Free Market Answer to Saving Ocean Fisheries
In 1978 Barrett Walker went snorkeling in the blue-green waters off the Virgin Islands, exploring a vibrant coral reef at Buck Island. There he saw “a coral cathedral filled with fish.” Not just any fish, but a mosaic of underwater life and diversity.
Twenty years later, Walker returned to Buck Island to snorkel. Those joining him marveled at the species that swam by, as well as the underwater environment, but Walker was unimpressed. “I saw a lot of rubble,” said Walker, now 55 and president of the Atlanta-based Alex C. Walker Foundation. “I saw a lot of dead, broken coral covered with algae, and a lot less fish. The fish I did see were smaller. What the others didn't know is what it looked like before.”
Barrett Walker's uncle Alex established the foundation in 1968 with the wealth accumulated by Thomas Walker, one of Pittsburgh's great nineteenth-century industrialists. Today it has an endowment of about $8 million and promotes market-based solutions to environmental problems.
Walker's reef experience illustrates an alarming ecological fact: The world's fish population is in trouble. Many of the fisheries that once seemed to have an unlimited supply of fish have declined or collapsed. They include the New England cod fishery, the Pacific groundfish fishery, and the Gulf of Mexico red snapper fishery. “We're in a spiral of fish depletion that will affect not only the ecosystem, but humans,” Walker said. “It's a very bad picture.”
Barrett Walker, shown fishing along the Outer Banks, wants to build a cooperative approach among nonprofits working to preserve ocean fisheries through individual fishing quotas.
The main problem, nearly everyone agrees, is over-fishing, which is caused by a variety of factors, including advanced technology that has given humans an unfair advantage in the age-old contest between man and the creatures of the sea. In an effort to preserve fish populations, governments have put tough limits on the number of fish that may be caught. In some instances they have shortened months-long fishing seasons to a few pressure-packed days. The result has been a survival-of-the-fittest fishing competition that only increases the already fierce battle between fishing crews, which in turn endangers lives as fishermen are forced to take on untimely storms and each other.
In general, this approach has failed to increase fish populations, and in some places has made matters considerably worse. Walker prefers a radically different approach: “individual fishing quotas,” or IFQs.
With IFQs, government authorities determine how many fish can be caught without damaging the fishery. They then allocate a percentage of the total catch to each fisherman. If a fisherman wants to catch more fish, he can buy quota shares from others. If he wants to catch less, he can sell some or all of his share.
“You have an exclusive right to catch a quantity of fish,” explains Peter Emerson, an economist with Environmental Defense, a New York–based nonprofit that receives Walker Foundation funds to promote IFQs. “Behavior changes dramatically with individual fishing quotas. Fishermen change from looking at a fishery as a commons to be exploited as rapidly as possible to seeing it as a valuable, sustainable resource in which they have an ownership stake.”
Emerson is referring to what has been called “the tragedy of the commons,” in which each person grabs what he can as fast as he can from a resource held in common—a patch of public grazing land, for instance, or a bay's stock of fish—with little regard for the resource or for the other citizens who share in its bounty. If something belongs to everyone in common, in other words, no one has an incentive to care for it. But if a resource like a stock of fish is split into discrete lots of private property, each person's ownership provides incentives to conserve that property for the long run.
For example, one advantage of IFQs is that they lengthen the fishing season, dramatically slowing the breakneck “fishing derby” that plagues some fisheries. “Fisheries with a Future,” an Environmental Defense document arguing for IFQs, points to Alaska and the halibut season as an example of what this approach can accomplish.
Before IFQs were implemented in 1995, the report says, Alaska fleets had become so effective in catching halibut that the legal fishing season was reduced to two days. The small window of opportunity forced crews to work 48 consecutive hours, even it that meant going out in dangerous weather conditions. Boats and lives were lost. The race against time also led to crews putting more hooks in the water than they could pull in during the two-day season. At season's end, crews left the extra hooks. There was no time to struggle with tangled lines; so they were simply cut loose. The lines, however, continued to lure and kill fish—a destructive process known as “ghost fishing.”
Too rushed to search for concentrations of larger halibut, fishermen caught whatever they could, throwing away “bycatch,” which are undersized fish and fish of other species. It was an environmental tragedy. Economically, the impact was also grim. Fishermen were forced to sell their catch in a glutted market, which depressed the value of their catch. Because only larger fish processors were equipped to handle the high volume coming in those few days, the number of potential buyers was reduced, thus further lowering prices. Further, with all the fish arriving at once, the market for fresh halibut almost disappeared. Nearly all the fish had to be frozen, with the end result that halibut ordered at restaurants wasn't as tasty as it could have been and fishermen did not receive the full potential value of their catch. Only large processors of frozen fish were happy.
In 1995, Alaska implemented individual fishing quotas. In the very first year, the halibut fishing season expanded dramatically, from two days to eight months. With annual shares safe in the water, crews stayed home during bad weather. Not a single life was lost.
“When fisheries are in poor shape economically, one of the first things that suffers is safety,” Alaska halibut shareholder Kevin Sather is quoted as saying in the Environmental Defense report. “For us, safety is the biggest advantage. Our distress signals went way down after the IFQ system was implemented.”
The first year that IFQs were established in Alaska, ghost-fishing catches dropped from 554 metric tons to 126 metric tons. Bycatch was reduced more than 80 percent. Further, fishing crews earned higher prices for their catch, and the smell of fresh halibut returned to restaurant kitchens. The improvements revived the Alaskan halibut fishery.
Despite this startling success, large fish processors were able to persuade Congress to put a moratorium on the exploration and use of IFQs. Unable to resolve disagreements over how to manage quota systems, Congress stalled for more time, calling for a study to examine the issue.
The Walker Foundation would like to see Congress bring back individual fishing quotas. In conjunction with the Bradley Fund for the Environment in Madison, Wisconsin, and the Charles G. Koch Foundation in Washington, D.C., the Walker Foundation has given a total of $54,000 in grants to Environmental Defense and two other charities to educate Capitol Hill legislators about IFQs. Walker says his foundation deliberately chose not to fund just a single charity. Instead, it wanted to challenge nonprofits that might otherwise have competed against one another to come together.
The grant money is sponsoring three meetings over lunch between members of Congress, fishermen, and environmental experts. The first meeting was held in November 2003. “We anticipate that if this is successful, there will be additional funding,” says Walker.
“It is really important for the nonprofit sector to get involved environmentally if they want to present alternatives to command-and-control regulations,” says Donald Leal, a senior associate at the Property & Environment Research Center, or PERC, another of the grant recipients. “In the fisheries world, the old way is telling fishermen when, where, and how to fish. That's been the traditional approach for 50 years, and it has not been effective in preventing over-fishing.”
The project's third grant recipient is Reason Public Policy Institute, a Los Angeles think tank that promotes a dynamic market economy. “You might call this a venture capital initiative,” Walker explains, “in which we're trying to develop a cooperative approach between grantees.”
Walker is talking to others about market-based solutions to environmental problems. By spreading the word, market-based solutions gain credibility. “It helps people understand that this isn't just one guy with a solo idea,” says Emerson, “but a group of thoughtful people trying to get behind a new way of doing things.
—Mark O'Keefe
Philanthropy • January/February 2004
(ecokeefe@verizon.net) is a national correspondent for Newhouse News Service in Washington who writes about values and philanthropy.