Individual transferable quotas  policy in Canada

Introduction:

Canada is maritime country , its coastline is occupied three of world’s ocean border, the oceans and resources make a great contribution to its national economy. There are around 60,300 fishers and 30000 vessels. In 2009, the landing fish was accounted for 1.8 million tones and valued at $3 billions. There are some differences in fisheries dependence between vary regions, the degree on the Pacific coast is less than on the Atlantic. However, the fisheries still contribute greatly to the BC economy. The ocean and marine fisheries are the common property of Canadian, so the effective policies are necessarily to be set to management and regulate the fishing. The federal Department of Fisheries and Ocean is the government agency that manage the nation fisheries resources, including quotas allocation and decision-making on access .

Individual transferable quotas

Decades ago, there are many cutthroat competition between fishermen, the poorly competitive Fishermen usually were bullied by other competitors with bigger boat and better fishing. Therefore, the government implemented an individual transferable quotas policy to regulate fishing. There are two major aims for fishery policy to implemented in Canada. One is to protect the environmental friendly aquatic ecosystems. The other one is to ensure the equity of allocation in fishery resources.

Individual transferable quotas is one kind of catch share.Individual Transferable Quotas was implemented by the federal Department of Fisheries and Ocean In 1990. The government set a total catch allowable , and then divided to individuals. Each quotas holder will allocated by a proportion of total catching. It is usually calculate by total weigh in a given time, the total weigh of landing fish cannot exceed the regulated quotas. Holders can decide the time and the methods to fish. The quotas also can be trade in the market ,including both bought and sold.

Here I want to introduce one kind of fish under the ITQ system, it called Pacific halibut, which is a flatfish which inhabits the continental shelf of the United States and Canada. The weight of  halibut can reach 400 pounds, and it is very popular in the food market , because it is very delicious and it has few bones compared other fishes .Before the implement of IVQ, it was hard to estimate when TAC was reached, the fishermen often overload their vessels, which result in overharvest and depletion of the halibut resources. The quantity of vessels began to reduce after the introduction of IVQ, but the land fee has increased because fishermen can time their landing to match period of high market demand, which can also provide the high value fish to the market and meet the maximum profit.

In one article called A cautionary tale about ITQ fisheries, it mentioned that IVQ is not facilitate ownership but leasing. Many vessel owners sold their initial quotas and then earn their life without out fishing. The quota leasing of halibut, had increased from 13%  to 86% of TAC from the year 1993 to 2008 , which showed a high leasing level. The  leasing on  BC’s integrated groundfish fishery is aims to conservation. It promotes a cap-and-trade system, fishermen can trade the surplus quotas with each other in the limit of TAC.

The mechanism for quote trading

In terms of mechanism for quote trading, there are several mechanisms for effective quote trading including the fish quantity monitoring and discard reduction.

1. The establishment of pre-landing notification requirement.

2. Quantity check. There must have supervisors to weight the total catch , and confirm the poundage landing and catch size. Recent year, Canada set up a QS program to help organize this quantity inspection.

3.Quality inspections. Government set up regulations to grade the quality of fish, the quality of fish can be grade to three levels.

4. Impose Landing fee. Due to monitoring and enforcement activity will generate administrative cost, the government impose the landing fee to reduce financial burden. These landing fee was not only collected to offset partial cost, but also improve the supervision department.

5.Impose the Stringent fines of fishing privileges for violations.

Conclusion

1) its effectiveness in reducing catch

The ITQ is one part of TAC, it is the small shares divided  by the TAC . The total allowable catches is introduce to reduce the over-fishing, which makes a great contribution on sustainable development of environment and biological. The ITQ policy is recognized as an effective fish resource management methods to reduce catch and overcome overfishing and dumping problem.

2) its impact on discarding

Discarding is often driven by the economic and political factors.The discarding Due to quotas restriction, it may occurred to more discarding.  The fish which are usually unmarketable,  for example, when the quantity of fish are caught reach the maximum limits, the fishermen often discard some low value fish , or have to discard other rest of high value fish. Government in Canada found ban on discarding some species except some specifically authorized fish，like groundfish，it is illegal to desert grounfish , because this species has a low survival rates on release.

Many research proved that individual transferable quota will decrease the discard in single species fisheries, but not in multispecies fisheries.The individual transferable quotas are depend on shares of TAC in each species instead of their catching numbers, in this situation, fishermen use their  their quota share to catch some certain kinds of fish before they catch their share on other species.  It may result in discard on the some species fish caught before in order to catch more fishes in other species.

There are still some arguments  in the discarding. Some research found that the discard did not increase after the implementation of individual transferable quotas, the discards tends to decrease in many species, because the fishermen have more flexibility choices, they can choose how and when to fish, if they want to catch more fish in the certain species, they can buy more quotas in this kind of fish to cover the excessive  caught. Or they can also lease their quotas to other fishermen who need more quotas.

To conclude, the ITQ policy is a double-edged sword. On the positive side, the ITQ policy is implemented to reduce both overcapitalization and improve the market condition. However, on the negative side, the ITQ policy may also bring some problems, like some wholesales will have the monopoly control in the landing, or the increasing discards in multispecies fisheries. Overall, the ITQ policy grant the fishermen the right to assign their own shares in fishery. But it still need to be improved and has a long way to go.

 Reference.

1. http://worldoceanreview.com/en/wor-1/fisheries/fisheries-management/

2. Individual transferable quotas in fishery management, CRS report for Congress

3. Individual vessel quotas in the Halibut Fishery of BC

4. The influence of individual transferable quotas on discarding and fishing behavior in multispecies fisheries

Emission Trading in New Zealand

Emission trading is a market-based approach for achieving environmental objectives. A cap and trade emission trading scheme provides a limit on the greenhouse gas emitted, which will be greatly helpful to emission reduction. Since the climate change became a global problem, it brings numerous environmental problems, like global warming, melt of sea ice, rise of sea level，droughts and longer heat waves. Meanwhile, it results in a negative impact on all economic and society. Hence，an increasing number of countries implemented the emission trade policy to reduce the greenhouse gas emissions. New Zealand has obligations under the Kyoto Protocol, so the government began to implement an emissions trading policy  in 2008 to meet the obligation.

1. The coverage of the carbon policy

1.1 What sectors are covered？

Based on the Kyoto Protocol, the scheme firstly covered forestry , and was then expanded in 2010 to cover stationary energy, transport, liquid chemistry fuels and industrial processes. And six greenhouse gases are covered in this emission trading scheme:  CO₂, CH_4, N₂O_, HFCs (hydrofluorocarbons), PFCs (perfluoro carbons) and SF₆.

1.2 How does the policy implement over time？

The New Zealand Emission Unit Register was established in the end of 2007. The  NZEUR plays an significant role in record Kyoto emission units assigned to firms enrolled in the Ministry for the Environment’s Projects to cut down Emissions and Negotiated Greenhouse Agreements programmes.

The NZEUR not only can trade the emissions units in the domestic carbon market, but also allows to import the units from the international carbon market . There are some specifics carbon trade units called New Zealand Unit in the domestic market, which allows free allocate and no auctions in the short period. But there are some differences between different sectors in the free allocation of New Zealand Units. For example, the commercial fishery sector will receive the units in a free allocation on a historic basis. The forests sectors will receive a fixed free allocation of units. In terms of emission-intensive industry, it will be allowed on an output-intensity basis. It does not provide a limit on the quantity of units that to be allocated. The quantities that can be allocated to participants depend on the average level of output within a certain business transcation.

In 2010, forestry contributed approximately 20.5 metric tonnes of abatement in CO₂, which equals to almost 21% of total emission in 2008. For the individual business, the dates for they to comply with their duty to report emissions are vary. The stationary energy and industrial processes enrolled the NZEUR in July 2010, while the landfill operators entered in February 2013. The emissions emitted by agriculture will enter the NZEUR until January 2015.

1.3 Which sectors /carbon-equivalent emission are exempted?

According to the New Zealand Trading Scheme , government implemented a carbon policy that Negotiated Greenhouse Agreement(NGA) were available to eligible firms whose international competitiveness would be impaired by the carbon tax. However, the government decided not press ahead with the carbon tax regime in recent year. In this situation, NGA companies were to get a portion of exemption from the carbon tax and pay less in their direct produced emissions of greenhouse gases.

1.4 The cost-effectiveness of the policy

The carbon trade policy is provided to lower the cost in the emission reduction. The cost-effectiveness of the policy can be proved in several ways. Firstly, Carbon Trade Scheme not only provides the private industries with more flexibility required to cut down emissions of greenhouse gases, but also stimulate the companies to develop  the innovation in technology , both ways will beneficial to economic growth. Secondly, the carbon trading policy requires flexible trade between different eligible firms in the domestic market and international market. Thirdly, the Carbon trade Scheme will meet its environmental objective at lowest cost to the economy. For the sake of biggest profit, companies will consider to pay a most reasonable price for emitting CO2, cap-and-trade seeks out the most efficient reduction projects within the market, delivering a lowest cost outcome.

2. Distributional effects of the policy

According to an environmental report, the key factor in carbon trading system is the quota allocation. In prior to the quota allocation, first must carry on the total set. Total carbon trading system not only influence its environmental effect, but also strongly associated with the carbon price . Hence, it plays a significant role in passing the signal to the low carbon technology investors. Therefore, carbon emissions should be setted  lower than ‘usual emissions ‘ level.”

The trading scheme has several advantages compared to the tax scheme. Firstly, the trading scheme is more flexible, it allows the adjustment in price, while the tax is in the fixed level. The reduction in the emissions are much cheaper in some sector of economy, which will give a more profitable opportunities to those participants. Secondly, the trade scheme allows to trade in a cap-and-trade system between countries under the Kyoto. Thirdly, more methods are developed to support the carbon trading on the climate change policy.

However, It also has its negative sides. New Zealand would set up a market price for emissions under the carbon trade scheme, and that price would flow through the economy. In this situation, Producers would intend to reduce their emissions, and meanwhile, consumers would cut down their demand for emissions-intensive products, which would result in the product in a more expensive price. For example, New Zealand is a vast agricultural country, the prominence of agriculture occupied to almost 45% in the economy, the CH₄ from the ruminant animals and CO from the fertilizer are leading the emission profile. Since the livestock farming accounts for 50% of emissions, the emission would be reduced if cut down the quantities of livestock feeding. In this situation, it would earn a profit in the reduction of emission, however, the prices of livestock will be increased. Compared to other sectors, there are fewer choices for reducing biological agricultural emissions, but about 50% of emission derived from agriculture in New Zealand. Scientific research reveals that the New Zealand Emission Scheme has contributed to a decade years high in generating renewable energy. Compare to the years before 2010, it was witnessed a five-fold increase in the capacity of renewable energy. New Zealand have already produced a large percentage of its energy  from renewable sources, therefore, it has less abatement alternatives in the energy sector than other countries.