EDF posted a blog about the resuscitation of U.S. fisheries and how two-thirds of those fisheries are now sustainable thanks to changes in management practices. At the core of those programs are market-based incentives with individual transferable quotas (ITQ). Fishermen are allocated a certain amount of catch within a season and they can trade those quotas among themselves. The overall cap maintains the sustainability of the fishery while individual fishermen can catch an amount that best meets their own objectives and constraints.
A second element that’s often part of these programs is a buyout program to reduce the size of the overall fleet. This reduces the risk for the boats that remain in the fleet while compensating those who exit for their losses.
These are examples of successful “cap and trade” programs. These lessons are applicable to managing water rights and reducing GHG emissions.