On Efficiency-oriented Approach Of Fisheries’ ITQ Allocation

According to the FAO, most of the world’s fisheries have reached their maximum potential,47%-50%of the fisheries have been fully exploited, nearly30%fisheries are overexploited and exhaustion. Global marine fisheries resources are facing tremendous pressure, in many cases, the strict management fishery resources are still under severe recession, even on the brink of collapse. Even more serious is that overfishing will lead to the depletion of fishery resources ecological, economic and social crisis. According to "China Ocean Development Report (2013)," as the number of the marine fishing vessels continuing substantial increase, the intensity of fishing capacity already exceeds renewable resources. Traditional fishery species have disappeared, some types of fisheries resource was depleted. Large and small yellow croaker, octopus and other bottom and near-bottom fish resources have been a severe recession. The proportion of quality fish of the total catches from has down from50%in the1960s to less than30%currently. Fishery biological resources have been in reduction, and are facing a devastating disaster.There is a common cause for this general situation:The Tragedy of the Commons caused by open-access. To eliminate the tragedy of the commons, although a variety of management tool has been adopted, it did not change the trend of depletion and decline of fishery resources and fishing industry fundamentally. The situation lasted Until property-based approach, especially ITQ-based (Individual Transferable Quotas) approach to fisheries management was adopted. Some countries (such as Iceland, etc.) which even made a profit from ITQ fisheries management system, and the ecological status of fisheries and the marine environment was significantly improved. Now more and more countries have gradually established the ITQ-based fishery management system. At present, China’s fishery management approach are mainly fishing moratorium, access limits etc. traditional used in1960s and1970s internationally. According to the international environment and severe situation of marine fisheries resources, the establishment of property-based fishery management system, especially ITQ-based management system has become a trend and the inevitable choice.Despite the ITQ-based system have made great progress in both theoretical research and practical application, there are still some theoretical and practical problems to be solved. The central problem is how to improve the efficiency of ITQ management system. To solve this critical problem, four related topics are discussed in this paper.First, we compared several existing rights-based management methods, particularly the ITQ-based and CMB-based self control methods, the advantages of ITQ-based systems was illustrated by the comparison. The sources of the advantages are traced along the path of institution evolution, from open-access to ITQ system and to ITQ-based self control system. The validity and applicability of the different self-control systems are discussed.Second, we pointed out that the allocation in terms of historical catches will cause an inevitable loss of efficiency in the process of ITQ initial allocation. Proposed that replace the historical catches with the historic fishing efficiency. On this basis, we established model of ITQ initial allocation based fishing effiicency. For the current practice in initial allocation that determining the ratio between the direct distribution part and the auction part by experience, this paper argues that the ratio is an instrument of the regulatory authorities in the balance between efficiency and equity. The higher the overall fishing efficiency requirements, then the ratio of the auction portion should be higher. Therefore, using the separation theorem in-depth analysis, we proposed an auction ratio selection method based on the expected efficiency of the regulatory authorities. Of course, with the help of the historical fishing efficiency based allocation approach proposed in this paper, the goal of improving overall fishing efficiency can be achieve without auction.Third, heterogeneity of ITQ is influencing factors can not be ignored in the initial distribution. However, almost all theoretical studies have assumed that ITQ are homogeneous. Although this problem has been noticed in practice, one has to accept the unrealistic assumption, for there is no suitable identification method. To solve this problem, this paper presents a quantification method for measuring ITQ heterogeneity using history input-output fishery data. On this basis, we established a combinatorial auction model based on the value of the coefficient obtained through aforementioned quantification method, as well as a numerical example. Not content with the centralized distribution idea of the existing auction model, we build a combinatorial auction model based on bidders’ personal choice, and proved when all bidders using the optimal bidding strategy given by our model, the whole auction market is in line with Walras’s law.Fourth, ITQ market price determinants and long-term trend was discussed from both theoretical and empirical studies. An ITQ pricing method under perfect competitive market was proposed by introducing real option pricing model. The tax base under the ITQ system was discussed from an angel of resource rents, a method for tax rate determining was given, which can calculate a suitable tax rate adapt to the natural growth rate of fisheries resources. The conduct of market prices makers and price takers were analyzed, and an new and more practical quantitative method for calculating the amount of the excess quota (an anti-monopoly indicators) was put forward.