Turtles nesting at Bellows. Opihi flourishing on offshore islands. Fish frolicking in Hanauma Bay. But Hawaii’s economy has been decimated. The lockdown has brought renewed attention to the question of how much economic activity we have to sacrifice in order to give nature some breathing space.
Papahanaumokuakea Marine National Monument is the third-largest protected area on Earth, larger than all the land in Alaska, Texas, and California combined. It is equivalent to almost 500 Yosemites. Not surprisingly, there has been controversy surrounding the economic cost of permanently banning fishing and mining within such a large area.
In June, on the back of a recent executive order, President Trump reopened the only marine monument in the Atlantic Ocean to commercial fishing. The fishing industry is now calling for all four of the monuments in the Pacific Ocean to also be reopened.
I fully expect that the president will reopen Papahanaumokuakea in the next couple of months. It might be useful to know whether claims about the economic damage that Papahanaumokuakea has caused to the fishing industry are actually true.
A map of the Papahanaumokuakea Marine National Monument depicting known maritime heritage resources. Will the president reopen it to the fishing industry?
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In February, my colleagues and I published an article that estimates the economic impact of Papahanaumokuakea. The same week, an economist affiliated with the National Oceanic and Atmospheric Administration, an agency within the Department of Commerce, published a similar study. Both studies focused on the impacts on the Hawaii longline fishery, a collection of over 140 boats that use long fishing lines with baited hooks to primarily catch tuna across the Pacific Ocean.
At first glance, the two studies appear to reach completely different conclusions. We concluded that the expansion “had little, if any, negative impacts on the fishing industry,” while the NOAA study concluded that “[t]he expansion of the Papahanaumokuakea Marine National Monument had negative impacts on the Hawaii longline fishery.”
How could two studies looking at the same event reach such differing conclusions?
Interpreting Results
First, the results of the studies are not actually that different; the main difference is in how to interpret the results and how to define vessels “affected” and “unaffected” by the monument.
If you dig into the NOAA study, you find that the author focused only on vessels that spent 6% or more of their fishing time within the monument before it closed, which accounts for only 26% of all boats. The study focuses on the impact to this group, but generally ignores the impact on the remaining 100-plus active vessels, the majority of which also used to fish within the monument.
At the end of the NOAA study, there is a brief reference to the impact on the remaining 74% of vessels, which finds that Papahanaumokuakea had no negative impact on either catch or revenue. It’s not surprising then that our study (which looked at all the boats in the fishery as one large group) found that the average effect was basically zero.
The reasoning is simple: even when the monument was open to fishing, 90-95% of fishing was taking place outside the monument.
Although there was no impact on the majority of vessels, the NOAA study concluded that the total revenue loss due to the monument was about $2.7 million per year (coming from an industry that brought in $115 million in revenue in 2018 alone).
How real is this number?
Upon careful analysis, I am confident that most statisticians would say that $2.7 million is actually an estimate of zero dollars in losses.
To explain, let’s say a medical company tests a vaccine on eight people. That’s not enough data to prove the vaccine works. Suppose the company claims that for each of the eight participants, there are one thousand other people just like them and, even though they haven’t taken the vaccine, it should also work to protect them.
Should the company be allowed to claim that their vaccine has been successfully tested on 8,000 people? Of course not.
But this is exactly what the NOAA study does. It takes 3,939 sales of fish (the real data) and converts them into 92,977 “daily” fish sales: it assigns revenue to days when a vessel was out on the water but didn’t sell any fish. This makes it seem like there is a huge amount of data to support the conclusion (8,000 vaccine trials) when in fact there is insufficient data to do so (eight trials).
The study does the same thing in its analysis of the numbers of fish caught: it creates data on fish catch for days when a boat didn’t actually catch any fish! This inflates the sample size (the amount of data) and makes it look like any negative effect is much stronger than it actually is.
In a separate analysis, I show that the estimated $2.7 million loss in revenue disappears when you use the real data and not the invented data.
When the monument was open to fishing, 90-95% of fishing was taking place outside.
Another strange thing about the NOAA study is that it could underestimate the negative impact of Papahanaumokuakea — if there had actually been one. The NOAA study splits the fishery into three groups: low, medium, and high fishing activity inside the monument before it closed.
Let’s imagine that Papahanaumokuakea had been a catastrophe for the fishing industry and caused $30 million in losses in 2017. Suppose these damages were spread across the three groups as $7 million, $13 million, and $10 million in losses, respectively.
Since the NOAA study ignores the medium activity group (most of the vessels) and subtracts the high activity losses from the low activity losses (the supposed control group), it would conclude that the damage had only been $3 million! Our approach, which compares the entire fishery to a similar but unaffected fishery (tuna longlining in American Samoa), would correctly conclude that the losses had been $30 million.
Let me end with two caveats.
First, I don’t doubt that some operators were made temporarily worse off by Papahanaumokuakea. If you exclude people from an area that they used to work in, it will have negative consequences, especially in the short-run. The COVID-19 lockdown has shown that clearly.
The critical question is whether the economic damage is greater than the benefits to nature. The benefits to fish, birds, turtles, whales, and dolphins. Our study and (after careful examination) the NOAA study show that the damage has been extremely small, essentially zero. To use the language of the president’s recent executive order, the monument does not constitute “unnecessarily burdensome regulation.”
Second, I personally support the monument and would be devastated to see it reopened; my work on this project was funded by Conservation Strategy Fund, an environmental NGO. For these reasons, you should be skeptical of my own research.
But there also many reasons why you should be skeptical of any claim that the fishing industry and Hawaii’s economy is hurting because of Papahanaumokuakea. In fact, I would argue that there are at least 92,977 reasons.
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