Saving Our Salmon
Using the Free Market to Protect the Environment
1999-02
As headlines in the daily news remind us, Washington’s once bountiful salmon supply is under severe challenge. State and local leaders are now struggling with ways to protect vulnerable salmon species targeted for listing under the Endangered Species Act.
A new Washington Institute Policy Brief, “Saving Our Salmon: Using the Free Market to Protect the Environment” by Travis Misfeldt, examines how the innovative use of private property rights can form part of a long-term solution.
The weakness in current environmental policy is that it provides little economic incentive for protecting threatened species. State law recognizes a property right in salmon only after the fish have been caught, so there is no direct benefit to protecting salmon while they are alive and free.
Economist Garrett Hardin has written that when a natural resource is treated as a commons freely open to all, each fisherman tries to maximize his own gain even if the overall burden placed on the resource is not sustainable. Each fisherman reasons that any fish allowed to go free will just be caught by someone else.
The result is a “tragedy of the commons” in which everyone is, as Hardin writes, “locked into a system that...brings ruin to all.”[1]
As vulnerable salmon populations dwindle, it becomes clear that the traditional top-down, government-regulation approach is not working.
Through the innovative use of property rights, however, some wild salmon (as designated by the state) would become economically valuable before they are caught.
The state could tap the power of the free market by auctioning defined “salmon certificates” to the public to regulate the yearly salmon harvest. Each certificate would list a certain amount of a certain species of salmon. The holder would have a legal property right to capture and sell these fish, up to the limit on the certificate.
Certificate holders would then have every incentive to be sure the natural resource in which they have invested is protected and continues to thrive. In addition, using property rights to manage the resource would give wildlife officials an effective tool to insure the viability of wild salmon populations.
The state could limit the number of certificates issued each year to make sure that year’s fishing harvest is maintained at sustainable levels.
The primary advantage of the free market approach is it would shift economic incentives away from the current “race to harvest” system created by state-regulated fishing seasons.
Privately owned certificates could be part of an overall salmon recovery strategy to satisfy the requirements of the Endangered Species Act.
A salmon protection policy based on limited private property rights would create an alternative system in which all stakeholders would benefit from protecting wild salmon as a permanent, valuable resource. Salmon certificates could be used by:
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The state to regulate the amount of sensitive salmon populations that are allowed to be caught each year;
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Commercial fishermen to plan and manage their access to an important economic resource;
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Sport fishermen and charter boat owners to revive Washington’s flagging recreational fishing industry;
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Indian tribes to insure that their rights to traditional fishing grounds, secured by treaty and the Boldt court decision, are protected;
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Environmental groups who could buy certificates on the open market, then “retire” them as a supplement to the state’s own salmon protection efforts.
Free market incentives and private property rights are already working in Washington and around the world to rescue threatened marine life from extinction.
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In Willapa Bay, oyster farmers who own the tidelands have worked for over a century to insure the waters of the bay remain pure and clean, benefiting their business interests while at the same time protecting the environment.
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In the North Atlantic, activist Orri Vigfusson has raised millions of dollars to buy up private fishing rights. By “retiring” these rights he has cut the harvest of wild salmon netted off Greenland and Iceland from 213 metric tons eight years ago to just 12 metric tons today.
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New Zealand’s decision in 1986 to issue limited private fishing rights has revived commercial fin-fish species in the South Pacific. The fishing industry there now has a direct interest in insuring fish stocks in area waters remain abundant and thriving year after year.
These real-world examples show how salmon certificates would resolve the apparent conflict between economic profit and protecting the environment. The same free market principles can help insure that fragile Northwest salmon species are preserved for generations to come.
[1] Garrett Hardin, The Tragedy of the Commons, 162, Science, 1243, (1968).