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12 February 2016 Regulating Multiple Externalities: The Case of Nordic Fisheries
Staffan Waldo
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Abstract

Open access is a well-known externality problem in fisheries causing excess capacity and overfishing. Due to global warming, externality problems from CO2 emissions have gained increased interest. With two externality problems, a first-best optimum can be achieved by using two regulatory instruments. However, solving the open-access externality problem also affects CO2 emissions. By using a bio-economic model covering Iceland, Norway, Denmark, Sweden, and the Faroe Islands, it is shown that regulations of the open-access externality problem have a large effect on both economic performance and CO2 emissions, while an additional CO2 regulation only has minor effects. The second-best solution achieved by only regulating open access reduces emissions by approximately 50% compared to current fisheries, with the exception of Iceland, which already has a well-developed fisheries management system.

JEL Codes: Q22, Q54.

© 2016 MRE Foundation, Inc. All rights reserved.
Staffan Waldo "Regulating Multiple Externalities: The Case of Nordic Fisheries," Marine Resource Economics 31(2), 233-257, (12 February 2016). https://doi.org/10.1086/685286
Received: 4 February 2015; Accepted: 1 November 2015; Published: 12 February 2016
JOURNAL ARTICLE
25 PAGES

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KEYWORDS
climate change
economic efficiency
externalities
fisheries
fuel efficiency
regulation
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