itq_ice[1]Iceland is a posterchild for economic incentive mechanisms for managing wildlife stocks. Its ITQ system is based on biological criteria, not political ones like many other systems which result from exhaustive bargaining in smoky rooms, billiard halls and corridors in Bruxelles. However, the Icelandic economy has been crippled by the financial crisis and is suffering a serious recession. And in what we worry is the beginning of a global precedent, the country is looking to its natural resources to restore value in its economy, particularly in its waters.

In January, it increased its whaling quota sixfold, and recently it has increased its catch by 32% in the first two months of 2009 over 2008. And while this trend began under the previous government, it has continued under the new government.

The potential quota-busting could be a rational response to underemployment, high demand and future uncertainty. Or it could be the beginning of a mining of the resource base that could have serious implications for the welfare of future fish stocks for Iceland and its main consumer base throughout Europe. There are two dual issues worth highlighting here.

First, there is a worry for the reputation of economics in supporting conservation. Fish is second to timber for value of trade. And there is evidence that ITQs work, at least for some fisheries. Alongside New Zealand’s quota management system and the clam and sea quahog fisheries in the US , Iceland is emblematic of sound economics driving and supporting conservation itq_ice2

Second, for the broader wildlife trade, the failure of the Icelandic QMS could spell the end of any flirtation with economic instruments. Yet, the wildlife trade labours to manage trade for conservation using CITES which uses a system of international regulation which is at best conservation-neutral and at worst a driver of unsustainable use of wildlife, ITQs offered some hope of salvation in light of very few alternatives to management.

Sustainableslump is concerned that conservationists will turn their back on promising economic incentives mechanisms, and that any hope for endangered species will be lost too.