As demonstrated in the lecture notes on Fisheries Regulation (Unit III) there are many options for the regulator to attempt to establish conditions for optimal economic harvest. One example is the establishment of an individual quota systems with an accompanying total allowable catch limit. Assume that the fishery is defined currently by open access and a loss of economic efficiency (E_OA in diagram below).

1. Describe the changes in the bio-economic diagram elements (from current equilibrium E_OA) associated with this regulatory option (students must utilize and describe the change in the context of the diagram below).

i. Will the new sustainable harvest level be higher or lower than the current level? Why?

ii. Will the new sustainable level of effort be higher or lower than the current level? Why?

iii. What may be position of industry participants (specifically: harvesters, processors, community, NGOs) on this regulatory approach (short and longer term)

iv. Describe how the establishment of a tradability component may influence the economic efficiency of an Individual Quota regime?