Privatization

Artificial Reefs, Real Fish

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Southern Alabama is home to the largest area of artificial reefs in the world. Between 8,000 and 10,000 artificial reefs have been placed in a 1,200 sq. mile area in the Gulf of Mexico off of Orange Beach and Gulf Shores. Because of these artificial reefs, Alabama, which has only 5 percent of the Gulf's coastline, produces nearly 40 percent of the red snapper that is caught recreationally in the Gulf. The Orange Beach Chamber of Commerce estimates that the red snapper fishery pumps in around $90 million a year to the local economy. "It's a very, very successful program," says Robert Shipp, head of the Marine Sciences Department at the University of Alabama at Mobile.

What are artificial reefs? Fishers learned years ago that fish like to live around "structure." Favored structures include everything from sunken ships to old car bodies and tires dumped in the sea to modern offshore oil and gas platforms. Artificial reefs are designed to take advantage of that predisposition. They're especially useful in the northern Gulf of Mexico, where the sea floor is largely flat sand and mud without much structure. Hard structures serve as anchoring places for an amazing array of soft corals, sponges, sea fans, and algae, as well as havens where fish can feed and hide from the perils of the open bottom.

In recent years, charter fishing boat captains and some local community groups have begun to buy and deploy specially designed concrete artificial reefs in the Gulf. For example, Reefball Inc. designs a popular reef in the shape of a hollow concrete ball riddled with holes. Artificial Reefs Inc. makes hollow concrete pyramids with triangular holes. And The Reefmaker builds pyramidal structures that incorporate old tires. Boat captains are motivated to pay upwards of $10,000 and $20,000 to buy and deploy these kinds of reefs–they want to make sure that their clients enjoy successful fishing trips.

The Alabama reef program has been approved by the U.S. Army Corps of Engineers, which issued a special permit that demarcated a special zone in which reefs could be placed. In earlier years fishermen simply dropped reefs anywhere they could get away with it and, as a result, shrimpers' nets that drag the bottom would regularly get caught and destroyed by the hidden reefs.

For years scientists have debated whether artificial reefs produce more fish or merely attract them to convenient locations where fishermen can nab them. Vernon Minton, director of the Marine Resources Division of the Alabama Department of Conservation and Natural Resources, thinks that debate is settled. "We are growing fish here," he insists. "We have some very good published research that shows that in our area we are producing additional biomass of fish. It's a very fair statement to say that the artificial reefs and the program are improving the quality of the environment."

The University of Alabama's Shipp agrees: "We're landing eight to 10 times what we did over 100 years ago. I think the increase in population is doubtless because of the reef program."

But there is a problem. When someone puts a reef on the sea floor, anybody else can go and fish over it. People go to the time and expense of buying and putting out the reefs, but they have no guarantee that they will benefit from their efforts.

"They consider it like planting a garden," says Robert Shipp. "They put out their reefs and then they'll go back the next year and harvest their red snapper. But the reefs are put on public bottoms so the only guarantee that one has to harvest his garden is the secrecy of the location–and that may disappear because people find these reefs all the time and they belong to the public. Anybody can fish them."

"I feel like I own the reef out there since I paid for it and had it deployed and decided where it would go down, but in effect I don't own anything that's out there. It's open to everybody out there," says Orange Beach charter boat captain Art Jones. He adds, "I've had lots of problems with overfishing on my reefs out there."

David Walter, who owns The Reefmaker, puts it more bluntly. He says that when people find a reef someone else has put out, "They just rape it. They take every legal size fish and it's no good for at least a year."

So as successful as the artificial reef program is, it still suffers from overfishing. Such overfishing, which plagues most commercial fishing areas around the world as well, is the predictable result of what environmentalist Garrett Hardin famously called "The Tragedy of the Commons." This environmental "tragedy" occurs because everyone has an incentive to use up a resource that no owns before another person beats him to it. (In fact, most environmental problems occur in open-access commons.) "The tragedy of the commons is the universal fundamental problem with almost all fisheries nowadays," explains Shipp.

In order to protect their reefs from overfishing, fishers go to a lot of trouble to keep their locations secret. Using modern global positioning satellite (GPS) systems, fishers can get within a few feet of any reef that they've deployed. Their reefs' GPS location "numbers" are closely held secrets. Fishers typically rotate among a number of reefs so that they do not overfish any one of them. Often, if fishers see another boat on the horizon while they are over one of their reefs, they will stop fishing and move on, so that the other boat cannot identify the reef.

What's the solution to this tragedy of the commons and overfishing? "Ultimately the privatization of the resource is inevitable," says Shipp.

Enforcing property rights in the ocean is not as far fetched an idea as it may seem at first. There are numerous examples of how giving property rights to fishers have dramatically improved the health of ocean ecosystems while at the same time boosting the production of fish.

Michael De Alessi, director of the Center for Private Conservation at the Competitive Enterprise Institute in Washington, D.C., points to the privatized fisheries in New Zealand. There, fisherman get "individual tradeable quotas" (ICQs), which give them secure rights to a percentage of the catch of a particular species of fish. This gives them an incentive to increase the overall size of that species' population. The fisherman pursue this by initially restricting their catches to create a larger, more sustainable breeding population. "When they have secure rights to the fish," says De Alessi, "the fishermen have done a tremendous job of ensuring that the fish are going to be there in the future."

Another example of highly successful privatization of marine resources is in the state of Washington, where by a quirk in the law, oyster beds are owned by the oystermen. "They have invested a lot in ensuring that the oyster population is healthy, that the water quality is healthy, and that the oyster industry is healthy," says De Alessi. There is no chicken shortage, no beef shortage, nor even a Persian cat shortage, largely because these resources are privately owned and therefore people have incentives to act as stewards to protect them.

"We have leases where people can lease ground to grow oysters," notes The Reefmaker's David Walter. "Why can't they lease areas where people could build reefs and harvest fish?" Why not indeed?

The seas are overfished because of the Tragedy of the Commons. We've learned that creation of artificial reefs and structures over featureless expanses of the sea floor increases fisheries production. But they too will be overfished unless we take the next step of creating some form of private ownership of these resources. To be sure, reef manufacturers such as David Walter–and fishermen–will gain from privatization. But ultimately everyone will gain if marine ecosystems are made healthier and fish populations thrive.