Markets, Not Ill-Fitting Regulatory Mandates, Are the Solution to Bycatch

Since Congress has not updated many federal environmental laws in decades, we’ve grown accustomed to federal agencies and courts twisting existing laws to address unexpected environmental challenges. The result is usually a poor fit, with regulations failing to achieve their desired ends or doing so only at exorbitant costs. Markets, by contrast, are adaptive to changing circumstances and can better balance environmental values with other values.

That contrast is on display as different fisheries try to address “bycatch,” fish and other marine life inadvertently caught by fishermen targeting commercial species. Some amount of bycatch is probably inevitable because fishing gear, even with technological improvements, cannot easily distinguish between target species and other species. Many of the species inadvertently caught have little to no commercial value. Therefore, bycatch is usually discarded back into the ocean, bay, or other water where it was caught. This can cause environmental harm, including depleting endangered and threatened species and ecosystem disruption where discarded fish do not survive.

In North Carolina, shrimp trawlers can inadvertently catch sea turtles, marine mammals, and non-target fish. Although fishers use bycatch reduction devices to reduce these impacts, especially for endangered species, much bycatch remains. By some estimates, four pounds of bycatch are collected for every one pound of shrimp, with several species declining as a result (including those fished recreationally).

Frustrated by the pace of progress, recreational fishermen have sued the state and shrimpers under the Clean Water Act. They claim that the fish discarded as bycatch is water pollution that requires a federal permit. They likewise claim that sediment disturbed by trawling gear requires a federal permit. Because these impacts cannot be completely eliminated, they demand the fishery be closed until shrimpers obtain Clean Water Act permits and fines of $25,000 per day per company for past unpermitted fishing.

Although frustration is understandable, the effort to have this activity deemed a violation of the 1972 Clean Water Act is another example of stretching an old law further than it can bear to be stretched. After all, if the theory of this case is correct, any fishermen practicing catch-and-release would need a federal permit. In fact, merely casting a lure or bait into a regulated water would require a federal permit. It is absurd to think that Congress meant to create such a massive federal permitting regime (and it would likely be unconstitutional besides).

The theory that disturbed sediment requires a federal permit is likewise troubling. Although the Clean Water Act treats sediment as a pollutant in some circumstances, principally where it is being used to “fill” a waterway, the law only applies to “additions” of pollutants “to” a regulated water. Mere disturbance of sediment that’s already there isn’t an addition. Indeed, if it were, you’d need a federal permit to merely wade into your favorite stream, river, or ocean, since your feet stir up some minimal sediment.

Setting aside whether a court is likely to accept these creative theories, the Clean Water Act is poorly suited to the task of reducing bycatch. It’s impractical for the U.S. Army Corps of Engineers and Environmental Protection Agency to review and issue individual permits for every shrimper in the country, much less every fisherman, wader, and others who would be ensnared by these broad theories of liability. Thus, the only option would be for the agencies to issue a general permit allowing shrimpers to continue their work subject to conditions. But, because declaring bycatch to be water pollution won’t solve any of the technological challenges that make it difficult to catch shrimp without catching other species, federal agencies can likely do little more than require shrimpers to comply with existing federal, state, and local fishery regulations, which they’re already doing.

Markets, on the other hand, can overcome the technological challenge by giving fishers and others the incentive to develop new ways to reduce bycatch. In a 2017 PERC report, economists Steve J. Miller and Robert Deacon explained how markets were reducing bycatch in the West Coast groundfish fishery:

The bycatch problem can in principle be managed using the same market-based approach that has been successfully applied to target species. Fishery managers could set total catch limits for each bycatch species based on biological considerations and then assign tradable shares of these overall limits to individual fishers. The profit motive would then incentivize fishers to find the least-cost methods to limit bycatch—a motivation that is largely absent under the current management system. . . In 2011, the U.S. West Coast groundfish fishery transitioned to a management system in which both target and bycatch species are managed by assigning quantitative catch rights to individual fishers. . . We find that fishers adapted by changing the ways they fished—for example, by shifting fishing locations, switching to different gear, and changing the timing and duration of fishing. The overall behavioral responses were fine-tuned, subtle adaptations that would be difficult or impossible to achieve with prescriptive regulations. We also find that the policy objective succeeded: Bycatch declined after the new management system was put in place.

Bycatch is already a significant cost for many fishermen since it means they spend significant time sorting fish and money towing fishing gear made heavier by unwanted fish. Properly constructed catch rights reinforce the existing incentives for fishermen to reduce bycatch, by encouraging them to internalize the impacts of bycatch on the ecosystem and other water users, including recreational fishermen. Therefore, such a property-rights based system is more likely to develop the innovations needed to reduce bycatch than is ill-fitting federal water pollution regulation.

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