Vessel Day Scheme and Tuna Catch in the Pacific Island Region

ADBIWorkingPaperSeries VESSELDAYSCHEMEANDTUNACATCHINTHEPACIFICISLANDREGION ChampaBatiDutta,MarkIvekolia,andDebasishKumarDas No.1417 October2023 AsianDevelopmentBankInstitute ChampaBatiDuttaisaPhDstudentattheSchoolofBusiness,UniversityofNewSouthWales,Canberra,Australia.MarkIvekoliaisafisherieseconomistatMI–ConsultingLimited,PapuaNewGuinea.DebasishKumarDasisaPhDstudentatArndt-CordenDepartmentofEconomics,CrawfordSchoolofPublicPolicy,AustralianNationalUniversity,Canberra,Australia. TheviewsexpressedinthispaperaretheviewsoftheauthoranddonotnecessarilyreflecttheviewsorpoliciesofADBI,ADB,itsBoardofDirectors,orthegovernmentstheyrepresent.ADBIdoesnotguaranteetheaccuracyofthedataincludedinthispaperandacceptsnoresponsibilityforanyconsequencesoftheiruse.TerminologyusedmaynotnecessarilybeconsistentwithADBofficialterms. Discussionpapersaresubjecttoformalrevisionandcorrectionbeforetheyarefinalizedandconsideredpublished. TheWorkingPaperseriesisacontinuationoftheformerlynamedDiscussionPaperseries;thenumberingofthepaperscontinuedwithoutinterruptionorchange.ADBI’sworkingpapersreflectinitialideasonatopicandarepostedonlinefordiscussion.Someworkingpapersmaydevelopintootherformsofpublication. Suggestedcitation: Dutta,C.B.,M.Ivekolia,andD.K.Das.2023.VesselDaySchemeandTunaCatchinthePacificIslandRegion.ADBIWorkingPaper1417.Tokyo:AsianDevelopmentBankInstitute.Available:https://doi.org/10.56506/JDKT5846 Pleasecontacttheauthorsforinformationaboutthispaper.Email:c.dutta@unsw.edu.au AsianDevelopmentBankInstituteKasumigasekiBuilding,8thFloor3-2-5Kasumigaseki,Chiyoda-ku Tokyo100-6008,Japan Tel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.orgE-mail:info@adbi.org ©2023AsianDevelopmentBankInstitute Abstract ThePacificIslandnationsheavilyrelyonthetunafisheryforgovernmentrevenueandeconomicgrowth.SincetheconversionofsomenationstotheVesselDaysScheme(VDS)fromthefishingQuotasystem,theregion’sdomesticcatchhassignificantlyincreased.VDShasstimulatedeconomicreturnbutraisedconcernsabouttunaoverexploitation.WeapplyDifferenceinDifferencetoinvestigatetheeffectsoftheVDSondomesticcatchlevelsinthePacificregionusingdataondomesticcatchesfrom17Pacificcountriesfrom2000to2020.Theestimatedresultindicatesthattunacatchesincreasedbymorethan200%inVDSnationsrelativetonon-VDSnationsintheregion. Keywords:VesselDayScheme,tunafishery,totalfleetcatch,Pacificislandcountries JELClassification:F55,O11,O13,O56,Q22,Q27,Q28 Contents 1.INTRODUCTION1 2.THEPACIFICECONOMY2 3.TUNAFISHERIESINTHEWESTERNANDCENTRALPACIFICOCEAN3 3.1TunaFishinginthePacific3 3.2ImportanceofTunaFisheryinPacificIslandCountries5 3.3InstitutionalandPolicyBackground5 3.4VesselDaysScheme(VDS)6 4.ESTIMATIONSTRATEGY7 4.1DataandVariables7 4.2EconometricMethods9 5.IMPACTOFVDSONTUNACATCHINWCPO10 5.1ImpactofVDSonPacificTunaFleetCatch10 5.2ImpactbySpecies—HeterogeneityAnalysis12 5.3ImpactbyFishingGears12 5.4Robustness13 6.CONCLUSIONSANDPOLICYIMPLICATIONS14 REFERENCES15 APPENDIX18 1.INTRODUCTION TheWesternandCentralPacificOcean(WCPO)tunafisheryistheworld’smostvaluableandlargesttunafishery.Globally,57%oftheworld’stunaiscaughtinWCPOfisheries(WorldEconomicForum2022).Tunaexploitationandtheuseofdestructivefishingpracticesbydistantwatersfishingnationshasledthetunafisherytobecomeatopicofconsiderabledebateoverfishingmanagement.Duetothehighlymigratorynatureoftuna,whichinvolvesthesovereignboundariesofnumerouscountriesthatsharetheresource,regionalcooperationhasbecomeessentialforthemanagementofthetunafisheryandforindependentstatestoexercisetheirsovereignrightsundertheUnitedNationsConventionontheLawoftheSea.TheVesselDaySchemeisanimplementationofendeavorrights-basedmanagementinthePacificregion.AccordingtoSquiresetal.(2017),effortrights-basedmanagementsystemspromoterevenueandcapturemaximization.Asaresult,theygenerateanincentivetoincreaseinputuseandcostsandtoadoptnewtechnologyinordertoboostproductivity. In2007,eightPacificnationsinstitutedtheVesselDaysScheme(VDS),atransferrableeffortprogram,tostrengthentheirrightsovertunaresourcesandcontrolofeconomicandenvironmentaltrends(Havice2013).Untilnow,theliteratureonVDSpolicyhasfocusedontheeconomic,political,andenvironmentalaspectsofVDS.Aqorau(2009)arguedthatVDSprovidesPacificIslandnationswithauthorityandcontrolovertunafisheriesinthePacificasopposedtonationsthatfishindistantwaters.Havice(2010)discussedtheevaluationofVDSstructuresthatengagerelevantvariablestoattaineconomicandenvironmentalmanagementgoals.Inaddition,thepaperexaminedthevariouspoliticalfactorsthatcountriesmustconsiderwhenimplementingthescheme.AfteracomprehensivereviewoftheVDSpolicy,Havice(2013)concludedthattheVDShassubstantiallyincreasedeconomicreturnsandimproveddatareporting,butitsstructureshavemadeitdifficulttodirectlytargetthebiologicalconcernsofindividualspecieswithinamultispeciesfishery.Bernadett(2014)describedtheVDSagreementasafruitfulinternationalnegotiationthathasresultedinanincreaseinmarineresourcerevenues.Despitethefactthattherearemultiplepapersonthesubject,therearenonethatanalyzethequantitativeimpactofVDSonthetunaca