Applying the principles to find solutions

5. Applying the principles to find solutions

Several instruments can be used to solve the problems outlined above, as summarized in An- tunes and Santos 1999. Below we highlight, by way of example, a few cross-cutting strategies that can incorporate many of the Lisbon principles simultaneously. Achieving sustainable governance of the oceans will require an ongoing, participa- tory and open process involving all the major stakeholder groups the participatory principle and will require integrated assessment and adap- tive management the adaptive management prin- ciple. The examples below could form an important starting point and input to that process. 5 . 1 . Share-based fisheries Fisheries management has traditionally been carried out on a species-by-species basis with little regard to: 1 interactions with other species or ecological effects at relatively small scales, even for the species of concern; and 2 the pattern of individual incentives created by regulation. ‘Share based’ fisheries and co-management schemes might remedy these problems. Initial steps in this direction have been taken with the creation of systems of individual transfer- able quotas or ITQs. The ITQ system is one in which the individual harvester is given a tradable right in a share of the annual quota for a single species fishery. In other words, if a harvester holds a 1 share, each year the harvester is entitled to harvest 1 of whatever the quota happens to be that year. Quota rights generally can be leased or sold. ITQs have had very positive economic effects. Compared with open access quota fisheries, ITQs have eliminated the ‘race for fish’ and the excessive levels of capitalization that result. ITQs also give their owner an asset whose value is tied to the value of the resource. In theory this should provide a strong incentive for conser- vation, but in practice it is not yet clear whether other conflicting micro-incentives re: resource un- certainties, enforcement, employees, etc. mini- mize the actual conservation effects. And, of course, ITQs are single species schemes that tend to treat the species as if it existed in an ecological vacuum. Alternatives to ITQs are beginning in a number of locations the papers by Wilson et al., 1999 and Young, 1999 report on two of these experiments. The New South Wales NSW, Australia system described by Young 1999 is a flexible adaptation of an ITQ system. Unlike an ITQ system, the NSW system is applied to broadly defined fisheries that might include a number of compo- nent fisheries defined in terms of species, gear types and areas. In this system harvesters will be given rights based on past fishing experience; these rights will be tradable perpetual shares in the broadly defined fishery. In quota managed component fisheries these shares translate into the equivalent of an ITQ, and in non-quota fisheries the shares provide the basis for participation. For example, the plan for a non-quota fishery with a particular gear type may stipulate that 15 000 shares in the broadly defined fishery are required to operate a 6 m vessel in that component fishery; that is, stipulations on participation in any com- ponent fishery may be stated in terms of inputs as well as outputs with either translatable into shares in the broader fishery. Shares in the system are strictly limited, as in a corporate setting, and entry is possible only by purchasing existing shares. A unique aspect of the NSW scheme is the system of continually revised plans and contracts and the option of ‘drop through’ provided to harvesters. Plans for each fishery, including terms for individual contracts, are initiated by the man- aging agency. Contracts extend for 10 years but are renewable every 5 years; however, when a new plancontract is initiated, harvesters have the abil- ity to reject the plan and continue operations for up to 5 years under their old contract. The con- tract stipulates the conditions under which users are permitted to exploit the fishery. This provides users with considerable negotiating leverage at the time of contract renewal and is designed to assure local user input. It is expected that the sharescon- tract approach will enable a flexible management system that is able to evolve continuously, but in an orderly fashion. The system under development in the state of Maine USA has similar objectives to the NSW scheme; it is based upon the premise that har- vesters recognize their collective dependence upon sustainable resources, but lack the governing insti- tutions required to achieve that collective end. Consequently, the Maine system is designed as an ecosystem governance scheme in which the au- thority for fishery rule making is divided among local, regional and statewide elected representa- tive bodies of users. The principle of subsidiarity is used to assign authority to the different gover- nance levels; that is, rule making authority is taken to the lowest level at which it can be expected that the costs and benefits of the rule are contained within the jurisdiction of that authority. As a consequence, rules whose direct ecological and economic effects are felt throughout the fish- ery are made at the statewide level; rules whose direct and preponderant impact is at the local level are made at that level. A primary advantage of this division of authority is the ability to ad- dress a great deal of local ecological and fishery- specific detail that would overwhelm a centralized system. Unlike the NSW system or ITQs, the Maine system does not place strict limits on entry nor does it create a tradable individual right. Instead the system depends upon an apprenticeship pro- gram of 2 years; the program is designed to slow or eliminate the periodic spurts of entry that appear to be responsible for most new effort and, equally, to create a long-term personal commit- ment to the health of the resource. As in the NSW system, the Maine system will cover the entire range of species. An overall license is required for participation in any fishery and in addition a person must hold a card for particular component fisheries, but not for all. For example, of the, say, ten component fisheries covered by the overall license a person may hold cards for only four. If the person wishes to participate in another fishery, the card for participation in one of the four currently used must be given up. Rules governing the timing and amount of movement between component fisheries are made at the state level. The purpose of this licensing scheme is to provide the traditional flexibility required by inshore har- vesters, but at the same time to restrain movement when necessary to avoid boom and bust responses to the natural variability of the various stocks. 1. Responsibility principle: share-based, fishery approaches tend to create local level manage- ment institutions to supplement existing ‘top down’ management structures. In these new institutions fishermen are required to assume responsibility for conservation of the resource while the governmental institution retains the authority for the management of broad scale ecological events. 2. Scale-matching principle: decentralization has a number of attributes that facilitate ecological approaches to fisheries management. Local level institutions are generally better able to identify the recipients of both costs and benefits and assign responsibilities that inter- nalize both. They tend to bring local ecological information about habitat and stock interac- tions into the management system quickly and with a minimum of information costs. 3. Precautionary principle: by adequately allocat- ing property rights, these systems encourage a more precautionary approach to management. Fishers are more likely to be precautionary if their share of the system is at risk and they can reap the benefits of behaving in a more pre- cautionary way. 4. Adapti6e management principle: as in an ITQ system the tradable property right provided to users is relied upon to generate incentives for conservative behavior on the part of individu- als and, equally, collective incentives to sanc- tion or report those harvesters who violate the contract. The Maine system began operation in July of 1996, implementing legislation of the previous year. Initially only the lobster fishery was brought into the scheme, but this fishery is the ‘core’ fishery in the state with nearly 80 of licensed fishermen. As operating procedures are worked out and experience gained with the system other fisheries will be gradually brought in. It is expected that relatively seden- tary fisheries will be brought in first with the more mobile fisheries coming in later. Finally, it should be noted that as the system develops more and more control will devolve to the elected bodies of users and they will determine its further evolution, in a manner consistent with the adaptive management principle. 5. Cost allocation principle: the principal objec- tive of these systems is the creation of individ- ual incentives that are consistent with the collective objective of a sustainable resource. It is expected that the high level of participation required by the system will result in rules that 1 are credible i.e. that users will have confi- dence that restraint on their part will have the intended effect; 2 provide assurances that others will follow the rules or be prepared to collectively sanction those who don’t; and 3 are equitable in the sense that individual costs are borne roughly in proportion to the benefits received. 6. Full participation principle: these systems are organized to maximize user participation and, if local level institutions are given authority for management rules whose impact is contained within the locality, those rules tend to be credible, viewed as aligned with individual in- terests and, consequently, are less subject to difficult enforcement problems. 5 . 2 . Integrated watershed management It is becoming increasingly clear that coastal ecosystems, and indeed the oceans themselves, are affected greatly by human activities that take place inland from the immediate coastal margin. Activities throughout watersheds influence the de- livery of fresh water, sediments, and pollutants to estuaries, bays, and continental shelf waters. Large areas have been affected by alterations in salinity, with attendant changes in circulation, nutrient over-enrichment, sedimentation or sedi- ment starvation, and contamination by land- based toxicants. Addressing these problems requires not only the regulation of emissions, but also managing the distribution of populations, land uses, and consumption patterns throughout the watersheds. Increasingly, regional e.g. North, Mediterranean, and Baltic Seas and sub-regional estuary management programs ocean gover- nance schemes are addressing land-based sources of pollution through integrated watershed man- agement approaches. Integrated watershed man- agement can incorporate the Lisbon principles in several ways. 1. Responsibility principle: a watershed level of analysis and management can better identify those responsible for ‘exportation’ of the prob- lems downstream and aid in implementing the responsibility principle. 2. Scale-matching principle: all stakeholders for specific management decisions — both up- stream and downstream — can be engaged in the decision making processes. The concept of ‘watershed councils’ as an integrating body can be implemented and these councils can be represented at all levels decision. 3. Precautionary principle: managing the distri- bution of human populations, the ‘ecological foot prints’ and land uses is an important component of watershed management. This may involve restricting the spread of land de- velopment and, limiting density in particularly sensitive coastal and riparian areas, and, par- ticularly in developing nations, steps to provide opportunities for settlement away from densely occupied and stressed coastal areas in line with the precautionary principle. 4. Adapti6e management principle: information on the status of the watershed and down- stream effects can be made broadly available to stakeholders and integrated in the decision- making process in line with the adaptive man- agement principle. 5. Cost allocation principle: watershed councils and other bodies can also implement the full cost allocation principle via environmental taxes, bonds, or other mechanisms see below. 6. Full participation principle: mechanisms can be included in order to ensure that decisions are made with full participation of stakeholders, in line with the participation principle. 5 . 3 . En6ironmental bonding Environmental bonding has been proposed Costanza and Perrings, 1990 as a method to incorporate the uncertainty about environmental impacts in market incentives. It requires posting a financial bond to cover the worst expected dam- ages from an activity which could be refunded if the damages did not occur. Otherwise it can be used to mitigate damages. This instrument com- plies with the Lisbon principles in the following ways. 1. Responsibility principle: it complies with the responsibility principle by making parties financially responsible for their potential impacts. 2. Scale-matching principle: it complies with the scale-matching and cost allocation principles by internalizing costs at all scales. 3. Precautionary principle: it complies with the precautionary principle by requiring payment up front for uncertain future damages. In fact, it represents a combining of the cost-allocation and precautionary principles that gives some guidance as to how precautionary we should be. The system has also been called the ‘pre- cautionary polluter pays principle’ or 4P Costanza and Cornwell, 1992. 4. Adapti6e management principle: it could be an important component in an adaptive manage- ment system see watershed management above. 5. Cost allocation principle: it represents an in- strument for allocating the full costs of not only known environmental impacts, but also the much larger and more important category of uncertain impacts. 6. Full participation principle: finally, in order to be effective, it would require full participation in the details of its design and implementation for specific problems. For example, the problem of oil spills could be addressed by designing a system with full partici- pation that required environmental bonds to be posted on all oil in transit. The bond would be refunded if the oil arrived safely and forfeited if a spill occurred. This would internalize costs and give oil transport operations strong economic in- centives to reduce the possibility of spills. They could, for example, invest in double-hulled tankers and on-shore treatment facilities while still remaining economically competitive. In fact, under the bonding regime, these kinds of environ- mentally protective activities would also be the most economical way to behave, because they would reduce the size of the bonds and the amount of bonds ultimately forfeited. 5 . 4 . Marine protected areas Currently, marine protected areas compose less than 1 of the marine environment. This is in- sufficient to maintain the ecological services of the ocean. Marine protected areas MPAs simulta- neously address several of the Lisbon principles. Low et al. 1999 provides a detailed simulation analysis of the effectiveness of protected areas. In the face of uncertainty, marine protected areas offer a way to buffer ocean services from climate change, and degradation by economic activities such as fishing and depletion of fishery resources which externalize the actors’ costs. Fisheries can benefit from MPAs, which have been shown to contain a higher density and larger fish than adjacent areas. MPAs may reduce water contami- nation and oil spill damage by zoning areas so that uses in any area are more compatible. MPAs will benefit coastal ecosystems by improving recreational resources, protecting highly produc- tive areas benefiting commercially important bio- logical resources and maintaining the resiliency of coastal systems. We recommend an assessment using ecological economics for sustainable gover- nance to set MPAs. In particular, a network of MPAs should be established that is sufficient in size and spatial distribution to assure that ocean services are sustainable in the face of increasing human impacts, environmental variability and ecological uncertainty. Recent professional assess- ments have suggested 20 of marine areas should be designated as marine protected areas. 1. Responsibility principle: MPA’s conform to the responsibility principle by allowing fisheries to be sustainable in the face of har- vesting pressure, implying a responsible use of the resource. 2. Scale-matching principle: MPA’s provide a so- lution to marine overfishing that is consistent with the ecological scale of the problem, thus conforming to the scale matching principle. 3. Precautionary principle: MPA’s represent a form of ecological insurance against the uncer- tainties inherent in fish population dynamics and harvesting, thus conforming to the pre- cautionary principle. 4. Adapti6e management principle: ideally, MPA’s should be embedded in an adaptive management system that monitors their effec- tiveness and modifies their size and attributes appropriately. 5. Cost allocation principle: MPA’s allocate the costs of conservation to the appropriate parties the harvesters, by setting aside a cer- tain percentage of the potential harvest to assure future harvests, thus satisfying the cost allocation principle. 6. Full participation principle: to be effective, MPA’s need to involve full participation from all stakeholders. While one can imagine an MPA enforced by government edict against the will of the local community, this approach would be much less effective and politically sustainable than one which engaged stakehold- ers in establishment and enforcement of the MPA.

6. Conclusions