Environmental market design for large-scale marine conservation

An international arrangement of transferable fishing rights and biomass-based allocation can incentivize establishing Marine Protected Areas while promoting the economy. It is commonly agreed that marine conservation should expand considerably around the world. However, most countries have not yet implemented large-scale no-take Marine Protected Areas (MPAs). When a country closes a large fraction of its waters to fishing, it stands to lose a considerable level of fishery revenue. Although biodiversity and spillover fishing benefits may far exceed these losses, benefits from large-scale MPAs typically accrue to other countries or to the high seas. Here, to overcome this dilemma, we simulate and test an international fisheries management scheme with transferable fishing rights that incentivizes, rather than hinders, large-scale marine conservation. By combining a bioeconomic model of cross-country trading of fishing rights with vessel-level tracking data before and after a large-scale conservation action is implemented, we show that transferable fishing rights and a biomass-based allocation rule are pivotal to incentivize conservation under this market-based setting. Our work focuses on the Vessel Day Scheme (VDS)-an environmental market that is employed by the Parties to the Nauru Agreement (a group of nine Pacific Island nations) to manage their tuna fisheries-and areas in which large-scale conservation interventions have taken place. Overall, these results provide a template for how to incentivize countries to engage in large-scale marine conservation within a market-based setting.