Operational tools and adaptive management

The optimal effort varies negatively with the tax/subsidy rate, w. Hence, when this rate is
positive, i.e. a tax is induced on effort, the optimal effort level is smaller compared to when
there is no tax on effort, and the vice versa.
3.2.3 New stakeholders get a say in the CFP
Ecosystem based management implies a more holistic view of the fisheries management,
which includes taking into consideration other uses and other users of the marine ecosystems.
Other uses (than fishing) are e.g. bird watchers who watch sea birds, and diving, enjoyment of
benthic habitats, i.e. the tourism industry, or maritime transportation and energy. All these
uses have their own NGOs that advocate their interests. Among the most popular NGOs we
find environmental NGOs (ENGOs). Since the 1970s these have gained popular support and
the number of ENGOs has increased.
Gaining popular support is an argument for demanding influence in societal decision making,
and we see that some NGOs have increased their influence upon national and international
authorities in their decision making considerably during the last decades. Examples are
Greenpeace and MSC on an international level, and the Norwegian ENGO Bellona on a
national level. The measures they use in addition to pressure upon politicians and other
decision makers are e.g. calls for boycott of fish from unsustainable fisheries and ecolabelling
of fish from well-managed fisheries. Such initiatives correspond to a tax or a subsidy
on the fishers‟ activity (effort) as they either reduce or increase the (net) income to the fishers.
Alternatively, we can also assume a scenario where representatives of NGOs are invited into
the negotiations about fisheries‟ regulations and allowed to have a say in the final
formulations of the CFP, or at least that their opinions are taken into consideration when
formulating the CFP.
This means we have extended from one to two principals, which have a say in the fisheries‟
regulations. A situation where two (or more) actors have the possibility to forward incentive
schemes for an agent is called a common agency (Bernheim and Whinston 1986). In this
situation the two principals can either decide to cooperate and derive a common incentive
scheme, or they can develop their measures separately and independently. In the last case
each principal develops its‟ optimal incentive scheme, taking into consideration that the other
principal acts accordingly. Then we get a solution characterised by so-called “best-replies”,
i.e. each scheme is a best reply to the incentive scheme developed by the other principal.
3.2.3.1 Cooperating principals
One option when there is more than one principal is that the principals cooperate and forward
one common incentive scheme. Then they agree upon a common objective function, and
derive the optimal incentive scheme as was done when there was only one principal (see
above).
The main difference is the formulation of the common objective function or goal and the
weighting of the different interests. This must be a compromise between the two principals.
When the two principals are national authorities and a national ENGO the common objective
function will be a weighted average of the interest weights in their respective objective
functions. Thus, assuming that the NGO holds stronger environmental interests and weaker
economic and social interests with regard to the fishery‟s activity than does the authorities, the
common objective function will have higher environmental interests than the objective
function of the authorities and lower than the objective function for the ENGO. For the
economic and social interests it will be the vice versa.
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