Market-Based Regional Agreements Can Help Achieve Large-Scale Marine Conservation

Changing how fishing days are sold to foreign fleets would save governments money, study shows

Market-Based Regional Agreements Can Help Achieve Large-Scale Marine Conservation
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Using evidence from nearby Kiribati, researchers estimated that Palau could cooperate with neighboring countries to reduce the economic effects of a proposed marine protected area.
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When countries cooperate to manage the ocean, they can promote a more equitable distribution of the costs of setting up marine protected areas (MPAs).

New research by Juan Carlos Villaseñor-Derbez and Christopher Costello from the University of California, Santa Barbara, and John Lynham from the University of Hawaii at Manoa, published Jan. 2, 2020, in the journal Nature Sustainability, provides an example of how this cost distribution might work. 

Although closing or otherwise limiting fishing in regions of the ocean, such as through the establishment of MPAs, can result in regionwide benefits to all stakeholders dependent on fish stocks, the costs of doing so often are paid by only a small group, such as individual governments and their fishing communities. This new research finds that market incentives and other rules that make the playing field more equitable can allow these stakeholders to recoup some, or potentially all, of their costs.

Using a combination of vessel-tracking information and revenue data from fishing, the researchers assessed the impact of the Phoenix Islands Protected Area (PIPA), a 408,250 square kilometer area in Kiribati and one of the largest MPAs in the world. They found that, because of the unique nature of the regional fisheries management system in the area, the 20-percent decrease in revenue following the implementation of PIPA was smaller than would be expected based only on the 35-percent reduction in fishing effort.

Long-term allocations

Despite a global movement to increase the area of the ocean under protection, experts have a limited understanding of how establishing an MPA affects the economy of the implementing country.

To examine the economic implications of creating MPAs, the study looked at Kiribati’s decision to establish PIPA within the context of the Parties to the Nauru Agreement (PNA). This group of nine countries in the Pacific Ocean banded together in 2007 to collectively regulate foreign fishing fleets targeting skipjack and yellowfin tuna within their waters. Under the PNA’s Vessel Day Scheme (launched in 2012), countries allocate and sell approximately 45,000 vessel-days—the right for a single vessel to fish for one day within a given country’s waters. In 2016, a vessel day was selling for approximately US$9,000. Revenue from this vessel-day scheme (VDS) represents more than half of all governmental revenue for some of the PNA member countries.

An important mechanism within the VDS allows for trading of vessel-days among PNA countries. Traditionally, trading has occurred to address annual variability in where the fish are. The study found that this structure can reduce some of the overall costs of MPAs while also distributing those costs more equitably among PNA countries.

In 2016, Kiribati received its normal allocation of 11,000 vessel-days but sold only 7,479 days to fishing vessels in its waters, in part due to the reduction in available fishing area from PIPA. However, although VDS fishing effort within Kiribati decreased by approximately 35 percent, its revenue from selling fishing licenses decreased by only 20 percent. This finding suggests that Kiribati was able to recoup some of the costs of the MPA by trading vessel-days to neighboring countries, which now potentially benefit from the MPA’s existence. Overall, the PNA still sold the full allocation of 45,000 vessel-days and actually increased total revenue from the VDS by about US$28 million.

Allocation rules

The researchers also found that the allocation rules for PNA’s VDS could further reduce the burden on each member country of future MPA designations. Currently, allocations are based on two factors: fishing effort, which accounts for 60 percent of the allocation and is based on each country’s average over the previous seven years, and biomass—how many fish are estimated to be in a country’s exclusive economic zone (EEZ)—which accounts for the other 40 percent and is based on the prior 10 years’ average. The parties, however, have the ability to change how they weigh each of these two factors.

Under that structure, large MPAs will reduce a country’s allocation of vessel-days over time as fewer boats purchase fishing rights in its EEZ. However, basing the allocation primarily, or even solely, on biomass would significantly reduce the costs of the conservation action, in some cases by as much as 99 percent.

Next steps

With a growing number of countries looking to establish large MPAs to achieve conservation goals, the results of this study provide insight into how to more equitably distribute the costs of conservation among all parties receiving the benefits.

“MPAs provide lots of benefits, including to fisheries, through the spillover of fish and the protection of spawning grounds,” Lynham says. “Our analysis shows how well-designed markets can reward governments that provide these benefits and ensure that large MPAs are a win-win for all parties involved.”

Jim Palardy directs research projects for The Pew Charitable Trusts’ conservation science initiative.

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