Here is an interesting article from ENN that describes a competition for the development of by-catch reducing fishing gear.
I think this is a great idea. Here's why...
Inventing fishing gear that is more environmentally safe sounds like a great idea, but when you think about it, there's little incentive for an individual to undertake such efforts. Once invented, the "smart gear" will generate positive externalities (benefits that accrue to society at large) through the reduction of incedental catch that cannot be captured by the inventor. Hence, the inventor incurs a great deal of R&D expenses, but shares the gains with society. With open-access or common property fisheries, fishers have no incentive to invent or adopt new technology unless their profits increase or they are forced to do via a technology standard mandate.
By creating a monetary prize, we are in effect subsidizing a positve externality generating good (R&D to reduce by-catch).
Question: is this competition enough, or do we need an additional policy to go along with it?