This paper provides a brief description of the origin, evolution, structure and performance of the ITQ (individual transferable quota) system in the Icelandic fisheries.

The current ITQ fisheries management system in Iceland was instituted gradually over a period of 15 years. An IQ (individual quota) system was initially imposed in the herring fishery in 1975 and transformed into a fully fledged ITQ system in 1979. An IQ system was introduced in the capelin fishery in 1980 and turned into an ITQ system 1986. An ITQ system was introduced in the demersal fisheries in 1984. Since 1990 all fisheries within the Icelandic EEZ (exclusive economic zone) have been subject to a uniform system of individual transferable quotas with only minor exceptions. The system, however, is still evolving and consequently subject to further modification and change.

The paper discusses the social and economic impetus for the initial adoption of the ITQ fisheries management system in the various fisheries, sketches its subsequent development and describes the main features of the current system. It presents assessments of the biological and economic impact of the ITQ system and discusses its future prospects.

The paper finds clear evidence of positive biological and economic impacts of the ITQ system in the herring and capelin fisheries. In the demersal fisheries, the evidence is more mixed, although also in these fisheries there is evidence of substantial economic benefits stemming from the ITQ system.