WHEN TO RATIFY AN ENVIRONMENTAL AGREEMENT: THE CASE OF HIGH SEAS FISHERIES

Abstract

We investigate in this paper the optimal timing of cooperative agreements dealing with the harvesting, utilisation or management of marine fish resources. We formulate the optimal timing problem as a two-player dynamic differential game model where both players, e.g. harvesting countries, consider the timing of the agreement as a strategic decision parameter. In other words, the initialisation of the environmental agreement will be subjected to negotiations. The game begins by a period during which the players negotiate on the cooperative agreement. During this period the players optimize their fishing unilaterally, that is, they play a non-cooperative game taking into account that they will enter a cooperative fishery some time later. It is up to the players to decide when they wish to initiate cooperation. We show that there are several possibilities where cooperation is never an option for at least one of the countries. In other cases immediate cooperation may be optimal for both countries. Between these extreme cases is the possibility of some delay in entering cooperation. The determinants of willingness to cooperate in the game include unit costs of harvesting, discount rate, maximum fishing efforts, initial stock size, biological growth rate, carrying capacity and division of profits.