fishing enterprises to be bought out by larger fishing enterprises. Smaller fishing enterprises are seen as having a special value to society that should be protected.

Protections against “unreasonable” concentration of quota are now common. One typical strategy involves putting a limit on the amount of quota that can be accumulated by any one holder. In New Zealand fisheries, for example, these range from 20 percent to 35 percent, depending on the species (National Research Council, 1999:90-91), while in Iceland the limits are 10 percent for cod and 20 percent for other species (1999:102).

Another strategy involves trying to mitigate the potential anticompetitive effects of hoarding. The U.S. sulfur allowance program does this in two main ways. First, it sets aside a supply of allowances that could be sold at a predetermined (high) price if hoarders refused to sell to new entrants.35 Second, it introduced a zero-revenue auction that, among its other features, requires permit holders to put approximately 3 percent of allowances up for sale in a public auction once a year.36

Another approach involves directly restricting transfers that seem to violate the public interest. In the Alaskan halibut and sablefish ITQ program, for example, several size categories of vessels were defined. The initial allocation was based on the catch record within each vessel class, and transfer of quota between catcher vessel classes was prohibited (National Research Council, 1999:310). Further restrictions required that the owner of the quota had to be on board when the catch was landed. This represented an attempt to prevent the transfer of ownership of the rights to “absentee landlords.”

A second concern relates to the potentially adverse economic impacts of permit transfers on some communities.37 Those holders who transfer permits will not necessarily protect the interests of communities that have depended on their commerce in the past. For example, in fisheries a transfer from one quota holder to another might well cause the fish to be landed in another community. In air pollution control, owners of a factory might shut down its operation in one community and rebuild in another community, taking their permits with them.

One common response to this problem involves allocating quota directly to communities. The 1992 Bering Sea Community Development Quota Program, which was designed to benefit remote villages containing significant native populations in Alaska, allocated 7.5 percent of the walleye pollock quota to these communities (Ginter, 1995). In New Zealand the Treaty of Waitangi (Fisheries Claims) Settlement Act of 1992 effectively transferred ownership of nearly 40 percent of the New Zealand ITQ to the Maori people (Annala, 1996). For these allocations the community retains control over the transfers, and this control gives it the power to protect community interests. In Iceland this kind of control is gained through a provision that if a quota is to be leased or sold to a vessel operating in a different place, the assent of the municipal government and the local fishermen’s union must be acquired (National Research Council, 1999:83).

A final concern with transferability relates to possible external effects of the transfer. Although in theory transfers increase net benefits by allowing permits to

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