Resource Rent, Transferable Quotas and Sustainable Regional Development; The Case of Norway

Abstract

"For the past decade Individual Transferable Quotas (ITQs) have been highly recommended as a device for improving the economic performance of fisheries. Numerous analytical reviews conclude that within the political and economic constraints of western democracies, there are no such alternatives to solve overcapacity problems and realize the resource rent of the fisheries. ITQ systems have been introduced as the main system of fishing regulations in some countries (Iceland and New Zealand) as well as elements of regulations systems in others (Canada, USA, Australia).

"The Norwegian debate on ITQ has been particularly concerned with the distribution effects, i.e. the distribution of resource rent between the fishery sector and other sectors of the economy and between regions. The debate has brought new insight to the evaluation of ITQ-systems and has introduced alternatives in order to achieve sustainable regional development. In an overcapacity situation the resource rent of fishery is 'wasted' to keep alive more capital and more manpower than necessary. From a regional point of view this 'waste is not real if the alternative is reallocation of wealth from the fishery sector to other sectors of the economy and from fishery-dependent regions to more central ones. This will be the case if ITQs are implemented in Norway or other countries with similar regional ownership to fishing rights and by implementation of regional based management systems. Such systems will be consistent with the expected recommendations of the U.N. Conference on Environment and Development (UNCED)."