Fuel Subsidies to Global Fisheries: Magnitude and Impacts on Resource Sustainability

U. R. Sumaila, L. Teh, R. Watson, P. Tyedmers, D. Pauly, (2006). “Fuel Subsidies to Global Fisheries: Magnitude and Impacts on Resource Sustainability,” Fisheries Centre Research Reports No. 14 (Fisheries Centre, University of British Columbia, Vancouver, Canada).

It is generally accepted that global fisheries are grossly overcapitalized, resulting in overfishing in most of the world’s fisheries. Fuel prices have recently seen significant increases. Given that fuel constitutes a significant component of fishing costs, it is obvious that, other things being equal, increasing fuel prices will reduce overcapacity and overfishing, because they will reduce the profits that can be made, thereby driving marginal fishers out of fishing. But, other things are hardly equal. Here, the willingness of governments to provide the fishing sector fuel subsidies reduce, if not completely negate, the conservation value of increasing fuel costs. The objective of this contribution is twofold. First, we explore the theoretical basis for the expectation that increasing fuel price faced by fishing enterprises will, everything being equal, reduce fishing pressure. Second, we estimate the amount of fuel subsidies (defined narrowly here as the price differential between what others and fishers pay in an economy) paid to the fishing sector by governments globally. Results from our study indicate that global fuel subsidies stand at between US$ 6±2 billion per year. This implies that, depending on how much of this subsidy existed before the fuel price increase, fishing enterprises can, in the aggregate, absorb as much as this amount of increase in their fuel budget before we begin to see any conservation benefits from fuel price increases.

1198-6727, http://www.ecomarres.com/downloads/FCRR14_6-2.pdf