Why the Free Market Can't Fix Overfishing

Photo by ROBERTO SCHMIDT/AFP/Getty Images

"Catch shares" are the latest fix-all solution to the world's overfishing crisis, and that's too bad. The idea was recently promoted by Gregg Easterbrook here in The Atlantic, and NOAA Administrator Jane Lubchenco has committed her agency to " transitioning to catch shares as a solution to overfishing. Although it's tempting to think that property rights will transform fishing into an industry focused on long-term sustainability, catch-shares are really just a retread of the same "markets will fix everything" thinking that has been thoroughly discredited.

Catch-shares allocate portions of the total catch within a fishery and give fishers a property-like right to a share of the fish. (These permits are freely tradable on the open market.) The alternative is open-access, in which anyone may catch fish until the total quota for the fishery is reached. Not surprisingly, open-access fisheries often involve a mad scramble to capture as large a share of fish as quickly as possible, the so-called "fisherman's dilemma."

Catch-shares remove the incentive to catch all the fish immediately, but the real management challenge is deciding how many fish should be caught in the first place. Regardless of whether a fishery is open-access or allocates catch-shares, it is only sustainable if the total level of fishing is low enough to allow fish populations to regenerate.

Unfortunately, total catch limits are often short-sighted. While setting the total allowable catch is theoretically a scientific decision, fishery managers face intense pressure to interpret every ambiguity in favor of allowing more, rather than less fishing. Sustainable levels of fishing fluctuate with environmental conditions: one year it might be fine to catch 100 tons of fish, while the next year even 10 tons might be too much. But the fishing industry depends on predictable levels of catch. Uncertainties inherent to estimating the "right" level of fishing makes it hard for managers to defend decisions to reduce fishing.

That brings us to the real problem with fisheries: overcapacity. There are simply too many boats chasing too few fish. The catch-share approach tries to solve this problem by creating a permit trading market. The thinking is that the permits will consolidate in the hands of "rational and efficient" producers who will voluntarily forego using a portion of their shares. That won't happen. The recent financial crisis ought to give anyone pause about the claim that markets inherently promote choices that are in everyone's long-term best interest.

Catch-shares assume that regulators can enforce the catch-share limits they grant. That's easier said than done. Regulators have sharply defined territorial jurisdictions, but fish do not cooperate by staying in one place. Fish move between countries' Exclusive Economic Zones (waters under the effective control of a coastal state) and the high seas. Boats on the high seas can undermine a coastal state's rigorously set catch limits (Spain and Canada almost went to war over this in the 1990s). Even when a fishery is under the control of a single state, most governments don't have the capacity to make sure each boat takes only its allotted catch-share.

Catch-shares also fail to address bycatch, the dirty little secret of the fishing industry. By most estimates, at least 40 percent of every catch is discarded as bycatch--fish other than the target species, including at least half a million endangered marine mammals and an unknown number of endangered sea turtles. Catch-shares will exacerbate this problem by creating a powerful incentive for fishing boats to discard not only unwanted or uncommercial fish, but also any fish potentially subject to someone else's share.

Moreover, privatizing the ocean through catch-shares has troubling social justice implications. Catch-shares are typically awarded to boat owners on the basis of fishing capacity, rather than to each fisher on a per capita basis. Those with big boats benefit richly, but their workers are shut out of any ownership stake. This is the same "give to the rich" dynamic that distorts privatization schemes around the world.

This is not to say that catch-shares are necessarily a bad idea, but neither are they a panacea. What's needed is a cultural change--governments should remove subsidies for fishing fleets and use the savings to fund new opportunities for fisher folk. We need to recognize that there are real, albeit imperfectly understood, biological limits to ocean ecosystems. Uncertainty calls for precaution in setting fishing levels, no matter how economically inconvenient, and no matter how painful for affected fishing communities in the near-term. There is not always another fish in the sea.