What is the Southern Bluefin Tuna?

The Southern Bluefin is a highly migratory, fast swimming fish that live in open seas. As a result they support several international fisheries.

They begin their life in warmer water in spawning grounds between Australia and Java. From there, juvenile fish leave the spawning grounds, and move south during summer along the Western Australian coastline towards the Great Australian Bight. They also travel west towards South Africa through the Indian Ocean (Welburn, 2011, Mori, Katsukawa et al, 2001).

The Southern Bluefin Tuna are fished by high seas long-line vessels and purse seine. Upon catching (between 13 and 25kg), the fish are towed back alive to “static growth pontoons” off Port Lincoln in South Australia. After six months of being grown out, they are harvested and exported, mainly to Japan (AFMA). The overwhelming majority of the fish is sold in the Japanese sashimi market (The Conversation, 2013).

The problem

Southern Bluefin Tuna have historically been heavily fished since the 1950s, which has resulted in decline of mature fish as well as annual catch falls. The over-fishing has been to levels that are above the average maximum sustainable yield.

The International Union for Conservation of Nature (IUCN) has a ‘red list’ that categorizes species according to their vulnerability of extinction (Welburn, 2011). The Southern Bluefin tuna has been red listed as a ‘critically endangered species’ due to its rapid decline in quantity (Punt, 2008, in Welburn).

Policy reaction

A voluntary mechanism to limit catch was introduced by Australia, NZ and Japan from 1985. In 1993, there was a move to a more formal management mechanism, with the creation of the Commission for the Conservation of Southern Bluefin Tuna (hereafter CCCBST), headquartered in Canberra.

The Republic of Korea, Indonesia and Taiwan joined the original three in 2001, 2008 and 2002 respectively and the Philippines, South Africa and the European Community were formally accepted as “Cooperating Non-Members in 2004, 2006 and 2006 respectively (CCSBT).

Policy mechanism

Catch for the Southern Bluefin Tuna is regulated via two mechanisms, a global total allowable catch (TAC) as well as individual country-specific transferable quotas (ITQ) set by the CCSBT.

In Australia, the ITQs are allocated as Statutory Fishing Rights. The Australian Fisheries Management Authority (hereafter AFMA) determines a TAC for the Australian domestic fishery, which is based on the allocation from the CCSBT. A Statutory Fishing Right then entitles the holder to receive an equal portion of the TAC set by the AFMA (AFMA, 2012).

A formal rebuilding management regime was adopted in 2011 in response to significant under-reporting discovered. The 2011 management procedure (harvest strategy) aimed to guide recovery of biological stock to 20% of unfinished biomass by 2035 (FRDC, 2012).

The “management procedure” provided guidance for the CCSBT to set global TAC as well as to provide the “fishing industry with stability in the level of catch over a set period of time” (DAFF, 2012). The TAC can be updated based on monitoring data, according to the following parameters:

• set for three-year periods
• built on a 70% probability of rebuilding the stock to the interim target point of 20% of the original spawning stock biomass by 2035
• the minimum TAC change is 100 tonnes
• the maximum TAC change is 3,000 tonnes.

 The FRDC reported that the CCBST set the global TAC for 9,449t (2010), of which Australia had the largest quota of 5,265t (2010). The Australian Fisheries Management Authority reported that approximately 96% of Australia’s quota is caught by five purse seine vessels.

Monitoring and surveillance

The CCSBT has several monitoring, control and surveillance schemes including:

• Catch Documentation Scheme (2010): tracks and validates legitimate flow from catch to point of sale on domestic or export markets
• Monitoring of SBT Trans-shipments at Sea (2009): applied to long-line vessels with freezing capacity.
• Approved Vessels and Farms: not allowed to land or trade SBT caught by those not on the list
• List of Illegal, Unreported and Unregulated (IUU) Fishing Activities (2013): identify vessels engaging in IUU each year
• Vessel Monitoring (2008): Members and co-operating non-members required to adopt and implement satellite vessel monitoring systems.
• Action plan: to build cooperation in supporting management and conservation measures. CCBST has advised if cooperation is not forthcoming, measures including trade restrictive measures, may be taken against them.

A separate by-catch and discards work-plan has also been developed (AFMA). In relation to boat numbers, although the number of active global vessels catching SBT is not available, the most recent estimates cite approximately 1,296 vessels in 2010 (FRDC, 2012). In Australia in 2010, six purse-seine vessels and 18 long-line vessels caught SBT (FRDC, 2012).

Potential advantages and disadvantages

1)    TAC size

The most recent figures for 2011/12 provided by the AFMA, recorded:

• Agreed Australian TAC: 4,528t
• Reduced TACL 4,509t (because overfished in previous year)
• Catch: 4,543t
• GVP: $40,503,000
• Farm gate value: AU$150million

The catch of 4,543t can be compared to a 21,000t TAC, which was implemented, but not binding, by the Australian government in 1983 (Coombs, 1997). This represents major progress in responding to the reduced Southern Bluefin stock. In addition, the TAC can contract and expand, which produces an incentive to increase the overall stock to increase individual share.

However, is it enough? As discussed above, quotas are set for three years to provide stability for fisherman. They can also increase, which they have, which has brought fierce criticism from environmental groups. Greenpeace (2013) slammed the three consecutive years of increase in quotas and called for “zero catch” as “the only way to ensure survival of a species decimated by overfishing”.

 “The Southern Bluefin fishery has been a case study in mismanagement and this new announcement continues to play Russian roulette with the survival of an entire species.”

Nathaniel Pelle, Greenpeace Oceans Campaigner

 “Current stock assessments show that this is already a fishery in collapse. The simple truth is we need to leave the Southern Bluefin tuna well alone for a while so that stocks can recover as quickly as possible.”

 Pam Allen, Australian Marine Conservation Society campaigner

2)    Suitability of ITQs: price and fleet response

 The use of ITQs suits Southern Bluefin fisheries for a number of reasons, as outlined by Coombs (1997):

• They are a long-lived species with small annual variations in parental stocks
• Market outlets were relatively few and well defined, which may reduce black market sales and the costs of enforcement.

In response to early ITQ’s, the average price of Southern Bluefin Tuna increased by more than double. In addition, Coombs (1997) reported that the system allowed Australian fisher’s to maximize the value of their catches “by concentrating on larger fish rather than maximizing the total amount of their catch (as is the incentive with aggregate quota schemes).

The ITQ changed the structure of the Australia fleet as fishermen had two choices: sell quota and exit the market, or buy additional quota. Many New South Wales and Western Australian fishermen exited the market and those remaining purchased additional quota and subsequently had to increase the scale of their respective operations (Coombs, 1997). However, as Coombs (1997) explained, although the ITQ reduced the amount of Southern Bluefin caught and increased efficiency of the fleet, they did not succeed in restoring parental biomass to desired levels. 

3)    Global agreement

For a highly migratory species, it is difficult to enforce global participation to reduce overfishing. The Southern Bluefin Tuna TAC has been an example of international cooperation and enforcement.

However, it is also due to the global nature of the system that causes problems. The Conversation (2013) argued that there is often decision paralysis and status quo management because management is via international agreements on quotas. They noted that this management system “can be slow to respond to problems such as low numbers, leaving the population ill-equipped to deal with the vagaries of juvenile survival” (The Conversation, 2013).

4)    Illegal fishing

As discussed above, there is significant enforcement and monitoring in place, that far outstrips many other fish policy initiatives. However, IIU continues to be an issue with reports of declines in mean lengths of Southern Bluefin in spawning grounds. This has been an indicator of Indonesian vessels fishing below the spawning grounds south (AFMA, 2013) and the issue is currently being investigated further. 

Current state

The Conversation (2013) reported that the current best scientific advice is that mature biomass is between 3-8% of the tuna’s un-fished level. This is well below sustainable levels. Supporting this, the stock assessment completed by the CCSBT in 2011 suggested that the spawning biomass is well below the level that could produce maximum sustainable yield (AFMA). The FRDC (2012) reported that measureable improvements in spawning stock are yet to be detected and the stock status remains “OVERFISHED”.

However, the AFMA reported that there is a positive outlook for stock based on the 2011 assessment, which include a continued reduction in total reported global catch. In addition, the current mortality has reduced below F_msy (maximum rate of fishing mortality: proportion of fish stock caught and removed by fishing) and stock is expected to increase at current catch levels (AFMA, 2012).

References

Australian Fisheries Management Authority (2012), ‘SBTF at a glance’, Available online at http://www.afma.gov.au/managing-our-fisheries/fisheries-a-to-z-index/southern-bluefin-tuna/at-a-glance/

Commission for the Conversation of Southern Bluefin Tuna, ‘Origins of the Convention’, Available online at http://www.ccsbt.org/site/about_commission.php

Coombs, J., (1997), ‘ Individual Transferable Quotas in Fisheries’, Available online at http://personal.colby.edu/personal/t/thtieten/itqs-aus.html

Department of Agriculture, Forestry and Fisheries, (2012), ‘Commission for the Conversation of Southern Bluefin Tuna’, Available online at http://www.daff.gov.au/fisheries/international/ccsbt

Fisheries Research and Development Corporation, (2012), ‘Southern Bluefin Tuna’, Available online at http://www.fish.gov.au/reports/finfish/tuna_and_billfish/Pages/southern_bluefin_tuna.aspx

Greenpeace Australia Pacific, (2013), ‘Increased quotas will decimate critically endangered southern Bluefin tuna’, Available online at http://www.greenpeace.org/australia/en/mediacentre/media-releases/oceans/Increased-quotas-will-decimate-critically-endangered-southern-bluefin-tuna—Environment-groups-call-for-zero-catch-4/

The Conversation, (2013), ‘Australian endangered species: Southern Bluefin Tuna’, Available online at http://theconversation.com/australian-endangered-species-southern-bluefin-tuna-11636

Welburn, N., (2011), ‘Reversing the decline of the Southern Bluefin Tuna. Are Marine Protected Areas the Answer?’, Bangor University. Available online at https://www.academia.edu/2343330/Reversing_the_decline_of_the_southern_bluefin_tuna._Are_marine_protected_areas_the_answer

The In’s and Out’s of Australia’s Carbon Policy

<<This post was created as part of a course requirement for ‘Environmental Economics and Policy’ >>

Carbon policy is inherently complex, uncertain and highly political. Australia is no exception to the case, and may in fact have taken it to another level completely, being the first nation to abolish a carbon tax after only one year in administration.

‘It’s official, Australia has a carbon tax’ (The Australian, November 08, 2011)

…but less than two years later…

‘Tony Abbott locks in death of carbon tax’ (The Australian, August 16, 2013)

In September 2013, Australia heralded in their 28th Prime Minister, Coalition Leader Tony Abbott. Upon winning the Federal election convincingly, Abbott’s first order of business, as promised, was to repeal the Carbon Tax. The Coalition had built their election platform on the disbandment of the Clean Energy Act 2011 in favour of a ‘Direct Action Plan’, which looks to incentivize industry directly to reduce emissions. Thus, whilst many countries are working to introduce, iron out and implement carbon taxes, Abbott is committed to push through legislation to dismantle ours.

So what is it that Abbott is repealing? It is important to first understand our current Carbon Policy, its coverage as well as distributional effects. We can then begin to compare Australia’s policy to the rest of the world, as well as to the ‘Direct Action Plan’ that Abbott is suggesting to replace it.

Clean Energy Act 2011

In 2011, a package of carbon pricing bills was passed through the House of Representatives. The central tenet of the act, the Carbon Pricing Mechanism (CPM), which took effect on July 2012, introduced an emissions trading scheme that put a price on Australia’s carbon emissions.

Julia Gillard, Labour Prime Minister, coined the term ‘carbon pricing mechanism’ when communicating the party’s carbon policy. This was in response to several announcements as part of her winning election platform where she promised she would not introduce a ‘carbon tax’.  However, many have argued that there was no practical difference between a fixed carbon price and a carbon tax, as they both drive up the cost of energy to bring about a reduction in energy use (Professor Michael Dirkis, ABC, 2014). The label of the policy became a point of contention and Gillard was consistently caught up in definitional debates. Gillard admitted recently that “her decision not to argue against a fixed carbon price being labelled a “tax” hurt her terribly politically” (ABC, 2014).

The CPM was to be introduced in two phases, with a fixed phase, beginning in 2012 to be following by a flexible price in 2015. Initially, the price of carbon units would be $AUD23.00 (2012), $AUD24.15 (2013), and $25.40 (2014), with a floor price of $15.00. During this period, there was to be no limit on the amount of permits able to be purchased. The second phase was to be characterized by a cap-and-trade system, where the Government would set caps on the number of units to be issued each year (Minter Ellison, 2012). Supply and demand forces would interact to determine the price paid for available carbon permits.

Coverage

In 2011, Australia’s emissions profile looked something like this:

So who was in and who was out? In regards to coverage, Australia’s Clean Energy Regulator (2014) stated:

“Generally, if a facility meets or exceeds the threshold of covered emissions with a carbon dioxide equivalence (CO2-e) of 25 000 tonnes in a financial year, the person responsible for such a facility will be liable under the carbon pricing mechanism”.

However, not all of the sectors in the chart above were covered as part of the carbon tax threshold.  Those industries covered (if above the annual threshold) included:

• Stationary energy (e.g. Electricity generation)
• Industrial Processing (e.g. Aluminum smelting)
• Fugitive Emissions (other than from decommissioned coal mines) (e.g. Emissions from extraction of coal, oil and natural gas)
• Emissions from landfill waste and waste water treatment (legacy waste exempted).

Emissions not covered by the CPM were:

• Agriculture
• Land use, land use change and forestry
• Fugitive emissions from decommissioned mines
• Conventional road transport
• Entities covered in CPM but fall below threshold

It was believed that 400-500 liable entities were covered under the scheme (between 50 and 60 per cent of Australia’s emissions), with another 4-7% via equivalent carbon pricing (Clean Energy Future, 2011). The equivalent pricing was to cover remaining sectors (domestic aviation, marine and rail transport) through separate legislation. This coverage was reported to be comprehensive and is reasonable compared to other countries (i.e. Norway’s tax covers approximately 65% of emissions).

Distributional Impacts

As the worst carbon-emitting nation per capita in the OECD, many saw the Clean Energy Act 2011 as a crucial first step in Australia playing a role in global climate change action. Andrew Hewett, Oxfam Australia Executive Director (2011) stated that “Australia has until now failed to contribute its fair share to global efforts to fight climate change. Passing this legislation is a crucial step in playing climate catch-up”.

However, the passing of the bill was met with mixed responses from Australian industries and consumers, as people were fearful of broad economic as well as individual distributional impacts. A flurry of discontent ensued due to expectations of flow on to consumers of businesses passing through increased costs through the supply chain. Also, as a resource-rich, net exporting country, many were concerned that the carbon tax would negatively affect our industry competitiveness on the global stage.

Distribution of the tax burden is an important policy consideration, for reasons of equity and political feasibility (Goulder and Schein, 2013). In response to regressive distributional effects, the Government responded by confirming that revenue from the carbon tax would be distributed to businesses and households in the form of compensation. Tax cuts, increases in allowances, payments and benefits were introduced to offset the average rise in household costs of $9.90 per week. Approximately 50 per cent of scheme revenue generate was to be used to compensate households and industry, however it was not revenue neutral as per BC’s Carbon Tax. Industry assistance mechanisms (Deloitte, 2011) included:

• Jobs and Competitiveness Program for Emission-Intensive Trade-Exposed Assistances. $9.2billion over three years to 2015 in form of free permits and grants to increase energy efficiently.
• Manufacturing Industries Clean Technology Program – $1.2billion to assist manufacturing industries.
• Coal Sector Jobs Package – $1.3billion over six years to manage transitional impact.
• Energy Security fund – Assist electricity sector deal of free permits and cash of $5.5b over six years as well as pay for closure of very high emitting coal-fired generators by 2020.

Enter Tony Abbott

Move forward one year in the CPM, July 2013. Results so far are mixed. One side reports that emissions from electricity are at a ten-year low, renewable power generation has increased by almost 30% and the CPM had “clearly not been the wrecking ball it was dubbed” (Huffington Post, 2013). On the other hand, Economist Alex Robson of Griffith University, stated the main effect of Australia’s carbon tax has been to significantly increase electricity prices for households and businesses, with no reduction in CO₂ emissions (Alex Robson, 2014).

Enter Toby Abbott and the argument for pro-business and “common sense action”.  Arguing on the limited effect of the tax on emissions, problems with artificial price setting and anti-competitiveness, the Coalition set out to “clean up the mess of the Carbon Tax imposed by the previous Labor-Greens Government” (Kelly O’Dwyer, 2013). The proposed ‘Direct Action Plan’ concentrates on funding private industrial financed initiatives through taxpayer money to reduce emissions as well as sequestration of atmospheric C0₂ (Lubcke, 2013).

 

The plan may be more palatable for industry and pragmatic for decision-makers. However, it still infers an implicit carbon price that may actually be higher for Australian taxpayers and may encourage free riders.

Maybe Australia won’t throw out our “baby with the bathwater” (Kelly Rigg, 2013) as the latest update (6 March, 2014) finds:

“Prime Minister Tony Abbott’s plan to scrap Australia’s carbon tax regime took a hit this week after the Senate failed to pass legislation to dismantle the independent Climate Change Authority.

Christine Milne, leader of the Green party in the Senate, said, “The Greens, with the balance of power in the Senate, saved the Climate Change Authority … because we know it’s more important than ever that Australia doesn’t succumb to inaction on climate change…”

(Taxnews.com, 2014)

Watch this space.