Whale as a mixed good Whales as a shared good

Table 1 Total economic value of whales and marine mammals Total economic value Use value Non-use value Non Consumptive use Indirect use values Optional and quasi option Existence value value consumptive use Whale watching; Ecological functions Mere conservation; Future uses; new Harvesting ‘functional values’ research value information on ecological ‘symbolic’ value and animal welfare motivations values Whales present two important features as an economic good. On the one hand, whales are characterised by having attached both private consumptive values and non-consumptive values privately appropriable or non-use public values; they are mixed good, or impure public good. Whaling is an example of consumptive value, whale watching of non-consumptive use value, existence value attached to conservation, that is species non-use value. At the very least, the values of all agents who declare a stake in a decision should, in principle, be taken into account in the making that final decision. Stakeholder participation in environ- mental decisions is accepted widely Lockwood, 1999a. Seligman et al. 1994 point out, ‘‘How can decision makers arrive at allocative decision making procedures and outcomes that are seen to be just or legitimate by all stakeholders? Pre- sumably, one approach is to ensure that society’s values and ethical considerations are reflected both in the decision-making process and outcome. The interest is in the institutional processes by which including values into management and de- cision making procedures’’. Secondly, whales are shared oceanic resources. This makes it necessary to analyse how interna- tional institutions have dealt with whales, what international laws apply to whales, and how those laws are interpreted and implemented. A theory of socio-economic bargaining arises as a neces- sary framework for global management. Both the mixed good and the shared nature of whales have arisen over the past 30 years, dramat- ically changing the nature of whale management, which had always been characterised by open access exploitation motivated by private con- sumptive values. I argue that the problem is that the IWC, which is aimed at managing whales sustainably, has not fully e6ol6ed, failing to keep up with the complex and conflictual set of values attached intrinsically to marine mammals. The cultural, symbolic back- ground has changed. Institutions have not.

3. Whale as a mixed good

Whales, as a natural resource, can be depicted economically by a complex set of valuesbenefits. Table 1 depicts total value components. In addi- tion to direct consumptive value, marine mam- mals can ‘produce’ direct non-consumptive values, and a set of non-consumptive non-use values, ranging from option, pure existence, be- quest value Kuronuma and Tisdell, 1993. I here add ‘Functional values’, which are crucial in de- termining the biological systemic value of whales. As they are hardly valued by ‘consumers’, the role played by IWC is strengthened in assuring full consideration. I define functional values as the set of non-monetary benefits a species indirectly pro- vides to human beings, by means of sustaining the biological equilibrium of the natural environment where they live. They are essentially non-anthro- pomorphic in nature Vatn and Bromley, 1994; Ariansen, 1998. Being mixed good, whales repre- sent different values to different people. In this sense, whales are mixed good with joint provision of conflicting economic services.

4. Whales as a shared good

The mixed good nature of whales has devel- oped in parallel with the recognition of marine resources as shared ‘natural assets’. The shared nature of whales stems from the migratory nature of such marine mammals, whales usually migrate to warmer tropical waters in winter where calves are born Table 2. No country can ‘manage’ effectively any species of whale through full con- trol of Exclusive Economic Zones EEZ, so that property rights definition is far from being a sufficient instrument leading to a stable solution to the whale ‘war’ Edwards, 1994; Hanna and Munasinghe, 1995. Whales can, today, be defined as a mix of open access and common property resources within EEZ. It will be shown below how the Law of the Sea has devoted special attention to whales, given their intrinsic nature of global shared resource global heritage of mankind and mixed good. Nonetheless, since articles of that treaty are neces- sarily non-definitive in determining the instru- ments of co-operation, a high degree of subjectivity and conflicts between different inter- pretations obviously remains Birnie, 1989. While the ‘mixed good’ characteristics have re- cently been considered and studied both on em- pirical and theoretical grounds Conrad, 1989; Kuronuma and Tisdell, 1993, 1994; Loomis and Larson, 1994; Bulte et al., 1998, the need to bring together the mixed and the shared nature has never been recognised. I claim that to achieve a structured and comprehensive scientific frame- work aimed at influencing future negotiations on whales, both features must be considered together within the economic and political arena. Classifying marine mammals by their mixed good and shared resource nature produces a framework for the socio-economic management of marine resources Ferrara and Missios, 1998. Two possible cases for analysis are envisaged. 1. Global and local mixed goods i.e. stock of seals; Wilen, 1969; McKelvey, 1987. 2. Global mixed good and shared resource i.e. whales, sea turtles, dolphins. Point b is the one relevant to the present analysis on whales. 4 . 1 . IWC and other con6entions The management of whales by IWC is influ- enced by and connected to other international conventions, and to national policies and acts concerning marine mammals and endangered marine species. Reciprocal connections among global conventions are important as far as the reciprocal consistency of policies and decisions is concerned. For example, the effects and consis- tency of trade tools as deterrents are to be as- sessed Schulz, 1997. Further, trade instruments will be compared with the instruments based on compensatory payments, assessing relative effec- tiveness in terms of social welfare and sustainabil- ity of agreements. The most relevant International Conventions and National Acts concerned with whales are the following. 1. 1972 UN convention on the Human Environ- ment in Stockholm calls for a 10-year morato- rium on commercial whaling. 6 2. 1973 Convention on International trade in en- dangered species CITES. This convention is relevant since endangered species can be listed either in appendix 1 or appendix 2 in order to prevent exploitation by illegal trade. CITES has provided a useful framework for prevent- ing any whale meat or products from being traded between parties. Following the 1982 ban, a proposal by Seychelles was approved in 1983 to list all whales under appendix 1. Nonetheless, the issue became one of compati- bility between objectives and action of two different but overlapping — as far as whales are concerned — conventions, IWC and CITES. Norway has attempted to de-list minke whales — from appendix II to I — never succeeding so far. A need for a reconcil- iation and co-ordination between IWC and CITES arises. 3. 1982 UN Convention on the Law of the Sea UNICLOS. This gigantic treaty — 320 arti- cles — has been called a constitution for the 6 Declaration of Principles on the Human Environment, A report of the UN conference on the Human Environment at 3, UN doc. aconference 48714review 1 1972. M . Mazzanti Ecological Economics 36 2001 205 – 221 211 Table 2 Whale stock size and migration patterns a Species Migrations Trend Estimated Total estimated stock size pristine population 20 00025 000 175 000 Mexico B--\ arctic seas Positive recovery Gray 54 000 Within arctic seas Bowhead Negative 60009000 Rarest of all 300 Within North Atlantic seas Right northern South AmericaAfrica B--\ Antarctica Rare+some recovery signs 25 00030 000 Right southern 95 of initial stock wiped out; some 120 000 All around the world, high latitudes to 10 000 Humpback recent recovery tropics World-wide, mostly cooler waters. 320 000 Not endangered Mostly abundant, some unit stocks Minke smallest Some migratory, some resident about 60 000, total about 300 000 great whale Heavily depleted from 250 000 to Sei 110 000 40 00060 000 World-wide in temperate waters, tropics and southern hemisphere 60 000 120 000 Depleted but not highly endangered Some resident some migratory between Fin 410 000 warm and cool southern waters 10 000 Blue Some stocks may never recover, some 190 000 Patchy world-wide distribution, some resident, some migratory between low i.e. Mexico have shown positive signs and high latitudes Not strictly endangered Patchy world-wide distribution, from 130 000 Sperm 98 000 tropics to arctic a Adapted from Duxbury and Duxbury 1991. oceans, and it should be ranked as one of the most important pieces of international law. It provides a massive extension of coastal state jurisdiction over adjacent ocean space, giving the message that high-seas resources should be managed internationally. This means that defi- nition of property rights should occur by co- operation sustained by IWC members, which is exactly the issue I am attempting to throw some light on. Article 56 introduced an exclu- sive economic zone of 200 miles, which was adopted to assign property rights on manage- ment of living and non-living natural re- sources. Since 1982, many countries have enforced it and many developing countries are sympathetic because it strengthens their bar- gaining power. Nonetheless, full ratification has not been achieved. This means that the framework for ocean exploitation is still hotly contested. Furthermore, the issue becomes more complicated when highly migratory spe- cies, as cetaceans, are examined De Klemm, 1989. Such marine resources fall in the shared stocks — highly migratory category 7 , and they are left to international treaty organisations. IWC is currently the one playing the predomi- nant role in the case of whales Birnie, 1989. Article 65 deals with it by stating that states must cooperate in conserving marine mam- mals. Cetaceans represent an exception since all countries, not only the range states, should participate in agreements. The issue is, nonetheless, unsettled, as range states may claim application of the consistency principle by which the management of resources should be consistent with the one chosen by coastal states. 4. World Trade Organisation WTO. WTO rules and articles are worth considering because uni- lateral trade policies i.e. US trade policies aimed at enforcing, by means of threats, spe- cific IEA, must be consistent with WTO arti- cles given the involved states are WTO members. This could be the case of commer- cial threats menaced by US to Norway and Iceland, in case of a resumption of whaling. The extent to which such threats are credible under international law is affecting the whale bargaining game. Article XI1 of WTO pro- hibits members from imposing restrictions on imports and exports. Moreover, no exceptions exist as far as conservation of natural re- sources is concerned. Articles XXb and g allows governments to impose trade measures that are necessary to protect human, animal or plant life or health, and to take measures relating conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production and consumption. It seems that the only cases where such threats are plausible and consistent might be a where another interna- tional treaty permits the use of trade measures to protect species i.e. CITES; in this case we could argue a priority over WTO; b when trade measures are established by the conven- tion concerned with the resource under analy- sis; c when the resource is under the jurisdiction of the damaged agent. It follows that the IWC agenda should contemplate trade sanctions in order to avoid WTO incon- sistency. It is not WTO the institution that should address global issues concerning spe- cies; the matter is one of providing responsible institutions with agreed rules and effective in- struments specifically aimed at managing global resources. 5. 1972 US Marine Mammal Protection Act. The basic scheme is unchanged although it has gone through several amendments. The central feature is a moratorium on all taking of all marine mammals and a ban on imports. 6. 1976 Magnuson Fishery Conservation and Management Act. The act applies within the US EEZ zone. The relevant fact for whales is the Packwood amendment to the act in 1979, which provides for an automatic 50 reduc- tion in fishing allocations within EEZ for 7 Species identified were quite a heterogeneous set of marine resources, seven tuna species, pomfrets, marlins, sailfishes, sauries, dolphins, ocean sharks, and seven families of cetaceans Rettig, 1995. Hence, we have both fishes and mammals. It is noteworthy that one of the main debates within IWC is over the possibility of including other cetaceans within IWC jurisdiction. those countries undermining conservation pro- grammes managed by international conven- tion. 8 Nonetheless, the Packwood amendment may have lost some relevance. 7. 1976 Fishery Conservation and Management Act and Pelly amendment of 1979. The amendment provides that the US President may restrict import into the USA of fish prod- ucts from a country that undermines conserva- tion programmes under international conventions. 9 Other national acts are, 1978 New Zealand Marine Mammal Protection Act, by which New Zealand asserts jurisdiction by their nationals on the high sea; Australian Whale Protection Act, 1980 Birnie, 1989; De Klemm, 1989. A first conclusion can be that whales, being both a mixed good and a shared resource, make it necessary that many international institutions deal with those marine mammals. Co-operation and consistency of actions and rules are to be sought among global conventions and national acts, so the degree of complexity is emphasised further. These facts raise even further the necessity of re-forming or re-founding IWC. Re-founding would be a process aimed at managing whales and reducing ambiguities, inconsistency and confl- icts within IWC and among IWC and other conventions. 10 As far as IWC is concerned, the big challenge is the reform of the international institutions deal- ing with and managing whales, by attracting the membership of all whaling and anti-whaling coun- tries recall unanimity is needed within IWC for structural reforms of the convention, as a revision of the treaty was not included as an option within ICWR Birnie, 1989. A great bargaining effort is needed to achieve such an agreement, as conflict- ing values over the use of common shared re- source are to be drawn together and reduced. As stressed by Swanson 1991, the main prob- lems in reaching an agreement on a global oceanic resource are free riding easy riding and non-com- pliance. Free riding easy riding is caused by opportunistic behaviour incentive to cheat when the other co-operates; non-compliance follows from country heterogeneity, which characterises international issues and is associated often with uneven distribution of agreement costs. Diversity and asymmetries are not only of an economic, but also of a cultural nature. As far as whales are concerned, interested parties have conflicting interests and values on the use of the resource. Non-compliance follows as a result. A strong bargaining effort is needed. The role of side payments and trade threats in achiev- ing and enforcing a potential global optimum will be explored below. 8 The President may direct the Secretary of the Treasury to prohibit the bringing or the importation into the US of any products from the offending countries for any duration and to the extent that such prohibitions are sanctioned by WTO. 9 Under the Pelly amendment, the US can restrict fish imports totally. In the case of Norway, this amounts in 1997 to a value of 900 million NOK loss, 4 of total Norwegian exports. Recall that Norwegian whaling business was about 1 million NOK over the period 1993 – 1996. Instead a restriction of Japanese fishing within US EEZ amounted to ten times the Japanese whaling business. Boycott actions are another way of menacing. Conrad and Bjorndal 1993 estimate at about 10 million NOK per year economic damage. Even this threat is likely to fade away over time, so is non-credible. 10 The main inconsistency arises between IWC and WTO. Trade threats, which have been menaced so far as a deterrent to whaling, represent a myopic tool, insofar as they do not provide stability of agreements and self-enforcement. Further- more, they are deemed to be WTO-inconsistent. More impor- tant, this inconsistency extends the importance of the analysis to endangered species mammals and non-mammals — other than whale species. At the time of writing, the same inconsis- tency has been confirmed as far as sea turtle exploitation and the tuna-dolphin case Vogel, 1995; Korber, 1998 are con- cerned. Turtles are included as most endangered species by CITES, three-quarters of the 90 species in Asia are being driven toward extinction, with 10 million animals traded per annum. The conflicts are between Asian and Latin American countries, which value the resource for consumptive values, and western countries that support non-use values. The same as for whales. Turtles are a mixed good and a migratory resource, so that the same paradigm should be applied to those resources. Further studies are encouraged Tisdell, 1986 in this direction. A confirmation of the need for searching for alternative economic ways of managing conflicts is the WTO sentence claiming that US embargoes, justified by turtle preservation, are inconsistent with international trade agree- ments. Table 3 Species and unit stocks under a ‘decentralised’ approach — how whales could be classified in order to pursue a decentralised approach to bargaining a North Pacific Southern hemisphere North Atlantic Protected Right Protected Bowhead Protected Not present Protected Not present Not present Gray Humpback Protected Protected Blue Fin Protectedsustained Protected Protected Protectedsustained Sei Initial Bryde’s Initialsustained Initial Sustained Minke Sustained Sperm protectedinitial Protected a Adapted from Kuronuma and Tisdell 1993.

5. Bargaining and side payments