The Issue Of Canadian Fisheries - 1431 Words

LORRAINE MBUYI ECONOMICS 405 Natural resource economics is greatly concerned with solving a phenomenon referred to as the â€Å"Tragedy of the Commons†, also known as a situation that results in the overuse of open access resources by independent agents, looking to retrieve as many resources as possible without giving regard to other users of the common property. This essay focuses on the issue of Canadian fisheries as a common example of the issue and a topic subject to much academic research. This essay serves as a two-part discussion of policies regarding common property open access. Specifically, two main categories of common-property source regulation price and quantity regulation. The goal is to explain what properties of a resource†¦show more content†¦Economists efforts to create a regulatory infrastructure have led to certain key policy assumptions. The first step towards determining the effects of the fishing industry is to calculate the amount of fishing capacity per season, based upon anticipated prices, costs, biomass level, and the regulations set by the regulatory agency (Homans Wilen, 1997, p. 3). The government assumes a regulatory stance in light of environmental goals, anticipating an amount of fishing activity, which is acceptable.The combination of the government and the industry should theoretically result in an equilibrium between the companies and the regulatory sector. Their main task is to characterize an equilibrium between the fishing industry and the regulatory infrastructure so that various situations related to fishing are taken into account. The cycle of biomass growth between seasons is dependent on the corresponding harvest, biological growth, environmental effects and the predetermined quota. Ultimately, it is assumed a full steady state can be reached. The goal of quantity regulation is to achieve a steady state of biomass in the long run, given constant industry and regulatory behaviour (Homans Wilen, 1997, p. 9). PRICE REGULATION Using economic incentives to conserve fisheries must occur under a regulatory framework that is enforceable. Price regulation as a result of taxes leaves many