Environmental policy and innovation in Norwegian fish farming: Resolving the sea lice problem?

Abstract In Norway, the world's largest salmon-producing country, reducing sea-lice levels in fish farms has been an overarching goal of government policy since 2013. However, industry innovation has not yet succeeded in significantly reducing the sea lice problem. We identify two main types of radical environmental innovation that could potentially resolve the sea-lice problem: in-shore closed-cage production technology, and a genetically lice-resistant salmon. Furthermore, we provide an analytical framework that shows how radical environmental innovations with a “public good” character are least likely to receive private R&D funds. This leads us to conclude that neither in-shore closed cage technology nor targeted breeding towards lice-resistance will succeed in the market unless backed by targeted government intervention. Closer examination shows that these two types of innovation have been less prioritized, if at all, in recent policy interventions. First, the government has geared most of financial support towards relieving the risk of investment in offshore innovation projects, although inshore projects might be better suited for accommodating public and environmental needs. Second, this study underscores the need and potential for stimulating sustainable innovation through the genetic route—a point overlooked in Norway's current policy mix.