciences (1); economics (4); anthropology (4); law (1); environmental technology (1); and political science (1). The remaining three (nonacademic) appointments included the chair (with a legal background), a New Zealand fisheries scientist, and the chief executive officer (CEO) of a professional forestry firm. 9 This panel included one fishing industry spokesperson and seven academics. 10 Sharing the Fish, p. vii. 11 Sharing the Fish, pp. ix-xi. 12 National Marine Fisheries Service’s IFQ Advisory Panel Report on the National Research Council Report “Sharing the Fish: Toward a National Policy on Individual Fishing Quotas,” May 1999. The composition of these panels, as indicated in Appendix B of this document, is of interest. The East Coast Panel, chaired by an academic environmental economist and strong advocate of ITQs, was composed of fourteen other members, over half of whom were from the commercial fishing industry. The other half included one academic, two fisheries management people, one private -2- Center for Ecological Economic and Ethical Education 19 November 1999 A. National Standards of Fisheries Management in the Magnuson-Stevens Act The general thrust of this study – as recommended by the NRC in its final report on IFQs, Sharing the Fish – is that a fisheries management system based on individual transferable quotas (ITQs) should be adopted as national policy by the SC and the NMFS, as a means of fulfilling the National Standards in the M-S Act. These standards call for “any fishery management plan” to meet the following criteria: (1) to “prevent overfishing while achieving, on a continuing basis, the optimum yield 13 from each fishery…;” charter boat owner, and only one environmentalist. The West Coast Panel – chaired by an Alaskan nonacademic – was made up of fourteen people as well, of which eight were in the fishing industry, with the other six including one academic, one fisheries manager and two environmentalists. The overwhelming representation of fishing industry interests seems to be quite typical of the NMFS and its approach to fishery management choices. 13 Standard 1 – the first on the list – does not include definitions of “overfishing” or “optimum yield,” at least according to Sharing the Fish. Carl Safina, director of the National Audubon Society’s Living Oceans Program, founder of the Ma- rine Fish Conservation Network, voting member of the Mid-Atlantic Regional Fisheries Management Council, and noted author of Song for the Blue Ocean: Encounters Along the World’s Coasts and Beneath the Seas (New York: Henry Holt and Company, 1997), in an essay on “Where Have All the Fishes Gone?” (Issues in Science and Technology, Spring 1994, pp. 37-44), p. 42, indicates that, though… …overfishing is undefined, … optimum yield is defined as the maximum sustainable yield ‘modified by any rele- vant economic, social or ecological factor.’ This definition sounds eminently reasonable but it can be used to justify virtually any catch level, including one that exceeds the reproductive abilities of fish. But the economic arguments suggest that the fishery stock size for an “optimal yield” does not lie below but above the biomass level for maximum sustainable yield (MSY) if fishing costs per unit of effort fall as stocks increase (which they do). As Daniel V. Gordon and K. K. Klein explain, for example, in a paper on “Sharing Common Property Resources: The North Atlantic Cod Fishery,” ch. 13 in Mohammed H. I. Dore and Timothy D. Mount, eds., Global Environmental Economics: Equity and the Limits to Markets (Malden, MA: Blackwell, 1999), p. 288: If the objective of government intervention is not only to sustain the stocks but also to maximize economic profit, the optimal harvest level is obtained at a stock level … [with] the greatest distance between total revenue and total cost [on a graph, where their slopes are equal to that of the fishery biomass growth function relative to stock size, which is the common representation of these single-species analyses… – FBJ]. The difference between revenue and cost for the harvest … represents the maximum profit possible in the fishery. … It is important to note that the optimal economic equilibrium is characterized by a larger stock level than the maximum sustainable yield level. Consequently, economic rationale calls for a more conservative management strategy in terms of stock size than required under the objective of maximizing sustainable yield. [emphasis added] So, on the basis of the definition supplied by Safina, the economic claim is clear, that “optimum yield” requires a higher stock size than does a standard based on “maximum sustainable yield.” The ecological arguments shall likely also work for more conservative fishing limits through a precautionary approach, given the many uncertainties involved in ocean fisheries and the effort to estimate these stocks. Social concerns – on the other hand – depend on discount rates and the embrace or range of ‘planning horizons,’ which should include the needs of future as well as present generations. And if the private rates of return required, due to the risks of fishing, exceed the expected present value of the capturable earnings growth path that comes from reproduction of fisheries, then the resource shall be overexploited down to commercial extinction anyway for private gain.
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