Incentives for investment in IUU fishing capacity

Considering investments in IUU fishing as "normal" investment decisions, this paper utilises a simple investment model in order to examine the concern that levels of investment in IUU fishing might be driven by a "spillover" of excess capacity from regulated fisheries. The available evidence suggests that this is rather unlikely. If IUU fishing is relatively profitable, as seems to be the case, most of the investment in IUU capacity will occur whether or not "cheap" capacity is available as a result of the subsidised removal of excess capacity from regulated fisheries. It appears that IUU fishing will only be of marginal profitability if costs are significantly increased or revenues significantly reduced as a result of enforcement efforts to deny vessels access to the fishery and/or to lucrative product markets.