Theoretical Model for Circular Plastic Practices in the Fishing Industry

Plastic from abandoned fishing gear can persist in the marine environment for extended periods, worsening the problem of ghost fishing and highlighting the urgent need for sustainable solutions. This research aims to develop a theoretical model that defines the socio-economic costs and benefits of fisheries within the context of the circular economy. The theoretical foundations of the model are based on moral risk theory, externality theory, and welfare economics. Marginal analysis, cost–revenue function analysis, and investment efficiency analysis were also used. According to the results, the costly process of catching, transporting, and collecting lost fishing gear carried out by fishermen can be replaced or offset by implementing several proactive measures. These include introducing compensation to encourage fishermen to adopt pro-ecological practices related to reducing the amount of used fishing equipment. The proposed model could be a helpful tool in determining the optimal level of subsidies for sustainable fisheries. The model could also help determine the costs and methods of reducing the pollution associated with fishing gear, which is vital for all entities currently operating in the fishing sector.