Improving Marine Management
Institutions responsible for designing and implementing policies can use a variety of management tools, including command and control or direct regulation (e.g., emission limitations under the Clean Water Act); moral suasion (e.g., marine debris programs); liability and compensation (e.g., recovery of damages under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the OPA 90 (Oil Pollution Act of 1990); direct production of environmental quality (e.g., sewage treatment facilities, fish hatcheries); education; economic incentives (e.g., taxes, tradable permits, and subsidies); and tools that affect the underlying dynamics of the marine system. Many of these management tools have already been used successfully in the marine environment.
No one management tool is appropriate under all circumstances. Choosing a management tool involves weighing the historical, technical, and economic factors, as well as the social and political context of resource use. Some of the available management approaches could be used often and vigorously to prevent further deterioration or depletion of marine resources. These tools could greatly improve marine governance within the existing institutional arrangements.
Managing Conflicting Uses
Users of the marine and coastal environment are imposing increasingly heavy costs on each other and on the marine environment and services. Jet skiers, for example, create safety risks for swimmers and noise pollution that interferes with other activities; speedboats are dangerous to scuba divers and may have a
negative effect on marine life, such as manatees and other marine mammals; using coastal waters for sewage and sludge disposal is inimical to recreation and compromises the quality of underwater habitats; aquaculture can interfere with fisheries and navigation and can be aesthetically unappealing; naval target practice can disturb wildlife protection areas. Economists call these costs externalities because they are not reflected in market transactions or cost accounting. Because organizations and individuals do not have strong economic incentives for considering externalities in their decisions, they must often be dealt with through regulation or informal sanctions. Several regulatory approaches can be used to increase the incentives for limiting environmental impacts.
In situations where the combined use of a resource is less valuable than single use, separating them in space or time can be useful. Zoning is one method often used to reduce externalities on land (Kelly, 1988). Especially in the near-shore environment, zoning is a relatively low-cost, effective management option for dealing with conflicting uses. In the marine and coastal environment, zoning has been used to segregate commercial, recreational, and aquacultural activities; to protect wildlife sanctuaries and the marine environment generally; and to isolate waste disposal sites. Sensitive near-shore areas are often zoned as low speed or no wake areas. Certain vessels, such as oil tankers or other carriers of hazardous cargo, may be required to use specific routes to separate them from protected features of the marine environment. Zoning is used to isolate military areas, such as bombing ranges, submarine surfacing areas, and areas that affect national security. Energy installations, such as oil production facilities, are often subject to zoning restrictions similar to waste disposal sites. Another example of zoning is Hawaii's restriction confining high-speed boating and other high-speed water sports to designated ocean recreation areas.
Marine and coastal protected areas (MCPAs) are a legislative tool for protecting marine resources in a defined geographic marine or coastal area. The primary objectives of MCPAs are to preserve marine biodiversity, to maintain the productivity of marine ecosystems, and to contribute to the economic and social welfare (Kelleher et al., 1995), MCPAs have been designated in response to emergencies (e.g., extinction of a species) or, in one case, in conjunction with a land-based park.
Making parties legally liable for the economic damages they inflict on others is another well established method for dealing with conflicting uses. Private parties who have property rights in the marine environment can sue to recover
damages. For example, the owner of aquaculture net pens can sue a boater who causes damage to the aquaculture facility.
The government, as the steward of marine resources held in public trust, can recover the value of damages to natural resources from parties responsible for chemical and oil spills through CERCLA and OPA 90. Although laws are limited by the vagaries of judicial decisions and the difficulties inherent in determining fault under conditions at sea, laws establishing liability provide incentives for marine resource users to avoid inflicting damages on other users and to internalize external costs.
Another incentive-based management tool is to create a framework by which injured parties can be compensated for economic damage. For example, offshore oil developers contribute to a fund to compensate fishermen who lose gear as a result of offshore oil and gas development. Shippers have created a fund to pay cleanup costs for accidental spills. The costs for these programs are lower than they are in the judicial process, but the incentives for avoiding damages are also weaker because the average losses of the group (e.g., shippers or oil companies) determine the amount each party must contribute to the fund. Compensation mechanisms can sometimes blunt opposition to a new development. On land, for example, developers of potentially noxious facilities have developed contingent arrangements with neighboring landowners to compensate them for lower property values or other damages.
Some funds are both international and mandated in the United States under OPA 90 to compensate for damages from accidental discharges of oil into marine waters. The International Convention on Civil Liability for Oil Pollution Damage, which has been in effect since 1975, makes shipowners strictly liable for damage from oil pollution that can be traced to their ships. Shipowners thus carry liability insurance, which is made, available through a system of clubs. Further compensation for oil pollution is available through the International Oil Pollution Compensation Fund, which is funded by a tax on oil companies for their oil imports.
In some situations, prospective users of a marine resource must complete a permitting process that allows agencies representing other interests to "sign off" on the proposed use. Examples in the marine environment include permitting for marine aquaculture facilities and for dredging marine waterways. If permits are a precondition for use, this mechanism gives other interests the power to compel the mitigation of potential damage. However, unless potential damages are
combined with mechanisms for compensation, existing interests can stalemate potential new users, even if they propose a worthwhile use of the resource.
There are many marine area examples of permitting requirements for certain allowable activities. In Willapa Bay and Grays Harbor in Washington state, oyster growers are required to obtain permits to treat aquatic oyster beds with coarbaryl, a pesticide used to control populations of ghost and mud shrimp. Under the authority of the Clean Water Act and the Rivers and Harbors Act, permits are needed from either the U.S. Army Corp Engineers or the EPA (often both) for changes to wetlands that entail dredging or filling, as well as for shoreline-hardening construction, such as bulkheads, groins, docks, and walls. The discharge of wastewater into the marine environment requires permits from EPA depending on the treatment methods and the condition and effects of the discharge on the receiving waters.
Controlling Access to Marine Resources
Many management tools are available for controlling access to marine resources by strengthening the rights of defined groups or individuals. One approach to the problem of common property is to establish exclusive, enforceable private property rights to the resource. Fish provide the best example. A private owner is granted the right to receive the full benefits of conservation and enhancement, to exclude others from taking those benefits, and to sell or lease his or her rights voluntarily.
Private use rights may be feasible for in-shore shellfish fisheries, for anadromous species fisheries, and for aquaculture fisheries. Indeed, many jurisdictions have leased or sanctioned marine locations for the exclusive use of such enterprises. Although the purchase and sale of fishing rights (and the inevitable consolidation of ownership that follows) have historically been viewed as inappropriate in the United States, similar strategies are widespread in the British Commonwealth countries. Private salmon fishing rights are common in English and Scottish rivers. Throughout the United Kingdom, an owner can voluntarily sell or lease rights. In Quebec, where the government has established exploitation zones managed by local associations on salmon rivers, overexploitation has declined and local contributions to enforcement and resource management have increased (Anderson and Leal, 1996). Native American communities in the Pacific Northwest once had nontransferable salmon fishing rights at particular locations on salmon rivers.
Private use rights for marine resources raises two questions. First, how feasible is establishing exclusive (community or individual) rights to harvest various marine species, and second, will it lead to better resource management? The following discussion deals with the options available for restricting access to marine resources by strengthening the rights of defined groups or individuals.
Community Access Rights
Exclusive, enforceable access rights can be assigned to particular groups, such as the residents of a particular community or a group that has traditionally used certain waters. Creating a sense of "ownership" over a resource may strengthen incentives for conserving it over time. However, the allocation of shares among members of the group remains a problem. Some of the 18 salmon fishery zones in Quebec have resolved this problem by establishing fishing fees (up to $44 per day) for members of the association and for nonmembers. The revenues are used to control poaching and for conservation projects (Anderson and Leal, 1996).
Informal (and sometimes illegal) community control over local lobster fisheries has also reduced overexploitation. Acheson's (1975) study of Maine lobster fisheries shows that the average size of lobsters tends to be larger where "harbor gangs" effectively exclude outsiders.
Individual Access Rights (Limited Access)
Access rights can be restricted to licensed individuals or entities (whose use of the resource may be further regulated). Eligibility may be defined in various ways, such as by completion of an apprenticeship program or by membership in a community. The allocation of limited rights can be carried out by various means, including "grandfathering" historical users or selling access rights. Aquaculture sites, for example, are leased to individuals and corporations in many coastal states.
License limitation programs are common in North America, Australia, and New Zealand. These programs attempt to control entry into a fishery and may facilitate cooperative management. But a license to fish, unless it also limits the catch, does not affect a fishermen's basic incentive to compete for fish. In fisheries where there are too many fishing vessels and technology is not controlled, licensing may not conserve stock or minimize costs.
Limitations on harvests are imposed in the United States, either by controlling the number of boats or by limiting the number of commercial licenses on a seasonal basis. For example, commercial salmon fishing permits are used to limit the total number of licenses disbursed in salmon fisheries in Bristol Bay, Alaska. In some cases, license limitations can be used as a moratorium on new users by limiting access to those already engaged in a harvest.
Individual Harvest or Use Rights
Licensed entities can be limited to certain amounts (e.g., catch quotas) or shares of the resources. Some traditional systems of managing naturally fluctuating resources (such as irrigation water in semi-arid climates) assign rights to given
shares of the available resource. These arrangements reduce the incentive for overcapitalization but require an effective mechanism for allocating shares.
Quotas on individual fishermen promise to improve the economic efficiency of fisheries.1 Quotas have been implemented in New Zealand's offshore and inshore fisheries (where they are called individual tradable quotas), in Australia's southern bluefin tuna and southeastern trawl fisheries, in a large number of Canada's freshwater and saltwater fisheries, and in the U.S. surf clam, wreckfish, ocean quahog, sablefish, and halibut fisheries. Privately owned individual quota shares (like water rights in western states) closely approximate exclusive property rights to the fish stock. Although owners do not own specific segments of the fish stock, they do have strong incentives to invest in the stock and to protect fish habitats. When quota shares are traded in competitive markets, the share prices approximate the economic value of fish (Anderson and Leal, 1996).
In New Zealand, the quota scheme has had mixed results. It has worked well with abalone beds, where fishermen have voluntarily stepped up security to stop poachers. But in the orange roughy fishery, the stock collapsed. Scientists determined that the breeding cycle of the fish was much longer than they had believed when the quotas were set. To reduce quotas and the resulting pressure on the fishery, the quotas had to be bought back by the government at great expense (Huppert, 1988; Annala, 1996).
Limiting Land-Based Growth
Point and nonpoint discharges into coastal waters, the volume of recreational use, and other demands on the marine environment are largely determined by the extent and pattern of land-based development in the coastal zone. Growth controls in the coastal zones are important tools for managing marine resources, which are otherwise the passive recipients of demands emanating on land. Growth can be controlled not only by controlling permitting for new construction but also by judiciously controlling public investments in infrastructure.
Control of land-based growth may be exercised through zoning restrictions, such as limiting population density or regulating coastal management and community master planning. Several federal and state laws include limitations on land-based growth. The federal CZMA (Coastal Zone Management Act) of 1972 encourages the creation of resource management plans to control growth and development in the coastal zone. Two acts in Washington state include limitations on land-based growth. The first, the Shoreline Management Act of 1971, attempts to balance resource use and resource protection with economic development and public access. This act mandated shoreline master programs to facilitate
View of Boston waterfront. Photo courtesy of William Eichbaum.
planning and permitting in an attempt to aid decision making and manage resources on a regional scale. The second act, the Growth Management Act of 1990, also attempts comprehensive regulation of development. Under this law, the state proactively assists localities grappling with decisions about limiting land-based growth.
Demands on marine resources can also be rationed by pricing mechanisms, such as user charges and fees. The advantage of pricing mechanisms, is that they discourage uses with low economic values. Pricing mechanisms also reflect the true economic value of marine resources in commercial and recreational activities, values that would otherwise be treated as zero. Pricing marine resources creates incentives for users of the marine environment and marine resources to internalize the environmental costs (i.e., negative externalities) associated with their activities. Theoretically, if private costs equal social costs, the efficient use of resources will be encouraged.
Permit and license fees for boaters, commercial and recreational fishermen, tour and dive boat operators, waste dischargers, and other users have typically been low and cover only administrative costs. These fees could be used, however, to limit demand to some target level, but raising fees to limit demand will price
Industrial treatment lagoon, adjacent to Key Bridge, Baltimore Harbor, Maryland. Photo courtesy of William Eichbaum.
some users out of the market. Auctioning the rights to develop a resource to the highest bidder is an example of how a pricing mechanism can be used to limit demand.
User charges and fees intended to limit demand will increase public revenues from the resource. For some marine resources, such as offshore oil and gas, these revenues are considered to be the public's share of marine resources held by the government in the national interest. Other valuable marine resources, including fisheries and recreational services, such as whale watching operations, are now exploited by profit-seeking companies without substantial payment to the government. The general public is thereby denied its share of the value of the resource.
Revenues generated by user charges and fees can also be used to finance resource management and conservation in the coastal zone. Because general revenues are under severe pressure at the federal and state levels, using user fees as a source of revenue for high-priority expenditures should be given greater consideration.
User charges and related expenditures can also be useful as private sector management tools. For example, in a fishery with limits on group access, the problem of overcapitalization could be addressed by the fishery association financing a buyout program with fees levied on the members of the association. This would create a ''win-win" situation for the association as a whole because
the fishermen who finance the buyouts would benefit from the reduced capacity, and those who left the fishery would receive compensation. In addition, an industry-financed buyout, in contrast to a government-financed buyout financed from government contributions, would create stronger incentives for the association to ensure that buyouts reduced fishing capacity commensurate with expenditures (i.e., that their money was well spent.)
A successful buyout program was undertaken in Iceland, where salmon quotas held by commercial fishermen in Greenland and the Faroe Islands were bought out for three years by the National Fish and Wildlife Foundation. As a result, the numbers of salmon returning to rivers in Iceland and Europe doubled. Not only were stocks rebuilt, but the increase in inland sport fishing also gave Iceland a boost in employment and income (Anderson and Leal, 1996).
In 1996, the minister of fisheries and oceans of British Columbia implemented a license retirement program as part of a Pacific salmon revitalization plan with the goal of reducing the capacity of the West Coast commercial salmon fleet by 20 percent. The purpose of the program was to reduce the number of licenses in the salmon fleet equitably and quickly. Under the license retirement program, funds were made available to retire licenses. All salmon vessel owners holding full-fee and reduced-fee salmon licenses were eligible to apply. A Fleet Reduction Committee was set up to review all offers and to recommend to the Department of Fisheries and Oceans which licenses should be retired. A total of 800 commercial licenses were retired at an estimated cost of $80 million.
An additional restriction on salmon fishing is in effect in British Columbia, where the holder of a license now has access to only one area on the Pacific coast. Fishermen who wish to fish another area are required to purchase another license. Holding multiple licenses, known as "license stacking," is, in essence, a voluntary fleet reduction or an industry-financed buy-back program.
"Cap and Trade" Mechanisms
An increasingly popular instrument of environmental policy involves determining an allowable ceiling on the use of a resource and enabling users to trade allowances among themselves. For example, total effluent limits have been established for different classes of pollutants, and emitters have been permitted to trade quanta of emissions among themselves. However, quotas in fisheries are more difficult to maintain than to impose so the outcome is not always clear.
Similar mechanisms have been used to limit development in ecologically sensitive areas by requiring prospective developers (beyond a predetermined scale) to purchase development rights from other landholders. Cap and trade mechanisms could be used (like taxicab medallions) to limit the number of commercial tour and dive operators in ecologically sensitive areas or (like pollution trading) to limit the amount of point-source effluent discharged into coastal waters. Cap and trade mechanisms introduce flexibility and incentives for efficiency
into regulatory systems, but, of course, they do not resolve the basic problem of establishing appropriate limits.
Many activities that degrade the marine environment, such as the illegal harvesting of commercial species by foreign vessels and the disposal of vessel waste at sea, occur out of sight of most observers. Because few people are on the water to see what goes on, violations of regulations are difficult to detect. Although the majority of firms and individuals working in the marine environment are law-abiding, the minority creates an enforcement problem. However, there are management tools that can make enforcement easier.
Recent technological advances in monitoring have created the potential for more accurate and comprehensive tracking and identification of marine activities. Observational satellites and global positioning systems can track ships far from shore. Previous violators of navigational, dumping, or fishing regulations might be required to carry transponders that would allow remote monitoring of their movements. Chemical tracers and "fingerprints" have been developed that might enable analysts to determine the source of ocean spills. New monitoring technologies could be employed more vigorously to detect and, thus deter, infractions of marine regulations.
More Severe Sanctions
Chronic violators of marine regulations are acting on reasoned expectations of likely gains and losses from their transgressions. Expectations of losses are based on the probability of their activities being detected and the penalty they might face. It follows that when the probability of detection is low, effective deterrence requires that the penalties be onerous. But penalty schedules do not always conform to this model. Sometimes they amount to little more than giving up illicit gains, which has little, if any, deterrent effect. Heavier penalties, especially for repeat violators, would probably improve enforcement.
Involving the Community in Rule-Making and Enforcement
A participatory approach to rule-making increases the likelihood that those to whom the rules apply will perceive them as legitimate and also ensures that rules are appropriate to local conditions. Community enforcement, enhanced by local knowledge and peer pressure, has been successful in regulating local fisheries. However, a broad "community" that includes all relevant stakeholders must be involved, not just stakeholders who exploit the resource commercially.
In land-based enforcement, broad participation has been encouraged through various inducements to "whistle blowers," including sharing fines or penalties with whoever reports and documents violations. This kind of enforcement mechanism seems applicable to marine area management as well.
Financing Marine Area Governance and Management Programs
Improving marine area governance will undoubtedly involve significant costs. There are mechanisms, however, that could be used to generate funds to cover programmatic costs. Traditional financing mechanisms that could potentially be applied to marine management programs include bonds, taxes, and grants and loans (see Appendix D for a discussion of these options).
Note that the use of bonds and taxes may require new legal mandates, and given the current political climate, may not be feasible. In addition, financing management programs solely from federal and state taxes, grants, and bond issues is becoming increasingly difficult as pressures on government budgets increase. Therefore, financing improved marine management programs will require innovative financing approaches (EPA, 1988; Kearney, 1994). Two such approaches are described below. (See Appendix D for a more comprehensive list.)
Chesapeake Bay Sports Fishing License Program
In response to deteriorating water quality in the Chesapeake Bay, the state of Maryland began a five-point program to improve water quality and manage the abundant natural resources of the bay. As part of this program, the state instituted the Chesapeake Bay Sport Fishing License plan in January 1985 and became the first East Coast state to license tidal water anglers. Fees collected from sport fishing licenses are credited to the Fisheries Research and Development Fund and are used to propagate and conserve native fish stocks. The ultimate goal of the program is to improve sport fishing and to support research on tidal fishery resources. Fees on sport fishing licenses generate considerable revenues for estuarine and marine management, depending on the strength of the regional sport fishing industry.
Under this program, no one is allowed to fish in the Chesapeake Bay or its tributaries up to the tidal boundaries without first obtaining a Chesapeake Bay Sport Fishing License.2 In addition to the basic license, special licenses must be obtained for charter boats or senior citizens. Box 6-1 outlines the different types of licenses, the number of licenses sold, and the total revenue from the program. The program is overseen by the Maryland Department of Natural Resources, and
Chesapeake Bay. Photo courtesy of William Eichbaum.
anyone caught fishing without a license is penalized. The enforcement officer generally issues a warning for the first offense.
Fees for sport fishing licenses can be used to fund management of the marine fish stock and sport fishing bases. License fees used to generate revenue for estuarine and marine management could be extended to other recreational activities, such as boating. Revenues from licensing fees could be used as seed money for revolving loan funds with the proceeds dedicated to marine area management.
Clean Water Districts3 in Washington State
In 1992, the Washington State legislature passed a provision for the creation of shellfish protection districts—more commonly referred to as clean water districts (CWDs)—to prevent the contamination of commercial and recreational shellfish beds and to restore water quality in areas already affected by nonpoint source pollution. Shellfish protection districts provide a mechanism for generating funds for improving or maintaining water quality. CWDs can be created by a county legislative authority or by voter referendum. If the State Department of Health has issued a downgrade or closure of a shellfish growing area because of nonpoint source pollution, counties in the downgrade area are required to establish a CWD within 180 days. District boundaries may cover an individual
watershed, an entire county, or, by interjurisdictional agreement, parts of several counties and incorporated areas. Seven CWDs have been established to date.
Once a CWD has been established, a citizens advisory committee determines priorities for controlling pollution. Counties finance CWD programs through taxes, fees, rates, charges for specified protection programs, and grants or loans from other sources. The combination of revenue sources is determined by the county legislative authority.
In Mason County, for example, property owners in the Lower Hood Canal CWD are assessed $52 per year for structures with on-site septic systems. The annual fee for complexes with multiple connections to a septic system is $250; the fee for state parks is $450. Tideland property owners are assessed $26 per year. The fees are supplemented by state grants (some of which require a 25 percent local match), which are dedicated to nonpoint source pollution control.
CWDs are an example of a mechanism that funds comprehensive water pollution management at the local level. This mechanism could be modified to deal with other marine area management problems, dredging, and dredged spoils disposal.
BOX 6-1 Fishing License Sales by the Maryland Department of Natural Resources, 1996
Source: Maryland Department of Natural Resources.
Improving marine area governance necessarily requires confronting fundamental underlying problems, such as the prevalence of externalities, open access to marine resources, and the unrestrained increase in demand for resources in the public domain. Whatever the institutional arrangements, responsible bodies must address these problems with effective management tools and approaches. Direct regulation has proven to be cumbersome and often ineffective. The benefits of other approaches, especially approaches that attempt to reconcile private economic incentives with the overall objectives of resource management, have not yet been fully realized.