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Assessing the costs and benefits of individual transferable quota management in the Tasmanian southern rock lobster fishery, Australia

Emery, TJ 2014 , 'Assessing the costs and benefits of individual transferable quota management in the Tasmanian southern rock lobster fishery, Australia', PhD thesis, University of Tasmania.

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Understanding how fishers behave and make decisions is critical in determining
how best to manage fisheries. If the response of fishers to management measures
can be predicted, unexpected and undesirable outcomes can be avoided. Individual
transferable quota (ITQ) management has been introduced in many international
fisheries, with the purpose of accounting for human behaviour, as it theoretically
generates behavioural incentives that are aligned with management objectives (e.g.
reducing fishing costs). The ability of ITQ systems to meet continuing economic,
ecological and social objectives therefore is centred on ensuring fisher behavioural
incentives remain aligned with those objectives. This thesis used the Tasmanian
southern rock lobster (TSRL) fishery in Australia as a case study to assess
changing fishing practices and behaviour of fishers under ITQ management and
how this had evolved through time. The aim was to improve general understanding
of how ITQ implementation and design may affect fisher decision-making and
improve certainty in fishery management outcomes.
It is critical that an ITQ system is able to manage interactions with all ecosystem
components (e.g. non-target species) as required under ecosystem based fisheries
management (EBFM) principles. The TSRL fishery to some extent, was more
successful than other fisheries in accounting for these interactions, due to the
selective and benign nature of potting. In many sustainably certified fisheries,
input controls continue to be used in place of ITQ systems to manage ecosystem
components, particularly in non-selective fisheries (e.g. trawl). The continued use of
input controls however, can reduce the security of a fisher’s ITQ right through loss of access and potentially separate their incentives and behaviour from management
Successful ITQ management also requires the managing authority to set a binding
total allowable catch (TAC). Between 2008 and 2010, the TSRL had a non-binding
TAC, which reduced the price of quota on the market and caused a reactivation of
latent effort, increase in fleet capacity, reduction in economic efficiency and
dissipation of economic rent, as fishers engaged in a competitive race to fish during
times of high revenue. Changing fishing practices such as “double night fishing”
during these years also had the potential to lead to localised stock depletion
through concentration of effort, however the format of the commercial logbook
prevented a precise assessment of the fleet-wide extent and impact of double night
fishing. Consequently, this research highlighted the importance of being able to
collect fine-scale spatial and temporal data on fishing effort in order to enhance
It is also important in an ITQ system that those actively fishing own the majority of
their quota units. An implicit assumption behind the theory of ITQs is that those
fishing are quota owners, however in many developed ITQ fisheries, with free
transferability of quota units, the majority of the fishing is undertaken by lease
quota fishers. Following analysis of the physical risk tolerance of both quota
owners and lease quota fishers in the TSRL fishery, it was evident that their
behavioural drivers were divergent. Lease quota fishers were more responsive to
changes in expected revenue than quota owners, leading in some areas to
significantly higher risk tolerance levels. In other words lease quota fishers were
more prepared to take greater risks at sea than quota owners when expected revenue was high. This result was not entirely unexpected as lease quota fishers
face high costs of leasing quota and an increasing “cost price squeeze” between
what that must pay to lease quota and what they are paid for their catch.
Consequently, their behavioural incentives and underlying business structures are
likely to be different. This was also evident in a series of economic experiments that
were conducted to examine the propensity of groups with varying numbers of quota
owners and lease quota fishers, to coordinate to prevent assignment problems that
cause economic rent dissipation. Heterogeneous groups of lease quota fishers and
quota owners were less successful in coordinating with communication than
homogenous groups of quota owners. This was because lease quota fishers were
less likely to adopt a socially-optimal strategy for preventing rent dissipation
compared with quota owners due to having: (i) inequality in wealth; (ii) insecurity of
tenure and; (iii) asymmetric information exchange. It was only through the
institution of income-sharing cooperatives that lease quota fishers chose to
coordinate because income-sharing offset the incentive to over-appropriate the
resource, if participants doubt that others would do the same. While requiring
external validation in the field, the results highlight the importance of recognising
and understanding the differing behavioural incentives of lease quota fishers and
quota owners. They also highlight the need for managers to consider the trade-offs
associated with allowing free transferability of quota units and whether this meets
overarching management objectives.
While contributing to further discussion and debate on the costs and benefits of
ITQ management, this research highlighted the importance of understanding
behavioural incentives of different types of fishers in order to inform management
decision making. This type of research now and in the future has the potential to inform and ultimately improve the design and implementation of ITQ management

Item Type: Thesis - PhD
Authors/Creators:Emery, TJ
Keywords: Jasus edwardsii, fisheries management, behaviour, ITQ, southern rock lobster, experimental economics, leasing, quota
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Copyright 2014 the Author

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