The economics of decommissioning schemes has been the focus of many studies in recent years. From this literature, it is clear that the design and implementation of decommissioning schemes (which are broadly defined – see Box 1.1) varies significantly both between and within countries. For example, some countries require that decommissioning payments be tied to the physical scrapping of vessels while others allow vessels to be shifted to another fishery (in which case the payment is for the removal of excess capacity from a particular fishery rather than reducing the overall capacity in the country). Some schemes are intended to remove latent capacity or effort instead of capacity or effort that is currently engaged in fishing so reducing potential rather than actual pressure on particular fisheries. Both auctions and flat rate payments are used across countries, each with advantages and disadvantages and various degrees of success.

This chapter presents a number of case studies of decommissioning schemes from recent experience in OECD and non-OECD economies. The types of schemes vary widely and include examples of mandatory vessel buybacks, ongoing decommissioning schemes, industry-funded buybacks and an NGO-funded permit acquisition. The objective in presenting the case studies is to highlight the lessons learned from the range of experiences in the design and implementation of the schemes. In particular, it is instructive to identify the key factors that influence the success or failure of the schemes in meeting their objectives.

The performance of decommissioning schemes can best be regarded as mixed. While some schemes have achieved lasting capacity reductions in a cost-efficient manner, other schemes have used less cost-effective means of reaching targets. Many schemes, however, did not achieve their objectives in terms of either cost or enduring capacity reductions. The analysis on the economic aspects of decommissioning schemes highlighted a range of factors that underlie the design and implementation of successful decommissioning schemes and have identified potential pitfalls for policy makers. The selected case studies highlighted the ways in which different countries have responded to particular decommissioning challenges focusing on the motivation for the schemes, design details, outcomes and lessons learned. Taken together, the economic analysis and the case studies underscore the need for careful and considered choices to be made when designing and implementing such schemes, a process that is not always simple or straightforward.

Decommissioning schemes have been demonstrated to be a useful policy tool in certain circumstances. They can accelerate the transition to a rationalised fishery managed on the basis of stronger use and access rights and improved ecosystem health. As part of a package of transitional assistance and management changes, they can provide a window of opportunity to help transform the nature of a fishery from one characterised by non-cooperative behaviour to one in which incentives are well-aligned and cooperation is the rational outcome of interactions between fishers. In effect, decommissioning schemes can serve as “shock therapy” to help fisheries adjust.