 I mentioned yesterday that these events don't happen in isolation or without a tremendous amount of help from a lot of people. So before she sneaks out again Charlotte Ferris come on down. Charlotte has been with the Marine Affairs Institute for seven years and she is the glue. We all have people in our offices that are glue and she is our glue and I can talk a lot about fishery stuff and tell you when you have two minutes left to speak but she is singularly responsible for a lot of things that make these events good so give her a hug when you leave because she's been working really hard. Secondly I want to acknowledge and thank Julia Wyman. Julia come here. Julia is our staff attorney. She just started in May and she's doing a fabulous job. The commercial plug is Julia is responsible for overseeing our law fellows program. So I know there have been a few conversations with a few of you about contacting us too with your research questions that you may have that are appropriate for law students and we have really good students and Julia is really good at overseeing them and producing a product for you. So but Julia has also just stepped very gracefully into the breach into the symposium madness this being her first first time around at least with this kind of event. So thank you ladies. Well I think it's appropriate for the topic of catch shares that there are a few moving pieces. There are a few moving pieces in our panel today. So you'll note that Don Perkins was not able to join us. However John Larraby laboratory I have screwed up your name every time I've pronounced it has gracefully stepped into the breach to moderate. John is with the Gulf of Maine Research Institute. He's been there since 2009 after a tenure at Maine Coast Heritage Trust. Also previously he worked for the Quebec Labrador Foundation's Atlantic Center for the Environment and he's really responsible for GMRI's work with the Grand Fish Industry in adapting to the brave new world of sector management. So thanks again for stepping in. We have a great panel today. We had to change things up a little bit. Sally McGee from Environmental Defense is unable to make it. So she sends her apologies. I would just say that Environmental Defense is very active on this issue. They have a lot of information on their website and I encourage you all to take a look at it. But there's nobody here who can speak for them so I'm not going to. So knowing what I've seen Pat Kirkle do in fisheries management I knew she was just the woman to ask to step into the panel. So she's graciously agreed to step into the panel. She's not saying ED's position but she will be presenting some information from her role as a council member sits at the table and has dealt with and is in the midst of dealing with this transition from one mode of ground fish management to sectors. So thank you Pat. Let me just go down our panel really quickly give you some brief bios. So first we're going to hear from Eric Thunberg and as I mentioned yesterday and I think earlier today I think it's also reflective of the complexity the fishery management is moving in these days that we have much fewer lawyers on this panel and the next one for good reason. And catch share systems involve a lot of complex social and economic data. So I'm really pleased that Eric who's there's not very many people who know as much about the economics of catch share programs as he does. Eric is from the Northeast Fisheries Science Center and he's an economist with the social sciences branch in Woods Hole, Massachusetts. He has a bachelor's from the University of New Hampshire and his master's in Ph.D. in natural resource economics from Virginia Tech. To his left speaking next will be Pat Kirkall. She's been the Northeast Regional Administrator and Gloucester since 1999 has been with NOAA for 30 years and like I said I always like to get to know people that I think I know pretty well even better when I make them give me a bio. Pat actually has a master's in resource economics from the University of Rhode Island which I had no idea. So we got two for the price of one. We got economists and council member. And next to her is Allison Reiser. She gets the Tropical Long Distance Travel Award. Allison's joining us from Hawaii and I'm so thrilled that she could make it. Allison is currently the Dai Ho-Chun Chair and Professor of Geography at the University of Hawaii. She's also Professor Emerita at the University of Main School of Law in Portland where she oversaw the Marine Law Institute there and taught for over 20 years. She has her J.D. from George Washington University Law School and an LLM from Yale. And finally to her left Vita Gigalani from the Northeast Seafood Coalition. Vita is the third generation U.S. commercial fisherman based in Gloucester has over 30 years of experience in the fishing industry. He owns and operates a 78 foot dragger called the Jenny G. and is the owner of the Fisherman's Wharf a working waterfront shoreside property. His current role is as policy director for the Northeast Seafood Coalition. And in that capacity he's very actively engaged in the development and implementation and management of 12 of the 17 sectors in the ground fish fishery which just became operational on May 1st. These sectors alone have nearly 500 permits and average about 60% of the total commercial catch the annual catch limits of the individual ground fish stocks managed by the New England Council. So he's going to provide us with a really great operational hands on perspective on what this what the system is really like from the ground up. So Eric I'll turn it over to you. Okay thanks I really appreciate being here. I'm normally at the Northeast Fishery Science Center. Part of the member of the social sciences branch in what's called currently a acting division chief at the no fisheries office of science and technology in the social and economic analysis division. I've been involved with principally involved in terms of fishery management kinds of issues with the New England ground fish. I've been on the New England ground fish plan development team since about 1995. So we've seen a lot of change over the years. I'm going to try to talk a little bit about the Magnus and Stevens acts issues related to or the components of the Magnus and Stevens act that deal with allocation. Talk a little bit about cat shares and a little bit about economics. At that at the time I actually did this the catch your policy was in fact a draft. So as it turns out yesterday it became final. So I'm hoping that the little I have to say about this will still be accurate. A little bit about Magnus Stevens acts provisions related specifically related to limited access privilege programs and allocation issues. And I think we were supposed to talk about some of the most important issues that we saw as being critical questions that come up when we start talking about cash cash or policies. And I'm going to talk a little bit about opportunity cost. And you know we've already talked about this essentially the know no catch your policies is a lot of verbiage in the in the policy document. But at the bottom line is it boils down to catchers or tool essentially encourage consideration of the fisheries where they're appropriate. And no is going to help support the design and implementation of monitoring catchers. The policy basically mirrors the design features that are important to consider at least within the policy document essentially mirror the requirements are already in the Magnus and act and that's essentially specify what your management goals are. You know deal with transfer ability to develop what options you might want to pursue with respect to transfer ability and in the variety of different ways that that can be done. It requires a periodic review of the catcher the program if you have one to make sure that it's doing what you what you wanted it to be doing. It also creates you know basically allows for distinctions amongst sectors and I don't mean ground for sectors I mean commercial recreational other types of user groups that may have an interest in in in having a catcher catcher or not being a part of a catcher program. You know consider fishing community sustainability and the possibility that you collect royalties or rents or some other type of payment to the public for a for the use of a public resource. Again these are all things to consider nothing really here is is required. The Magnus and Steven act you know particular requirements and features with respect to a catcher and this is this is part of the limited act of privilege program language. It's basically quite clear that it's not a right or an interest in any fish prior to the harvest. So it's not a it's not a property right. It's not a right in the Institute resource. It's a right to it's a harvest right and and that it doesn't extend beyond that. If you're in a fishery that is in rebuilding mode then you know you require to have some you know the catcher program would be assist in rebuilding if you have a capacity that he contributed to reconciling a reducing capacity reconciling overcap capitalization with the with the resource promotes safety and social and economic benefits include appeal appeals process for an initial allocation and established procedures to detect collusion. If indeed there's there's some concerns about that certainly allows for allocations to communities. There's a community development quota that's in place in the Alaska region but it certainly allows for those types of entities to to have an allocation and it allows allocations to very regional fishery associations. Within the language there's there's there's kind of a important distinction between shells and and considers and I don't think I need to tell anybody in this audience what what that what the why that's important. But essentially the allocation shells include the sure insured fair and equitable initial allocations in in coming to these considerations of initial allocations. You want to consider the current and historical harvest employment and harvest and processing sectors investments and it depends on the fishery and current and historical participation by fishing communities. Again you're required is shall ensure fair and equitable conditional allocations but these are things that you can that you need to consider. None of these things are are are necessarily actionable. Another one is include measures to assist where necessary and appropriate again necessary and appropriate. It's an open open to interpretation of course that the you consider measures to assist entry level and small vessel owner operators captains and crews. These are in terms of initial allocations by the way fishing communities which would include potentially having set asides for economic assistance or set asides for communities or small small vessel fishermen or and and have a program potentially to have an economic assistance in purchasing shares if if that's again where necessary and appropriate. It also requires that they set up excessive share limits. Some of the things that are in the consider category basic culture and social framework. This is again it's interesting that there's an allocation shall and an allocation consider that that involves small vessel owner operators fishing communities and it also you consider regional report specific landing requirements excessive geographic concentration or other consolidation harvests or processing sectors. I mean there's all various types of things that that are needed to be taken into consideration in terms of initial allocations. Some of the other provisions that that are included at least in the Magnuson Act. You know again transferability is consistent with council objectives and I think we're going to come back to this this issue of council objectives when I conclude. It also requires that you at least consider auctions in initial allocations or other program to collect royalties shall develop at the program for cost recovery. So if you have a limited access for this program then there's a requirement to have a cost recovery that's associated with the the administration monitoring enforcement of those programs. There are limits on the cost recovery by the way. The permit is actually issued in a limit access privilege program for a period of not more than 10 years and it will be renewed according to language unless it's revoked at some point. There's a lot of conditions under which revocation could take place. There's also a provision that I actually didn't know about until I actually started reading some of these provisions and it's an assisted purchase program and it entails a reservation of 25% of the fees that are collected under the royalty or auction that would be set aside and provided to entry level or potential for them to purchase or assist in the purchase of a quota share by entry level or small vessel fishermen. And so these are all the types of things that are actually in the act. I wanted to talk a little bit about what I felt were some of the most important issues in terms of the development of catch shares and the kinds of things that I think are really important to consider and may or may not have been articulated to the extent that it would have been helpful in terms of the design of sectors in ground fish. Probably the most important thing is if anyone can imagine that the goals and objectives really are essential to articulate what they are. Even more so that they actually need to be measurable and my strong suggestion is that they be data informed, that there are a number of perceptions of reality and it would be very helpful if you know some of these perceptions of reality were in fact tested. I think many of these things really ought to be viewed as hypotheses that hopefully are testable and so data informed decisions I think are actually really quite critical. And the other thing is it's one thing to stay to a whole bunch of objectives and to have them measurable but in quite frankly a lot of these objectives are conflicting. And it's very difficult to and I think it's incredibly important to actually be upfront about what the trade off amongst those different objectives might be. I want to try to give you a little example of what I mean by the way objectives and goals are stated or have typically been stated. These come from the amendment 16 to the ground fish plan which didn't initiate sectors. Sectors were actually initiated in 2004 with amendment 13 but expanded use of sectors actually occurred through amendment 16. This objective states that fleet capacity commensurate you want to have fleet capacity commensurate resource to achieve goals of economic efficiency that encourages diversity within the fleet. It's unclear that it's certainly possible that these are potentially conflicting objectives within the same goal statement. And I think this is an example of and so I want to make it very clear that it's not that amendment 16 didn't have objectives with respect to cat shares and with respect to you know the sector development. It's just that some of the objective objectives are difficult to very difficult to make operational. Again economic efficiency, encourage diversity, minimize adverse impacts on fishing communities and shore site infrastructure. Again potentially incompatible or difficult to make operational with the first objective. Maintain a diverse ground fish fishery including gear types, vessel size, geographic location, participation. Maintain essentially literally means keep it unchanged. Don't do anything. Don't allow for you know people to move around. Don't allow for change in geographic location, fleet diversity and things of that nature. So again it's an objective. It's problematic in the way it's stated and it doesn't speak very well to some of the other objectives and it's not clear how to trade these objectives off against one another. And also actually this is quite nice. It's developed biological, social and economic performance measures to assure accountability and achieving management objectives. I think this is really quite valuable. I don't believe it was actually really done. So it's a stated objective and I'm not sure that within this particular context anyone really ever returned to that objective and said oh yeah. What performance measures ought we to be tracking? There's something here and potentially if you have performance measures you track them you monitor them over time maybe you can start thinking about how these objectives trade off against one another. The one thing I do want to talk about and this relates to objectives and increasing the number of objectives. I think of this process as one of a you can state this mathematically such as it's a constrained optimization problem. So in the objectives you know it can become the constraints in terms of affecting the opportunity set or the opportunities that the council has in terms of decision-making and in terms of individual fishermen in terms of making decisions about their own businesses. And this is the this is just a conceptual approach. This represents the potential if you have essentially an unconstrained system and this might be your what your opportunity set might look like. And all I mean by that is that you can be anywhere inside the boundary. It doesn't mean that you're going to be on the boundary. It could you could be anywhere in that. So you have a lot of flexibility in terms of how you design a program and how individuals that are affected by that program it affects their choices as well. So as we begin to introduce constraints you change the size or you change how much you change the opportunities and in many cases this might be just as a you know pull a rabbit out of the hat here. Not really but this is a this this might be thought of as a an ownership cap. In some cases that that constraints where quota can go and it may compromise some of the some of the flexibility that individuals have. And in many cases I'm not arguing at all that these are not worth doing. And that these objectives in these constraints are not worth imposing on a system. It's just that they do reduce opportunities. And here's another one. And you know so you introduce another constraint another objective. You're closing down some of the opportunities that that fishermen have that councils have in terms of what they can do in their systems. And I'm just you know you keep going and then all of a sudden what what used to be a very large a large amount of latitude that councils have and individuals have to operate or adapt to a particular management system and their opportunities become increasingly constrained the more you impose objectives the more objectives you have the more constraints that you impose on a system. This is this is essentially this is one of the things I think as an economist I think be wary of this problem. That there's there's some things that that catch your systems or allocation allocation systems offer and you can continue you can erode some of those benefits. And so that's something to be to be careful about. Yeah last slide. Catch years are a tool not a requirement. No catch your policy clearly makes that quite clear. Within the context of no no catch your policy and within the Magnuson Act councils really are really afforded a tremendous amount of discretion in design of how these systems might operate. They have lots of choices just because they don't exercise those choices does not mean that those choices aren't there. The Magnuson Act is in terms of the in terms of those choices does create a wide array of economic and social concerns but not all that many of them are really truly actionable in the in the sense that thou shalt do have set asides you're not required to have set asides for small boat fishermen but it does allow the discretion for the councils to choose to do that. Objectives objectives objectives I think this is this is probably the most important thing that that people can do for themselves and councils can do for themselves in terms of thinking about catch shares. They really need to be clear they need to be measurable data informed they need to articulate the trade-offs and I'm gonna but don't have too many of them because you do you can be taking away some of the flexibility that catch your systems do provide and I think it also takes away some of the council's discretion in designing those catch your programs and that's that's all I have. Well surprise, surprise, surprise. I'm I'm going to do a little bit of stream of consciousness since I had about 10 minutes to think about this so bear with me a little bit. Susan's asked me to talk a little bit about catchers from the council perspective and so we've we have touched a lot in fact on ground fish in the last couple of days. I would note that in fact we do have some other catcher programs in the northeast region we had the first ITQ program individual transferable quota program in the mid-Atlantic for surf cream ocean co-hawk fishery and that was implemented back in the early 90s I want to say and I'm pretty sure it was the first in the country. That particular program I think goes along so smoothly now that people often forget even that it's an ITQ program. Here in New England it is a new concept but we never wanting to do anything without a splash in fact it wasn't just the sector program that we implemented this past year we also implemented an ITQ program in the scallop fishery for the general category scallopers those are basically the small operators they were limited to pretty much 400 pounds per trip but we implemented an ITQ program for that fishery on March of this year and then the sector program in the ground fish fishery as Eric points out it wasn't entirely new we did the first sector in 2004 added a sector in 2006 but then but then had the big shift in the fishery in this past start of the fishing year which is in May so we had really three things going on at the same time to try to provide a little bit of background on this or context for this but the council was dealing with first off the requirement under the Magnus and Act is to rebuild in 10 years or less and so they were reaching the midpoint in the 10-year rebuilding program for most of the ground fish stocks and had a requirement to take a look at whether or not progress was being made towards rebuilding and we were going to make the 10-year rebuilding so that was going on at the same time we had the 2006 reauthorization that required implementation of annual catch limits and accountability measures and then finally there was this interest in moving over to sectors so you had these three just sort of massive changes to the to the program coming together at the same time just colliding at the same time and it's really in some ways difficult to tease apart what's going on because of all those things going on at the same time with the with the rebuilding programs in fact we found out that we were making insufficient progress towards rebuilding for many of the stocks 13 of 19 and for the acls and ams of course that was a was a major change for the council because they were moving from input controls to output controls and this council and this region have consistently resisted any kind of output control any kind of control on the total amount that would be caught and it wasn't just output controls actually the annual catch limits do set up a sort of an accounting system that requires in the past there was this look at just what the directed fishery was doing you know this is what we're catching here and yes there are all these other leaks in the system there's bycatch here and is this going on there but we won't worry too much about those we'll just worry about what's going on in the directed fishery and try to control that but but acls annual catch limits actually require you to take account of every single source of mortality and so that was a major change too and then finally this this whole concept of sectors it's and that's i think a really difficult transition for everybody involved in and all of us are still trying to get our feet under us for these the for the three things that i mentioned that had to come together and then how quickly they had to come together it was really just a compressed timeline for this kind of a change for the change of this magnitude and so it came together a little bit differently than than many other management programs do in fact the council in some way sort of ran out of time and at the end they said so there should be all these programs too to monitor things but but we'll we'll let everybody figure out that after the fact which is a very different process and so so sort of after the fact we and the industry was sort of left with needing to come together to try to figure out how these programs were going to work how how these monitoring programs in particular were going to work and so that was very different for both of us and i and i think in in retrospect it was really beneficial because i think it was important for us to collaborate to get a good product and and you know we're still working that through we're still in the really early stages of this and and it's going to be a while before we figure all these things out but but really what this does and probably the most important thing it does is it it really does change the accountability here it changes and shifts to the industry a lot of the responsibility for monitoring the fishery and so they become responsible for monitoring their own catch and and and they're able to do these transfers they can transfer and lease to make sure that they can balance their books and in fact we allow them a couple of weeks after the end of the fishing year to continue this book balancing and and they are ultimately responsible and then they are also partially responsible for the costs of the programs so the way that the amendment was designed and this you know this was really kind of surprising i think to everyone that the council you know finally agreed to this kind of transition but the way it was designed as the industry is responsible for paying for for doxide monitoring and then they are also responsible for for at least partially covering the costs of at-sea monitoring now um no uh sort of recognizing the state of this resource right now and that the profit margins were were in fact quite small um we did step in and for the um first year provided funding for both of those programs as well as um providing additional assistance uh to the sectors directly um in getting set up and in their operating costs um and and um we have sufficient funding to do that into 2011 um in 2012 um we we don't know what will happen um at that point the industry may need to assume these costs um we're hoping that um there's at least some funding to bring us into 2012 but certainly as the resource rebuilds the thinking is um the the the responsibility needs to shift from the government and and to the uh to the industry and you know this concept of um those who most benefit from the harvest rights uh should in fact be responsible for some of the some of the costs of that um so um on the on so that's sort of the ground fish side of things and then on the scallop side of things as I said it implemented this ITQ program um that started at the beginning of the year uh there's also leasing and transfer is available in that um and um and the ITQ programs tend to be frankly less complicated um and and less resource intensive than the sector programs have been um because an individual is responsible in that case for for monitoring for their own um allocations and monitoring their own allocations um but there is also a cost-share requirement in that um we've we've waived the cost-share requirement for the um for the first year for the partial first year um but we'll be collecting it starting in this fall but one of the things that we found in the cost share is yes the Magnuson Act does allow um does allow uh recovery of some of the costs in uh in a limited access privilege program and ITQ ITQ program up to three percent um of um up to three percent of the of the revenue and then um but what we're really finding is the way that it has been interpreted is it's it's sort of marginal costs um so it's just the new costs associated with the ITQ programs um or the other catchier type programs um and for the ITQ programs in particular the the marginal cost is actually quite low um and so we're finding in some cases it's actually cost us more to collect it than than what we'd we'd get in return um so this we're not quite seeing the benefit of that um provision of the act just yet um so I I think I just wrap it up by saying um this is a this is a work in progress um the councils in fact uh have already um we'll already be considering a motion that they are November council meeting um to remove the responsibility from the industry for paying for the the program um and um and we'll be adding some new changes to the programs and in fact for the for next year it looks like we're going to have uh even more vessels participating in the sector program at this point we're up well over 98 percent of the historical landings are represented by vessels that are in the sector program so this common pool program that you see is is actually becoming very very small um compared to the overall fishery uh and so it's um it's um an open book I would say and stay tuned for the last chapters thank you well aloha I'm Allison Racer from the University of Hawaii um I'm going to present a sort of the legal and policy half of the paper uh that I am working on um with Les Wotling from the University of Hawaii uh Department of Zoology uh and uh what I what I doing in this in what we are doing in this paper is looking at uh one of the uh claims I think that that has been made uh with respect to cat share programs uh ITQ's uh exclusive allocation um of uh fishing privileges so before I uh turn to all my slides that have words and not beautiful pictures I just want to explain a little bit about what we're what uh we're talking about these are this is uh part of the marine ecosystem that Les Wotling studies uh it's the the benthos the benthic communities of uh you can see uh in this picture there's probably uh I don't know what would you say and maybe 100 or 200 uh different species uh there's tremendous biological diversity uh in the seafloor in the deep seafloor uh and uh you can see that in some cases these uh species um create structure they create habitat for other species because you can see uh different organisms living um in close association here so this is the benthos and uh we're we uh are trying to tune in and listen for dispatches or messages from the benthos about uh how's it working out uh these uh cat share programs uh uh in their changes in fisheries that have been brought about by uh cat share programs uh just a a little bit of background about what what we're talking about when we're talking about uh managing fisheries what should what your objectives should be um and we're basically talking about preventing um ecosystem overfishing uh not uh overfishing or rebuilding stocks uh that have been overfished in terms of the uh biological reference points for those single stocks but we're talking about the the overall cumulative uh ecological effects of uh of overfishing of of fishing um and um we've been we've been talking about uh background uh policy two magasin act changes in the last a few years um and I just wanted to remind you that um both of the u.s uh commissions on ocean policy the pew commission and uh the u.s commission on ocean policy both acknowledged that uh that fisheries can profoundly alter marine ecosystem structure and function and indeed uh in many places this has already happened so so again i just want to remind you that we're not talking about um overfishing of target stocks but alteration of ecosystems so you have uh fishing can have physical impacts uh of the fishing gear uh you can have the impact through harvest mortality of the target species and uh bycatch species over here um incidental mortality uh and you can also alter the ecological structure uh of of the ecosystem um which has been uh demonstrated in a paper by daniel paulie of fishing fishing down uh food the food web um by uh serial depletion from high trophic levels down to lower and increasingly lower trophic levels um and this can have um and also when you fish for species uh um through the selective or unselective process that you use you can um alter um the size structure of the of the stock the sex ratio the genetic makeup of these populations so that you are selecting for um fast growing uh species that tend to be um lower lower uh reproducing because um you've altered that um through the selective pressure applied by by fishery so that's the kind of overfishing that that we're talking about and um ultimately you end up with altered ecosystem structure and function and it appears that in some of these cases these changes are um irreversible uh the overfishing of the Atlantic cod the northern cod stocks um on the grand banks and in the canadian exclusive economic zone probably um made permanent changes to the ecosystem that that we can't uh we really can't reverse even by a moratorium okay um again just a little bit more about the prescriptions now these are the the policy prescriptions for fisheries that came out of the two ocean commissions uh earlier in this decade uh the pew um said um and basically they they had two things in common that the two commissions agreed uh on two basic policy prescriptions that um to address uh ecosystem overfishing we we should allocate fishing privileges uh to uh the uh fishing industry uh to and we should also manage on the on ecosystem basis and so those are twin prescriptions and it is it's very interesting that the two commissions um agreed on on these two kind of twin prescriptions using individual uh transferable quotas or other cat share programs allocations uh and uh to manage on ecosystem basis uh a little bit of difference uh pew said uh um actually the the differences are really not not important um but if you use to use a greater use of dedicated access privileges and to use the fees that are collected uh to uh support ecosystem based management um and so um the obama administration's new ocean policy that came out i think in july uh reflects these this this consensus on these these sort of twin policy prescriptions to uh adopt ecosystem based management as a foundational principle for the comprehensive management of the oceans and then we know that the uh cat share policy which just came out yesterday i'm like eric i didn't see the final um but this is a quote from the draft um it reflect again it reflects this kind of policy consensus um that what we're trying to achieve is long-term ecological and economic sustainability of the nation's fishery resources and communities uh and and to do so encouraging the adoption of cat shares um and that no one will support that the implementation the design and implementation of those so we're talking about again ecological sustainability of fishery resources and communities um sally is not here so i happen to have a slide from the environmental defense fund um their uh their approach to cat shares um and this is where we're beginning to get into a little bit of the the um uh it's a policy prescription but it's it's hoping that cat shares will will turn out to be what we've all been waiting for the people that we've been waiting for the uh that yes we can have truly impressive results uh with cat shares and um and i i think um these are some of the the um claims and hopes that have been reflected with respect to cat shares as a policy instrument um and uh and the one we wanted to address is that um do cat shares lead to conservation of important marine habitat that kind of complex uh community structure on the sea floor and um environmental defense fund i think in trying to uh uh promote um adoption of the commission recommendations to consider individual cat shares and allocation programs uh i tried to um determine whether these in fact these benefits um really can be achieved in cat share programs um and uh concluded in their somewhat limited review uh of uh existing cat share programs that yes it's good for habitat for the kind of habitat that i showed in the first slide um because uh sort of indirectly because you rationalize the the fishing effort uh you tend to reduce the amount of gear that's used uh because you're not engaged in a race for fish and they found on the overall whoops um 20 less gear to catch the same amount of the same amount of fish so less gear uh converts to or translates into less habitat impact um and uh all of the cat share fisheries that they looked at also make use of ecosystem protection tools or area based closures so uh we wanted to kind of unpack that um claim um and so we were looking at whether there is any evidence that cat shares and itq programs in fact create incentives for fishermen's stewardship um i've probably heard um or seen in the literature that the sort of the slogan is that uh incentive based management cat shares exclusive access privileges align the industries incentives with the ecosystem with sort of the general public's uh goals and objectives um and we wanted to see how is uh how it's how is stewardship being defined what kind of behavior uh in the fishing industry are we seeing where they are managed using uh cat share programs um what kind of stewardship can we reasonably expect to see kind of after the boom after you've had the perfect storm and you've got you've got a an exclusive allocation a cat share program in in place um and then sort of the larger question is can we design cat share programs knowing uh how they're actually being uh implemented and and how uh the industry is behaving uh under this system uh can we design cat share programs in the us um to promote ecosystem based management outcomes without relying on fishful thinking um so some of you may have seen uh the writings of um daniel bromley and seth mesenko uh on uh sort of the utopian vision that is behind uh this assumption that exclusive access rights uh will lead to suit uh stewardship um and to some extent and this is a quote from um an article by tony um picture and Cynthia lamb from ubc uh that this is just one sort of naturalistic fallacy that this is how it ought to be uh if we give exclusive access rights it will it will lead to stewardship and therefore it is and uh and that's that's a form of wishful thinking uh or fishful thinking as they as they say so that was the challenge that's what we're we're working on um and uh so the good thing is for the from the united states perspective it took uh it's taken quite a long time to come around to serious consideration of catch share programs um for us fisheries that are managed under the magnus and stevens act um and you may know that in 1996 among the other amendments that we discussed uh in the sustainable fisheries act in 1996 there there was a congressional moratorium on the adoption of any further itq programs they had just approved i think the secretary had just approved one for the gulf of mexico uh red snapper fishery there was one uh in had um had been approved for um uh halibut and sable fish in alaska and uh there were certain certain interest groups were not that crazy about the idea of this ball getting this ball rolling in other fisheries uh so a congressional moratorium was adopted and and for two or three years and during that time the national academy of sciences um was uh required or requested to to put together a committee to study itq programs um and to make recommendations to congress about whether this is uh a good direction to go into to go into um so um so that during that time uh some other forms of allocation were adopted that were not transferable quota programs cooperatives uh largely where the industry um voluntarily um takes a um a fleet wide quota uh and instead of racing to and competing against each other and racing to it a racing to take the fish which doesn't help anybody um develop kind of a contractual arrangement through a cooperative where they would agree on you know who's going to fish when and for how much um and therefore basically making it a private business uh uh decision among the uh the catching sector uh so anyway but there's a lot now a lot of catchier programs or itqs around the world um as you probably know new zealand has really a comprehensive quota ownership uh program it relies on itqs um virtually and all in all uh commercially significant uh fisheries and um and australia has a has a kind of a related program um iceland norway um some other some other places uh so there's quite a bit of that you know there's a lot of experience now it's time to do some empirical research to see well what has happened rather than thinking about you know wishful thinking that it ought to happen that that stewardship uh incentives are are created um and therefore it is to see whether this has actually happened um and so the findings are basically summarized here that catchiers uh looking at all the the catchier programs around the world they do uh appear to create incentives uh in the industry to internalize the adverse impacts on the target fish stock and and often the specific bycatch species because if those are if the bycatch species are also commercially important there are usually uh special there are provisions and there may even be um uh quotas on bycatch so yes there's stewardship in that sense with respect to the target stock but the but the evidence is not there for any for stewardship with respect to the kind of broader ecological system that fisheries are part of share catchers do not create incentives to address the ecological externalities of fisheries the things that i um that i um briefly reviewed in the the slide um second slide uh damage to habitat you don't see uh voluntary stewardship or um measures with respect to damage to habitat that's not habitat that's not specifically um identified with fish productivity you don't see measures adopted to protect those kinds of communities um habitat uh structure forming uh species um and you don't and you don't see measures to prevent damage to benthic communities and and biodiversity yeah there there are a couple of exceptions okay so i'll skip over this uh this is just one of the papers that shows uh um some of the effects of these cat share programs um it's important to to understand how we're identifying or defining industry stewardship and these are some of the things that have been identified reducing the amount of gear slowing down the fishing so more can care can be taken in choosing where and how to fish the industry going to the decision maker the ministry of fisheries or whomever that is and ask for reductions in TACs and there are examples of that um also uh uh identifying areas outside the existing footprint of where the fishery occurs and i'm i'm in this case i'm talking about um basically bottom trawling fisheries uh and also the adoption of less damaging gear trevor branch did a review um you can look at the paper and found that in these fisheries did find stewardship actions but you'll if you look at this you probably cannot read whoops um that most of them have to do with re requesting a voluntary reduction in the TAC so the industry is saying you know we don't you know maybe that's the biologically available uh uh catch but uh we we would like a lower TAC to either reduce the risk of overfishing um or um it's just better for our business plan and and prices uh so but a critical thing i think from the uh the review is that timing is is crucially important um and uh mark gibbs uh from australia did a review of itq programs uh in um in australia and new zealand and found that um once exclusive access rights property rights property like rights have been allocated it's proven difficult for regulators to protect benthic habitats and associated independent non-commercial uh species and that has to do with the fact that there is an implicit you know the itq or the catch share is the right to catch a uh uh specified percentage of the TAC generally it has no usually has no spatial spacial your geographical location um that's explicit but the itq catch shares uh embody and implicit spatial element in other words it's not only conveys a um a property right or a right to a share of the total allowable catch but it implies in this this sort of right to occupy the space uh in the ocean to in order to search for and find that amount of fish to extract um and so but there are other claims on ocean space and it's in uh didn't determine that itqs make it difficult to accommodate other spatial uses you seriously want me to stop susan i thought you were going like this okay some of you some of you uh uh may know about the the benthic uh protection areas so this is like supposedly like the big exception to the uh where the uh deep sea trawl fishery in new zealand which has quota ownership it's a full property right uh there's no takings clause uh in the new zealand constitution there's no public trust doctrine they have a full property right and they and they ask the ministry to set aside 31 percent of the new new zealand exclusive economic zone and to create them into benthic protection areas uh and close that to bottom trawler and this is the deep sea trawling fleet uh in new zealand um uh but it turns out that uh uh the benthic protection areas that they ask for voluntarily are all outside their footprint of where they're currently trawling and and uh they're in areas of of the turnout to be of low low biodiversity value and they're in waters far too deep to ever trawl so our question is is this ecological stewardship and and those of you who know less waddling may know that this makes him ballistic this um so the alternative and maybe i can talk about this later on is australia has taken this timing question uh before they uh revamped the southeast trawl fisheries uh fishery management plan into uh individual transferable quotas or statutory fishing rights they went through this ocean policy marine regional planning system and uh did bioregional planning and used it to uh identify uh a series of uh deep sea and it's the first network of deep sea um marine protected areas um that are generally close to bottom trawling uh pelagic fisheries are are still allowed allowed in some of them and it and it protects a representative sample of diverse sea floor features and associated benthic habitats now the industry had input through the australia fishery management authority which is kind of like a super a super council um and um and the industry did modify the proposal the initial proposal but it turned out the industry uh after the industry input this is the trawling industry uh it ended up with a 20 percent larger area um and probably more protective this is just the sort of the area where they fish and the media release uh where the australian seafood industry council is saying um you know we think this is a good thing now they didn't do it voluntarily uh because australia like new zealand australia had a commitment um to protect 20 percent of its uh ocean habitats by 2012 i think it is the world the sustainable um the sustainable development world summit on sustainable development johannesburg in 2002 where um a lot of countries made a commitment to protect biological diversity in the ocean um through representative uh networks of mpa's so likely outcome uh under us catch share policy that policy that none of us has read yet um that uh industry associations and sectors will ask the councils to reduce the tacs we can i think we can expect to see that but they will not ask for uh additional closure of areas to protect biological diversity these the the bentos that i showed in the first slide they'll not ask for additional eff or closed areas under section 303 b uh b2 or b12 uh and that has to do with um unlike in australia australia requires there's another statute the environment protection and biodiversity conservation act of 1999 and another agency the department of sustainability and environment that reviews and certifies requires the fisheries the fishery council uh to prepare for the fmp's and ecological risk assessment and the conditions for certification so this other agency has to certify the ecological sustainability of the fishery management plan and in order to get certification they have to commit to um uh closures and protections changes in fishing gear um as well as compliance with the with the tac um so my conclusion is that the magnuson act uh are our ecological protection provisions and nymphs' interpretation um and habitat they do not create sufficient incentive for industry to adopt uh ecological stewardship i have a joke here so you might want to wait for it susan so what are the prospects for uh for doing better um well i think it's it's difficult to anticipate um additional amendments to the magnuson stevens act to kind of give that statutory uh backbone uh to require to inspire the ecological stewardship uh but i think that noa the national fishery service has um in these other laws has a has a suite of authorities that it could use including nipa national marine sanctuaries act uh the czma uh to put together a comprehensive attack on ecosystem overfishing and i think they could require an overhaul of all fmp's that do not address ecosystem overfishing do not really seriously rebuild uh ecosystems uh using access privileges using cat shares um in order to leverage a sincere a sincere commitment from the industry to ecosystem rebuilding and that's all i'm going to say well everybody uh vido jigaloni north east seafood coalition um first of all i just want to say you know here in and uh in the wingland the cat shares only five or we're almost six months into it um so it's really difficult to try to make uh early judgments on it but i think a little of the history of it uh living the the three or four years of policy making that we went through um one of the key things that uh were mentioned about all of the colliding of different major changes uh i think um the big issue is initial allocation and i want to you'll see that coming up all the time um the initial allocation was something that was not able to be taken as uh front and center as it could have been um and we're actually glad that this was not considered an la pp at this point um just to get into the uh some of the key points that we're supposed to touch on or try to touch on here at the supposed symposium as far as advantages and disadvantages of a cat share uh system um some advantages that are at least purported to to be uh potentially extracted from a cat share as it replaces the reliance and effort controls we have days at sea trip limits and area closures that are basically designed inefficiencies and um you know of course it makes sense to look to relieve those but you need some other control um what a cat share potentially does once it does the allocation is that it allows to have direct output controls um which generally increases uh efficiencies and you know it's agreed in at least in these first five months we're seeing that efficiencies on some platforms are definitely taking place um and it provides opportunities for fishermen to consolidate their effort in the cat share fishery to a shorter time period uh basically what that what that means is people can be more efficient uh take what they have for an allocation in that particular cat share uh fishery and have more time to do something else or or work in other fisheries um more potential advantages are it may provide better control for fishermen to meter their catches uh towards fish price uh trends um when you're under trip limits you have to go more frequently you can run out of fishing year um and and you end up going with the market uh seesaw uh ride whereas in this case one of the purported advantages that fishermen can wait catch more of their fish in a shorter period of time and try to speculate on fish prices um those opportunities we've seen uh some of that to be true so far in the first five months of the of the cat share presents a theoretical opportunity to right size the capacity of the fleet to the available resource um we've said for the last three or four years um and we absolutely are already showing that it's not the case um right size is is a theoretical it's fallacy um business uh is what what determines what makes the most sense of how much to accumulate and so right size is such in a subjective thing i think eric did a fantastic job of laying out the issues that really need to be considered and put in the goals and objectives up front and center and um so far they're just theoretical and until we really are able to have something that you can work with it's difficult so the right sizing one we're seeing is definitely not aligned with um with the cat share the way it's implemented right now and um it removes many of the pressures contributing to derby fishing mentality that that is true um now once once fishermen or sectors have a certain amount of the quota they're not in a situation where they all feel compelled to go out every day until the quote is taken uh disadvantages is it creates an additional cost to the actual fishing effort through lease extraction this to me is what we've seen is the single greatest um unforeseen or um you know unexpected uh occurrence in the fishery the the lease extraction is enormous in our fishery right now the ex-vessel value of the species isn't going to increase simply because we've created this man-made constraint on trading quota the market is not going to respond to that so what's happened is the actual fishing effort is now being burdened by an additional cost to go out and lease quota and that's coming right off the bottom line and it's potentially enormous um as far as what the net profit in the fishery is going to come out and a lot of the things that we're seeing is being masked by gross revenues which are not an indicator of the profitability of the fishery at all um and the combined effects of speculators uh or i'm sorry i skipped one the we create a market for these um cat shares or the uh privileges um and and people are starting to buy them just to lease them because the lease price is so high that it actually if you look at it um is more profitable to lease the quota than to catch it when the prices have gotten as high as it's gotten um and then the combined effects of speculators and the urgency of fishermen we have um just finished a period of uh some severe consolidation and transferability that was allowed since amendment 13 where you were allowed to buy additional permits to get more fishing opportunities so as the regulations cut effort in half you were able to go out and try to buy more so this put um people in a situation where a lot of the participants in the fishery today were people that expected to participate in the future and they're not really positioned well um right now to just lease their quota away so everyone's looking to buy more quota which is inflated the permit market um the complexity of a multi-species fishery also uh compounds and exaggerates the problems that plague all catch here uh schemes uh species leveraging there's all kinds of things that can go on um that are very difficult to forecast and it creates a tendency to consolidate beyond what is necessary it's back to that right sizing um there's uh the more capitals available the the people are going to race and and tend to over buy um so a limited access privilege program the LAPP which is uh 303a basically defines or the definition is to harvest the quantity of fish expressed by a unit or units representing a portion of the total allowable catch of the fishery that may be received or held for exclusive use by a person in person being any entity um whether it's an individual or or a company um some examples of limited access privilege programs would be um individual fishing quotas uh individual transferable fishing quotas uh the regional fishing associations that are contemplated in the act i'm not sure how many actually exist yet but um the rfa's are also capable of holding um LAP type currency and uh in a community or other recognized group that is allocated a portion of the total allowable catch um this was i i had to snip this out um where we definitely did allocate fish to the sectors at this point um but as i started out with i'm actually glad that we're not an LAPP at this point because i think it preserves the opportunity for the fishery this is an experiment and i and a lot of things are occurring in the fishery that some of us saw and it was too complicated to explain because obviously we didn't prevail but they're starting to play out and things that we didn't expect are playing out so i think from all sides this is actually good that this is not the final uh crack at an LAPP from New England because i think there's going to be a lot of lessons learned and in a short time we're going to need to react to um so i think one of the key things and this comes to the law and and understanding um what may need to be done in the future for tightening things up is the understanding is fishery pre LAPP you need to basically evaluate the state of the fishery resource at the time you know is it and what's the historical distribution eric laid out some of the things that are um already done all the time in the fmp's regardless of the LAPP requirements um what's the allocation currency of the existing system our fishery was days at sea was the was the currency it was tradable it was limited based on what you were allocated it was a limited access privilege in its own um its own right and what were the perceived privileges as as in other words how did the stakeholders perceive their stake in the fishery being at the time when the LAPP is considered and then investment in the existing currency which is aligned with the LAPP considerations that uh that should be taken into account evaluations i think is is a big one how do you look at success and a lot of these goals and theories and stuff that it tossed around um as Eric said a very difficult to enforce or to really lay on the ground because they're they are just theoretical and and they conflict um what is a success in a fishery would it be to have a certain amount of the of the fish distributed to more participants or that more communities continue to stay the same or are we looking to maximize efficiencies those are two entirely different things and unless you put constraints you're going to live you know then you're going to end up with one the consolidation will eventually go to one um so in in during the amendment 16 process because there were so many things to evaluate we basically looked at fleet level uh impacts uh if you look in the weeds and really get into you know eric's group did an awful lot of analysis and you get inside and you start to see the individual impacts were very broad from people being totally wiped out to you know folks doing quite well um but the median really wasn't very telling of the type of impact that was occurring um the implications to net revenue i don't believe um it i think is something that needs to be front and center even in the law markets don't take care of these things like people think they do implications to the fishing permit market is another thing that's extremely important in the initial analysis what will happen to permit prices and then how does that relate to the assumption that people will go out and access capital get more in order to stay in business there were assumptions that that would occur and it's not occurring the markets crippled because the you know no one wants to sell because no one knows what it's worth um the demographics of the participants in the fishery is another key if we're worried about consolidation or corporate uh you know takeover type of thing um we have an aged aged um group that own access right now um it's really not comforting for fishing communities to know that 50 plus are who own the fishing privileges right now and uh you know we would be silly to say that they're not for sale they're going to be for sale and as difficult as fishing is these days and as difficult as the regulations are and the things that were pointed out in the last that we need to constantly be wrestling with I think it's very easy to see if you make two dynamic and liquid a currency available that it will go corporate very fast and the folks that are going to hang on are not going to be the 55 and 60 year old guys that have pretty much had it so I think that needs to be evaluated when you set up the currency if you don't put constraints on the movement of the currency and don't recognize that people are looking to retire then it'll go quick so the initial allocation again I believe is the whole enchilada that you have to deal with in a catch here you need to figure out what the proposed currency should be what the allocation baselines would be other applicable statutes how does the by allocating the fishery based on some historical catch levels how does that way into achieving optimum yield if you allow certain sectors of the fleet to end up holding choke stocks for example and they target those choke stocks will that make it impossible essentially for the fmp to achieve optimum yield because you've basically trapped the bycatch that's needed to catch the other species those are things I think that all need to be considered in the initial allocation and then distribution of the growth of the fishery I think this is the biggest one that's potentially overlooked when you allocate a catch here and the fishery is at a fairly low level say 20 percent 30 percent of its you know maximum sustainable yield and you allocate purely on catch history of a recent period or some past period essentially the reason the fishery is low you would assume is because a period of overfishing occurred if you allocate based on the highest performance only then you're allocating the highest level of overfishing gets awarded with the highest share of the rebuilt fishery so the future net value of the fishery is allocated to the folks that contributed to the highest level this I'm just pointing out that's an objective fact and it's not talked about that's it's not has nothing to do with opinion but something we need to really think about the way we're we allocate the fisheries up front there are ways to to balance that I think and then the duration of the allocation I saw 10 years up there but we don't have any of that specified yet so that I'm sorry two minutes okay the New England experience that we just went through we do have from what from an operational standpoint an ITQ system it's an ITQ system that was not implemented with the referenda and the initial allocation was not adequately vetted due to the blurring of too many things going through that's why this is actually a good science experiment that's going on right now but I do believe that the sectors are the best protection that we have in this almost uncontrolled ITQ there are a lot of protections that are happening in the sectors they've right of first refusal to each other there isn't a lot of quota movement I'm sorry there isn't a lot of permit movement happening because of those rights of first refusal so as much as I was a against sectors before I continue to say that if you're going to implement a make-believe ITQ system you know that's not for keeps then one way to prevent permanent damage is the sectors and I believe they are doing a good job of that so my observations is are you know for the the initial allocation is everything are the management councils well suited to do this I think management councils are fantastic they need we need to have that on the ground mix we need to have people who have intimate knowledge of the fishery but at the same time if people that were directly impacted by the decisions on allocation had to recuse themselves you wouldn't have a vote so I'm not sure it's the right body and and I would think in MSA if we were looking at really moving talking about public trust how is the public trust defended or protected in the MSA I think this is one place where it's almost impossible to do it at least from my personal experiences and the council should be involved but I think at some national group or body should make those those decisions ultimately that's it so thank you Alforio excellent excellent presentations and I we we do have this one kind of overriding question I think Eric and and Vito answered it pretty well in their presentations so I'll give Pat and Allison a crack at asking this sort of answering trying to answer this question of what's the sort of the single most important thing to consider when designing and implementing a a cat share system Pat do you want to take a crack am I am I right Eric and Vito you you covered those in your I think I go already presentations yeah could I be second do you want to go second oh I'm going to be second I'm going to be second I'm going to be second I'm going to be second she doesn't know the whole absolutely Allison this is why Pat has survived for so many so okay so I prepared for this question and I guess if I was forced to the single most important issue Vito is absolutely right the initial allocation is everything and it's the gift that keeps on giving and so if you are creating these they they tend to be permanent and and they have a lot of they can have a lots lots of unforeseen consequences anyway so in the initial allocation from from the perspective of the benthos I would say rather than then relying on on wishful thinking about stewardship instead of making the initial allocation based on catch history and Vito did a very good job of laying out why that may be problematic when you're talking about rights to the future benefits of of a rebuilt fish stock I would I would base the initial allocation on a demonstrated commitment to ecological stewardship to ecosystem rebuilding and then I would have a definition of demonstrated commitment to ecological stewardship in the act I would have a definition of ecological stewardship so that it wouldn't just be voluntary reductions in the TAC but it would be making that in order to be eligible for initial allocation the sector or the industry association or the individual fishing company would identify a series of actions and commitments for example that they are not going to fish with a particular kind of fishing gear or they're going to make modifications to it they are going to not fishing in in in areas or they will help identify areas that are vulnerable vulnerable marine ecosystems and they are they're basically giving and an easement a conservation easement to that area that they otherwise would have an implied spatial right to occupy with their extractive activity so I would make the initial allocation based on a a demonstrated upfront irrevocable commitment to those kinds of measures because they're not going to happen voluntarily after the the ITQ or the cat share program is created well I agree with everyone I think in fact people are all saying the same thing in a way that that Eric has highlighted the objectives and I and I think the objectives are in fact the first step and often the step that people want to skip over and get to let's make some decisions but if you've got clear objectives then what comes out of it is a clear path to decide about the allocation and some of the other measures one of the other primary things that I think people raise as a concern for cat shares is the issue of the potential for consolidation and the potential for excessive shares and and yet in fact one of the goals of of a catch your type program is to rationalize the fishery in some way so you expect some consolidation and so having the conversation about objectives ahead of time I think will help with making sure that that you in fact have clear goals and and that the measures are that you make decisions about the measures with a focus on those goals thank you so we do have time for a couple of questions I saw Peter's hand up first and then I guess this is the veto veto first thanks for coming and sharing your insider perspective on what many of us have kind of just black box all sector that some of us are hoping is going to help the industry but I was particularly intrigued by your comment about the councils capacity to do the allocation because certainly if you look back in the legislative history that was one of the primary objectives of creating the council system was to allow that kind of local knowledge to be brought to bear upon questions precisely like allocation you pointed but but I tend to I understand what you're saying because actually the minimum council is very reluctant to pick it up a number of us you are different people have been pushing this and in fact the white paper came up that talked about these fleet composition issues and you know everyone in the council just pushed back against it was fascinating to watch the reluctance the council has to pick that you pointed up to this federal level kind of as the philosopher king that would be able to solve some of those problems but I wonder what you think about another approach would be to push it down to the state level and actually force some of the state mechanisms who even within New England have very different philosophies about the fisheries that they want to promote locally to tackle that set of questions I just want to see the federal government having the knowledge to do it well and I hate to give them the federal government another thing that they're going to struggle with so I just wonder maybe this is the election that's talking to me right maybe the states are the the popular level state government particularly state governments are going to wrestle with that I just want to agree with that idea I'm going to quickly chime in just for the record to kind of I'm not going to repeat what you said Peter maybe you could submit no but I think the question to Vito is about the appropriateness of determining allocation questions at the council level and whether you bring it up a few notches up to the federal level or whether there's there's an intermediate level maybe at the state level where those those issues are a little more appropriately addressed so having thought through definitely not looking for more government but I think that you know the west coast and the east coast and the Gulf and folks in Alaska could probably come together with a concept that would appoint people that would be liaisons to that group and that they would weigh in on those types of decisions because for a council to be well-structured to be suited to make those on the ground decisions for management is not what I'm seeing personally is it's awful difficult for people to vote against their own personal that's a long-term wealth thing it's there's a lot more to it than just deciding whether you're going to have a temporary closure or a different trip limit those are the types of things that you need you know local input on but when you're talking about whether you've been speculating on the right permits for the last five years or not is probably not fair to put those in you know some of the individuals that are on there are folks that I wouldn't want to see anywhere else but they're taking the beating that they take and making the great decisions and motions that they have to make but it's just if you take them out of it then you end up with the non-fishing stakeholders having to make those decisions which wouldn't be fair to them or us so I just think that whether that body were made up of fishermen or experts that were you know in that field of that directly but they're making decisions for the east coast with input from the west coast I think would be better than what we have right now let's Josh yeah this question just for for Eric I think about I thought you did that job sort of laying out or bringing up how like the point of trade-offs between sort of the benefits versus the costs associated with lost opportunities my question is as the economy is how far can you get one get pricing for those costs or is that simply a political would always just be a kind of a political decision right is there some rational way sort of possible a rational way to approach that or is it simply political and I guess also not just the amount of lost opportunity but then also the distribution of lost opportunity which is part of the flow because there is there quantitatively a percent just a second could you repeat the question back to him because I didn't understand that one no no I mean I just I think you can probably couch it a little bit better you're just talking about but I think go ahead the question relates to whether or not is can you measure the for gone opportunities associated with constraining a system in such a way that it gets further and further away from what might loosely define economic efficiency okay I'm going to say I can answer that question by saying on the one hand economic efficiency is essentially the result of a constrained optimization problem so you can have I mean if you oppose additional constraints the outcome of how you know initial allocations and various other kinds of things is still like it is still efficient in the sense that you know it solves an optimization problem the question is though I think what you're getting at is you can measure essentially the you could potentially measure the opportunity cost in dollar terms by first you have to figure out okay what is the what would be the efficient outcome if you didn't impose constraints on ownership share associated with requiring that fleets you know that you have small bills large bills medium size bills and all these things and then and then everything else essentially all the all the potential for gone opportunities would be measured against that and so the question is is is is is ultimately in economics we're concerned about opportunity costs and I was just saying I forgot anyway so oh marginalism what you what you're asking really is what is the what is the marginal gain from you know and it's not necessarily monetized of accepting a a achieving a social objective as compared to what are the what are the potential opportunity you know for gone opportunities in economic terms so I mean it's a question of how much you know what's the marginal loss in economic efficiency associated with imposing another constraint so yes you can measure that that in the process you would do it but and you're asking you should be seeing okay how many how many of these constraints are you know and which are desirable maybe all of them and what is a relative you know for gone opportunities that would be associated with accepting those constraints it's just a way of thinking I mean economics is just a way of thinking it's not the only way of thinking but it's a way of thinking about marginal changes what are the role of incentives um and that's our thing but it's it's a problem I mean I guess I'm going to see the problem is that on if like it might be quite easy to put a monetary value on the sort of benefit of science but on the cost side of the document what's the benefit of diversity in the fleet that could be quite different yeah and I'm well and by the way I mean I I really do think that I don't I don't know I would expect an outcome that that has diversity in the fleet because I would I mean there there are certain species are better targeted using certain types of gears than others there are certain places where one would fish that you know makes a certain size vessel more than advantageous than another size vessel so I wouldn't expect just one monolithic single size vessel to you know in in terms of efficiency I still think that a fairly diversified fleet was would be a likely outcome it would be a small fleet perhaps you know it's but but it wouldn't necessarily be just one size a size I wouldn't expect that to occur we got time for one more take one more take one more one more question yeah I might go over one more back here I guess that my question is in part it's actual question and then perhaps and here I have a question as well you think about the initial allocations I couldn't help but think about the cabin trace programs greenhouse gases that are happening at a regional level around the country and one of the things that's happening in these instances is the initial allocations are being covered by options so that there's a cost to enter the market in the first place and there are of course existing facilities that are that have to buy their way unless there's a pricing mechanism that's going on during that initial allocation I'm just I just don't know whether or not that's something that has been considered as part of a possible process in the initial allocations and if not why not and so could it be helpful at all so the so the question is whether an auction was considered or could be considered as part of an initial allocation formula scheme Vito I think that's one of the examples that why the regional councils I'm not sure you know correctly suited because the cap and trade concept is something that makes sense in a multi-species something that's moving all the time but it was difficult for folks that were already fog out on the road we already have the investment in the fishery and everyone perceived whether they invested the days or they invested in catch history type permits that speculating that it would go that way they were already entrenched so when ideas like that would come forward they were really not accepted very well we had put forward the Northeastern Coalition point system I think was actually studied by URI Yeah we did an experiment that just placed a value that moved all the time on the different the different components of the fishery to different stocks based on their health based on leveraging all of those things and people just ended up with a common currency that they could put on the table now they could use that common currency in an auction or they could use it while fishing in a more dynamic system but that proposal was fairly thought out put on the table really didn't get any leads at all because it just didn't fit the model the economic model that a lot of folks already had in the mind so I mean there are examples of ITQ systems in other parts of the world that do use auctions they auction off the I think there's I know one in Chile and they auction off the either quote or write and they own that for a certain period of time and then they have to give it up and then they have to remit them so there are examples of doing things along those lines I'll tell you my favorite allocation scheme is one that was done in the Pacific ground fish fishery in Canada and after two years of bickering and fighting over allocations they basically DFL basically said okay everyone gets the same everyone gets and just divide the number of people who got to get an allocation for the Bible quoted by the number of people that would get quoted and every person got exactly the same allocation at the beginning of the system but that just meant really that people got quota for which they had never fished and never had any intention of fishing but then they said okay have at it and then they had the trading took place and then everybody got the portfolio that they wanted I think that kind of finessed the number of issues and it's sort of like yeah I can see how that makes a lot of sense great well thank you panel very much we'll break for lunch and be back at one