FIGURE 6-1 Building resilience into tradable permit systems.

SOURCE: Based on Figure 7-1 in Young and McCay (1995). Reprinted with permission.

The primary AAQS are defined at levels that protect human health.28 In water the aggregate limit typically is based on expected water flow (Easter et al., 1998). In formal tradable permit fisheries, the governing body routinely estimates the size of the fish stocks to determine the amount of fish that can be harvested in a given year so that fisheries can be sustained; this amount is termed the “allowable biological catch” (ABC). The catch level that fishermen are allowed to take, the total allowable catch, normally would be equal to or less than the ABC (National Research Council, 1999:3).

Initial Allocation Method

The initial allocation of entitlements is perhaps the most controversial aspect of a tradable permits system. Four possible methods for allocating initial entitlements are:

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