How significant is the common-pool problem in global fisheries, and how will it be affected by climate change? Many fish populations cross national borders, diluting the incentive for governments to conserve. Climate change will upend the current equilibrium by directly affecting fisheries productivity and by altering the distribution of fish populations as they migrate towards more favorable environments. The latter effect could lead to maladaptive overexploitation by stock-losers as it weakens incentives for conservation, but could also increase conservation by stock-gainers. I construct a panel of fishery ranges and show this strategic response in historical data: extraction rates rise as the share of a stock controlled by that country falls. I then simulate the effects of future climate change on fish ranges and extraction. The strategic response to range shift is close to zero on net, but economically meaningful for individual fisheries: stock-gainers increase conservation of the stock by 1.6 million tons (2.6%) and stock-losers decrease conservation by 1.5 million tons (3%) due to range shift. For the average fishery, this strategic response comprises 25% of the total effect of climate change on the fish stock. I also simulate fisheries outcomes under first-best global cooperation, and find an 87 million ton (77%) increase in conservation. In a more plausible scenario of US-Canada cooperation, conservation increases by 14% and the behavioral response to climate change is dampened by 66%.
The latest draft is available here.
Countries facing over-exploitation of domestic waters may find it politically and economically advantageous to offer subsidies as a way of “decongesting” their domestic fisheries. Fuel subsidies, the most significant form of fisheries subsidies, may play such a role if they induce distant water fishing. We characterize the conditions under which fuel subsidies are decongesting and then estimate their empirical effects using a triple-difference design exploiting a change in Chinese subsidy policy. We show that China’s fuel subsidy increased fishing in its domestic waters, by suppressing a 1.24% elasticity of domestic fishing with respect to the oil price. Meanwhile, it decreased distant water fishing. We also show that non-Chinese vessels in spatial competition with China decreased their fishing in response to China’s subsidies. However, we show that the evolution of China’s subsidy policy away from fuel subsidies and towards spatially specific subsidies did promote domestic decongestion: Had China not changed it subsidy policy, vessels in our sample would have fished 39% more in the Chinese EEZ and 33% less outside of it.
The latest draft is available here.
Scientific exploration in remote environments is an underprovided public good. In the case of the deep sea, there is significant interest both in biological exploration and exploitation through commercial mining. Therefore, the institution governing deep-seabed mining in areas beyond national jurisdiction has created a requirement for mining contractors to explore their deep-seabed tracts before applying to mine them. However, this may not entirely resolve the public goods problem because the mining contractor has an incentive to shirk in their exploratory effort to avoid discoveries that could prevent them from mining. I investigate whether the publicly reported exploration data is of lower quality in tracts eligible for mining when explored by the mining contractor, compared to areas that have been protected. I find evidence that mining contractors underreport the taxonomic characteristic of biological samples in their mining area, consistent with this perverse incentive to shirk in exploratory effort.
Currently under review. Draft available upon request.
This paper describes the modern problem of critical mineral supply with respect to the choice between terrestrial and deep-seabed mining. We describe the global utilitarian social planner’s optimum and then introduce institutional features that drive a wedge between that optimum and the realized outcome. While the issues facing terrestrial mining are common in many settings, we introduce several unusual features of the management of deep-seabed mining which diverge from the global utilitarian social planner’s optimum. Deep-seabed mining in areas beyond national jurisdiction is governed by an international social planner, but its objective function is non-utilitarian. We discuss how some of its legal mandates can be interpreted for economic purposes, such as revenue sharing, and explain how these principles can apply in the cases of other international commons.
Draft available upon request.