The market failure of the Tuna fishing regulations
The fishing habits have caused to destroy the life cycle of bluefin tuna in Denmark and are now continuing to spread through the northeast Atlantic and Mediterranean. Although the International Commission for the Conservation of Atlantic Tunas organization has already organized a recovery plan they have failed. The concern with Bluefin tuna is that it is overproduce and therefore, causing a lot of unnecessary environmental problems. To stabilize the tuna life cycle and to prevent bankruptcies of tuna companies, the government will have to adapt to new solutions for this problem.
Bluefin tuna is a common good which means that it is rival, however not excludable. One person’s use of the tuna can diminish other people from using it. However, no one can be excluded from fishing, since it is an open market to everyone. As tuna is not excludable it is a great concern in this case, as it gives anyone the chance of fishing as many tunas as possible for their own purpose. This situation lies under a tragedy of commons, meaning that common resources get used more than is desired form the population. Although fishers are aware that they are depleting the ocean, they do not stop selling tuna fishes. The tragedy is that the fishers continue depleting the ocean due to their self interests, not regarding the consequences for the ecosystem or the ocean. Therefore, fishing for tuna is a negative externality which people who don’t get charged for their usage are destroying the ecosystem.
The fishing habits have caused to destroy the life cycle of bluefin tuna in Denmark and are now continuing to spread through the northeast Atlantic and Mediterranean. Although the International Commission for the Conservation of Atlantic Tunas organization has already organized a recovery plan they have failed. The concern with Bluefin tuna is that it is overproduce and therefore, causing a lot of unnecessary environmental problems. To stabilize the tuna life cycle and to prevent bankruptcies of tuna companies, the government will have to adapt to new solutions for this problem.
Bluefin tuna is a common good which means that it is rival, however not excludable. One person’s use of the tuna can diminish other people from using it. However, no one can be excluded from fishing, since it is an open market to everyone. As tuna is not excludable it is a great concern in this case, as it gives anyone the chance of fishing as many tunas as possible for their own purpose. This situation lies under a tragedy of commons, meaning that common resources get used more than is desired form the population. Although fishers are aware that they are depleting the ocean, they do not stop selling tuna fishes. The tragedy is that the fishers continue depleting the ocean due to their self interests, not regarding the consequences for the ecosystem or the ocean. Therefore, fishing for tuna is a negative externality which people who don’t get charged for their usage are destroying the ecosystem.
The graph above shows the negative externality of production when dealing with tuna fish. Producers are fishing and selling too much tuna at a too low prize and therefore, they reach the point Q1 and P1. This point is not beneficial for the community since marginal private cost (MPC) is equal to marginal social benefit (MSB). In other words, this means that the producers are fishing too much tuna and sell them for a too low prize causing the benefit for the society to decrease since they are destroying the natural ecosystem. The production of tuna causes a negative externality on the 3rd party, which is the livestock of the ocean and the ecosystem, shown by the green dead weight loss. The government had already intervened by making laws and producing recovery plans. However, it is difficult for the recovery plan to succeed, as tuna is not only a very popular food, but also it lies under the tragedy of commons. Therefore, the government had failed with its plans and has to intervene with other possible solutions.
One solution to decrease the production of tuna is to tax the fishers on the amount they are fishing per day. When the fishers have to pay a tax they will automatically not fish as many tuna because they would not be able to afford the high taxation.
One solution to decrease the production of tuna is to tax the fishers on the amount they are fishing per day. When the fishers have to pay a tax they will automatically not fish as many tuna because they would not be able to afford the high taxation.
As one can see on the graph that with the taxation on the marginal private cost the quantity being produced would automatically decrease and the prize would increase. If the prize increases this would mean that people will stop consuming as much tuna because it would become a luxury good. When people are not consuming as much tuna anymore, then the production of tuna fish will decrease as well. However, in order for this to work all the countries will have to introduce this taxation and production as well. When not all countries have this taxation, then fishers from countries without the taxation will continue destroying the ecosystem of the ocean. Therefore, to make all countries attend this taxation the countries should be confronted with shocking facts and future catastrophes to make them realize how drastic the situation is.
These two solutions would reduce the tuna amount being fished and also it would stabilize the ocean’s ecosystem again. However, the danger of these two solutions could be that while other countries reduce their fishing amount, that others will continue depleting the ocean. In order to stabilize the life of the tuna and ocean the government will have to start introducing stricter laws in order not to start a market failure.
