An Adjustment Restriction on Fish Quota: Resource Rents, Overcapacity and Recovery of Fish Stock

Research output: Contribution to journalArticleAcademicpeer-review

1 Citation (Scopus)

Abstract

Management objectives of the European Union for North Sea fish stocks are shifting towards considering both biological sustainability and economic benefits. As part of multiannual management plans, an adjustment restriction on fish quota has been introduced. Its objective is to obtain an efficient fish stock and to reduce overcapacity for the fishing industry. We develop and apply a bi-level stochastic dynamic programming model to study the effect of a quota adjustment restriction on the net present value of resource rents, overcapacity and fish stock, when the system is recovering from a downward environmental shock. At level one, a policy maker sets the quota, considering fishermen behavior, stochastic fish stock dynamics, capital stock dynamics and a quota adjustment restriction. At level two, fishermen harvest myopically and make long-term investment decisions, assuming that fish stock and quota do not change over time. The two levels are linked by the quota, which is optimized by the policy maker at level one and becomes a restriction for myopic harvest and long-term investment decisions of fishermen at level two. Our analysis suggests that in the long run, overcapacity can be reduced by 54 % at modest costs, namely at a 1 % reduction in the net present value of resource rents. Long and short run sustainability of the fish stock is not affected.

LanguageEnglish
Pages203-230
JournalEnvironmental and Resource Economics
Volume67
Issue number2
DOIs
Publication statusPublished - 2017

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Fish
Recovery
resource
fish
Sustainable development
sustainability
fishing industry
fish stock
Overcapacity
Resource rent
Dynamic programming
European Union
Economics
economics
cost
Costs
Industry
policy
harvest
decision

Keywords

  • Fisheries management
  • Investment behavior
  • Quota adjustment restriction
  • Stochastic dynamic programming

Cite this

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title = "An Adjustment Restriction on Fish Quota: Resource Rents, Overcapacity and Recovery of Fish Stock",
abstract = "Management objectives of the European Union for North Sea fish stocks are shifting towards considering both biological sustainability and economic benefits. As part of multiannual management plans, an adjustment restriction on fish quota has been introduced. Its objective is to obtain an efficient fish stock and to reduce overcapacity for the fishing industry. We develop and apply a bi-level stochastic dynamic programming model to study the effect of a quota adjustment restriction on the net present value of resource rents, overcapacity and fish stock, when the system is recovering from a downward environmental shock. At level one, a policy maker sets the quota, considering fishermen behavior, stochastic fish stock dynamics, capital stock dynamics and a quota adjustment restriction. At level two, fishermen harvest myopically and make long-term investment decisions, assuming that fish stock and quota do not change over time. The two levels are linked by the quota, which is optimized by the policy maker at level one and becomes a restriction for myopic harvest and long-term investment decisions of fishermen at level two. Our analysis suggests that in the long run, overcapacity can be reduced by 54 {\%} at modest costs, namely at a 1 {\%} reduction in the net present value of resource rents. Long and short run sustainability of the fish stock is not affected.",
keywords = "Fisheries management, Investment behavior, Quota adjustment restriction, Stochastic dynamic programming",
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year = "2017",
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An Adjustment Restriction on Fish Quota : Resource Rents, Overcapacity and Recovery of Fish Stock. / van Dijk, Diana; Hendrix, E.M.T.; Haijema, Rene; Groeneveld, R.A.; van Ierland, E.C.

In: Environmental and Resource Economics, Vol. 67, No. 2, 2017, p. 203-230.

Research output: Contribution to journalArticleAcademicpeer-review

TY - JOUR

T1 - An Adjustment Restriction on Fish Quota

T2 - Environmental and Resource Economics

AU - van Dijk, Diana

AU - Hendrix, E.M.T.

AU - Haijema, Rene

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AU - van Ierland, E.C.

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AB - Management objectives of the European Union for North Sea fish stocks are shifting towards considering both biological sustainability and economic benefits. As part of multiannual management plans, an adjustment restriction on fish quota has been introduced. Its objective is to obtain an efficient fish stock and to reduce overcapacity for the fishing industry. We develop and apply a bi-level stochastic dynamic programming model to study the effect of a quota adjustment restriction on the net present value of resource rents, overcapacity and fish stock, when the system is recovering from a downward environmental shock. At level one, a policy maker sets the quota, considering fishermen behavior, stochastic fish stock dynamics, capital stock dynamics and a quota adjustment restriction. At level two, fishermen harvest myopically and make long-term investment decisions, assuming that fish stock and quota do not change over time. The two levels are linked by the quota, which is optimized by the policy maker at level one and becomes a restriction for myopic harvest and long-term investment decisions of fishermen at level two. Our analysis suggests that in the long run, overcapacity can be reduced by 54 % at modest costs, namely at a 1 % reduction in the net present value of resource rents. Long and short run sustainability of the fish stock is not affected.

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