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MARINFORSKFISK-Marine ressurser og miljø - fiskeri

DistRes - Distribution and resource rent in fisheries

Alternative title: DistRes - Fordeling og ressursrente i fiskerier

Awarded: NOK 6.6 mill.

This project studies distributional impacts of fisheries management and managerial challenges considering changing conditions due to environmental and socioeconomic factors. Norway has been an early adopter of vessel-based quota management of its fisheries resources, and while it has been successful in generating a significant amount of wealth in the sector, there are concerns about adverse distributional impacts of rights-based management. We address concerns such as crowding out of smaller-scale fishers; excess volatility and price uncertainty in quota prices; consolidation of rights geographically and a loss of viable rural fishing communities; excess consolidation and market power; and foregone resource rent tax revenues. The project has three overarching themes: 1) We survey the available knowledge on distributional impacts in fisheries and statistically analyze how the capitalization of resource rent in Norwegian quota prices have changed and why. 2) We analyze the distributional impacts of consolidation in fisheries and study how different policies impact the redistribution resource rents. 3) We use global satellite data to analyze how Exclusive Economic Zone (EEZ) boundaries and climatic shocks affect fishing effort and thus the value of global fish resources. Our results will be directly policy-relevant to fisheries policy in Norway and in other countries that have adopted or are considering rights-based management. We will make our results public through outreach activities and use them in teaching. Our main objective is to publish in high-quality journals in economics and possibly in natural sciences. Project members will also present results in international seminars and conferences. The project has funded a postdoctoral researcher, who has worked on two of her dissertation chapters for journal submission, in addition to contributing to the deliverables of the project. One paper looks at price discrimination when consumers have biased behavior. This paper finds that the new pricing schedule favors regulators for both welfare improvement and distributional goal. The second paper studies the efficiency costs and distributional impacts of "not in my backyard" (NIMBY) policies in waste management. She finds that NIMBY, by doing what citizens want and mean to protect local communities from health and environmental contaminants, is inefficient and exacerbate the uneven distribution of waste going to minor communities. Both papers have been published in well-ranked economics journals. The postdoctoral researcher has used the same theoretical insights and empirical techniques for studying the distributional impacts in our projects on fisheries. In a new paper, the postdoc empirically studies the value of traded fishing quotas. She finds that tradable fishing permits can help reduce operation costs of a firm, because trading can increase the firm’s productivity and facilitate the realization of economies of scale. In decomposition of the value of traded quotas, she finds economies of scale played a main role in the first few years after a big vessel acquired quotas. This finding suggests consolidation in tradable fishing permits can be a sign of cost efficiency owing to economies of scale rather than market power. The postdoc had a research stay at Cornell University funded by an additional grant associated with the project, between January and October 2022 to develop this paper. While abroad, she also presented the paper at several conferences and workshops, including the (US) National Bureau of Economic Research Summer Institute Meetings. The postdoc also presented the work in seminars at several universities. Currently, three more new papers are underway. First, a paper (revise and resubmit at a top economics journal) studies welfare and distributional impacts of alternative allocation methods in environmental markets. This work also proposes an alternative allocation formula, “reverse grandfathering”, which maintains the positive political economy aspects of grandfathered allocations but changes the marginal incentives to favor conservation before the market is implemented. The second paper addresses the third main objective of the project, cf. above. This paper, in draft form, uses satellite data to study the effectiveness of EEZs on curbing overfishing. Finally, a paper (in preparation) will study the impact of resource policy on labor markets in theory and empirically.

This project focuses on distributional impacts of fisheries policies. Specific focus is given to possible adverse distributional impacts of right based management, which is becoming an increasingly popular way to regulate fisheries. These concerns include crowding out of smaller-scale fishers, excess volatility and price uncertainty in quota prices, consolidation of rights geographically and a loss of viable rural fishing communities, excess consolidation and market power and dissipation of resource rent. Analysis of distributional impacts is made possible by availability of new data sets. Microdata on transactions in quota-managed fisheries from Norway and New Zealand will allow us to estimate the total value of resource rents in fisheries and assess the distributional impacts of rights based management. Global satellite data covering movement and activities of 70,000 large fishing vessels make it possible to analyze how economic and climate shocks form global fisheries patterns and affect global distribution of resource rents. A strength of this application lies in its combination of the newly-available data and a research team that has both strong knowledge of econometric techniques and economic theory, and in-depth knowledge of fisheries and fisheries management in Norway and beyond.

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MARINFORSKFISK-Marine ressurser og miljø - fiskeri

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