Economic instruments for achieving ecosystem objectives in fisheries management

An aggregative model of fisheries is developed in the context of the ecosystem. Rules for optimal harvesting are derived and their content is examined. An important result with obvious practical implications is that it may be optimal to pursue unprofitable fisheries in order to enhance the overall economic contribution from the ecosystem. Another interesting result is that modifications of single-species harvesting rules may be required even when there are no biological interactions between the species. The possibility of multiple equilibria and complicated dynamics and their implications for sustainability are briefly discussed. Equations for the valuation of ecosystem services are derived. Only two classes of economic instruments capable of optimal management of ecosystem fisheries have been identified so far, namely ia) corrective taxes and subsidies (Pigovian taxes) and (b) appropriately defined property rights. Of these, Pigovian taxes are informationally demanding perhaps to the point of not being feasible. In contrast, property-rights-based regimes are informationally much more efficient and therefore appear to constitute a mure promising overall approach to the management of ecosystem fisheries. The employment of the latter for the management of ecosystem fisheries is discussed and some of the implications are explored. (C) 2000 International Council for the Exploration of the Sea.