- 14952 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT CASE STUDIES AND DESIGN APPLICATIONS Edited by Susan Hanna and- Mohan Munasinghe The Beijer International Institute of Ecological Economics A and The World Bank ESD Property Rights in a Social and Ecological Context Case Studies and Design Applications Edited by Susan Hanna and Mohan Munasinghe Beijer International Institute of Ecological Economics and The World Bank Copyright © 1995 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, N.W. Washington, D.C. 20433 U.S.A. This publication may be reproduced in whole or in part and in any form for educational or nonprofit uses, without special permission from the copyright holder, provided acknowledgment of the source is made. Copies mav be sent to the Environment Department, The World Bank, 1818 H Street N.W., Washington, D.C. 20433, U.S.A. and to the Beijer International Institute of Ecological Economics, the Royal Swedish Academy of Sciences, P. 0. Box 50005, S-10405, Stockholm, Sweden. No use of this publication may be made for resale or other commercial purpose without the prior written permission of the copyright holders. The designations of geographical entities in this book, and the presentation of materials, do not implv the expression of any opinion whatsoever on the part of the World Bank or the Beijer Institute concerning the legal status of any country, territory, or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. The interpretations and conclusions in this report are those of the authors and do not necessarily represent the views of the World Bank or the Beijer Institute. ISBN 0-8213-3416-6 CONTENTS Foreword ........................................................... v About the Contributors . ................................................... vii Introduction ........................................................... 1 1. An Introduction to Property Rights in a Social and Ecological Context .... ....... 3 Susan Haima and Moliair Muinasinghe Governance .......................................................... 13 2. Design Lessons from Existing Air Pollution Control Systems: The United States .................................................... 15 Tomn Tietenberg 3. Distributed Governance in the Northwestern Hawaiian Islands Lobster Fishery .................................................... 33 Ralphi E. Townsend and Samuel G. Pooley 4. Enforcement of Regional Environmental Regulations: Nitrogen Fertilizer in Sweden .......................................... 41 Ing-Marie Gren antd Runar Brannlund Appendix 4-A: Calculation of Abatement and Enforcement Costs ..... ........ 48 Equity and Stewardship . .................................................. 51 5. Designing Incentives to Conserve India's Biodiversity ....................... 53 Madhai' Gadgil and P. R. Seshagiri Rao 6. Will New Property Right Regimes in Central and Eastern Europe Serve the Purposes of Nature Conservation? ............................... 63 Tornasz Zylicz 7. Nonsustainable Use of Renewable Resources: Mangrove Deforestation and Mariculture in Ecuador ........................ 75 Peter J. Parks and Manuel Bonifaz Traditional Knowledge . ............................................ 83 8. Learning by Fishing: Practical Science and Scientific Practice .85 Gisli Pdlsson 9. Indigenous Knowledge and Resource Management Systems: A Native Canadian Case Study from James Bay .99 Fikret Berkes iii iv PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT 10. The Role of Validated Local Knowledge in the Restoration of Fisheries Property Rights: The Example of the New Zealand Maori .... ..... 111 Kenneth Ruddle Linking Mechanisms ...................................................... 121 11. The Role of Tenurial Shells in Ecological Sustainability: Property Rights and Natural Resource Management in Mexico ..... .......... 123 Janis B. Alcorn and Victor M. Toledo 12. Integrating Ecological and Socioeconomic Feedbacks for Sustainable Fisheries .141 Monica Hammer 13. Parametric Management of Fisheries: An Ecosystem-Social Approach .153 James A. Wilson and Lloyd M. Dickie 14. Environmental and Socioeconomic Linkages of Deforestation and Forest Land Use Change in the Nepal Himalaya .167 Ajay S. Pradhan and Peter J. Parks Poverty and Population ................................................... 181 15. Environmental Crisis and Unsustainability in Himalayas: Lessons from the Degradation Process .............. ............. 183 Narpat S. Jodha FOREWORD Institutions are the rules of the game in a society or, more fornally, are the humanly devised constraints that shape human interaction. In consequence they structure incentives in human exchange, whether political, social, or economic. Institutional change shapes the way societies evolve through time and hence is the key to understanding historical change. Douglas North, Nobel Prize Laureate 1993 in Institutions, Institutional Change and Economic Performance Cambridge University Press, 1990 When analyzing environmental problems, economists have traditionally searched for ways of extending the rules of social cost-benefit analysis so as to include the environmental side effects associated with investment projects. This they have done by estimating the "economic" value of side effects. Such side effects are often called "extemalities" in the economics literature. Economists have also studied the efficacy of various policy instruments-such as the taxation of resource use or the use of tradeable permits for environmental pollution-for directing economic activity in decentralized economic environments. Recently economists have inquired into the environmental side effects of macroeconomic policies.' However, a more fundamental question, concerning the nature of the institutions of society that shape the use of environmental resources, has only recently begun to be studied. One such program of research, conducted at the Beijer International Institute of Ecological Economics, on the ecology and economics of biodiversity loss, explored the notion that a significant cause of much biodiversity loss lies in inadequate institutions, in particular, ill- defined property rights.2 It was a natural next step for the Institute to launch a more general program of research on property rights and environmental resources. Towards this end, the Institute was fortunate to receive generous economic support from the MacArthur Foundation in Chicago. Subsequently, this support was augmented by the World Bank's Vice Presidency on Environmentally Sustainable Development. This enabled the two institutions to work together in what we believe to be a vital area of concern. We are particularly grateful to Professor Susan Hanna of Oregon State University (also Director of the Property Rights Programme at the Beijer Institute), and to Dr. Mohan Munasinghe of the Environment Department of the World Bank (also Fellow of the Beijer Institute) for the able manner in which they have developed the joint program of activities and produced these two volumes. Much remains to be done on the design of institutions that would improve upon the current patterns of use of environmental resources. For example, we need to better understand the relationship between various property rights regimes and the speed and direction of technological change because the use of environmental resources is greatly shaped by the technologies in operation. Future programs, both at the Beijer Institute and the World Bank, will hopefully address these issues. I. See M. Munasinghe and W. Cruz, Economywide Policies and the Environment (Washington, D.C.: World Bank, 1994). 2. For an overview of this research program, see the special issue of Ambio 1993. and E. Barbier, J. Burgess, and C. Folke, Paradise Lost (London: Earthscan, 1994). v vi PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT The subject of property rights covers a wide field, as reflected in these volumes. The relevance of property rights for any study of environmental problems should be self-evident. Nevertheless, the bulk of the efforts that have been made to date for improving the state of the environment in developing countries has been devoted to a support of appropriate investment projects. It is time to place more emphasis on aid that is directed at improving the institutional framework within which resources are used. Indeed, institutional reforms that are aimed at a better management and use of environmental resources should now complement those reforms that are usually called structural adjustment programs. These two volumes should be read with this background in mind. Ismail Serageldin Partha Dasgupta Karl-Goran Maler Vice President Chairman of the Board Director Environmentally Sustainable Beijer International Institute Beijer International Institute Development of Ecological Economics of Ecological Economics The World Bank Stockholm Stockholm Washington, D.C. ABOUT THE CONTRIBUTORS Janis B. Alcorn has been involved in environ- worked with the Fisheries Research Board of mental research and international development Canada. for the past twenty-five years, with emphasis on Asia and the Americas. She is Director of the Madhav Gadgil is Professor of Ecology at the Asia and Pacific program of the Biodiversity Indian Institute of Science in Bangalore and is Support Program at World Wildlife Fund-us. involved in both field research and mathematical Her publications include over fifty articles on modeling in the areas of population biology, biodiversity conservation, tropical forest man- conservation biology, and human ecology. He agement, tenure, and economic botany; and four has served as a member of the Science Advisory books, including Huastec Mayan Ethnobotany Council to the Prime Minister of India, and and Ethnobotany. Community, Culture and works actively with the voluntary sector in Biodiversity (forthcoming). nature conservation and ecodevelopment efforts. Fikret Berkes is Professor and Director of the Ing-Marie Gren is Associate Professor of Natural Resources Institute, University of Mani- Economics at the Stockholm School of Econom- toba. His research interests include common ics and is also on the staff of the Beijer Interna- property resources, applied ecology, and ecolog- tional Institute of Ecological Economics, the ical economics. He has been fascinated for a Royal Swedish Academy of Sciences. Her long time with the interface between natural research has emphasized cost-effective achieve- systems and social systems, and reports in this ment of environmental targets, choice of policy volume on a research project that spans over instruments and their enforcement, and valuation twenty years in the James Bay area of Canada. of complex ecosystems. She is currently con- ducting interdisciplinary research relating to Manuel Bonifaz completed his Master of Envi- water pollution. ronmental Management degree in 1993 in the Resource Economics and Policy Program of the Monica Hammer has a Ph.D. in natural re- School of the Environment, Duke University. sources management and is Researcher at the His research and professional experience empha- Department of Systems Ecology, Stockholm sizes environmental and resource economics and University, Stockholm, Sweden. Her research policy, and he is currently employed in this field interests concern the interface between ecology in Quito, Ecuador. and economics, with special reference to Baltic Sea fisheries, ecosystem resilience, biodiversity, Runar Brannlund is Associate Professor at the and property rights issues. Department of Economics, University of Umea, Sweden. His research interests are concentrated Susan Hanna is Associate Professor of Marine in the fields of environmental economics, ap- Economics in the Department of Agricultural plied production theory, and industrial organiza- and Resource Economics at Oregon State Uni- tion. versity, and Director of the research program, Property Rights and the Performance of Natural Lloyd M. Dickie is Scientist Emeritus at the Resource Systems, at the Beijer International Bedford Institute of Oceanography in Nova Institute of Ecological Economics, the Royal Scotia. He was formerly Director of the Marine Swedish Academy of Sciences. Her research Ecology Laboratory at the Bedford Institute of areas are fishery economics, natural resource Oceanography, Chairman of the Department of management, economics of common property Oceanography at Dalhousie University, and resources, and the economic history of marine Director of the Institute of Environmental Stud- resource use. ies at Dalhousie University. For many years he vii viii PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Narpat S. Jodha is with the Social Policy and Samuel G. Pooley has been Industry Economist Resettlement Division of the Environment with the National Marine Fisheries Service's Department at the World Bank in Washington, Honolulu Laboratory since 1981. He is responsi- D.C. His professional interests include agricul- ble for their Fishery Management and Perfor- ture and natural resource management in fragile mance Investigation which monitors U.S. do- areas. Formerly he has worked in the Interna- mestic fishing in the area around Hawaii. Most tional Crop Research Institute for Semi-Arid of his research has involved cost-earnings Tropics (ICRISAT), the International Institute for analysis of commercial fishing fleets and sea- Tropical Agriculture (IITA), and the International food market analysis with an orientation toward Center for Integrated Mountain Development fishery management applications. (ICIMOD). Ajay S. Pradhan is a Ph.D. student in the Mohan Munasinghe is Chief, Environmental Environmental Science Program, School of Economics Division, the World Bank, and Public and Environmental Affairs, Indiana Fellow of the Beijer International Institute of University. His research concentrates on terres- Ecological Economics, the Royal Swedish trial ecological systems and human dimensions Academy of Sciences. He is also Distinguished of environmental change. He was formerly a Visiting Professor of Environmental Manage- Fulbright Scholar at the School of the Environ- ment, University of Colombo, Sri Lanka. During ment, Duke University, before which he was 1982-1986, he served as Senior Advisor to the with IUCN-the World Conservation Union's President of Sri Lanka. He has authored or National Conservation Strategy Implementation edited more than fifty books and several hundred Program in Nepal. technical papers on environmental economics, energy, water resources, and informatics. P. R. Seshagiri Rao is a practicing farmer, as well as a researcher in the area of human ecol- Gisli Palsson is Professor of Anthropology at ogy and conservation biology. He is currently the University of Iceland. His writings include working on a doctoral dissertation on coopera- Coastal Economtiies, Cultural Accounzts: Humnll tion and conflict in the human use of natural Ecology antd Icelandic Discourse (1991), The resources at the Indian Institute of Science, Textual Life of Savanits: Ethnograpihv. Ice lan(l, Bangalore. andl the Lingutistic Turin (1995), and a number of articles published in anthropological journals. Kenneth Ruddle is Professor at the School of His major fields of research interest include Policy Studies, Kwansei Gakuin University, ecological anthropology, fishing economies, Japan. His main research interest is coastal cognition, and language. He is currently doing marine fisheries management in the Asia-Pacific research on practical skills and quota manage- Region, and particularly the modern role of ment in Icelandic fishing. traditional resources management and its sup- porting "local" knowledge base. He has also Peter J. Parks is Assistant Professor of Envi- studied integrated systems of agricul- ronmental and Resource Economics in the ture-aquaculture in China, Southeast Asia, and Department of Agricultural Economics and Africa, and is interested in tropical resources Marketing at Rutgers University. His research policy and management. examines local, regional, national, and global environmental consequences of land use, with a Tom Tietenberg is Mitchell Family Professor of particular interest in the design policies and Economics at Colby College in Waterville, property rights systems that sustain environmen- Maine. He is the author or editor of seven books, tal quality and resource productivity by intluenc- including Environmnental antd Natural Resource ing land use. Economics, and nearly fifty articles and essays on environmental and natural resource econom- ics. Formerly President of the U.S. Association ax PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT of Environmental and Natural Resource Econo- fisheries, including ideas such as corporate mists, he has served as a consultant on environ- management, transferable dynamic stock rights, mental policy to international, national, and state bankable ITQS, and fractional licenses. governments. James A. Wilson is Professor of Resource Victor M. Toledo is a researcher at the Centro Economics at the University of Maine. He has de Ecologia at the Universidad Nacional worked in the area of fisheries regulations and Aut6noma de M6xico. He has carried out re- markets for about twenty-five years. His re- search on the ecological and economic relation- search has been directed principally at regulatory ships between Latin American peasant commu- implications of complexity and unpredictability nities and their natural environment for over in both the ecosystems and human systems twenty years, and has published over 100 articles associated with fisheries. and numerous books on biogeography, tropical ecology, deforestation, and ethnoecology. He Tomasz Zylicz is Professor of Economics at was recently awarded a Guggenheim Fellowship Warsaw University, and Advisor to the Minister and is the founding editor of the journal of the Environment. Since 1974 he has taught at Etnoecol6gica. Warsaw University, where-from 1989 on- ward-he has been involved in an extensive Ralph E. Townsend is Professor of Economics curriculum reform. He was formerly Director of at the University of Maine. His research has the Economics Department at the Ministry of the focused on economic evaluation of alternative Environment, where, among other things, he was fisheries management institutions. Much of his responsible for the design of several major current research is directed at the exploration of policy reforms. new approaches to economic management of ix Introduction /9 1 An Introduction to Property Rights in a Social and Ecological Context Susan Hanna and Mohan Munasinghe THIS BOOK AND ITS COMPANION VOLUME, Property Rights and the Environment: Social and Ecological Issues, concern the institutional dimensions of environmental sustainability. Humans interact with their environment through systems of property rights that are embedded in social, political, cultural, and economic context. The outcome of that interac- tion affects both the quantity and quality of environmental resources. It is becoming increasingly clear that although national and international economic policies have often ignored the environment, economic development ultimately depends on institutions that can protect and maintain the environment's carrying capacity and resilience (Arrow and others 1995). The knowledge of how property rights re- gimes, as particularly important types of institutions, function in relation to humans and their use of the environ- ment is critical to the design and implementation of effective environmental protection. 3 4 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT The papers collected in these books are prod- 1968 article, "The Tragedy of the Commons," ucts of a research program of the Beijer Interna- focused widespread attention on the problem of tional Institute of Ecological Economics, the environmental degradation in the absence of Royal Swedish Academy of Sciences, Stock- rules governing use (Hardin 1968). For a num- holm, Sweden. The research program "Property ber of years the general interpretation of Rights and the Performance of Natural Resource Hardin's argument was that collectively owned Systems" began in 1993 with support from the property was the culprit and that private property World Environment and Resources Program of was necessary to sustain environmental re- the John D. and Catherine T. MacArthur Foun- sources. However, a rapidly expanding body of dation and the Environment Department of the scientific evidence indicates that sustaining World Bank. The program's goal is to further environmental resources is not dependent on a the scientific understanding of ways humans particular structure of property regime, but rather relate to their natural environments through the on a well-specified property rights regime and a mechanism of property rights regimes. A major congruency of that regime with its ecological objective of the program is to bring together and social context. social scientists and natural scientists to address Sustainability is a difficult concept because it research questions in their full social and ecolog- has a wide range of meanings based on different ical dimensions. disciplines and world views. What is being More than fifty international scholars have sustained, how it is to be sustained, and over participated in interdisciplinary research pro- how long a period of time are all open to inter- jects. These projects address questions of the pretation. Regardless of the specific meaning design of governance systems for sustainability; used, it is clear that, to some extent, the relationships among equity, stewardship, and sustainability is a human construct. Humans use environmental resilience; the use of traditional their environment for a range of objectives, knowledge in resource management; the mecha- including subsistence, commodity production, nisms that link humans to their environments; aesthetic pleasure, and indirect ecosystem ser- and the role played by poverty and population. vices. These objectives have their basis in the The chapters in the companion volume, Property desire to sustain human life, enhance standards Riglhts (iand the Env'ironmnenit, Sociil anidt Ecolog- of living, mainltain culture, and protect environ- ie(tl Issutes, review the theoretical and conceptual mental quality for generations to follow. The background of these five general issues of prop- different objectives for the use of environmental erty rights and the environment. The present resources lead to different expectations as to volume contains a number of case studies that what is to be sustained, and who is to have address questions of design application in the claims on environmental services. same five areas. It is becoming increasingly clear that the question of sustainability is a complicated one Sustainability, Sustainable whose answer involves more than the generic Development, and Property Rights application of a property rights regime. Property rights regimes, to be effective in modulating the Property rights regimes consist of propert v interaction between humans and their environ- rig/lits, bundles of entitlements defining rights ,ent, must reflect both general principles and and duties in the use of natural resources, and specific social and ecological contexts. General propertv rtules, the rules under which those principles are the structural and functional attributes of property rights regimres which fights and duties are exercised (Bromley 1991). p p y r Property rights reginmes matter to the use of transcend a particular context. General principles environmental resources a fact that has lono are the necessary conditions of effective property r~ ights regimres because a property rights regime been well established, if not well practiced. In LI a ty r e 1911 Jens Warming wrote of the danaers of cannotsucceedoverthelongrunwithoutthem. fisheries overexploitation without ownership, an They include the congruence of ecosystem and argument enhanced by Scott Gordon in 1954 governance boundaries; the specification and (Warming 1911; Gordon 1954). Garrett Hardin's representation of interests; the matching of governance structure to ecosystem characteris- 1. An Introduction to Property Rights and the Environment 5 tics; the containment of transaction costs; and 1994). Equity is an important aspect of this the establishment of monitoring, enforcement, approach. The ezvirotinnenttal view of sustain- and adaptation processes at the appropriate scale able development focuses on the stability of (Eggertsson 1990; Ostrom 1990; Bromley 1991; biological and physical systems. The emphasis Hanna 1992). is on preserving the resilience and dynamic General principles are necessary, but not ability of such systems to adapt to change, rather sufficient in themselves for effective property than conservation of some "ideal" static state. rights regimes. In addition to the general princi- Natural resource degradation, pollution, and loss pies, specific attributes of social and ecological of biodiversity reduce system resilience. Recon- context must be represented. Social contexts ciling these various concepts and implementing contain all the dimensions of the human relation- them as a means to achieve sustainable develop- ship to environmental resources, including social ment is a formidable task, since all three ele- arrangements, cultural practices, economic uses, ments of sustainable development must be given and political constraints. Ecological contexts balanced consideration. contain the structure of ecosystems in which The correct economic valuation of environ- humans live and work, as well as the particular mental and sociocultural assets, and their inter- functional properties of those ecosystems. The nalization in the price system is one means of particular details of the social and ecological ensuring that market forces lead to more sustain- context are what give a human-environmental able resource use. The more equitable distribu- interaction its variety in detail. The match be- tion of resources and assets is a step toward tween a property rights regime and the contex- poverty reduction and social sustainability, as is tual characteristics of the affected humans and greater participation and empowerment of disad- ecosystems will determine success or failure in vantaged groups. Clearly, property rights re- terms of sustainability. gimes that specify access to the natural resource The scientific (biogeophysical) concepts and base and rights of use have a crucial role to play measures of sustainability have been explored in in this context (Dasgupta 1993). a recent volume that made a number of recom- The body of research addressing questions of mendations and set out several areas for further property rights and environmental resource use study (Munasinghe and Shearer 1995). Mean- is growing, but there remain areas characterized while, those concerned with poverty and devel- by large gaps in knowledge. Five of these areas opment are exploring how to implement some of form the focus of the Beijer Institute's Property these approaches to sustainability. The now Rights Research Program and are represented by well-known definition of sustainable develop- the sections of these books. These areas are the ment, succinctly paraphrased from the Bruntland design of governance systems, the development Commission report as "meeting the needs of the of stewardship and equity in environmental present generation without jeopardizing the management and its contribution to environmen- ability of future generations to meet their needs," tal resilience, the management role of traditional must be elaborated further, for practical applica- ecological knowledge, the mechanisms by which tion (World Commission on Environment and humans are linked to their environmental re- Development I987). The current concept of source base, and the relationship between pov- sustainable development encompasses three key erty, population, and environmental degradation. elements-the economic, social, and environ- mental (Munasinghe 1993). The Volume on Property Rights and The econonmic approach to sustainability is the Environment: Social and based on the Hicks-Lindahl concept of the Ecological Issues maximum flow of income that can be generated while at least maintaining the stock of assets (or In the overview chapter of this book, Hanna, capital) which yield these benefits. The social Folke, and Miler summarize the findings on concept of sustainability is people-oriented, and property rights and environmental re- seeks to maintain the integrity of social and sources-focusing on why property rights cultural systems, including the reduction of matter, the general problems they address, their destructive conflicts (Munasinghe and McNeely 6 PROPERTY RIGIITS IN A SOCIAL AND ECOLOGICAL CONTEXT structural forms, design principles, mechanisms tion in lowering management costs. The contri- by which they create linkages between human bution of user participation to governance effi- and ecological systems, and mechanisms by ciency is analyzed in terms of the structure and which they coordinate uses at different scales. function of user participation and its effect on They argue that policies addressing environmen- management costs. tal problems must focus on general principles of Kaitala and Munro's chapter addresses the property rights regimes and on the context in question of governance coordination over multi- which such regimes are placed. ple jurisdictions, as exemplified by transboundary fishery resources categorized as Governance highly migratory fish stocks and straddling fish Questions of governance over environmental stocks. The high seas portion of the stocks are resources have to do with the ability to predict exploited both by coastal states and distant water and oversee both human behavior and ecosystem fishing nations. The problem of managing such behavior. Success in prediction and oversight resources (characterized by ill-defined property depends on a number of variables. The complex- rights over the high seas portion of the re- ity of the human systems and ecosystems affects sources) is now seen as severe, and has become the ability to extract consistent objectives, design the focus of a major United Nations intergovem- meaningful control systems, and monitor re- mental conference. sponse. The scale of the ecosystem in compari- son with scales of social organization or legal jurisdiction determines the extent of the match esilience between the human and environmental systems. It is a general finding of the property rights The clarity of lines of authority over environ- literature that the degree of equity represented by mental decisions and the degree to which author- a property rights regime helps create the incen- ity is coordinated or fragmented is critical to tive structure which either promotes or inhibits relating actions to outcomes. Finally, the ways in stewardship of environmental resources. The which governance is coordinated between au- degree of stewardship practiced, in turn, affects thorities at different levels determine consistency the level of ecosystem resilience, or the ability of across scales. Ostrom addresses both complex- an ecosystem to absorb external shocks. Exactly ity and scale. Since many biological processes how equity affects stewardship, and how specific occur at small and medium, as well as large stewardship practices affect resilience is still a scales, governance arrangements that can cope matter of research. It is becoming clear that with this level of complexity also need to be definitions of equity, stewardship practices, and organized at multiple scales and linked effec- environmental resilience reflect a combination of tively together. The importance of nested institu- local context, appropriate incentive structures, tional arrangements is emphasized, with quasi- and adaptation to environmental change. autonomous units operating at very small, up The goals of equity and stewardship are through very large, scales. comimlonily considered to be inconsistent with Two further chapters address the question of efficiency in environmental management. In a the distribution of authority. Townsend and departure from the usual approach, Young and Pooley present the concept of distributed McCay look at efficiency-driven, market-based governance-how rights and responsibilities are property rights systems and evaluate them for distributed amonig the centrall government, their ability to accommodate equity, steward- industry, and local communities-analyzing ship, and resilience, offering suggestions about competing models of cooperative mnana.gement, ways these criteria can be built into the design of comanagemiient, and rights-based management in adaptive and flexible management regimes. the context of fisheries. They pay attention to They consider a number of different types of both internal and external governance issues. property rights systems for a variety of re- Hanna's chapter focuses on the effect of distrib- sources. uted authority on governance efficiency and in particular on the role played by user participa- 1. An Introduction to Property Rights and the Environment 7 Traditional Knowledge A systems view of social and ecological interac- Long-standing systems of environmental tions is presented, which stresses the need for resource nianagement and their use of traditional active social adaptations to environmental feed- ecological knowledge are yielding insights into backs and the use of traditional ecological ecolo kurrnowledgurce mareyielinage instp ms. intoknowledge. Particular attention is paid to the The documentation and use of traditional eco- lessons that can be learned to assist in the design The documentation andof use ofsainabetraditionalana eco- logical knowledge is now a part of international of more sustainable resource management environmental policy. Cicin-Sain and Knecht systems-improving their adaptiveness and review and assess major developments at the reslience. international level that have recently emphasized Poverty and Population the importance of reconciling systems of tradi- tional knowledge with modern approaches to the Population is importantly linked to poverty management of natural resources. They look at and the erosion of the environmental resource the varying conceptions of the role of traditional base. The population policy literature reflects the knowledge and indigenous peoples in these current conclusion that previous successes in international agreements, and analyze implemen- population policy directed at family planning, tation challenges that both regional and national- the supply side of population growth, cannot be level entities will face as they endeavor to en- sustained without serious attention to the need to hance the role of indigenous knowledge and reduce both the demand for births and the mo- participation. mentum of population growth (Bongaarts 1994). Proposed policy foci include the education of Linking Mechanisms women to enhance economic standing, incen- Linkages between humans and environmental tives to postpone childbearing to later years, and systems operate in different ways according to establishment of formalized systems of property their structure, the systems they link, and the rights to resources (Bongaarts 1994; de Soto process by which the linkage is made. Some 1993). linkages are constructed by the informal obser- Dasgupta applies economic analysis to rural vation of environmental characteristics on the households in poor countries to examine the part of users, and the gradual evolution of be- forces underlying population growth-finding havioral response. Others are established as that it is in varying degrees linked to poverty, to more rapid responses to change. In cases of gender inequalities in the exercise of power, to environmental overuse, linking mechanisms are communal sharing of child-rearing, and to an often weak or absent, cutting, off the interaction erosion of the local environmental-resource oftween weakorosent,l cu itingofe intmacon base. These linkages suggest that population between environmental condition and humanpoiysulcntnntolyuhmeursa response. The particular structure of a linking policy should contain not only such measures as mechanism reflects the economic, social, and family planning programs, improved female ecological context in which it is established. The education, and employment opportunities, but structure determines what information will be also those measures that are directed at the monitored, how it will be monitored, and what alleviation of poverty-such as improved credit, will be done with the information once acquired. insurance, and savings opportunities-and The key question is whether the governance improved availability of basic household system promotes or even allows behavioral needs-such as potable waterand fuel. adaptation to environmental change. Linkages affect both ecosystem and human system adapta- The Volume on Property Rights in a tion and evolution through the type of feedbacks Social and Ecological Context: Case allowed. Studies and Design Applications Folke and Berkes look at the structure and processes by which ecological systems and Governance human systems are connected. They extract from The first three illustrative case studies in this the common property literature lessons about the book apply various principles of govemance to interface between ecological and social systems. the environmental challenges of air pollution, 8 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT fishery management, and pesticide use. right regimes have influenced the social context Tietenberg examines the question of gover- of the protection of nature. Parts of national nance design and scale through an analysis of parks are being claimed by previous landowners the use of market-based mechanisms in his who feel they were not reimbursed fairly, there chapter on the transferable permits approach to are private or communal enclaves left within polltition control problems in the United States. park boundaries, and neighboring landowners From the various examples described, he ex- protest against development constraints implied tracts lessons for both the implementation pro- by the park's existence. The fate of the protec- cess and program design. tion of nature crucially depends on the ability of Townsend and Poolcy consider the question conservationists to demonstrate economic bene- of appropriate levels of authority-through a fits from investing in natural capital, rathier than potential application of the distributed gover- letting it be degraded. nance concept to the lobster fishery of the North- Parks and Bonifaz examine the incompati- western Hawaiian Islands. In their chapter, they bility of incentives in the joint use of environ- pay particular attention to how rights and re- mental resources by looking at the inconsisten- sponsibilities would be distributed among cen- cies of short-term commodity production with tral government, industry, and local communi- long-term environmental sustainability in open- ties. access Ecuadorian mangrove-shrimp systems. Gren and Brannlund approach the issue of They identify incentives to maximize short-term coordination by examining enforcement of profits through shrimp mariculture, which have regionally adjusted environmental regulations. led to destruction of larval-shrimp habitats as Although geographic differences in environmen- mangrove ecosystems were converted to shrimp tal impacts may call for region-specific environ- ponds. mental regulations, regional differences in enforcement costs will lead to different levels of Traditional Knowledge cost-effective regulation. Three further case studies examine the use of traditional and nontechnical knowledge by itself, Equity, Stewardship, and Environmental in combination with modern scientific knowl- Resilience edge, and in the restoration of previously estab- The next three chapters demonstrate the lished property rights. Palsson considers the use difficulties of crafting equitable schemes that of practical knowledge obtained by Icelandic promote better stewardship and resilience for the fishing skippers in thie course of their work, conservation of natural resources. Gadgil and exploring how fishermen's knowledge differs Rao examine the incentives for managing from that of fishery scientists, and to what extent biodiversity contained in India's folk traditions the former could be brought more systematically of nature conservation, in conjunction with a into the process of resource management for the vigorous state-sponsored program of protected purpose of ensuring resilience and sustainability. areas. They tocus on the efficiency and equity He outlines many of the benefits of engaging gains possible through reestablishing conserva- fishermen and using their practical knowledge of tion approaches based on positive incentives to fishing for the purpose of sustainable resource local comMunities. This attractive option is use and responsible management. contrasted with current unsuccessful regulatory Berkes presents a case study of Cree Indians methods that are too centralized, sectoral, and from the Canadian subarctic, analyzing the bureaucratic. evidence regarding the distinctions of the local Zylicz looks at the dift'iculties posed by indigenous knowledge from Euro-Canadian, abrupt changes in property rights regimes for science-based wildlife and fishery management perceptions ot' equity, incentives tor stewardship, knowledge. He notes that resource development and the maintenance of conservation goals. policies have rarely taken into account local Analyzing an example of the contlict between systems of knowledge and resource use. Along conservationists and a municipality in Northeast- with increasing attention to the social impacts of em Poland, he illustrates how changing property development, there is more interest in traditional indigenous knowledge. Yet, concepts of tradi- 1. An Introduction to Property Rights and the Environment 9 tional knowledge and resource management degradation of the biotic or physical environ- systems have remained elusive, not only for ment of desirable species, upsetting their feeding development policymakers, but also for scholars pattems and disrupting normal life cycles. How- engaged in such research. ever, the fundamental cause of overfishing lies Ruddle focuses on the use of traditional in the social institutions that either cannot grasp knowledge to reestablish claims to fonner rights. the complexities of biological interactions, or For the New Zealand Maori, traditional property have insufficient means to control the inputs. rights have been recognized by customary law. This institutional difficulty, combined with the Bodies of local knowledge have been accepted uncertainty characterizing marine systems, as legal evidence in the process of restoring suggest the appropriateness of a multilevel usurped rights. The codification of existing governance system that captures the so- rights and customary laws within a system of cial-ecological linkages on different scales. statutory law in various cultural settings is a Pradham and Parks look at Nepal, where contemporary process in niany nations in deforestation and forest land use change have the Pacific Basin, which might provide useful both socioeconomic and environmental linkages. precedents for application worldwide. The interactions between forests and subsistence agricultural systems in Nepal's villages are Linking Mechanisms influenced by the activities of rural farming The question of linkages is addressed in four communities that depend on the forest for vafi- chaptersthat examine their function in nested ous subsistence products. It is because of this forest tenure systems, fishesies, and joint farm- reliance on forest resources that such communi- ing-forestry systems. Alcorn and Toledo exam- ties often have been blamed for the country's ine Mexican resource tenure systema s, which deforestation problem and its associated environ- me Meican esoure tenre sytems,whichmental consequences. Recent government efforts function as "shells" that provide the superstruc- to coresteresouRcest exceudin local ture within which activities are developed and to protect forest resources by excluding local operate. Such shells are linked in very specific communities have resulted in the opposite effect. ways to the larger "operating system" in which Destruction of the social-ecological linkages at the shell is embedded. The evidence from Mex- the local level has resulted in a new perception ico suggests that the best course of action for by village residents of forests as open-access promoting ecologically sustainable resource resources, which has led to further environmen- management is to support existing structures that tal degradation. have served this function earlier. Poverty and Population Hammer focuses on the links between eco- logical and social systems in Swedish fisheries, The links among poverty, population, and the especially in the Baltic Sea. An important aspect environment are explored in a case study that of fisheries management is the degree to which examines how poverty affects resource use property rights systems can be developed that behavior based on desperation. Jodha examines reflect the ecological and socioeconomic con- the current unsustainable pattern of resource use text, and that sustain or improve the resilience of in the Himalayas-finding the root cause in the the life-supporting ecosystemn. Hammer com- replacement of traditional conservation-oriented pares traditional small-scale and current large- resource management systems with more extrac- scale management systems, in terms of how they tive systems. He examines the driving forces that promote linkages between social and ecological induced or forced the communities to treat systems, and finds that large-scale systems are natural resources differently under the traditional more vulnerable because of their failure to and current contexts, and discusses ways to process ecosystem feedbacks. restore some of the beneficial properties of the Wilson and Dickie also look at fisheries. traditional systems. They present a view of social and ecological linkages that is based on the broader parametric effects of fishing on the whole biotic and envi- ronmental system. Fishing activity leads to a 10 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Lessons Learned and Conclusion erties of linking mechanisms are presented in the contexts of forest tenure systems in Mexico, These two volumes provide powerful evi- fisheries management in Sweden and elsewhere, dence of the importance of both general princi- and the interaction between agriculture and ples and specific social and ecological context to forestry in Nepal. the design, implementation, and maintenanlce of Population antd Poverty: General principles of property rights regimes for environmiental re- the connection between population and poverty sources. are discussed in terms of the intermediate link- Governance: General principles of gover- ages of gender equality, child-rearing practices, nance are discussed in relationi to the need to women's education, and general employment match the scale and comiplexity of ecological opportunities. Specific properties of the popula- systems with their property riglits regimes, to tion-poverty connection are presented in the ensure that the sets of rules are consistent across context of the relationship of population growth different levels of authority, to design a distribu- to poverty and unsustainable forest practices in tion of authority that achieves represenitation and Nepal. contains transactions costs, and to coordinate The chapters cover a wide range of general between jurisdictions. Specitic properties of principles and specific contexts. Despite their governance are presented in the contexts of diversity, the chapters are woven together by a controlling air pollution, manacging a fishery, common thread-the interaction of social and and enforcing regional environmental regula- ecological systems through property rights to tions. produce environnmental outcomes. Each chapter Equity, Stewardship, anditl Environiental demonstrates in its own way the importance of Resilience: General principles alre discussed in the social and ecological context. The ecological terms of the relationship between equity, stew- context shapes human organization and behav- ardship, environmtental resilicice, and efficiency ior, and the human context in tum shapes eco- in property rights regimes designed for a range logical organization and response. The structure of environmental resources. Specific properties of governance, values of equity and stewardship, of equity, stewardship, and cnvironmiienltal traditional knowledge, linking mechanisms, and resilience are presented in the contexts of tradi- conditions of poverty and population all form a tional systems For maintaining biodiversity in part of that context. It is, most important, the India, changinig property right,s to national parks interaction of social and ecological contexts that in Poland, and miangrove-shrimp production determine the co-evolutionary path that humans systems in coastal Ecuador. and their environment follow. The more we Tradlitionial KnowvledgI(e: General principles of understand about the mechanisms of their inter- traditional knowledge are discussed in terms of actions and the role of property rights regimes in the interaction betweenl international environi- shaping that interaction, the better able we will mental policy on the usc of traditional knowl- be to structure that path. edge and the implementation of local-level The editors gratefully acknowledge the in- resource maniagemenit systems that use tradi- valuable contributions of the chapter authors. tional knowledge. Specific properties of tradi- Thanks are also due to Adelaida Schwab and tional knowledge are presenlted in the contexts of Stephanie Gerard, as well as to Rebecca Kary practical knowledge acquired by fishing skippers and Jay Dougherty of Alpha-Omega Services, in Iceland, fishery and wildlite minar;agenient in Inc., for assistance in the editing and production the Canadian subarctic, and the restoration of stage. Judith Smith of Soleil Associates designed Maori property rights in New Zealand. the elegant cover. Linking MechanismsN: General principles of mechanisms that linkl humnliais to tileir environ- Bibliography ment are discussed in terms of their structures and the processes by which they allow lhumilans Arrow, K., B. Bolin, R. Costanza, P. Dasgupta, to observe environmenital change, adapt their C. Folke, C. Holling, B.-O. Jansson, S. Levin, behavior to reflect environmenital change, and K.-G. Maler, C. Perrings, and D. Pimentel. create knowledge in the process. Specific prop- 1. An Introduction to Property Rights and the Environment 11 1995. "Economic Growth, Carrying Capacity, Studies, University of Delaware, Newark, pp. and the Environment." Science 268:520-21. 23-25. Bongaarts, J. 1994. "Population Policy Options Hardin, Garrett. 1968. "The Tragedy of the in the Developing World." Science Commons." Science 162:1243-48. 263:771-76. Munasinghe, Mohan. 1993. Environmental Bromley, D. W. 1989. Economic Interests and Econonmics and Sustainable Development. Institutions: The Conceptual Foundations of Washington, D.C.: World Bank. Public Policy. Oxford, U.K.: Basil Blackwell. Munasinghe, Mohan, and J. McNeely, eds. Bromley, D. W. 1991. Envit-onmilent and Econ- 1994. Protected Area E-conomics and Polic.y. omy: Propertv Rights and Public Policy. Geneva and Washington, D.C.: World Con- Oxford, U.K.: Basil Blackwell. servation Union (IUCN) and World Bank. Dasgupta, Partha. 1993. An Enquirv into Well- Munasinghe, Mohan, and W. Shearer, eds. 1995. Being and Destitution. Oxford, U.K.: Oxford Defining and Measuring Biogeophysical University Press. Sustainability. Tokyo and Washington, D.C.: de Soto, H. 1993. "The Missing Ingredient." The United Nations University and World Bank. Economist 328(7828):8-12. Ostrom, L. 1990. Governing the Commons. Eggertsson, T. 1990. Economic Behavior and Cambridge, U.K.: Cambridge University Iistitutions. Cambridge, U.K.: Cambridge Press. University Press. World Commission on Environment and Devel- Gordon, Scott. 1954. "The Economic Theory of opment (WCED). 1987. Our Common Future. a Common Property Resource: The Fishery." Oxford, U.K.: Oxford University Press. Journal of Political Economy 62(2):122-42. Warming, Jens. 1911. "Om grundrente af Hanna, Susan. 1992. "Lessons for Ocean Gover- fiskegrunde." Nationalokonomisk Tidsskrift: nance from History, Ecology, and Econom- 495-506. Translated in P. Andersen, 1983, ics." In B. Cicin-Sain, ed., Ocean Gover- "On Rent of Fishing Grounds: A Translation nance: A New Vision. Center for the Study of of lens Warming's 1911 Article, with an Marine Policy, Graduate College of Marine Introduction." History of Political Economy 15(3):391-96. Governance 13 -4~~~~~~~~~~~~~~~~ Design Lessons from Existing Air Pollution Control Systems: The United States Tom Tietenberg Abstract IN 1975 A VERY LIMITED transferable permits approach to air pollution control was implemented in the United States. From rather humble beginnings this approach has been expanded dramatically, encompassing not only a much wider set of pollutants, but also some rather different design characteristics. In this chapter, I describe the various applica- tions of this approach to pollution control problems in the United States and extract the lessons for both the implemen- tation process and program design that can be drawn from these applications. 15 16 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Background Applications of the Concept Beginning in 1975, burgeoning costs associ- The Traditional Approach ated with the rigidities inherent in its traditional Stripped to its bare essentials, the U.S. pre- predominantly legal approach to controlling air reform approach to pollution control relied upon pollution, led the U.S. Environmental Protection ' . . ~~~~~~~~a command-and-control approach to controlling Agency (EPA) to start experimenting with an economic Incentive approach now known as the polto. Amin stnad,wic. sals Ecoomicsioncntadive aPrograch now knowned arsithe highest allowable concentration of the pollut- Emissions Trading Program, a limited version ati h min i rwtrfrec ovn of a system of transferable emissions permits. tin poluant repr te targets ofvthi tional pollutant, represent the targets of this Since that time, the transferable emissions per- approach. mit concept has been applied to several new To reach these targets, emissions or efuent areas of environmental policy and is currently Tadreal discharge eiins ar imposed standards (legral discharge ceilings) are imposed being proposed for several more. on a large number of specific discharge points, Support for the use of this market approach to c , v envirnmenal cntro has leary grwn i the such as stacks, vents, outfalls, or storage tanks. environmental control has clearly grown in the Following a survey of the technological options United States, as reflected by the increasing Unibed Stat asp rfleted by the incralgoveasng of control, the control authofity selects a favored number of applications by the federal govern- coto ehooyadcluae h muto ment and by state cyovemments. This political control technology and calculates the amount of ment and by tat:oenet. hsphia dischar-e reduiction achievable by that technol- shift toward transferable permits has both bene- di ogy as the basis for setting the emissions or fited from and contributed to an increasingly es favoabletreamentin he ppula busnessandeffluent standard. Technologies yielding larger favorable treamn inte pular iness and amounts of control and, hence, supporting more strinnent standards are selected both for emitters ronmental organizations have even adopted in r in ~areas where is it very difficult to meet the economic incentive approaches as a core part of ament wtandard an for ne mit the their strategy for protecting the environment. r ..esntsitynord andf enforcn Thes responsibility for definmng anld enforcing these standards is shared in legislatively specified Overview ways between the national government and the various state governments. The intellectual foundation for this policy is provided by the economic concept known as the Conventional Air Pollutants transferable permit. Knowledge about this particular form of control has grown rapidly in In an attempt to inject more flexibility into the the two decades in which it has been imple- manner in which the objectives of the Clean Air mented. Act were met during the last half of the 1 970s, In this chapter, I will briefly describe the the EPA created what has become known as the major programs that have made use of this emissions trading program. It attempts to facili- concept to control air pollution and will provide tate compliance by allowing sources a much a brief overview of some of the major lessons wider range of choice in how they satisfy their that have been learned about this approach.' legal pollution control responsibilities than is possible in the command-and-control approach. Any source that chooses to reduce emissions at any discharge point more than is required by its emissions standard can apply to the control 1. In the limited space permittcd by this chapter, only a authority for certification of the excess control as few highlights can be illustrated. All of the details of the an emissions reduction credit (ERC). proofs and the empirical work can be found in the Defined in terms of a specific amount of a bibliography at the end of the chapter. For a particular pollutant, the certified emissions comprehensive summary of this work, see Dudek and reduction credit can be used to satisfy eiissioiis Palmisano 1988; Hahn 1989; Hahn and Hester 1989a: Hahn and Hester 1989b; Tietenberg 1985; and Tietenberg standards at other, presumably more expensive 1990. to control, discharge points controlled by the creating source, or it can be sold to other 2. Design Lessons from Existing Air Pollution Control Systems: The United States 17 sources. By making these credits transferable, possibility for trading ERCs among very different the EPA allowed sources to find the cheapest kinds of emitters. means of satisfying their requirements, even if Netting allows modifying or expanding the cheapest means were under the control of sources, but not new sources, to escape from the another firm. The ERC is the currency used in need to meet the requirements of the stringent emissions trading, and the offset, bubble, emis- new source review process (including the need sions banking, and netting policies govern how to acquire offsets) providing that any net in- this currency can be stored and spente crease in emissions, counting any ERCS earned The offset policy requires major new or elsewhere in the plant, is below an established expanding sources in nonattainment areas, those threshold. Insofar as it allows firms to escape with air quality worse than the ambient stan- particular regulatory requirements by using ERCS dards, to secure sufficient offsetting emissions to remain under the threshold that triggers appli- reductions, through the acquisition of ERCs, from cability, netting is more properly considered existing firms so that the air is cleaner after their regulatory relief than regulatory reform. entry or expansion than before. This is accom- Emissions banking allows firms to store plished by requiring new sources to more than certified ERCS for subsequent use in the offset, offset any pollution they will add to the area. bubble, or netting programs or for sale to others. These sources must acquire ERCs for 120 percent of the amount they will emit. The extra 20 Lead in Gasoline percent is gained as better air quality. Prior to Following the path established by the Emis- this policy, no new firms were allowed to enter sions Trading Program, the government began nonattainment areas on the grounds that they applying the transferable permit approach more would interfere with attaining the ambient widely. In the mid-1980s, prior to the issuance standards. By introducing the offset policy, EPA of new, more stringent regulations on ]ead in allowed economic growth to continue while gasoline, EPA announced the results of a cost- insuring progress toward attainment. benefit analysis of their expected impact. The The bubble policy receives its unusual name analysis concluded that the proposed .01 grams from the fact that it treats multiple emissions per leaded gallon (gplg) standard would result in points, those that are controlled by existing $36 billion (1983 U.S. dollars) in benefits, from emitters as opposed to those expanding or enter- reduced adverse health effects, at an estimated ing an area for the first time, as if they if they cost to the refining industry of $2.6 billion. were enclosed in a bubble. Under this policy, Although the regulation was unquestionably only the total emissions of each pollutant leaving justified on efficiency grounds, EPA wanted to the bubble are regulated. Although the total allow flexibility in how the deadlines were met leaving the bubble must be 20 percent less than without increasing the amount of lead used. the total permitted by adding up all the corre- Some refiners could meet early deadlines with sponding emissions standards within the bubble, ease, but others could do so only with a signifi- emitters are free to control some discharge cant increase in cost. Recognizing that meeting points fewer than dictated by the corresponding the goal did not require every refiner to meet emissions standard, providing that sufficient every deadline, EPA initiated the lead banking compensating ERCs are obtained from other program to provide additional flexibility in discharge points within the bubble. In essence, meeting the regulations. sources are free to choose the mix of control Under this program, a fixed amount of lead among the discharge points as long as the overall rights, which authorized the use of a fixed emissions reduction requirements are satisfied. amount of lead over the transition period, were Multi-plant bubbles are allowed, opening the allocated to the various refiners. Refiners who did not need their full share of authorized rights, owing to earlier or larger reductions, could sell 2. The details of this policy can be found in "Emissions their rights to other refiners. Trading Policy Statement." (Dec. 4, 1986) Federal Refiners had an incentive to eliminate the lead Register, 51, 43829. quickly because early reductions freed up rights for sale. Their acquisition of credits made it 18 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT possible for other refiners to comply with the demonstrating the safe destruction of an equiva- deadlines, even in the face of equipment failures lent amount of controlled substances by ap- or acts of God. Fighting the deadlines in court, proved means, but thus far no means have been the traditional response, was unnecessary. De- approved. signed purely as a means of facilitating the Although transfers of the production allow- transition to the new regime, the lead banking ances are allowed, even across intemational program ended as scheduled December 31, 1987 borders, they are severely constrained. The (Nussbaum 1992). regulations allow any producer to increase its production allowance by any means, including Ozone-Depleting Chemicals transfer of a portion of another producer's allow- Responding to the threat to the ozone shield, ance, by a maximum of 10 percent of its appor- twenty four nations signed the Montreal Protocol tionment before 1998 and 15 percent of its in September 1988. According to this agree- apportionment after that date. ment, signatory nations have to restrict their Because the demand for these allowances is production and consumption of the chief respon- inelastic, supply restrictions increase revenue. sible gases to 50 percent of 1986 levels by June By allocating allowances to the seven major 30, 1998. Soon after the protocol was signed, domestic producers of CFCs and halons, EPA was new evidence suggested that it had not gone far concerned that its regulation would result in enough; the damage apparently was increasing sizable windfall profits, estimated to be billions more rapidly than previously was thought. In of dollars, for those producers. EPA handled this response, fifty nine nations signed a new ozone problem by imposing a tax on the rents created agreement at a London conference in July 1990. by the regulation-induced scarcity. The Revenue This agreement called for the complete phaseout Reconciliation Act of 1989 includes an excise of halons and chlorofluorocarbons (CFCs) by the tax imposed on all ozone-depleting chemicals end of this century. Moreover, two other de- sold or used by manufacturers, producers, or structive chemicals, carbon tetrachloride and importers of these chemicals. The tax is imposed methyl chloroform, were added to the protocol at the time the importer sells or uses thle affected and are scheduled to be eliminated by 2000 and chemicals and is computed by multiplying the 2005, respectively. chemical's weight by the base tax rate and the The United States has chosen to use a trans- chemical's ozone depletion factor. In addition to ferable permit system to implement its responsi- soaking up some of the regulation-induced bilities under the protocols. On August 12, 1988, scarcity rent, this tax provides incentives to the Environmental Protection Agency issued switch to less harmful and, therefore, untaxed regulations implementing a tradable permit substances. system to achieve the targeted reductions (Fed- The application is unique in two senses. It not eral Register, 53, 30598). According to these only allows international trading of allowances, regulations, all major U.S. producers and con- but it also involves the simultaneous application sumers of the controlled substances were allo- of permit and tax systems. cated baseline production or consumption allow- ances, using 1986 levels as the basis for the Acid Rain proration. Each producer and consumer is al- A version of the emissions-trading concept lowed 100 percent of the baseline allowance also has been incorporated into the U.S. ap- initially, with smaller allowances being granted proach for achieving further reductions in those after predefined deadlines. These allowances are electric utility emissions contributing to acid transferable within producer and consumer rain. Under this innovative approach, allowances categories, and production allowances can be to emit sulfur oxides have been allocated to transferred across international borders to pro- older plants; the number of allowances will be ducers in other signatory nations if the transac- restricted to ensure a reduction of 10 million tion is approved by EPA and results in the appro- tons in emissions from 1980 levels by the year priate adjustments in the buyer or seller produc- 2010. The allowances, which provide a limited tion allowances in their respective countries. authorization to emit I ton of sulfur, are defined Production allowances can be augmented by for a specific calendar year, but unused allow- 2. Design Lessons from Existing Air Pollution Control Systems: The Llnited States 19 ances can be carried forward into the next year, area (Robinson 1993). Under RECLAIM, each of and they are transferable among the affected the almost 400 participating industrial polluters sources. Any plants reducing emissions more are allocated an annual pollution limit for nitro- than required by the allowances could transfer gen oxides and sulfur, which will decrease by 5 the unused allowances to other plants. Emissions perceint to 8 percent each year for the next de- may not legally exceed the levels permitted by cade. Polluters are allowed great flexibility in the allowances allocated plus acquired. An meeting these limits, including purchasing annual year-end audit balances the emissions credits flroim other firms that have controlled with allowances. Utilities that emit more than more than their legal requirements. authorized by their holdings of allowances must The RECLAIM progr-anm shares with the sulfur pay a $2,000-a-ton penalty and are required to allowance program the chlaracteristic that it sets forfeit an equivalent number of tons in the a cap on total emissions from the controlled following year (Kete 1992; Kete 1994). group rather than on emissions from each An important innovation in this program was souice. This cap ensures that expansion must be the assurance of the availability of allowances accommodated within the cap, by cutting back a through the institution of an auction market. conmpensating amoun1t somewhere else, rather Each year, EPA withholds 2.24 percent of the than by allowin-g em1issions to increase. allocated allowances for the auction. These In an imiiportanice senlse, the RECLAIM program withheld permits are allocated to the highest changes the nature of the regulatory process: the bidders, with successful buyers paying their bid buLiden of identifyinig the appropriate control price. The proceeds are refunded to the utilities strategies hals been shifted from the control from whom the allowances were withheld, on a authorl-ity to the polluter. In part, the shift was a proportional basis. necessity becaLIse traditional processes were Private allowance holders also may offer incapable of identifyinig enough appropriate allowances for sale at these auctions. Potential technologies to prodiuce sufficiently stringent sellers specify minimnum acceptable prices. Once redtuctionzs. In another part, it was motivated by the withheld allowances have been disbursed, a desire to inake the process as flexible as possi- EPA matches the highest remaining bids with the ble. lowest minimi1unm acceptable prices on the private As a, resLilt ot the flexibility that became offerings and matches buyers and sellers unltil all possible fromil the shitt in the burden of choosing remaining bids are less than the remaining appropr-iate responlses, many new control strate- minimum acceptable prices. This auction design, gics arc erner-ing. Instead of the traditional unfortunately, is not particularly efficient be- fOCLIS on end-of-pipe control technologies, cause it provides incentives for inefficient strate- pollutioll prevention has been given an eco- gic behavior (Cason 1993; Hausker 1992). noiiiic underpinning by the program. All possi- ble pollutioni reductioni strategies, for the first Smog Trading time, can11 compete onl a level playing field. All of the above programs were initiated and promoted by the federal government. The new- est programs, however, have arisen from state As a result of emissions reductions achieved initiatives. Faced with the need to reduce ozone from stationary souL-ces, mobile sources in many concentrations considerably in order to comply regions of the Unlited States now account for a with the ozone ambient standard, states have high percenitamge ot the remaining pollution. chosen to use trading programs as a means of Although individual new vehicles also have facilitating drastic reductions in precursor pollut- been controlled for many years, an increase in ants. both the nulilber of vehicles and the amount of One of the most ambitious of these programs mileagc the averaue vehicle is driven has offset is California's Regional Clean Air Incentives to a large degree the gains achieved from the Market (RECLAIM) established by the South productioni of cleanier vehicles. Coast Air Quality Management District, the The desire to reduce mobile source pollution, district responsible for the greater Los Angeles beyondl what can be achieved with traditional 20 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT emissions standards, has motivated recent at- gases was established by the Climate Change tempts to include them in emissions-trading Convention, which went into force March 21, programs designed to reduce ozone (Boyd 1993; 1994. Reducing carbon dioxide emissions to Kling 1994). Because remote sampling of in-use 1990 levels by the end of the decade was speci- vehicles has confirmed that in many cases a fied as a voluntary target within the convention. substantial proportion of the mobile source Limiting carbon emissions to specific levels now pollution is coming from a relatively small appears to be an internationally-recognized number of vehicles, one approach specifically objective. targets those vehicles for early retirement.3 The convention identified nations (listed in Under this approach, credits can be created by Annex I of the convention proceedings) that any source that acquires and retires high-emis- were committed to achieving a stabilization of sions vehicles. The number of credits is deter- carbon dioxide emissions by 2000. As Annex I mined by estimating the emissions avoided by nations seek to i-educe emissions sufficiently to vehicle retirement, which involves combining meet the target, they have two choices: they can actual emissions tests on the retired vehicle with either find reductions within their own borders, estimates of the number of miles the vehicle or they can seek them in other nations. An could have been driven over its remaining useful official process, known as joint implementation, life and subtracting the emissions expected to be has been established to explore and develop a set added by a replacement vehicle to produce the of procedures for transborder transfers of reduc- expected net emissions reduction per vehicle. tion offsets. Pilot projects, funded by the Global After aggregating the results over the fleet of Environment Facility (GEF), have been initiated retired vehicles and discounting the aggregated in China, Jamaica, Mexico, and the Philippines estimated reduction to account for uncertainties (Bertram 1992; OECD 1992; Rose and in the estimation process, credits are issued for Tietenberg 1993; United Nations Conference on the adjusted aggregate net emissions reduction. Trade and Development 1992). Although any In Califomia, for example, the UNOCAL Cor- initial trading is likely to take place among the poration, in cooperation with the California Air industrialized nations, in the future, trades that Resources Board, initiated a vehicle scrappage include developing countries are a distinct program. Offering $700 for pre-1971 vehicles, possibility (Tietenberg 1994). the program ultimately was responsible for retiring some 8,000 vehicles (Dudek and other Design Elements 1992). of the Transferable Permit System Vehicle retirement strategies are not the only way to include mobile sources within an Two distinct forms of trading currently are in emissions-trading program. A credit system can use, but the general evolution has been from be used to provide manufacturers an incentive to credit trading to allowance trading. Although produce cleaner cars than required by law (Ru- they are similar in many ways, the differences bin and Kling 1993) or to reward fleet operators are subtle and significant. The variations in for driving cleaner cars than required by law, design that have been implemented in the United States provide a menu of possibilities as well as opportunities for assessing the consequences of The proposed application of the emissions- various choices. trading concept to global warming could have large intemational consequences, particularly for Credit Denomination developing countries. The possibility of using In the original emissions trading program, the emissions trading in controlling greenhouse ce credits were typically denominated in terms of a pollutant flow, such as tons per year. The newer 3. Iniefm EPA guidance for mobile source crediiing can programs are based on allowances defined in be found in the Federal Register, 58, 11134 (Feb. 23, discrete terms-for example, tons rather than 1993). tons per year. Whereas the former confers a continuing entitlement to a flow, the latter is a 2. Design Lessons from Existing Air Pollution Control Systems: The United States 21 one-time entitlement to emit I toil. Once the set of regulatory standards. Allowance trading authorized ton has been emitted, the allowance does not. Once the aggregate number of allow- is surrenldered. Authorizinig additional emissions ances is defined, they can, in principle, be allo- requires the issuanice of new allowances. In cated among sources in an infinite number of general, this is done well in advance according ways. The practical implication is that allow- to specific schedules so that emitters have rea- ances can be used even in circumstances where sonable security for pollution contiol investment a technology-based baseline either has not been, planning. Allocating allowances in advance has or cannot be, established. also facilitated the developnment of t'lftures mar- kets. Caps One of the bi- differences between the two I Allowanlces and credits differ in another types of credits involves the capacity of the new significant way. Allowances systems set a cap defiitiiion to accommluodate the creation and on aggregate emissions that cannot be eroded by transfer of discrete emissionls reductions. One of economic growth. This characteristic is not the on gi nal criteria used by EPA for approving shared either by traditional technology-based, credits was that the emissionis reductions sup- s e s portiiig~~~~~~~~~~~ thn'1L epriaet ai ieu source-specific emiissions standards or, In the porteig them must be perimanestils Many useful absence of other constraints, by an emissions strategies to redluce emissions, such as mleeting credit system that is linked to technology-based a deadline early, produce temporary, rather than standards. Because emissions standards are pcrilial1ent ~ ~ ~ ~ ~ tadads Becauseos emsson stanaed abreth permiiiailent, i-edLuCtions. As iloted above, the source-specific, they exert no control over the ability to set an earlier deadline in the lead aggregate amount of emissions from all sources. phaseout program was made possible by the As the number of sources increases, the aggre- flexibility inherent in an allowance program. gate level of emissions increases. Similarly Witlh all allowanice program, the tonis salved by c o t t s credit trading that is based on these standards early compliance can free up a discrete iiulilber ill allow Wllalwaggregate emissions increases unless of allowanices. som1e additional constraint is built into the sys- Baseline temn. In the United States, the additional constraint Credit trading, the approach taken in the was that all new or expanding sources in bubble anld offset policies, allows enlissions nonattainment areas were required to offset all reductioCls, above and beyond legal require- emissions increases by acquiring sufficient imenlts, to be certified as tradeable credits. TIle credits from existing emitters so that air quality baseline for credits is provided by traditionlal would improve as a result of their entering the tecililology-based staildards. Credit trading area or expanding their operations. No such presuLmIes the preexistence of' these standards, constraint was mandatory in attainment areas so aild it provicdes a more flexible means of achiev- that credit trading could lead to emissions in- ing the aggregate goals that the source-based creases in those areas as the number of sources staildards were desigined to achieve. increased. Allowance trading, used in the acid rain-lead phascout prograii aild RECLAIM inl California, Allocation Method assigns a prespecified number of allowances to n p LI' In pninciple, entitlements couid either be polluters. Typicallv, the ilt .mber declines over auctioned off, with the sources purchasing them tinle, and the initial allocations are not necessar- from their respective governments at the market- ily based on traditional technology-based stan- clearing price (Lyon 1989; Lyon 1990), or dards; in most cases, the aggregate reductions distributed to each source on the basis of some mphed~ ~ ~~ L ditrbye the alloanc alloction onthxceedosm imiplied by tIe allowance aillocations exceed allocation rule, which typically, but not inevita- those achievable withi techtiology-based stan- bly, is based on historical use. Only a transfer- dards. able permit system that allocates permits free of charge to sources on the basis of their historic ence between these two types of trading systems ee should not be missed. Credit trading depends emissions rate WOuld guarantee that existing upon the existence of a previously determined sources WOuld be no worse off than they would 22 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT under a command-and-control system imposing proach is that it raises the financial burden of the the same degree of control. The financial outlays polluting firms, a significant deterrent in an associated with acquiring allowances or credits increasingly competitive global market in a traditional auction market, or a comparable (Tietenberg 1990). emissions charge, would be sufficiently large In the absence of either a politically popular that sources typically would have lower financial way to use the revenue or assurances that com- burdens with the traditional command-and- petitors will face similar financial burdens, the control approach than withi these particular political opposition could be reduced substan- economic incentive approaches (Atkinson and tially by distributing the permits free to existing Tietenberg 1982; Atkinson and Tietenberg 1984; sources on the basis of a grandfather rile. Under Hahn 1984; Harrison 1983; Krupnick 1986; grandfathering, sources only have to purchase Lyon 1982; Palner et al. 1980; Seskin, Ander- additional permits they may need over and son, and Reid 1983; Shapiro and Warhit 1983). above the initial allocation, as opposed to pur- From the point of view of the source that is chasing all permits in an auction market. required to control its emissions, two compo- Grandfathering is defacto the approach taken in nents of financial burden are significant: control- all of the programs. ling costs and controlling expenditures on per- Grandfathering, however, has disadvantages. mits. Althoughi only the first represents real Although reserving some permits for new firms resource costs to society as a whole-the latter is possible. this option is rarely exercised in merely represents transfers from one group in practice. As a result, under the free distribution society to anothier-both represent a financial scheme, new firms typically have to purchase all burden to the source. The empirical evidence permits, whereas existing firms get an initial suggests that when a traditional auction market allocation free. Thus, this free distribution sys- is used to distribute permits or, equivalently, tem imposes a bias against new sources in the when all uncontrolled emissions are subject to an sense that their financial burden is greater than emissions tax, the permit expenditures (tax thait of an otherwise identical existing source, revenue) frequently would be larger in magni- even if the two sources install exactly the same tude than the control costs. The sources would emissions control devices. The evidence sug- spend more on permits, or pay more in taxes, gests that this new source bias has retarded the than they would on the control equipment. This introduction of new facilities and new technolo- characteristic has inhibited the adoption of these gies (Maloney and Brady 1988; Nelson, approaches within the United States. Tietenberg. and Dlonihue 1993). Under the traditional comiliand-and-control As the auctions in the sulfur allowance pro- system, firms make no financial outlays to the gram have made clear, it is possible to combine government. Although control costs are neces- these approaches in a useful way. Although that sarily higher with tihe command-and-control program bases the allowance distribution in part system than with a marketable permit system, on historical emissions, it also requires some of they are not so high as to outweigh the addi- those allowances to be put up for sale each year. tional financial outlays required in an auction Because the proceeds from the auction are market permit system or an emissions tax sys- returned to the original holders of the auctioned tem. For tihis reason, existing sources under- allowances, the financial burden associated with standably oppose distributing permits by a this auction is no greater thlan that associated traditional auction market despite its social with a pure grandfatilered system. appeal, unless tihe revenue derived is used in a manner that is approved by the sources, and the Coping with Spatial Issues sources with which it competes are required to Transferable permits seem to have worked absorb similar expenses. particularly well for trades involving uniformly Both free distribution and the auction market mixed pollutants-those for which only the level have significant disadvantages. A main disad- of emissions matters-and for trades of vantage of the free distribution approach is that nonuniformly mixed pollutants-those for it does not genierate any revenue for the govern- which memisin location hals mat ment. A inain disadvantage of the auction ap- trinvoevingiontigous arge pits ters-mivolviiig contiguous dischiarge points. 2. Design Lessons from Existing Air Pollution Control Systems: The United States 23 The plurality of consummated trades in the developed by a new entity for controlling tropo- emissions-trading program have involved uni- spheric ozone, the Ozone Transport Commission formly mixed pollutants. Because dispersion (OTC). Attempting to implement a truly regional modeling is not required for uniformly mixed strategy that deals realistically with the spatial pollutants, even when the trading sources are elements of the problem, the commission, which somewhat distant from one anoiher, trades has jurisdictioni over the northeastern United involving these pollutanits are cheaper to con- States fiom Washington, D.C., to Maine, has summate. Additionally, trades involving uni- allowed regional trading of NOx offsets, subject formly mixed pollutants do not raise concerns to some specific trading constraints. about local air quality deterioration because the Because the ozone plume typically moves in location of the emissions is not a matter of a particular direction, and not all emissions in a policy consequence. region affect nonattainment status equally, But whien emissions location does matter, the without any constraints it would be possible for dominance of economic instrumilenits over tradi- offset trades to actually worsen the degree of tional command-and-control strategies is less noniattaiiinment. To allow interstate trading while clear cut in practice than it might appear trom ensrlng11 environmental improvement in the theory. Although the fully cost-effective system most sever-ely affected areas, the OTC plan is relatively easy to define in this circumstance imposes two restrictions on trading: offsets must (Montgomery 1972), implemilenitinig such a comie from an area with equal or more severe system imposes a large adminiistr-ative burden. nonattaininent,4 and offsetting reductions must Because the economic and environilmenltal bene- ha;lve contributed to violations of the ambient fits from allowing trading both in the short run standard in the area of the new emissions. The and the long runi, particular-ly their ability to fi-st restriction offers protection against trades stimulate technological progress and pollution which worsen pollutiotn in the most severely prevention, are so large, attempts to implement affected areas, while the second, in effect, cre- second-best designs are justified. All seconid-best ates trading zones that conform to wind flow designs involve an element of compromilise with patterns. the cost-effectiveness goal, but thcy still can Compared to an unrestricted trading area, represent an improvement, somietiiles a substan- these rules have the effect of reducing the size of tial improvemenit, over mnore traditional ap- tradinig areas and, hence, the number of possible proaches. trades. However, they do allow trades across The menu of promising second-best strategies large distances and offer better environmental is growing (Atkinson 1994; Tietenberg, forthl- protectionl thani an unrestricted system. coming). Although the most comimlonily dis- cussed second-best strategies all have problems, Dealing with Market Power slight modifications of those approaches, as One of the fears that is expressed in almost embodied in the new generation of approaches, aly new discussion of transferable permits do appear to offer the prospect f'or- signlificant involves the degree to which this approach may reductions in comilpliance costs, while assuring either facilitate market power or be rendered environmlleiital imyprovemient.eihrfclte Taktpwrobeenrd environmen tal t imperovemt aii ent, orationofall ineffective by the existence of market power. In general, these fears have not been substantiated the possibilities here, but one approach can be by expeience illustrated. The starting point for this approach is The first type of market power involves the the assumption that it is better to im)plemilenlt a ability of participants to manipulate prices basic system built around standard emiiissions permits, dealing individually with those trades strategically in the permit market, either as a that would result in hot spots or excess pollution at the most severely affected receptors, rather 4. Nonattainient areas are further classified into five than to establish wholesale restrictionis on trades. calegolics, depending on current ozone concentration One illustration of how this type of con- levels: marginal, moderate, serious, severe, and extreme. strained trading could be implemented has These (lesigmationis affect both the deadlines for achieving surfaced in the United States in the trading rules the adihni ozone standards and the rules affecting oft'set 24 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT monopolistic seller or a monopsonistic buyer. shown, however, that from a political point of Although only a few studies of the empirical view it does. And, among the various ways of impact of market power on emissions trading creating credits, shut-downs seem to have gener- have been accomplished, their results are consis- ated the most dissatisfaction. tent with a finding that market power does not When a source shuts down its operations, its seem to have a large effect on regional control emissions will drop to zero. Normally, the costs in most realistic situations (Hahn 1984). allowable emissions granted to that plant would Within the class of grandfathered distribution become available for transfer. Some states, rules, some rules create a larger potential for however, have shown a reluctance to allow the strategic price behavior than others. In general, unrestricted sale of allowances from a shut- the larger the divergence between the number of down. The reluctance is based not only on the permits received by the price-searching source desire to avoid any appearance that policy may and the cost-effective number of permits, the be implicitly subsidizing shut-downs, but also on larger the potential for market power. When the belief that the economic incentive should be allocated an excess of permits by the control targeted at positive actions to reduce pollution, authority, price-searching firms can exercise such as investing in new control equipment or power on the selling side of the market, and changing the production process to reduce when allocated too few permits, they can exer- emissions, not to reduce shut-downs. Shut- cise power on the buying side of the market. downs are considered an artifact of other eco- According to the existing studies, it takes a nomic decisions, rather than a positive action to rather considerable divergence from the cost- reduce pollutants. effective allocation of permits to produce much A variety of methods have been developed to difference in regional control costs. Because deal with these concerns while attempting to most realistic rules used to distribute permits are maintain the integrity of the system. In the two estimated to affect control costs to only a small limiting cases, all shut-down credits could either degree, the deviations from the least-cost alloca- revert to the control authority, or they could be tion caused by market power pale in comparison authorized for unrestricted sale. In practice, most to the much larger potential cost reductions areas make finer distinctions. For example, firms achievable by implementing a marketable emis- which are selling their shut-down facilities to sions permit system. another firm commencing operations at the same Strategic price behavior is not the only poten- site may be allowed to include the allowance tial source of market power problems. Firms entitlements in the sale. Or, if the firm that is could conceivably use also permit markets as a shutting down its operations wants to commence vehicle for driving competitors out of business. operations elsewhere in the state, it may be (Misiolek and Elder 1989). This problem is allowed to carry its allowances from the shut- relatively rare (Tietenberg 1985). down with it. Even when the possibility of market power Other allowances may revert to the state, exists, the consequences frequently can be either to be retired, thereby producing better air limited by proper program design. For example, quality, or sold, thereby facilitating economic the sulfur allowance program has two design development. If they are retired, then the supply components that would diminish the ability of of allowances is reduced. In areas with very any participant to exercise market power stringent controls, shut-down credits may be a of either form. First, the auction market provides major source of available allowances, and their a continuous alternative source of permits. retirement could have a significant effect on the Second, the program contains a set-aside of number available for trading. allowable permits that the government can sell at $1,500 a ton, should the need arise. Opt-in Provisions Shut-Down Credits Each program applies to an eligible popula- tion. For example, the sulfur allowance system From an economic point of view, how the applies to the slightly more than 800 electric credits are created or allowances freed up for utilities in the United States, and the RECLAIM sale does not really matter. Experience has program applies to approximately 400 industrial 2. Design Lessons from Existing Air Pollution Control Systems: The United States 25 polluters. Usually, the eligible population is not authority, the South Coast Air Quality Manage- the sole source of the pollutants being con- ment District, could not have based allowances trolled, but for monitoring or other reasons, the on predetermined standards even if they had remaining sources are not included. Leaving been inclined to do so. Defining a complete set them out, unfortunately, reduces the set of of technologies that offered the necessary envi- control opportunities and, therefore, increases ronmental improvement and yet were feasible in the resulting cost. both an economic and engineering sense proved This problem is reduced by creating a process impossible. Traditional regulation was incapable by which polluters that are not part of the eligi- of providing the degree of reduction required by ble population can voluntarily opt-in, or join, the the Clean Air Act. process. Usually, in opt-in procedures, appli- The solution was to define a set of allowances cants face the burden of proving that they can that would meet the environmental objectives, satisfy the basic conditions of participation. leaving the choice of methods for living within Individual emitters who fulfill the conditions the constraints imposed by those allowances up may join. The sulfur allowance program, for to the sources covered by the regulations. This example, has opt-in provisions for industrial approach fundamentally changes the nature of boilers. the control process. The historical approach Why would any initially ineligible individual involved making the control authority responsi- source want to join? In many cases, individual ble, no, only for defining the environmental emitters are capable of reducing emissions objectives and performing the monitoring and well below their allowable levels. As long as enforcement activities necessary to assure com- they are not in the program, surplus reductions pliance with those objectives, but also for defin- are not rewarded. Once in the program, however, ing the best means for reaching those objectives. surplus reductions become transferable and can The allowance program transfers the last of these either be sold or used by the plant owners in responsibilities to the private sector and retains other locations. for the public sector both the responsibility for defining the environmental target and perform- Conclusions and Policy Implications ing the monitoring and enforcement function. Substituting for vs. Conmplementing Pursuing Cost-Effectiveness T)raditional Regulation A vast majority, though not all, of the relevant Whereas the early programs complemented empirical studies in the United States have found traditional regulation by making it more flexible, control costs to be substantially higher with the later programs represent a more radical departure regulatory command-and-control system than from traditional regulation. They are beginning the least-cost means of allocating the control to substitute for traditional regulation. responsibility (Tietenberg 1985). This is an The earliest use of this concept, the important finding because it provides the moti- emissions-trading program, overlaid credit vation for introducing a reform program; the trading on an existing regulatory regime and was potential social gains, in terms of reduced con- designed to facilitate implementationl of that trol cost, from breaking away from the status program. Trading baselines were determined on quo are sufficient to justify the trouble. Although the basis of already determined, technology- the estimates of the excess costs attributable to a based standards, and created credits could not be command-and-control system, presented in the used to satisfy a number of these standards. The numerous studies, overstate the cost savings that requisite technology had to be installed. would be achieved by even a completely unre- More recent programs, such as the sulfur stricted permit niarket (a point discussed in more allowance and RECLAIM programs, replace, detail below), the general conclusion that the rather than complement, traditional regulation. potential cost savings are large from adopting Allowance allocations for these programs were economic incentive approaches seems accurate, not based on preexisting technology-based even after correcting for overstatement. standards. In the case of RECLAIM, the control The emissions-trading program is the basis for most existing empirical work because of its 26 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT longevity. When judged from the perspective of amounts of emissions allowed by the modeled whether the emissions-trading program im- permit equilibrium (Atkinson and Tietenberg proved the system that preceded it, the answer is 1987). For nonuniformly mixed pollutants, for certainly yes! Judged by whether it has achieved example, the cost estimates imply that the con- full cost-effectiveness, the answer is no! trol authority is allowed to arrange the control The program has unquestionably and substan- responsibility in any fashion that satisfies the tially reduced the costs of complying with the ambient air quality standards. In essence, the requirements of the Clean Air Act. Most esti- models allocate more uncontrolled emissions to mates place the accumulated capital savings for sources with tall stacks because those emissions all components of the program at over $10 can be exported. Exported emissions avoid billion. This does not include the recurring control costs without affecting the readings at savings in operating costs. the local monitors. The portion of the cost On the other hand, the emissions-trading savings estimated by the models that is due to program did not produce the magnitude of cost allowing increased emissions is not acceptable to savings that was anticipated by most proponents regulators. Some recent work has suggested that at its inception. Part of this failure to fulfill the benefits received from the additional emis- expectations can be explained as the result of sions control required by the command-and- unrealistically inflated expectations. More re- control approach may be justified by the net strictive regulatory decisions than expected and benefits received (Oates, Portney, and higher than expected transaction costs also bear McGartland 1989). The regulatory refusal to some responsibility. allow emissions increases may not have been The models used to calculate the potential such a bad idea.5 cost savings were not, and are not, completely Certain types of trades that were assumed to adequate guides to reality. The cost functions in be permissible under the models were prohibited these models are invariably ex ainite long-run cost in the emissions-trading program. New sources, functions. They implicitly assume that the mod- for example, were not allowed to satisfy the New eled plant can be built from scratch and can Source Performance Standards, which imply a incorporate the best technology. In practice, of particular control technology, by choosing some course, many existing sources cannot retrofit less-stringent control option and making up the these technologies, and, therefore, their ex post difference with acquired emissions reduction control options are much more limited than credits; they must install the degree of techno- implied by the models. logical control necessary to meet the standard. The models also assume all trades are multi- Typically, this is the same technology used by lateral and are simultaneously consummated, EPA to define the standard in the first place. whereas actual trades are usually bilateral and In the emissions-trading program, much sequential. The distinction is important for uncertaiity was associated with emissions nonuniformly mixed pollutants because bilateral reduction credit transactions because they de- trades frequently are constrained by concerns pend so heavily on administrative action. All about decreasing air quality at the site of the trades required approval by the control authori- acquiring source. With multilateral trades, the ties. When the authorities were not cooperative, concerns would frequently be allayed by com- or at least consistent, the value of the created pensating reductions coming from other near-by emissions reduction credits was diminished or sources. In essence, the models implicitly as- even destroyed. sume an idealized market process, which is only remotely approximated by actual transactions. The amount of potential cost savings that is 5. Not all ol the cost savings, ol course, rcsults from the sacrificed in bilateral, sequential trading of capability to increase emissions. The remaining portion of nonuniformly mixed pollutants is apparently the savings, which results from taking advantagc oi large (Atkinson and Tietenberg 1991). opportunities to control a given ievel ol cmissions at a In addition, lower cost, is still substa;ntial and can bc captured by a Iii addition, some non-negligible proportion well-designed permit system that does niot allow emissions of the expected cost savings recorded by the to increase beyond the command-and-control benchmark. models is attributable to the substantially larger See the calculations in Atkinson and Tictenberg (1987). 2. Design Lessons from Existing Air Pollution Control Systems: The United States 27 Reducing Transactions Costs with Program One-stop shopping for allowances represents a Design considerable improvement over the previous The emissions-trading program resulted in practice of hiring brokers to ferret out possible fewer trading opportunities than had been antici- sources. Although brokers were a market re- pated, as noted above. Therefore, although the sponse to high transactions costs, providing a program did produce considerable savings, it fell clearinghouse makes it easier, quicker, and far short of achieving full cost-effectiveness. cheaper for all parties. One of the lessons derived from the evolution of these programs is that some of the high trans- Shifting the Payoff actions costs experienced by the emissions- The demonstration that the traditional regula- trading program can be decreased with proper tory policy was not cost-effective had two program design. Providing better information to mirror-image implications. It either implied that participants is the key. the same air quality goals could be achieved at lower cost, or that better air quality could be Price Revelation achieved at the same cost. The earlier programs One of the specific problems with the early were designed to exploit the first implication; the system was that prices were determined in later programs attempted to produce better air private during bilateral negotiations. Because the quality and lower cost. results of those negotiations typically were not Trading programs were used to produce better revealed publicly, the prices associated with air quality in many ways. The lower costs of- ERCS were not known generally. fered by trading were used in initial negotiations Inadequate knowledge about prices not only to secure somewhat more stringent pollution makes negotiations more complicated than control targets, as in the acid rain and RECLAIM necessary for the parties involved, but it makes programs, or earlier deadlines, as in the lead pollution control investment planning more phaseout program. Offset ratios for trades in difficult for all sources. Because equilibrium nonattainment areas were set at a ratio greater prices should reflect marginal control costs, than 1.0, implying that a portion of each acquisi- knowing these prices and how they are changing tion would go for better air quality. Environmen- over time provides a great deal of information on tal groups are allowed to purchase and retire the desirability of future control investments. sulfur allowances at the auction. Prices in the $5,000-a-ton range suggest a very This shift toward sharing the benefits has had different set of control options than prices in the two consequences. Cost savings are lower than $250-a-ton range. they would have been without benefits sharing, The sulfur allowance program rectifies this but the public support, and particularly the deficiency by initiating both spot and future support from environmental organizations, has auctions for sulfur allowances. One of the side been increased greatly. Politically, this means benefits of this auction is that it reveals both that it is now easier to implement trading pro- current and future prices to everyone, thereby grams because the potential common ground has improving information considerably. been expanded. Even in cases where auctions may not be practical, it is possible to get better price infor- Encouraging Technological Progress mation. For example, whenever sources that Transferable permits encourage more techno- have acquired credits seek to use them to fulfill logical progress in pollution control than the regulatory requirements, they could be required command-and-control system (Milliman and to provide price information that would be Prince 1989). The anecdotal evidence seems to shared in annual reports to the public. suggest that it not only bolsters the rate of change in pollution control, but it influences the Clearinghouse direction and structure of control approaches. Another strategy for lowering transactions Traditional command-and-control policies costs is to provide a clearinghouse for all buyers usually base standards on technologies known to and sellers to learn about trading possibilities. the regulators. Meeting those standards can be 28 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT accomplished simply by adopting the identified Conversely, although grandfathered entitlements technology. Adopters have little incentive to have been effective in producing the desired search for superior technologies. level of control, they produce no revenue. The With transferable permits, adopters not only combined system provides more assurance of have an incentive to search for new technologies sufficient emissions reduction and of raising that reduce the cost of compliance of meeting revenue. the mandated standard, they also have an incen- Because per unit annual fees applied to the tive to search for technologies that can reduce emissions authorized by the allowances do not emissions more than is required by the standard. affect the cost-effectiveness of the system, the Selling the emissions reduction credits, or un- fee can be as low or as high as necessary to used allowances, produces revenue that can be achieve the desired revenue result. Although the used to finance the new technologies. fees do lower the entitlemiient price, they do not Allowances have facilitated the transition to affect the incentive to trade. The incentive is new areas of pollution control most notably in preserved by the fact that a seller not only re- the area of pollution prevention. Whereas, under ceives the puice for the entitlemitent, but is able to traditional regulation, firms saw their role as avoid paying the annual fee any longer on the merely adopting the end-of-pipe technology transferred entitlements. suggested by the federal or state control author- ity, now they have begun to scrutinize their Merging Equity with Cost-Effectiveness entire production process. Strategies that prevent Because transferable entitlement systems pollution, such as process changes, free up allow' the iSSu. of who will pay for control to be valuable allowances and, hence, become more separated from who will undertake control, they attractive to the adopting source. allow distiibutional and cost-effectiveness goals Combining Policy Instruments to be pursued simultaneously. They also facili- tate technology transfer- by providing a means If raising revenue became an important com- for cost-sharing and risk-shariig. ponent in the coalition-building strategy fol- Recardless of the initial allocationi of permits, lowed by negotiators, the revenue could be the trading that would subsequently take place raised by levying a low annual fee on each would provide the meanls tor control of green- entitlement, even while using a grandfathered house gases to be acccmplished cost-effectively. entitlement system. The revenue could be used This is a particularly important feature when to finance the monitoring and enforcement concerins about fairness and af'fordability pre- system, be retained by the community, or be ClUde simple solutions, such as equal propor- dedicated to other worthy purposes without tional reductions. Even very complex allocations jeopardizing the cost-effectiveness of the system. of the control responsibilities, which are sensi- Although an annual fee is not a necessary tive to a host of individual fairness concerns, can component of a transferable entitlement system, be fully compatible with achieving the desired it can be added if so desired. This combined emissions target at the lowest possible cost. system would leave the control of emissions to the quantity-based entitlements, and would use Sharing the Risk the fee to raise revenue. Risk-sharinig canl be achieved even for very Coupling a low annual fee with a f'ree distri- limited versions of transferable entitlement bution of permits provides an attractive alterna- systems. In the United States, for example, some tive to both auctioned entitlements and an emis- sulfur oxide control equipment manufacturers sions charge. Because of political reluctance to have indicated a willingness to install the pollu- establish rates as high as would be required to tion control equipment free of charge, taking achieve conventional emissions reduction tar- only the sulfur oxide allowances in return.6 In gets, emissions charges have traditionally not this way, the recipient utility incurs neither a been effective in producing the desired level of emissions reduction. They have, however, been effective in raising revenue for environmental 6. 1 am indebted to Dan Dudek ol the Environmental purposes, particularly in Europe (OECD 1989). Defense Funid lor pointing this out. 2. Design Lessons from Existing Air Pollution Control Systems: The United States 29 financial burden nor a financial risk; the equip- accumulating sufficient resources over time, ment supplier is willing to accept both by ac- little by little. cepting the allowances as payment. My experience in the United States leads me to believe that the infrastructure that would be Can This System Be Used in Developing necessary to run a transferable permit program is Countries? not, over the long run, greater than those neces- Although no definitive answer can be given to sary to run an equally effective traditional regu- this question because developing country imple- lation system, but the nature of that infrastruc- mentation experience is lacking, some grounds ture may differ. for optimism exist. To start with, it certainly One misleading myth about conventional appears that attempts to use this type of system regulation holds that mere verification that the in a developing country context are merited. In correct control equipment has been acquired by developing countries, where the opportunity cost the source and that it has been installed correctly of capital is high, it makes especially good sense is a sufficient enforcement strategy. Although it to assure that investments, including pollution is possible to set up a regulatory system where control investments, are made wisely. The cost- enforcement takes this form, those systems are effectiveness properties of tradable permits, rarely effective (Russell, Harrington, and therefore, make them especially attractive. Vaughan 1986). Initial compliance does not Furthermore, the powerful incentive effects ensure continuing compliance. Installing the provided by transferable permits could stimulate right equipment certainly does not guarantee that much more rapid development and implementa- it is operated and maintained correctly; effective tion of new, innovative control technologies and enforcement requires continuous monitoring of strategies, such as pollution prevention. By some form. In this respect, transferable permits stimulating technological progress, a transferable and traditional regulation share the same require- permits approach can contribute to the lowering ments. of long-run as well as short-run costs. These As a practical matter, however, reasonable potential cost savings should provide consider- monitoring systems are not very burdensome for able motivation to adapt the strategy for use in a control authority. Most emissions monitoring developing countries. is based upon a system of self-reporting (Rus- Transferable permits also offer the possibility sell, Harrington, and Vaughan 1986). Although for raising revenue for environmental protection self-reporting systems immediately raise con- in countries were government revenue is a cems about possible abuse, in practice they work sefious constraint. Combining fees with transfer- remarkably well, particularly when comple- able permits allows an additional source of mented by an effective system of criminal penal- funding. In the United States at the moment, ties for falsification. much of the financial responsibility for funding Furthermore, it is possible to design limited the monitoring and enforcement system has been resource enforcement systems that can be effec- transferred from the taxpayers to the pollution tive (Harrington, 1988; Russell, Harrington, and sources by means of fees on permits. Vaughan 1986). The secret to this design is to The most serious concerns about the transfer- target more resources on repeat offenders. ability of this approach to developing countries Among other characteristics, this approach have to do with whether developing countries discourages sources from becoming repeat have sufficient organizational resources to offenders so they can avoid the hassle of intense manage this approach (Lyon 1989). When this scrutiny. question is raised, the questioner usually is The skills involved in running these two types making the implicit assumption that the organi- of programs are rather different. Under tradi- zational resources in developing countries are tional regulation, the responsibility for defining homogeneous and insufficient. They are not appropriate control technologies falls on the homogeneous, of course. Some countries have regulatory authority. With transferable permits, sufficient resources now, and others could use a it falls on the private sources. Therefore, with program such as this to begin the process of transferable permits, the control authorities need fewer staff trained in environmental engineering. 30 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT The remainider could be dedicated to the moni- . 1984. 'Approaches for Reaching Ambi- toring and enforcement functions. ent Standards in Non-Attainment Areas: Finally, the public monitoring and enforce- Financial Burden and Efficiency Consider- merit infrastructure can be bolstered by allowing ations." Lantd( Economzitics 60(2):148-59. some degree of private enforcement (Naysnerski . 1987. "Economic Implications of Emis- and Tietenberg 1992). Allowing pfivate enforce- sion Trading Rules for Local and Regional nient to complement public enforcemnent in- Pollutanits." Canialdian Jourinal of Econornics creases the amount of resources dedicated to 20(2): 370-86. monitorinig anid enforceinent and allows public . 1991. "Market Failure in Incentive- resources to be used more effectively. An effec- Based Regulation: The Case of Emissions tive self-reporting system, as described above, Trading." Jouriutit of Eviroznmenztal Economn- makes this private entforcement possible. ics anld Maniagemiienit 21(1):17-3 1. It probably will not be long before we have Bertram, G. 1992. "Tradeable Emission Permits implemilenitationi experience from developing and the Control of Greenlhouse Gases." Jour- countries. Chile recently passed an Environmen- natl of Development Studies 28(3):423-46. tal Framework Law that requires the use of Boyd, James D. 1993. "Mobile Source Emis- transferable permits. In its etfort to implement sions Reduction Credits as a Cost-Effective this law, Santiago is likely to become the world Measure for Controlling Urban Air Pollu- leader in craftin, versions of this approach that tion." In Richard F. Kosobud, William A. are appropriate in a developing country context. Testa, arid Donald A. Hanson, eds., Cost- At that point, we thankfully will be able to Efje'tive Control of Urban Smog. Chicago: replace speculation with experience. Federal Reserve Bank of Chicago. Cason, T. N. 1993. "Seller Incentive Properties Concluding Comment of EPA'S Emission Trading Auction." Journal The transferable permit programs in the ot Environmental Economics anasd Manage- United States have improved upon the Inewt 25(2): 177-95. commanid-and-control program that preceded Dudek, Daniel J., Josephi Goffman, Dean Drake, theml. The documented cost savings are large and Tom] Walton. 1992. Mobile Emiiissions and the flexibility provided has been important. Reduction Creditinmg. New York: Environ- To be sure, the program is far fromil perfect, but mental Delcnse Fund and General Motors. the liaws should be kept in perspective. Al- Dudek, Daniel J., and Johni Pahnisano. 1988. though the emissions-trading program loses its "Eimissions Tradin1g: Why is this Thorough- utopian luster upon closer inspection, it has bred Hobbled?' Columbia Journl ol Envi- nonetheless made a lasting contribution to rolnme'tl Law 13(2):217-56. environmental policy. Feldimiani, Stephen L., anid Robert K. Raufer. 1987. Emissions Trading and Acid Rain.: Bibliography IlmplementinL a Market Approach to Politu- Bionz Control. Totowa, NJ: Rowman & Atkinson, Scott E. 1983. "Marketable Pollution Littlelield. Permits and Acid Rain Exterilalities." CaniW- Hahni, Robert W. 1984. "Market Power and dianl Journaol of Economnic,s 16(4):704-22. Transferable Property Rights." Quarterlv 1994. "Tradable Discharge Permits: Jour,iol (f Economics 99(4):753A-65. Restrictions oni Least Cost Solutions." In G. . 1989. "Economiiic Prescriptions for Klaassenl and Finn Forsund, Economic lInstru- Environimiental Problems: How the Patient mnent /or Air Pollution Control. Boston: Followed the Doctor's Orders." Thze Journlul Kluwer Academic Pubishers, pp. 3-21. ofEIEconomnic Perspectives 3(2):95-114. Atkinson, Scott E., and Tom H. Tietenberg. Hahn, Robert W., and Gordon L. Hester. 1989a. 1982. "The Empiricail Properties of Two "Marketable Permits: Lessons from Theory Classes of Designs for Transferable Discharge and Practice." Ecology Lawv QuarterlY Permit Markets.' Journatil of Enmvironmnental 16:361-406. Economics andi(s Mainagemtent 9(2):1()1 -21 . 1989h. "Where Did All the Markets Go'? An Analysis of i3A's Emission Trading 2. Design Lessons from Existing Air Pollution Control Systems: The United States 31 Program." Yale Journa(l of Regulxation Misiolek, W. S., and H. W. Elder. 1 989. 6(1):109-53. "Exclusionary Manipulation of Markets for Harrison, D., Jr. 1983. "Case Study 1: The Pollution Rights." Journial of Envirotnmenttal Regulation of Aircraft Noise." (p. 41-143) In Econotnics anad Management 16(2):156-66. Thomas C. Schelling, ed., Incentives for Montgomery, W. D. 1972. "Markets in Licenses Environmental Protection. Cambridge, Mass: and Efficient Pollution Control Programs." MIT Press. Journal of Economic Theoi-ry 5(3):395-418. Hausker, K. 1992. "The Politics and Economics Naysnerski, W., and T. Tietenberg. 1992. "Pri- of Auction Design in the Market for Sulfur vate Enforcement of Environmiental Law." Dioxide Pollution." Journall of Policv Analv- Land Economics 68(1):28-48. sis and Management II (4):553-72. Nelson, Randy, Torn Tietenberg, and Michael R. Harrington, W. 1988. "Enforcement Leverage Donihue. 1993."Differential Environmental When Penalties Are Restricted." Journal ojf Regulation: Effects On Electric Utility Capital Public Economics 37:29-53. Turnover and Emissions." Review of Economi- Kete, Nancy. 1992. "The U.S. Acid Rain Con- icfs and Statistics 75(2):368-73. trol Allowance Trading System." (p. 69-93) Nussbaum, Barry D. 1992. "Phasing Down Lead In Tom Jones and Jan Corfee-Morlot, eds., in Gasoline in the U.S.: Mandates, Incentives, Climate Chanige: Designing a Tradeable Trading and Banking." (p. 21-34) In Tom Permit System. Paris: Organization for Eco- Jones and Jan Corfee-Morlot. eds., Climate nomic Co-operation and Development. Change. Designing a Tradeable Permit 1994. "Air Pollution Control in the System.Paris: Organization for Economic Co- United States: A Mixed Portfolio Approach." operation and Development. (p. 122-44) In Ger Klaassen and Finn R. Oates, W. E., and A. M. McGartland. 1985. F0rsund, eds., Economic Instrumtients for Air "Marketable Pollution Permits and Acid Rain Pollution Control. Boston: Kluwer Academic Externalities: A Comment and Some Further Publishers. Evidence." Canadian Journal of Economics Kling, C. L. 1994. "Emission Trading vs. Rigid 18(3):668-75. Regulations in the Control of Vehicle Emis- Oates, W. E., P. R. Portney, and A. M. sions." Land Economics 70(2): 174-88. McGartland. 1989. "The Net Benefits of Krupnick, Alan J. 1986. "Costs of Alternative Incentive-Based Regulation: The Case of Policies for the Control of N02 in the Balti- Environmental Standard Setting." American more Region." Journzal of' Environmental Economic Review 79(5): 1233-42. Economics and Management 1 3(2): 189-97. OECD. 1 989. Econonmic Instrumnents fir Envi- Lyon, R. M. 1982. "Auctions and Alternative ronmental Protection. Paris: Organization for Procedures for Allocating Pollution Rights." Economic Cooperation and Development. Land Econotnics 58(1): 16-32. . 1992. Climate Change: Designing a 1989. "Transferable Discharge Permit Tradeable Permit System. Paris: Organization Systems and Environmental Management in for Economic Cooperation and Development. Developing Countries." World Development Palmer, Adele R., William E. Mooz, Timothy H. 17(8): 1299-1312. Quinn, and Kathleen A. Wolf. 1980. Eco- .1990. "Regulating Bureaucratic Pollut- nomic Implications of Regula7ting ers." Public Finiance Quarterlv 2:198-220. Chlorofluorocarbon Emissions from Maloney, Michael and Gordon L. Brady. 1988. NonaerosolApplicatiotns. Washington, D.C.: "Capital Turnover and Marketable Property U.S. Environmiental Protection Agency. Rights." The Journal of Lii7 anbd Economics Robinson, Kelly. 1993. "The Regional Eco- 31(1):203-26. nomic Impacts of Marketable Permit Pro- Milliman, Scott R., and Raymond Prince. 1989. grams: The Case of Los Angeles." In Richard "Firm Incentives to Promote Technological F. Kosobud, William A. Testa, and Donald A Change in Pollution Control." Joumral of Hanson, eds., Cost-Effective Con tnrl of Ur- Environmental Economics and Management han Smog. Chicago: Federal Reserve Bank of 1 7(3):247-65. Chicago. 32 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Rose, Adam and Tom Tietenberg. 1993. "An Tietenberg, Tom H. 1985. Emissions Trading: International System of Tradeable C02 An Exercise in Reforming Pollution Policy. Entitlements: Implications for Economic Washington, D.C.: Resources for the Future. Development." Journal of Environment and . 1989. "Acid Rain Reduction Credits." Development 2(1): 1-36. Challenge 32(2):25-29. Rubin, Jonathan and Catherine Kling. 1993. "An . 1990. "Economic Instruments for Envi- Emission Saved Is an Emission Earned: An ronmental Regulation." Oxford Review of Empirical Study of Emission Banking for Economic Policy 6(1):17-33. Light-Duty Vehicle Manufacturers." Journal . 1994. "Implementation Issues for of Environmental Economics and Manage- Global Tradeable Permits." (p. 119-49) In ment 25(3):257-74. Ekko C. Van lerland, ed., International Envi- Russell, Clifford S., Winston Harrington, and ronmental Economics: Theories, Models, and William J. Vaughan. 1986. Enforcing Pollu- Applications to Climate Change, Interna- tion Control Laws. Washington, D.C.: Re- tional Trade and Acidification. New York: sources for the Future, Inc. Elsevier. Seskin, Eugene P., Robert J. Anderson, Jr., and . 1995. "Economic Instruments for Pollu- Robert 0. Reid. 1983. "An Empirical Analy- tion Control When Emission Location Mat- sis of Economic Strategies for Controlling Air ters: What Have We Learned?" Environment- Pollution." Journal of Environmental Eco- tal and Resource Economics 5(2):95-113. noinics and Maniagemrenit 10 (2): 112-24. United Nations Conference on Trade and Devel- Shapiro, M., and E. Warhit. 1983. "Marketable opment. 1992. Combating Global Warming: Permits: The Case of Chlorofluorocarbons." Study on a Global System of Tradeable Car- Natural Resource Jourtnal 23(5):577-91. bon Emission Entitlements. New York: United Nations. Distributed Governance in the Northwestern Hawaiian Islands Lobster Fishery Ralph E. Townsend and Samuel G. Pooley Abstract ALTERNATIVF NMANAGEMENT APPROACHES for the gover- nance of the lobster fishery of the Northwestern Hawaiian Islands (NWHI) are considered. These alternatives are analyzed within the framework of distributed governance: how rigyhts ancd responsibilities arc distributed among the central government, the industry, and local communities. The analysis presentcd hereii does not represent the ollicial position of the National Marine Fisheries Sers Ice. T his research w as supported in part by the Nationial Oceanographic and Atmospheric AdminisiStratioin (NOAA). thc National Sea Grant Program, Department of Commerce. under Grant NU36R1?(! 10-01 through the Maine/New Hampshire Sea Grant Program, Project R/1MID)-237. indl in part by the research program in Property Rights and the Perlorinarice 't Natit il Resource Svstems of the Bcijer International Institute oli LELOlOgIC:cat1 Fe LMT11n h. ithC ROY al Swed iSh AcademI1y oJ Sciences. Stockholm. Sweden. ithl supprt 11 in tll 1Wi W ,IdIl nvironiment and Resources Prograrm ol the John D. and C(atherilIe [ \lacAAtiur Foundatioti and the W orld Batik. Ralph Townsend was supported hy iwo National Marine Fisheries Service summer Iellowships while part of this work was; completed( 33 34 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Townsend and Pooley (1995) suggested the wanted to prevent mining of the resource by idea of distributed governance as a criteria by vessels from other fisheries and especially by which to analyze governance of fisheries. Dis- potential entrants from the longline fishery for tributed governance examines how rights and large pelagics, which was facing its own morato- responsibilities are distributed among and within rium on entry and restrictions on fishing areas. the government, the fishing industry, and fishing Fishery biologists recommended an annual quota communities. This analysis of governance of in the lobster fishery and a limited fishing season fisheries must ultimately be applied within the in response to what was believed to be an un- specific circumstances of individual fisheries. usual decline in the lobster biomass.2 The limited The present analysis applies the concept to the entry and quota regulations were adopted by the lobster fishery of the NWHI. Western Pacific Regional Fishery Management Council (the council) in 1991 and were imple- The NWHI Lobster Fishery mented by the National Marine Fisheries Service and Its Management (NMFS) for the 1992 fishing season. Fifteen boats qualified for permits under these regulations. The NWHI lobster fishery harvests two species The quota for the NWHI lobster fishery is set of lobsters, spiny lobsters (Panulirus in a two-step procedure. A preliminary or fore- marginatus) and slipper lobsters (Scvllarides cast quota is announced in the spring, prior to squamosus).' The fleet operates in an archipel- the opening of the fishery on July 1. The final ago of small islands and atolls that stretches quota is set by August 15 and is based in part north and west of the main Hawaiian Islands for upon catch-per-trap-haul from the first month of over 1,000( miles to Kure and Midway Islands. A the season. small fleet ot fifteen boats makes trips of four to The fishery opened under quota regulation in ten weeks to harvest these lobsters. Total land- July 1992, with a preliminary quota of 750,000 ings are small in comparison to many other lobsters. The final quota was revised downward fisheries, varying from a high of 2.3 million to 438,000 lobsters. The fishing season was not pounds in 1985 to no catch in 1993 because of a closed prematurely, because the quota was not closure. However, the catch is quite valuable, reached. Final landings for 1992 were 424,000 with average prices of $5.81 per pound (round lobsters. In 1993, due to poor stock conditions, weight) for spiny lobsters and $3.65 per pound the fishery was closed to fishing. The closure in for slipper lobsters in 1994. Most of the catch 1993 was a particular burden for some small has beenl sold as a frozen product on the U.S. vessels that had few short-term options. mainland. The preliminary quota for 1994 was set at Mangemient of this tishery under the U.S. 200,000 lobsters, and five vessels chose to Magnlson Fishery Conservation and Manage- participate in the fishery. However, the final ment Act began in 1983. Regulation initially quota was revised downward to 20,900 lobsters, was contined to reporting catch and eflort data and the fishery was closed in August 1994 by and to biological measures, such as minimum emergency rule. Because the vessels had oper- size limits and protection of egg-bearing fe- ated for six weeks before the closure was an- males. Trap design also was regulated, in part to nounced, the total catch was actually 1 30,000 reduce any potenitial for incidental mortality of lobsters. Separate concerns by the industry about moilk seals, an1 endangered species. the large in-season quota reduction and by NMFS In 1991, the management structure changed about exceeding the final quota led to a review dramatically, wheni the indlustry proposed a of the quota setting process. limited entry plan. In large part, the industry The limited-entry plan originally contained a requirement that a permit be used at least once 1. Descriptive information and data on this t'isherv are primizrily f'rm the annual reports on the fishery. the most 2. PolovinaanddMitchumf i1992) andPolovinaandothers recent ol'which is Dollar (1993). The reculatolry structure ( 1994) subsequently attributed this decline to a is described in the Crustacean Fisheries Management Plan deterioration ot the carrying capacity ot the environment. (Wcsiern Pacific Regional Fishcrv Management Council. which was caused by changes in nutricnt levels associated 1994). ith atmospheric and oceanographic cycles. 3. Distributed Governance in the Northwestern Hawaiian Islands Lobster Fishery 35 every two years. Each vessel was required to who gets rights under any new management land a minimum of four lobsters per registered approach has largely been answered in the trap-approximately 4,000 lobsters for most existing limited-entry program. These factors boats-every other year to meet this require- create a favorable environment for many alterna- ment. This use-it-or-lose-it provision had unin- tive approaches to management. tended consequences because some permit holders, who otherwise would have been volun- Governance Alternatives tarily idle, were forced to fish. (The use-it-or- in the NWHI Lobster Fishery lose-it provision was rescinded by the council following the 1994 fishing season.) The balance of this chapter examines how The immediate prospects for the NWHI lobster alternative approaches to distributed governance fishery seem to be poor. The combination of might be applied to this fishery. We will exam- uncertainty created by changing biological ine external governance arrangements and conditions and administrative inflexibility are internal governance arrangements. creating economic hardships. A cost and earn- ings study by Clarke and Pooley (1988) indi- External Governance Alternatives cates that the average vessel would break even at Rights-based management catch rates and prices that prevailed in the 1980s. The catch rates were 1.27 lobsters per trap haul The NWHI lobster fishery is subject to limited for 1985-89, and they fell to 0.63 lobsters per entry, so a form of rights-based management is trap haul for 1990-94. Real prices have fluctu- already in place. The question is whether a more ated in a narrow band over the past ten years, so elaborate rights-based regime should be consid- price levels have not offset the decline in catch- ered for the fishery. Either an individual trans- per-unit-effort. The use-it-or-lose-it provision ferable quota (ITQ) or an individual transferable added to the economic hardship by increasing input (ITI) approach would be a logical, evolu- costs and catch competition. With fewer vessels, tionary path in the management of the NWHI lower total costs, and higher catch rates, the lobster fishery. The main limitation to this fishery certainly would generate significant rents evolutionary approach is apparent in the current under favorable stock conditions. It also proba- system: it is very difficult for the government to bly would support a small, marginally profitable determine which regulations will accomplish fleet under poorer stock conditions. biological objectives without imposing unneces- The history of management of the NWHI sary costs and inconvenience on the industry. As lobster fishery supports three conclusions. First, long as fishery management is basically an the general structure of the current management adversarial relationship between government and system for this fishery, which includes limited the industry, the confrontational game is likely entry and quotas, ought to be a solid foundation to produce unnecessarily high transactions costs. for management. But, secondly, ancillary rules For a number of reasons, ITQ management is and administrative complexity, including the an attractive option in the NWHI lobster fishery. use-it-or-lose-it requirement and the within- The often-difficult ITQ allocation problem is season quota adjustments, have combined to simplified because a well-defined pool of recipi- create unnecessary uncertainty and hardship in ents already exists: the fifteen limited-entry the fishery. permit holders. However, allocating the quota Third, the fishery is both small and, from a among the fifteen permit holders may be conten- management point of view, relatively tious. Usually, quota allocations are based on the noncomplex. Only two species are harvested, historical record of landings. The difficult ques- and there are almost no interactions with other tion is which part of history. In the NWHI lobster fisheries. All lobsters are landed in Honolulu, so fishery, how to treat the fishing years of 1992 the cost of monitoring quotas is relatively low. and 1994, which were subject to quota regula- As a trap fishery, a relatively good index of tion and to use-it-or-lose-it permit requirements fishing effort is available in traps, and enforce- and which also had poor stock conditions, may ment of trap limits is simplified by the distant be difficult. Using the years prior to 1991 would water nature of the fishery. The hard question of generally favor the larger, non-Honolulu boats. 36 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Including the 1992 and 1994 years would gener- tively good input index (Bell 1972; Morgan ally favor the smaller, Honolulu boats that had 1980). An individual transferable trap (irE) lower fixed costs and could survive on lower program may provide an adequate index of catches. The decision is ultimately a political fishing effort. A somewhat better index of effort one. An equal division among all fifteen boats might be trapdays or trapmonths, the number of might be a viable alternative. traps fished times the number of days or months An overall quota is required to determine of fishing. Because all traps are returnied each annual quota allocations from ITQ shares. The trip, monitoring trap numbers is somewhat quota-setting history in the fishery has been simpler in this fishery than in coastal trap fisher- controversial, particularly in light of the quota ies. revisions in 1994. Although the quota-setting Because the enforcement problems of ITQs problem is not unique to ITQS (it would also arise seem generally manageable, there are no signifi- under the continuation of the current overall cant advantages of an ITT program. Because an quota), quota setting under ITQ management is ITT will create some incentives for boats to likely to be more sensitive because fishers feel a increase non-trap inputs, it will create some direct effect between the total quota and their distortions. Although it is fully feasible and has allocations. Moreover, the current within-season some advantages over the current system, the ITT adjustment process would be difficult, and approach will probably yield less economic probably impossible, to implement under ITQS. benefit than the ITQ approach. If fishers expect that the quota will be revised downward during the season, every boat will Comnaiagement rush to exhaust the initial ITQ before it is re- The NWHI lobster fishery already involves a voked. Althcugh the current quota-setting pro- degree of comanagement. Authority is legally cess may be very annoying even under the shared between the Western Pacific Regional current regulations, it would be untenable under Fisheries Management Council and the National ITQS. Hence, some revision to the process would Marine Fisheries Service. The council has be necessary. twelve members, apportioned among Hawaii, Enforcement of ITQS is always a critical issue. American Samoa, the Northern Marianas, Guam, They are very valuable, with annual lease values and federal agencies. In recent years, two of the often running to 50 percent of landed value. The four public Hawaii members of the council have net (not gross) return to unreported landings is as been lobster permit holders. Given the deference much as 50 percent of market value of the fish. that non-Hawaii members of the council usually Moreover, income tax obligations are reduced accord Hawaii's representatives on the manage- by not reporting landings. The incentive to cheat ment of Hawaii's fisheries, these two members is great. Even if as little as 5 percent or 10 per- have significant influence in the lobster manage- cent of total landings were diverted to an unre- ment policy process.3 That influence is reflected ported channel, the corrosive effect on other in the implementation of the limited-entry plan participants' willingness to cooperate with for NWHI lobsters. However, the fact that NMFS enforcement would be severe. Because all NWHI was able to insist upon a quota-setting regime lobsters are landed in Honolulu and within a that has been troublesome for the industry idi- relatively short season, dockside monitoring of cates the extent of NMFS influence. landings is relatively easy. Because this is a An obvious step would be to create a formal small, distant water ileet, unscheduled prob organization that represents all fifteen permit calls-landing without reporting-could proba- holders in negotiations with government agen- bly be monitored by electronic "black boxes." Whether a black box could detect off-loading to other vessels may be less clear. 3. It should he noited that some proposed amendments to Individual transferable input programs are the Magnuson Fishery Conservation and Management Act probably also feasible in the NWHI lobster fish- would rcstrict the ahility of fishing industry members to ery. If the experience in other.lobster fishefies serve as public members or to vote on issues that directly ealect the individual council member. Passage of such around the world is an indication, the number of amilenidments would reduce the dcgree of comanagement traps in the NWIII lobster fishery may be a rela- created by the act. 3. Distributed Governance in the Northwestern Hawaiian Islands Lobster Fishery 37 cies. Such an organization perhaps could be or cooperative that regulated interactions of the advisory to the current council process. How to fishing fleet with the environment of the NWHI. move beyond a merely advisory role into a The contract would specify, for example, the position of coauthority is more difficult to iden- current gear design restrictions that limit interac- tify, whether under the council process or not. tions with monk seals and the current area Perhaps the most obvious U.S. model might be closures around coral reefs. The contract would agricultural marketing orders, which permit also identify information, bodi biological and groups of farmers to petition the government for economic, that must be provided by the industry creation of what are essentially marketing mo- organization to the government. nopolies. But even agricultural marketing orders For the NWHI lobster fishery, a contract of lack the kind of flexibility that would be neces- twelve years would seem appropriate. That sary to respond to the dynamic changes in fisher- contract length should provide the industry ies in general and in the NWHI lobster fishery in organization with a period sufficiently long that particular. decisions about investments in both physical As Townsend and Pooley (1995) suggested, capital and in resource status can yield adequate it is very difficult to frame institutions of retums. This period covers between one and comanagement that create equality for the cen- three recruitment cycles for the lobster fishery. tral government and the industry in the gover- Under the staggered renewal process proposed nance process. There are no special circum- by Townsend and Pooley (1995), contract rene- stances in this fishery that avoid this fundamen- gotiation would occur at year six. tal difficulty. The strength of the contractual management approach, to which we now tum, is Internal Governance Alternatives that it delineates distinct functions for the central The real choice in intemal governance for the government and for the industry, rather than NWHI lobster fishing industry is between cooper- trying to create some kind of dynamic equality ative and corporate govemance. Because the of the two organizations over a wide range of local community has very little stake in the decisions. fishery, communal govemance is not really an important altemative. Inasmuch as the existing limited entry program has already defined the Two factors make the NWHI lobster fishery participants, there is no new self-organizing well-suited to contractual management. First, the group waiting to form. The government might fishery is relatively self-contained with little well leave some of the details of the intemal direct interaction with other fisheries. It has an organization to the industry, but the government extremely limited impact on the local economy will also shape that institution by how it defines and a similarly small social impact. Second, the rights and responsibilities. industry is both small and relatively undifferenti- In this fishery, there is likely to be relatively ated. There are common interests across all little difference in the short run between cooper- fishers, so joint decisionmaking will not be ative and corporate management. Fifteen voting difficult. As discussed below, these common members of a cooperative or fifteen equal share- interests, under either corporate or cooperative holders in a corporation are certain to reach very governance, are likely to produce a clear man- similar conclusions. The real differences be- date for efficient management. tween cooperative and corporate management The permanent right that would be bestowed are likely to arise over a longer term, as changes under contractual management would be the in ownership and membership occur. right of ownership or membership in a fisheries Transfers, effort reduction, and divisions of management corporation or cooperative. To interests are all easier under corporate gover- protect minorities, the corporation or cooperative nance than under cooperative govemance. Effort would be required to bestow fishing privileges reduction is an issue in this fishery, even in the only in proportion to ownership or membership short run. If members can freely transfer and rights. divide shares, the consolidation of fishing effort The govemment would negotiate and admin- will be easiest. Given the need to deal with effort ister an operating contract with the corporation reduction, transfers, and divisions of interests, a 38 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT cooperatively organized industry is likely over supervising the fishing activities of individual time to accede to economic pressures and to boats. move closer to the corporate model. Although corporate govemance from the time of initiation Conclusions and Policy Implications may be preferable, even an initial choice of cooperative governance may ultimately mean This analysis has obvious policy implications something very close to corporate governance. for the governance of the lobster fishery of the Townsend and Pooley (Manuscript) have NWHI. But the analysis also suggests a general proposed a detailed model ot' corporate gover- approach for policy analysis in fisheries. nance for the NWHI lobster fishery, which could Because of the relatively simple nature of the be modified slightly to accommodate coopera- N-WH! lobster fishery, a wide array of governance tive governance. Each of the current fifteen structures could be applied to this fishery. If limited-entry license holders would receive an minanagement options are limited to the tradi- equal number of shares. Because the shares tional rights-based approaches, either ITQ man- would be distributed to the current limited-entry agement or transferable trap regulation could be permit holders, who hlave an existing usufruct expected to increase the economic rents that the interest, the government would probably not industry would earn. The administration of receive compensation. The owners probably either type of rights-based management would should be expected to pay for any administra- he relatively straightforward in this fishery. On tive, research, and enforcemelnt services that the other hand, this fishery presents a unique would continiue to be provided by the govcrn- opportunity to move beyond government-cen- ment. All shares would be freely transferable, tered, rights-based management to a contractual subject only Lo restrictions embodied in securi- model of management between the government ties law. The manlagement corporation would be and a local cooperative or corporation. able to elect a representative board ot' directors. The current literature on governance of com- To protect minorities, the bylaws ot the manage- mon pool resources suggests a fundamental meit corporatiol would contain two constrainits. dissatisfLctionl with the governance dynamics First, any tishing benefits bestowed by the that are inherent in command-and-control regu- mana,gemilenit corporation must be in proportion lation. But to move away from command-and- to share ownership. Second. fees imposed to control regulation, new governance structures finance the nianagemienm corporationL must be must be proposed and tested. There will be no either in proportion to ownership shares or in theoretical proof of the efficacy of alternative proportion to landings. models of distributed governance that will The mnanagenment corporationi or cooperative dissuade governments from continuing with for the NWlIt lobster tisherv would be responsi- government-centered solutions. Rather, alterna- ble tor making all resource management deci- tive models, such as contractual external gover- sions, sutbject to the operating contract. The nance and corporate internal governance, must management corporation wouldl determine the be tested and demonlstrated in the real world. level of f-ishii i' iIctivity. Within this structure. The application of' these concepts to small re- the managemenicnt cor-porattion would have anl source managemalenlt problems, such as manage- internal economiiic interest in et'ficienit mnanage- mnent of tile NWIII lobster fishery, are crucial ment of the lobster resource. For example, thc demonstration projects in the evolution of these cost of enforcing the regulaltionIs, which would new ideaLs. be borne by the mnana-gement corporation or cooperative, would he one economic consider- Bibliography ation. The maniagemient corporaltion or coopera- tive could evaluaite alternatives, sucih as overall Bell, F. W. 1972. "Technological Externalities quotas, closed seasons, minimiiluim sizes, ITQS, and Common Property Resources: An Empir- and trap limitatiois. For exactlv the samie rea- icakl Stutdy ot the U.S. Northern Lobster Fish- sons that ITQS an(d tTTs seeiii feasible under ery." Journal of Political Economn' rights-based management. thcy nialy also mini- 80:148-58. mize the corporationis or cooperative's costs of 3. Distributed Governance in the Northwestern Hawaiian Islands Lobster Fishery 39 Clarke, R. P., and S. G. Pooley. 1988. An Eco- Northwestern Hawaiian Islands." Fishery nomic Analysis of NWHI Lobster Fishintg Bulletinz 90:483-93. Vessel Performance. Honolulu, Hawaii: U.S. Polovina, J. J., G. T. Mitchum, N. E. Graham, Department of Commerce, NOAA-TM- M. P. Craig, E. E. Martini, and E. N. Flint. NMFS-SWFC-106. 1994. "Physical and Biological Consequences Dollar, R. A. 1993. Annual Report of the 1992 of a Climate Event in the Central North Pa- Western Pacific Lobster Fisherv. Honolulu, cific." Fisheries Oceanograph/y 3(1):15-21. Hawaii: Southwest Fisheries Science Center Townsend, R. E., and S. G. Pooley. 1995. Administrative Report H-93-09. "Distributed Governance in Fisheries." In S. Morgan, G. R. 1980. "Increases in Fishing Hanna and M. Munasinghe, Propertv Righlts Effort in a Limited Entry Fishery-The West- and the Environment: Social and Ecological em Rock Lobster Fishery 1963-1976." Jour- Issues. Washington, D.C.: World Bank. nal du Conseil internationial pour . Manuscript. "A Proposal for Corporate l'Exploration de la Mer 39:82-87. Management of the Northwestern Hawaiian Polovina, J. J., and G. T. Mitchum. 1992. "Vafi- Islands Lobster Fishery." ability in Spiny Lobster Paniulirus Western Pacific Regional Fishery Management Marginatus Recruitment and Sea Level in the Council. 1994. "Amendment 8: Fishery Management Plan for the Crustacean Fisher- ies of the Western Pacific Region." Honolulu. 4 A Enforcement of Regional Environmental Regulations: Nitrogen Fertilizer in Sweden Ing-Marie Gren and Runar Brannlund Abstract ONE DIFFICULTY WITH INTRODUCING regional adjusted environmental regulations within a nation is the enforcement of compliance. An appropriate design of regulations among regions then calls for the introduction of enforcement costs into the decision problem. The analytical results in this study indicate that the introduction of enforcement cost changes the cost-effective allocation of abatement between regions when the marginal environmental impacts and the marginal enforcement costs are not perfectly correlated. The simple analysis is applied to regional regulation of nitrogen fertiliz- ers in Sweden. According to the results, the impact on total costs of including enforcement costs in the decision problem is relatively small for the entire country. On the other hand, for some of the regions, total costs may change by about 50 percent when enforcement costs are included in the decision problem. 41 42 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Like many other pollutants, the environmental The Model damages of nitrogen fertilizers depend on the location of the pollution source. As one of A simple model for cost minimization is used several causes of eutrophicated coastal waters, to identify various conditions for relatively large nitrogen fertilizer stimulates the production of impacts of the introduction of enforcement costs. algae, which in tum causes oxygen deficits at sea It is then assumed that the environmental target bottoms and hence reductions in the stock of at the recipient in question is a function of the certain species of fish, such as cod. loads of pollutants from all regions qi, where According to a ministerial declaration in j=l,...,k regions. The load of pollutants to the 1989, the Nordic countries agreed to reduce the ecosystem from a certain region is, in turn, load of nitrogen in all coastal waters by 50 determined by total emissions of firms within the percent. However, the impact on the coast of region, E"j where i=1,..,n firms, minus abate- particular deposits of nitrogen within a drainage ment, Y'I. The environmental quality of the basin on coastal waters depends on such factors ecosystem can then be written as as soil quality and hydrology, which differ in various basins. Thus, an efficient regulation of Q=q(iq i(EY,(EViiY'))) (1) nitrogen requires adjustments to the leaching conditions of each drainage basin. The design of policy instruments to take into The abatement cost of a firm is described by account regional environmental differences has C'(Y') where Y is the level of abatement and been recognized in several studies (see, for i=l,...,n are the firms. It is further assumed that example, Tietenberg 1979; Siebert 1992). A CY>0 and CY Ž0. For each region there exists a common result is that the policy instrument cost function for enforcement, CO(Ri) where Ri is should be designed in order to account for these the level of enforcement, which is assumed to be regional differences. The losses, as compared increasing in Y. The level of enforcement with cost-effective allocation of abatement needed to achieve full compliance depends on between regions, might otherwise be high. One several factors, such as choice of policy instru- important argument against differentiated policy ment, the enforcement weapons available to the schemes is that they usually require more moni- regional agency, and the number of firms being toring and supervision and, hence, the enforce- regulated and their associated costs of compli- ment costs can be relatively high. The enforce- ance (see, for example, Andreasson-Gren 1992. ment costs associated with a differentiated Here it is simply assumed that the level of en- regulation scheme may then outweigh the gains forcement can be written as a function of the from lower abatement costs. total abatement within the region. The purpose of this study is to analyze under what conditions enforcement costs are important R jr (E Yi') (2) for a cost-effective allocation of abatement -r measures when the spatial allocation of abate- ment measures matters for the environmental The decision problem of the national environ- impact. The analysis is applied to the regulation mental agency is then formulated as a choice of of nitrogen fertilizers in Sweden. The chapter is the allocation of VJ, which minimizes total costs organized as follows. First, a simple model is subject to Equation (I) where total costs are presented, which is used for identifying under written as what conditions the introduction of enforcement costs is likely to have relatively large impacts on LI Mill E~~M ~C)(r i(El Y )))+ EC '(N') (3) the regional allocation of abatement measures. Next, an application is made to the Swedish Y farmers' use of nitrogen fertilizers. The chapter ends with a summary. 4. Enforcement of Regional Environmental Regulations: Nitrogen Fertilizer in Sweden 43 The first-order conditions are written as in regions with high marginal enforcement costs the marginal impacts of abatement measures are (aCjIar1(ar'/aY41')+aC. . also high. When equality does not hold, the x (4) impact on the allocation of abatement measures (eQlaq )(aq/ilaY') is relatively small if the levels of the marginal enforcement costs in all regions are low as where X is the Lagrange multiplier for the re- compared with the abatement costs. Thus, the striction in emissions Equation (1). A cost- introduction of enforcement costs is important effective allocation of regional abatement occurs for the regional allocation of abatement mea- where the marginal cost of abatement is equal to sures when they differ between regions and X for all regions and firms. The numerator when the size of the enforcement cost is not consists of two parts: the enforcement cost of a negligible in at least one region. marginal abatement and the firm's marginal cost Two cases are then identified; the correlation for abatement at the emission source. The mar- of marginal enforcement cost and marginal ginal enforcement cost is, in turn, determined by environmental impacts is positive or negative. two factors: the marginal increase in enforce- The level of abatement is reduced in regions ment and the associated marginal enforcement with relatively high marginal enforcement costs cost. The former is determined, as mentioned and vice versa. Note that the introduction of above, by the regulated firm's violation behav- enforcement costs is an argument in favor of ior. The denominator measures the marginal uniform policy instruments for all regions if the impact on the environmental quality of a certain inequality holds and when the marginal abate- ecosystem. The whole expression thus measures ment costs and marginal environmental impacts the cost for a unit improvement of the environ- are negatively correlated. The efficiency losses mental quality, that is, . The condition for cost- of a uniform regulation scheme are reduced effectiveness is that these marginal costs shall be when the marginal enforcement costs are rela- equal. tively high in regions with relatively low abate- Let us for a moment ignore the enforcement ment costs and vice versa. cost. The abatement level of each emission source is then determined by the relation be- An Application tween marginal cost at the source and impact on to Nitrogen Fertilizers the environment. The higher the impact on the environment of a the abatement of a specific Sweden is divided into seven main drainage emission source, ceteris paribus, the higher is the basins: the Bothnian Bay, the Bothnian Sea, level of abatement, and vice versa. Malar region, Baltic Proper South, the Sound, When introducing the enforcement cost, the Kattegatt, and Skagerack. These drainage basins associated impact on the allocation of abatement differ with respect to several factors, such as soil measures of enforcement depends on the relation conditions, climate, and farm management between the marginal enforcement costs and the practices. In general, the soil in the south of marginal environmental impacts. For two differ- Sweden is more fertile. We would expect differ- ent regions, I and m, this can be written as ences in farmers' costs of reducing the use of nitrogen fertilizers in various drainage basins. In (aC'1ar')(ar'IaY") > (aCmIar')(OrmIdY'") (5) this study, abatement costs are calculated as a (aQlaq ')(aq IaY") < (aQIaq m)(aq m1aY"") reduction in producer surplus from decreases in the use of nitrogen fertilizers. Changes in pro- ducer surplus are calculated by means of input When equality holds so that the marginal demand functions estimated by econometric enforcement cost as related to the marginal methods. Input demand functions and associated environmental impact is the same in all regions, costs functions for decreases in the use of nitro- the allocation of measures remains unchanged. gen fertilizers are estimated for each drainage This occurs when the marginal enforcement basin (see Appendix 4-A). costs and the marginal environmental impacts By enforcement cost we mean the regional are perfectly correlated between regions. That is, authorities' costs of monitoring and supervising 44 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT compliance, and the cost for prosecution and coastal waters. Therefore, we disregard this final conviction. The enforcement cost is deter- aspect. In Table 4-1, nitrogen fertilizer loads, mined by violation behavior by the farmers and the estimated marginal environmental impacts, the associated cost for perfect compliance. In marginal abatement costs, and marginal enforce- order to estimate the cost function for enforcing ment costs are presented for different drainage reductions in the use of nitrogen fertilizers, we basins. thus need to know farmers' compliance as a The use of nitrogen fertilizers in the Baltic function of the enforcement level, and the re- Proper South catchment region accounts for gional agency's costs as a function of the en- about one-third of the total use. The next impor- forcement level. Ideally, we would have suffi- tant region is Kattegatt where the use of nitrogen cient data for the estimation of these functions fertilizers corresponds to about one-fourth of the from actual regulations on nitrogen fertilizers. total use. Due to the relatively high rate of Unfortunately, such data are not available. retention, 0.40, the role of the Baltic Proper Instead, the estimation of cost is based on data region is reduced when comparing loadings to available from investigation of enforcement of the coastal waters. However, the total use of all current environmental regulations (Statistics nitrogen in these two regions and the associated Sweden 1993). load to coastal water account together for about Traditionally, enforcement of regulations 50 percent and 66 percent of total use and load, include decisions on penalties and the detection respectively. The total minimum costs for reduc- rate (see, for example, Becker 1968). In Sweden, tion in nitrogen use and load to coastal waters however, the determination of penalties is regu- are thus to a large extent determined by the costs lated by the law, which implies that changes in in the Baltic proper and the Kattegatt regions. the detection rate can be regarded as the only When comparing the marginal enforcement enforcement tool available to regional environ- costs with the marginal environmental impact, mental agencies. The regional agencies supervise we identify different pattems. The marginal compliance by visits and inspections of some of enforcement cost is relatively high in regions the firms subjected to environmental regulations. such as the Bothnian Sea, Kattegat, and the Costs of enforcement are thus calculated by Malar region where the marginal environmental means of econometric estimates (see Appendix impacts are low. The reverse is true for the 4-A). Sound region. We therefore expect that the Unfortunately, the data do not allow us to introduction of an enforcement cost will have estimate compliance as a function of the detec- some impact on the cost-effective allocation of tion rate. Therefore, a linear relation is assumed nitrogen reductions among the regions. between the detection rate and compliance rate. As mentioned earlier, the Nordic ministerial The detection rate is calculated as the amount of declaration indicated a 50 percent reduction of visits divided by the total amount of regulated nitrogen loads to all coastal waters. Therefore, firms, and the compliance rate is calculated as minimum costs for a 50 percent reduction in the the amount of complying firms divided by the use of nitrogen fertilizers are calculated for two total amount of regulated firms. scenarios: with and without the inclusion of the Recall from the foregoing section that the enforcement costs. We assume that the environ- condition for cost effectiveness is determined by mental agency's exclusion of enforcement costs three factors: the marginal environmental im- in the decision problem does not imply that these pact, the marginal enforcement cost, and the costs do not exist. The associated enforcement marginal abatement cost. Here, the marginal costs are therefore calculated for this scenario. environmental impact is defined as the share of As mentioned above, we would expect that the a certain nitrogen deposition within a drainage introduction of enforcement costs into the deci- basin that reaches the coastal water. Note that sion problem would have an impact on the it is then assumed that the inpacts on the marine allocation of nitrogen between the regions, since waters are independent on where along the coast there is a negative correlation between marginal the nitrogen is deposited. This is probably not environmental impacts and marginal enforce- true, but currently there are no measurements of ment costs for some of the regions. The results the nitrogen retention capacities of different are presented in Table 4-2. 4. Enforcement of Regional Environmental Regulations: Nitrogen Fertilizer in Sweden 45 According to the results presented in Table lation between the marginal enforcement costs 4-2, there is only a small increase in total costs and the marginal environmental impacts for only under the two policy scenarios. Total annual some of the regions. Because of this result, the costs amount to 536.2 million SEK when en- cost-effective allocation of nitrogen abatement forcement costs are included in the decision among five of the seven drainage basins re- problem, and to 557.1 million SEK when they mained, in principle, unchanged when enforce- are not. The increase corresponds to about ment costs were introduced. However, the 4 percent. One important reason for the rela- impacts of nitrogen reduction and associated tively small difference in costs is that the abate- costs were considerable for the two remaining ment cost dominates under both scenarios. The regions. For one region, the Sound, with rela- abatement costs account for about 85 percent of tively low marginal enforcement costs and high total costs when enforcement costs are included marginal environmental impact, the introduction and for 80 percent when they are not included. of enforcement costs into the decision problem We can also see from Table 4-2 that the increased total costs by about 50 percent. The impact on five drainage basins is relatively marginal enforcement costs were relatively high small: Bothnian Bay, Bothnian Sea, Baltic and the marginal environmental impact low in Proper, Mdlar region, and Skagerack. The main the other region, Kattegat, where instead total changes occur for the Kattegat and the Sound costs were reduced by 45 percent when enforce- regions. The enforcement costs are relatively ment costs were introduced into the decision low in the Sound region, which implies that the problem. It should be noted, however, that the nitrogen reduction and associated costs are ditferences in total costs, abatement, and en- higher under the policy, with explicit inclusion forcement costs were small between the two of the enforcement costs. The total cost for this policy scenarios, decreasing by about 3 percent region increases by about 50 percent when when enforcement costs were included into the enforcement costs are included in the decision decision problem. One important reason is that problem. The reverse is true for the Kattegat the shares of enforcement costs are low in both region where the enforcement costs are relatively scenafios. high. An introduction of the enforcement costs reduces the total costs by about 45 percent for Bibliography this region. Andreasson-Gren, I-M. 1992. "Profits from Summary Violating Controls on a Polluting Input." Environmental and Resource Economics. The purpose of this chapter has been to ana- Becker, G. 1968. "Crime and Punishment: An lyze the impact on total costs of the explicit Economic Approach." Journal of Political inclusion of enforcement costs in the decision Economy 76:169-80. problem. The decision problem was formulated Braden, J. B., R. S. Larson, and E. E. Herricks. as minimizing total costs for obtaining certain 1991. "Impact Target versus Discharge Stan- environmental improvements in different re- dards in Agricultural Pollution Management." gions. The analysis was applied to the regulation American Journal of Agricultural Economics of nitrogen fertilizers in Sweden. According to (73)2:388-97. the analytical results, the introduction of en- Brannlund, R., I-M. Gren, and K. Elofsson. forcement costs is likely to change the allocation 1994. "Uniform versus Differentiated of abatements between regions when there is a Charges. An Application to a Nitrogen Fertil- negative correlation between the marginal en- izer Charge in Sweden." Presented at the forcement costs and marginal environmental European Association of Environmental and impacts. The impact on total costs is also deter- Resource Economics (EAERE) Fifth Annual mined by this factor and on the size of the en- Conference, Dublin, June 22-24, 1994. forcement costs as compared with the abatement Elofsson, K., and I-M. Gren. 1994. "Cost Effec- costs. tive Reductions in the Agricultural Load of The application on the regulation of nitrogen Nitrogen to the Baltic Sea." Beijer Intema- fertilizers in Sweden indicated a negative corre- tional Institute of Ecological Economics, 46 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Royal Swedish Academy of Sciences. Unpub- Siebert, H. 1992. Economics of the Environ- lished. ment-Theorv and Policy. Berlin and Heidel- Kneese, A. V. 1964. The Economics of Regional berg: Springer Verlag. Water Quality Management. Baltimore, Md: Statistics Sweden and Swedish Environmental Johns Hopkins University Press. Protection Agency. 1990 and 1993. "Appli- Lau, L. J. 1978. "Applications of Profit Func- cation of the Swedish Environment Protection tions. In M. Fuss and D. McFadden (eds.), Act 1989 and 1990." Report Na 34, SM 9301, Production Economics: A Dual Approach to Stockholm, Sweden. In Swedish. Theory and Applications, Volume 1. Amster- Tietenberg, T. H. 1979. "On the Efficient Spatial dam: North-Holland. Allocation of Air Pollution Control Responsi- Miltz, D., J. B. Braden, and G. V. Johnson. bility." In H. Siebert, I. Walker, and K. 1987. "Standards versus Prices Revisited: The Zimmerman (eds.), Regional Environmental Case of Agricultural Non-Point Source Pollu- Policy: The Economic Issues. New York: tion." Journal of Agricultural Pergamon Press, pp. 79-93. Economics:360-368. 4. Enforcement of Regional Environmental Regulations: Nitrogen Fertilizer in Sweden 47 Table 4-1: Nitrogen Fertilizer Use, Marginal Coastal Impact, Marginal Abatement, and Enforcement Costs for Different Swedish Drainage Basins Use Marginal coastal' Marginalb abate- Marginae enforce- Region tons of N impact ment SEK/ton ment SEK/ton Bothnian Bay 2.607 0.03 7,568 1,669 Bothnian Sea 13,129 0.05 5,632 6,092 Malar Region 31,448 0.02 6,600 10,491 Baltic Proper 68,648 0.07 7,000 7,294 The Sound 23,172 0.21 15,972 1,913 Kattegatt 51,171 0.10 7,722 12,445 Skagerrack 3,708 0.17 4,246 7,194 Total 193,833 a. Share of the use of nitrogen that reaches the coast (Elofsson and Gren (1994)). b. Evaluated at a 50 percent reduction in the respective basin's current use. Table 4-2: Regional Costs, Millions of Swedish Crowns (SEK), Regional Nitrogen Reductions in Percent under Two Policies Reducing the Nitrogen Load to the Coastal Water by 50 Percent Including enforcement costs Excluding enforcement costs Abatement Enforce- N reduction Abatement Enforce- N reduction Region cost ment cost % cost ment cost % Bothnian Bay 1.0 0.2 10 0 0 Bothnian Sea 7.9 1.4 17 11 2.7 23 MalarRegion 0 0 0 0 0 0 Baltic Proper 145.0 12.8 44 123.2 10.1 38 The Sound 193.0 12.7 56 132.9 3.7 43 Kattegatt 110.0 25.4 34 179.8 66.9 58 Skagerack 15.8 11.0 100 15.8 11 100 Total 472.7 63.5 50 462.7 94.4 50 48 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Appendix 4-A: Calculation of there are forty-eight observations on costs and Abatement and Enforcement Costs the number of visits. This is not sufficient to estimate enforcement cost functions for different The costs for reducing the use of fertilizers drainage basins. A fixed effect model is there- are calculated as the associated decreases in fore applied to account for different drainage profits from yield. The production of yield is a basins where BS is Bothnian Sea, BP is Baltic function of the vectors of variable and fixed Proper, MR is Malar region, KAT is Kattegat, inputs, X, and F, respectively, which is written SKA is Skagerack, and SU is the Sound. In as order to account for the different years of inves- tigation, a dummy, DUM, is introduced for Q = f(X, F) (Al) 1989. Since the regression model reveals heteroscedasticity, weighted least square is used In addition to nitrogen, the variable production where the amount of regulated firms constitute factor included here is labor. The fixed produc- the weights. The estimated result is tion functions are land and supply of manure. Assuming given prices of outputs and inputs and E 1 1261 + 0.0008*(V)2 - 10028*DUM - 725.2*BP that farmers maximize profits, the nitrogen (5.46) (4.80) (8.15) (0.29) demand, N, can be specified as a function of the prices of variable inputs nitrogen and labor, pN 479.4*BS + 1958*MR - 323*KAT and pL, respectively, the output price, PQ, and the (0.91) (0.73) (0.14) supply of manure and arable land, M and HA + 5877*SKA + l 383*SU (see, for example, Lau 1988). The regression (2.61) (4.93) Adj. R2=0.98 equation is then written as where E is enforcement cost and V visits for N = h(pN, pL, pQ, M, HA, E) (A2) each county. Numbers in parentheses denote t- statistics. The regression performs well with a where c is the error term. When estimating the significant impact on costs of visits, and the regional demand functions, the SURE-estimator adjusted R2 is high. (for "seemingly unrelated regression equations") When estimating cost functions for enforcing is used in order to account for simultaneous error nitrogen reductions, two components are needed: between the equations. In Table 4-Al, the the estimated cost function for changes in the results from estimation of the linear equations detection rate and the impact on compliance of are presented. changes in the detection rate. A simple linear Most of the estimated nitrogen price coeffi- relation is assumed between compliance and the cients are significant on a 5 percent level. For detection rate, which is obtained by dividing the three region, however, the results are rather compliance rate by the detection rate. poor. In spite of the poor estimates, all the Cost functions for enforcing nitrogen fertilizer estimated price coefficients are used for calculat- reductions are then obtained by first expressing ing cost functions. The quadratic cost functions the coefficient and the variable Vi in use of are calculated by solving for pN in all regression nitrogen per farm. It is further assumed that there equations and integrating over N. is no fixed cost component in enforcing reduc- The Swedish Statistics and the Environmental tions of nitrogen. The compliance rate, detection Protection Agency have in a joint project inves- rate, and nitrogen fertilizer use per farm are tigated the level of compliance, enforcement shown in Table 4-A2. options, and costs for twenty-four Swedish counties during the years 1989 and 1992. Thus 4. Enforcement of Regional Environmental Regulations: Nitrogen Fertilizer in Sweden 49 Table 4-A l: Results from Nitrogen Demand Regressions Constant Region pN pQ pL M HA RI2 Bothnian Bay 1,266 -5.95 -89.5 .93 .47 .03 0.52 t-statistic .73 -1.18 -3.11 1.92 1.19 1.82 Bothnian Sea 13,942 -54.5 -233.9 5.27 .37 .06 0.69 t-statistic 1.91 -2.63 -1.94 2.47 .54 .84 Malar region -1,612 -96.05 -708.9 7.57 -1.42 0.16 0.86 t-statistic (-.12) (-2.99) (-3.90) (2.43) (-1.31) (8.44) Baltic Proper 91,786 -188.5 -1,092.2 2.76 0.18 0.034 0.81 South 3.73 -4.42 -6.14 0.77 1.01 1.22 t-statistic The Sound* -24,807 -421.5 99.0 -3.89 .33 0.72 t-statistic -1.54 -.69 2.67 -4.17 4.90 Kattegatt 54.828 -119.3 -1174 3.69 -.01 .06 0.79 t-statistic 3.16 -2.64 -7.67 1.77 -.02 2.51 Skagerack 5,921 -32.2 -117.2 .28 -.25 .11 0.82 t-statistic 3.59 -7.69 -5.20 0.70 -0.40 3.43 * For the Sound Region, the general specification gives poor estimates. The input prices divided by the output price generates a better fit for the Sound. Table 4-A2: Detection Rates, Compliance Rates, Entforcement Costs, and Number of Farms Region Detection rate Compliance rate Tons of N/farm Bothnian Bay 0.39 0.62 0.62 Bothnian Sea 0.30 0.57 1.01 Malar Region 0.40 0.47 2.01 Baltic Proper 0.28 0.47 3.96 The Sound 0.32 0.56 5.54 Kattegatt 0.31 0.40 2.57 Skagerack 0.53 0.48 4.62 Equity and Stewardship 51 5 Designing Incentives to Conserve India's Biodiversity Madhav Gadgil and P. R. Seshagiri Rao Abstract INDIA HAS VIBRANT FOLK TRADITIONS of nature conserva- tion, as well as a vigorous state-sponsored program of protected areas. However, there are signs that the current centralized, sectoral, bureaucratic regulatory approach to conservation is facing serious difficulties. We suggest that it would be far more efficient and equitable to replace it with an approach based on positive incentives to local communi- ties. This would entail local communities being conferred (a) greater control over public lands and waters in appropriately defined territories, (b) enhanced capacities to add value to local biodiversity, and (c) specific financial rewards linked to conservation value of elements making up biological communities within their territories. We are grateful to the Ministry of Environment and Forests, Government of India, for financial support. 53 54 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Technical inputs from the national or global measure, a focus that has brought in its wake level would be needed to establish a system of serious conflicts. It has attempted to divorce assigning conservation value and of monitoring conservation from development, and is today the levels of biodiversity throughout the coun- facing the threat of opening large tracts of nature tryside. Such a system based on redeployment of reserves to mining and other development funds currently being spent on a bureaucratic, (Nambiar 1993). It has paid little attention to the regulatory approach would create a very effi- significant levels of biodiversity in areas outside cient market for conservation performance, as nature reserves, whether it be in wetlands or on well channelize rewards for conservation action farm bunds. It has completely ignored issues to relatively poorer communities living close to such as in situ conservation of land races of the land. husbanded plants and animals. And finally, it has treated with contempt folk practices like -<> sacred groves, as well as extensive practical ecological knowledge of large numbers of Conserving India's biological diversity is a Indians living close to the earth. staggering challenge. For it must address itself to Indeed, it is time we begin to seek alternative the task of protecting populations of organ- paradigms to conserve the natural heritage of isms as diverse as soil amoebae and sea urchins, this diverse country. Such a new paradigm could rock bees, and Gangetic dolphins. It must strive attempt to involve as partners the masses of to maintain a whole spectrum of habitats from Indian people brought up in a biodiversity- coral reefs and rain forests of Andaman to high friendly culture, to marry conservation with altitude lakes and meadows of Kashmir. It must development, and to employ positive rewards in try to promote continued cultivation of thou- place of bureaucratic regulations as the main sands of land races of rice and husbanding of instrument of conservation (Gadgil and Rao hundreds of different breeds of cattle. This it 1994). It is our purpose here to outline such an must accomplish in a variety of human settings: alternative approach. from the thinly populated Mizoram, with its largely autonomous communities of swidden Current Approach agriculturists to the Rajasthan desert dominated by nomadic herders; from the thickly settled State Monopoly Gangetic plains with complex stratified societies of cultivators to the modemn metropolises of Today, the formal responsibility for conserv- Delhi and Bangalore. ing India's biological diversity rests solely with Ovelhirand millenngalore. Indian the state apparatus. Indeed, since independence, Over millennia Indian society has evolved a Idassaeaprtshstne oasm variety of biodiversity-fniendly practices. Thanks India's state apparatus has tended to assume to these, myriads of banyan and peepal trees dot responsibility for a very wide range of activities: the Indian countryside, while thousands of manufacturing steel and generating power, troops of langurs and macaques roam freely in providing education and health care, broadcast- the towns and villages. The Indian lion survives ing news, and protecting forest resources. While inthe GirNationallPark, protectediagainstuheavy greatly broadening its range of functions, the odds by the Nawab of Junagarh in what was state apparatus has continued many of its colo- once a princely huntig preserve. Today India nial traditions. In particular, these include main- has a well dispersed network of wildlife sanctu- tenance of a distance from the people at large aries, national parks and biosphere reserves, and a lack of transparency in function. It has covering overn 4 percent of the land surface. This therefore developed into a massive apparatus, coveingove 4 ercnt f th lad srfae. his with a monopoly over provision of many goods is indeed a most creditable performance in an a s er povis of mation. old, densely settled country (Gadgil 1991 ). and services and extensive powers of regulation. But the current state-sponsored approach to Although democracy has struck roots in India, biodiversity conservation is evidently under the functioning of the state has not been ade- serious strain (Singh 1995). It has tended to quately openedrtofpublic scrutiny. focus on elimination of subsistence demands of In this atmosphere of lack of public account- local communities as a major conservation ability, the state apparatus has tended to concen- 5. Designing Incentives to Conserve India's Biodiversity 55 trate on growing in size and power. Its function- The deticiencies of this approach are evident ing has become highly compartmentalized, withi in what has happened at the Bharatpur Bird little coordination among the mianiy differenit SanctUary over the last twelve years. Bharatpur ministries and departments. It has gone on is a wetland of several hundred hectares created accumulating excessive levels of regulatory by dammining a tributary of the river Yamuna powers. All of this has inevitably been at the some 150 years ago. The impounded waters cost of services it is expected to deliver (Gadgil have always been used for irrigation in the dry and Guha, in press). months of the summer, and the wetlands them- This way of functioning is rctlected in the selves have provided excellent grazing for cattle way the state apparatus has gone about the and especially water buffaloes. These wetlands business of conserving the counitry's heritage of hiave been attracting enormous numbers of biological diversity. Given its interest in the aquatic birds, supporting a large heronary of accumulation of regulatory powers, and its residenits breeding in the monsoon, and an even narrow sectoral preoccupationis, interests of greater nuimber ot migrants in the winter. The conservation have been viewed as diamnetrically locality served as a hunting preserve of the opposed to the basic subsistenice demiianids of Maharaja of Bharatpur in the pre-independence local people, as well as development aspirations days, supporting shoots of tens of thousands of of the larger society. SucIh anI attitullde implies ducks and teals in a single day. The significance that there are very large opportunity costs at- of this wetland as a bird refuge has been increas- tached to any conservation effort. Consequelntly in,, with timie, with other wetlands in the region such efforts enjoy the Suppor of a relatively being brought under cultivation. narrow segment of the society, mostly aniong Following inidependence, Bharatpur wetlands urban middle classes. In particular, there is little camle to constitute one of the first wildlife sanc- support to state-sponsored conservaLtion efforts tuaries of the country. This, of course, led to the by the local people. Conservation is theetfore suspension of winiter shoots. But the use of water forced to rely on guns and gualrds, niakin, it a for irrigattion an(d grazing by livestock continued. very expensive proposition. Furtilerilmore, given In the I 960s, some scientific studies were initi- its lack of accountability, the state apparatus in ated at 13haratpur, but these focused on ringing charge of conservation tends to squander much migrant birds to trace them to their summer of the resources made available to it on salaries breeding grounds in the north, and did not and perquisites, buildings, and vehicles. There is prov ide any information on the functioning of little doubt, then, that India, like mzaniy other the wetlanld ecosystemils. In particulai; there was countries, goes about the business of coniservaL- no scientific information pertaining to the impact tion in a highly wasteful and inetficicit mianinler. of' grazing on the ability of the locality to sup- porl breeding and wintering bird populations. It The Bharatpur 'Tragedy was nevertheless assumed by scientists as well as On top of this, the business of conservation is forest mianagers--Indian as well as from often conducted in simply a wrong-headed abroad-that eliminiation of grazing would be fashion. For conservation involves management highly desirable. Bharatpur used to support of complex, little understood natural ecosystems. Siberian cranes in the winter, and scientists of The science of ecology has simiiply no broad the U.S.-based Crane Foundation wrote to the generalizations that can be applied to make Prinie Minister, Mrs. Indira Gandhi, urging her detailed management decisions at the field level to banl gratzinig in the sanctuary. (Ludwig, Hilborn, and Walters 1993). Rather, As a result of these demands, the government such management is best based on lonlg-range, imposed a ban on grazing in November 1983. locality-specific observations ol the behavior of The local villagers, whose several hundred cattle particular ecosystems, adjusting human iinterveni- and buffilloes grazed in the sanctuary, were tions in light of the observed eflects. The state never consulted; no provisions were made for apparatus has little of such information avail- alternative fodder supply for these animals. As a able, and most coniservation prescr-iptions tiere- result, thc villagers protested against the ban, fore tend to be arbitrary, anid ofteni result il anid there was an altercation with the police in wholly undesired consequences. which several people were killed. The ban was 56 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT upheld, but it turned out that the ban was biodiversity has from the very beginning treated counter-productive from the perspective of the traditional folk practices of conservation with birds, especially the wintering waterfowl. In the contempt. One such practice is that of setting absence of grazing, a grass, Paspalum, grew aside parts of the landscape as sacred groves unchecked, choking out the wetland. Other birds from which little or no harvests would be per- also suffered, for instance, some songbirds that mitted. Notably enough, in 1801, Francis Bu- nested in the hollows formed by buffalo hoof chanan (1870), a surgeon of the British East marks. Money must now be spent to engage India Company asked to survey the newly bulldozers to remove the grass. But the bulldoz- conquered territory, wrote of a sacred grove as a ers are nowhere as efficient as the buffaloes, and "contrivance" by the local villagers to prevent Bharatpur continues to deteriorate as a bird the company from claiming its rightful property. habitat (Vijayan 1987). The Siberian cranes, for It is no wonder, then, that in 1 883 Dietrich instance, have now ceased to visit Bharatpur. Brandis (1897), the first Inspector General of While the precise reasons for this are not clear, Forests in India, remarked that the network of they could be linked to the overall habitat sacred groves that once covered much of the change. country was already in poor shape. Brandis was Bharatpur has several lessons. The assump- especially impressed by the excellent state of the tion that all human use is detrimental to conser- sacred groves of Coorg, a hill tract at the junc- vation was evidently invalid. The local villagers tion of Karnataka, Kerala, and Tamilnadu. need not have been forced to pay the opportunity Following independence and the growing de- cost of desisting from grazing in the sanctuary. mands of the plywood industry, the forest de- The additional expenses in protection and now partment opened up the sacred groves of Coorg use of bulldozers that this policy has entailed is to commercial fellings in the I 970s. It turns out a wasteful use of scarce resources that are de- that the relatively few remaining sacred groves ployed to support conservation. Finally, re- today harbor climax species that have largely spected scientists and managers gave completely disappeared elsewhere. Indeed, scientists froni inappropriate advice on the basis of some gen- the Botanical Survey of India discovered a few eral and, as it turns out, mistaken notions of years ago a new species of the first-ever record incompatibility of human use and conservation of a leguminous genus, KAunstleria, in a sacred objectives. grove in the thickly populated west coast plains While conservationists have thus succeeded in of Kerala (Mohanan and Nair 1981). But these lobbying forelimination of subsistence demands significant practices continue to be largely from protected areas, they have had less success ignored by and receive scant support from the in resisting the demands of the industrial sector. state machinery charged with conservation of Consider, for example, the case of the Dandeli biodiversity. wildlife sanctuary, once the most extensive of The traditional network of sacred groves India's protected areas, encompassing over remained relatively intact in may parts of north- 5,000 square kilometers of the hill tracts of eastern India until independence. These remote Western Ghats in the Uttara Kannada district of hill areas continued up until that time to harbor Karnataka. In areas once within the sanctuary, largely autonomous tribal groups of shifting exhaustive harvesting of bamboo was permitted cultivators outside the fold of the mainstream to supply the West Coast Paper Mill, at rates, society. Soon after independence, these people incidentally, of less than 0.1 percent of the came into contact with the larger economy, and market price. Also permitted were mining for were simultaneously converted to Christianity. manganese and construction of a series of reser- On conversion, they abandoned many traditions, voirs on the Kali river and its tfibutaries. The including that of protection of sacred groves, and area of the sanctuary is now reduced to 800 they liquidated many of them. Over the years, square kilometers. however, they noticed that this destruction of sacred groves, which earlier covered more than Sacred Groves and Safety Forests 10 percent of the land area, had many adverse The state machinery managing the forests and consequences. In particular, in their absence, fire now entrusted with the task of conserving began to spread to the villages. Many groups in 5. Designing Incentives to Conserve India's Biodiversity 57 the states of Mizoram and Manipur have there- relatively modest levels of compensation; and fore revived protection to some forest patches, (c) by assigning the role of custodians to those in especially those surrounding the villages. In the intimate contact with the biological communities new context, these protected areas are termed being managed, so that the custodians can per- "safety" rather than "sacred" forests. However, form their role more effectively; (d) by assigning the community-level mechanisms of ensuring the role of custodians to the economically under- the protection of these forests remain as before privileged, so that the custodians are willing to (Malhotra 1990). Notably enough, protection of perfonn for relatively modest levels of compen- these safety forests is often as stringent as prohi- sation; and (e) by establishing a firm link be- bition of harvests-even of rattan, which has a tween conservation performance and the com- ready market. It is notable that this revival of pensation paid to the custodians. protection has been possible because land The interests of equity would be served in largely remains under community control in ways compatible with promoting efficiency by northeastern India. preferentially involving the economically weaker sections of the society in economic Growing Problems activities deemed compatible with maintenance There are many signs that the current central- of high levels of biodiversity and as custodians ized, sectoral, economically wasteful, anti-devel- of biodiversity who may receive some compen- opment, anti-people, bureaucratic, regulatory sation for their role. approach to conservation is facing serious diffi- culties. On the one hand, it is beset with growing Empowering Local Communities opposition from local communities, as manifest We must then stand the current system of in tribals setting fire to large tracts of Kanha managing biodiversity on its head, and assign tiger reserve and Nagarhole National Park. On the role of custodians of biodiversity to local the other hand, it is losing out to pressures of communities of people who live close to the commercial interests, with large tracts being earth: to the tribals, peasants, herders, fishers, opened up to development, as in the case of and rural artisans. These are the people who Narayansagar National Park. Evidently, the time depend for their day-to-day survival on the has come to look for alternative paradigms biological resources of their immediate sur- (Singh 1995). roundings. They have for centuries obtained livelihoods without destroying the natural diver- An Alternative sity of their environment; its rapid erosion has largely followed large-scale commodification of Efriciency and Equity nature in the last two centuries. Their traditions, Any alternative approach must aim at greater such as sacred groves, have permitted survival of efficiency by keeping the costs of conservation species such as Kunstleria keralensis in coastal as low as possible. It should also serve the plains of Kerala with human population densities interests of equity by passing on the costs to exceeding 1,000 per square kilometer. They those who would benefit from the conservation have an intimate knowledge of natural resources, effort, and those who are wealthier and therefore albeit often in very limited localities. They are in a better position to bear such costs to promote amongst the poorest of Indian people and would long-term, socially desirable objectives. The be willing to perform for relatively low levels of costs of conservation may be reduced in five remuneration. ways: (a) by accepting that conservation may be Experience of recent years has shown that combined with certain economic pursuits and communities of such people, the ecosystem then promoting those pursuits that are most people of Dasmann (1988), are often willing and compatible with the conservation objectives; (b) even eager to take on the role of custodians of by assigning the role of custodians of local natural resources when permitted to do so. biodiversity to those involved in some of the The most notable instance of this is the experi- economic pursuits compatible with conservation, ment of joint forest management initiated some so that the custodians are willing to perform for twenty years ago in the predominantly tribal 58 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Midnapore district of West Bengal. The natural basis. Empowering local communities to control vegetation of this tract is dominated by sal and benefit from the local natural resource base (Shorea robusta), an excellent coppicer. Large is thus a powerful, highly efficient route to tracts of sal forest of Midnapore had been re- conservation of biological diversity. duced to poor scrub growth by the mid 1970s, although the tree root stock remained intact. Focusing on Biodiversity Some imaginative forest officials therefore . ... Sofferedmte locginaiv comuest o ials sharefne There is, however, a distinct limitation to the offered the local communities a share in the range of diversity that the villagers would thus timber if they accepted the responsibility of be motivated to protect on the grounds of utility. protecting a forest patch and if they ensured The larger interest in protection of the entire good coppice growth. This approach was suc- cessful because the local tribal communities spectrum of biodiversity would obviously en- cessul ecaue te loal riba comuniles compass many additional elements of no imme- were relatively homogeneous, because the State diate uity to dthoal commnts. Thus, dmea Government of West Benalca troduced trees left standing for years are an important system ofdcntied governane th helped habitat for a whole range of wood-eating insects, local communities get organized to deal effec- wood-rotting fungi, and hole-nesting birds that tively with the bureaucracy, and because protec- may play no role in village economy. Villagers tion led to rapid tangible results in the form of w ld n be inclndt qckly Ves s would then be 'nclined to quickly harvest such coppice growth of sal (Deb and Malhotra 1993). dead trees and use them as timber or fuelwood The success of their West Bengal experience If we wish to motivate the villagers to conserve persuaded the State Government of West Bengal such habitats, we need to offer them additional to formally recognize the role and rights of incentives. Indeed, it is clear that if the rationale village-level forest committees. This in turn for conservation of biological diversity includes prompted the Government of India to issue in retaining options for future economic use, or June 1990 an order urging other state govern- ethical or aesthetic grounds, then simply assur- ments to formulate rules encouraging the opera- ilagers for immediate use would tionof vllae-leel sateforet deartentsin ng access to villgr o meit s ol on of village-level state forest departments in lead to socially suboptimal levels of biodiversity programs of joint forest management. The conservation. The larger Indian (or global) response to this initiative has been remarkable, society must then mobilize additional resources and the last few years have witnessed the sponta- Io . - . ~~~~~~~~to raise the level of conservation efforts towards neous formation of several thousand village socially desirable levels. Today such additional forest committees spanning the length and resources are indeed being made available and breadth of the country (Poffenberger and used in a highly wasteful manner by the state McGean, in press). bureaucracy. It is our contention that they should Villagers participating in such joint manage- instead flow to local communities, which would ment programs are motivated by their interest in use them in a far more effective fashion. more assured access to enhanced levels of plant biomass, for fulfilling their subsistence needs of Building Institutions food, fuel, fodder, drugs, leaf mulch, etc., as well as higher levels of income through market- We then visualize the additional resources ing of nontimber forest produce such as sal leaf mobilized by the state flowing to the local plates and eventually mature timber. They utilize communities to encourage them to adopt re- a considerable variety of species for subsistence, source use practices that would promote as well as market a great diversity of nontimber biodiversity. This proposal is clearly analogous forest produce. The village forest committees to the subsidies farmers in some countries re- therefore do promote much higher levels of ceive to adopt land use practices in the broader diversity than the state forest departments, which interests of soil conservation or payments made tend to focus on a few commercial species, such by the Nature Conservancy in the United States as teak or eucalyptus. The village forest commit- to landowners to adopt land use practices com- tees have been working without any financial patible with conservation of biodiversity. Our inputs on the part of the state, organizing them- focus is on communities, rather than on private selves and managing the resource on a voluntary parties, for the proposal concerns public lands 5. Designing Incentives to Conserve India's Biodiversity 59 and waters. To operationalize such a proposal of a community-based resource management would require answers to a whole series of system. It should be authorized to manage all the questions, such as: public lands and waters within a defined terri- tory, and to coordinate actions of private land * How are local communities to be bounded? owners within the bounds of such a territory. How many households should they involve? This management would of course operate How homogeneous must such communities within a broader, socially acceptable framework be? which may specify that no public lands or wetlands should be brought under cultivation, or * How are parcels of land and water to be that no trees belonging to the genus Ficus should assigned to particular local communities to be felled. The local communities should be manage in the interests of biodiversity? organized into larger and larger groups within a nested hierarchy, with the larger groups serving * How should the national or global society go to coordinate the activities of component neigh- about assigning conservation value to differ- boring groups and to resolve disputes. The larger ent elements of biodiversity'? How should this resource management groups should form information be shared with local communi- appropriate links with political institutions at ties? corresponding levels: panchayat or village- cluster level corresponding to a population of * How can local communities be organized on around ten thousand, taluk or county level different spatial scales to enable them to corresponding to a population of around a hun- manage local natural resources effectively in dred thousand, and district level corresponding the interests of biodiversity? to a population of around a million. A number of difficulties would of course arise * How are the levels of financial or other incen- pertaining to the complexities of social organiza- tives to be awarded to local communities to tion and to the overlap of areas of resource use conserve biodiversity to be arrived at? by neighboring communities. Special cases of overlap would involve nomadic herder commu- * How can the conservation performance of nities. It would be best to create institutions for local communities be firmly linked to the finding locality-specific solutions to such diffi- level of rewards flowing to them? culties. We have elsewhere provided much more detailed suggestions on such an institutional * How can the funds used to promote framework (Rao and Gadgil 1995). biodiversity be generated? Valuing Biodiversity Evid,ntly we need to design and build a series The local natural resource management of alternative institutions to manage the coun- groups would each have their own system of try's biodiversity, while dismantling part of the valuing biodiversity, based on utility, culture, current wasteful, inequitable machinery. We and religion. The values may change with time, suggest below a broad approach to such a task. as when allopathic drugs supplement the use of It is important that care be taken to ensure suffi- herbal remedies. These local systems would be cient flexibility to permit the emergence of inadequate guides to organizing a national, or a institutions appropriate to the local conditions. global, eftort at conservation of biodiversity. It is therefore necessary to set priorities at a larger level and to ensure that these provide the frame- The basic unit of human society is a group of work for the local conservation efforts. Such people in day-to-day, face-to-face contact, priorities may be set at many different scales: at somewhere between 20 to 200 households living the !evel of specific genes, of individuals of in a hamlet or a small village. Each unit would specific species, or of specific types of ecologi- be relatively homogeneous, economically and cal habitats. In general, elements representing culturally, and likely to act in a cohesive fashion. more isolated evolutionary lineages, such as Such a group should constitute the basic element those with restricted geographical ranges, under 60 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT greater threats of extermination, or of greater global level and on the supply of conservation economic utility, would tend to be valued more. effort offered at the local levels. However, we Establishment of such priorities is a technical believe that such a system would deliver conser- exercise and might have to be organized by a vation effort in a far more cost effective fashion technical body such as the Subsidiary Body on than the current system of investing in regula- Scientific, Technical, and Technological Advice tory efforts by a bureaucracy which is not ac- to the Conference of Parties of the International countable for what it ultimately delivers. Convention on Biological Diversity. It is, how- ever, important that the relevant information Ensuring Accountability from such an exercise of setting conservation Ensuring accountability in the proposed priorities should ultimately reach local commu- alternative system would depend on periodic nities. Educational institutions at various levels, monitoring with adequate independent checks of ranging from universities to village pfimary the biological communities within the territories schools, could play a vital role in this process. of the various local communities. The system for Indeed, information on the conservation value of organizing such monitoring would, of course, different species of living organisms or different have to be designed at the national or global types of habitats could constitute an important level, and then adapted to local conditions. Its component of the environmental education implementation in the field would best involve curriculum at all levels. local lower-level educational institutions guided Rewarding Conservation Efforts by appropriate higher-level institutions. Indeed, such a program could form a valuable compo- Armed with information on the conservation nent of the teaching of ecology at all levels. It values of different elements of local ecology, would, of course, be necessary to guard against and with authority to manage public lands and local schools overestimating local levels of waters in their immediate neighborhoods, local biodiversity in order to attract higher levels of communities could design management strate- rewards to their own territory. This could be gies that would preserve and even enhance the ensured by organizing exchanges of students and total conservation value of biological communi- teachers across districts or states to serve as ties within their territories. Indeed, we believe independent auditors of the monitoring process. that local communities in continual touch with Such visits, too, would have considerable educa- the local biological communities would be best tional value. equipped to do so. They could then continually adjust their resource use strategies in the interest Generating Finances of biodiversity, provided that they are ade- India as a nation state is already investing quately rewarded. The perception of local people substantial amounts of state revenue in conserva- as to the adequacy of such external rewards tion efforts. Its population is further contributing would to a great extent depend on their ability to by eptin cts oflconsertiontrit be directly benefit from biodiversity. An important to foregoing om economically more compnen ofrewrdsfor onsrvaioneffrts through foregoing sonie economnically more component of rewards for conservation efforts attractive development options, or tolerating could then be building the capacity of local crop damage by elephants. What we propose is communities to add value to local biodiversity. that these financial inputs be organized as a This may, for instance, involve preparing alco- national biodiversity conservation fund, perhaps hol extracts of ingredients used in the pharma- with contributions from international SO.rces ceutical industry, or organizing ecotourism. . Over and above that, the local communities may funds the be rationally allted The need~ tob.opnae frfrgigsm funds could then be rationally allocated to the needo toec for foregoingrsome various local communities spread across the opportunities for economically more rewardmig nation in relation to the levels of conservation usEsact ofat land l ofrewaterd theirocal erior- value of biological communities in their respec- Exactly what level of rewards the local commu- tive territories. We have suggested elsewhere nities receive and what level of conservation fle eal fhwti ytmmyb ra effort they put in would depend on the demand nizedetaofand Gdis 1995). for conservation generated at the national or 5. Designing Incentives to Conserve India's Biodiversity 61 Conclusions and Policy Implications and perks of bureaucrats and technocrats, includ- ing their jeeps and guns and buildings to house Biodiversity elements of value are by no them, should be critically assessed. It would means confined to extensive tracts of pristine undoubtedly be found to be exceedingly low. ecosystems; they occur even in the midst of These funds should then be redeployed over a extensively humanized landscapes, as with wild period of time to provide positive incentives to relatives of paddy and climax rain forest species local communities to maintain biodiversity in sacred groves on the densely populated elements of high value to conservation. coastal plains of Kerala. Nor has conservation of Technical inputs from the national or global biodiversity been the exclusive concern of a level would be required to decide on a common specialist bureaucracy, as is seen with the ban- system of assigning conservation value to spe- yan and peepal trees belonging to the keystone cific elements of biodiversity and to organize a resource genus Ficus dotting the entire country- reliable, transparent system of monitoring side of India. In fact, the bureaucratic attempts at biodiversity levels within the territories assigned conservation of biodiversity have many glaring to various local communities. Educational deficiencies and are extremely wasteful of institutions at all levels, from village primary resources. Conservation of biodiversity must schools to universities, could play an important therefore be made a people's movement, as role in this effort. Indeed, these exercises could forest protection has been made with the joint become very valuable components of environ- forest management program. Times are particu- mental education curricula. larly opportune for such an initiative, since the In the long run, only a very lean bureaucratic 73rd amendment to the Indian constitution has apparatus should be retained to play a coordinat- set the stage for a decentralized system of gover- ing, facilitative role and to ensure that local nance, including management of natural re- communities can effectively enforce a desired sources, throughout the country. system of protection and management of the The focus of biodiversity conservation efforts natural resource base. must therefore shift from a small number of Such a system would create a very efficient protected areas, guarded with the force of arms market for conservation performance so that by a state apparatus alienated from local people, funds earmarked to promote biodiversity would to attempts to maintain substantial levels of flow to localities and local communities en- biodiversity throughout the countryside by dowed with capabilities of conserving high providing positive incentives to local communi- levels of biodiversity. ties. This system would also channel rewards for Local communities should be conferred much conservation action to relatively poorer commu- greater control over public lands and waters in nities living close to the earth, thereby serving their own localities by extending systems such as ends of social justice, and creating in the long joint forest management and farmers' guilds to range a situation more favorable to the mainte- manage irrigation waters. nance of biodiversity on the earth. Local communities should be encouraged to manage both public and private lands and waters Bibliography in their own localities in a biodiversity-friendly fashion by enhancing their capacity to add value Brandis, D. 1897. Indian Forestry. Woking: to biodiversity, be it through supplying pro- Oriental Institute. cessed material for pharmaceutical industry or Buchanan, F. D. 1870. A Journey from Madras through ecotourism. Through the Countries of Mysore, Canara Local communities should be further encour- and Malabar. Vol. 2. Madras: Higgin- aged to maintain high levels of biodiversity bothams. through financial rewards, liking payments to Dasmann, R. F. 1988. "Towards a Biosphere conservation value of elements making up Consciousness." In D. Worster, ed., The Ends biological communities within their territories. of the Earth. Cambridge, United Kingdom: The efficacy of funds being deployed towards Cambridge University Press, pp. 277-288. conservation efforts today in the form of salaries 62 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Deb, D. and K. C. Malhotra. 1993. "People's stracts of the Plenary, Symposium Papers and Participation: The Evolution of Joint Forest Posters Presented at the V International Con- Management in Southwest Bengal." In S. B. gress of Ecology, Yokohama, Japan. 439. Roy and A. K. Ghosh, eds., People of India: Mohanan, C. N., and N. C. Nair. 1981. Biocultural Dimensions. New Delhi: Inter Kunstleria Prain-A New Genus Record of India Publications, pp. 329-42. India and a New Species in the Genus. Pro- Gadgil, M. 1991. "Conserving India's ceedings of the Indian Academy of Science, Biodiversity: The Societal Context." Evolu- B-90:207-10. tionary Trends in Plants 5:3-8. Nambiar, P. 1993. "A Change for the Worse." Gadgil, M. and R. Guha. In press. Ecology and Down to Earth, November 15:45. Equity: The Use and Abuse of Nature in Poffenberger, M., and B. McGean. In press. Contemporary India. London: Routledge. Village Voices-Forest Choices: Joint Forest Gadgil, M., and P. R. S. Rao. 1994. "A System Management in India. New Delhi: Oxford of Positive Incentives to Conserve University Press. Biodiversity." Economic and Political Rao, P. R. S., and M. Gadgil. 1995. "People's Weekly. August 6:2103-2107. Nature, Health and Education Bill." Hindu Ludwig, D., R. Hilbom, and C. Walters. 1993. Survey of the Environment, pp. 217-223. "Uncertainty, Resource Exploitation and Singh, T., ed. 1995. "Parks and People: A Sym- Conservation: Lessons from History." Science posium on Resource Use Around Our Pro- 260:17-36. tected Areas." Seminar 426:72. New Delhi. Malhotra, K. C. 1990. "Village Supply and Vijayan, V. S. 1987. Keoldeo National Park. Safety Forest in Mizoram: A Traditional Bombay: Bombay Natural History Society. Practice of Protecting Ecosystem." in Ab- 6 Will New Property Right Regimes in Central and Eastern Europe Serve the Purposes of Nature Conservation? Tomasz Zylicz Abstract IN THIS CHAPTER, an example of the conflict between conservationists and a rural municipality in Northeastern Poland, is analyzed in order to illustrate how changing property right regimes after the collapse of communist rule in 1989 have influenced the social context of nature protec- tion. The municipality resists establishing the Mazurian National Park, whose presence would imply certain eco- nomic restrictions. The pattern emerging from this case study is a complex one. This research was sponsored by the Beijer Institute, The Royal Swedish Academy of Sciences, with support from the World Environment and Resources Program of the John D. and Catherine T. MacArthur Foundation and the World Bank. The research was conducted as part of the program Property Rights and the Performance of Natural Resource Systems. The case study in this chapter received funding from the Pew Scholar Program in Conservation and the Environment. 63 64 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT On the one hand, any development constraints regions and their almost intact natural capital are perceived as more severe now than before represent an asset which is becoming increas- when there was little private entrepreneurship ingly scarce in Europe. However, because of the around. On the other hand, however, the en- cliche of disruption, not only average citizens forceability of law-including environmental but also those environmentally concemed citi- regulations-has improved as a result of in- zens are not fully aware of the value of their creased transparency of public decisionmaking. natural heritage (Zylicz 1994). Thus, the fate of nature protection crucially In Poland, experts estimate that about 8.5 depends on the ability of conservationists to percent of the area of the country remains rela- demonstrate economic benefits from investing in tively unscathed by development. Commercial natural capital rather than letting it be degraded. forests and farms operating within sustainable A project is under way to identify local sustain- and ecologically acceptable principles include able development options and to show that land about 19 percent of the Polish territory. Hence, use restrictions, when combined vvith a larger over a fourth of Poland represents an asset that package of social and economic improvements, many areas of Europe no longer have. Poland's can turn out to be an asset rather than a liability. biological diversity is high, particularly with The project is used by conservationists to seek respect to forest and bog communities. Accord- support of the local population for the national ing to a recent study (Andrzejewski and others park idea. 1992), in the last 400 years, the Polish vertebrate fauna has lost fifteen species (2.5 percent), including three mammals, eleven birds and one fish species. At the same time, the Polish flora Nature Protection in Poland has lost thirty-one species of vascular plants. Sad as they are, these figures turn out to be much less When the communist political system in alarming than in other, more developed, Euro- Europe collapsed in 1989, the gravity of the pean countries in the same biogeographical environmental destruction in this part of the zone. For instance, a sister study for Germany world could finally be ascertained with some found that-apparently due to the longer and degree of scientific veracity. Most of the earlier more intensive industrialization period-the assessments were largely inaccurate because of biodiversity loss has been much more acute. In inadequate information supply resulting from the the last 150 years, 28 species of vertebrates (6 communist censorship or lack of reliable moni- percent) have become extinct, comprising 7 toring. One of the reasons for such policies of mammals (8 percent), 19 birds (8 percent), and the old regimes was to portray their countries as 2 fishes, along with 58 vascular plant species. environmental trouble-free. Ironically, this The ecological value of Poland's natural approach proved totally counterproductive and capital has been internationally recognized. Most triggered even more curiosity from western of its twenty national parks are on the IUCN list, journalists. It also stimulated a great deal of one- as they meet all the criteria for this highest sided reporting and stigmatized the region with degree of protection. Three of them have been an image of the most devastated piece of land. included by UNESCO in a network of biosphere This overall image has determined thinking of reserves representing typical, well-preserved thePolishnatural envrometothdoesexamples of the world's ecosystems. One of the Polish natural environment both domesti- te-h ilweaNtoa ak(hs them-the Bialowieza National Park (whose cally and in the West. As a result, the Poles tend natural extension in Belarus has enjoyed the to view their environmental predicament in status of a national park, too)-has been de- catastrophic terms, but they largely fail to have t, clared an object of exceptional Importance to the a comprehensive and consistent picture of what World Heritage, as the last remaining area of the went wrong, which are the greatest risks, and characteristic Central European lowland prime- how to redress the situation. At the same time, val forest. Also, a number of smaller objects, they overlook the fact that because the commu- "nature reserves," were found to be of interna- nist industrialization concentrated in areas of tional importance, some of them being protected traditionally high intensity of production, vast under the Ramsar Convention on wetland eco- regions remained largely underdeveloped. These systems. 6. Will New Property Right Regimes Serve the Purposes of Nature Conservation? 65 Table 6-1 presents the development of na- form, and its successful resolution can thus be tional parks in Poland in recent years. Between instructive for other areas in Poland. 1988 and 1993 their number grew from fourteen Quite paradoxically, the natural capital which to nineteen. The total area almost doubled, survived several decades of communist misman- which was achieved both by adding new parks agement is now under the serious threat of a new and augmenting some of the old ones. sort of development. Even though the logic of Apart from the network of national parks, market economies is likely to lead to a more covering the area of 244,000 hectares (0.8 efficient use of resources, at the same time, it percent of the country area), Poland has an even exposes these resources to new pressures result- larger system of "landscape parks." In 1993 ing from their opening up to large scale interna- there were ninety-one such parks, comprising as tional tourism and international real estate mar- much as 1,726,809 hectares (5.5 percent of the kets. The ecologically valuable ar- country area). The difference between a national eas-especially those in Western and Northern and a landscape park is in the scope of protec- Poland-are reportedly experiencing tourism tion as well as in the legal authority. While the pressure which increased rapidly after the col- former is established by a decree of the Council lapse of the Berlin Wall. of Ministers (the central govemment), the latter is enacted by a decision of a regional administra- Conservation and Property tor (there are forty-nine such administrative Rightlssues regions in Poland). The former is financed from the central budget directly. The financial status At first glance, nature conservation seems to of the latter is more complex. Even though most have been easier under the central planning subsidies that landscape parks receive originate regime. Even though most of the land was from the central budget, regional administrators always in private hands in Poland (unlike in are supposed to contribute to their accounts too. other Central and Eastern European countries), However, the most crucial difference between the nondemocratic governments that ruled in the two types of parks is that only the national 1945-1989 had little respect for owners' rights. ones have the authority to issue regulations, Establishing a nature reserve or a national park within well-defined legal limits, which otherwise was thus just an administrative decision. As a fall within the competence of regional adminis- result, many patches of private property within trators. In particular, directors of national parks national park boundaries were left. State policy have the night to license economic activities towards buying these pieces of land was incon- carried out within the park boundaries and to sistent, and quite often real estate owners could influence land-usc patterns in their parks' buffer neither sell nor develop their lots. This contrib- zones. uted to tensions between park managers and the Most examples of the country's unique and local populations. unspoiled ecosystems have already been given Table 6-2 presents the ownership structure of the status of a national park (Nowicki 1993). the Polish national parks in 1992. As seen from There are only a few areas-usually protected as the table, state property accounts for over 93 landscape parks-which are considered candi- percent of the total area, mainly because of the dates for becoming national parks. The high share of the forest land in the parks. Most Mazurian Landscape Park is the site of a major of the nonstate enclaves are farms whose opera- conflict between conservationists, who urge tors still hold ownership title to the land. The turning it into a national park, and a part of the most typical conflicts include crop damages local population, who fear that the new status done by game animals, for which the parks serve will make them worse off. The opposition comes as safe havens, constraints on the use of chemi- from Piecki (pronounced Pee-etzkee), one of the cals, and unclear prospects for the future. What three rural municipalities where the Mazurian could have been hushed up under the communist Landscape Park is located. The conflict reveals regime emerged as an open conflict after 1989. in a transparent form what can be found in the Thus national park directors started to face existing national parks in a more or less latent serious problems despite the fact that the agricul- 66 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT tural land accounts for a minor fraction of the least one member who eams income in the total area. United States (mainly in the construction busi- Another, perhaps an even more serious, ness), either temporarily or permanently. There conflict exists where the agricultural enclaves is strong pressure to invest money in creating are left as a communal property. Here park sport and tourist infrastructure modeled after the directors are challenged not by individual farm- Alps ski resorts. What is overlooked in these ers but rather by strong collectives with a long plans is the scale of the Tatra mountains. The tradition and a sense of self-identity. This type of entire range (less than 30 kilometers long) could conflict has been best known from the Tatra be contained in one of the many Alpian valleys, Mountains National Park located on the border some of which were developed into large recre- with Slovakia (where the other part of the range, ation factories and some of which were pre- also protected as a national park, is situated). served. Building roads, luxury hotels, and a The park was established in the first, most system of cable cars-as envisaged by local brutal, decade of communist rule in Poland. This leaders-would give investors high short-term fact has often been recalled in order to portray revenues but only at the cost of an irreversible the conflict merely as the heritage of an insane degradation of the Tatra ecosystem. In the long political regime. The conflict, however, cannot run, such a scenario would seriously reduce the simply be solved by compensating the original attractiveness of the region for visitors and thus owners. The true struggle is not for a reimburse- undermine the local economy. ment for victims of unfair administrative deci- It is a pity that the conflict affects a region sions. What is at stake here is who will control where both natural and cultural capital are so the local assets which can generate decent reve- rich and outstanding. Besides, they seem to have nues in the long run if well managed, and enor- successfully coevolved until the middle of the mous yet unsustainable short-term profits. twentieth Century (with one exception of an The predicament resembles much of the overgrazing incident in the nineteenth Century). tragedy of the commons. In fact, the community This coevolution and creative coexistence is went through this in the nineteenth Century. One considered to be a key element of a sound man- of the fertile valleys (Dolina Jaworzynki) was agement of landscape and biodiversity resources overgrazed. Once green slopes were tumed into (Berkes and Folke 1992, Nelson and Serafin barren rock. The community does not want to 1992). It does not even help much that the acknowledge its contribution to the erosion present director of the Tatra National Park, who process and insists on increasing the number of holds a Ph.D. in ecology, was bom in one of the sheep allowed in the national park or best-known and best respected shepherd families "recommunalization" of some of the valleys. For in the region. The director faces a real danger of the time being, the limit set at 1,000 sheep is physical attack on himself and his estate. Appar- seen by the park as ecologically safe and pre- ently, the stakes are so high that they will not let serving the historical landscape. The culture of the parties calm down and cooperate. the region, which is one of the most popular in The lesson learned from the Tatra National Poland, has been closely linked to pastoralism Park experience is fourfold. First, it proves that and to the gorgeous diversified landscape which the establishment of some parks by the old depends on the land use. (Without sheep, all the political regime stigmatized them permanently foothills, now a major tloristic attraction, would with the image of an extemal intrusion which be covered by forest.) makes rational cooperation difficult. Second, no The grazing conflict should not be overem- realistic compensation scheme for the previous phasized in the Poland of the 1990s any more. owners of assets protected by a national park is After all, agriculture provides an ever-decreasing likely to solve some of the conflicts. Third, share of the local incomes. Of great concem now encroaching on the park land gradually becomes is the ecological integrity of the Tatra range of lesser importance (even though local poachers commons. The region is a top tourist attraction. can be a serious problem in some places). The The local population has been known for their main conflict is over the pattern of development entrepreneurial skills, and the supply of capital in the park neighborhood with or without taking is not a constraint; almost every family has at advantage of the continued presence of its natu- 6. Will New Property Right Regimes Serve the Purposes of Nature Conservation? 67 ral assets. Fourth, comanagement (McCay heavily centralized, and development was seen 1993)-understood as a regime entailing a as a matter of bringing industry into the region. mixture of local governance with an external Many ecologically valuable regions in Poland authority based on mutual trust and recognition happen to be located in economically depressed of each other's role in preserving resources-is areas without clear perspectives for attracting the only viable form of control. external investors. It is here where a skilled A practical lesson learned from this experi- national park manager can win local support for ence is that carrying out a successful conserva- conservation measures when they bring jobs, tion project calls for cooperation of conserva- visitors, and capital. tionists and the local population from the outset. Otherwise, the project may be doomed to a The Case of Piecki lasting conflict, and its conservation objectives will be difficult to achieve. When the initiative of establishing the McKean (1993) observes that "public owner- Mazurian National Park in lieu of the existing ship may be the most preferred form when a Mazurian Landscape Park was first officially resource system is so threatened, so abused that discussed in 1993, it met with various reactions. (or so close to that point) that most uses and Two out of three municipalities involved de- harvesting must be prohibited for the time cided to support it. The representatives of the being." Indeed, in Poland in some instances the third one, Piecki, announced that they would not predicament of the natural capital assets calls for let their municipality be included in a national public ownership. At the same time, however, park. Several informal consultations were held, the local pressure on the resource system calls yet without any effect on the municipality's for "the cooperation of local people so that they position. Facing such strong local opposition, become coenforcers with the government, rather the Ministry of Environment asked the Warsaw than perpetual encroachers" (McKean). Thus, Ecological Economics Center for assistance in comanagement emerges as a preferred form of discussing with the local leaders the costs and control once again. benefits that would result from having the na- Nature protection under the old nondemo- tional park. The following summary is based on cratic regime was easier only formally. Actually, the assessment (Kaczanowski and others 1994) the neglected property right issues were a source prepared in response to that request. of tensions in the past, as they are now. The The assessment starts with general character- Tatra region conflict shows how bad things can istics of Piecki and with the municipality's list of become, even though in most cases they do not development constraints and other adverse deteriorate. A more typical conflict entails a bit effects expected from the national park's pres- of poaching, illegal construction of small scale ence. objects in the park's buffer zone, controversies about carrying out agricultural activities on General Characteristics private land in the park, and the general lack of The municipality of Piecki is located in the interest in taking advantage of the protected northeastem part of the country, referred to as natural capital in the neighborhood. "The Green Lungs of Poland" because of the The respect for private and communal prop- abundance of forests and diversified, near-pris- erty rights reestablished under the post-1989 tine ecosystems. It belongs to the Great regime makes the position of national park Mazurian Lakes district, and it is adjacent to authorities more difficult. From now on, they ~ niardwy, Poland's largest lake. The area of must prove the legality of all decisions taken. At Piecki is 31,500 hectares, and its population (as the same time, however, they have an opportu- of the end of 1993) is 7,766, which gives aver- nity to become local commiunity leaders by age density of twenty-five persons per square demonstrating development options linked to the kilometer, that is, one fifth of the country aver- preservation of natural capital. There was no age and one half of the density recorded in the demand earlier for such a role to be played by district. The sparse population and the lack of conservationists, since little entrepreneurship large enterprises are reflected in the breakdown was allowed, economic decisionmaking was of the municipal budget (Table 6-3). 68 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT In 1993, the municipal budget revenues in forest plays an important role in controlling Piecki were PLZ 2,060,000 per person, whereas erosion, the water table, climate, local habitats, the average number for Poland was PLZ etc. In fact, a vast majority of protected forests 2,513,000 (the approximate exchange rate in are outside national parks. mid-1993 was PLZ 17,500 per U.S. dollar). Thus, No commercial hunting is allowed within the municipal revenues in Piecki can be esti- national park boundaries. To the extent that mated at $120 per person, which is 82 percent of some species may breed excessively while the the national average and corresponds to 6 per- local ecological system is not in a natural equi- cent of gross domestic product per capita (esti- librium (e.g., for historical reasons), hunting can mated at somewhat less than $2,000). be permitted, but only under direct supervision The composition of Piecki's budgetary reve- of park authorities. No foreign visitors are nues reflects the importance of the forestry as allowed to hunt. Even though the latter issue was well as the relative importance of personal never raised by park opponents openly, conser- incomes vis a vis corporate profits. Despite low vationists believe that the loss of incomes linked revenues per capita, Piecki was considered more to the lack of a foreign hunting business is self-sufficient than average, as reflected in the nevertheless the main cause of the opposition. low "general subsidy" which serves a However, only few families were involved in redistributive function and which is based on a foreign hunting activities. Typical tips for assist- complicated formula encompassing municipali- ing in a successful shooting of a deer range from ties' socioeconomic characteristics. DM 100 to 200 (in Deutshe Marks). Given the Agriculture provides more jobs than any other number of hunts, one can estimate the local sector in Piecki. There is a growing number of income loss at no more than DM 10,000 per year. firms in the service sector, but their exact contri- Under central planning, with an average monthly bution to the local employment is not certain salary worth $20 at the black market exchange because of a reporting system that is far from rate, a DM 100 tip was a fortune. Now that an perfect. Table 6-4 gives employment figures for average salary is worth $200, the same tip is a sectors covered by regular reporting. The num- pleasing addition to households' incomes, but its ber of persons employed in agriculture, which is value has decreased tenfold. Certainly it does not dominated by small family farms, is probably contribute to the municipal budget at all, as it underestimated. In addition, of the 303 regis- never enters official records. tered service firms, 78 operate in commerce, 45 Other arguments against the park include in the tourism business, 34 in forestry, 33 run expected denial of building permits, constraints small restaurants, 30 operate in transport, and 28 on selling real estate, reduced attractiveness of are in the construction business. Most of them the area for tourists, and no perspectives for the are one-person enterprises, and their contribution development of industry and agriculture. Under to the local employment yields to that of indus- closer scrutiny, it can be demonstrated that all try. these concerns are inappropriately linked to the national park's presence. Arguments Against the Park Actually, regulations which affect building The primary local argument against the permit procedure and real estate markets are Mazurian National Park is the loss of the for- totally independent from the park's existence. A estry tax, which accounts for 8.3 percent of house or a summer cottage can be built if the lot budgetary revenues. The forestry tax, which is a was designated in the municipal spatial develop- flat rate payment based on the quality of the ment plan for this purpose. Also, real estate can forest land rather than actual yields, was con- be bought and sold subject to regulations which ceived as an instrument to stimulate an optimal have nothing to do with the national park. Per- use of the land. The tax, which is indexed by the haps a tacit assumption is often made that illegal price of timber, is collected by municipalities. construction or real estate transactions which The tax is waived if the forest is classified as were tolerated or "overlooked" in the past will protected. National park forests certainly belong be prosecuted when the national park officers are in this category. However, the Minister of Envi- around, and the region is an object of general ronment can classify an area as protected if the interest. Fortunately for conservationists, it can 6. Will New Property Right Regimes Serve the Purposes of Nature Conservation? 69 be demonstrated that enforcement improved loss of 6 percent. Tips left by foreign hunters are dramatically after 1989, that is, not as a result of another quantifiable loss. They do not exceed the national park's presence, but rather because 10,000 DM (approximately $7,000). Since this is of the change of the political system. For in- a loss of a nonreported income, it does not affect stance, it was almost impossible in the past to the municipal budget. enforce regulations against illegal construction. Since 1 989 more than a dozen buildings erected Benefits from the Park's Existence without a valid building permit have been torn It proved to be fairly easy to demonstrate down in Piecki. immediate local benefits from the park's exis- Not all of the municipality's area is planned tence in the form of additional employment and for inclusion in the Mazurian National contracts. Most of the planned 160 employees of Park-only 15,300 hectares is, which is slightly the Mazurian National Park will be recruited less than half. Only 1,112 inhabitants (one- either from the existing landscape park adminis- seventh of the total number) would live within tration or from the state forestry service; none of the park boundaries, and only 678 hectares of the present employees in these organizations will agricultural land (out of 9,500 hectares) would lose a job as a result of establishing the national be included. Thus, licensing economic activities park. On the contrary, the park will offer seven- by the park director will affect only a fraction of teen new positions. This implies additional the local economy. In particular, all the existing annual incomes on the order of PLZ 1,000 mil- industries operating in the municipality have lion (in 1993 prices) or $57,000, the sum exactly valid pollution permits, and their presence does equivalent (by a pure coincidence) to financial not interfere with the national park objectives. losses identified in the section above entitled Moreover, the local spatial development plan, Arguments Against the Park. The park will also which is the main constraint for bringing new employ additional part-time workers, thus creat- industries into the region, designates a number ing incomes on the order of PLZ 400 million, or of sites for potential (small scale) industrial $23,000. Investment expenditures of the plants outside the park. Establishing businesses Mazurian National Park on tourist infrastructure on these sites will not be hindered by the park's are planned at the level of PLZ 800 million, or existence. $46,000, for the first vear. To some extent, agriculture will be affected $46,00,lonr irst year. by th parks prsence Currntlythe ue ofIn the longer run, indirect benefits from the by the park's presence. Currently the use of park's presence are expected to play an increas- chemical inputs is minimal and close to the ingly important role. They include three broad country average of 60 kilograms NPK (nitrogen categories: (1) benefits from increased demand l phosphorus + potassium) per hectare in mf- for high-quality tourist services; (2) benefits eral fertilizers, and 0.4 kilograms per hectare for from a potential specialization in supplying pesticide use. It is several times lower than in "ecological farming" products; and (3) benefits Western Europe and does not interfere with park from attracting attention to the existence value of objectives. Problems may arise if in the future assets protected by the park. farmers would wish to apply Western input The region is attractive for various types of levels. However, the potential income loss is tourists. It provides excellent opportunities for difficult to assess, since alternative low input backpacking, sailing, kayaking, rafting, swim- options may prove attractive as envisaged in the ming, and bird-watching, among other activities. study of benefits from the national park's pres- Despite local concerns, the establishment of the ence. national park will not reduce the attractiveness To sum up, the only demonstrable loss related of the region. The interest in the region will to the establishment of the Mazurian National almost surely increase. According to a recent Park is a decreased municipal revenue from the assessment of the "carrying capacity" of Piecki, forestry tax. Since not all the forest would be the number of tourists can increase without included in the park, the loss does not affect the adversely affecting the local ecosystems. To entire tax, that is, the sum of PLZ 1,300 million, have this increased demand translated into new but only PLZ 900 million (approximately jobs and additional incomes requires only the $50,000). The municipal budget will suffer a ability to provide tourists with the services they 70 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT look for. In a few years, further growth of the at concrete mechanisms or funding sources that number of visitors may become constrained by are available for national parks. what can be accommodated without degrading In Poland, there are several institutions whose the natural capital or losing it due to congestion. charter activities include providing support for By licensing services offered, the nationlal park national parks. The most important one is the will keep their supply within sustainable limits. National Fund for Environmental Protection, This does not necessarily imply lower incomiies which finances almost 25 percent of the coun- (even in the short run). By controlling supply try's environmental investment expenditures. and promoting high quality services rather than The Fund has formal project selection proce- those aimed at consumers wlho expect less and dures which favor investors located in national pay less, it is possible to earn more than under parks or thleir buffering zones. Thus, establishing an open access regime (Lanza and Pigliaru a park increases the likelihood of receiving 1993). The latter assertion, however, depends on support for an environment-related investment. demand elasticities and should be empirically Upgrading and expanding tourist infrastructure validated in each particular case. in Piecki will require investment in sewage Farmers in Piecki-especially those operating treatment plants and environmentally friendly in the national park or its buffer zone-may find heating systems. With the National Fund sup- it profitable to specialize in high quality "eco- port, these (mainly private) projects will be logical" products and services. There is a grow- much easier to undertake. There are also other ing number of "ecological" grocery stores that domiiestic and international sources of project claim that their products are pesticide free. financing which favor national park sites that While the demand for such commodities is Piecki can be referred to. In fact, the municipal- uncertain, there is no doubt that customers will ity was offered free services to prepare project be increasingly choosy in selecting stores, proposals (addressed to banks or funding institu- brands, and producers they tnist. Hence products tions) which are already now at the park plan- endorsed in one way or another by a national ning stage. park will be trusted more than ordinary ones. Again, however, this is an empirical question, Summary and no firm conclusions about the Piecki farmll- T he direct financial benefits provided by the ers' revenues can be made at this momiient. Mazurian National Park, should it be estab- Another interesting option is agro-lecotourism, a lished, outweigh any quantifiable losses by a new type of service combining accommodation wide margin. Nevertheless, two qualifications on an environment-friendly family tarm with must be added here. First, despite a demonstra- purchasing high quality farm products, perhaps ble net increase in local revenues, there will be hand-picked by tourists themselves. There is a a net loss to the municipal budget (caused by the European Association of Agro-Ecotourism forestry tax loss), since 85 percent of personal which publishes catalogues of farms that offer income taxes and 95 percent or corporate profit such services. Location in a national park or its taxes are claimed by the state budget. One way buffer zone is an additional asset a farm can of responding to the municipality's concern is to demonstrate. argue that the forestry tax would have been lost Both high-quality tourist services and "eco- anyway, since ministerial decisions are already logical"~~~ ~ farmiy, involv amUnienas whichon arrered logical" farming involve arguments which are prepared to increase the area of protected forest hypothetical and may be not convincing for the n the Great Mazurian Lake District. Even local community. One indirect benefit from though this is a valid argument, it does not serve establishing a national park that is tangible and contlict resolution well and should be avoided. certain is attracting attention to the existence Second, there will be several households defi- value of assets protected. Existence values can nitely worse off because of the loss of foreign materialize in several ways, including wealth hLunters. In order to weaken their opposition to transfers to those who steward the natural capital the park idea, it is possible to offer them finan- supporting these assets~. While sonie of such cial support (for example, from sources like the transfers are hypothetical as well, one can point National Fund for Environmental Protection) for 6. Will New Property Right Regimes Serve the Purposes of Nature Conservation? 71 investment in infrastructure to capture expected standards, enforcement, and funding will serve benefits from the park's presence. nature conservation best. It turns out that enclaves of private property New property right regimes in Poland mean within the park boundaries or in its buffer zone reestablishing respect for private and communal should not pose serious management problems. interests and mutual trust in economic relations On the contrary, it is expected that private entre- between private and public entities (which, by preneurship can be channeled into high-quality the way, is a long process rather than a one-time tourism and "ecological" farming, providing event). This new situation implies certain prob- sustainable revenues for the municipality. The lems for a number of national parks which national park logo attached to products and struggle with the conflicts inherited from the services provided by businesses licensed by the communist rule, which carelessly manipulated park authorities is a source of advantage Piecki ownership titles and private rights. For new can enjoy over competitors located elsewhere. parks, this situation creates a level playing field, where interests of various groups can be articu- Concluding Remarks lated and taken into account in the institutional design phase. As Eggertsson (1993) points out, in designing The case of the Mazurian National Park institutions for the control of natural assets, one provides an interesting example of an experi- has to face the universal problem of ment in designing a model for effective coopera- nonexclusivity. This means that none of the tion between local communities and representa- parties involved, such as private owners, the tives of the "public interest." The study referred local community, or the government, can ever to in this paper identified opportunities for local enjoy full control of resources they own or care sustainable economic development based on the for. A socially optimal use of resources requires natural capital protected by the park. As of that a balance is kept between the cost of gover- January 1995, the conflict between conservation- nance (that is, intemal control) and the cost of ists and the municipality of Piecki had not been exclusion (that is, control against encroachers). resolved. There is, however, a firm economic One extreme case is a party's attempt to com- foundation for a compromise, since the net pletely control an asset by excluding all other outcome of establishing the park is positive potential users. On the other extreme there is a beyond any doubt. Hence there are no funda- fully cooperative arrangement, allowing for mental reasons precluding a mutually satisfac- controlled access for all potential users. There is tory agreement. If the park is finally established no universal rule on how to optimally allocate with local support, the question raised in the title effort between govemance and exclusion, and of this chapter can be answered positively. the problem has to be solved in each particular Interim results from the negotiation process case. Nevertheless, it is obvious that neither of suggest that a comanagement regime has been the extremes is a good model for managing emerging with a somewhat smaller park size ecologically valuable resources such as those accepted by both sides as a key element of the protected in national parks. final compromise. Comanagement seems to be the only viable strategy for integrating diversified interests of Bibliography local communities and other social groups having stakes in protecting the natural capital in Andrzejewski, Roman, and others. 1992. question. This capital entails not only traditional Krajowe studium bior6hnorodnokci. Raport resources such as grazing land and fisheries, but poiski dia UNEP. Warsaw: National entire ecosystems and their life-supporting biodiversity study. Poland's report to UNEP. functions, too. It is unlikely that the communi- Berkes, Fikret, and Carl Folke. 1 992, "A Sys- ties themselves would be able to arrive at tems Perspective on the Interrelations Be- optimal-let alone effective-models of local tween Natural, Human-made and Cultural resource control in the case of assets of national Capital." Ecological Economics 5: 1-8. or international importance. A mix of local Eggertsson, Thrainn. 1993. "Economic Perspec- management with extemal support in the form of tives on Property Rights and the Economics 72 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT of Institutions." Beijer Discussion Paper holm: Beijer International Institute of Ecolog- Series (40). Stockholm: The Beijer Interna- ical Economics. tional Institute of Ecological Economics. McKean, Margaret A. 1993. "Empirical Analy- Kaczanowski, Feliks, Ewa Lapifiska, Joanna sis of Local and National Property Rights Spyrka, Zdzislaw Szkiruc, and Tomasz Institutions." Beijer Discussion Paper (42). Zylicz. 1994. "Bilans koszt6w i korzysci Stockholm: Beijer International Institute of gminy Piecki zwiazanych z utworzeniem Ecological Economics. Mazurskiego Parku Narodowego." Mimeo, Nelson, J. Gordon, and Rafal Serafin. 1992. Warsaw Ecological Economics Center, War- "Assessing Biodiversity: A Human Ecologi- saw University. cal Approach." Anibio 21(3) (May):212-18. Lanza, Alessandro, and Francesco Pigliaru. Nowicki, Maciej. 1993. Environnient in Poland: 1993. Specialization in Tourism Based on Issues and solutions. Kluwer: Dordrecht. Natural Resources in the Presence of a Oclhrona Srodowiska 1989... 1994. 1994. War- Trade-off Between Qualitv and Quantitv. saw: Gl6wny Urzqd Statystyczny (Environ- Milan: Nota di lavoro della Fondazione ENI mental Protection Yearbook 1989... 19941. Enrico Mattei. Zylicz, Tomasz. 1994. "In Poland, It's Time for McCay, Bonnie J. 1993. "Management Re- Economics." Environtnental Impact Assess- gimes." Beijer Discussion Paper (38). Stock- meltt Review 14:79-94. 6. Will New Property Right Regimes Serve the Purposes of Nature Conservation? 73 Table 6-1: National Parks in Poland 1988 1989 1990 1991 1992 1993 Number of national parks 14 15 17 17 17 19 National park area, 1,000 hectares 127 141 166 177 179 244 Source: Ochrona (1989-1994). Table 6-2: Land Ownership in National Parks in Poland (Status December 31, 1992) Land-use category Total area Of which private or communal property hectares % of total* All categories 178,764 12,955 7.2 of which: Forest 130,058 5,757 4.4 Agricultural land 13,014 6,485 49.8 Water 15,388 21 0.1 Other 20,304 692 3.4 *As percent of the total area of a given land-use category. Source: Files of the National Parks Board. Table 6-3: Breakdown of Municipal Budgets: Poland's Average and Piecki (1993)* Revenue category Poland Piecki All categories 100.0 100.0 of which: Real estate tax 14.8 17.0 Agricultural taxes and fees 3.8 4.7 Forest tax 0.3 8.3 Share in personal income tax** 21.8 36.8 Share in corporate tax*** 3.6 0.3 Administrative fees 5.0 2.0 Grants from the state budget 16.7 14.2 General subsidy from the state budget 11.4 2.9 * Main revenue items providing 86.2 percent of revenues for the Piecki municipal budget. ** Municipalities receive 15 percent of the personal income tax the rest being claimed by the state budget. *** Municipalities receive 5 percent of the corporate income tax the rest being claimed by the state budget. Source: Kaczanowski and others (1994). 74 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Table 6-4: Employment in Piecki in Selected Sectors, 1993 Sector Employment Agriculture 800 Saw mills, wood processing, and furniture production 467 Forestry 190 Food industry 40 Source: Kaczanowski and others (1994). 7 Nonsustainable Use of Renewable Resources: Mangrove Deforestation and Mariculture in Ecuador Peter J. Parks and Manuel Bonifaz Abstract The chapter provides a conceptual model that examines (a) open-access exploitation and (b) mangrove deforestation as two potential causes for the scarcity of post-larval shrimp inputs to shrimp mariculture in Ecuador. Results indicate that conversion of mangrove ecosystems to shrimp ponds may have obtained short-term profit at the expense of long- term productivity. Open-access collection of post-larval shrimp may also have contributed to dwindling stock levels. Specific policy recommendations are presented, and future empirical studies are proposed. A longer version of this chapter appears in Marine Resource Economics 9(1):1-18. 75 76 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Ecuador's shrimp industry grew rapidly from Shrimp Mariculture in Ecuador 1973-1988 to become the country's second largest earner of foreign currency. At that time, Shrimp Production Ecuador was the largest supplier of shrimp to the A shrimp producer enters the production United States and one of the largest mariculture cycle first by obtaining a concession to publicly producers in the world (Instituto de Estrategias owned coastal lands below the high-tide line. If Agropecuarias 1989). However, recent decline nmangroves are present, the producer determines in the competitiveness of the industry has raised how much of these lands must be cleared for concerns about its future stability, and has ponds. Trees are typically removed by workers focused national attention on how to develop using chain saws, and the residual biomass is policies to sustain the productivity and competi- burned. Once the forest has been removed, a tiveness of shrimp mariculture in Ecuador. bulldozer is used to create a rectangular levee Important factors contributing to the decline bullozes u tcate rectangular levee that encloses a flat, rectangular pond. Most of shrimp mariculture include (a) the reduced ponds are between 2 and 3 meters deep and availability of post-larval shrimp (PLS) to stock between 7 and 15 hectares in area. After the shrimp ponds, (b) low productivity of mature pond has been built, it is filled with water shrimp per hectare of ponds, (c) fluctuations of pumped from adjacent estuaries and stocked international market prices for mature shrimp, with PLS. and (d) growing competition from Asian produc- Pennaeus vannamei has proved to be the most ers. While general policy guidelines have been robust species for use in stocking shrimp ponds. developed to address some of these factors (for Stocking densities range from 30,000 to 50,000 example, Olqen and Arriaga 1989; Southgate PLS per hectare, depending on management and Whitaker 1994), there are relatively few intensity Once the PLS are mature, they are analytical studies that can provide more specific collected by workers in canoes, who sweep nets policy recommendations. through the pond until the mature shrimp are This chapter examines two potential causes removed. The mature shrimp are sold by the for scarcity of PLS inputs. Causes for PLS scarcity shrimp producer to processors who ready them include open-access exploitation of the PLS for final consumption. The pond is then pumped fishery (for example, Thian-Eng and Kungvankij dry and filled with fresh water for the next 1989) and the depletion of mangrove habitat for production cycle. PLS (for example, Turner 1989). Alternative explanations for stock fluctuations, such as the Collection of Post-Larval Shrimp by El Nino phenomenon-a southward shift of Artesanos warm ocean current into Ecuadorean waters-of 1982-83, are considered in the context of com- Pennlaeus vannm(itrei PLS are obtained by parative statics. Economic policies to correct for shrimp producers from middlemen, who in turn open access and deforestation externalities are purchase them from artesano fishermen. described. Artesanos collect PLS in an open-access fishery. Results indicate that if mangrove ecosystems In Ecuador, PLS are collected by a few thousand influence PLS stock development, conversion of full-time and about 10,000 part-time artesano forests to ponds for shrimp production has fishermen who make a living collecting PLS with obtained short-term profit at the expense of hand-held nets in estuaries and beaches along the long-term productivitv. If Ecuador's shrimp coast (Scott and Gaibor 1992). Artesanos collect industry is to maintain its competitiveness in the PLS using nets, which are held in water roughly world market, it must invest in mangrove habitat one meter deep. Once the net is full, the restoration and technological improvements to artesano fisherman returns to the beach, and increase long-run productivity per hectare, rather typically discards species other than Pennaeus than continue to mine the country's renewable vaznnanei. A day's catch of Pennaeus vannanzei mangrove resources for nonsustainable benefit. PLS is stored in buckets, which are sold to mid- dlemen. The middlemen, in turn, transport the buckets of PLS to shrimp producers' ponds in 7. Mangrove Deforestation and Mariculture in Ecuador 77 unrefrigerated trucks (LiPuma and Meltzoff salt flats, where costs of pumping and PLS stock- 1985). ing were lower; however, since 1979 pond construction has expanded into estuarine ecosys- The Shrimp Life Cycle and Mangrove tems. This includes the conversion of 41,700 Ecosystems hectares of mangroves, one-fifth of Ecuador's Shrimp begin life in the open sea. After going coastal mangrove resources. Individual estuaries through several maturation phases, including a have lost as much as half the primary mangrove larval phase, the post-larval shrimp move to forest (Centro de Levantamientos Integrados de estuarine waters. Post-larval shrimp remain in Recursos Naturales por Sensores Remotos estuaries between three and five months before 1992). Furthermore, some low-lying agricultural returning to the ocean. The estuafine habitat lands have also been converted to ponds; high provides nutoient-hich substrates, such as man- residual salinity in the converted lands makes provies ntriet-ric subtrats, suh asman this change practically, irreversible. grove roots; the mangroves' complex vegetative thesIhnm indutry endede osirpil system may also provide protection from preda- The sh9imp indus1y expanded most rapidly tors. between 1979 and 1984. In 1978 there were Several studies link PLS stocks to mangrove 5,416 hectares of legally authorized shrimp ecosystems. Data for Malaysia and the Philip- ponds in production. By 1984, the authorized pines suggest that although estuarine salinity and pond area grew to 89,400 hectares. Meanwhile, water temperature changes affect the survival annual shrimp production increased by more rate of PLS, in the long term yields are related to than 600 percent, from less than 5,000 tons (one both quality and area of the mangrove habitat. ton equals 106 g) of shrimp in 1979 to over Similar studies from the Gulf of Mexico, Louisi- 33,000 tons by 1984. Currently the industry's ana, and Japan corroborate this hypothesis pond area has expanded to 146,000 hectares, and (Turner 1989). production has grown to about 100,000 metric Mangrove forests are among the most biologi- tons per yearR' (Centro de Levantamientos cally productive mafine ecosystems. These Integrados de Recursos Naturales por Sensores forests are essential habitat for many species in Remotos 1992). addition to PLS. Besides providing habitat, these International competition in shrimp produc- ecosystems maintain water quality, and they tion is growing. The entry of more efficient and function as "kidneys" for estuarine environments productive producers into the market has caused by purifying water and ensuring sufficient international pnices to fall. Ecuador's ability to oxygen for marine species. Other nonmarket and compete with other countries is in jeopardy. market benefits provided by mangrove forests Over half of Ecuador's shrimp industry is domi- include sediment stabilization, bird habitat, and nated by semi-extensive production technolo- a renewable supply of forest products, such as gies. These technologies depend primarily on edible fruits, bark for tanning, charcoal, and large pond areas and PLS collected in the wild. construction wood. These benefits are only Average productivity in Ecuador is 0.68 metric examples of the types of benefits that can be tons- perhectare. This productivity is lower than provided by mangrove ecosystems. Dixon and that found in Honduras and Mexico-Ecuador's Lal (1994) give a thorough overview of the closest Latin American competitors-and far functions, products, and attributes provided by lower than China and Thailand-Asian competi- eight globally important wetlands categories, tors that have made effective use of hatchery- including mangroves. Barbier (1994) describes produced PLS inputs (Rosenberry 1990). how such environmental functions may be The rapid growth of the industry during the valued, early 1980s can be attributed to the abundance of PLS stock as a result of El Nifio, low costs for National Trends in Shrimp Mariculture establishing ponds on intertidal salt flats, and high demand and prices for shrimp in U.S. Shnrmp manaculture has dramatically changed markets. In 1983, almost all authorized ponds Ecuador's coastal land uses. By 1991, 146,000 were placed into production (93 percent). How- hectares had been converted to shrimp ponds. ever, beginning in the mid-1980s, the PLS re- The first shrimp ponds were placed on intertidal quired to stock ponds became scarce (Instituto 78 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT de Estrategias Agropecuarias 1989; Iverson, benefits provided by mangroves must be inter- Darryl, and Jory 1986). Shortages have been nalized by the producer. A tax that includes (a) severe enough that since 1985 only half the discounted stock effects of additional mangrove authorized pond area is in production. In addi- habitat and (b) discounted non-PLS mangrove tion to changes in water temperature, loss of benefits would internalize the environmental habitat, and overfishing of PLS, stocks decreased opportunity costs currently omitted in the pro- the PLS available for pond production of shrimp. ducer's problem. Making these costs internal to Decreases in stock of a marine species are the producer's decisions would lead the individ- difficult to document. This is especially true ual producers to act to maximize their own with PLS, which are collected for subsistence benefits to accomplish the collective welfare- income by artesatio fishermen in an open-access maximizing solution sought by the planner. A fishery: few, if any, catch-effort studies exist. tax on mangrove-clearing would ultimately However, there is some preliminary economic provide more PLS habitat, which could in turn evidence that scarcity has increased: prices paid help replenish the dwindling stock. However, for PLS inputs have increased (Sutinen, Broadus, this is only part of an integrated solution. and Spurfier 1989; Southgate and Whitaker Individual choices by producers and 1994). If marginal extraction costs for a given artesanos also determine the level of PLS har- stock of PLS are relatively constant-an assump- vest. Producers determine demand for PLS in- tion that seems reasonable given harvesting puts, which in turn are supplied by artesanos. practices (see the discussion of artesanos The aggregate harvest by artesanos influences above)-then the increasing gap between price the development of PLS stock over time. The and marginal cost may indicate a scarcer stock. producer will demand PLS in order to maximize profits. In an open-access PLS fishery with Economic Analytical Strategy minimal costs of entry (that is, the cost of a Parks and Bonifaz (1994) integrate the bene- hand-held net), artesanos determine the supply fits provided by PLS collection, shrimp produc- of PLS by harvesting until all rents are dissipated. tion, and inangrove ecosystems into an eco- Shrimp producers and artesanos will interact to nomic management problem. The problem faced exploit the PLS stock at greater harvests than the by Ecuador is to determine how to sustain maxi- social planner. mum joint benefits from the PLS fishery, shrimp A tax in the amount of marginal cost minus production, and mangrove ecosystemiis. average cost will correct for the open-access The analytical strategy is to construct and externality, and a tax in the amount of marginal solve a social planner's problem, and use the scarcity rent for PLS will account for opportunity planner's solution to identify policy instruments. costs of decreases in stock. Making these costs The social planner's problem is a partial equilib- internal to the artesanos' decisions would ac- rium model that includes the shrimp production complish the collective welfare-maximizing and artesano sectors, as well as environmental solution sought by the planner. Although these services provided by mangroves. The key con- taxes would enable the PLS stock to recover, nection between the economic and environmen- such instruments may be costly to administer tal systems is via the recruitment function for and enforce (see below). While licensing fees PLS stocks, which depends not only on existing that approximate these costs are a possibility, stock, but also on available mangrove habitat, other regulatory instruments to reduce catch, The planner's solution is compared with solu- such as quotas or equipment restrictions, may be tions for profit-maximizing shirimp producers more feasible. and artesa,ios; the latter are assumed to collect PLS in an open access fishery. Discussion Econonmic Policy Instruments If mangrove habitat effects PLS stock, then the increasing scarcity of PLS represents a growing In order to reconcile the producers' profit- C, maximizing deforestation rate with the social opportunity cost for the Industry and fishermen mlaximizin defresit-matioing rate withthescid in the form of foregone future benefits. By planner's benefit-maximizing rate, discounted selecting excessive deforestation rates, the 7. Mangrove Deforestation and Mariculture in Ecuador 79 industry may have purchased short-term profits Much of the alteration of coastal ecosystems at the expense of long-term sustainable produc- in Ecuador can be attributed to the legal standing tivity. of coastal resources. Although a legal and insti- One of the most critical consequences of the tutional framework has been in place to regulate crises of the mid-I 980s was the generation of a the development of the industry, for all practical vicious cycle between mature shrimp prices and purposes, access to the resources has been com- PLS fishing rates. This occurs in the market for pletely free (LiPuma and Meltzoff 1985; Perez PLS as a factor input. The supply of PLS is deter- and Robadue 1989). According to Ecuadorean mined by open-access collection by artesanos. laws, all coastal land lying below the highest tide The demand for PLS inputs is the derived de- line belongs to the government (LiPuma and mand of shrimp producers for a production Meltzoff 1985; Instituto de Estrategias input. The rapid expansion of the industry's Agropecuarias 1989)-that is, coastal beaches, pond hectarage precipitated increased demand large portions of salt flats, and, of course, all for PLS inputs. This created excess rents in the mangrove forests and estuarine ecosystems. The PLS market, and encouraged artesanos to in- most critical example of the weakness of laws crease PLS harvest rates, ultimately leading to the and govemment institutions is the total failure to overexploitation of the resource. Diminished PLS protect the mangrove forests. stocks leads producers to compete for smaller A 1975 regulation and its 1985 amendment and smaller amounts of PLS inputs, while at the contain specific articles prohibiting the conver- same time, artesanos must continue to increase sion of mangrove forests to shrimp ponds. In their effort to support their families from a addition, a law concerned with forestry and dwindling PLS stock. conservation of flora and fauna enacted in 1978 Exogenous shocks to the PLS input market, prohibits the construction of ponds in mangrove such as El Nifio, provide transitory windfalls to areas. Moreover, there are other laws and de- both producers and artesanos. The warmer crees enacted by several government agencies temperatures may be favorable to recruitment, that created protected areas and declared the which increases stock and lowers extraction conservation of mangrove forests as "in the costs to artesano suppliers. (The abundant public interest" (Instituto de Estrategias PLS are easier to catch.) This downward shift in Agropecuarias 1989). In spite of these laws, the PLS supply decreases the marginal factor cost to rate of mangrove deforestation between 1979 shrimp producers, leading to increased equilib- and 1991 averaged about 3,000 hectares per rium demand for PLS inputs. Equilibrium extrac- year, resulting in the loss of one-fifth of Ecua- tion (after El Nifio causes a downward shift in dor's mangrove forests. PLS supply) may be greater than under normal The laws and regulations governing the ocean temperatures; however, this can only be industry were not designed to encourage a temporarily supported. If capacity expands to sustainable relationship between economic take advantage of these ephemeral conditions, objectives and ecosystem management. In 1975 overcapacity is a natural consequence when the the government issued a regulation allowing the ocean (and PLS stocks) return to normal condi- construction and operation of shrimp ponds on tions. public lands under a renewable ten-year conces- The economic interaction between shrimp sion. Although the system of concessions was farmers demanding PLS inputs and artesano well intentioned, it very quickly became an open fishermen collecting these inputs can be environ- source of corruption and a critical policy issue mentally devastating. Their unregulated interac- affecting resource management. A longer con- tion may perpetuate the crisis that the shrimp cession that allowed producers to reap the PLS industry suffers. There are no public agencies stock benefits from mangrove conservation regulating the activities of the artesano fisher- would make more economic sense. The short men and, in fact, there is a government decree length of current concessions may contribute to clearly stating that all beaches, estuaries, and incentives for the short-term mining of man- mangrove ecosystems of public access are open grove resources as a location for ponds. In to PLS fishing (Instituto de Estrategias addition, the government sells concessions for Agropecuarias 1989). far below their value: the annual charge, equal to 80 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT 1I percent of a minimum monthly wage per Had it been implemented and enforced before hectare, is generally less than $10. This captures the expansion in the early 1980s, an incentive- less than one percent of the economic rent that based tax approach could have encouraged can be obtained from placing these lands in recognition of the full costs of deforestation. ponds; this rent can exceed $2,000 per Although it is true that the industry has been hectare per year (Southgate and Whitaker 1994). subjected to a tax on shrimp exports (Sutinen, Short-term concession arrangements and Broadus, and Spurfier 1989, p. 31), this has poorly-enforced laws are among the main causes failed to slow conversion of mangroves. A tax for the excessive deforestation and degradation that is more directly linked to pond construction of Ecuador's coastal ecosystems. Although would help internalize the opportunity costs of government agencies must take much of the deforestation. The addition of these costs into blame for the problems that the industry faces, it the shrimp producers' decisions could prevent is also possible that the failure of shrimp farmers excessive conversion of mangroves to ponds. to recognize the costs of environmental distur- In the long term, there may be opportunities bance are critical components for understanding for tax revenues to be recycled into profitable the industry's dilemma. One of the most dra- investments in mangrove reforestation. Incen- matic consequences of the lack of planning and tives to supplement these public investments regulation of the industry is the excessive with private funds could be strengthened by amount of land in ponds relative to the availabil- increasing the length of the land concessions. ity of PLS. The result of this imbalance is that the Concession length should be sufficient to allow industry's installed capacity has been largely concession holders to benefit from reforestation underused (Instituto de Estrategias activities that they undertake (for example, Agropecuarias 1989), and the ratio of shrimp sufficiently long for PLS stocks to respond to produced to area in ponds has fallen below those increased habitat area). of competing countries. If the effects of mangrove deforestation on Because of the lack of integrated planning, PLS stocks are fairly localized (for example, short-term rent-seeking behavior of the industry, within an estuary), it may be feasible to internal- and unenforced laws, Ecuador's maficulture ize the opportunity costs of deforestation to industry has developed without considering cooperatives of shrimp producers within an environmental costs. This has cost the industry estuary. Cordell and McKean (1992) identify competitiveness, and has resulted in excessive physical and technical attributes and deforestation and the uncontrolled collection of decisionmaking arrangements that have led to PLS. The industry's failure to recognize these sustainable management of fisheries commons in opportunity costs is jeopardizing the long-term Bahia, Brazil. These commons have flourished sustainability of the industry itself. with minimal reliance on government agencies or policies. Provided that similar conditions are Conclusions and Policy Implications present in Ecuador, private solutions to excess exploitation of mangrove stocks by shrimp The conceptual model explores the conse- producers-or of PLS stocks by artesanros-niay quences of a relationship between mangrove be possible. habitat and PLS stocks and concludes that defor- At the same time, if Ecuador is to maintain its estation may have been excessive. The most competitiveness in the world shrimp market, it is important policy implication of these results is also critical that the industry's productivity per that command-and-control approaches have hectare be increased. To accomplish this, invest- completely failed to regulate the industry's ments in human capital and scientific research economic development. In addition, public must be encouraged. The development of a policies have encouraged the overexploitation of sustainable and profitable hatchery industry is a PLS stocks through open-access collection by viable short- and long-term alternative to the artesanos. If drastic policy measures are not unreliable supply of PLS collected in the wild. By implemented, ecosystem destruction will con- providing a larger, more stable supply of PLS tinue as long as there are profits to be made from inputs, hatcheries will increase the industry's mangrove forest conversion and PLS collection. productivity per hectare. Improving the ability of 7. Mangrove Deforestation and Mariculture in Ecuador 81 hatchery-produced PLS to survive the production socioeconomic forces and policies behind rain cycle is essential. forest conversion. Extension of these policy This approach represents a shift from land- recommendations presumes a positive economic intensive shrimp technology to capital-intensive feedback for those who make conservation technology-a shift that has already succeeded decisions (that is, increased PLS stocks and lower in Asia. The change in inputs from land toward input costs for shrimp producers). In the case of capital will also help prevent future conversion tropical forests, conservation benefits directly of mangrove forests and agricultural land. An accrue to decisionmakers in some contexts (for expanded model of the shrimp mnariculture sector example, ecotourism revenues and marketed rain that includes both wild and hatchery-produced forest products), but not everywhere that defor- PLS inputs could clarify the incentives necessary estation is of concern. for these shifts. Producing more shrimp from a relatively stable land base is clearly a step to- Bibliography ward restoring and sustaining Ecuador's compet- itive position in the global shrimp market. Barbier, E. B. 1994. "Valuing Environmental Although PLS hatcheries may contribute to a Functions: Tropical Wetlands." Land Eco- sustainable shrimp industry for Ecuador, their nomics 70(2):155-73. economic viability is uncertain. For example, Centro de Levantamientos Integrados de equilibrium demand for PLS produced in hatcher- Recursos Naturales por Sensores Remotos ies may fluctuate with changes in ocean temper- (CLIRSEN). 1992. Estudio Multitemporal de ature. When the El Ninio effect is present, wild los Mantglares, Camaroneras y Areas Salinas PLS is abundant and cheap; profit-maximizing dle la Costa Ecuatoriana, Actualizado a 1991. shrimp producers may displace PLS produced in Quito, Ecuador. hatcheries with cheaper, wild PLS. Therefore, Cordell, J., and M. A. McKean. 1992. "Sea quantifying and planning for temperature effects Tenure in Bahia, Brazil." In D. Bromley, ed., on the hatchery industry is essential before any Making the Commons Work. San Francisco: program designed to support this industry can be Institute for Contemporary Studies Press. developed. Dixon, J. A., and P. N. Lal. 1994. "The Manage- Conceptual extensions of the model can help ment of Coastal Wetlands: Economic Analy- by examining the economic connection between sis of Combined Ecologic-Economic Sys- ocean temperature fluctuations and the returns to tems." In P. Dasgupta and K. G. Maler, eds., hatchery investment. As a starting point, one can Tile Etvironment and Emerging Development recognize that since temperature is exogenous, Issues. C'larendon: Oxford University Press. the supply of wild PLS and derived demand for Instituto de Estrategias Agropecuarias (IDEA). PLS inputs will depend on temperature levels. If 1989. Situaci$n Actual de la Maricultura del wild PLS and PLS produced in hatcheries are Carnar6n en el Ecuadory Estrategias para su substitutable inputs, then comparative statics Desarrollo Sostenido. Quito, Ecuador. could subsequently be used to anticipate how Iverson, I., S. Darryl, and E. Jory. 1986. "Farm- shrimp producers would change demand in ers without Seed: Shrimp Culture in Ecua- response to changes in the availability of both dor." Sea Frontiers 32 (Novem- types of PLS. ber-December):442-53. Finally, it is important to point out that many LiPuma, E., and S. Meltzoff. 1985. "The Social of the policies encouraging the mismanagement Economy of Shrimp Mariculture in Ecuador." of coastal ecosystems are similar to the policies Rosenstiel School of Marine and Atmospheric stimulating tropical deforestation. For example, Science, University of Miami, Miami, Flor- the lack of enforceability of laws that prevent the ida. use of forests in an open access fashion and the Olsen, S., and L. Arriaga, eds. 1989. A Sustain- failure to recognize the opportunity costs of able Shirimp Industry for Ecuador. tropical forest conversion are parallel issues to Narragansett, Rhode Island: University of the case of coastal resource management. There- Rhode Island Coastal Resource Center. fore, this study's arguments and results could Parks, P. J., and M. Bonifaz. 1994. cautiously be extended to analyze some of the "Nonsustainable Use of Renewable Re- 82 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT sources: Mangrove Deforestation and Mari- Southgate, D., and M. Whitaker. 1994. Eco- culture in Ecuador." Marine Resource Eco- nomic Progress and the Environment: One nomics 9(1):1-18. Developing Country's Policy Crisis. New Perez, E., and D. Robadue, Jr. 1989. "Institu- York: Oxford University Press. tional Issues of Shrimp Mariculture in Ecua- Sutinen, J. G., J. Broadus, and W. Spurrier. dor." In S. Olsen and L. Arriaga, eds., 1989. 1989. "An Economic Analysis of Trends in Rosenberry, B. 1990. "World Shrimp Farming: the Shrimp Cultivation Industry in Ecuador." Can the Westem Hemisphere Compete with In S. Olsen and L. Arriaga, eds., 1989. the Eastem?"Agriculture 16(5):60-64. Thian-Eng, C., and P. Kungvankij. 1989. An Scott, I. and N. Gaibor. 1992. A Review of the Assessment of Shrimp Culture and Maricul- Fishery for Shrimp Larvae in Ecuador: Bio- ture Diversif cation. Guayaquil, Ecuador: logical, Economic, and Social Factors. U.S. Agency for Intemational Development, Guayaquil, Ecuador: Instituto Nacional de Coastal Resources Management Project. Pesca. Tumer, R. 1989. "Factors Affecting the Relative Abundance of Shrimp in Ecuador." In S. Olsen and L. Arriaga, eds., 1989. Traditional Knowledge 83 8 Learning by Fishing: Practical Science and Scientific Practice Gfsli Palsson Abstract PROFESSIONAL RESOURCE MANAGERS often assume that the ecological knowledge obtained by fishing skippers during years of practical experience is of relatively little use. At the same time, recent research indicates that knowledge gained on the spot, in the course of production, is of fundamental importance. This chapter explores, with particular reference to the Icelandic context, how fishers' knowledge differs from that of professional biologists and to what extent the former could be brought more systematically into the process of resource management for the purpose of ensuring resilience and sustainability. Parts of this article are also presented in "Property rights and practical knowledge: the Icelandic quota system" (co-authored with Agnar Helgason), published in Fisheries Afnagemnent in Crisis: A Social Science Perspective, D. Symnes and K. Crean, eds., Blackwell Scientitic Publications, 1995. In addition to being a part of the Property Rights Program ot the Beijer Institute of the Swedish Academy of Sciences, the study on which the article is hased relates to a collaborative research project, "Common Property and Environmental Policy in Comparative Perspective," funded by the Nordic Environmental Research Programme. It has also received financial support from the Nordic Committee for Social Science Research, the Beijer Institute of the Swedish Academy of Sciences, the Research Ccnter of the Vestman Islands and the University of Iceland, and the Icelandic Science Foundation. I thank Agnar Helgason, Orn D. J6nsson, J6nas Allansson, and Broddi Sigurdsson for their help with practical logistics in the Vestman Islands, as well as for interviews and data collection. 85 86 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT An important recent attempt at bridging the unpredictable, with constant fluctuations in gap between Icelandic fishers and marine scien- interactions among species and between species tists is the so-called trawling rally-a procedure and their habitat (Gomes 1993). Several scholars whereby a group of skippers regularly follow the have suggested that fisheries are chaotic systems same trawling paths identified by biologists for with too many uncertainties for any kind of the purpose of supplying detailed ecological modernist, "scientific" control (Smith 1991; information. I argue that while the trawling rally Wilson and others 1994:296). This does not is a useful and interesting experiment, it is mean that governance is impossible; it suggests, important to look for alternative ways of engag- however, increasing reliance on a finer spatial ing fishers, of using practical knowledge of and temporal scale, a scale that only the skillful fishing for the purpose of sustainable resource practitioner is able to apply. It is essential, use and responsible manageinent. therefore, to pay attention to practical knowl- edge, allowing for contingency and extreme fluctuations in the ecosystem. Some form of self-governance may be a practical necessity, In many fisheries, resource management is strange as it may sound to those accustomed to largely informed by professional scientists and the theory of the "tragedy of the commons," public officials. Such management often as- which assumes that overfishing is inevitable as sumes that the extensive knowledge that fishing long as access is "free" for everyone.' skippers have achieved in the course of their Focusing on Icelandic fishing, in particular work is relatively irrelevant and ineffectual as far the Vestman Islands, this chapter discusses the as fisheries management is concerned. Indeed, in similarities and differences between the knowl- many cases there is little attempt to draw upon edge of fishers and that of professional biologists such knowledge in the process of ecological and the extent to which the former could be research and decisionmaking. brought more systematically into the process of The current denigration of practical knowl- public resource management. With the persistent edge has been reinforced by a powerful "mod- threat of overexploitation, Icelandic fishing has emist" paradigm in bio-economics and resource been subject to increasingly stringent public management which assumes that ecosystems are regulations and scientific control. Generally, characterized by linear relationships and that both marine scientists and resource economists only a market approach, emphasizing private have presented the coastal ecosystem as a pre- ownership of resources (usually privileging dictable, domesticated domain. At the same capital rather than labor), will ensure steward- time, there has been a tendency to assume that ship and responsible resource use. The estimate the practical knowledge of those who are en- of total allowable catch and the allocation of gaged in fishing on a daily basis is of little or no transferable resource quotas, it is often argued, value for resource management. Thus, there is are the only feasible and efficient management little attempt to utilize the knowledge that skip- strategies. pers have achieved. Skippers frequently com- Increasing empirical evidence and a growing plain that marine biologists tend to treat them body of theoretical scholarship suggest, how- "as idiots," reducing practical knowledge and ever, that there are good grounds for questioning local discourse to mere "loose talk." Despite the the assumptions of modernist management. occasional lip service in the reference to "collab- Recent research indicates that, given the signifi- oration" (samrdd), there is little real dialogue cance of the learning context and situated between fishers and marine biologists. Those enskillment, the current restrictive emphasis on who have come to know the fishing grounds disembedded knowledge needs to be revised (Lave 1988, Gergen and Semin 1990; Fischer and others 1993). Moreover, research emphasiz- 1. In some fisherics, including the lobster fishery of ing the uncertain nature of many marine ecosys- Maine in the United States (Achcson 1988), fishers have tems suggests that nianagers modify theirhieraran important role to play in fisheries management. The relations of power betwcen local l'ishers and professional chical notion of linearity and expertise. Multi- managers and scientil'ic experts typical for many fisheries species ecosystems, it is argued, are highly in the weslern world seem to be reversed. 8. Learning by Fishing: Practical Science and Scientific Practice 87 around Iceland, during a lifelong career in In recent years, however, the dualistic theory fishing, fishers complain, must remain silent of knowledge has been challenged on a number when the "wise men" (spekingar) announce their of fronts. Not only is the notion of absolute precise measurements of the stocks. Recently, objectivity, the idea of some scientific Archime- attempts have been made at bridging the gap dean standpoint outside history and culture, between fishers and scientists. An important frequently subject to critical discussion, it is example is the "trawling rally" (Iogararall)-a increasingly apparent that the local view makes procedure whereby a group of skippers regularly much more sense than supposedly objective follows the same trawling paths identified by "observers" have often assumed. The commu- biologists in order to supply detailed ecological nity of modelers has been both expanded and information. While the trawling rally represents redefined, empowering the local voice and an interesting endeavor, it has its shortcomings. relaxing modernist assumptions of privilege and It is important, I argue, to look for alternative hierarchy tGudeman and Rivera 1990). This is ways of engaging fishers, of using knowledge evident fiom current interest in practical knowl- obtained in the course of production for the edge in development agencies on the intema- purpose of responsible resource use and sustain- tional scene as well as in academic studies of able management. learning and expertise (Williams and Baines 1993; Lave and Wenger 1991). It is not quite Practical and Theoretical Knowledge clear, on the other hand, what the empowering of the "local voice" entails. For several centuries, since the Renaissance One of the important issues involved concems and the Enlightenment, Western discourse has the concepts of "indigenous" and "traditional" tended to radically separate scientific under- knowledge. While it is true that an extensive standing and everyday accounts. Scientists, it body of local knowledge has often been set has often been assumed, are objective explorers aside, if not eliminated, in the course of Western of reality, proceeding by rational methods and expansion and domination and while there are detached observations, while the lay person is good grounds for attempting to recapture and locked up in a particular natural or cultural preserve what remains of such knowledge world, dfiven by genetic makeup, ecological (Chapin 1994), the reference to the "indigenous" context, superstitious beliefs, or local concerns. and "traditional" in such contexts tends to repro- Thus, orthodox functional theory of learning duce and reinforce the boundaries of the colonial suggests a one-way hierarchical ordering of world, much like earlier notions of the "native" knowledge: and the "prinmitive" did. Such terms are not only loaded with hidden transcripts-the value terms In this theory, duality of the person translates of colonial discourse-they are fraught with into a division of (intellectual) labor between ambiguity. How old does a particular skill or academics and "the rest" that puts primitive, body of knowledge have to be to count as lower class, (school) children's, female, and "traditional"? Where does it have to be located everyday thought in a single structural posi- to be classified as "indigenous"? We may try to tion vis-a-vis rational scientific thought. (Lave relativize our answers to such questions, empha- 1988:8) sizing that everything is indigenous and tradi- tional from some point of view, but in the long One of the consequences of such a Cartesian run "natives" have a tendency to congregate in scheme is the tendency to reduce local environ- particular times and locations. mental knowledge to mere trivia and to assume Another contested issue relates to the meaning that what people have to say about ecological of knowledge and learning. Orthodox theories matters and human-environmental interactions is tend to present the learning process in highly pure ideology, of relevance only as cultural data. functional terms, presupposing a natural novice Accordingly, sustainable resource use and who gradually becomes a member of society by sensible management become the privileged assimilating its cultural heritage. Knowledge business of outsiders formally trained in public becomes analogous to grammar or dictionaries, institutions. invested with the structural properties and the 88 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT stability often attributed to language. Given such spective not only provides a useful antidote to a perspective, indigenous knowledge. is some- the project of modernist management, it reso- times presented as a marketable commodity-a nates with some aspects of the discourse of thing-like "cultural capital"-and at times with Icelandic fishers (Pdlsson 1994). For them, "missionary fervor" (DeWalt 1994:123). It may "real" schooling is supposed to take place in be useful and quite legitimate in some contexts actual fishing, not in formal institutions. As one to think of practical knowledge as a bounded, skipper put it, "Naturally, most of the knowledge tradable object, for instance when encoding one uses on a daily basis is obtained by experi- "indigenous" knowledge for the protection of ence. One learns primarily from the results of "intellectual property rights" (Brush 1993) and personal encounters; that is what stays with defending legal claims about patents and royal- you." The emphasis on "outdoor" learning is ties.2 Much of the practitioner's knowledge, emphasized in frequent derogatory remarks however, is tacit-dispositions acquired in the about the "academic" learning of people who process of direct engagement with everyday have never "peed in salty sea" (migid i saltan tasks. In reifying practical knowledge, we fall sj6). Even a novice fisher, skippers say, with into the trap of Cartesian dualism that we may be minimal experience of fishing, is likely to know trying to avoid, separating body and mind. more about the practicalities of fishing than the The distinction between practical and scien- teachers at the Marine Academy. Therefore, tific knowledge resolves such conceptual ambi- there is little connection between school perfor- guities and difficulties. It does not necessarily mance and fishing success. Questioned about the suggest a cultural or temporal boundary, the role of formal schooling, skippers often say that radical separation of producers and scientists, what takes place in the classroom (during les- participants and observers, traditionalists and sons in astronomy, for instance) is more or less modernists. Rather, it draws attention to differ- futile as far as fishing skills and differential ent ways of knowing, irrespective of time and success are concerned, although they readily space. Practical knowledge is not restricted to admit that schooling has some good points, any particular group of people, for none of us preventing accidents and promoting proper (including practicing scientists) would manage responses in critical circumstances involving the to live without it; scientific knowledge, of safety of boat and crew. Commenting on the course, involves some degree of practical knowl- competence of young men who nowadays edge obtained in the course of engagement and graduate from the Marine Academy, one skipper experimentation. Likewise, on some occasions said, "they know absolutely nothing!" most of us seek to formulate our tacit knowledge Skipper education recognizes the importance in general terms, by verbal or textual means. of situated learning. Earlier participation in fishing, as a deck hand (hdseti), is a condition "Having a Pee in the Salty Sea" for formal training, built into the teaching pro- gram; this is to ensure minimum knowledge The theory of practice (see, for instance, Lave about the practice of fishing. Once the student in 1988) offers a view of learning and craftsman- the Marine Academy has finished his formal ship which is very different from that of ortho- studies and received his certificate, he must work dox learning theory. Informed by the notions of temporarily as an apprentice-a mate situated action and mutual enskillment, it em- (s6Vrimadury-guided by a practicing skipper, if phasizes democratic collaboration and direct he is to receive the full license of skipperhood. engagement with everyday tasks. Such a per- The attitude toward the mate varies from one skipper to another; as one skipper remarked, "some skippers regard themselves as teachers 2. When defending indigenous claims, anthropologists trying to advise those who work with them, but have often emphasized the boundedness of cultural units others don't." While skippers differ from one and the intellectual properties belonging to them: another and there is no formal economic recog- "Biological knowledge is among the most important types i o of information possessed by any culture, a fact long nition of the their role m this respect in terms of recognized and emphasized by anthropologists" (Brush a teaching salary, according to many skippers, 1993:657; italics added). the period of apprenticeship is a cnitical one. 8. Learning by Fishing: Practical Science and Scientific Practice 89 Reflecting on his mentor, with whom he had (gloggskyggni), the ability to recognize and spent several years at sea, one skipper explained, apply an array of minute but relevant details. "I acquired my knowledge by working with this Attentiveness is a complex ability and includes, skipper, learning his way of fishing. I grew up for example, being able to "read" the sky and with this man." It is precisely here, in the role of predict the weather, to participate in discussions an apprentice at sea, that the mate learns to within the local fleet, to understand the "sparks" attend to the environment as a skipper. Working of electronic instruments, and to be able to as a mate under the guidance of an experienced coordinate crew activities. In order, however, to skipper gives the novice the opportunity to have success in catching fish, the skipper must develop attentiveness and self-confidence, and to reside with his crew. Moreover, the crew, of establish skills at fishing and directing a boat course, is part of a larger context. Fishers often and crew. The role of the mate, in fact, institu- speak of the personnel (mannskapur) of a boat in tionalizes what Lave and Wenger (1991) term an extended sense-including several people "legitimate peripheral participation," a forrn of ashore, those who ensure efficient repairs of apprenticeship that allows for protection, experi- equipment between fishing trips, and those who mentation, and varying degrees of skill and bait lines and take care of nets, repairing old responsibility. This is not a one-way transfer of ones or supplying new ones. Indeed, folk ac- knowledge as the skipper frequently learns from counts of fishing success often emphasize the the cooperation of his mate; mate and skip- importance of good fishing gear and the dili- per-in fact, the whole crew-educate each gence of the people ashore responsible for its other. In the beginning, the mate is just like an maintenance. "Having a good crew," therefore, ordinary deck-hand; in the end he is knowledge- means not only being able to rely on a good able enough to have a boat of his own. At first fishing crew, but also being provided with good he is of little help to his tutor; later on he can be "services" (pjonusta) on land. trusted with just about anything. Occasionally, The fleet is ever-present as well. While one the skipper may even take a break and stay may speak of the vessels temporarily associated ashore, leaving the boat and the crew to his with a particular landing port and nearby fishing mate. grounds as a "local" fleet, such a fleet knows no The folk account of fishing also emphasizes clear boundaries (cf. Acheson 1988). The fleet is a particular pragmatic view of technology. For a changing constellation of boats that are regis- the skilled skipper, fishing technology-the tered in different towns and municipalities, and boat, electronic equipment, and fishing gear-is many of the skippers, crew, and boat owners not to be regarded as an "extemal" mediator involved are permanent residents of other locali- between the person and the environment but ties. Moreover, the fleets of different ports are rather as a bodily extension in quite a literal hard to separate; during fishing they merge on sense. Experienced skippers often speak of the boundless sea. Nevertheless, the communion knowing the details and the patterns of the at sea is a very important one. Inevitably the "landscape" of the sea bottom "as well as their skipper's decisions while fishing are constrained fingers." Thanks to technological extensions, the by the decisions of other skippers and by the experienced skipper is able to "see" the fish and movements of the fleet. While deciding where to "probe" the landscape of the sea bed. For many fish is largely guided by the readings of elec- landlubbers, no doubt, the sea is primarily tronic equipment and by the skipper's experi- fishing space. For skippers, in contrast, it is a ence of earlier fishing seasons, of no less impor- three-dimensional world, with variable bottom tance is knowing what other skippers are doing, features, migrating fish, and stratified masses of where they are likely to be, and how much they water. will catch. The skipper's knowledge is complex; a skip- An important issue in current discussions of per must choose times and places to fish on the practical knowledge is the extent to which basis of a series of detailed environmental infor- technical and economic changes influence levels mation. It is not surprising, therefore, that fishers of practical skill, leading to reduced or increased often refer to the importance of "attentiveness" levels of skills (Gallie 1994). Somewhat para- (eftirtekt, athygli) and "perceptiveness" doxically, with the crisis in the world's fisheries, 90 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT fishing technology has been revolutionized. ual transferable quotas. Assuming a sense of While in some fisheries, for instance in Brazil responsibility among the new "owners" of the (see Kottak 1992), technological changes seem resource (the quota holders) and a free transfer to have resulted in rapid deskilling, there is little of quotas from less to more efficient producers, reason to believe that this has generally been the economists argued, a quota system would both case. Some skills are inevitably lost; in Iceland, encourage ecological stewardship and ensure old and retired skippers sometimes point out that maximum economic efficiency. fishing has been radically transformed by elec- It seems difficult to separate such bio-eco- tronic technology (including the computer) and nomic theorizing from politics, culture, and artificial intelligence, emphasizing that "natural rhetorics (see, for instance, McCloskey 1985, signs" are increasingly redundant. Attentiveness Gudeman 1992, Ferber and Nelson 1993). One continues, however, to be one of the central example of the rhetorical content of theorizing assets of the good skipper and, just as before, it on enclosure and privatization is the persistent demands lengthy training. The skipper's uni- inclination of advocates of systems of individual verse is very different from that of his colleagues transferable quotas to privilege capital over of earlier decades, but what shows on the screens labor. Icelandic fishing is a case in point. Here, of the radar, the computer, and the fish finder is a quota system was introduced in the cod fishery no less a "natural sign," directly sensed, than in 1983 to prevent the "collapse" of the major birds in the air or natural landmarks. stocks and make fishing more economical (Palsson 1991:Chapter 6). This system divided Scientific Management access to the resource among those who hap- pened to be boat owners when the system was Nowadays, decisions on the scope of fishing introduced, largely on the basis of their fishing operations are usually informed by marine record during the three years preceding the sciences, setting the limit of the total allowable system. Each fishing vessel over ten tons was catch for a fishing season on the basis of mea- allotted a fixed proportion (aflahlutdeild) of surements and estimates of stock sizes and fish future total allowable catches of cod and five recruitment. The science of resource economics, other demersal fish species. Catch quotas however, has played an even more important (aflamark) for each species, measured in tons, role in fisheries management than marine biol- were allotted annually on the basis of this per- ogy, providing the theoretical framework and the manent quota share. And the fortunate quota political rationale for a quota system, and, by holders were the owners of vessels, not crews. extension, private property. In many ways, This arrangement did not go uncontested, for resource economics has replaced marine biology there have been heated debates about what to as the hegemonic discourse on Icelandic fishing. allocate and to whom. The issues involved While the original, formal demand for the quota illustrate the discursive contest between different system came from within the fishing industry, it groups of "producers." Boat owners argued for would hardly have been instituted if it had not "catch quotas," to be allocated to their boats. been advocated by influential Icelandic econo- Some fishers, on the other hand, advocated an mists. Not only did they play a leading role "effort quota," to be allocated to skippers or within the major political parties as well as on a crews. series of important committees that designed and In the modem world, individual transferable modified the management regime, their writ- quotas and similar market approaches are in- ings-in newspapers, specialized magazines, creasingly adopted in response to environmental and scholarly joumals-paved the way for the problems. Their wider social and economic "scientific" discourse on efficiency and the implications are hotly debated, however, as they "rational" management which the quota system raise central questions of ethics, politics, and represents. Some of the economists argued, with social theory (Dewees 1989; McCay and Creed reference to the "tragedy of the commons:' that 1990; Pdlsson and Helgason 1995). For many of the only realistic alternative-euphemistically the critics, market approaches to resource man- defined as "rights based" fishing, as if rights agement are incompatible with egalitarian sensi- were something new-was a system of individ- bilities and communitarian notions of responsi- 8. Learning by Fishing: Practical Science and Scientific Practice 91 bility. Social scientists-including anthropolo- in only a few hands was "totally unacceptable": gists and economists-should attempt to exam- "It scares me to think of the possibility that four ine what the rather loose reference to the "mar- or five companies might gain control of the ket" entails (Dilley 1992). How the narrative of entire national quota." Results obtained through privatization and economic efficiency is used in interviews and ethnographic field work were specific ethnographic contexts is an important strengthened by statistical conclusions regarding topic for research. the distribution of quotas. Statistical results show Icelandic fishers continue to challenge the that there have been radical changes in the total privileging of capital over labor. This is some- number of quota holders, a reduction from 535 times expressed in a critique of the notion of to 391 (27 percent) from 1984 to 1994. Another "fishing history" which defined the original measure is provided by examining the relative quota allocations on the basis of previous holdings belonging to different groups of quota catches. To quote from an interview with a holders, heuristically defined as "giants,' "large" fisher, owners, "small" owners, and "dwarves" (see Palsson and Helgason 1995). If quotas are It's a shame that quotas were only allocated to changing hands, with full transferability, and the boat owners. Originally, allocations were total number of quota owners is decreasing, based on 'fishing history,' but that history has where are the quotas going? To make a long nothing to do with companies and boat own- story short, the proportion of the quota holdings ership. It's the men on board the boats who of the "giants" has rapidly increased in only one have created the right to fish. decade, from 27.9 percent to 49.7 percent. During the same period, the proportion of the The present debate on fisheries management quota belonging to the "dwarves" has decreased is not so much concemed with the technical from 12.5 percent to 8.7 percent. Thus, quotas details of quota allocation as with the larger are increasingly concentrated at the top. social and political consequences of the system. After more than a decade of stringent quota The most serious criticism of the current system management and redistribution of assets, the is that it transfers immense resources into the major Icelandic fishery (the cod fishery) is still hands of a relatively small group of people, in a critical phase and, even worse, there are no comprised of the owners and managers of the signs of ecological recovery. Stock sizes and biggest fishing companies. Many people have recruitment rates continue to be far too low, questioned the privileged access of the large given earlier estimates of maximum sustainable quota holders, the "feudal lords" or the "princes yield. The relative failure of the quota system of the sea" (stegreifar), as the latter are fre- and scientific management of recent years to quently called. In a popular phrase from recent deliver the goods they promised, and the severe political campaigns, the quota system represents social and ethical problems of inequality they "the biggest theft in Icelandic history." have raised, suggest that it may be wise to look Not only has the quota system given perma- for alternative management schemes emphasiz- nent rights of access to an exclusive group, but ing the practical knowledge of the fishing indus- this right has been turned into a marketable try, in particular the people who are directly commodity. With some companies holding more engaged with the ecosystem. than they are capable or willing to fish and Wilson and associates suggest that the "nu- others with less than they actually need, some mefical" approach of current resource economics companies temporarily rent a part of their annual and marine biology, emphasizing linear relation- quota. In public discourse, this is frequently ships and states of equilibrium, fails to account referred to by a loaded and somewhat fuzzy for the chaotic aspects of many fisheries. Their term, "quota-profiteering" (kv6tabrask). The empirical work shows that while fisheries are public is increasingly concerned with growing deterministic systems, because of their extreme inequality due to the concentration of quotas. sensitivity to initial conditions, even simple fish One skipper who had a bigger quota at his communities have no tendency toward equilib- disposal than most of his colleagues claimed that rium. As a result, management faces forbidding the apparently increased concentration of quotas problems when trying to explain the noise in 92 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT ecological relationships, for example, the rela- tematic fishery-independent survey was seen to tionship between recruitment and stock size, be essential. Such a large-scale project was often a key issue for managers: "the degree of beyond the capabilities of Icelandic research accuracy and the completeness of knowledge vessels, and, therefore, commercial vessels were required for prediction are far beyond any capa- hired for the task. For two weeks in March every bilities we might expect to achieve in a fisheries year, five vessels survey the same research environment" (Wilson and others 1994:296). stations (595 in the beginning, 600 later on), Therefore, it becomes difficult, if not impossible, originally selected through a semi-randomly to know the outcomes of management actions stratified process in cooperation with fishers (see such as quotas. Figure 8-1). The vessels (stem-trawlers) are identical in overall equipment and design, in Bridging the Gap: terms of size, fishing gear, and engine power. The "Trawling Rally" This is seen to be important to ensure compara- ble data sets, allowing for reliable estimates of If marine ecosystems are chaotic and fluctuat- changes in the ecosystem from one year to ing regimes, those who are directly involved in another. resource use are likely to have the most reliable The trawling rally is an interesting experi- infonnation as to what goes on in the system at ment. While it is partly a diplomatic endeavor on any particular point in time. Often, however, behalf of the Marine Research Institute in order scientists are reluctant to collaborate with fish- to reduce the tension that has developed between ers. One of the reasons for the lack of collabora- biologists and fishers in recent years as a result tion is the fundamental difference between the of stringent scientific management, and an two groups in terms of the knowledge they seek; attempt to improve the image of the Institute the knowledge of scientists is largely normative among the general public, there is obviously and textual, preoccupied with statistical methods more to the story. No doubt the trawling rally and theoretical ways of knowing, while that of yields extensive comparative information that fishers, often tacit, is tuned to practical realities the biologists could not possibly gain otherwise, in the ever-changing sea. given their limited funding. In an attempt to encourage cooperation be- Nevertheless, as an attempt to cultivate effec- tween scientists and fishers and to involve the tive interactions between fishers and biologists latter in the collection of detailed ecological data for management purposes, the trawling rally has on the state of the seas and the fishing stocks, the significant limitations. To begin with, while the Marine Research Institute hires a group of design of controlled surveying has an obvious skippers to regularly fish along the same pre- comparative rationale, it is also a straitjacket, given trawling paths on their commercial vessels preventing a more flexible and dynamic sensing (see Palsson and others 1989); this is the so- of ecological interactions in the sea. Skippers fail called "groundfish project"-in everyday lan- to be impressed with the scientific design, criti- guage, the "trawling rally"-initiated in 1985: cizing the biologists for "isolating themselves temporarily on particular ships, pretending to The cooperation with fishermen is based on practice great science," to paraphrase one of the the main objective of the project: to increase skippers. Many skippers pointed out during precision and reliability of stock size esti- interviews that, fixed to the same paths year after mates of relevant fish stocks, especially cod, year, the rally fails to respond to fluctuations in through the integration of fishermen's knowl- the ecosystem, thus providing unreliable esti- edge of fish behavior and migrations, as well mates. One skipper who had participated in the as the topography of the fishing grounds. trawling rally remarked that knowing how the (Palsson and others 1989:54) biologists worked had made him lose all faith in scientific procedures. "If these guys were skip- Because mature cod sometimes migrate from pers," another skipper remarked, "they would Greenland to Icelandic fishing grounds, thereby have been fired long ago." making traditional stock assessment on the basis Also, the reliance on trawling, skippers say, is of fishing statistics relatively unreliable, a sys- likely to produce biased results. Often, those 8. Learning by Fishing: Practical Science and Scientific Practice 93 fishing with gill nets on nearby grounds offer a tendency to project an image of resource man- very different picture. From the skippers' point agement as an apolitical enterprise, as the "ratio- of view, a more intuitive and holistic approach, nal" domination of nature independent of ethics allowing for different kinds of fishing gear and and social discourse. Policy makers in fisheries greater flexibility in time and space, would make often remain firmly committed to a modernist more sense. Indeed, skippers discuss their nor- stance, curiously innocent of recent develop- mal fishing strategies in such terms, emphasizing ments in social and ecological theory, presenting constant experimentation, the role of "perpetual themselves as detached observers, as pure ana- engagement" (ad vera ( stanslausu sambandi), lysts of the economic and material world, inde- and the importance of "hunches" (stud) and tacit pendent of the "partial" viewpoints and the knowledge. trivial, practical knowledge of the actors. On the Like their colleagues in other parts of the other hand, current environmental discourse is world, Icelandic biologists have often focused characterized by the postmodem condition, on one species at a time, modeling recruitment, emphasizing, much like medieval European growth rates, and stock sizes, although recently discourse, the embedded nature of any kind of they have paid increasing attention to analyses of scholarship and the interrelatedness of nature interactions in "multi-species" fisheries. While and society (Palsson 1996). The former view, scientists may qualify their analyses and predic- which presents the pursuit of environmental tions with reference to some degree of uncer- knowledge as a relatively straightforward accu- tainty, the "margin of error," they often talk as if mulation of "facts" and radically separates that margin is immaterial. Fishers question their knowledge of nature and the social context in basic assumptions, arguing that understanding of which it is produced, has come increasingly fish migrations and stock sizes is still limited. under attack in several fields of scholarship, Knowledge of the ecosystem, they claim, is too including anthropology, economics, and envi- imperfect for making reliable forecasts. "Erect- ronmental history. We may well be advised to ing an ivory tower around themselves," one search for alternative epistemologies and alterna- skipper argued, "biologists are somewhat re- tive management schemes, democratizing and moved from the field of action; they are too decentralizing the policymaking process. It may dependent on the book." While such comments simply be more effective. Below, I briefly dis- have to be seen in the light of cultural and eco- cuss three related policy implications of the nomic tension between social classes and be- preceding discussion, emphasizing the issues of tween center and periphery, they should not be property rights, the nature and relevance of rejected on that basis alone, as they also have practical knowledge, and, finally, the need to some grain of truth. Biological estimates and develop institutional frameworks which allow fisheries policy are often literal and rigid in for democratic participation. form, unable to deal with variability and to respond to changes in the ecosystem. Skipper Property Rights knowledge, in contrast-the result of situated Many scholars have raised serious doubts and learning, of direct engagement with the aquatic criticisms with respect to the central assumptions environment- is necessarily tuned to the flux of bio-economic theory. To begin with, the and momentum of fishing. An important task on emphasis on privatization and the tragedy of the the management agenda is to look for ways in commons has been challenged on practical which that knowledge can be employed to a grounds. Some "commons" regimes function greater extent than at present for the purpose of rather well (McCay and Acheson 1987, responsible and democratic resource manage- Durrenberger and Palsson 1987) and, con- ment, bridging the modernist gap between versely, some privatized regimes are obvious scientists and practitioners. failures. In some African pastoralist economies, for example, the argument about the tragedy of Conclusions and Policy Implications the commons has been forcefully used by gov- ernments and companies when pressing for There Is a strange paradox in Western envi- privatization of communal grazing areas. In the ronmental discourse. On the one hand, there is a process, earlier mechanisms for regulating 94 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT access have sometimes been eliminated, with simply "I cannot quite explain." How can one serious ecological consequences. Environmental elicit and reformulate such tacit knowledge in degradation was not the consequence of the general terms, in order to incorporate it into absence of property rights, but rather the result biological models and decisionmaking? If much of the imposition of a privatized regime. There of the relevant knowledge that skippers obtain in is some evidence that a similar erosion of the course of their work is the result of first-hand responsibility is occurring in fisheries as a result experience, embedded in the practical world of of quota management. Discarding of small and fishing, its mediation to landlubbers is obviously immature fish during fishing operations and the a difficult task. "high-grading" of the catch (the dumping of Scientists and practitioners, after all, have species of relatively low economic value) seem somewhat different methods and motives. One to be major problems in many fisheries, includ- of the problems entailed by their collaboration, ing the Icelandic one. In addition, privatization to draw upon 1. Kloppenburg and B. R. DeWalt, sometimes causes severe social inequalities and is to transform practical knowledge which ethical problems, which escalate the problem of produces "mutable immobiles"-that is, rela- irresponsible resource use. Before instituting tively flexible knowledge geared to the details of programs of privatization and quota allocation, a given task of a particular locality-into "muta- managers should be careful to examine the ble mobiles" (see DeWalt 1994)-general, particularities of history and culture and the holistic knowledge that can be applied to similar likely social and ecological consequences of phenomena in other contexts. This should not, their schemes. however, be seen as an insurmountable hin- drance. One possible avenue in this direction, in Practical Knowledge the context of fisheries management, is to have An important conceptual problem with cur- biologists observe practicing skippers on differ- rent bio-economic theory relates to the tendency ent kinds of commercial vessels during actual to separate systems and activities, experts and fishing trips, using a variety of fishing gear at practitioners. Management is often presented different times of the year. This would allow and practiced as a hierarchical exercise, the them to learn by fishing, much like a novice business of privileged professionals (see Marglin mate learns from a skipper in the course of 1990). As I have argued, learning by doing production. Biologists would thereby periodi- entails the development of detailed practical cally become apprentices, guided by experienced knowledge, the accumulation of personal wis- skippers. Knowledge obtained in such practical dom potentially of crucial importance for any encounters may later on become important for project of resource management that seeks to ecological assessment, for the estimation of ensure resilience and sustainability. Standardized stock sizes, recruitment, migrations, and carry- procedures such as the Icelandic trawling rally ing capacity. may prove to be quite useful in this respect. Frameworks of Cooperation Science and practical knowledge should be seen as complimentary and interactive sources of While much of fishers' knowledge is tacit and wisdom, not mutually exclusive. nonverbal, one should not forget that they often The fact, however, that skippers often fail to discuss their observations and theories in fairly express what they know by verbal means, since clear terms, verbalizing their personal knowl- much of what they have learned is tacit and edge, their decisionmaking, and their manage- intuitive, presents a formidable "translation" ment goals. To draw upon this personal re- problem. One Icelandic skipper explained his source-indeed, upon local knowledge and approach in the following terms: "It's so strange: concems in general (including those of when I get there it's as if everything becomes fishworkers)-it is important to establish a clear. I may not be able to tell you exactly the democratic institutional framework, a framework location, but once I'm there it's as if everything that avoids the hierarchy of modernist manage- opens up." Indeed, a frequent comment in inter- ment, allowing for what Habermas has called views with skippers on their fishing tactics is "the ideal speech situahlon," a "speech situation that is immune to repression and inequality" 8. Learning by Fishing: Practical Science and Scientific Practice 95 (Habermas 1990:85). Such an institutional Access to Sea Resources."American Ethnolo- context is particularly important today, given the gist 14(3):508-22. mutual integration of many fishing societies and Ferber, Marianne A., and Julie A. Nelson, eds. the importance of coordinated fisheries policy. 1993. Beyond Economic Manl: Feminist Several studies of European fishing communi- Theory anid Econzomics. Chicago: University ties, informed by theorizing on the process of of Chicago Press. "globalization," have drawn attention to the Fischer, K. W., D. H. Bullock, E. J. Rotenberg, ways in which local concerns are articulated and P. Raya. 1993. "The Dynamics of Com- within a larger regional, national, and interna- petence: How Context Contributes Directly to tional context, emphasizing that in order to Skill." In R. H. Wozniak and K. W. Fischer, understand recent developments and to act eds., Developmenit in Context: Actirig and responsibly, it is necessary to move beyond the Thinkinig in Specific Environiments. Hillsdale, study of either "local" or "external" influences to New Jersey: Lawrence Erlbaum Associates, the wider encompassment of the local commu- Publishers, pp. 93-117. nity within larger contexts (see, for instance, Gallie, Duncan. 1994. "Patterns of Skill Change: LiPuma and Melzoff 1994). Often fishing asso- Upskilling, Deskilling, or Polarization?" In R. ciations act as mediating institutions in this Penn, M. Rose, and J. Rubery, eds. Skill and process, coordinating individual concerns, local Occupatiorial Change. Oxford: Oxford Uni- activities, and the political structures of the versity Press, Oxford, pp. 41-75 larger environment, looking both inside and Gergen, K. J., and G. R. Semin. 1990. "Every- outward. day Understanding in Science and Daily Life." In K. J. Gergen, ed., Everyday Under- Bibliography standing: Social and Scientific Implications. London: Sage Publications, pp. 1-18. Acheson, James M. 1988. The Lobster Gangs of Gomes, Manuel do Carmo. 1993. Predictions Maine. Hanover and London: University unider Uncertainty: Fish Assemblages and Press of New England. Food Webs on the Grand Banks of New- Brush, Stephen. 1993. "Indigenous Knowledge foundland. St. John's: Institute of Social and of Biological Resources as Intellectual Prop- Economic Research. erty Rights: The Role of Anthropology." Gudeman, Stephen. 1992. "Remodeling the American Anthropologist 95(3):653-86. House of Economics: Culture and Innova- Chapin, Mac. 1994. "Recapturing the Old Ways: tion." American Ethnologist 19(i):139-52. Traditional Knowledge and Western Science Gudeman, Stephen, and Alberto Rivera. 1990. among the Kuna Indians of Panama." In C. D. Conversations in Colombia: The Domestic Kleymeyer, ed., Cultural Expressioni and Economy in Life and Text. Cambridge: Cam- Grassroots Development: Cases from Latin bridge University Press. America. Boulder and London: Lynne Habermas, Jurgen. 1990. "Discourse Ethics: Rienner Publishers, pp. 83-101. Notes on a Program of Philosophical Justifi- DeWalt, Billie R. 1994. "Using Indigenous cation." In S. Benhabib and F. DalImar, eds., Knowledge to Improve Agriculture and The Communicative Ethics Conitroversy. Natural Resource Management." Human Cambridge, Massachusetts: MIT Press, pp. Organizationi 53(2): 123-31. 60-110. Dewees, Christopher M. 1989. "Assessment of Kottak, C. P. 1992. Assault on Paradise: Social the Implementation of Individual Transferable Chanige in a Brazilian Village. Second Edi- Quotas in New Zealand's Inshore Fishery." tion. New York: McGraw Hill. North American Journal of Fisheries Manl- Lave, 1. 1988. Cognition in Practice: Mind. agement 9:131-39. Mathematics and Culture in Evervdav Life. Dilley, Roy, ed. 1992. Contesting Markets: Cambridge: Cambridge University Press. AnalYses of Ideology, Discourse and Practice. Lave, J., and E. Wenger. 1991. Situated Learn- Edinburgh: Edinburgh University Press. ing: Legitimate Peripheral Participatson. Durrenberger, E. Paul, and Gisli Pdlsson. 1987. Cambridge: Cambridge University Press. "Ownership at Sea: Fishing Territories and 96 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT LiPuma, Edward, and Sarah Keene Melzoff. . 1996. "Human-Environmental Rela- 1994. "Economic Mediation and the Power of tions: Orientalism, Patemalism, and Commu- Associations: Toward a Concept of Encom- nalism." In P. Descola and G. Palsson, eds., passment. American Anthropologist Nature and Society: Anthropological Per- 96(i):31-51. spectives. London and New York: Routledge, Marglin, S. 1990. "Towards the Decolonization in press. of the Mind." In F. Apffel Marglin and S. Pilsson, Gisli, and Agnar Helgason. 1995. Marglin, eds., Dominating Knowledge: De- "Figuring Fish and Measuring Men: The velopment, Culture, and Resistance. Oxford: Quota System in the Icelandic Cod Fishery." Clarendon. Ocean and Coastal Management. Under McCay, Bonnie M., and James M. Acheson, eds. review. 1987. The Question of the Commons: The Palsson, 0., K. E. Jonsson, S. A. Schopka, G. Culture and Ecology of Communal Re- Stefansson, and B. A. E. Steinarsson. 1989. sources. Tucson, Arizona: University of "Icelandic Groundfish Survey Data Used to Arizona Press. Improve Precision in Stock Assessments." McCay, Bonnie M., and C. F. Creed. 1990. Journal of Northwest Atlantic Fishery Science "Social Structure and Debates on Fisheries 9:53-72. Management in the Atlantic Surf Clam Fish- Smith, M. Estellie. 1991. "Chaos in Fisheries ery." Ocean and Shoreline Management Management." Maritime Anthropological 13:199-229. Studies 3(2):1-13. McCloskey, Donald. 1985. The Rhetoric of Williams, Nancy M., and Graham Baines, eds. Economics. Madison, Wisconsin: University 1993. Traditional Ecological Knowledge: of Wisconsin Press. Wisdom for Sustainable Development. Can- Neher, P. A., R. Amason, and N. Mollett, eds. berra: Centre for Resource and Environmental 1989. Rights Based Fishing. Dordrecht, Studies. Netherlands: Kluwer Academic Publishers. Wilson, James A. 1990. "Fishing for Knowl- Palsson, Gisli. 1991. Coastal Economies, Cul- edge." Land Economics 66:12-29. tural Accounts: Human Ecology and celan- Wilson, James A., James M. Acheson, Mark dic Discourse. Manchester, U.K.: Manchester Metcalfe, and Peter Kleban. 1994. "Chaos, University Press. Complexity and Community Management of . 1994. "Enskilment at Sea." Man Fisheries." Marine Policy 18(4):291-305. 29(4):901-28. 8. Learning by Fishing: Practical Science and Scientific Practice 97 Figure 8-1: Fishery Survey Data 26' 24 22' 20- 1 14 12- NORTHERN AREA 67O / 4 3 722 *72~~~~1 720 714 )~ 7 67- 67' 6 674 673 672 671 670 669 *668 667 666 665 664 662 626s 625 624 623 622 621 620 619 618 617 616 615 614 613 6 611 66- / >~~ 1 2 l5 3 - _3 3 4 4 4 4 34 7 6 576 575 574 573 571 570 569 568 564 563 562 5 d 2 2 2 5 5 5 5 5 6 15 2 4 57 526 525 524 523 513 512 1 6s- 0 ~~8 8 a .5. 2. 6s | 476 475 474 473 472 X Statitical unit no 463 462 461 4 9 8 7 9 |10 Fx Stratum no. 4 I1 _5 6 ( 2 25 424 423 422 Main- uas 45 14 13 t2 411 1 . . . .8 8 8| . . . . .I Otlt wb.r aA 1 t 8 3 6- 64- 3 ~~3715 374 373 *372 371 370 367 36 6 84r ;2361 aS 0 10 8 a a w 9 v v 32! 324 323 *322 321 320 131 /31217% 311 310 0 7,- a 9 '9 I10 e3' V79' SOUTHERN AREA A-~ 266424' 22" 20 ' 1 " 1 6< 1 4" 1 2" 26- 24- 22" 20 W1 14' 121 9 Indigenous Knowledge and Resource Management Systems: A Native Canadian Case Study from James Bay Fikret Berkes Abstract THIS CHAPTER IS BASED ON A CASE STUDY of Cree Indians from the Canadian subarctic. It includes an analysis of the evidence regarding the distinctions of the local indigenous system from Euro-Canadian, science-based wildlife and fishery management systems. There is good evidence that the local system has incorporated certain Western scientific game conservation ideas since the 1 800s. However, there is also good evidence that the indigenous system retains certain distinctive features in both thought and practice-core characteristics that could not have come from a Western source. This chapter is based on a paper delivered at the Canadian Anthropology Society Annual Conference, Vancouver, May 1994. For the development of many of the ideas in this chapter, I owe much to colleagues Harvey Feit, Carl Folke, Madhav Gadgil, and Buzz Holling. The chapter is based on a long-termn research project supported by the Social Sciences and Humanities Research Council of Canadla (ssHRc). 99 100 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Cree traditional management systems cannot fishermen controlling access to resources, pro- be assessed by the criteria of conventional vide lessons on how common-property resources resource management science because they are can be managed (Berkes 1987). Encoding ideals based on a different system of knowledge. The such as respect, reciprocity, and sharing simulta- Cree are not concerned, for example, with the neously into religious tradition and hunting population dynamics of wildlife and fish species, culture has powerful potential. Switching prey and how much can be taken. They are concerned and fishing areas according to declining catch with how people hunt or fish. Cree management per effort shows how harvesters can respond to systems can be assessed by the use of outcome ecological feedback and conserve biodiversity measures (sustainability). Appropriate for (Berkes 1977). Rotational use of fishing areas cress-validation with Cree traditional practice is improves both biological and economic returns. the emerging alternative resource management The thinning of fish populations by the use of a approaches of C. S. Holling, with its nonlinear, mix of gillnet mesh sizes helps conserve fish multi-equilibrium concept of an ecosystem and population resilience (Berkes and Gonenc 1982). its focus on system resilience and feedback. It Resource management professionals have can be argued that there is a remarkable conver- always been skeptical about claims of "native gence between some indigenous views of the wisdom" in the use of resources, a view shared natural world and Holling's unpredictable eco- by other scholars as well, including anthropolo- systems. gists such as Smith (1983) and Alvard (1993), who have provided evidence from different groups of hunters that foragers tend to maximize their short-term harvests, and that apparent Only recently have scholars and policymakers resource management is merely an artifact of considered the possibility that systems of natural optimal foraging strategies. Indigenous peoples resource management based on indigenous may have a profound knowledge of their envi- practices may exist and may be considered ronments, but it does not follow that they use alternatives to resource management and eco- this knowledge for a conscious conservation of nomic development based on Western scientific their resources (Hames 1987). In the case of knowledge. This chapter explores the idea that contemporary Canadian subarctic hunting indigenous knowledge systems can provide groups, conservation-oriented practices have alternative frameworks for sustainable uses of been attributed to European, rather than indige- the environment. Indigenous knowledge is used nous, thought. Brightman (1993) has argued on here to mean local knowledge held by indige- the basis of ethnohistorical evidence that Central nous peoples, or local knowledge unique to a Canadian Subarctic Cree resource management given culture or society. Traditional ecological practices for beaver were most likely learned knowledge is defined as a cumulative body of from the Hudson Bay Company in the 1800s. knowledge and beliefs, handed down through The questions raised by these authors touch generations by cultural transmission, about the upon a number of fundamental issues with relationship of living beings (including humans) indigenous knowledge and resource manage- with one another and with their environment; ment systems: just what is "traditional" knowl- traditional ecological knowledge is used here as edge, and how "pure" is it? Can elements of an a subset of indigenous knowledge (Gadgil, "indigenous" resource management system be Berkes, and Folke 1993). segregated from that of a Western scientific The chapter is based on a case study of Cree resource management system? How do these Amerindians from the James Bay area in the two systems of knowledge interact? The chapter Eastern Subarctic region of Canada. It has been starts with a Cree hunter's narrative, a device to known for some years that a number of Cree provide insight into a contemporary indigenous resource use practices provide potentially signif- knowledge and resource management system, as icant lessons in wildlife management (Feit 1973, described first-hand by a local expert. The 1986, 1987; Tanner 1979; Scott 1986). In the chapter then proceeds to argue that: area of fisheries, community-based management systems of the Cree, with knowledgeable master 9. Indigenous Knowledge and Resource Management Systems 101 *Western concepts of resource management respect for the animals is maintained. He should available to the Hudson Bay Company (HBC) also make sure that the area is rested. He divides in the 1800s were too simplistic to be much up his area and concentrates on one part at a use for the conservation of beaver or other time during a trapping season. The remainder of game; his area is rested. Normally a trapper should rest parts of his trapline for two or three years but no * The notions of resource management of the longer than four years. If he leaves it, say, six or early and mid-1900s were utilitarian, useful ten years, he is not properly using his area, and for maximizing production but prejudicial to the beaver will not be plentiful. optimizing long-term use (that is, "In an area which has not been trapped for a sustainability); and long time, there will be many empty lodges (that is, beaver houses made of mud and wood). This * Indigenous systems of knowledge and prac- may be due to disease because of overcrowding; tice which have the potential to result in it may be due to beavers depleting their food sustainable outcomes are not uncommon. supplies. The trapper knows that in an area Some of these indigenous systems, including which has not been trapped for a long time, those of the Cree, are consistent with altema- various types of beaver food, such as aspen, tive resource management theories of C. S. would be in low supply. If there has been a fire, Holling which focus on ecosystem processes this also affects the beaver. Trappers know that and resilience. three or four years after a fire, the beaver will again begin to inhabit an area. At first, however, There are a number of policy implications of they would be eating more of the root foods. The the above arguments for development planners trapper may resume trapping again when the and development projects in areas inhabited by willows are half grown. This may be some eight indigenous peoples. In fact, the very area of the to ten years after a fire. case study has been affected by a large develop- "The tallyman makes an inventory of the ment project, the James Bay hydroelectric pro- lodges of the area where he intends to trap. He ject, which has interfered with the use of local would normally prepare this inventory during resources and which has rendered some of the the last time he was in that area. Before the major fish resources unusable (Berkes 1988). James Bay Agreement, the Provincial Game Indigenous knowledge could have been used to Department (MLCP) used to assign beaver quotas avoid some of the impacts but was not. Various to individual tallymen based on the tallyman's issues in the development of indigenous and inventory of beaver lodges. More recently, the tribal lands have been debated for some time in Cree Trappers Association (CrA) has taken over the World Bank and other international circles this function. The principle is that the yearly (Goodland 1982; ICIHI 1987; Davis 1991). harvest of beaver be in line with the number of Warren (1991) argued that development agen- beaver lodges in a trapline. cies can take a leading role in promoting the use "The tallyman went to trap a part of his of indigenous knowledge for development by trapline. He had not been there for several years, preserving indigenous knowledge, incorporating but he had given permission to another group to indigenous knowledge into education, conduct- trap it a few years previously. These people had ing participatory research, and establishing reported plenty of beaver at that time. But the networks. trapper knew that there would not be many beaver in that area because these other people A Cree Hunter's Narrative had killed too many. He knew this because when these people returned to the village that year, "The tallyman takes care of a trapline so that their furs had not been prepared properly. Many the beaver continue to be productive. Taking of the furs had to be thrown out. They had killed care of a trapline means not killing too many. A indiscriminately-young, old, every animal. trapper paces himself, killing only what he Some of the beaver even may have been trapped needs, and what can be prepared by the women, out of season. The trapper visited, one after so that there is no wastage of meat and fur, and another, lakes and ponds which he knew to be 102 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT good beaver lakes. There were beaver signs, but Keeping in mind what he left behind at the other these were old signs from before that group's area just before Christmas, he checked some visit. Beaver had declined, had not produced additional areas near the main camp. Now there because those trappers had not taken care of that was more daylight, and he had more time to spot. They had done wrong to the game. In such check the lakes he did not have time to visit cases, game retaliates. Leave nothing be- earlier. He found ten lakes in this new area with hind-and it affects the later hunt. Bad manage- signs of beaver in them. He set new traps but did ment has repercussions for later years. not check them immediately the next day. In- "The tallyman started his inventory in early stead, he broke trail to a new area and did an fall when he arrived at his trapline. This was inventory. He also set a fish net in this new area. before freeze-up, so he was using his canoe to He would be making camp in one of those lakes check for signs of beaver. He was looking for later. The next day he checked his traps and lodges and food piles. But beaver do not always brought in beaver. The wife had to work hard to make a food pile if there is in that lake a certain keep up in cleaning skins. kind of water plant (a species of water lily) with "The next day, he left his traps in and went to roots used for food. He was also checking for the new area to actually set up camp this time. teeth marks on nearby trees to figure out the He checked his traps the following day, and numbers and age of the beaver in the lodge. brought beaver to be cleaned and to be stretched "The size and shape of the lodge also gave on frames. With the new camp already set up for him clues as to what to expect: how many ani- the whole family, he proceeded there. The traps mals of different ages. He noted the distance were still set, but he did not check them that day. between lodg2s and his camp by pacing himself. Instead, he inventoried a different area again. When he started trapping, he took care to leave Even if there were no beaver in this new area, he some animals behind. Sometimes he would knew there would be no problem because he leave behind the younger beaver, sometimes he already had a set of traps in the previous area. would kill them. Leaving an adult behind en- "From the new camp, he set out the next day sures quicker reproduction. The first-year beaver with his traps. He was lucky to find beaver would not reproduce the following year. But lodges, four or five of them, and he was quite leave one adult, and it will find a mate and happy about that. He sent his son to go even reproduce the following year. further east the next day. The son checked the "By November, he was finished trapping traps set the previous day and brought in the around his base camp. He started setting up new beaver. The next day after that, the son checked camps in new areas. He would be gone from the the last set of traps set further east, but had no base camp for one or two weeks at a time. Mov- luck. With son and wife, he checked the first set ing to a new area, he would check 'beaver of traps placed earlier. But he still had no luck lakes,' lakes where he knew from experience with those traps set most recently. He took the that he would expect to find beaver. Making an traps out; let them be; they will increase for the inventory of 'beaver lakes' told him what to next time,' he said. He was not catching any- expect in that new area as a whole. He also kept thing there, and there was a meaning to that. The an eye open for other fur animals, mainly beaver did not want to be caught yet. Next fall, by checking for tracks. The beaver is not the he would come back to this area, and maybe the only animal he is after, of course; he needs a bit beaver would then be ready to be caught."' of everything (for commercial sale and for food). It was now near Christmas. He built a cache (platform with legs) for his traps and gear in this new area. This way he would not have to haul everything back to main camp. By this time, he knew of the existing lodges in the new area. I. The ahove narrative was recorded in 1985 in the "After Christmas, he went back to his main meetings of a working group organized by the CrA in camp; this was a lodge built of sod (a traditional Chisasibi. James Bay. Quebec. The speaker was Robbie building style with split logs and blocks of Matthew, then the head of ClA, respected hunter and Sphagnum moss on the outside for insulation). traditional leader. one time chief of Chisasibi First Nation. ten years later an elder and still an active hunter. 9. Indigenous Knowledge and Resource Management Systems 103 Indigenous System: trade, territories and leaders in fact characterize Ideologically Pure? resources other than fur trade species and may well have indigenous origins in the James bay Does the narrative indicate a European or an area (Scott 1986; Berkes 1987; Feit 1991). indigenous style of resource management, or However, even if we were to accept that the perhaps a mixture of both? One striking feature master hunt leader or steward (Feit 1991) is an of the narrative is that the speaker has a indigenous institution, the designation "tally- nondominant relationship with game, one based man" (one who keeps a tally of beaver lodges on respect, and on the assumption that the ani- for the determination of harvest quotas) is mals control the hunt, and that the role of hu- clearly recent. mans in the natural system is characterized by a Thus, the speaker is describing neither a "community-of-beings" worldview (Gadgil and purely indigenous, non-Western resource man- Berkes 1991). These are notions that have no agement system, nor one which the Cree adopted counterparts in Western European thought, at from the Hudson Bay Company in the 1800s or least not since the Middle Ages (e.g., White later. There is strong evidence that it is a system 1967; Capra 1982). Thus, they characterize an that has a mixture of both European and indige- indigenous, non-Western system of thought and nous styles of management, a system strongly attitude towards nature. The phrase "the beaver influenced by Western resource management but did not want to be caught yet" reveals a one that retains the fundamentals of an ancient worldview in which it is the animals (and not the worldview and a locally-evolved system of hunter or the resource manager) who control the practice. success of the hunt; it is a notion that is still common among the older Cree hunters of the Limits of Western Resource James Bay area (Tanner 1979). Management Science Yet other phrases and descriptions reveal resource management thinking more closely The idea and practice of beaver conservation associated with current Western practice. For based on trapping seasons were introduced by example, "taking care of a trapline means not the Hudson Bay Company into the Canadian killing too many" shows a concern with numbers subarctic in the 1800s (Brightman 1993). How- which, according to Brightman (1993), is not ever, there are reasons to think that Western historically associated with the Cree and other resource management was of limited use to the subarctic hunting peoples. The speaker has an Cree, at least initially. The first scientific theo- obvious quantitative understanding of animal ries of overharvesting did not develop until the conservation that is a characteristic of European 1920s and the 1930s, starting in the field of thought and practice (Brightman 1993). Other fisheries. Prior to that, notions of depletion no parts of the narrative show evidence of mixing doubt existed, but there was no scientific basis European and indigenous notions. For example, for resource management policy and no mathe- the previous group's misdeeds are assessed on a matical tools appropriate for analysis (Gause criterion likely to be non-Western: "their furs 1934; Lotka 1956). The conventional wisdom had not been prepared properly" and yet, they used by the Europeans in 1800s for game man- "may have trapped out of season:' a notion that agement seems to have been derived from expe- could only have come from the fur trade. The rience with domestic animals. Much of this narrator speaks of "respect for the animals" in "management" thinking seems to be comprised the same sentence with "no wastage of meat and of prescriptions against the killing of young fur." Brightman (1993) argues that the Cree animals and mothers, and against hunting in the hunters of the 1800s were not concerned with reproductive season. Much of the available wastage at all, although the contemporary Cree ethnohistorical material makes this clear (e.g., hunter considers wastage taboo. Brightman 1993). The notions of hunting territories and hunt As reasonable as these measures may be for leaders is a source of much debate in subarctic the management of cows in the barn, they have anthropology (Bishop and Morantz 1986). little relevance or applicability to hunting strate- Thought by many to be a product of the fur gies in complex ecosystems. The optimal hunt- 104 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT ing period for a given species may well be in the The ecological dimensions of resource man- peak reproductive season, and as in the case of agement are closely linked to their social dimen- many fish species, harvesting may not even be sions. Regier, Mason, and Berkes (1989) noted possible in other seasons (Berkes 1987). There is that "our experience with most 'successful' good reason to be skeptical of the observa- conventional exploitative development is that it tions and impressions of the early Europeans. If is not ecologically sustainable, and often leads to the indigenous peoples of the Canadian subarctic the marginalization of local populations depend- had a management system, chances are that it ent on these resources." Single-minded concern would not have been recognizable to the person- with economic or biological maximization and nel of the Hudson Bay Company. Further, as lack of concem with equity or culture are among people coming from a country in which most of the characteristics of conventional resource the wildlife had already disappeared, the Hudson management science. As such, these resource Bay Company personnel, missionaries, and managers can hardly be expected to be sympa- those others likely to observe indigenous hunters thetic observers of indigenous resource manage- did not have a knowledge base that would have ment systems, in which the main concerns are enabled them to evaluate indigenous hunting precisely the opposite. practices. The effectiveness of British conserva- tion prescriptions exported to Canada by the Systems of Knowledge Hudson Bay Company can be readily put to test: beaver had already been hunted to extinction in The expression "systems of knowledge" Britain by the 1500s. comes from an extensive body of literature in When conventional scientific resource man- philosophy and anthropology, and is used here agement did develop, it developed in the service to signify that there are multiple ways of defin- of utilitarian, exploitative premises of a ing reality. As Banuri and Apffel Marglin "dominion-over-nature" worldview. Reduction- (1993:9) put it, " ...indigenous and modern istic science, as used for example in the maxi- communities are not just different political mum sustained yield management of cod, is best groups aiming to maximize their income or geared to the efficient utilization of resources. wealth, but embody different systems of knowl- Ecosystem interactions and environmental limits edge, different ways of understanding, perceiv- are not integral parts of management thinking. ing, experiencing, in sum, of defining reality, Resources are often treated as if they are bound- which includes the notions of one's relationship less. This is a legacy of the laissez-faire ideology not only to the social milieu but also to the of Adam Smith and still persists in the neoclassi- natural environment." cal economic theory of today (Daly and Cobb In sketching what they call modem and 1989). nonmodem knowledge as ideal types, Banuri It is important to identify correctly the domi- and Apffel Marglin (1993) note that the distin- nant ideology of conventional resource manage- guishing characteristics of modern knowledge ment: it is well suited by design for short-term are disembeddedness, universalism, individual- exploitative development by means of maximiz- ism, objectivity, and instrumentalism. In con- ing production of a particular resource at a trast, nonmodem knowledge is characterized by particular time and place. But it is not well embeddedness, locality, community, a lack of suited for long-term sustainable use of resources separation between subject and object, and a in a complex ecosystem (Gadgil and Berkes non-instrumental approach. The modern or 1991). Dominant resource management para- scientific knowledge system, although not digms did not develop in an ideological vacuum, exclusively Western, is dominant because of nor did they develop without scientific contro- certain unquestioned assumptions, such as versies. Worster (1985) has described in some individualism and instrumentalism, deeply detail the struggle between the more holistic, rooted in Western civilization. ecosystem management views of the ecologists, Conventional resource managers have usually as opposed to the utilitarian approaches of seen indigenous peoples not as a source of conventional resource managers. solutions to resource and environmental prob- 9. Indigenous Knowledge and Resource Management Systems 105 lems; rather, they have often seen indigenous (Gadgil and Berkes 1991), or from its instrumen- people themselves as a source of the prob- tal attitudes that undermine the larger social lem (Freeman 1989). Indigenous peoples have basis of conservation (Banuri and Apffel often been blamed for resource depletion when, Marglin 1993)? The apparent convergence in reality, there were other forces at work. Ex- between indigenous ideologies and the nonlin- amples include the depletion of beaver and ear, multi-equilibrium ecosystem thinking of C. caribou in the Canadian North, and deforestation S. Holling provides an insight for the possible in the tropics. Population growth rates of indige- integration of Western science and indigenous nous peoples have been seen as putting pressure knowledge. on scarce resources, and their systems of collec- tive resource management have been seen as Indigenous Knowledge and being incapable of coping with the "tragedy of Ecosystem Resilience the commons." The solutions, according to this view, would include reducing population growth Conventional resource management based on rates and instituting modem managerial systems Western science often generates simplified of resource management or privatizing rights ecosystems, as, for example, in modern. aiorcul- (Berkes 1989). tural systems. Resource management pracitces Modem management systems, however, have are often designed to lock out feedbac. f.omn the no room for respecting the wishes of the beaver environment and to avoid natural perturbations, and whether or not "it" wants to be captured. as in fire management in forestry. Assuming Nor have they any room for reciprocity between away signals from the environment allows the the hunter and the hunted. The very detailed conventional resource manager to carry on contextual knowledge of the Cree hunter of without having to worry about complications. beaver teeth marks, health of beaver feed, and Reductionism tends to rely on simplified views signs of beaver abundance, are often respected of natural systems. In contrast to the Cree by the field ecologist. However, as far as the hunter, who sees nature pulsating with life and conventional resource manager is concerned, meaning, and who regards it with awe and such indigenous knowledge (or for that matter, uncertainty, the resource manager is often self- detailed ecological knowledge) has no place in confident in the belief that nature is an inanimate the disembodied population models that must be clockwork governed by simple, universal laws used. and "behaves as an automaton which, once Detailed local knowledge is the starting point programmed, continues to follow the rules of indigenous knowledge and management inscribed in the program" (Prigogine and systems. Subarctic Indian hunters and fishermen Stengers 1984:5). are not unique in this regard (Berkes, Folke, and Only in the last few years has there been a Gadgil 1994). The issue is not merely that systematic critique of the view of science as indigenous peoples are conservationists but consisting of linear, cause-and-effect, and pre- whether systems of knowledge other than West- dictive relationships. Holling is perhaps the best em resource management science can provide known proponent of an alternative view of the capability to manage resources sustainably. ecosystem science and resource management. In The body of evidence accumulating especially in Holling's view, ecosystems are characterized by the last decade or so makes it difficult to reject changes that could not, on looking back, have the notion that some indigenous knowledge been anticipated. These changes Holling calls systems have this capability. "surprise," and their study "the science of sur- The growth of interest in indigenous knowl- prise" (Holling 1986). The equilibrium-centered edge in recent years is partly related to the view of ecosystems ("ecosystem balance") is failures of conventional resource management replaced by a multi-equilibrium view of stochas- science. It is a paradox to many that modem tic uncertainties, as in chaos theory. Dynamic managerial systems, with all their power, seem processes and ecosystem resilience (the ability of unable to halt or reverse the depletion of re- the system to maintain its structural integrity) sources. Is this failure due to a systemic problem become all-important (Holling 1986; Holling stemming from its ideology of utilitarianism and Bocking 1990). 106 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Holling observes that when ecosystems are The conventional scientific management systems managed for human benefit, perturbations are for subarctic fisheries in Canada may employ the eliminated to increase the efficiency of manage- following tools: restrictions on gillnet mesh size ment and hence the productivity of the resource, and fishing gear used, minimum fish size, season be it trees, wheat, or big game. But the very closures, prohibition of fishing at times and success of management freezes the ecosystem at places when fish are spawning. Catch quotas and a certain stage of dynamic change, making the maximum sustainable yield calculations based ecosystem more fragile or more "brittle." Block- on population dynamics of the stock may also be ing out perturbations and feedback, efficient in used in larger-scale fisheries. However, many the short term, tends to make the ecosystem commercial fisheries based on whitefish brittle by inviting even larger and less predict- (Coregonusspecies) in the Canadian North have able feedback from the environment. The feed- proved to be nonsustainable (Berkes 1987). One back and surprises may be harder to deal with explanation for observed stock failures is the than the natural perturbations, and may have reduction of reproductive resilience, by the devastating effects on the ecosystem and societ- selective removal of larger fish, in populations in ies dependent on it (Holling and Bocking 1990; which multiple reproductive year-classes pro- Holling 1994). Examples include budworm vide an adaptation to an unpredictable environ- control in Canadian forests (in which more and ment whereby reproduction may fail in a given more control effort seem to result in larger year (Berkes and Gonenc 1982). infestations when they do occur), and forest fire Subsistence fisheries in many parts of Canada suppression (following a century of fire suppres- are exempt from government regulations. Cree sion, half of Yellowstone Park bumed down in subsistence fishermen in Chisasibi fish with the one major fire in 1988). most effective gear available, using a mix of Resource management characterized by mesh sizes that gives the highest catch per unit indigenous knowledge and management systems of effort by area and season, and concentrate allows perturbations to act on the system, instead effort on aggregations of the most efficiently of trying to lock them out. In indigenous cul- exploitable fish (Berkes 1977). In short, Cree tures, a knowledge base has evolved to provide fishermen violate just about every conservation guidance on how to deal with perturbations and or management practice used elsewhere by feedback, and how to respond to environmental government managers. Yet records going back change. For example, the Cree hunter's narrative to the 1930s show that Coregonus fisheries in provides recipes from the indigenous wisdom to Chisasibi have been sustainable (Berkes 1987). deal with fire in a trapping area ("three or four How do the Cree do it? years after a fire, the beaver will begin to inhabit The thinning of populations by the use of a an area"). Cultural practices are not only adapted mix of mesh sizes appears to help conserve to, but actively modify the environment by population resilience, compared with the whole- managing feedback. For example, the depletion sale removal of the older age groups by single of aspen signals possible overcrowding of bea- large mesh size (Berkes and Gonenc 1982). In ver, warning the trapper that a new cycle of addition, a number of other practices contribute beaver trapping is necessary. Contrary to text- to sustainability: Cree fishermen switch fishing book wisdom, hunters can manipulate environ- areas according to falling catches per unit of mental feedback and manage habitat, as, for effort; rotate the more remote fishing areas on a example, in the use of fire to rejuvenate wildlife five- to ten-year cycle; key harvest to needs; habitat (Lewis and Ferguson 1988). have master fishermen or stewards who control A detailed example of the interaction of access into harvest areas; and have a land use indigenous knowledge and ecosystem resilience system with common-property institutions at the is provided by the fishery system in Chisasibi, community level to ensure that resources are James Bay. Studied and documented over an used under principles and ethics agreed upon by extended period, the case provides a detailed all (Berkes 1987). The viability of the Cree illustration of some of the fundamental differ- fishery shows that sustainability is possible ences between Western and indigenous systems under community-oriented economics and and the role of the latter in conserving resilience. indigenous knowledge systems, whereby fisher- 9. Indigenous Knowledge and Resource Management Systems 107 men know how to respond to environmental ples to be "in equilibrium" with their resources, feedback, such as declining catches per unit of there is no such equilibrium-presumably be- effort, and maintain resilient fish populations. cause equilibrium in the ecosystem is an elusive notion. Instead, indigenous hunters may be Conclusions and Policy Implications harvesting opportunistically and maximizing short-term gains; this applies to the James Bay The question of indigenous conservation of Cree as well as the Amazonian foragers of resources (Hames 1987; Alvard 1993; Hames (1987) and Alvard (1993). Unlike the Brightman 1993) cannot be assessed by the foragers of Hames and Alvard, however, the criteria of conventional resource management Cree also safeguard long-term productivity by science because of the mismatch in systems of territorial behavior and prey-switching. Re- knowledge. Further, the appropriateness of searchers steeped in the traditions of Western criteria based on conventional resource manage- resource management, like the Hudson Bay ment science is altogether suspect: it was not a Company workers of the 1 800s, may be limited system designed for sustainability-not even in their ability to identify those fundamentally ecological sustainability. Hence, traditional different but nevertheless ecologically sustain- knowledge and resource management systems able practices of indigenous peoples. can best be assessed in terms of their own long- Many researchers in the area of fisheries term survival, as evidence (but not necessarily management have been forced to question the proof) of ecological sustainability. wisdom of using catch quotas, an equilibrium- Whether indigenous systems can conserve centered concept, in a highly fluctuating, multi- resources is not merely an academic question. It equilibrium environment. Are there any lessons is a very practical matter for a group of people that can be learned from the many long-surviv- trying to survive on a resource. All groups of ing, indigenous fishery management systems? A resource users have powerful, built-in incentives recent review by Wilson and others (1994) to conserve the resources on which they depend. concluded that traditional fisheries are managed In many cases they do conserve them, provided by rules and practices limiting "how" people that they can control access to the resource and fish, as in the Cree case, rather than by attempt- can work out rules for collective action, that is, ing to regulate "how much" can be taken. In solve the exclusion and jointness problems of addition, many of the cases covered by Wilson common-property resource management (Berkes and colleagues indicate systems highly adapted 1989). Indigenous management systems have to respond to feedback from the environment. provided adaptations for societies to cope with The process by which indigenous knowledge their environment; those which did not disap- accumulates and local management systems peared a long time ago. evolve is the natural process of adaptation. There In contrast to the beaver case, in which the is a great deal of learning-by-doing and "adap- existing local system has elements which may be tive management" (Holling 1994) involved in attributed to Western scientific thinking, the the development of local resource management fishery case is so fundamentally different from systems. The evolution of indigenous knowledge Western scientific practice that it could only can be seen as part of a general process of self- have been based on an altogether different organization arising from the necessity for a system of knowledge. In terms of its operation, social group to deal with information from the the Cree system is characterized by much closer environment (Berkes, Folke, and Gadgil 1994). attention to, and much greater sensitivity of, It is a "cultural capital" of knowledge that con- environmental feedback, such as declining local tains not only the simpler, "is this good to eat?" catches. Detailed local knowledge is backed up type of information, but also the codified essen- by appropriate social institutions, and a tial knowledge of how to respond, for example, "community-of-beings" worldview provides the to changes in abundance and behavior of ani- ethical backdrop. mals. The indigenous ecological knowledge held A number of principles illustrated by the Cree by a social group contains the recipes for re- case study extrapolate to other situations. For sponding to and managing ecological feedback. Westem observers looking for indigenous peo- This can be seen in the Cree case and in many of 108 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT the cases summarized by Wilson and others Berkes, F. 1977. "Fishery Resource Use in a (1994). We have hypothesized elsewhere that Subarctic Indian Community." Human Ecol- conserving resilience and diversity of the local ogy 5:289-307. ecosystem assures the resilience of the local Berkes, F. 1987. "Common Property Resource social system (Berkes, Folke, and Gadgil 1994). Management and Cree Indian Fisheries in Western science is moving away from the Subarctic Canada." In B. J. McCay and J. M. positivist emphasis on objectivity towards Acheson, eds., The Question of the Commons. a recognition that fundamental uncertainty is Tucson: University of Arizona Press, pp. large, that certain processes are irreversible, and 66-91. that qualitative judgments do matter. Traditional Berkes, F. 1988. "The Intrinsic Difficulty of elders in groups such as the James Bay Cree Predicting Impacts: Lessons from the James would be quite comfortable with these ideas. In Bay Hydro Project." Environmental Impact contrast, quantitative concerns of conventional Assessment Review 8:201-20. resource managers, such as population dynamics Berkes, F., ed. 1989. Common Property Re- of wildlife and fish, make limited sense to indig- sources: Ecology and Community-Based enous resource managers. Thus, their quantita- Sustainable Development. London: Belhaven. tive understanding of game populations, or lack Berkes, F., C. Folke, and M. Gadgil. 1994. thereof, cannot constitute appropriate evaluative "Traditional Ecological Knowledge, criteria for assessing indigenous systems. Biodiversity, Resilience and Sustainability." In the larger scheme of things, the gap be- In C. A. Perrings, K. G. Maler, C. Folke, tween scientific knowledge and indigenous C. S. Holling, and B.-O. Jansson, eds., knowledge rray be narrowing. Current West- Biodiversity Conservation. Kluwer Academic ern science, with chaos theory, Prigogine's Publishers, pp. 269-87. irreversible thermodynamic systems, and Berkes, F. and T. Gonenc. 1982. "A Mathemati- Holling's science of surprise, may be more akin cal Model on the Exploitation of Northern to indigenous thought than many were willing to Lake Whitefish with Gillnets." North Ameri- recognize. Some of these findings will be of can Journal of Fisheries Management interest for development planning which is 2:176-83. sensitive to local needs and values. They may Bishop, C. A., and T. Morantz, eds. 1986. Who also be of use in minimizing social and environ- Owns the Beaver? Northern Algonquian Land mental impacts of development, especially in Tenure Reconsidered. Special issue of indigenous and tribal areas. As Warren (1991) Anthropologica NS 28(1-2). proposed, it makes sense to incorporate into Brightman, R. A. 1993. Grateful Prey: Rock development planning a process for understand- Cree Human-Animal Relationships. Los ing and using local knowledge systems and condutingpartcipatry rsearh to trenthenAngeles: University of California Press. conducteng participatory research to strengthen Capra, F. 1982. The Turning Point: Science, those systems. Society and the Rising Culture. New York: Simon and Schuster. Bibliography Daly, H. E., and J. B. Cobb. 1989. For the Common Good: Redirecting the Economy Alvard, M. S. 1993. "Testing the 'Ecologically toward Community, the Environment, and a Noble Savage' Hypothesis: Interspecific Prey Sustainable Future. Boston: Beacon Press. Choice by Piro Hunters of Amazonian Peru." Dais, b.D 1991. Indgeou ieason and Human Ecologv 21:355-87. ~Davis, S. D. 199 1. Indigenous views of land and Human Ecology 21:355-87. the environment. A Report for the World Banuri, T. and F. Apffel Marglin. 1993. "A Development Report 1992. Washington, Systems-of-Knowledge Analysis of Defores- tation." In T. Banuri and F. Apffel Marglin, D.C.: World Bank. Feit, H. A. 1973. "The Ethno-Ecology of the eds., Who Will Save the Foresis? London: Waswanipi Cree, or How Hunters Can Man- The United Nations University/Zed Books, age Their Resources." In B. Cox, ed., Cul- pp. 1-23 tural Ecology. Toronto: McClelland and Stewart, pp. 115-25. 9. Indigenous Knowledge and Resource Management Systems 107 men know how to respond to environmental ples to be "in equilibrium" with their resources, feedback, such as declining catches per unit of there is no such equilibrium-presumably be- effort, and maintain resilient fish populations. cause equilibrium in the ecosystem is an elusive notion. Instead, indigenous hunters may be Conclusions and Policy Implications harvesting opportunistically and maximizing short-term gains; this applies to the James Bay The question of indigenous conservation of Cree as well as the Amazonian foragers of resources (Hames 1987; Alvard 1993; Hames (1987) and Alvard (1993). Unlike the Brightman 1993) cannot be assessed by the foragers of Hames and Alvard, however, the criteria of conventional resource management Cree also safeguard long-term productivity by science because of the mismatch in systems of territorial behavior and prey-switching. Re- knowledge. Further, the appropriateness of searchers steeped in the traditions of Western criteria based on conventional resource manage- resource management, like the Hudson Bay ment science is altogether suspect: it was not a Company workers of the 1800s, may be limited system designed for sustainability-not even in their ability to identify those fundamentally ecological sustainability. Hence, traditional different but nevertheless ecologically sustain- knowledge and resource management systems able practices of indigenous peoples. can best be assessed in terms of their own long- Many researchers in the area of fisheries term survival, as evidence (but not necessarily management have been forced to question the proof) of ecological sustainability. wisdom of using catch quotas, an equilibrium- Whether indigenous systems can conserve centered concept, in a highly fluctuating, multi- resources is not merely an academic question. It equilibrium environment. Are there any lessons is a very practical matter for a group of people that can be learned from the many long-surviv- trying to survive on a resource. All groups of ing, indigenous fishery management systems? A resource users have powerful, built-in incentives recent review by Wilson and others (1994) to conserve the resources on which they depend. concluded that traditional fisheries are managed In many cases they do conserve them, provided by rules and practices limiting "how" people that they can control access to the resource and fish, as in the Cree case, rather than by attempt- can work out rules for collective action, that is, ing to regulate "how much" can be taken. In solve the exclusion and jointness problems of addition, many of the cases covered by Wilson common-property resource management (Berkes and colleagues indicate systems highly adapted 1989). Indigenous management systems have to respond to feedback from the environment. provided adaptations for societies to cope with The process by which indigenous knowledge their environment; those which did not disap- accumulates and local management systems peared a long time ago. evolve is the natural process of adaptation. There In contrast to the beaver case, in which the is a great deal of learning-by-doing and "adap- existing local system has elements which may be tive management" (Holling 1994) involved in attributed to Western scientific thinking, the the development of local resource management fishery case is so fundamentally different from systems. The evolution of indigenous knowledge Western scientific practice that it could only can be seen as part of a general process of self- have been based on an altogether different organization arising from the necessity for a system of knowledge. In terms of its operation, social group to deal with information from the the Cree system is characterized by much closer environment (Berkes, Folke, and Gadgil 1994). attention to, and much greater sensitivity of, It is a "cultural capital" of knowledge that con- environmental feedback, such as declining local tains not only the simpler, "is this good to eat?" catches. Detailed local knowledge is backed up type of information, but also the codified essen- by appropriate social institutions, and a tial knowledge of how to respond, for example, "community-of-beings" worldview provides the to changes in abundance and behavior of ani- ethical backdrop. mals. The indigenous ecological knowledge held A number of principles illustrated by the Cree by a social group contains the recipes for re- case study extrapolate to other situations. For sponding to and managing ecological feedback. Western observers looking for indigenous peo- This can be seen in the Cree case and in many of 108 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT the cases summarized by Wilson and others Berkes, F. 1977. "Fishery Resource Use in a (1994). We have hypothesized elsewhere that Subarctic Indian Community." Human Ecol- conserving resilience and diversity of the local ogy 5:289-307. ecosystem assures the resilience of the local Berkes, F. 1987. "Common Property Resource social system (Berkes, Folke, and Gadgil 1994). Management and Cree Indian Fisheries in Western science is moving away from the Subarctic Canada." In B. J. McCay and J. M. positivist emphasis on objectivity towards Acheson, eds., The Question of the Commons. a recognition that fundamental uncertainty is Tucson: University of Arizona Press, pp. large, that certain processes are irreversible, and 66-91. that qualitative judgments do matter. Traditional Berkes, F. 1988. "The Intrinsic Difficulty of elders in groups such as the James Bay Cree Predicting Impacts: Lessons from the James would be quite comfortable with these ideas. In Bay Hydro Project." Environmental Impact contrast, quantitative concerns of conventional Assessment Review 8:201-20. resource managers, such as population dynamics Berkes, F., ed. 1989. Common Property Re- of wildlife and fish, make limited sense to indig- sources: Ecology and Community-Based enous resource managers. Thus, their quantita- Sustainable Development. London: Belhaven. tive understanding of game populations, or lack Berkes, F., C. Folke, and M. Gadgil. 1994. thereof, cannot constitute appropriate evaluative "Traditional Ecological Knowledge, criteria for assessing indigenous systems. Biodiversity, Resilience and Sustainability." In the larger scheme of things, the gap be- In C. A. Perrings, K. G. Maler, C. Folke, tween scientific knowledge and indigenous C. S. Holling, and B.-O. Jansson, eds., knowledge rray be narrowing. Current West- Biodiversity Conservation. Kluwer Academic em science, with chaos theory, Prigogine's Publishers, pp. 269-87. irreversible thermodynamic systems, and Berkes, F. and T. Gonenc. 1982. "A Mathemati- Holling's science of surprise, may be more akin cal Model on the Exploitation of Northern to indigenous thought than many were willing to Lake Whitefish with Gillnets." North Ameri- recognize. Some of these findings will be of can Journal of Fisheries Management interest for development planning which is 2:176-83. sensitive to local needs and values. They may Bishop, C. A., and T. Morantz, eds. 1986. Who also be of use in minimizing social and environ- Owns the Beaver? Northern Algonquian Land mental impacts of development, especially in Tenure Reconsidered. Special issue of indigenous and tribal areas. As Warren (1991) Anthropologica NS 28(1-2). proposed, it makes sense to incorporate into Brightman, R. A. 1993. Grateful Prey: Rock development planning a process for understand- Cree Human-Animal Relationships. Los ing and using local knowledge systems and Angeles: University of CalifomiaPress. conducting participatory research to strengthen Capra, F. 1982. The Turning Point: Science, those systems. Society and the Rising Culture. New York: Simon and Schuster. Bibliography Daly, H. E., and J. B. Cobb. 1989. For the Common Good: Redirecting the Economy Alvard, M. S. 1993. "Testing the 'Ecologically toward Community, the Environment, and a Noble Savage' Hypothesis: Interspecific Prey Sustainable Future. Boston: Beacon Press. Choice by Piro Hunters of Amazonian Peru." Davis, S. D. 1991. Indigenous views of land and Hluman Ecology 21:355-87. the environment. A Report for the World Banuri, T. and F. Apffel Marglin. 1993. "A Development Report 1992. Washington Systems-of-Knowledge Analysis of Defores- D.C.e World Bankt tation." In T. Banuri and F. Apffel Marglin, Feit, H. A. 1973. "The Ethno-Ecology of the eds., Who Will Save the Forests? London: Waswanipi Cree, or How Hunters Can Man- The United Nations University/Zed Books, age Their Resources." In B. Cox, ed., Cul- pp. 1-23 tural Ecology. Toronto: McClelland and Stewart, pp. 115-25. 9. Indigenous Knowledge and Resource Management Systems 109 Feit, H. A. 1986. "James Bay Cree Indian Man- Natural Capital. Washington, D.C.: Island agement and Moral Considerations of Fur- Press, pp. 57-73. bearers." In Native People and Resource Holling, C. S., and S. Bocking. 1990. "Surprise Management. Edmonton: Alberta Society of and Opportunity: in Evolution, in Ecosys- Professional Zoologists, pp. 49-65. tems, in Society." In R. McLaren, ed., Planet Feit, H. A. 1987. "North American Native Hunt- under Stress. Toronto: Oxford University ing and Management of Moose Populations." Press, pp. 285-300. Swedish Wildlife Research Vitlrevy Suppl. ICIHI. 1987. Indigenous Peoples: A Global Quest 1:25-42. for Justice. Secretariat of the Independent Feit, H. A. 1991. "Gifts of the Land: Hunting Commission on International Humanitarian Territories, Guaranteed Incomes and the Issues. London: Zed Books. Construction of Social Relations in James Lewis, H. T., and T. A. Ferguson. 1988. "Yards, Bay Cree Society." Senri Ethnological Stud- Corridors and Mosaics: How to Bum a Boreal ies 30:223-68. Forest." Human Ecology 16:57-77. Freeman, M. M. R. 1989. "Graphs and Gaffs: a Lotka, A. J. 1956. Elements of Mathematical Cautionary Tale in the Common-Property Biology. New York: Dover. Resources Debate. In F. Berkes, ed., Common Prigogine, I., and I. Stengers. 1984. Order Out Property Resources. London: Belhaven, pp. of Chaos: Man 's New Dialogue with Nature. 92-109. New York: Bantam. Gadgil, M., and F. Berkes. 1991. "Traditional Regier, H. A., R. V. Mason, and F. Berkes. Resource Management Systems." Resource 1989. "Reforming the Use of Natural Re- Management and Optimization 18:127-141. sources." In F. Berkes, ed., Common Property Gadgil, M., F. Berkes, and C. Folke. 1993. Resources. London: Belhaven Press. 110-26. "Indigenous Knowledge for Biodiversity Scott, C. 1986. "Hunting Territories, Hunting Conservation." Ambio 22:151-56. Bosses and Communal Production among Gause, C. F. 1934. The Struggle for Existence. Coastal James Bay Cree." Anthropologica NS Baltimore: Williams and Wilkins. 28:163-73. Goodland, R. J. A. 1982. Tribal Peoples and Smith, E. A. 1983. "Anthropological Applica- Economic Development: Human Ecologic tions of Optimal Foraging Theory: a Critical Considerations. Washington, D.C.: World Theory." Current Anthropology 24: 625-65 1. Bank. Tanner, A. 1979. Bringing Home Animals. Hames, R. 1987. "Game Conservation or Effi- London: Hurst. cient Hunting?" In B. J. McCay and J. M. Warren, D. M. 1991. Using Indigenous Knowl- Acheson, eds., The Question of the Commons. edge in Agricultural Development. World Tucson: University of Arizona Press, pp. Bank Discussion Papers 127. 97-102. White, L. 1967. "The Historical Roots of Our Holling, C. S. 1986. "The resilience of terrestrial Ecologic Crisis." Science 155:1203-07. ecosystems: Local surprise and global Wilson, J. A., J. M. Acheson, M. Metcalfe, and change." In W. C. Clarke and R. E. Munn, P. Kleban. 1994. "Chaos, Complexity and eds., Sustainable Development of the Bio- Community Management of Fisheries." sphere. Cambridge: Cambridge University Marine Policy 18:291-305. Press, pp. 292-317. Worster, D. 1985. Nature 's Economy: A History Holling, C. S. 1994. "New science and new of Ecological Ideas. New Edition. Cam- investments for a sustainable biosphere. bridge: Cambridge University Press. Pages" In A. M. Jansson, M. Hammer, C. Folke, and R. Costanza, eds., Investing in 10 The Role of Validated Local Knowledge in the Restoration of Fisheries Property Rights: The Example of the New Zealand Maori Kenneth Ruddle Abstract SYSTEMAnCALLY DOCUMENTED and validated local knowl- edge of resources and environments provides persuasive evidence of traditional property rights recognized by customary law. As demonstrated by the case of the New Zealand Maori, such bodies of local knowledge are accept- able as legal evidence in the process of restoring usurped rights. The simple and culturally sensitive methodology used is also directly relevant to the codification of existing rights and customary laws within a systems of statutory law in various cultural settings. This is a contemporary process in many nations in the Pacific Basin, and one which might provide useful precedents for application worldwide. A travel grant from the Norwegian Ministry of Foreign Affairs enabled me to do research in the archives of the Waitangi Tribunal in February 1992. 1 am most grateful to former Prime Minister Sir Geoffrey Palmer, Professor, School of Law, Victoria University of Wellington, Sir Tipene O'Regan, Chairman, Treaty of Waitangi Fisheries Commission, and Hon. Mr. Justice John Wallace, Commissioner, Law Commission, Department of Justice, for valuable advice and discussions while in Wellington. I also greatly appreciate the assistance of Tessa Castree, Information Manager, Waitangi Tribunal Division, Department of Justice, for helping locate and copy documents. 111 112 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Local knowledge of coastal marine environ- The Treaty of Waitangi (1840), which described ments is of direct practical importance for policy the nature of the Crown's right to govern and the design, planning, and management (Ruddle protection of Maori interests. In the English 1994d).' It is also a system of actual or potential version of the Treaty, the Maori received full, power. The way in which the rights of the ma- exclusive, and undisturbed possession of their rine fisheries of the New Zealand Maori were lands and estates, forests, and fisheries for as legally restored after 150 years, via a formal long as they wished to retain them. tribunal process that collected and then validated Because the Treaty of Waitangi was neither their local fisheries knowledge, provides a good ratified nor passed into law, it lacked legal example. The methodology used in New Zea- standing, and has been treated as a legal nullity. land is an equally powerful example that merits That situation was exacerbated by interpretation replication wherever historical injustices remain problems of mutually incomprehensible property to be corrected, and where minority rights are in rights concepts. The existence of an English and jeopardy. a Maori version, neither of which is a translation The colonial era had a major and lasting of the other, has not helped matters. impact on indigenous systems for managing Consequently, Maori rights were gradually marine inshore fisheries (Ruddle 1994a; 1994b, eroded. This process was accelerated by legisla- 1994e). Impacts were particularly severe where tion aimed at dispossession. Conspicuous were large-scale and permanent European settlement the destruction of traditional Maori authority by occurred, and where indigenous property con- the Native Land Act (1862), which individual- cepts and rights were either not recognized or, if ized titles to tribal lands (Kawhuru 1977), and recognized initially, as in New Zealand, were land confiscation under the New Zealand Settle- gradually overridden and forgotten. There, ments Act (1863). despite a vital and well-documented fisheries Fisheries laws followed. Although Maori tradition and a treaty intended to protect Maori fishing rights were provided for in law, in prac- property, the rights of indigenous fisheries were tice they were denied. Rights under the Treaty of gradually usurped. Initially, European settlers Waitangi were acknowledged in general terms were only minor users of marine resources, but by the Fish Protection Act (1877) and by the as the Maori population declined, their land Fisheries Conservation Act (1884). The Fisher- rights diminished, and laws effectively dispos- ies Amendment Act (1903) reintroduced a sessed them of their fishing rights, Euro-New general and essentially meaningless provision Zealanders gradually came to dominate fishing. (since it was left to administrators to interpretand By the late nineteenth Century, Maori fishing thus was basically ignored in practice) that had declined to subsistence activities. "Nothing in this Act shall affect any existing Maori fishing rights." Conflicting interpretations Causes of the Loss of that general statement led to many court of Maori Property Rights cases. But it was invariably held that it did not provide for fishing rights. The Oyster Fisheries British settlement of New Zealand and recog- Act (1866), the first New Zealand fisheries nition of Maori resource rights were based on legislation, was also the first statutory expression of erroneous assumptions regarding Maori fishing. By allowing only exclusive subsistence use of oyster beds near Maori villages, this Act 1. Several terms have been used to describe such knowledge systems. The main ones are local knowledge, implied that: (1) the Crown had an unencum- indigenous knowledge, traditional (ecological) knowledge, bered right to dispose of foreshore fisheries indigenous skill, and eshnoscience. All have conceptual because foreshore and the sea space beyond and semantic problems, but local knowledge is used here belonged to the Crown; (2) the Treaty of because it is the least problematical (Ruddle 1994c). Until Waitangi could be ignored; (3) Maori fishing very recently, local knowledge has been either summarily traditionally had no commercial component; (4) dismissed or denigrated. Thus to be acceptable as evidence for adjudicating claims, it requires validation by scientific the Crown alone had the right to manage fisher- and social scientific methods. ies; and (5) only non-Maori had the right to commercially exploit traditionally Maori inshore 10. Validated Local Knowledge in the Restoration of Fisheries Property Rights: New Zealand Maori 113 fisheries (Waitangi Tribunal 1988). Thus, proof purpose to determine its meaning and effect and of customary entitlement was no longer accept- whether matters are inconsistent with those able as evidence of a fishing right, as confirmed principles" (GNZ 1975). Since the intentions of by the Larceny Act (1869), which made it an the signatories of 150 years ago can no longer be offense to take fish from private waters or from interpreted, the Tribunal is reconstructing the an area governed by a fishery right. This effec- underlying Treaty principles (Levine 1989). tively demonstrated that unless specifically Initially jurisdiction of the Waitangi Tribunal provided for, traditional Maori fishery rights included only Crown actions after the Treaty of lacked any status. Waitangi Act (October 10, 1975). But with the The Fish Protection Act (1877) illustrates Treaty of Waitangi Amendment Act (1985), typical legislative window dressing by blithely jurisdiction was extended to February 6, 1840, assuming that Maori interests under the Treaty when the Treaty of Waitangi was signed. The of Waitangi could be accommodated by a gen- Treaty of Waitangi Amendment Acts of 1986 eral statement "...that nothing in the Act was to and 1988 increased Tribunal membership to affect any of the provisions of the Treaty of seven members, four of whom were to be Maori, Waitangi, or to take away Maori rights to any provided a research and administrative staff, and fishery secured by it" (Section 8). This was granted authority for the Tribunal to appoint stated even though everything else in the piece counsel for itself and for claimants. of legislation was clearly contrary to Treaty of The initial terms of the Waitangi Tribunal Act Waitangi principles (Waitangi Tribunal 1988). (1976) meant that fisheries claims took a "point The social climate also changed drastically. In position" in the resurgence of Maofi ethnic 1840 the intentions of the Crown were benign. politics. Whereas by 1976 they had long since Governors were directed "...to honourably and lost most of their lands, the Maori retained a scrupulously fulfil" the treaty conditions " ...as residual interest in marine waters. The official a question of honour and Justice no less than of perspective was that marine fisheries remained policy" (Wards 1968:171). But policy changed common property under the Crown. Whereas as permanent settlers began to outnumber the versions of the Fisheries Act acknowledged Maori and the first Colonial parliament was some residual Maori fishing rights, nowhere formed, in 1855. Racial relations changed drasti- were they ever specified. Thus fisheries issues cally as a consequence of the "Land Wars," in were current (that is, ongoing in the post-1976 the 1860s. era), pertained to a vital resource, and, although But unlike the colonizers, the Maori never acknowledged, had never been specified. entirely forgot their treaty-enshrined fishing rights and management systems; they were Making "Cultural Deprivation" embedded in and transmitted via a comprehen- Actionable sive system of local knowledge and a rich oral culture. Preserved in that way, and together with In the first three fisheries claims (Motonui, the enormous injustice of their dispossession, the Kaituna, and Manukau), the Maori emphasized legacy remained as an aide memoire for poster- loss of reefs as a cultural resource. Since seafood ity, until conditions were suitable to seek re- and reef habitats are highly prized in Maori dress. Although there were occasional appeals culture as taonga katoa ("treasures"), pollution for justice, substantive action had to await the damage is a cultural affront, by degrading the politicization of the 1960s. mana ("authority," "status," "prestige") of the tribes involved, and so protected by the Article The Waitangi Tribunal 2 of the Treaty of Waitangi. In this way, Maon culture, demonstrated through local knowledge, In 1975 the Treaty of Waitangi Act estab- became an instrument of empowerment. The lished the Waitangi Tribunal, a permanent Waitangi Tribunal hearings on the three water commission of enquiry, to investigate and rights cases show that simple issues of effluent ".make recommendations on [Maori] claims pollution to food sources have been expanded relating to the practical application of the princi- into far wider ethnic demands (Levine 1987; pies of the Treaty [of Waitangi] and, for that Oliver 1991). 114 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT The Motonui case (Waitangi Tribunal 1983) Crown and companies, who are in strange established the principle that Maori cultural surroundings" (Levine 1987:429). deprivation was actionable under the Treaty. With cultural deprivation actionable, the This aspect was examined in the pollution claims Maori themselves are now expert witnesses in for the Kaituna River (Waitangi Tribunal 1984) the cultural realm, on an equal footing with and Manukau Harbour (Waitangi Tribunal Euro-New Zealander technical specialists and 1985). lawyers. Whereas expert Maori witnesses in a The Maori successfully demonstrated court have their testimony translated into Eng- that traditional life was intimately shaped by the lish property rights terms-which undermines availability and sustainability of renewable the Maori claims-in the marae setting of Tribu- natural resources. Water is regarded as so vital to nal hearings, English property terms and other life that it acquired a spirit (wairua). Tradition- legalistic notions are deemphasized, and the ally, the Maori believed that life is derived from concept of cultural damage correspondingly the waters of the womb of the Earthmother emphasized. Unlike a formal court setting, no (Papatuanuku), and that water, the life-giving cross-examination of witnesses is conducted, essence, must remain pure and unadulterated to and no opposition witnesses are called. ensure life for the following generations (Taylor and Patrick 1987). Thus to pollute seriously Using Local Knowledge to Refute diminishes "..... the life-force (mauri) of the Erroneous Perceptions water, demeans its wairua and thereby affects the mana, the prestige, of those who use it and That the New Zealand Maori were historically its resources" (Taylor and Patrick 1987:22). The expert fishers with a profound fisheries tradition Maori relied heavily on marine and freshwater was recognized during the earliest European fish. Seafood (kaimoana) was of great cultural contacts, accounts of which commented briefly importance, since much prestige and social on the sizes and composition of catches, the gear standing accrued to groups that could provide a employed, fisheries knowledge, long-distance lavish feast at social and cultural events. This fishing expeditions, large fishing fleet opera- remains important to the Maori (Sandrey 1987). tions, trading in marine products, and traditional On those bases, according to the principles of fisheries management systems. the Treaty of Waitangi, cultural deprivation is Despite that documented tradition, through actionable. the social, economic, and legal processes de- scribed above, the heavy Maori involvement in The Tribunal Environment fisheries characteristic of the early decades of the nineteenth Century had so declined in the twen- The "business environment" of the Tribunal tieth Century that little credence of its former balances the strictly legalistic Euro-New Zea- importance existed. Changed economic circum- lander interpretations of Maori interests charac- stances of the Maori as well as general accultura- teristic of the last 150 years with a Maori under- tion took their inevitable toll on the old ways. standing of Treaty intentions. The Tribunal Thus it is now widely believed that Maori fisher- conducts investigations and collects evidence in ies never were commercial and always were a the field, at the traditional communal assembly household subsistence activity done on a few site (marae) of the claimant group. At these local reefs and grounds (Waitangi Tribunal hearings, Maori protocol and ceremonial are 1988). stressed. Thus what had become traditional The erroneous assumptions about Maori ethnic roles are reversed. Hitherto the Maori fishing embedded in early legislation became were intimidated by European-style court pro- uncritically accepted. Maori fishing was as- ceedings and English legal language. But now sumed to traditionally have been (a) limited to the Euro-New Zealanders typically feel intimi- few species; (b) confined to limited inshore dated: "The 'court' comes to their Ithe Maoris'] areas; (c) for household subsistence; and (d) home, as their guest, to respectfully hear them. rightfully managed by the Crown. It is the non-Maori lawyers, speakers for the The Waitangi Tribunal has demonstrated the falsehood of those perceptions by: (a) systemati- 10. Validated Local Knowledge in the Restoration of Fisheries Property Rights: New Zealand Maon 115 cally collecting evidence from Maori fishers to Scientific Verification establish empirically the existence of a local The visual triangulation coordinates for knowledge base; and (b) validating local knowl- establishing navigational direction presented by edge bases from both historical records and Maori witnesses were plotted on topographic scientific evidence of fisheries biologists and maps and marine charts. Those fishing grounds other specialists. were found to locate precisely small areas of This process was used first for the shallow water-the summits of sea- Muriwhenua claim, in North Island (Waitangi mounts-16-32 kilometers offshore and totally Tribunal 1988) and then repeated for the Ngai soundedby er deepmwters These shallo Tahu claim of South Island (Waitangi Tribunal surrounded by very deep waters. These shallows were then confirmed by fisheries scientists to be 1992). Here I refer just to the former. known locations of fish aggregations. From the mass of evidence accumulated from witnesses Few Species and plotted onto maps and charts, it was appar- Maori Evidence ent that traditional Maori fishers had explored all Maori informants listed ninety-four species areas within workable depths of water (Waitangi of marine finfish, twenty-seven species of ma- Tnbunal 1988). rine invertebrates, and four species of marine Literature Evidence plants, along with thirty-five species of freshwa- ter finfish and three species of freshwater inver- Traditionally, Maori marine fishing was tebrates as having been harvested in traditional widespread and encompassed most of the coast- fishing areas. They named the grounds and line and offshore islands. However, it was pinpointed their locations precisely (Waitangi mostly concentrated within 16 kilometers of the Tribunal 1988). shore, although special fishing grounds much further away were also worked (Buller 1878; Literature Evidence Waitangi Tribunal 1988). Over 120 species of fish were known to have Limited to Household Subsistence been taken by the Maori of North Island (Firth 1929). In addition, the Maori were intimately Literature Evidence familiar with spawning and maturing seasons as Gear, especially large (900-meter) seine nets, well as fish habitats and behavior. Fishing was described by Anderson (1781) and Crozet grounds far offshore were visited seasonally, (1891), based on observations made during a when fish were known to be there. visit in 1772; Savage (1807), Thomson (1859), Buller (1878), Banks (1896), and Roux (1914), LimitedlInshore Areas describing a 1772 voyage; and Best (1929). Maori Evidence Polack (1840) described the very large Maori The depth ololseines and expertly made lines. Colenso (1868), The depth of local knowledge of traditional Taylor (1870), and Matthews (1910) described fishig grounds IS demonstrated by navigational the fishing operations of large canoe fleets. bearings for locating traditional fishing grounds These were hardly the gear types and vessel within a 40-kilometer band off the coast. Also opera tally associated wit housel demonstrated is a profound local knowledge of subsiste .ish adboreaand afte ontact species caught on each ground and the seasonal- wit ens is summre in aitang ity of fishing each location. Individual fishers Tribunal (1988). gave evidence. One identified nine grounds in the Karatia Estuary, twenty in the Waitiki Estu- Rightfully Managed by the Crown ary, eight in the Waihuahau Channel, seventeen in open waters, fourteen in the Poroporo Estu- This assumes that either no indigenous system ary, twenty-seven along the coastline from of marine resources management existed, or if it Parengarenga Harbour entrance to Cape Reinga, did, the only valid type of management system and four at Te Oneroa-o-Tohe (Waitangi Tribu- is one based on European concepts. nal 1988). 116 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT Literature Evidence from societies lacking any notion of "law." In Examples of Maori fisheries property rights contrast, in customary law, as exemplified by the areas were mentioned by Nicholas (1817), Kiriwinan Islanders of the Trobriand Islands, Polack (1840), Taylor (1870), White (1889), and Papua New Guinea, traditional claims are sub- Best (1909). Traditional fisheries property rights stantiated by records preserved in lore, legend, were comprehensive. song, and dance. As observed by Williamson (1989:31-32), himself a Western-trained lawyer, Conclusions and Policy Implications "Traditions and customary usage are important in resolving disputes relating to maritime claims. The example of the New Zealand Maori Folklores, legends, songs, and dances to a demonstrates how validated local knowledge can Kiriwinan are like principles of the English be applied to restore fisheries property rights, Common Law to judges in Common law juris- particularly in cases where a treaty exists, and diction." especially at a time when resurgent ethnic pride Contemporary, unsystematic, and ad hoc coincides with a Western liberalist trend to right statutory frameworks relating to community- past wrongs. In particular, the example demon- based marine resource management claims result strates a simple data collection and validation from the absence of appropriate policy, itself methodology and a culturally sensitive "business partly a legacy of colonial neglect. Neglect was environment" that is replicable in other contexts. understandable, since the underlying philosophy It is likely to be particularly effective, of course, of colonialism was to displace indigenous sys- in cases where historical documentary evidence tems and institutions by metropolitan legal exists, as it does usually in Western colonial systems and to educate native peoples to use archives. them.2 To have encouraged resource manage- The main policy implication goes far beyond ment systems rooted in local systems of custom- local knowledge, sensu strictu. The imputation ary law would have been inimical to that objec- is that local knowledge, based on generations of tive. Rather, the objective would be attained by praxis, demonstrates entitlement via prior estab- legislating directly against community-based lished and continuous usage-"credentials of systems and by allowing them to wither and ownership," as in the case of the Torres Strait become displaced during a gradual process of Islands (Nietschmann 1989)-and therefore a Zernd. property right upheld in customary law. The Zealand. prime policy issue then becomes that of accept- National independence has not changed the ing local knowledge qua customary law within situation. This is partly because nations have the framework of Western-based legal systems. been preoccupied with other development priori- The relationship between customary law that ties, partly because devolution of power to local governs, or governed, traditional marine re- communities is an anathema in many nations govem, orgovemd, taditonal arin re- still concerned with the fundamental task of source management and statutorv law is highly varied and extremely complex. It is character- "nation-building," and partly because, as in ized basically by a strongly contradictory legal colonial times, the sheer logistical and practical complexity, with Western-based statutory law complexity of attempting to incorporate custom- that essentially regards all waters below the high ary rights into a system of legal norms is almost tide mark as being state property and open to overwhelming. In an extraordinarily diverse access, at odds with local, indigenous-based society like Papua New Guinea, for example, it customary law, which recognizes some form of is all but impossible to devise an approprate marine property right. Worse, it is generally national system of laws and policiestoembrace accepted by Westerners and those with Western training that customary law, which locally legitimizes customary rights to resources, is invalid for upholding legal claims because it is 2. But traditional institutions for conflict resolution and invalitten, for uphldig bleir clais sveaseign is such functions as land transactions, transfers and unwritten, not made by either a sovereign or inher'tance were permitted to opcrate. provided they did legally-constituted legislative body, and arises noi conflict directly with colonial administrations and statutory law (Pulca 1993). 10. Validated Local Knowledge in the Restoration of Fisheries Property Rights: New Zealand Maori 117 the specific customs of some 700 distinct cul- source management, and in particular to assist in tural groups. the reconciliation of the ambiguities between Tom'tavala (1990), a Trobriand Islander and statutory and customary law. a Westem-trained legal scholar, observes of Comanagement is the outcome of these Papua New Guinea that neither the national approaches: national government sets rules and government nor the provincial governments had principles, simultaneously recognizing tradi- a policy for traditional marine fishing rights, tional rights and allowing local government to despite the official admission that conflicts over manage locally within this national legislative them are among the most prevalent contempo- framework. It can be argued that local "title to" rary disputes. This actually or potentially im- resources implies an obligation to manage them pedes economic development, leads to social effectively. But this is problematical because it and political instability, and contributes to an goes beyond fisheries legislation to include increase in criminality, since customary claim- political issues of local autonomy, national ants tend to uphold their claims by physical policy, hereditary claims and rights, and other violence, without regard either to the national highly contentious factors. good or to the validity of outsiders' claims. But Nevertheless, the reality is that in a great violence or the threat of it to enforce claims, many nations in the Asia-Pacific Region, partic- although customarily sanctioned in many parts ularly in the far-flung archipelagic states where of Papua New Guinea, is unacceptable according the central government lacks the capacity to to modem criminal law. However, unless tradi- manage fisheries comprehensively, that defacto tional claims are given some degree of recogni- comanagement has long existed in practice. It tion or protection, communities will continue to remains now for legislation to formalize this, enforce their claims with violence, since they and for central governments to shoulder a larger, regard their actions as both culturally warranted complementary share of the task. and sanctioned. In many nations, despite an absence of clear- In the context of economic and social change, cut policy and the requisite statutes, the contem- during which rights to resources increase in porary value and role of traditional community- value, groups may attempt to obtain codification based coastal-marine resource management of their customary rights. This has occurred in systems is recognized. There has also been Papua New Guinea (Wright 1985). The most scattered and somewhat ad hoc attempts to compelling reason for codification is to restore implement this recognition. For example, the to local communities the authority to protect government of Papua New Guinea seeks to their rights. One principal reason why traditional return enforcement to local "resource owners." community-based management systems have In this effort, devolution of power to provincial been undermined is that the quality and security and lower levels is fundamental (Chapeau, of rights has been eroded: "Traditional [local] Lokani, and Tenakanai 1991). Similarly, based authority has been usurped, replaced by the on the Provincial Government Act (1981), ephemeral authority of central governments; the revisions to the Fisheries Act of Solomon Is- institutions in which [traditional management lands seek to transfer inshore fisheries manage- systems werel previously 'informally codified' ment to the provinces, whereby they will have have collapsed" (Graham 1992:36). Thus mod- full jurisdiction over "Provincial Waters" for 3 em codification is required to re-institute local nautical miles offshore, and will formulate their authority to protect rights. own by-laws. In this way it is hoped to achieve This linkage between the preservation of a better correspondence between provincial systems of traditional authority and the preserva- management and customary laws (Moore 1987). tion of traditional resource management systems In Vanuatu, all reefs are owned by coastal com- has been recognized in the constitutions of some munities. This is enshrined in the constitution: Pacific Island nations, particularly in Cook "All Land in the Republic belongs to the indige- lslands, Samoa, Fiji, Vanuatu, Marshall Islands, nous custom owners and their descendants" the Federated States of Micronesia, and Palau (Article 71, Chapter 12) (Amos 1993). In Fiji, (Pulea 1993). This enables traditional leaders to the Native Lands Trusts Board is attempting to influence national and lower-level marine re- increase integration of the traditional 118 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT community-based fisheries management system Banks, 1. 1896. Journal During Captain Cook's with state law by seeking more formal Fijian First Voyage. London. ownership of proposed Marine Parks. This Best, E. 1909. "Maori Forest Law." Transac- planned devolution of management responsibil- tions and Proceedings of the New Zealand ity has recently received ministerial support Institute 42:433. (Adams 1993). Best, E. 1929. "Fishing Methods and Devices of It is being increasingly accepted that many the Maori." Dominion Museum Bulletin 12. subsistence fisheries are governed by Wellington: Government Pnnter. community-based management systems, and that Buller, J. 1878. Forty Years in New Zealand. such systems must be accounted for in evaluat- London: Hodder and Stroughton. such systemstmust develaccnte strategis Inev - Chapeau, M. R., P. M. Lokani, and C. D. ing potential development strategies (Lewis Tenakanai. 1991. "Resource Owners as Im- 1990). Further, the policies of many govem- plementing Agencies in Papua New Guinea ments recognize that traditional systems are an Coastal Marine Resources Management integral part of a matrix that regulates social and Regulations." Paper presented to the South political relationships and defines cultural identi- Pacific Commission 23rd Regional Technical ties and ways of life, rather than being concemed Meeting on Fisheries. Noumea, New Caledo- with just fishing rights and the organization of nia, 5-9 August, 1991. economic activities. Thus in many instances Colenso, W. M. 1868. "On the Maori Races of abandonment would entail severe social and New Zealand." Transactions and proceedings cultural repercussions. In recognition of this, of the New Zealand Institute 1. although generally no( without considerable Crozet, Lt. 1891. Crozet's Voyage to Tasmania, confusion and complications, in Papua New New Zealarnd, the Ladrone Islands and the Guinea, Solomon Islands, and Vanuatu, where Philippines in the Years 1771-1772. London: traditional marine resource management systems Truslove and Shirley. are recognized as a form of customary law, they Lewis, A. D. 1990. "Fisheries Research in the have been embedded within statutory law. In South Pacific: an Overview." In R. Herr, ed., havebeenembeded ithi stautor law InThe Forum Fisheries Agency: Achievements, those countries it is a tenet of policy that custom- Chaengesadrospe'ct : Insitutenof ary law may empower community-based man- Challenzges and Prospects. Suva: Institute of arymlaw ma wempwer cmuitybae cman- Pacific Studies, University of the South Pa- agement, as well as being a basis for comanage- cific, pp. 69-87 ment of local marine resources. Firth, R. 1929. Economics of the New Zealand Practical management considerations make it Maori. Wellington: Government Printer. likely that this trend will continue worldwide. GNZ (Govemment of New Zealand). 1975. The New Zealand Maori case provides both a Treatv of Waitangi Act of 1975. Wellington: solid example of what can be achieved, given Government Printer. the political will, and a common-sense method- Graham, T. 1992. "The Application of Tradi- ology for substantiating and upholding historical tional Rights-Based Fishing Systems to Con- property rights claims grounded in non-Westem temporary Problems in Fisheries Manage- legal concepts and systems of law. ment: A Focus on the Pacific Basin." Mas- ter's thesis. Marine Resource Management Bibliography Program, College of Oceanography, Oregon State University, Corvallis. Adams, T. 1993. "Forthcoming Changes in the Kawhuru, 1. K. 1977. Maori Land Tenure. Legal Status of Traditional Fishing Rights in Oxford: Clarendon Press. Fiji." Traditional Marine Resource Manage- Levine, H. B. 1987. "The Cultural Politics of ment and Knowledge Information Bulletin Maori Fishing: an Anthropological Perspec- 2:21-22. tive on the First Three Significant Waitangi Amos, M. 1993. "Traditionally Based Marine Tribunal Hearings." Journal of the Polyne- Management Systems in Vanuatu." Tradi- sian Societ' 96(4):421-443. tional Marine Resource Management and Levine, H. B. 1989. "Maori Fishing Rights: Knowledge Information Bulletin 2:14-17. Ideological Developments and Practical Anderson, G. W. 1781. Account of Cook's Paradigms." Maritime Anthropological Stud- Voyages. London. ies 2(l):21-33. 10. Validated Local Knowledge in the Restoration of Fisheries Property Rights: New Zealand Maori 119 Matthews, R. H. 1910. "Reminiscences of Maori Ruddle, K. 1994e. "Marine Tenure in the 90s." Life Fifty Years Ago." Transactions and( In G. R. South, D. Goulet, S. Tuqiri, and M. Proceedinigs of the New Zealand In.stitute 43. Church, eds., Traditiotnal Marine Tenure and Minhinnick, N. K. 1989. Kaitiaki. Auckland: Sustainable Management of Marine Re- The Print Centre. sources in Asia and the Pacific: Proceedings Moore, G. 1987. The Rev ision of thle Fisheries of the International Workshop 4th-8th July, Legislation in Solomon Islands: Draft Provin- 1994. Suva: The International Ocean Institute, cial Fisheries Ordinance, Central Proviince. South Pacific and Marine Studies Fisheries Law Advisory Programme. Western Prograimimi1e, University of the South Pacific. Pacific and South China Sea Region. Rome: 6-45. TCP/SOI/6601 (A) Fl/WPs cs/87/14 Suppl. 1. FAO. Sandrey, R. A. 1987. "Maori Fishing Rights in Nicholas, J. L. 1817. Narrative of a Voyage to New Zealand: Ani Economic Perspective." In New Zealandl. London: James Black and Anonymous, eds., Proceedings, International Sons. Confrrence onI Fisheries, August 10-15, Nietschmann, B. 1989. "Traditional Sea Territo- 1986. Rimouski: Universite du Quebec a ries, Resources and Rights in Torres Strait." Ririouski, pp. 499-503. In J. C. Cordell, ed., A Sea oJ Smnall Boats: Savage, J. 1807. Some Account of New Zealand. Customaryv Lw andl Territorialityv in the London: Union Printing Office. WVorld of Inshore Fishing. Report 62. Cultural Taylor, R. 1870. Te Ika a Maui, or New Zea- Survival. Cambridge, pp. 60--93. land and Its Inhabiitants. London: W. Oliver, W. H. 1991. Claims to thre 1/aitangi Macintosh. Tribunal. Wellington: Department of Justice, Taylor. A., and M. Patrick. 1987. "Looking At Waitangi Tribunal Division. Water Through Different Eyes-The Maori Polack, J. S. 1840. Manners and Customs oJthe Perspective." Soil and Water (sum- Newv Zealanders. London: R. Bentley. iner):22-24. Pulea, M. 1993. An Overview of Constitutional Thomson, A. S. 1859. The Story of New Zea- and Legal Provisions Relevant to Cuistomarv lanld. London. Mariine Tenu/re and MaIIna,gemenlti Svstems in Tom'tavala, D. Y. 1990. National Law, Interna- the South Paucific. Report 93/23. Honiara: tional Lawt, and Traditional Marine Claims: A Forum Fisheries Agency. Cuse Studv of the Trobriand Islands, Papua Roux, L. St. J. 1914. '"Journal of the Voyage Nevt, Guinea. Master's thesis. Halifax, Nova Made in the King's Ship 'Le Mascarin."' In Scotia: Dalhousie University, Department of R. McNab, ed., Historical Recordls of New Law. Zealandt. Wellington. Waitangi Tribunal. 1983. Motunui-Waitara Ruddle, K. 1994a. "External Forces and Change Report (WAI 6). Wellington: Department of in Traditional Community-Based Fishery Justice. Management Systems in the Asia-Pacific Waitangi Tribunal. 1984. Kaituna River Report Region." Maritime Anthropological Studies (WAI 4). Wellington: Department of Justice. 6(1-2):1-37. Waitangi Tribunal. 1985. Manukau Report (wAI Ruddle, K. 1994b. A Guidle to the Literature on 8). Wellington: Department of Justice. Tratditional Communitv-Based Fishery Man - Waitangi Tribunal. 1988. Muriwhenua Fishing agement in the Asia-Pcif ic Tropics. Fisheries Report (WAI 22). Wellington: Department of Circular 869. Rome: Food and Agriculture Justice. Organization. Waitangi Tribunal. 1992. Ngai Tahu Sea Fisher- Ruddle, K. 1994c. "Local Knowledge in the ies Report (WAI 27). Wellington: Brooker and Folk Management of Fisheries and Coastal Friend, Ltd. Marine Environments." In C. L. Dyer and J. Wards, 1. 1968. The Shadow of the Land: a R. McGoodwin, eds., Folk Management in Study of British Policv and Racial Conflict in the World's Fisheries: Lessons Jor Modern New Zealandl. Wellington: Government Fisheries. Management. Niwot: University Printer. Press of Colorado, pp. 161 -206. White, J 1889. Ancient History of the Maori. Ruddle, K. 1994d. "Local Knowledge in the Six vols. Wellington: Government Printer. Future Management of Inshore Tropical Williamson, H. R. 1989. "Conflicting Claims to Marine Resources and Environments." Nature the Gardens of the Sea: The Traditional Own- and Resources 30(l):28-37. ership of Resources in the Trobriand Islands 120 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT of Papua New Guinea." Melanesian Law grated?" In K. Ruddle and R. E. Johannes, Journal 17:26-42. eds., The Traditional Knowledge and Man- Wright, A. 1985. "Marine Resource Use in agement of Coastal Systems in Asia anid the Papua New Guinea: Can Traditional Concepts Pacific. Jakarta: UNESCO-ROSTSEA, pp. 79-99. and Contemporary Development Be Inte- Linking Mechanisms 121 11 The Role of Tenurial Shells in Ecological Sustainability: Property Rights and Natural Resource Management in Mexico Janis B. Alcorn and Victor M. Toledo Abstract PROPERTY RIGHTS OPTIONS SHOULD BE ASSESSED for their performance in supporting ecologically sustainable develop- ment. Tenurial systems function as "shells" in the sense that they provide the superstructure within which activities are developed and operate. They are constraining and enabling structures with particular characteristics linked in very specific ways to the larger operating system in which the shell is embedded. Mexico has tested a mixture of private and community-based tenurial shells for over fifty years. This chapter is based on research undertaken in collaboration with the Property Rights and Performance of NaLural Resource Systems Program of the Beijer International Institute of Ecological Economics, Swedish Royal Academy of Sciences, Stockholm. 123 124 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT We offer evidence from Mexican case studies growth and ecologically sustainable manage- that the best course of action for designing ment of rural natural resources. Rural property property rights shells to enable ecologically rights options should be assessed for how well sustainable resource management is to support they support the economically and ecologically existing structures that have served this function. sustainable development of both urban and rural National recognition and policy support for sectors, including their performance in provision existing, community-based property rights of essential safety net features for the poor systems is a design principle that can be used to (World Bank 1990). enable farmers to orchestrate natural processes, Sometimes the best design is to seek ways to social processes, and multiple species to create support an existing structure. Designing ways to sustainable agro-ecosystems that maintain for- allow the market to work efficiently is an exam- ests and high levels of biodiversity while gener- ple of designing support for an existing structure ating economic benefits and social services that (in this case, the market). In this chapter we offer complement those generated by urban develop- an insight into designing property rights to ment. support an existing socio-ecological structure. We consider property rights where land use patterns exhibit ecologically sustainable adapta- tions to changing sets of opportunities and In assessing the options as one sets out to constraints. We conclude that national support design or reform a property rights system, one for corporate, community-based property rights should consider the ecological and social im- systems offers a design principle that can enable pacts of the property rights regimes being con- farmers to orchestrate natural processes, social sidered, as well as the impacts of the property processes, and multiple species to create comn- rights options on market function and national plex, sustainable agro-ecosystemns that maintain economic growth. Property rights systems do not a high level of biodiversity while generating just define and grant rights to property; rather economic benefits and providing social services they establish the rights and responsibilities of that complement those generated by urban system participants vis-a-vis each other development. (Crocombe 1971). Property rights over land We focus on Mexico, a country that has tested have generally been assessed in terms of trends a mixture of private individual and commitunity- in annual agricultural production as they relate to based property rights' within a modern capitalist progress in formal titling to individuals because environment for decades. Although sustainable individual titling has been viewed as the prop- resource management was not the objective2 of erty rights design to free the market to determine investments in land use. The property of concern in this chapter, 1. The mix includes corporaite communiity-based however, is broader than land considered as an landholdings (66.3 percent ol' the production units and agricultural input or real estate for sale. It Is covering 59 percent of' the land arca ol Mcxico); private individual holdings (comprised of' 30.8 percent of' the property comprised of ecosystems and their production units anid coverinig 40.9 percent ol the lanid component parts and processes; that is, land, arca): and mixed systems (includinig 2.9 perccnt ol' the forest, water, and other associated resources of production units and covering 0. I percent ol' thc land area) economic interest. The long-term value of these (NaLional Census 1990). assets depends on their ecologically sustainable maassetsmdends Using theirnnuoloally commcinabl c2. The political purposes and ditficulties of Mcxico's management. Using annual comnmercial crop laund rciorm program are evident in thC unlusuallv slow and production and its monetary value as a lens to sporadic way in which it was impicilieiited. The process assess the appropriateness of property rights "Ilosicred dependency on the apparatus of thc state" alternatives ignores ecological impacts and (Powelson and SLock 1987, p. 29). Programs ostensibly thereby produces a shortsighted and narrow established to support agriculture and marketing services focus (for example, Porter, Allen, and Thomp- were also designcd to build political patronage and power son 1991). bases lor the ruling party rather than to assist communities to develop and market their products. These lactors Sustainable economic development requires atfected the productive performance of the cjidos and a proper balance between urban economic t onnini1ade.s (indigenous communiities), as wcll as tihc 11. Property Rights and Natural Resource Management in Mexico 125 Mexico's land reform legislation enacted some economy-the ultimate operating system in the 80 years ago, Mexican recognition of computer jargon sense. community-based tenure has enabled locally Recognition of existing local property rights adapted agro-ecosystems to continue to develop regimes by powerful outside entities creates a and adapt in the face of changes, while at the shell around local systems, a protective border same time allowing maintenance of the biologi- around subsystems that could not remain viable cal and cultural patrimony that provides the if fully exposed to the outer environment in inputs and means for future adaptations. For the which they are embedded. Communities, how- past twenty years, Mexico has supported the ever, do need to interact with economies and largest experiment with community-based organizations outside their shell. Therefore, the forestry in the world (Bray 1995). tenurial shell has, in addition to its protective The Mexican experience offers lessons for dimensions, a facilitating dimension that enables other countries. Group property rights are not selected interactions across the boundaries of the legally recognized in most countries, although shell-rather like a cell membrane inside a vestiges of pre-existing, customary property living organism that separates one environment rights systems persist in many biodiverse areas. from another, yet at the same time facilitates Legal support for community-based, corporate essential transfers across the border between tenure is a policy option that is particularly environments. attractive for sustainable management of forests During colonial and neocolonial times, the and biodiversity in situations where indigenous shells of many local communities were dis- peoples and other rural communities use locally rupted, and the more common interface became adapted resource management systems. isolated local shells abutting an outside global community and state property regimes (Alcorn Conceiving of Property Rights 1995; Alcorn and Molnar 1995). The historical as Shells trend has been increasing loss of local tenurial shells and the locally based resource manage- Property rights systems provide the basic ment systems they contain. Communities inside structure from which spring the opportunities different local shells forge organizational links and avenLes for exploiting and managing re- between themselves and with other national sources. We propose that property rights systems support organizations and networks in order to function as "shells" in the computer jargon resist legal and illegal efforts to dismantle shells. sense, in that they provide the superstructure, or Each community-based tenurial shell is inner environment, within which activities are constructed of linkages into institutions that developed and operate. In other words, a shell is pervade the lives of community members. The a constraining and enabling structure with partic- term "institution" is used here to mean the ular characteristics linked in very specific ways invisible bodies of rules, regulations, and pro- to the larger "operating system" in which the cesses that guide decisionmaking (Ostrom 1990; shell is embedded. This aspect of the shell Ostrom, Walker, and Gardner 1992). Such responds to local cultural, ecological, and social decisionmaking is often carried out within factors, including those arising from extemally organizational structures-organizations being generated stresses or opportunities. Such shells groups of people acting in relationships gov- are generally nested within a hierarchy of erned by and legitimized by institutions. Exam- shells-each outermost shell forming the operat- pies of organizations include families, clans, ing environment in which the next level of inner cooperative societies, community organizations, shell operates. Shells are created within nations the church, local government councils, unionis, by special recognition of local systems that and state agencies. Organizations are frequently function within a particular national framework. linked in hierarchical relationships. In turn, national shells operate within the global Local organizations often manage community members' access to forest or other natural re- sources based on local common property institu- tions (Berkes and others 1989; Bromley and judicial process for recourse when laws were violated. Cemea 1989). Such institutions include rules 126 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT about use and acceptable distribution of benefits, Alternatively, communities in remote areas may means by which tenure is determined, and have rights that have been legitimized by the conflict resolution mechanisms. These institu- government, but these communities may be tions contribute to the structure of the tenurial uninformed of their rights and therefore fail to shells. Tenurial shells are created at the interface seek state assistance in the face of illegal extrac- between competing social and political systems tion of their resources (for example, Cortez Ruiz and their associated institutions. Hence, the 1992). Design for support of local shells should tenurial shell includes gateways for political be based on an assessment of factors undermin- intercourse between the inside and the outside. ing those shells. Tenurial shells and systems are invisible to In the remainder of this chapter, we briefly those who don't participate in local political describe the tenurial shells in Mexico, summa- activity or directly manage local resources. For rize the attributes of sustainable tropical forest this reason, few natural resource managers, management, and demonstrate how sustainable economists, or ecologists have recognized or forest management is related to design principles assessed the role of tenurial systeins in ecologi- that support the protective, enabling shells of cal sustainability. Instead, they have uncritically community-based tenurial systems. accepted fee simple titling to individuals as a necessary step to facilitate development. The Mexican Case: Our discussion focuses on old, local subsys- National Support for Tenurial Shells tems within the national and global economies where local feedback loops within local subsys- In Mexico, unlike most other countries rich in tems can lead to recognition of overexploitation tropical forests, resource users gained the state's of a resource and failure of ecosystem functions. protection lor community-based management of When communities extract distant resources, resources. The Mexican state formally recog- recognition of overexploitation and follow-on nized tenurial shells for communities after the harvest adjustment rarely occur. If ecosystem- Mexican Revolution, which was born, fought, level damage is registered by an extractor with and won on the demand for the return and redis- long-term interest in maintaining his assets, tribution ot land to peasant communities (San- alteration in exploitation or shifts in livelihood derson 1984). The 1917 Constitution supported strategies are more likely to occur. In response to land reform and recognized community owner- feedback and tensions between individuals ship of land under Article 27. Constitutional seeking access to resources, local institutionls recognition of community-based tenure has have arisen to ensure community members' provided a protective shell for the functioning continued access to resources while restricting and evolution of resource management systems access by outsiders, as well as to manage the responsive to local ecological conditions. differentiated access rights of insiders. These Comimiuniity land rights in Mexico are typical institutions result from a political process of of community-based teniure systems elsewhere in trade-offs between members of a comnmnunity the world. Tenurial rights and responsibilities who must work together because of their inter- within the shell are defined by local communi- dependence in many other spheres. ties within the basic framework established by Traditional shells are weakened by the lack of the state. We refer to these systems as state support. The community's traditional community-based because the primary legiti- resource management systems and related insti- macy of community-based tenure systems is tutions are often slowly undermined by new drawn from the community and not from the laws. Unsustainable resource use increases as the nation state which recognizes them (Lynch and old shell is weakened and replaced by a new Alcorn 1994). In other words, the local commu- operating shell-often an aberrant version of the nity, not the national government, is the primary legally-specified shell as it is interpreted and allocator and enforcer of rights to resources locally implemented by the politically powerful, within the boundaries of the community. Re- including the military. In remote areas, tradi- sponsibilities to the land and to the community tional tenurial shells often continue to operate are defined by the community, and the national without legitimization by the govenmment. government defends a community's rights to its 11. Property Rights and Natural Resource Management in NMexico 127 resources against the claims of noncommunity export-oriented policies, prices for food rose members. At the same time, however, the Mexi- significantly, while profits from growth in the can state retains ultimate rights over the re- export sector primarily accrued to foreign inves- sources and places restrictions on rights to sell, tors. Wages remained low, "verging on slavery" lease, or rent community properties. in some areas (Sanderson 1984). These condi- In Mexico, two forms of community-based tions gave rise to the Mexican Revolution. corporate ownership are currently recognized Under the post-Revolution land reforms, despite and supported by law: ejidos and comuniidades the legally specified difference between (indigenous communities). The ejido is a cre- cornuttidatdes and ejidos, most pre-existing ation of the Mexican revolution that enables communities were not recognized as groups of people to petition for access to re- comuttidades on the basis of documented prior sources to which they have no prior claim. The claims, but were instead granted rights as ejidos comunidad, on the other hand, is a pre-existing for political reasons.' corporate entity whose rights are recognized if Under both ejido and comnunidad systems, its members can demonstrate prior, longstand- each household in the community has the right ing, community-based use of the land and wa- to exploit the community's natural resources ters. The stated objective of legally establishing necessary for livelihood. The household cannot the post-Revolution comunidadl was to return to sell or rent community lands to anyone outside the earlier corporate tenurial system originally the community (but see 1992 revisions below). recognized by Spanish colonial administrators Inheritance and membership is regulated by based on similar European traditions of corpo- communities. The household is, in effect, a user- rate land use (Sanderson 1984; Sheridan 1988). manager of a set of resources that belongs to Traditional corporate systems derive strength everyone in the community. Resources are from a cultural and social integrity which, on the allocated to members of the community who one hand, reinforces a unified approach to exploit and manage these resources on an indi- management decisions and yet, on the other vidual basis within the limits set by the commu- hand, offers individual households the freedom nity. Communities are heterogeneous, dynamic to benefit from differential, individual access to entities containing subunits that form shifting specific resources held within the community.3 alliances within shared institutions and that are During the Porfirian period(I876-1910) prior guided by shared ethics. Their tenurial shells to the Revolution, the state withdrew its earlier form crucibles within which local conflicts and support for the communities' tenurial shells. differing strategies can bubble together without Federal laws eliminated communal prop- being destabilized by external factors. Land erty rights and claimed as state property all lands disputes within communities are common, but without official titles (Barthas 1994; Sanderson they are generally resolved at the community 1984; Stresser-Pean 1967). The state in turn gave rights to those same lands to capitalists and owners of haciendas, leaving communities to depend on wages for their survival. The impact 4. The rights of ejidos are spelled out more clearly than epen poaes . . . those of comuLnidades in the agrarian reform legislation of these policies varied In different regions of (ReyesOsorioandothers 1974).Theprocessofformingan Mexico, but nationwide, by 1910 , nearly half the ejido is much simpler than the tortuous process required to rural population had become debt peons on receive recognition as a comunidad. In addition, the state haciendas and ranches, 82 percent of all commu- strongly favored the option of granting land to ejidos nities were located on haciendas and ranches, rather than recognizing pre-existing rights to comunidades; and free agricultural villages held very little land the former option placed the state in a more powerful position (Powelson and Stock 1987; Sanderson 1984). In practice. there are greater operational differences within the range of ejidos than there are between ejidos and cYmunidades. Communities that purchased their own lands 3. Landholdings of individual ILirm families may he when threatened with eviction at various times in past fragmented in order to provide each family with access to centuries have enjoyed stronger state support for their available soil types and microbabitats. This acts to tenurial security when threatened by invasions. As of strengthen in situ conservation of traditional crop varieties 1995. however, all ejidos and comunidades are functioning (Oldfield and Alcorn 1987, Brush and Bellon 1994). as longstanding communities with prior rights. 128 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT level and do not become a burden for state Within the protective and enabling shells agencies (DeWalt and Rees 1994). Land dis- created by ejidos and comunidades in Mexico, putes between communities are also common, communities apply an incredible range of inno- but they are settled through state agencies and vative, sustainable, locally adapted natural the state's judicial apparatus.5 Land disputes resource management systems in a wide variety between communities and ranchers are also of ecosystems ranging from desert to rain forest common, particularly in forested areas (for (for example, G6mez-Pompa and Kaus 1990; example, Sandoval 1994), and the state appara- Mora Lopez and Medellin-Morales 1992; tus offers the only peaceful recourse for justice Wilken 1987; Nahmad, Gonzalez, and Vasquez in situations where ranchers have enormous 1994; Toledo and Barrera-Bassols 1984; Toledo political intIuence, and sometimes private ar- and others 1985; Zizumbo Villarreal and mies. Colunga Garcia-Marin 1982). Indigenous peo- The extent and impact of community-based ples live within the borders of 80 percent of resource management in Mexico are significant. Mexico's protected areas, an indication of the Approximately 3 million households belong to level of biodiversity maintained by their land use the nearly 30,000 ejidos and comunidades6 that pattems. An archipelago of communitizs linked manage 59 percent of Mexico's land area (103 as a network of campesino (peasant) ecological million hectares) and 66 percent of the total rural reserves could effectively cover Mexico's production units. Most indigenous communities biodiversity (Toledo 1992b, 1994b). operate ejidos, and long-established mestizo Every ecological zone in Mexico supports ejidos often retain the pre-Hispanic traditions of rich reserves of biodiversity, but the forested their indigenous ancestors. For these reasons, it areas are especially rich (Ramamoorthy and is appropriate to assess ejidos and comunidades others 1993). Between 70 percent and 80 percent as a group. Most of the land operated by ejidos of Mexico's forests are under management by and (oinutidaldes is marginal for agriculture due some 7,000 to 9,000 ejidos and comunidades to poor climatic and soil conditions. Of (Molnar 1995).7 From a cultural perspective, it is the co0unicdad and ejido lands, only 22 percent also noteworthy that 4.8 million indigenous is agricultural (arable), and the remainder is people8 reside in ejidos and cornunidades in under pasture or forest. Highly productive lands forested areas (National Census 1990). (particularly those that are irrigated) are pri- In the next section, we summarize the attrib- vately owned under individual title. Mexican utes of sustainable tropical forest management. rural communities, whether indigenous or mes- Then we briefly explore community-based tizo, are similar to peasant communities in other property rights and resource management by parts ot the world in that, while they produce long-established communities in two of Mex- goods tor their owni consumption, they also rely ico's forest ecosystems-the lowland humid on outside jobs and the sale of cash crops to tropical forest and the subhumid temperate meet their subsistence needs and purchase other forest-some 15 million hectares of which consulimier goods. remain under the management of comunidades and ejidos (National Census 1990). Over the past few decades, ranchers have converted 20 million 5. lincticicncies. rent-seckinig bchavior of bureaucrats. hectares of lowland and temperate forests into and political intrigucs have olicniiade settlcment difticult. pasture (Toledo 1992a), and they continue to Nonetheless. despite analysts locus on specicic local cases press on the edges of forested ejidos (for exam- where the government lailcd to resolve the problems (ibr cxainplIc. Powelson and Stock 1987: DeWalt and Rces 1994). from a national perspective the majority of cjidos and coiuimd(dles have conitinued to iunction successtulty 7. A recent World Bank sector review found wide without seeking governmncit intervention in border variation in published estimates of forest held by cjidos disputes and coonn idades and in the numbers of ejidos and coniunidades who hold forest. 6. Although the cooaiuidid was expressly created for indigenous communities, due to the reasons described 8. Mexico's botal indigenous population is 10.5 million above there are only 1.231 coimunidades covering some 9 (National Census 1990). There are 54 major indigenous million hectares (Sheridan 1988). groups speaking 240 languages. 11. Property Rights amid Natural Resource Management in Mexico 129 pie, Sandoval 1994), putting external stress on support agricultural management systems their tenurial shells and their forests. Given the adapted to the tropical forest ecosystem's limits. high percentage of indigenous communities Controls (including tenurial rights and responsi- living in these two zones and the importance of bilities defined by a community) and incentives these two forest zones, it is appropriate to select to encourage community members to respond to case study examples from indigenous communi- evidence that forest is being damaged are also ties from these two forest zones. important. Finally, monitoring to recognize that the forest is being harmed or helped by certain Attributes of Sustainable Tropical changes may be a group or individual activity, Forest Management Systems but it must be linked through a feedback mecha- nism into an institution that can bring the com- Patterns from tropical forests around the munity together to wrestle with a problem if it is world suggest that the key elements of a sustain- detected. If loss of forest is not perceived or is able management strategy are (a) patchy distur- not recognized as a problem, then no conscious bance, (b) controls over placement of distur- choice is made to keep or lose the forest, and the bance, and (c) active development of crops and process proceeds as an accident. If it is perceived crop varieties adapted to the local agro-ecosys- and recognized as a problem, then choices are tem patches within the forest matrix. These made to hold losses to an acceptable level or elements are found in indigenous resource arrest and reverse the process. The successful management systems. Patchy disturbance (spa- implementation of choices (whether individual tial and/or temporal) creates patches of different or group) depends on the societies' shared types of habitat. For ecosystem integrity to be values, appropriate organizations, and political maintained by patchy disturbance, patches must power vis-a-vis outsiders who may be causing include undisturbed areas of sufficient size and the changes. coverage, and of appropriate distribution and composition to (a) ensure regeneration of the Inside the Shell: species and the communities, and (b) maintain Resource Management in a ecosystem services essential for habitat mainte- Changing Environment nance of the entire matrix and adjacent ecosys- tems. The management system's ability to create Introduction and maintain patches that meet these criteria is challenged by changes in population size, politi- The cases from Mexico summarized below cal organization, market values, in-migration, include (a) strong tenurial rights held by individ- intensity of resource mining and other ual families within a strong communal tenurial nonbiological factors. shell recognized and supported by the state; (b) Although most case studies contain insuffi- some resources under communally shared ten- cient information to ascertain the key factors that ure; (c) evidence that potential negative impacts determine whether a society can create or adapt of land use options are considered in making a resource management system to meet the choices; and (d) shared cultural values, institu- ecological criteria for forest maintenance, exist- tions, and organizations developed over centu- ing evidence suggests it is important that several ries of changes in situ. things are shared within the user group, includ- The in situ changes have included shifts from ing (a) cultural values, traditions, and sociopolit- subsistence production to involvement with cash ical organizations; (b) controls and incentives; crop production, resistance to outside efforts to and (c) attention to monitoring for negative eradicate their cultural traditions, and efforts to changes. counter increasing marginalization within the Strong cultural traditions, social organiza- political economy. The specific resource man- tions, and institutions have evolved in many agement practices in the two eco-regions differ. forest-dwelling societies which have experienced In both zones, individual households and forest loss and then reacted in an effort to man- communitywide land use patterns are con- age or reverse the change. Values and institu- structed from core elements that include forest, tions (such as inilpa described below) evolved to fallow cycled fields, corridors of wild vegetation 130 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT within agricultural areas, bodies of water, house the time of the earliest written documents, the gardens, and permanent fields, including planta- tropical moist forest region has been character- tions and pastures (Toledo and others 1995b). A ized as a "hell" or a "paradise," depending on survey of forest use by indigenous people in the the viewer (for example, Vetancourt 1689; Tapia lowland humid tropical zone revealed that 1,052 Centeno 1960). If this ecosystem is managed forest species are used for a wide variety of properly, it is a paradise because it provides a products for consumption and sale, ranging from wealth of short- and long-term benefits. If its medicines and food to construction and fuel special resources created under hot, humid materials (Toledo and others 1995a). This study conditions are misused for short-term extractive emphasizes the economic value of Mexico's gains, or if conversion is attempted, then this forests beyond their value as standing timber for ecosystem degenerates into a less valuable paper or plywood production. ecosystem requiring external inputs to maintain The specific type of tenurial rights within a production. community is probably less important for eco- We focus on two user groups located in logical success than are the legitimacy of the contiguous areas (southeastern San Luis Potosi tenurial shell and the strength of the institutions and northern Veracruz) of this ecosystem who that reinforce tenurial responsibilities and pro- use similar resource management systems: the vide the capacity to take action on the basis of Huastec Maya (population 121,000; National feedback from monitoring. In both cases, com- Census 1990 Table 10, Cuadro 8) and the munity institutions influence local property Totonac (population 208,000; National Census rights interpretation and resource management. 1990 Table 10, Cuadro 8). Totonac and Huastec These include state-imposed institutions and both retain their language and strong cultural cultural institutions. The local institutions cre- traditions, but at the same time have participated ated by the state to regulate activities on in economies linked to the global economy for comunidad and ejido lands in accordance with several centuries. state law include the General Assembly to which Economic differences do exist between fami- all households are represented by one person, lies, but only a few families in any given com- and two important elected three-person commit- munity hold significantly greater resources than tees: the comisariado (which represents the the rest. Huastec and Totonac communities community to outside authorities and settles land occupy comnunidad and ejido lands where popu- disputes) and the consejo de vigilancia (which lation densities average around 100 persons per monitors the activities of the first committee). square kilometer. Communities vary in size from Community decisions are made in General 500 to several thousand hectares. Assembly meetings or special meetings by While there are no significantly distinct majority vote; representatives of all households subgroups of resource users within their commu- must attend these meetings, or they are fined. To nities, Huastec and Totonac communities are varying degrees, elders and traditional leaders spatially distributed as islands in a sea of lands influence the functioning of these institutions. operated by a different group of resource users-mestizos, the Spanish-speaking people Case One: Lowland TEropical Moist Forest who claim Mexican national identity. Mestizos' The 1990 National Census identified twenty- political power and domination of the economy two indigenous groups operating ejidos and influence the technical and organizational op- cotniinidcaeles (population 1.56 million) in the tions available to indigenous resource users. tropical humid zones of Mexico. The case study Mestizos occupy towns, ranches, and citrus and site is a representative example located in north- sugarcane plantations in the more level lands and eastem Mexico on the Gulf coastal slopes of the areas along roadways, while the islands of Sierra Madre Oriental in the states of San Luis indigenous territories tend to be aggregates of Potosi and Veracruz where rain forests reach communities grouped on steeper, less desirable their northernmost range in the Americas agricultural lands. There is continued tension (Rzedowski 1978). Prior to the arrival of the over borders between mestizo and indigenous Spanish, the area was occupied for thousands of lands and forests. Occasionally, powerful mesti- years and supported complex civilizations. From zos still assert their rights over these resources 11. Property Rights and Natural Resource Management in Mexico 131 without any legal basis to back their claims (for to protect the community and the land and example, Brisefio Guerrero 1994). resources for which the community is collec- The land use patterns of the indigenous peo- tively responsible. Middle American cultural ple and the mestizos who own private lands are concepts of ownership extend beyond the usual quite different. Mestizos manage the majority of Western legal considerations. The real owners of the land in the region. Mestizo households the land and forest are divine beings and spirits operate a wider range of land sizes than do (including ancestors). Another way of express- indigenous households-from large ranches to ing this relationship is that the earth (with its the small garden plots of landless laborers. On resources) is a member of the community, and the margins of the Huastec and Totonac areas, the community has the obligation to treat the mestizo ejidos also exist, and their land use earth and all other community members with varies from indigenous-like mosaic patterns to respect and concern for their continued well- monocultures. Mestizo land use outside ejidos being (Brisenio Guerrero 1994). In other words, generally tends to follow the standard Eurocen- ownership means that the human community has tric model of monocrops and pastures with a moral responsibility to maintain the land, its intensive herbicide and pesticide use. Mestizos resources, and society in good condition. Hence, in this region dedicate most of their lands to despite the apparent clear-cut borders between cattle, although pastures are largely degraded Huastec families' lands, members of one family and unproductive. This general pattern has been have the right to ask another family to borrow in place for several hundred years (Barthas land or harvest forest products to meet their 1994), but forest in mestizo areas decreased subsistence needs. This system provides a social dramatically after World War II when mestizos safety net for the poorer members of the commu- gained access to machinery for clearing forest nity. and used it to increase the area dedicated to Disputes over land borders and harvest rights cattle pasture (Aguilar-Robledo 1994). are common and can disrupt congenial relation- Property within the borders of the comunidad ships between families within a community. or ejido is recognized, used, and inherited ac- Accusations of witchcraft are made against those cording to local institutions. Almost all forested who attempt to appropriate resources for private land is under family ownership-a situation in gain. A belief in witchcraft provides a strong which the family, not others, make management social sanction against actions that go against decisions. Families are responsible for making conservative use of resources and a commitment management decisions that are appropriate to the to the corporate group. Traditional curers rein- context and rules shared by the community. The force socially appropriate behavior during their small patches of communally shared forest are interactions with patients, looking for causes of used to generate income to pay school expenses the illness in the patient's or others' misuse of and maintenance of other buildings required by resources. Here the importance of the relation- the state, as well as to provide materials for ship between the divine powers and the land poorer community members who do not have comes into play, as well as the relationship access to forest resources on their own family between people. Clearing a private forest along lands. Decisions about community lands and a community watershed, for example, would forests are discussed at assemblies in which result in strong pressure (including accusations representatives of every family participate. of witchcraft) against the family, as well as in The specific lands that belong to each family interpretations by the curer as causing illness or are well defined, but border disputes do occur. misfortune because the person went against Under the state-sponsored comunidad and ejido religious sanctions about protecting water (eco- systems, a community-elected official adjudi- logically unwise). Hence, ecologically sound cates over land disputes and inheritance deci- land use is supported by cultural values and sions in consultation with other community belief in the ethical commitments made between members. Community members understand the people and spiritual powers when people make state's legal apparatus establishing ejidos and land use decisions. The tenurial shell created by comunidades as an extension of traditional the state supports the traditional belief structure, institutions that control human behavior in order 132 PROPERTY RIGHTS IN A SOCIAL AND ECOLOGICAL CONTEXT whlich in turn supports ecologically sustainable land was under forest, 36 percent under milpa, land use. 10 percent under cash crops (aside from vanilla), The effects of these moral commitments and and 23 percent was in pasture (Toledo, Ortiz, beliefs are visible in the stark contrast between and Medellfn-Morales 1994). The Huastec and land use on either side of the border where Totonac system is generally similar to that of indigenous ejidos/comunidades abut mestizo other Mesoamerican milpa agriculturalists lands. The tenurial shell that reinforces commu- (Alcom 1990). Milpa is the Mesoamerican nity and cultural values is physically visible at version of integral swidden agriculture (Warner the border. At the border, people tell stories of 1991) applied in most tropical areas of the how their way of life and forests were threatened world. Milpa is a central institution from which before the Revolution, and how they were un- other institutions draw strength. From a property able to reclaim parts of their territory (now rights point of view, milpa is an institution outside the border). They say that the Revolution which reinforces reciprocity and community- was terrible, but they acknowledge that the based control of natural resources. Making milpa Revolution saved their forests and their way of requires reciprocal labor exchange and decisions life. Without the ejido and comunidad, there made by following a specific regime associated would be no borders and no islands, only a sea with rituals and culturally appropriate rules of of pasture. proper behavior. One analyst has argued that the Within the borders of their territories, both milpa system requires corporate ownership Huastec and Totonac apply a high level of (Rees 1974). knowledge about species and ecosystems Farmers manage their forest patches through (Alcorn 1984, 1989a; Barrera-Bassols, Medellfn, selective removal of unwanted individuals and and Espejel 1991; Toledo and Medellfn-Morales selective encouragement of desirable species. In 1986). Huastec use 679 plant species and specif- many cases, the high-value crops coffee ically manage 349 of those species. Totonacs use (Huastec) or cacao (Totonac) are planted in the and manage 355 species of plants and animals. understory and then allowed to reproduce them- Useful species are harvested from lands man- selves naturally there where they are treated like aged by risk-spreading strategies to make multi- any other useful wild species. These systems pie use of available resources while maintaining have been detailed extensively elsewhere the natural processes on which agricultural and (Alcom 1981, 1983; Medellfn-Morales 1986). forest-based systems rely. An economic assessment of costs and benefits The Huastec and Totonac agro-ecosystem of operating a typical Huastec community's is a fluid mosaic of various resource zones: lands yielded a net benefit of cash and subsis- permanent planted fields, periodically planted tence goods valued at US$598 per hectare per fields, fallows, dooryards, orchards, forests, and year (Alcomr 1989b). This number compares streams. People use and manage the natural favorably with the benefits generated by other ecosystem for human benefits-crops, wild systems (for example, Godoy, Lubowski, and plants, wild animals, and ecological services. Markandaya 1993). Despite the relatively high Simply put, the two systems create a shifting population density, approximately 25 percent of mosaic of replicates of three standard pieces: the area is still forested although it could have forest patches, swidden mnilpa patches, and cash been cleared. People chose not to clear it. The crop patches. reasons they give for their decision to maintain In this shifting mosaic, the siilpa cycled fields biologically diverse managed forests include (a) are the most "mobile" and the managed forests commercially valuable products; (b) direct the least mobile part of the shifting mosaic. access to products (firewood, fruits, medicine, Managed forests, especially along streams and construction materials, and other it