Trade in freely granted individual rights has been speculated to gradually reduce the political feasibility of reallocation, as the initial recipients who enjoy windfall profits are replaced by rights holders who purchased their rights and would unfairly become loss-making if the rights were subsequently reallocated. This hypothesis, sometimes referred to as a Transitional Gains Trap, may be relevant when evaluating alternative methods of allocating rights. This paper presents a potential indicator for investigating the Transitional Gains Trap in grandfathered individual transferable quota fisheries, based on the cumulative amount invested in quota after allowing for offsetting windfall profits, relative to the total value of all quota. The indicator ranges between 0% and 100%, with higher values indicating more net investment and a greater threat of a Transitional Gains Trap. Illustrative calculations for Iceland's ITQ system, introduced in 1991, yield a value of 29% by 2016, suggesting that the Transitional Gains Trap is not a major constraint, although the results vary by species and are sensitive to assumptions. Finally, the indicator is shown to decrease over time under certain conditions, implying that the potential relevance of the Transitional Gains Trap is context-specific.

The Arctic may be particularly vulnerable to the consequences of both ocean acidification (OA) and global warming, given the faster pace of these processes in comparison with global average speeds. Here, we use the Atlantis ecosystem model to assess how the trophic network of marine fishes and invertebrates in the Icelandic waters is responding to the combined pressures of OA and warming. We develop an approach where we first identify species by their economic (catch value), social (number of participants in fisheries), or ecological (keystone species) importance. We then use literature-determined ranges of sensitivity to OA and warming for different species and functional groups in the Icelandic waters to parametrize model runs for different scenarios of warming and OA. We found divergent species responses to warming and acidification levels; (mainly) planktonic groups and forage fish benefited while (mainly) benthic groups and predatory fish decreased under warming and acidification scenarios. Assuming conservative harvest rates for the largest catch-value species, Atlantic cod, we see that the population is projected to remain stable under even the harshest acidification and warming scenario. Further, for the scenarios where the model projects reductions in biomass of Atlantic cod, other species in the ecosystem increase, likely due to a reduction in competition and predation. These results highlight the interdependencies of multiple global change drivers and their cascading effects on trophic organization, and the continued high abundance of an important species from a socio-economic perspective in the Icelandic fisheries. 

To prevent the overfishing of marine fish populations, governments often limit fishing access through the allocation of fishing opportunities. While some studies have linked particular systems of fishing opportunities to sustainable outcomes (particularly individual transferable quota), it remains unclear whether it is the use of exclusive access (individual allocation), the use of a market (tradability), the duration of this access or the quota limits themselves that drive the sustainable outcomes. To determine which attributes of fishing opportunities are associated with sustainable fishing, we developed a novel method to systematically classify how fishing opportunities are allocated for 443 global fish stocks from 1990 to 2018 to produce the longest and most comprehensive dataset and longitudinal study of its kind. Our results revealed that quota limits and individual allocation are linked to a reduced probability of overfishing, with the most robust result for quota limits. No attributes were robustly linked to a reduced probability of overfished biomass. Whereas some previous studies have found that systems with market-based features or strong property rights (i.e. a long duration) were linked to sustainable fishing, these benefits were found to be small or not significant once proper controls for other system attributes were introduced. These results highlight the importance of considering all attributes of institutional design in the governance of common pool resources.  

The management of marine resources pose a difficult commons problem as monitoring behavior is difficult and benefit flows from the resources are uncertain. Implementing individual transferable quota (ITQ) is a management regime in which quasi-property rights are assigned for an often mobile and uncertain environmental resource, fish or marine invertebrates. This thesis addresses sustainability impacts of ITQ’s as a fisheries management tool. The findings demonstrate that fisheries management regimes in which fisheries opportunities are allocated as quota and / or are allocated individually experience reduced overfishing compared to controls that do not have these attributes (Paper I), however the analysis found less support for transferability and no support for longer duration being associated to any change in the probability of overfishing. In addition, a longitudinal study showed that with an adaptive design ecological and economic goals could be balanced in an important mixed fishery in Iceland (Paper II), and based on such findings suggested that several policy changes could be implemented to modify the ecological risk of catch-quota balancing allowances. Additional longitudinal analyses allowed to conclude that rapid consolidation in an important small-boat fishing sector in Iceland, which may have had negative implications for local fishing communities (Paper III), and that on average since the introduction of ITQ’s total amount of quota traded stayed below around 60% for the main commercial species in the Icelandic ITQ system. Moreover, the results of Paper IV also show that in case of a credible announcement of quota revocation in the future there would be scope for policy reform. Finally, research is beginning to emerge that shows that marine species are unequally affected by climate change. In a final chapter the analyses show that under different scenarios of global change a re-shaping of the Icelandic foodweb is likely (Paper V). The re-shaping of the foodweb will be to the benefit of some resource users and to the loss of others. In general, the findings from all the analyses together demonstrate that there could be benefits to individual quota implementation for fisheries sustainability and that some of the hypothesized trade-offs could potentially be balanced, the thesis highlights ways forward in investigating the common pool problems in fisheries management.

Fishers with individual catch quota, but limited control over the mix of species caught, depend on trade and catch-quota balancing al-lowances to fully utilize their quota without discarding. However, these allowances can theoretically lead to overfishing if total allowable catches (TACs) are consistently exceeded. This study investigates usage of balancing allowances by the Icelandic demersal fleet over 2001-2017, for over 1,900 vessels. When a vessel's demersal catch exceeds owned and leased quota for a given species, the gap can be bridged by borrowing quota from the subsequent fishing period or transforming unutilized quota in other species, restricted by limits. Conversely, excess quota can be saved or transformed into quota for species where there is a shortfall. We found evidence that balancing behavior is frequently similar across the fleet. Transformations are consistent with indicators of a general quota shortage and potential for arbitrage caused by differences in conversion ratios used for transformation and lease prices. Larger companies contribute more to these patterns. Nevertheless, TAC overages are generally modest especially in recent years-key reasons appear to be the tightening of vessel transformation limits and the central role of Atlantic cod, which is the main target species but cannot be persistently overfished due to a specific prohibition on positive transformations into the species. These results show how the tailored design of the Icelandic catch-quota balancing system has helped in balancing economic and ecological goals of management. We suggest policy changes that could further reduce ecological risks, e.g., prioritizing between-year transfers over transformations.

The introduction of Iceland's current ITQ system in 1991 has been followed by significant consolidation of the harvesting sector. This paper quantifies the rate of consolidation by measuring the concentration of quota holdings at company and vessel level for eight commercially important demersal and pelagic species over the period 1991-2017, using concentration ratios and the Herfindahl-Hirschman index. These metrics are complemented by calculation of the Instability Index, which is a measure of competitive rivalry. The results indicate a significant increase in concentration across all species at both company and vessel level, although company consolidation appeared to accelerate relative to fleet consolidation during the early 2000 ' s when the Icelandic financial sector was privatised and then slowed in the wake of the financial crisis in 2008. The Instability Index fell for all species, indicating a general decline in competitive rivalry. Concentration varies greatly by species, and is lowest for cod and haddock which are caught extensively by small and medium-sized vessels and highest in the pelagic sector, reaching levels associated with market power. Finally, there is evidence that regulatory limits on individual company quota holdings may be starting to hamper further consolidation and any associated efficiency gains.

The quota market is the instrument through which fishing operations under an individual transferable quota (ITQ) system achieve greater efficiency. It allows fishing companies to optimally configure their quota portfolios to their catches. Globally, fisheries corresponding to ~25% of landings have adopted ITQ systems. However, there is surprisingly little empirical information on quota markets functioning. Here we study the development of quota share and lease markets and assess market activity and functioning for the cod fishery in Iceland. We use a social network analysis to assess changes in four Icelandic quota markets, distinguished by boat size (large versus small) and permanence of transfers (leases versus shares). The quota market for permanent trades in small-boat quota shows a sharp increase in trade and network connectivity between 2004 and 2006, resulting in a high rate of quota concentration. The quota markets for permanent quota shares were the most fragmented and sparse during the years of the financial crash in Iceland and never regain the same activity. Our results suggest that quota systems evolve towards a consolidated state and that their markets are not entirely resilient to financial instability. We also found some evidence that better-connected traders could sell quota at higher prices in the lease markets, though price dispersion was generally low.

Increases in the speed and scale of seafood trade in the global trade network along with the simultaneous decline of many marine fisheries globally raises serious concerns about the sustainability of such trade development. The continuity, number and grouping of trade connections has changed: seafood trade in the Anthropocene is short-lived and globally connected. In this new reality, (i) the formation of new trade connections can outpace that of regulatory action in fisheries and (ii) the state of a fishery can depend on its trade-related connectivity to other fisheries. Despite mounting empirical and theoretical evidence of the importance of trade networks in natural resource management, indicators of network speed and scale are rarely used to understand fisheries sustainability. Here, we assess whether the speed and scale of the seafood trade network is indicative of fishery status. Our data consolidates post-1995 global, bilateral trade data including >400,000 bilateral trade flows and stock status estimates for 746 stocks from 222 countries and is analyzed with both static and dynamic panel analysis methods. We find that low levels of grouping in the network correlates with low fishery status and despite increasing numbers of trade connections grouping has declined. Contrary to earlier findings, we demonstrate that long-term trade connections correlate with low fishery status. These results highlight the importance of the way trade develops i.e. in the continuity and grouping of trade connections as key indicators of fisheries sustainability. Thus, policies aimed at improving fisheries sustainability cannot focus on regulating local fisheries alone. For one, trade agreements could target the formation of new multilateral trade alliances. Parallel efforts of international trade organizations, national trade and fisheries ministries need to create incentives that long-term trade connections enable sustainable fisheries use.

Trade in grandfathered fishing quota has been argued to inevitably lead to a Transitional Gains Trap whereby revocation of quota initially gifted becomes politically impossible as the original beneficiaries are eventually succeeded by harvesters who have paid for their quota and would become loss-making in the event of revocation. This paper proposes a quantitative measure of the trap which reflects not only the potential loss faced by individual harvesters due to revocation of purchased quota but also the offsetting effect on these harvesters of accumulated profits due to the initial grandfathered allocations and subsequent investment in quota. Illustrative calculations for Iceland´s ITQ system suggest that the extent of the trap varied considerably by species but remained below 60% under a range of assumptions. Finally, it is shown that the proposed measure may decrease over time, suggesting that the trap may not necessarily be a long-term political barrier to reform.

To prevent the overfishing of marine fish populations, governments often limit access through the allocation of fishing opportunities. While some studies have linked particular systems of fishing opportunities to sustainable outcomes (particularly individual transferable quota (ITQ)), it remains unclear, whether it is the use of exclusive property-rights (individual allocation and secure duration), the use of a market for fishing opportunities (tradability), or the quota limits themselves that underlie these positive outcomes. To determine which system attributes lead to sustainable fishing we developed a novel method to systematically classify how fishing opportunities are allocated for 443 global fish stocks from 1990 to 2018 to produce the longest and most comprehensive dataset and longitudinal study of its kind. Our results revealed that quota limits and individual allocation were associated with a reduced probability of overfishing, with the most robust result for quota limits. The leasing of quota was the only attribute associated with a reduced probability of overfished biomass. Whereas some previous studies have emphasized that market-based systems or those with strong property rights (i.e. a long duration) are associated with sustainable fishing, these benefits are small or not significant once proper controls for other system attributes are introduced. These results highlight the importance of considering all attributes of institutional design in the governance of common pool resources.