OECD Economics Department Working Papers

ISSN :: 1815-1973 (online)
DOI :: 10.1787/18151973

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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

Ensuring a Sustainable and Efficient Fishery in Iceland

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Authors:

Gunnar Haraldsson¹, David Carey

Author Affiliations

1: OECD, France

Publication Date

19 Sep 2011

Bibliographic information

No.:: 891

Pages

DOI

10.1787/5kg566jfrpzr-en

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Iceland has managed its large fishing industry in a sustainable and profitable way. The foundations of this success are setting Total Allowable Catches (TACs) based on scientific recommendations of what is biologically sustainable and the Individual Transferable Quota (ITQ) system, which gives each holder the right to catch a certain of the TAC in various species. The efficiency of this system could be under threat from potential policy responses to the perceived unfairness of quotas having initially been given away and by Iceland’s possible accession to the EU. However, there is nothing the government can do now to do undo the unfairness of the initial allocation. Nevertheless, it could be attractive to increase the special fisheries resource rent tax as it is likely to be a more efficient tax than most others, although the increase should not be so great as to damage the fisheries management system. The resource rent could also be increased by reducing TACs from the current, biologically sustainable level to the level that maximizes rent. Provided that Iceland is able to negotiate to maintain the authority to set TACs and to keep the ITQ system, joining the EU, and hence the Common Fisheries Policy (CFP), should not reduce the efficiency of the Icelandic fisheries management system. This Working Paper related to the 2011 OECD Economic Survey of Iceland. (www.oecd.org/eco/surveys/Iceland)

Keywords:: fisheries management, EU accession, Individual Transferable Quota (ITQ) system, resource rent tax, Total Allowable Catches (TACs), resource rents, Rights Based Management

JEL Classification:

Q01: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / General / Sustainable Development
Q22: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Renewable Resources and Conservation / Fishery; Aquaculture
Q28: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Renewable Resources and Conservation / Government Policy