05/14/2013 02:20 pm ET Updated Jul 14, 2013

Catch Shares: It's Not Cap and Trade

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Commercial fishing is a multi-billion dollar industry. It's an important part of American life and American culture, going back centuries. Nevertheless, the federal government still has not figured out how to get it right. As Congress prepares to consider the reauthorization of the Magnuson-Stevens Act that governs fisheries management, they should consider ways to better incorporate free-market, private conservation principles into the regulatory regime.

Currently, the industry is mostly still heavily regulated in a one-size doesn't fit all manner, subsidized by taxpayers, and vulnerable to economic downturns as well as what the insurance industry likes to call "acts of God." Likewise, America's fishermen are, quite literally, up against the world as the global economy grows, with more and more countries able to put large fishing fleets in the water without concern for the environmental impact of over fishing.

Research suggests that the free-market approach will not only help preserve America's commercial fishing industry but will make it stronger. As I have previously written, scholar Michael DeAlessi offered some initial ideas in Fishing for Solutions that, over the past ten years, have been partially enacted in U.S. policy as individual fishing quotas or "catch shares."

The idea is simple: give fishermen an ownership stake in a particular fishery through the assignment of tradeable quotas. This invests individual fishermen with the responsibility for managing each fishery. Common sense dictates that they will therefore work to maximize their own personal benefit, improving the sustainability of the fishery and working against measures that will deplete the fishing stock, because it is in their long-term self-interest to do so.

Critics of this approach deride it as a sea-borne version of "cap and trade," the unpopular idea of commoditizing greenhouse gasses in the hope that market forces will limit their emission in industrial societies. Yet the two approaches, while similar, are different for one very basic reason: fish are a real and tangible commodity, one that has value because people believe it does -- and the market demonstrates that they do -- without the government have to establish an artificial structure to give them value.

A person who is hungry and so inclined understands innately that a fish may be used to satisfy that hunger. And that the person who provides that fish must be compensated for their time and labor in bringing it to market in exchange for satisfying that hunger. The same cannot be said for carbon emission, which have little to no value unless the government assigns one to them in order to establish a bookkeeping scheme to regulate the behavior of industry.

If the catch shares approach to fisheries management is applied correctly, government steps out of the way and owners are allowed to be the stewards of the resources on which their livelihoods depend. The principles of property rights, free markets, and environmental conservation all come together. A "cap and trade" scheme for dealing with environmental emissions only works when the government steps in to set the values, creates the tax credits, and police the enforcement and allocation of resources.

Catch shares have worked in New Zealand, where the value of fishing exports has increased from $469 million (US) in 1986, when the program began, to $923 million today as I have previously written. Far from reducing the number of fish landings, they have increased from 200,000 MTons in 1986 to 489,000 in 2007. Almost all of the fish stocks originally included are now above sustainable levels.

It is also important to note that in the case of New Zealand fishing and fisheries management the property right involved is a constitutionally protected one. It cannot be taken away by an arbitrary decision of government, as happened in Iceland in 2010. Indeed, one of the advantages of true catch share programs is that it gets bureaucrats out of the way. The bureaucratic approach has failed for the Endangered Species Act -- under which only a handful of species have recovered -- and is clearly failing here in current U.S. versions of catch shares.

Catch shares are an innovative -- some might say revolutionary -- solution that does not require everyone to start over from the ground up, but they do require commitment from government to step out of the way to work well. Private conservationists have worked tirelessly around the globe to protect privately-held habitats and preserve species, based on the idea that property rights matter and produce actions that benefit the collective good even as they benefit the individual who possess them.

It remains true that, if we want to save fish and fisheries, catch shares are the answer. The principles of private conservation underlying them work, and will both keep us in seafood for decades to come and help depleted fisheries recover. More government bureaucracy is the last thing America's -- and the world's -- fisheries need.

You can learn more about catch shares via CEI, Frontiers of Freedom, or the Environmental Defense Fund.