Misplaced Pages

#185814

90-587: ITQ may refer to: Individual Transferable Quota - permits to harvest fish QQQ - an Australian television station In the United Kingdom, an NVQ in information technology, commonly known as ITQ During a tendering process ITQ may refer to Invitation To Quote Abbreviation of "Inside the Queensway ", a colloquial term referring to the region in immediate proximity to Canada's Houses of Parliament . The term ITQ

180-505: A moratorium on moving other fisheries into the programme that lasted from 1996 to 2004. Starting in January 2011, fishermen in California, Oregon and Washington will operate via tradeable catch shares. Fishermen have been discarding bycatch that is not their target, typically killing the individuals. Catch shares allow trawlers to exchange by-catch with each other, benefitting both. Goals of

270-445: A certain fishery, accounting for carrying capacity, re-generation rates and future values. This amount is called the total allowable catch (TAC). Under ITQs, participants in a fishery receive rights to a portion of the TAC without charge. Quotas can be fished, bought, sold, or leased. Twenty-eight U.S. fisheries have adopted ITQs as of 2008. Concerns about distributional consequences led to

360-414: A firm that reduced its emissions would receive fewer permits in the future (IMF, 2008, pp. 25–26). There are costs that emitters do face, e.g., the costs of the fuel being used, but there are other costs that are not necessarily included in the price of a good or service. These other costs are called external costs (Halsnæs et al. , 2007). This problem can also be criticized on ethical grounds, since

450-411: A fisherman leaves the industry, the quota reverts to the government to retire or to grant/auction to another party. Once distributed, quotas can be re-granted/re-auctioned periodically or held in perpetuity. Limiting the time period lowers the quota's value and its initial auction price/cost, but subsequent auctions create recurring revenues. At the same time, "privatising" such a public resource reduces

540-403: A government political process, individual companies are free to choose how or whether to reduce their emissions. Failure to report emissions and surrender emission permits is often punishable by a further government regulatory mechanism, such as a fine that increases costs of production. Firms will choose the least-cost way to comply with the pollution regulation, which will lead to reductions where

630-484: A large scale study concluded that ITQs can help to prevent collapses and restore declining fisheries when compared to a data set including 11,000 fisheries of various management structures (some entirely unmanaged). While nearly a third of open-access fisheries have collapsed, catch share fisheries are only half as likely to fail. However, when compared to other modern fishery management schemes, IFQ managed fisheries exhibit no long term ecological advantages. A study of

720-465: A limited number (a "cap") of permits that allow a discharge of a specific quantity of a specific pollutant over a set time period. Polluters are required to hold permits in amount equal to their emissions. Polluters that want to increase their emissions must buy permits from others willing to sell them. Emissions trading is a type of flexible environmental regulation that allows organizations and markets to decide how best to meet policy targets. This

810-501: A model that includes the price of carbon and greenhouse gases (GHG). In many schemes, organizations which do not pollute (and therefore have no obligations) may also trade permits and financial derivatives of permits. In some schemes, participants can bank allowances to use in future periods. In some schemes, a proportion of all traded permits must be retired periodically, causing a net reduction in emissions over time. Thus, environmental groups may buy and retire permits, driving up

900-410: A particular objective. Coase's model assumes perfectly operating markets and equal bargaining power among those arguing for property rights. In Coase's model, efficiency, i.e., achieving a given reduction in emissions at lowest cost, is promoted by the market system. This can also be looked at from the perspective of having the greatest flexibility to reduce emissions. Flexibility is desirable because

990-427: A polluter that affects water quality at a number of points has to hold a portfolio of licenses covering all relevant monitoring-points. In the above example, if country 2 wants to emit a unit of pollutant, it should purchase two permits: one for location 2 and one for location 3. Montgomery shows that, while both markets lead to efficient license allocation, the market in pollution-licenses is more widely applicable than

SECTION 10

#1732898614186

1080-419: A price on pollution (for example, see carbon price ), and so provide an economic incentive to reduce pollution beginning with the lowest-cost opportunities. By contrast, in a command-and-control approach, a central authority designates pollution levels each facility is allowed to emit. Cap and trade essentially functions as a tax where the tax rate is variable based on the relative cost of abatement per unit, and

1170-527: A quota market for cod in 1984 and made those quotas transferable in 1990. Iceland became one of the first countries in the world to adopt a quota system to manage its marine resources. The quota system is contentious in Icelandic politics. Critics of the quota system criticize the manner in which the quotas were initially distributed, arguing that the quotas should have been auctioned to the highest bidders. Critics have called for quotas to be gradually returned to

1260-575: A rate which will cause no more than a specified increase at the pollution-level. For concreteness, consider the following model. As an example, consider three countries along a river (as in the fair river sharing setting). So the matrix H {\displaystyle H} in this case is a triangular matrix of ones. Each pollution-license for location i {\displaystyle i} permits its holder to emit pollutants that will cause at most this level of pollution at location i {\displaystyle i} . Therefore,

1350-407: A sufficient number of permits in system. Some analysts argue that allowing others to participate in trading, e.g., private brokerage firms, can allow for better management of risk in the system, e.g., to variations in permit prices (Bashmakov et al. , 2001). It may also improve the efficiency of system. According to Bashmakov et al . (2001), regulation of these other entities may be necessary, as

1440-410: A surcharge on the pollution created while producing goods and services. For example, a carbon tax is a tax on the carbon content of fossil fuels that aims to discourage their use and thereby reduce carbon dioxide emissions. The two approaches are overlapping sets of policy designs. Both can have a range of scopes, points of regulation, and price schedules. They can be fair or unfair, depending on how

1530-569: A time when it is most efficient to do so. One of the advantages of Coase's model is that it suggests that fairness (equity) can be addressed in the distribution of property rights, and that regardless of how these property rights are assigned, the market will produce the most efficient outcome. In reality, according to the held view, markets are not perfect, and it is therefore possible that a trade-off will occur between equity and efficiency (Halsnæs et al ., 2007). In an emissions trading system, permits may be traded by emitters who are liable to hold

1620-438: A world of uncertainty, it is not clear whether emissions fees or cap-and-trade systems are more efficient—it depends on how fast the marginal social benefits of reducing pollution fall with the amount of cleanup (e.g., whether inelastic or elastic marginal social benefit schedule). Other: The magnitude of the tax will depend on how sensitive the supply of emissions is to the price. The permit price of cap-and-trade will depend on

1710-455: Is a price instrument because it fixes the price while the emission level is allowed to vary according to economic activity. A major drawback of an emission tax is that the environmental outcome (e.g. a limit on the amount of emissions) is not guaranteed. On one hand, a tax will remove capital from the industry, suppressing possibly useful economic activity, but conversely, the polluter will not need to hedge as much against future uncertainty since

1800-535: Is a quantity control instrument. That is, a tax is a unit price for pollution that is set by authorities, and the market determines the quantity emitted; in cap and trade, authorities determine the amount of pollution, and the market determines the price. This difference affects a number of criteria. Responsiveness to inflation: Cap-and-trade has the advantage that it adjusts to inflation (changes to overall prices) automatically, while emissions fees must be changed by regulators. Responsiveness to cost changes: It

1890-514: Is determined by reference to the participant's historical emissions. To demonstrate compliance, a participant must hold permits at least equal to the quantity of pollution it actually emitted during the time period. If every participant complies, the total pollution emitted will be at most equal to the sum of individual limits. Because permits can be bought and sold, a participant can choose either to use its permits exactly (by reducing its own emissions); or to emit less than its permits, and perhaps sell

SECTION 20

#1732898614186

1980-469: Is different for regional pollutants (e.g. SO 2 and NO x , and also mercury ) because the impact of these pollutants may differ by location. The same amount of a regional pollutant can exert a very high impact in some locations and a low impact in other locations, so it matters where the pollutant is released. This is known as the Hot Spot problem. A Lagrange framework is commonly used to determine

2070-577: Is different from Wikidata All article disambiguation pages All disambiguation pages Individual Transferable Quota Historically, inshore and deepwater fisheries were in common ownership where no one had a property right to the fish (i.e., owned them) until after they had been caught. Each boat faced the zero-sum game imperative of catching as many fish as possible, knowing that any fish they did not catch would likely be taken by another boat. Commercial fishing evolved from subsistence fishing with no restrictions that would limit or direct

2160-411: Is done in other financial markets , e.g., to prevent abuses of the system, such as insider trading . Emissions trading gives polluters an incentive to reduce their emissions. However, there are possible perverse incentives that can exist in emissions trading. Allocating permits on the basis of past emissions ("grandfathering") can result in firms having an incentive to maintain emissions. For example,

2250-409: Is essentially an emission cap and permit trading system but the maximum (or minimum) permit price is capped. Emitters have the choice of either obtaining permits in the marketplace or buying them from the government at a specified trigger price (which could be adjusted over time). The system is sometimes recommended as a way of overcoming the fundamental disadvantages of both systems by giving governments

2340-452: Is fundamentally different from pollution quotas, since the latter regulate the by-product of an industry, whereas fishery ITQs regulate the actual output product of the fishing industry, and thus amount to exclusive industry participation rights. The use of IFQs has often been related to broader processes within neoliberalism that tend to utilise markets as a regulatory tool. The rationale behind such neo-liberal mechanisms situates itself in

2430-462: Is how to distribute/allocate the shares and what rights come with them. The initial allocation can be granted or auctioned . Shares can be held permanently ("owned") or for a fixed period such as one year ("rented"). They can be salable and/or leasable or not, with or without limits. Each variation has advantages and disadvantages, which may vary given the culture of a given fishing community. ITQs are typically initially allocated as grants according to

2520-463: Is in contrast to command-and-control environmental regulations such as best available technology (BAT) standards and government subsidies . Pollution is a prime example of a market externality. An externality is an effect of some activity on an entity (such as a person) that is not party to a market transaction related to that activity. Emissions trading is a market-based approach to address pollution. The overall goal of an emissions trading plan

2610-460: Is not clear which approach is better. It is possible to combine the two into a safety valve price: a price set by regulators, at which polluters can buy additional permits beyond the cap. Responsiveness to recessions: This point is closely related to responsiveness to cost changes, because recessions cause a drop in demand. Under cap and trade, the emissions cost automatically decreases, so a cap-and-trade scheme adds another automatic stabilizer to

2700-496: Is possible for a country to reduce emissions using a command-and-control approach, such as regulation, direct and indirect taxes . The cost of that approach differs between countries because the Marginal Abatement Cost Curve (MAC)—the cost of eliminating an additional unit of pollution—differs by country. Coase (1960) argued that social costs could be accounted for by negotiating property rights according to

2790-401: Is the traditional approach to reducing air pollution. Command-and-control regulations are more rigid than incentive-based approaches such as pollution fees and cap and trade. An example of this is a performance standard which sets an emissions goal for each polluter that is fixed and, therefore, the burden of reducing pollution cannot be shifted to the firms that can achieve it more cheaply. As

ITQ - Misplaced Pages Continue

2880-446: Is to minimize the cost of meeting a set emissions target . In an emissions trading system, the government sets an overall limit on emissions, and defines permits (also called allowances), or limited authorizations to emit, up to the level of the overall limit. The government may sell the permits, but in many existing schemes, it gives permits to participants (regulated polluters) equal to each participant's baseline emissions. The baseline

2970-520: Is urgent, as with greenhouse gas emissions. A price floor also provides certainty and stability for investment in emissions reductions: recent experience from the UK shows that nuclear power operators are reluctant to invest on "un-subsidised" terms unless there is a guaranteed price floor for carbon (which the EU emissions trading scheme does not presently provide). Responsiveness to uncertainty: As with cost changes, in

3060-581: Is used metaphorically to refer to issues and people directly involved with Federal politics in Canada . Topics referred to by the same term [REDACTED] This disambiguation page lists articles associated with the title ITQ . If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=ITQ&oldid=920825836 " Category : Disambiguation pages Hidden categories: Short description

3150-593: The Saami in North Norway. Aboriginal fishing rights are said to pose a challenge to the authoritative claims of the state as the final arbiters in respect of access and participation in rights-based regimes. The term catch share has been used more recently to describe the range of programmes similar to ITQs. Catch shares expanded the concept of daily catch limits to year-long limits, allowed different fishermen to have different limits based on various factors, and also limited

3240-421: The marginal costs, that is to say, the incremental costs of reducing emissions, varies among countries. Emissions trading allows emission reductions to be first made in locations where the marginal costs of abatement are lowest (Bashmakov et al ., 2001). Over time, efficiency can also be promoted by allowing "banking" of permits (Goldemberg et al ., 1996, p. 30). This allows polluters to reduce emissions at

3330-570: The 14 IFQ programmes in the United States revealed that fish stocks are unaffected by these management schemes. In terms of productivity, a study that exploits a 2009 reform that introduced IFQ for Peruvian anchovy finds that quotas do not increase within-asset or within-firm productivity in quantities. In 1995, the Alaskan halibut fishery converted to ITQs, after regulators cut the season from about four months down to two or three days. Today, due to

3420-424: The TAC becomes ITQs, with the remainder allocated to other management strategies. The grant approach is inherently political, with attendant benefits and costs. For example, related industries such as fish processing and other non-participants may seek quota grants. Also, fishermen are often excluded from receiving quota if they are not also boat owners, however boat owners who do not fish do receive quota, such as

3510-652: The US Gulf Red Snapper quota. The consolidation results in job loss, reduced wages, and decreased entry opportunities into the fishery. Many IFQ systems involve the temporary transfer of fishing rights, whereby the owner of quota leases the fishing rights to active fishermen in exchange for a fixed percentage of the landed value of fish. Since quota acquisition is often beyond the financial means of many fishermen, they are forced to sacrifice substantial portions of their income in order to lease fishing rights. For example, Bering Sea crab lease fees can be as high as 80% of

3600-426: The amount of tax will track with profits. The burden of a volatile market will be borne by the controlling (taxing) agency rather than the industry itself, which is generally less efficient. An advantage is that, given a uniform tax rate and a volatile market, the taxing entity will not be in a position to pick "winners and losers" and the opportunity for corruption will be less. Assuming no corruption and assuming that

3690-457: The belief that market mechanisms harness profit motive to more innovative and efficient environmental solutions than those devised and executed by states. Whilst such neo-liberal regulation has often been cited as a move away from state governance, in the case of privatization the state is integral in the process of creating and maintaining property rights . The use of neoliberal privatising regimes has also often raised contradictions with

ITQ - Misplaced Pages Continue

3780-434: The boats came in. A secondary consequence was that boats sometimes embarked when the fishery was "open" regardless of weather or other safety concerns. The implementation of ITQs or IFQs works in tandem with the privatisation of common assets. This regulatory measure seeks to economically rationalise access to a common-pool resource . This type of management is based in the doctrine of natural resource economics . Notably

3870-446: The catch. The implicit assumption was that the ocean's bounty was so vast that restrictions were unnecessary. In the 20th century, fisheries such as Atlantic cod and California sardines collapsed, and nations began to limit access to their fishing grounds by boats from other countries, while in parallel, international organizations began to certify that specific species were "threatened", "endangered", etc. One early management technique

3960-426: The controlling agency and the industry are equally efficient at adapting to volatile market conditions, the best choice depends on the sensitivity of the costs of emission reduction, compared to the sensitivity of the benefits (i.e., climate damage avoided by a reduction) when the level of emission control is varied. A third option, known as a safety valve , is a hybrid of the price and quantity instruments. The system

4050-572: The cost and effectiveness of various control strategies. Each abatement strategy was compared with the "least-cost solution" produced by a computer optimization program to identify the least-costly combination of source reductions in order to achieve a given abatement goal. In each case it was found that the least-cost solution was dramatically less costly than the same amount of pollution reduction produced by any conventional abatement strategy. Burton and later Sanjour along with Edward H. Pechan continued improving and advancing these computer models at

4140-440: The cost of coastal communities whose economies rely principally on their fishing fleet. This cost results from the re-equilibration of the quota-regime market, revealing the inefficient over-investment that had taken place in the industry prior to implementation of the quota regime. Emissions trading Emissions trading is a market-oriented approach to controlling pollution by providing economic incentives for reducing

4230-728: The course of its history can be divided into four phases: In the United States, the acid rain related emission trading system was principally conceived by C. Boyden Gray , a G.H.W. Bush administration attorney. Gray worked with the Environmental Defense Fund (EDF), who worked with the EPA to write the bill that became law as part of the Clean Air Act of 1990. The new emissions cap on NO x and SO 2 gases took effect in 1995, and according to Smithsonian magazine, those acid rain emissions dropped 3 million tons that year. It

4320-416: The current iteration of the quota system. Parties such as Social-Democratic Party and Viðreisn have called for a quota system that increasingly relies on auctions. The Magnuson-Stevens Fishery Conservation and Management Act defines individual transferable quotas (ITQs) as permits to harvest specific quantities of fish of a particular species. Fisheries scientists decide the maximum annual harvest in

4410-619: The current market price of emission permits in Europe and the US. Countries face the permit market price that exists in the market that day, so they are able to make individual decisions that would minimize their costs while at the same time achieving regulatory compliance. This is also another version of the Equi-Marginal Principle , commonly used in economics to choose the most economically efficient decision. There has been longstanding debate on

4500-426: The economy—in effect, an automatic fiscal stimulus. However, a lower pollution price also results in reduced efforts to reduce pollution. If the government is able to stimulate the economy regardless of the cap-and-trade scheme, an excessively low price causes a missed opportunity to cut emissions faster than planned. Instead, it might be better to have a price floor (a tax). This is especially true when cutting pollution

4590-409: The efficiency of the economy. Form of allocation The economist Ross Garnaut states that permits allocated to existing emitters by 'grandfathering' are not 'free'. As the permits are scarce they have value and the benefit of that value is acquired in full by the emitter. The cost is imposed elsewhere in the economy, typically on consumers who cannot pass on the costs. Some economists have urged

SECTION 50

#1732898614186

4680-420: The emissions of pollutants . The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). One prominent example is carbon emission trading for CO 2 and other greenhouse gases which is a tool for climate change mitigation . Other schemes include sulfur dioxide and other pollutants. In an emissions trading scheme, a central authority or governmental body allocates or sells

4770-404: The excess permits; or to emit more than its permits, and buy permits from other participants. In effect, the buyer pays a charge for polluting, while the seller gains a reward for having reduced emissions. Emissions Trading results in the incorporation of economic costs into the costs of production which incentivizes corporations to consider investment returns and capital expenditure decisions with

4860-421: The fish) but can potentially cause large changes in the culture of fishing communities. Consolidation of quota accompanies every IFQ programme, and typically works to phase out smaller, less profitable fishing operations in favour of larger, often corporate-owned fleets who have better financing capabilities. Some fisheries require quota holders to be participating fishermen to prevent absentee ownership and limit

4950-542: The fisheries. Initial recipients of quota receive windfall profits through the gifting of share ownership, while all future entrants are forced to purchase or lease the right to harvest fish. Many have questioned both the ethical and economic repercussions of dedicating a secure, exclusive privilege to access this public resource. For example, in the US, during a presentation given to the Gulf Fishery Management Council, Fishery Manager Larry Abele stated that

5040-464: The fishery). Since IFQs began in 1995, the commercial longline fleet has never exceeded these fisheries' TACs. ITQs may have the effect of changing the criteria that fishermen apply to their catch. Highgrading involves catching more fish than the quota allows and dumping specimens that are less valuable because of size, age or other criteria. Many of the discarded fish are already dead or quickly die, increasing fishing's reduction of stocks. In 2008

5130-428: The flexibility to adjust the system as new information comes to light. It can be shown that by setting the trigger price high enough, or the number of permits low enough, the safety valve can be used to mimic either a pure quantity or pure price mechanism. Cap and trade is the textbook example of an emissions trading program . Other market-based approaches include baseline-and-credit , and pollution tax . They all put

5220-415: The hands of private investors, and can cause major financial strain on fishermen along with the economic contraction of fishing communities. The transition to IFQ management tends to cause considerable economic harm to coastal communities that are dependent on commercial fisheries. Although IFQ management systems are designed to enhance the economic performance of the fishing industry, this usually comes at

5310-463: The industry must accordingly bear the cost of adapting to these volatile market conditions. The burden of a volatile market thus lies with the industry rather than the controlling agency, which is generally more efficient. However, under volatile market conditions, the ability of the controlling agency to alter the caps will translate into an ability to pick "winners and losers" and thus presents an opportunity for corruption. In contrast, an emission tax

5400-561: The industry. It is theorised that without a long-term right to fish stocks, there is no incentive to conserve fish stocks for the future. The use of ITQs in resource management dates back to the 1960s and was first seen in 'pollution quotas' , which are now widely used to manage carbon emissions from power utilities. For both air and marine resources ITQs use a 'cap-and-trade' approach by setting typically annual limits on resource exploitation (TAC in fisheries) and then allowing trade of quotas between industry users. However, ITQ use in fisheries

5490-456: The landed value of the crab, meaning that the active fishermen only retain 20% of the revenue, much of which is needed to cover costs. In some fisheries, the majority of quota is leased to active fishermen, often by individuals who do not physically participate in the fishery, but have been able to acquire shares. This makes quota acquisition even less likely for active fishermen, results in diversion of wealth away from fishing communities and into

SECTION 60

#1732898614186

5580-518: The least cost of achieving an objective, in this case the total reduction in emissions required in a year. In some cases, it is possible to use the Lagrange optimization framework to determine the required reductions for each country (based on their MAC) so that the total cost of reduction is minimized. In such a scenario, the Lagrange multiplier represents the market allowance price (P) of a pollutant, such as

5670-406: The least expensive solutions exist, while allowing emissions that are more expensive to reduce. Under an emissions trading system, each regulated polluter has flexibility to use the most cost-effective combination of buying or selling emission permits, reducing its emissions by installing cleaner technology, or reducing its emissions by reducing production. The most cost-effective strategy depends on

5760-420: The local regulator. Enforcement methods include fines and sanctions for polluters that have exceeded their allowances. Concerns include the cost of MRV and enforcement, and the risk that facilities may lie about actual emissions. An emission license directly confers a right to emit pollutants up to a certain rate. In contrast, a pollution license for a given location confers the right to emit pollutants at

5850-412: The market in emission-licenses. The nature of the pollutant plays a very important role when policy-makers decide which framework should be used to control pollution. CO 2 acts globally, thus its impact on the environment is generally similar wherever in the globe it is released. So the location of the originator of the emissions does not matter from an environmental standpoint. The policy framework

5940-408: The newly created U.S. Environmental Protection Agency. The agency introduced the concept of computer modeling with least-cost abatement strategies (i.e., emissions trading) in its 1972 annual report to Congress on the cost of clean air. This led to the concept of "cap and trade" as a means of achieving the "least-cost solution" for a given level of abatement. The development of emissions trading over

6030-468: The pollutant market. A tax generates government revenue, but full-auctioned emissions permits can do the same. A similar upstream cap-and-trade system could be implemented. An upstream carbon tax might be the simplest to administer. Setting up a complex cap-and-trade arrangement that is comprehensive has high institutional needs. Command and control is a system of regulation that prescribes emission limits and compliance methods for each facility or source. It

6120-710: The polluter is being paid to reduce emissions (Goldemberg et al ., 1996, p. 38). On the other hand, a permit system where permits are auctioned rather than given away, provides the government with revenues. These revenues might be used to improve the efficiency of overall climate policy, e.g., by funding energy efficiency programs (ACEEE 2019) or reductions in distortionary taxes (Fisher et al ., 1996, p. 417). In Coase's model of social costs, either choice (grandfathering or auctioning) leads to efficiency. In reality, grandfathering subsidizes polluters, meaning that polluting industries may be kept in business longer than would otherwise occur. Grandfathering may also reduce

6210-685: The polluter's marginal abatement cost and the market price of permits. In theory, a polluter's decisions should lead to an economically efficient allocation of reductions among polluters, and lower compliance costs for individual firms and for the economy overall, compared to command-and-control mechanisms. In some industrial processes, emissions can be physically measured by inserting sensors and flowmeters in chimneys and stacks, but many types of activity rely on theoretical calculations instead of measurement. Depending on local legislation, measurements may require additional checks and verification by government or third party auditors , prior or post submission to

6300-642: The pre-allocation of catch that accompanies IFQs, the season lasts nearly eight months and boats deliver fresh fish at a steadier pace. However, halibut stocks have been in continuous decline for over a decade, as poor stock assessments leading to overfishing have caused a substantial decline in biomass . Additionally, despite the increase in landings value, the number of quota holders has declined by 44%, as consolidation and quota pricing has served to prevent new entrants. Not all fisheries have thrived under ITQs, in some cases experiencing reduced or static biomass levels, because of factors such as: Iceland introduced

6390-514: The present value of the Gulf Fishery IFQ Harvest amounted to $ 345,000,000 and this was given without requiring of any return to the public from IFQ holders. Virtually every IFQ programme results in substantial consolidation of quota. For example, it is estimated that eight companies control 80% of New Zealand's fisheries through quota acquisition, four companies control 77% of one Alaska crab fishery, and 7% of shareholders control 60% of

6480-538: The price of the remaining permits according to the law of demand . In most schemes, permit owners can donate permits to a nonprofit entity and receive a tax deductions . Usually, the government lowers the overall limit over time, with an aim towards a national emissions reduction target. There are active trading programs in several air pollutants . An earlier application was the US national market to reduce acid rain . The United States now has several regional markets in nitrogen oxides . The efficiency of what later

6570-478: The public. The auction for crab quota in Russia in 2019 raised about 2 billion euro. Note however that the television industry did not have to pay for the necessary spectrum to switch from analog to digital broadcasting , which is more like quota grants for incumbent fishermen. ITQs can be re-sold to those who want to increase their presence in the fishery. Alternatively, quotas can be non-tradeable, meaning that if

6660-530: The quota that a captain can accumulate. In the Alaska halibut and black cod fisheries, only active fishermen can buy quota, and new entrants may not sub-lease their quota. However, these measures have only served to mitigate outside speculation in IFQs by non-fishermen. A lack of regulatory policy or enforcement still results in the prevalence of "armchair fishermen" (those who own quota but do not materially participate in

6750-578: The quotas to fishermen was fair, as they would have incurred the costs of the implementation of a quota system and thus deserved a share of the quota. Supporters also say that the current system has successfully ensured the sustainability of Icelandic fish stocks and led to prosperity. Political parties such as the Independence Party , the Progressive Party and the Left-Greens largely support

6840-425: The rate of technological improvement towards less polluting technologies (Fisher et al. , 1996, p. 417). William Nordhaus argues that allocations cost the economy as they cause the under utilisation an efficient form of taxation. Nordhaus argues that normal income, goods or service taxes distort efficient investment and consumption, so by using pollution taxes to generate revenue an emissions scheme can increase

6930-455: The recent catch history of the fishery. Those with bigger catches are generally allocated larger quotas. The primary drawback is that individuals receive a valuable right at no cost. Grants are somewhat analogous to a " homestead ", in which settlers who developed farms in the American wilderness eventually received title without payment to what had been public land. In some cases, less than 100% of

7020-440: The relative merits of price versus quantity instruments to achieve emission reductions. An emission cap and permit trading system is a quantity instrument because it fixes the overall emission level (quantity) and allows the price to vary. Uncertainty in future supply and demand conditions (market volatility ) coupled with a fixed number of pollution permits creates an uncertainty in the future price of pollution permits, and

7110-403: The remaining amount of public resources and can be thought of as "giving away our future". In the industry, rented quotas are often referred to as "dedicated access privileges" (DAP). Another issue with tradability is that large enterprises may buy all the quotas, ending what may be a centuries-long tradition of small-scale operations. This may benefit the sellers (and the buyers and those who buy

7200-402: The revenue is used. Both have the effect of increasing the price of goods (such as fossil fuels) to consumers. A comprehensive, upstream, auctioned cap-and-trade system is very similar to a comprehensive, upstream carbon tax. Yet, many commentators sharply contrast the two approaches. The main difference is what is defined and what derived. A tax is a price control, while a cap-and-trade system

7290-517: The rights of indigenous communities. For example, the exclusion of Māori tribes in the initial allocation of fishing quota in New Zealand's quota management system led to a lengthy legal battle delaying development in national fisheries policy and resulting in a large settlement from the crown. There have also been similar legal battles regarding the allocation of fishing rights with the Mi'kmaq in Canada and

7380-404: The state, which can then auction the quotas to highest bidders. They argue that this would ensure that the state receives its fair share of the profits whereas the current system where the state taxes a share of the profits leads to suboptimal returns for the state. They also criticize the tendency of the market to result in consolidation of quotas. Supporters say the initial distribution of

7470-415: The system include increased productivity, reduced waste, and higher revenues for fishermen. More than a dozen other U.S. fisheries are now managed by catch shares. Fishery managers say that in Alaska, where catch shares have been in place for several years, fishermen are now achieving higher prices for their catch. IFQs are usually initiated through the de facto privatisation of an otherwise public resource:

7560-399: The tax base is variable based on the amount of abatement needed. In a baseline and credit program, polluters can create permits, called credits or offsets, by reducing their emissions below a baseline level, which is often the historical emissions level from a designated past year. Such credits can be bought by polluters that have a regulatory limit. Emissions fees or environmental tax is

7650-471: The total catch. Catch shares eliminate the "race to the fish" problem, because fishermen are no longer restricted to short fishing seasons and can schedule their voyages as they choose. Boom/bust market cycles disappear, because fishing can continue throughout a typically many-month season. Some safety problems are reduced because there's no need to fish in hazardous conditions just because the fishery happens to be open. A crucial element of catch share systems

7740-405: The use of ITQs in environmental policy has been informed by the work of economists such as Jens Warming, H. Scott Gordon and Anthony Scott. It is theorised that the primary driver of over-fishing is the rule of capture externality. This is the idea that the fisherman does not have a property right to the resource until point of capture, encouraging competitive behaviour and overcapitalisation in

7830-547: The use of market-based instruments such as emissions trading to address environmental problems instead of prescriptive "command-and-control" regulation. Command and control regulation is criticized for being insensitive to geographical and technological differences, and therefore inefficient; however, this is not always so, as shown by the WWII rationing program in the U.S. in which local and regional boards made adjustments for these differences. After an emissions limit has been set by

7920-580: Was the case in Alaskan IFQ distributions. The offshore pollock co-operative in the Pacific Northwest allocated initial quotas by mutual agreement and allows quota holders to sell their quotas only to the co-operative members. Quota auctions recompense the public for access to fisheries. They are somewhat analogous to the spectrum auctions that the U.S. held to allocate highly valuable radio spectrum. These auctions raised tens of billions of dollars for

8010-650: Was to be called the "cap-and-trade" approach to air pollution abatement was first demonstrated in a series of micro-economic computer simulation studies between 1967 and 1970 for the National Air Pollution Control Administration (predecessor to the United States Environmental Protection Agency 's Office of Air and Radiation) by Ellison Burton and William Sanjour . These studies used mathematical models of several cities and their emission sources in order to compare

8100-490: Was to define a "season" during which fishing was allowed. The length of the season attempted to reflect the current abundance of the fishery, with bigger populations supporting longer seasons. This turned fishing into a race, driving the industry to bigger, faster boats, which in turn caused regulators to repetitively shorten seasons, sometimes to only a few days per year. Landing all boats over an ever-shorter interval also led to glut/shortage market cycles with prices crashing when

#185814