The economics of the Swedish individual transferable quota system: Experiences and policy implications

Sweden and other European Union countries are currently carrying out extensive work aimed at improving the marine and freshwater environment. The adaptive management approaches typically used for this require the development of new policy instruments and measures when needed, but also evaluations of instruments and measures already in use or under way. This paper reports on a study of the Swedish individual transferable quota system introduced in 2009 for the pelagic fishery. The new system was motivated mainly by economic arguments and, thus, the need to get incentives right. Despite this, the design of the Swedish system weakened the intended incentive effects in several ways, compared with the foreign systems that served as models. Moreover, the information needed for future evaluations was not collected, even though the need for future evaluations had been expressed explicitly and the data needs for this could be identified at the time that the system was introduced.