Ecological Modelling 220 (2009) 3404–3412 Contents lists available at ScienceDirect Ecological Modelling journal homepage: www.elsevier.com/locate/ecolmodel An agent-based model for simulating trading of multi-species fisheries quota L. Richard Little a,b,∗ , André E. Punt a,c , Bruce D. Mapstone d , Gavin A. Begg e , Barry Goldman f , Ashley J. Williams f,g a CSIRO Marine and Atmospheric Research, PO Box 1538, Hobart, TAS 7001, Australia b Crawford School of Economics and Government, Australian National University, Canberra, ACT 0200, Australia c School of Aquatic and Fishery Sciences, University of Washington, Box 305520, Seattle, WA 98195, USA d Centre for Australia Climate and Weather Research, A partnership between the Australian Bureau of Meteorology and CSIRO, PO Box 1538, Hobart, TAS 7001, Australia e Bureau of Rural Sciences, GPO Box 858, Canberra, ACT, Australia f Fishing and Fisheries Research Centre, School of Tropical Environment Studies and Geography, James Cook University, Townsville, Queensland, Australia g Oceanic Fisheries Programme, Secretariat of the Pacific Community, BP D5, 98848 Noumea, New Caledonia article info Article history: Received 26 February 2009 Received in revised form 3 August 2009 Accepted 4 August 2009 Available online 4 September 2009 Keywords: Individual transferable quota ITQ Vessel dynamics Computer model Simulation modelling Coral reef fisheries abstract Individual transferable quotas (ITQs) are increasingly seen as a way to make fisheries more profitable and halt over-capitalisation. ITQs allocate to users of a resource a share of a total allowable catch (TAC) which they are free to use, lease, or sell. We outline an approach to modelling the effect of an ITQ system in a multi-species, multi-sector fishery and apply it to the Coral Reef Fin Fish Fishery (CRFFF) in Queensland, Australia. An ITQ model, based on the assumption that operators seek to maximize profits, simulates the use of tradeable quota units by operators in the fishery, taking account of the initial quota allocation to operators, seasonal fish prices and individual operator variable costs, their fishing efficiency and experi- ence, and constraints on vessel movements. Rationalization of the fishery is predicted to occur under an ITQ system for the CRFFF, which will lead to reductions in effort, increases in profits, and changes over time in quota prices. The ecological consequences of transferable quota in the multi-species fishery are seen in the catch and discard levels of the less profitable species, even though a TAC was set. This had flow-on effects on biomass. For example, simulations showed that the TAC for the primary target species, coral trout, was used more fully than that for a less valuable target species, red throat emperor, and that this was achieved through increased discarding of red throat emperor. Catches of both coral trout and red throat emperor that were derived from the model were higher than those recently observed in the fishery. The effort predicted by the model, however, closely approximated the actual effort observed in the fishery following implementation of ITQ management. Crown Copyright © 2009 Published by Elsevier B.V. All rights reserved. 1. Introduction Fisheries management is an inherently difficult and complex process that must balance competing ecological, economic and social objectives. Managers have tried to address these conflicts by constraining the short-term economic drive of fishers but this has tended to make fishers economically inefficient (Kompas et al., 2004), driving them to improve their fishing effectiveness in any way possible. Individual transferable quotas (ITQs) have been pro- posed as a way of breaking this cycle (Branch, 2008). The economics of ITQs originated in work on environmental pollution and interna- tional trade and was subsequently extended to fisheries (Grafton, ∗ Corresponding author at: CSIRO Marine and Atmospheric Research, PO Box 1538, Hobart, TAS 7001, Australia. Tel.: +61 3 6232 5006; fax: +61 3 6232 5053. E-mail address: Rich.Little@csiro.au (L.R. Little). 1996). ITQs allocate a share of a total allowable catch (TAC) to each fisher, which they are then free to use, lease or sell at will within legislated trading rules. Proponents suggest that property or harvest rights given to the users of a resource in the form of an individual TAC share (or indi- vidual quota, IQ) create an incentive for fishers to minimise the cost and effort associated with catching their TAC share while at the same time maximizing their revenue by fishing at times when prices are high (Grafton et al., 2006). Different costs and fishing abilities lead to variation among fisher profits. The addition of transferability of individual quotas (ITQs) allows fishers to either continue fishing or transfer (by sale or lease) their quota holdings to other fishers or, for efficient fishers, to accumulate quota by pur- chase or lease. Fishing effort, and its broader ecosystem effects, therefore should decrease if the fishers who purchase quota are more efficient, resulting in a shift of effort from high to low marginal cost operators (Kompas and Che, 2005). Some (e.g. Dewees, 1998; 0304-3800/$ – see front matter Crown Copyright © 2009 Published by Elsevier B.V. All rights reserved. doi:10.1016/j.ecolmodel.2009.08.004