When analogies fail... Marine Protected Areas edition

In The Conversation last week, Mark John Costello (Nord University) wrote an article explaining the economic benefits of Marine Protected Areas (MPAs). MPAs are areas where fishing is prohibited. The article is interesting, and in short it makes the case that MPAs have unrecognised (or under-recognised) economic benefits, in terms of positive spillover effects on fishing and tourism.

However, this bit struck me as really odd:

Although it may seem counterintuitive that a full restriction of fishing in an area will result in more fish elsewhere, this happens because MPAs act like a reservoir to replenish adjacent fisheries.

In financial terms, the capital is invested and people benefit from the interest on the investment. To count the establishment of an MPA as a cost to fisheries is like claiming that interest earned on money is a cost.

I had to read that second paragraph a couple of times, because it didn't make sense to me. And it didn't make sense to me because it doesn't work as an analogy. Let me labour that point by unpacking the analogy.

First, think about a financial investment. The return on the financial capital that the investor employs is the interest that they receive. The less financial capital they invest, the less interest they will receive. Now think about a fishery. The return on the natural capital is the value of the fish that the fishermen take from the fishery. The less natural capital in the fishery, the less fish the fishermen can take.

Now think about a marine protected area. The MPA sets aside some of the fishery (some of the natural capital). Lower natural capital means that the fishermen will be able to take less fish. The fishermen will receive a lower return from their fishing. Now go back to the financial investment. The equivalent of an MPA for the financial investment is setting aside some of the financial capital. Lower financial capital means that the investor will receive less interest. The investor will receive a lower return from their investing.

The establishment of a MPA really is a cost to fisheries. Fishermen can take less fish. Unlike Costello's claim, this is nothing at all like "claiming that interest earned on money is a cost". It is more like claiming that 'losing interest that you would have otherwise earned if the financial capital hadn't been set aside and paying no interest is a cost'. Which it is. It is what economists refer to as an opportunity cost. Costello's analogy fails.

The rest of the article is interesting and does raise some important and valid points. There may be spillover benefits to fishermen outside of MPAs because the MPA can act as a nursery for young fish. Focusing solely on the fish that were not taken in the MPA area would overstate the cost to fishermen, if they are able to take more fish from outside of the MPA. Tourist operators also benefit from the MPA, because tourists like to look at wildlife, including fish. The case that MPAs have significant benefits is strong. It's a pity that the analogy that was employed to make part of the case was much weaker.