Regulating Multiple Externalities: The Case of Nordic Fisheries

Open access is a well-known externality problem in fisheries causing excess capacity and overfishing. Due to global warming, externality problems from CO2 emissions have gained increased interest. With two externality problems, a first-best optimum can be achieved by using two regulatory instruments...

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Bibliographic Details
Published in:Marine Resource Economics
Main Authors: Waldo, Staffan, Nielsen, Max, Jensen, Frank, Ellefsen, Hans, Hallgrimsson, Jònas, Hammarlund, Cecilia, Hermansson, Oystein, Isaksen, John
Format: Article in Journal/Newspaper
Language:English
Published: MRE Foundation, Inc. 2016
Subjects:
Economics
Climate change
economic efficiency
externalities
regulation
fisheries
fuel efficiency
Q22
Q54
Faroe Islands
Norway
Iceland
Online Access:https://lup.lub.lu.se/record/9003bc45-3908-4f1c-8817-11785afb4555
https://doi.org/10.1086/685286
Description
Summary:Open access is a well-known externality problem in fisheries causing excess capacity and overfishing. Due to global warming, externality problems from CO2 emissions have gained increased interest. With two externality problems, a first-best optimum can be achieved by using two regulatory instruments. However, solving the open-access externality problem also affects CO2 emissions. By using a bio-economic model covering Iceland, Norway, Denmark, Sweden, and the Faroe Islands, it is shown that regulations of the open-access externality problem have a large effect on both economic performance and CO2 emissions, while an additional CO2 regulation only has minor effects. The second-best solution achieved by only regulating open access reduces emissions by approximately 50% compared to current fisheries, with the exception of Iceland, which already has a well-developed fisheries management system.

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