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Market-Based Strategies for Marine Conservation

Eileen Campbell

The recent Society for Conservation Biology conference in San Jose, California, included a session on market-based strategies for marine conservation. The Ecosystem Marketplace sat in to hear the latest.

The recent Society for Conservation Biology conference in San Jose, California, included a session on market-based strategies for marine conservation. The Ecosystem Marketplace sat in to hear the latest. SAN JOSE, CALIFORNIA – Crab boats set out in winter storms stacked high with traps to catch whatever they can in shortened seasons. Trawlers drag nets across the ocean bottom, burying the seafloor and crushing sea life. Marine habitats and fisheries are in trouble—and marine conservation is twenty years behind its terrestrial counterpart, says Mike Beck of The Nature Conservancy. But a recent session coordinated by Beck at the Society for Conservation Biology Conference made it clear that marine conservationists are ready to launch a quick game of catch up.

Sharing the Catch

Much of the effort focuses on fisheries. Existing policies that set total allowable catch numbers but don't regulate how much any individual can take encourage fishermen to maximize their catches. "It's like a pií±ata," says Rod Fujita, a biologist with Environmental Defense. "When it breaks, no one stands around saying 'you first.' Everyone dives in and grabs as much as they can." Under this regimen, he says, "conservation is irrational—if you leave something, someone else will just take it." This leads to a host of undesirable results: too many boats fishing for too few fish, gear designed for the maximum haul regardless of bycatch or habitat destruction, and a short, frenzied time span for catching the quota, with resulting inefficiency and dangerous conditions. It also emphasizes short-term profit over long-term sustainability, causing the destructive boom-and-bust cycles that recur in species after species as fishing fleets burn through one resource and move on to the next. To keep fisheries alive, Fujita argues, "We need to fix the fundamental drivers of behavior." One market-based conservation strategy advocated by Environmental Defense and a growing host of environmental and fishing groups is for fishermen to share the catch by means of Individual Transferable Quotas, or ITQs, which distribute a set percentage of the total allowable catch to a limited number of fishermen. Fishermen can catch their share of the fish, or can decide to sell, trade, or lease their shares on the open market. Giving fishermen an ownership stake changes the equation in critical ways. When everyone knows they'll get their fair share of the bounty, there's no pií±ata scramble. Fishermen can fish when and how they see fit. Fishing can be done more deliberately, with greater safety for fishing crews, leading to higher-quality fish in the hold and resulting higher prices at the docks. Even more important, an ITQ has long-term value that increases with the health of the fish stocks, providing a built-in incentive for fishermen to take care of the resource.

Permit Buy-Backs

Environmental Defense is also working with The Nature Conservancy on another market use of fishing permits along California's central coast. Chuck Cook from The Nature Conservancy describes how they approached conservation in one fishery. Analyzing the threats to 25 hotspots of marine biodiversity, they targeted bottom-trawl fishing as particularly destructive. Trawlers catch bottom-dwelling fish, primarily flatfish, sablefish, and rockfish, by means of a weighted net dragged along the ocean bottom. The method destroys habitat and, since everything in the trawl's path is scooped up, results in a huge percentage of bycatch relative to the target species. In 2003, says Cook, West Coast trawlers caught 50 million pounds of seafood. They discarded a nearly equal tonnage of bycatch, much of it juveniles of the target species. Studies in protected areas have shown that eliminating trawling allows fish species and bottom habitats to recover—but it also cuts into the livelihood of local fishermen. In a pilot project, The Nature Conservancy worked with Morro Bay fishermen to find a solution. Together, they approached the Pacific Fishery Management Council with a proposal: close a section of the coast to trawling and The Nature Conservancy would buy back permits and vessels from the fishermen to offset the fishing loss. In May, 2006, trawling was banned on 3.8 million acres off the California coast between Santa Barbara and Monterey Bay. The Nature Conservancy purchased six permits and four boats, reducing the fishing pressure on the remaining open areas by 83%. The federal government has tried buying back permits to reduce fishing pressure on particular species, says Cook, but the buy-outs have failed for a number of reasons. This program, unique in being a private buy-out, builds on earlier lessons. "In the federal programs there was nothing to prevent people from reentering the fishery after a buy-out," says Cook. "The buy-outs were done to consolidate the industry and make it economically viable, but there was no large public-trust benefit—no real environmental focus, and no monitoring." This program has "no-compete" clauses for the participating fishermen, and The Nature Conservancy plans to monitor the no-trawl zones to make sure the ban is observed. Now that The Nature Conservancy holds fishing rights to the area, the organization has several options for what to do with the permits. For the time being, they'll bank the permits or extinguish them and watch to see how the fish stocks do. In the future, if stocks recover, they could lease permits back to select fishermen with constraints built into the leases to ensure responsible fishing, "moving in the direction of conservation easements on land," says Cook. For example, a lease could specify that fishing be done with traps or vertical long-lines, methods that target abundant species and preserve endangered ones. While such methods may catch fewer tons of fish, the ones they do catch could potentially be certified as ecologically sustainable and sold at a premium price.

Conservation Leasing

Beck, a colleague of Cook's at The Nature Conservancy, expands further on the applications that land conservation strategies have in the marine realm. "At first we thought, 'How can we work in marine conservation? We buy land,'" says Beck. The hurdles seemed high—not only was submerged land not "land," but most coastal waters are publicly owned and not available for purchase. But as his organization began to do some homework, Beck says, they realized that vast swaths of public waters are available for lease. Oil companies famously hold offshore leases; other underwater leaseholders include enterprises such as docks, marinas, and aquaculture companies. Conservation groups weren't on that list—but, The Nature Conservancy figured, there wasn't any reason they couldn't be. The trick was convincing the agencies responsible for the marine areas that a conservation group should be considered on par with other competitors for leases, and that restoration and research are just as legitimate a use of marine parcels as more traditional extractive uses. "Conservation's not a special interest, just another interest that needs access," explains Beck. Washington State Department of Natural Resources bought the logic of this argument, understanding how such an arrangement could further its own conservation mission. In 2005, it became the first governmental agency in the nation to lease an underwater property for conservation. And The Conservancy has now begun restoring species and habitat in Washington state waters. The Conservancy was encouraged by its Washington experience and by underwater conservation it had undertaken on some of its own holdings. Finding that submerged-land leases were both affordable and relatively easy to obtain, they moved forward and outward, to offshore waters. At the close of the conference session, Beck described The Nature Conservancy's most recent effort off the California coast, where they have leased two kelp forest beds. The state makes available half the kelp beds in its waters, at the rate of $1,000 per square mile. Most are leased to kelp harvesting companies, which mow the top part of the forests to produce alginate and feed farmed abalone. The Nature Conservancy is using its beds to study the effects of such harvesting on juvenile rockfish, which shelter in the kelp forest canopy when they're small. Beck is enthusiastic about the possibilities and eager to show the way for other groups. "Think about all the coastal land trusts—they could all be doing this," he says. His message to groups devoted to the ocean: "Don't wait. Don't whine. Just do it." Eileen Campbell is a science writer and partner at Farallon Media, which produces exhibits, documentaries, and other media on nature and history. She can be reached at eileenc@farallonmedia.com. First published: July 24, 2006 Please see our Reprint Guidelines for details on republishing our articles. For a synopsis of the Q&A session that followed the above presentations at the Society for Conservation Biology conference, see below.

Q&A A lively Q&A session after the presentations focused on the social and economic aspects of market-based marine conservation. One participant, noting that these were constructed, rather than natural, markets, wondered if they could work in low-income nations without strong economic infrastructures. Acknowledging that such markets were somewhat non-organic, and that views on "ownership" vary around the world, the presenters described how in some places catch-share arrangements make use of—or reestablish—traditional social structures. Community groups that hold fishing rights and allocate shares include the ahupua'a in Hawaii, cooperativas in Mexico, and adat in the Philippines and Indonesia. Answering questions on the economics of the trawler buyback program, Chuck Cook described how the values of the permits had been determined using standard economic measures: 14 years of records from the fishing industry on pounds landed and prices paid. The "several thousand dollars per permit" (Cook wasn't willing to be more specific than that, since The Nature Conservancy is still negotiating some buybacks) bought not only the fishing rights and vessels, but also the fishermen's willingness to go with The Nature Conservancy to the Fisheries Council and support a trawling ban in the area. Rod Fujita compared the fishing economy to a broken factory. "The factory makes good widgets, and it has good workers, but the management is screwed up. What we're doing is in effect a hostile takeover. You change the management, make it work better, and demand a return on your investment." The hope is that these new approaches will fix some of the structural problems of the industry that encourage destructive practices. Then, once the stocks and their habitats recover, they can be fished in a manner that's both biologically and economically sustainable. Questioners were concerned about not only the fishing industry, but the communities and individuals that comprise it and how these changes in existing policies might affect small fishermen. Is there danger that tradable fishing rights will end up concentrated in the hands of a few large holders? How can the new approaches protect the fishing way of life? Rod Fujita addressed the question, noting that policies need to build in constraints to protect things like social values that have no explicit market value. "There's been an evolution of complexity and sensitivity to social concerns" in market-based programs, he said; "We're getting better at addressing this." Fujita expressed the hopes of many in the room as he discussed these market-based approaches to marine conservation. Because of the wisdom we've gained on land, he said, we can apply the latest legal and economic thinking to the ocean. "We can demand stewardship in return for access to these valuable resources. We have the opportunity to create a new social contract here."

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