2000 Conference

IIIrd International Conference

Property rights, economics and environment: Marine Resources
June 2000

AIX-EN-PROVENCE, France

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Conference ProceedingsContentGeneral ReportPatronage CommitteeAdvisory group and/or speakers

Actes-2000 International Review of Comparative Public Policy – Elsevier

The 3rd international conference on “Property Rights, Economics and Environment” has been dedicated to “marine resources”. The Groupe d’Etudes Droits de Propriété et Environnement / International Center for Research on Environmental Issues (GEDPE/ICREI) and the Centre d’Analyse Economique (CAE) have organized this meeting which took place at the Law, Economics and Sciences University of Aix-en-Provence, France.

During 3 hard-working days (June 21-23, 2000), about fifty-plus speakers – coming from 12 different countries – expressed their opinions to a 120-persons floor. Speakers were scholars, professionals, government officials, conservation association members, students…
These proceedings illustrate the diversity of opinions with respect to the role assigned to property rights and economic instruments for managing and preserving marine resources; additionally, some light is shed on the combination of these instruments to the necessary evolution of national, Community and international legislations.

Two books related to the previous two conferences (held in June, 1996 and July, 1998) have been published in French by Dalloz: “Droits de Propriété et Environnement” (1997) and “Droits de Propriété, Economie et Environnement : Les Ressources en Eau” (2000). In March 2002 Dalloz published “Droits de propriété, économie et environnement: les ressources marines”.
Thanks to the financial assistance of the EU Commission, (DG Fisheries) an English version of the 3rd conference proceedings is now available in English.

Max Falque was trained in law and economics and graduated from the Paris Institute d’Etudes Politiques. He began a professional career as an international consultant on environmental policies since the early beginnings of 1970s after the Ford Foundation awarded him a scholarship for research at the University of Pennsylvania.
He published many articles and books on the relation between environment, planning and development (environmental planning and assessment), and on the implementation of environmental policies based on property rights and economic instruments respecting individual freedom.

Michael De Alessi specializes in marine conservation and wildlife issues and is former director of the Center for Private Conservation. He received a B.A. in Economics and an M.S. in Engineering Economic Systems from Stanford University and an M.A. in Marine Policy from the Rosenstiel School of Marine and Atmospheric Science at the University of Miami. He is the author of Fishing for Solutions (London: Institute of Economic Affairs, 1998), and his articles on private conservation and the oceans have appeared in such publications as New Scientist, Journal of Commerce, International Herald Tribune, The Wall Street Journal Europe and The Asian Wall Street Journal. He lives in San Francisco.

Henri Lamotte is an economist who graduated from the Paris Institut d’Etudes Politiques and Ecole Nationale d’Administration. Since 1989, he is deputy director at the Finance and Economy Ministry’s Forecasts Department. From 1993 to 1995, he also worked as an economist for the OECD’s Economic Affairs Department. He teaches economics at the Paris Institut d’Etudes Politiques and at the Ecole Nationale d’Administration. The major bulk of his research is devoted to macroeconomics , taxation and environmental and agricultural policies. He co-authored with Jean-Philippe Vincent a couple of books on contemporary macroeconomics.

ix Patronage Committee
xi Acknoledgments
xiii About the Editors
xv List of contributors
xix Statement of scope
xxi General introduction
Max Falque
Part I. Legal and regulatory issues
3 Introduction
Max Falque
7 Property rights and seabirds
Annie Charlez
13 Fertilisation of the open ocean : effects of private property rights, economiocs ans the environment
Michael Marketls Jr.
17 Fisheries, property rights and regulation of fisheries in ancient Rome : Nihil Noui Sub Mari
Yves Peurière
25 Existing law : a help or hindrance ? a case study of marine ranching
Helen Pickering
43 european and french sea fisheries legislation in search of individual transferablequotas
Jean-Luc Prat
53 Property rights and fisheries in OECD countries
Carl-Christian Schmidt
69 Property rights and marine pollution
Patrick Simon
77 The evolution of U.K. fisheries management : an overview
Gregory Valatin
Part II. Economics
119 Introduction
Henri Lamotte
123 Property rights and marine resources : theoretical foundations and applications
Jean-Pierre Centi
137 Equity and management onstruments in fisheries
Joseph Catanzano, Stephen Cunningham
147 Overcoming trhe “new tragedy of the commons” : a commercial framework is inevitable
Roger Edwrds, Martin Smallridge
159 Modeling individual transferable quotas for renewable resources
Louis-Pascal Mahé, Carol Ropars
171 Managing renewable resouirces : theoretical and empiritical issues for the case of fishing resources
Valérie David, Sophie Mairesse
183 Economic, institutional and social conditions for efficient property rights
Hélène Rey-Valette
197 Beyond regulatory solutions : controlling overfishing with access cotrols
Jean-Paul Troadec
219 Do private property rights lead to the sustainable development and management of marine rources ? an analysis
Christoph Vanderstricht
Part III. Institutions 
233 Introduction
Max Falque
237 Implementation and future of marine property rights
Roger Beattie
247 Saving Canada’s fisheries : why we should move from government regulation to systems of self-managed ownership
Elizabeth Brubaker
255 Fisheriy policy of Russia in 1998-1999
Victor Chevtchenko
265 Remapping the waters : the significance of sea tenure-based protected areas
John Cordell
293 Private property rights, markets and regulation in the 21st century
Michael De Alessi
307 When ideas conspire with circumstances : introducing individual transferable quotas in iceland’s fisheries
Hannes Gissurarson
341 Co-management and crisis in fisheries science and management
Bonnie McCay
361 Privatization of marine resources in European union countries : an overview of national situations
Christoph Nordmann
369 Artificial reef immersions in the Languedoc-Roussillon coastal zone
Béatrice Pary
381 General report and final remarks
Henri Lamotte
389 Subject index

By  Henri Lamotte, General Reporter

Henri Lamotte

The 3rd international conference on “property rights, economics and environment” addresses the same problem as the first two conferences, namely the contribution of property rights to environmental protection. Marine resources – the theme selected for this year – has proven to be a fruitful illustration for this overall issue.

A general report always simplifies the debates and imperfectly reflects the diversity of the themes that were discussed, the variety of approaches that were used and the debates’ liveliness. Nevertheless and in my opinion, this conference has provided two lessons: on one hand, property rights can contribute to a sustainable development in many ways; on the other hand, property rights can only be efficient if some conditions are met.

The different and multifaceted contributions of property rights to marine resources’ sustainable development

Environmental economists will certainly not be surprised by the diversity of the possible contributions of property rights to marine resources sustainable development. The lack of clearly defined property rights oftentimes results in marine resources misuses; either an open access regime or an imperfect liability system may apply for marine resources.
Available datas prove that marine ecosystems are subject to a growing and excessive pressure whose forms are multiple:
– Deterioration of marine stocks – as the FAO proved it – especially in some areas (northern Atlantic, Canada’s salmon, cod and crab fisheries);
– Pollution of marine environment in some hot spots (Brittany for instance),
– Extinction or threats of extinction of some species and , more generally, damage to bio-diversity.
The conference has perfectly illustrated the diversity and the multifaceted nature of property rights’ contribution to sustainable management arrangements for marine resources; here follows a non-exhaustive list:
– Development of civil liability for marine oil pollution and intensive rearing discharges;
– Fisheries management either with traditional collective access rights or with the much-debated Individual Transferable Quotas, ITQs;
– Marine resources exploitation: fish-farming, algae and pearl farming, construction of artificial reefs and oil platforms;
– Finally, protection of endangered species, water birds and marine mammals which requires the abolition of the “res nullius” status – nobody’s property status; the creation of national parks or marine sanctuaries may be viewed as related to this problem.

The conference has emphasized how property rights and their wide scope of application could contribute to sustainably manage marine resources; property rights are flexible instruments – an advantage to adapt to a great number of political-economic backgrounds and respond to a great number of problems. Unfortunately, the term of property right poorly accounts for this flexibility. For economists, property rights mean: individual as well as collective rights, rights on properties that could be traded or not, rights that could be formally or informally designed, territorial access rights, or the right to sue if public, collective or individual rights are infringed.
These rights have different extent, features, duration… Nevertheless, economically speaking, property rights should have the three following elements:
– They should be exclusive: individuals and communities holding these rights – or being conferred upon by the society – should be able to exclude whoever refuses to pay or to abide by customary rules;
– They should be transferable: property rights’ reallocation should result in efficient management;
– They should be durable to foster long-term based management arrangements.
Rights’ excludability, transferability and durability might induce rights’ holders to adopt optimal management methods in order to preserve resources and to maximize both the value and income to be derived from.

ITQs illustrate the real and not only the potential benefits that fisheries could grasp with this kind of rights.
The purpose of ITQs was to remedy the poor efficiency associated with fisheries management methods based on access restriction (licenses), input control (ship power, fishing season…) accompanied with an overall quota (TACs and overall quota as applied by the European Union). The problems triggered by such an inefficient management method are well known: over-investment in non restricted production factors, race for fish and shortened fishing period (the Olympic-race-styled fishing, with the Saint-Brieux’s Bay, France, Scallop fishery as a case in point), deterioration of fish quality (caught fishes were to be frozen since fishing periods were sharply shortened), over-equipment by downstream businesses, general decline in the economic profitability of the whole sector. On the other hand, ITQs produce: i) a much more efficient fishing rights allocation; ii) the end of races for fishes; iii) the enhancement of fish quality since fishes no longer need to be frozen – because the fishing period is extended. Such a positive impact is not purely theoretical: the implementation of ITQs in the British Columbia’s halibut fishery – in the early 1990s – has proven to be a fruitful device for this fishery. To a larger extent, OECD’s works OECD (1998)[1] have reviewed the positive consequences of ITQs on a few fisheries: improved stock preservation, alleviated race for fish and reduction in vessels over-equipment even though the benefits of such measures are not immediate.
The contribution of property rights to marine resources’ sustainable management is neither general and absolute but conditional and contingent
Efficiency conditions have a technical, economic and social nature. Hereafter, I will focus on fisheries management only.

Technically speaking, the contribution of property rights, and especially ITQs, to fisheries sustainable management cannot be isolated from the targeted fishery. ITQs seemed to be the appropriate system for mono-species fisheries and species under the jurisdiction of one state. Concerning multi-species fisheries, ITQs appeared as an improper solution due to the importance of by-catches – this was particularly true for Mediterranean fisheries, except tuna fisheries. Concerning fisheries under the jurisdiction of several states, implementing ITQs was not virtually impossible but raised a number of coordination problems, and especially monitoring problems.
Economically speaking, property rights will positively impact on marine resources provided the following conditions are met:
i) The overall quota must be set at an adequate level if resources are to be sustainably managed – this requires appropriate information about stocks and migration dynamics;
ii) Operation, control and sanction costs should be proportionate to potential gains; consequently, managing and sustaining this legal device requires a sufficient social, economic and institutional development level;
iii) Additionally, ITQs measures should not conflict with other instruments; no positive effect on resource management and vessels’ over-equipment should be expected if public authorities still heavily subsidize fisheries;
iv) Finally, the market for ITQs should not lead to an excess in economic concentration at the benefit of few firms with a significant market power; nevertheless, this is not a fishery-specific issue and, as a result, could be properly tackled by competition policies.
The third kind of condition, social acceptability, is much more crucial: property rights in general, and ITQs in particular, will never be implemented without a public assent.
Concerning ITQs, societies will only accept if ITQs advocates can respond to three kinds of concerns expressed by stakeholders, especially fishermen.
Concern #1: will an ITQ system increase fishermen’s long-term income?
Following the cases detailed during the conference, it will. ITQs enhance fish quality, reduce costs, smooth price fluctuations, can be used as collateral for banking loans and provide individuals deciding to quit the market with a net worth – derived from the ITQ transfer.

Concern #2: May ITQs trigger an excess in geographic and economic concentration at the expenses of some areas and groups of fishermen?

Even though this is a real problem, a cautious analysis is required due to some economic ambiguity. At the individual level, the ITQ seller must be better off: he will sell his quota only if the sale will benefit him. Hence, the implementation of a market for quotas will result in utility-maximization. Consequently, quota sales by individuals and/or regions should raise no fears. At the social level, a social planner might have a concern for quota distribution if his social welfare function is not the mere aggregation/addition of individual utilities; the social planner might derive utility from the geographic distribution of activities and/or the number of operating fishermen. In this perspective, the social planner will express a concern for the allocative impact of a market for property rights on marine resources, and notably those of an ITQ system on fisheries. Promoting fishing rights reallocation is the very principle of ITQs; and such reallocations may be economically desirable[2]. However, real-life politics will certainly be inconsistent with heavy inter-regional transfers and will probably recommend to prevent ITQs concentration – otherwise ITQs will not be accepted.

Concern #3: Is the ITQ system a fair one?

The case of Iceland shows that a social consensus on ITQs fairness was a pre-requisite to their long-term acceptability. The concern for fairness is, at first, related to that of the initial allocation of ITQs and, subsequently, to the division of the scarcity rent – i.e., the difference between the price for fish and the marginal operation cost (the difference must be positive, otherwise resources could not be sustainably managed). Two polar initial assignment procedures may be conceived: i) rights assigned for free on the basis of past catches – this is the so-called “grandfathering” system; and ii) a generalized auction. The experience of ITQs in developed countries has proven that the search for an agreement with fishermen is only consistent with a free allocation procedure based on past catches. With this allocation device, the scarcity rent is divided amongst fishermen who exploit the targeted resource at the time of the initial assignment. Given the high price for quotas – a sign of the scarcity rent, will such a system be considered as fair in the short and in the long run? There is, obviously, no unique and systematic answer to this question. Concerns for equity are contingent to social-political backgrounds. The best I can do is to underline that ITQs flexibility provides a number of options to modify the redistributive consequences of ITQs. The following arrangements are possible solutions:
i) A minimum percentage of the overall quota periodically auctioned off;
ii) A stock of quotas distributed for free to the newcomers;
iii) A tax system designed either to extract a part of the scarcity rent or to obtain from fishermen a financial contribution for operation, monitoring and sanction costs.
I will conclude with three reflections on which virtually every participant to this conference agreed.

1/ Property rights, and especially ITQs for managing fisheries, are not universally optimal solutions due to the extreme diversity of situations, traditions and cultures, and due to the complexity of problems raised by a sustainable management for marine resources. Conditions required for an efficient and socially accepted use are hardly met; and these conditions are even more hardly met than ITQs are the only instrument in force. As a matter of fact, ITQs implementation is rooted in a medium/long term perspective: their implementation requires a long social and political maturation. In this respect, Iceland is a case in point since ITQs implementation was extended over 10 years with an experimental period exceeding 8 years (1983-1990).

2/ Conversely, property rights’ flexibility is the basic reason why they are an efficient instrument to cope with a number of problems related to marine resources management; this is particularly true since the lack or the incompleteness of property rights frequently occasions these problems.

3/ Finally, the fisheries management case reveals the necessity to get the largest variety of instruments to meet the various issues and situations. Property rights are one possible solution to sustainably manage environmental – and notably marine – resources. In some situations, property rights may be improper or unacceptable solutions, but experience suggest they may be, together with accompanying measures, an efficient instrument for managing marine resources.

I will conclude with a few more personal remarks. Concerning property rights contribution to the sustainable management of marine resources, my position is profoundly optimistic in the long run even though in the short run significant political-institutional barriers remain, especially in the European Union. In the long run, however, each social organization will reveal its efficiency. Hence, the most efficient social organizations will spontaneously emerge and eventually prevail in the long run; indeed, social groups adopting them should grow faster than those having adopted the less efficient ones; furthermore, people may pressure their government to adopt the most effective organization methods. In this perspective, property rights defined as a device for a sustainable management of marine resources have a fruitful future.

[1] OECD (1998), « Les contingents individuels transférables en tant que mesure d’incitation à la préservation et à l’utilisation durable de la diversité biologique des mers », Direction de l’environnement.

[2] In Iceland, 90% of ITQs changed of owner. On the other hand, economic concentration is still limited. Family companies were transformed into joint-stock companies thus leading to the diffusion of capital ownership.

Under the Patronage of

Under the presidency of honour of

Madame Dominique Voynet,
Ministre de l’Aménagement du Territoire et de l’Environnement.

Monsieur Jean Glavany
Ministre de l’Agriculture et de la Pêche

Joana Schelton, Ancienne Secrétaire Général adjoint à l’OECD
Esperanza Aguirre, Présidente de Instituto de Ecologia y Mercado, Spanish Free Market Environment Research Institute
Rosalba Giugni, Présidente de Marevivo (Rome)
Mario Soares, Président de la Commission Mondiale Indépendante sur les Océans, World Independant Commission on the Oceans
Amiral Lanxade, Ambassadeur de France
Franck Vorhies, économiste en chef à l’IUCN
Serge Antoine, Président d’Honneur du Comité 21 pour la France
Jean François Saglio, Président d’Honneur de l’IFEN, French Environmental Information Service
Pierre Delaporte, Président d’Espaces pour Demain, Président d’Honneur d’Electricité de France
Baron Nordenfalk, Président de European Landowners Organization
Ambroise Guellec, ancien Secrétaire d’Etat à la Mer, former Minister
Louis Le Pensec, Sénateur et ancien Ministre de l’Agriculture et de la Pêche, former Minister
Christian Louit, Président d’honneur de l’Université Aix Marseille III
Gilbert Peiffer, Président de l’Université Aix-Marseille III
Henri-Germain Delauze, Président de la COMEX, deep sea research company
Hannes Gissurarson, Université d’Islande, Iceland
Peter Pearse, ancien Président de la Commission Royale sur la Pêche (Canada)
Bernard Tramier, Directeur Environnement Elf, oil corporation
Harold Demsetz, Professeur de Science Economique, UCLA
Ismaïl. Serageldin, Vice Président à la Banque Mondiale, World Bank
Jean François Minster, Président-Directeur Général de IFREMER, French Institute for Marine Research
Roger Beattie, Président de Sea-Rights,Inc., Nouvelle Zélande
François Vallat, Président de l’Institut Français de la Mer, French Marine Institute
Claude Mercier, Gouverneurs Rotary International 1999-2001 District 1760
Azzedine Kettani, Attorney at Law, Morocco Supreme Court
Brice Lalonde , ancien ministre de l’Environnement, Conseiller Régional de Bretagne, former Minister of Environment
Lucien Laubier, Directeur du Centre d’Océanologie de Marseille
Michel Vauzelle, President de la Region Provence Alpes Côtes d’Azur.

Alban Frédérique, CEDEM
Brest Anderson Terry, Political Economy Research Center (Montana)
Augier Henri, professeur de biologie marine (Marseille)
Avon Michel, High-Tech Environnement (Marseille)
Bachet Frédéric, Parc Marin de la Côte Bleue
Bailly Denis, CEDEM (Brest)
Bal Jean-Louis, ADEME (Paris)
Bate Roger, Institute of Economic Affairs (Londres)
Beattie Roger, Sea Rights Investment (Nouvelle Zélande)
Becker Pierre, Géocéan-Solmarine (Aubagne)
Bell Nial, CORDAH Consultants (Aberdeen)
Bernal Patricio, UNESCO
Blomquist William, Indiana University
Bolopion Jacques, Affaires Maritimes (Marseille)
Bonzon Alain F.A.O. (Rome)
Boudouresque Charles François, CNRS (Marseille)
Brubaker Elizabeth, Environment Probe Canada
Catanzano Joseph, IDDRA (Montpellier)
Centi Jean-Pierre, Université Aix-Marseille
Chamoux Jean-Pierre, consultant (Paris)
Charlez Annie, Office National de la Chasse (Paris)
Chassy (de) Christian, Expert International (Paris)
Chevchenko Victor, Commission Interministérielle d’Ichtyologie (Moscou)
Cordell John, Ethnographic Institute (Berkeley)
Cuningham Stephen, IDDRA (Montpellier)
Davigo Jacques Ingénieur Général du GREF
De Alessi Michael, Center for Private Conservation (San Francisco)
Déjardin Daniel, Affaires Maritimes (Marseille)
Delauze Henri-Germain, COMEX (Marseille)
Edwards Roger, South Australian Lobster Industry
Escaille (de l’) Thierry, European Landowners Organization (Bruxelles)
Falque Max, délégué général
Gauthiez François, Ministère de l’Agriculture et de la Pêche
Gissurarson Hannes, Professeur de Science Politique (Islande)
Huglo Christian, Avocat (Paris)
Jarmache Elie, IFREMER (Paris)
Jones Tom, OCDE (Paris)
Lamotte Henri, Ministère des Finances
Laroche de Roussane Jean-Pierre, Marine Nationale
Lepage Henri, Euro 92 (Paris)
Leyland Guy, WAFIC (Australie)
Mahé Louis Pascal, ENSA Rennes
Markels Michael Jr, Ocean Farming Inc. (Etats Unis)
Massenet Michel, Conseiller d’Etat
McCay Bonnie, International Association for the Study of Common Property
Megret Alain, Ministère de l’Environnement
Morris Julian, Institute of Economic Affairs (Londres)
Mouton Patrick, journaliste et écrivain
Nordenfalk Johan, European Landowners Organisation (Stockholm)
Nordmann Christoph, Commission Européenne
Pampillon Olmedo, Instituto de Ecologia y Mercado (Madrid)
Pary Béatrice,CETRALMAR (Montpellier)
Pickering Helen CEMARE (Portsmouth),
Piquemal Alain, Université de Nice
Prat Jean Luc, CEDEM, Brest
Rey Hélène, Université de Montpellier
Saglio Jean-François, Ingénieur Général des Mines
Schmidt Carl Christian, OECD
Shotton Ross, FAO
Simon Gilbert Conseil Supérieur de la Pêche (Paris)
Simon Patrick, Avocat (Paris)
Smith Robert J., Competitive Enterprise Institute(Washington)
Strosser Pierre, Commission Européenne
Tramier Bernard, TotalFinaElf, (Paris)
Troadec Jean-Paul, consultant international
Valatin Gregory, ENSA Rennes
Vanderstricht Christoph, Coopers & Lybrand, Bruxelles
Vicente Nardo, Université Aix Marseille
Waugh John, IUCN, Washington
Yandle Bruce, Clemson University (USA)
Yesou Pierre, Office National de la Chasse.