Management Of The Scottish Inshore Fisheries; Assessing The Options For Change

19 RECREATIONAL DIVING ( RD)

19.1 Background

Ever since recreational diving began in the 1950's Scotland has been one of the most accessible and popular areas for UK divers and is recognised across Europe and beyond as a premier cold water dive venue. The variety of diving experiences across Scotland is a big attraction with a plethora of historic and more recent wrecks, sea cliffs, gullies teeming with colour, offshore pinnacles and reefs. The waters are clear and the coastal topography of the islands and the west coast means there is always shelter available with deep water close inshore. Added attractions are the long hours of summer particularly in the more northern islands. The water is cold in mid winter but much warmer than other sites on the same latitude.

One of the most notable locations is Scapa Flow, Orkney, which is considered to be one of the top three diving sites in the world ^[56] . Charter boat operators in Scotland, particularly in Orkney, have regular charters from clubs and groups in Canada, America, France, Germany and Holland. Other sites attracting divers from all over the UK are St Abbs and Eyemouth off the Berwickshire coastline, the island of the Inner Hebrides and sites on the East coast from North of Dundee. Most dive in the shallow coastal zone up to 50metres deep, though some dive deeper in water to around 130 metres to observe wrecks and cultural heritage artefacts. On balance more activity takes place on the west coast with the varied experience and shelter offered by the island and sea lochs.

Scuba diving in Scotland is supported by a fleet of charter vessels ranging from day boats and larger vessels that offer cabin accommodation for longer dive excursions, such as to St Kilda. In addition, at the key venues there are dive schools, dive centres and shops whilst most centres of population have local dive clubs.

In their contributions to the consultation on the National Marine Plan the British Sub Aqua Club ( BSAC) wrote:

"We are pleased to see recognition of Scotland as a world class diving location and to find mention of some of many sites enjoyed by scuba divers and snorkelers. We would support further work to establish the extent and economic impact of diving in Scotland to ensure that it is fully considered in marine planning and development".

With respect to the quality of Scottish diving BSAC stated:

"It is apparent to us in reviewing the cases presented for potential locations for the foundation of Scotland's First Coastal and Marine National Park that virtually the entire coastal area of Scotland is worthy of such recognition. Even the East Coast area south of the Moray Firth only warrants the dismissal it receives because of the overwhelming excellence of some of the other areas (e.g. it has the benefit of the cultural heritage of the herring fisheries, Stevenson's first lighthouse on the Bell rock, internationally important sand eel grounds in the Forth and Tay estuaries, etc.).

We believe a remarkably bold step would be to declare the entire coast, islands and territorial waters of Scotland the first (and only) Coastal and Marine National Park. However, as expressed above we are concerned at overstretching resources may impact on the success of such a wide ranging approach and that such costs and logistics may make this difficult to achieve".

Within the diving community there is a belief that the increase of bottom trawling and dredging has led to deterioration in the quality of diving. Visibility is one of the most important factors for diver's enjoyment of dive sites. In the short term diving activity often ceases in the vicinity of scallop dredging and to a lesser extent nephrop trawling. There can be a long wait for water to clear, particularly if there is a low tidal flow. Even after the water has cleared the quality of the diving experience has been compromised through the sea bed damage. In the longer term divers have been reporting deterioration in visibility over the last few years. In particular they report an increase of suspended particles in the water column and less rewarding marine observation through the sea bed impact of demersal trawling and dredging ^[57] .

In Orkney last year there were 10 dive charter boats operating around Scapa Flow where mobile demersal gear cannot cope with the underwater obstructions. The charter operators are however limited in their scope to offer sea search diving and flora and fauna observation outside the refuge of Scapa Flow. The diving community takes the view that restoration of the Scottish inshore ecosystem should substantially improve the quality of Scottish diving. In this context BSAC noted in its consultation:

"we consider that certain types of fishing are inconsistent with both the objectives of the Strategic Framework for Inshore Fisheries in Scotland and with any proposed Marine Park and the future of marine biodiversity in Scotland. Divers are in a unique position to bear witness to the damaging effects of scallop dredging on the marine environment that is out of all proportion to its economic and even short term benefits".

Analytically, our approach to RD mirrors that used to evaluate RSA. The first task, therefore, is to identify numbers and activity levels. In common with most such studies the chosen unit is the "activity day" i.e. diving days. For the purposes of this study we assume that when a day or part of a day involves sub-aqua the total expenditure in that day is associated with sub aqua.

19.1.1 Numbers and Activity Levels.

There has been no study which has specifically addressed UK diving in an effort to establish where the activity takes place, how much they spend or the economic value of the activity. It is therefore necessary to piece together various pieces of evidence to derive the variables necessary to undertake an economic impact analysis or a NEV/ CBA evaluation.

This is a difficult task for Scotland as a whole. Disaggregating to the level of individual IFG areas is highly problematic. Indeed, the view might be taken that the end product is too contrived for decision making purposes. In which case the exercise should at least highlight the evidence currently available, enlighten the current debate and facilitate a broader stakeholder engagement with the issues. More importantly, the exercise will identify the evidence that is needed and how that evidence should be assembled to deliver a logically coherent evaluation.

It should also be recognised that whilst the estimates are contrived, it might not be sensible to seek to refine them further. This would be the case if the difference between costs and benefits were so large that no amount of refining could change the policy implications. Precision is desirable but only necessary when costs and benefits are finely balanced.

There are number relevant studies and sources on diving. The extensive and detailed work of Kenter et al is important and their sample of 1261 UK divers is much larger than their sample of UK sea anglers (see above). On page 52, they provide the following information on the frequency of participation measure in days out

Table 19.1.1 Frequency of Annual Participation (Diver Days)

	1 or 2	3 to 7	8 to 14	15 to 21	More than 21
% of Divers	4.00%	14.00%	23.00%	31.00%	28.00%

It is also stated that the mean number of days out was 47 days for the 28% of divers who participated more than 21 days. The table below estimates the total number of days using mid-points of the above ranges and UK diving populations of 150,000, 200,000 and 250,000.

The figure of 200,000 UK divers was based on their personal correspondence with the British Sub Aqua Club. In their analysis Kenter et al used 150,000 thousand as the lower and 250,000 as the upper end of the range.

Table 19.1.2 Total UK Diver Days

Frequency	1 or 2	3 to 7	8 to 14	15 to 21	More than 21	Total
% of Divers	4%	14%	23%	31%	28%	100%
150,000 divers	9000	105000	362250	837000	1974000	3,287,250
200,000 divers	12,000	140,000	483,000	1,116,000	2,632,000	4,383,000
250,000 divers	15,000	175,000	603,750	1,395,000	3,290,000	5,478,750

From the above table the mean number of diving days in the UK is 22 for the UK population of divers and they spend a total of 4.383m days diving. This is from a large sample of 1,261 UK divers, albeit self-selected. The relevant issue is the proportion of those days in Scotland.

The BMF Water sports and Leisure Participation Survey is undertaken every year and, until 2010, sub aqua and snorkelling was included in their omnibus survey of over 12,000 households. Their 2009 survey reported estimates there were 444,868 who participated in sub-aqua and snorkelling. They also provide Min and Max estimates based on a 90% confidence level. ( BMF et al, 2009).

Table 19.1.3 UK Diver Population Estimates

No of participants for 2009	Min 90% of Number of participants	Max 90% Number of participant
444,868	377,000	513,000

The BMF survey also provided participation rates by ITV regions

Table 19.1.4 Participation Rates home and abroad by Residence – ITV Regions 2009

London East and South East	Wales, West and South West	Midlands	North West, North East Yorkshire	Borders Scotland	Northern Ireland	All regions
179,228	52,036	67,844	119,283	17,282	9,196	444,868

A BMF survey also reported a majority of participants (54.2%) participate exclusively abroad. Some will be scuba divers who have a preference for the warm water experience. Others will be holiday makers engaging in snorkelling from the shore.

If the proportion participating exclusively abroad (54.2%) was uniform across the UK, the geographical distribution of UK divers would be given by the Table below

Table 19.1.5 Diver Participation at home by Residence –ITV Regions 2009

London East and South East	Wales, West and South West	Midlands	North West/ North East/ Yorkshire	Border/ Scotland	Northern Ireland	All regions
82,086	23,832	31,073	54,632	7,915	4,212	203,750

The UK population of divers who participate in the UK falls to 203,750. This is very reassuring close to the BSAC estimate of UK divers used by Kenter et al.

Table 19.1.6 Frequency of Participation in the UK

Never	Once		2-5	6-12	13-25	More than 25	Total	Base	Mean
54.20%	9.40%	17.20%		9.60%	8.60%	2.70%	100%	97	4.5
153,521	81,588	131,600		44,822	17,445	15,892	291,348	97

In the above calculation, the actual participation rate of those participating more than 25 times was taken into account when calculating the overall average. If the foreign only divers are removed we are left with a small base of 44 divers. The average number of events for that sample is 9.8. An event could be a full week or two week excursion or a day trip to a local venue. The BMF survey is therefore not directly comparable with the more reliable activity data (mean 22 diver days) from Kenter et al

Based on the BMF survey work the estimated Scottish diver population is 7,915. This is derived from a small base of 44 divers across the UK and it is necessary to triangulate this estimate with other evidence. Our interviews with Scottish Sub Aqua Club, the Sub Aqua Association and the British Sub Aqua Club revealed a combined Scottish membership of 3,946 (rounded to 4,000) implying that 50% of the 7,915 Scottish divers belonged to a diving club. This is believed to be high. Since the membership numbers are well anchored, the population figure of 7,915 could be low. In our correspondence with the BSAC, they provided an estimate of 10,000 to 15,000 resident Scottish divers who dive in Scotland. For illustrative purposes, if we assume a population of 12,000 Scottish Divers, this would suggest a club membership of 33%. The BMF survey revealed a dive club membership ratio across the UK of 46% (base of 97). Not wishing to produce an over-estimate it is sensible to take 10,000 as the Scottish population. Apart from club membership the other reliable indicator is the average number of diver days (22) from the Kenter et al survey. The following table summarises.

Table 19.1.7 Participation Rates and UK Diver Days Residence ITV Regions 2009

	London East and South East	Wales, West and South West	Midlands	North West/ North East/ Yorkshire	Border/ Scotland	Northern Ireland	All regions
Divers	82,086	23,832	31,073	54,632	10,000	4,212	205,835
Diver Days	1,805,892	524,304	683,606	1,201,904	220,000	92,664	4,528,370

It is difficult to determine how many days in Scotland were by non Scottish UK residents, and how many of the 220,000 diving days by Scottish residents were undertaken in the rest of the UK. In correspondence with the BSAC, we were informed that, given the diving quality in Scotland, relatively few Scottish resident divers would regularly dive elsewhere in the UK. In contrast many other UK residents would travel to dive in Scotland. BSAC estimated between 12,000 and 20,000 English/Welsh/ NI divers would visit Scotland over the course of a year and the average number of days they dived in Scottish waters was between 7 and 14 days.

This produces a wide estimate range of between 84,000 and 280,000 other UK diving days in Scotland. The mid-point estimate would be 180,000. In discussion with charter operators on Orkney, we were informed that around 3,000 diving days were taken by overseas visitors. This would imply the following distribution of diving activity.

Table 19.1.8 Diving Days in Scotland by Origins

	Residents Scotland	UK Visitors	Overseas visitors	Total
Diver Days	220,000	180,000	3,000	403,000

Thus, this study estimates around 403,000 diving days across the whole of Scotland.

19.2 Diving Expenditure

With respect to expenditure, in correspondence with BSAC it was estimated that UK visitors to Scotland would spend between £100 and £170 per day for a charter boat and £60 to £140 on shore based diving depending on location.

The Scottish Enterprise Borders study of St Abbs found that diving expenditure varied substantially between those staying overnight and those on a day (or evening) trip and also between those using a dive boat and those going from the shore. The Table below gives the expenditure per activity day at St Abbs.

Table 19.2.1 Diving Expenditure at St Abbs (2013 prices)

AVERAGE EXPENDITURE PER TRIP (DAY AND OVERNIGHT DIVERS)
	Day	Overnight	Combined
Travel / Fuel to St Abbs / Eyemouth	£7.97	£7.51	£7.76
Fuel at St Abbs / Eyemouth (e.g. for boat)	£14.44	£8.77	£11.84
Car Parking	£4.73	£8.43	£6.43
Food and Drink	£7.62	£44.46	£24.57
Air	£5.09	£9.47	£7.11
Equipment Hire	£3.24	£3.34	£3.29
Boat Hire	£19.86	£46.55	£32.14
Launching Fees	£0.69	£2.19	£1.39
Other	£0.46	£3.81	£2.00
Total (Excluding Accommodation)	£64.10	£134.55	£96.51
Accommodation	£0.00	£27.95	£12.85
Trips	£14,481.87	£12,337.32	£26,820.25
Gross Expenditure	£868,792.34	£1,876,209.05	£2,745,002.46

Source: Scottish Enterprise Borders (2007)

The daily expenditure figures are higher than for most recreational activities but sub-aqua is recognised as an expensive sport (on a par with skiing). The typical diver is a male in the 30-50 age group who will have disposable income available.

For Lyme Bay study Rees et al estimated the mean expenditure per diver per day diving from a club boat was £65.18 in 2013 prices compared to £64.10 at St Abbs. In Lyme Bay dive businesses and charter boats appear to add around £24.58 to the day and shore based diving about £18.17 less. In St Abbs, after adjusting for day and overnight variation the figures are similar.

The average diver day expenditure varies significantly with the location, type of diving and length of trip. The minimum, which would apply to Scottish resident divers would be £65.00 per day (excluding accommodation). The mid-range BSAC's estimate for UK visiting shore based divers is £100 and £140 per day for visiting charters. The expenditure of overseas visitors would be much greater but most of the additional spending would be on travel. Some of this travel expenditure such as ferry fares, some flight expenditure would impact on Scotland. In the absence of primary research £180 per day would be a conservative figure.

It would be helpful to establish the relative size of these market segments. Websites, particularly the Scottish Sub Aqua club website provides a list of 29 specialist dive charter vessels, which were allocated them to the IFG regions as below. This was based on their home port where the direct, indirect and induced effects of angler expenditure are most likely to impact. Most of these will have live-aboard facilities, others will offer a complete package with accommodation on-shore. Some operate across two IFG areas, particularly between Orkney and Shetland with the Orkney based vessels taking divers to Shetland sites and Oban based boats visiting sites in the South West and North West.

The average number of divers per trip is 10, with weekly trips lasting 6 days. The season is between 20 and 25 weeks. We have assumed a modest daily expenditure of £140 for these specialist charters. For Orkney the average was raised to £150 to reflect the preponderance of overseas visitors

Table 19.2.2 Specialist Charter Vessels

	Boats	Diving Days per Day (10)	Diving Days per week (6)	Seasonal Diver Days (22 weeks)	Seasonal Expenditure (£140 per day)
South West	10	100	600	13,200	£1,848,000
North West	4	40	240	5280	£739,200
Outer Hebrides	2	20	120	2640	£369,600
MF& NC	1	10	60	1320	£184,800
Orkney	10	100	600	13,200	£1,980,000
East Coast	2	20	120	2640	£369,600
Shetland	0	0	0	0	£0
Total	29	290	1740	38,280	£5,491,200

In addition there are other charter vessels which cater occasionally for diving day trips along with whale, bird and other wildlife watching, sea angling and coastal pleasure excursions. In the absence of more primary research, the diving component of this occasional market is difficult to establish. The total number of charter days including the occasional diver is probably 40,000.

The Table below attaches estimates of angler expenditure to each of the identifiable diver categories. The resident divers will include divers who dive locally and could accumulate 50-60 diving days annually and would have a relatively low daily costs as their overhead costs would be spread further. Included in this category would be a proportion who take expensive 5-7 day charters. An average of £80 would not be unreasonable. As stated above, UK visitors pay £100 for shore trips and £140 for charters. Given the relative frequencies of diving and chartering an overall average of £110 would be appropriate. The Table below summarises.

Table 19.2.3 Diver Expenditure in Scotland

	Residents Diving in Scotland	UK Visitors Diving in Scotland	Overseas Visitors Diving in Scotland
Diver Days	220,000	180,000	3,000
Expenditure	£80	£110	£180
Total	£17,600,000	£19,800,000	£540,000
		Overall Total	£37,940,000

Overall, 403,000 diver days and £38m seems an appropriate estimate for diver activity and expenditure in Scotland.

19.3 The Current Economic Impact of RD to Scotland

Unfortunately we do not have sufficient information to track categories of expenditures through models of local economies. We do know the direct, indirect and induced effects of sea angler expenditure. There are many similarities between the two activities. They occur in the same coastal areas because they broadly seek the same characteristics of sheltered water, cliff faces, rough ground and wrecks. They buy the same kind of services such as travel, accommodation, charter vessels, food and drink. Neither group has to pay access charges. The differences are in the higher equipment costs and gas supply costs of RD. It would not be unreasonable to assume that RD and RSA would have similar impacts. This argument could not be easily made for say RSA and other activities such as golf, deer hunting or skiing. If we process RD expenditure in the same way that we processed RSA, the £38m would have the following impact

Table 19.3 Economic Impact of Recreational Diving (2013 prices)

Currently Supported		Net Impact
Jobs	Income (£'000s)	Jobs	Income (£'000s)
795 ( FTE's)	£18,794	423 ( FTEs)	£9,992

This above table shows that currently RD support 795 Full Time Job Equivalents ( FTE's) and £18.8m of annual Scottish household income in the form of wages, self-employment income, rents and profits. This means that if RD completely ceased in Scotland then 795 jobs and £18.8m of income (i.e. GVA) would be lost. However, a proportion of the expenditure of divers would likely be diverted elsewhere within Scotland and would create income and employment in other sectors. Despite this there would still be a Net Loss of at least 423 FTEs in Scotland and annual loss of £10m in GVA. These estimates seem reasonable.

19.4 The Potential Economic Impact of RD to Scotland

In Section 3.2 we described two status quo trajectories and three indicative outcomes of the policy options. For the 0-3 NM restriction we define a Major Transformative Effect as a 50% increase in RD activity levels of all types. We assumed a linear relationship between activity levels and income and employment effects.

Charter operators were clear that restrictions on mobile demersal gear would enable them to offer a broader range of diving experiences and improved quality of their existing offerings. This same would apply to other types of RD. Whereas the existence of fish to catch is a pre-requisite of RD, the quality of RD is less sensitive to fish biomass or diversity. On the other hand the diving experience is compromised through issues around visibility and the visual absence of sea bed flora and fauna. We know that the absence (or increased availability of fish) does impact on RSA because we have observed these kinds of changes both over time and through cross sectional variations in RSA participation.

Even allowing for the visual dimension of RD, it is unlikely that that a major transformative effect would deliver the same 50% increase in diver activity levels across Scotland. If we were to return to pre 1984 condition there would very likely be an increase in Scottish diving. For illustrative purposes we assume increases of 20%, 10% and 5% would be more realistic.

For decision making the more relevant estimate is net balance of jobs and income lost in RD over the number of jobs and income lost elsewhere as expenditure is diverted. We only consider the net impact.

Table 19.4.1 Economic Contribution 20% Increase in RD

	Net Impact
	Jobs	Income (£'000s)
Current Impact	423	£9,992
Additional Impact	85	£1,998
Total	508	£11,990

Table 19.4.2 Economic Contribution 10% Increase in RD (2013 prices)

	Net Impact
	Jobs	Income (£'000s)
Current Impact	423	£9,992
Additional Impact	42.3	£999
Total	465	£10,991

Table 19.4.3 Economic Contribution 5% Increase in RD (2013 prices)

	Net Impact
	Jobs	Income (£'000s)
Current Impact	423	£9,992
Additional Impact	21.2	£500
Total	444	£10,492

In the case of RSA we had two scenarios. One possibility was the decline would continue, the other was a position of stability. In the case of RD continued decline is not realistic since demersal fish stocks are not a necessary input to create a diving experience. There is the prospect of some decline through the impact of demersal trawls. It seems sensible to assume a status quo scenario of stability. In these circumstances only the additional impact is relevant

Table 19.4.4 RD's Potential Economic Impact on Scotland (2013 prices)

	Major Transformative Effect (20%)		Some Enhanced flow (10%)		Minimal Enhanced Flow (5%)
	Jobs	Income (£'000s)	Jobs	Income (£'000s)	Jobs	Income (£'000s)
Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
Stability	85	£1,998	42.3	£999	21.2	£500

19.5 The Current Economic Impact of RD to IFG Areas

It is necessary to allocate activity levels (403,000) and expenditure (£38m) across the seven IFG's. There are a number of criteria that could be used. The attractiveness of the area as a dive venue is obviously important, especially for non-Scottish divers. The population of the IFG area will also have an effect. In some respects angler and divers seek similar marine characteristics. The exception is possibly that proportionately more diver days will be in Orkney and more sea angler days Dumfries and Galloway. The Table below uses the distribution of RSA effort as a basis for estimating RD effort across IFG's.

Table 19.5.1 RD Expenditure Across IFG's

IFG	% of RD Days	Pro Rata RD Expenditure	Adjusted Expenditure
South West	48.6%	£18,483,368	£18,224,888
North West	4.4%	£1,682,188	£1,682,188
Outer Hebrides	5.2%	£1,987,751	£1,987,751
MFNC	10.4%	£3,959,959	£3,959,959
Orkney	2.3%	£883,925	£2,000,000
East Coast	26.4%	£10,045,239	£10,045,239
Shetland	2.5%	£957,595	£100,000
Overall Total	100.0%	£38,000,025	£38,000,025

As expected Orkney is under represented since the Orkney charter market is estimated to be £1,980,000 (see above). There is only one domestic dive club on Orkney and it would be reasonable to propose that total diver expenditure was £2m. Shetland is over-estimated since the charter fleet is based in Orkney. The South West is possibly over-estimated. The final column shows the adjusted estimates. If we assume that every pound spent by a diver in an IFG area would have broadly the same impact a pound spent by an angler in the same area we can calculate a scaling factor (assuming underlying relationships are linear).

Table 19.5.2 RD Adjustment Factor

IFG	Adjusted RD Expenditure	RSA Expenditure [58]	Scaling Factor
South West	£18,224,888	£76,375,740	23.86%
North West	£1,682,188	£5,715,598	29.43%
Outer Hebrides	£1,987,751	£9,819,845	20.24%
MFNC	£3,959,959	£12,321,287	32.14%
Orkney	£2,000,000	£3,099,823	64.52%
East Coast	£10,045,239	£39,769,837	25.26%
Shetland	£100,000	£3,420,383	2.92%
Total	£38,000,025	£150,522,514

Applying these adjustments to each IFG area's RSA impact produces the following results for RD's current net economic impact.

Table 19.5.3 RD's Current Net Economic Impact

	Would be Lost ( RSA)		Would be Lost ( RD)
	Jobs	Income (£'000s)	Jobs	Income
South West IFG	1093	£18,510	261	£4,416,883
North West IFG	81	£1,359	24	£399,974
Outer Hebrides	117	£2,028	24	£410,511
MF& NC IFG	171	£3,206	55	£1,030,382
Orkney	46	£788	30	£508,416
East IFG	548	£12,586	138	£3,179,027
Shetland	50	£869	1	£25,407

19.6 The Potential Economic Impact of RD to IFG Area

To identify the potential impact of RD to each IFG, we applied the 20%, 10% and 5% enhancement. As argued above we have dispensed with the decline to zero trajectory for RD. We are therefore only concerned with the enhancement element and not the preservation dimension.

Table 19.6 RD's Potential Economic Impact on IFGs (2013 Prices)

IFG		Major Transformative Effect (20%)		Some Enhanced flow (10%)		Minimal Enhanced Flow (5%)
		Jobs	Income (£'000s)	Jobs	Income (£'000s)	Jobs	Income (£'000s)
South West	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	52.2	£883,377	26.1	£441,688	13.05	£220,844
North West	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	4.8	£79,995	2.4	£39,997	1.2	£19,999
Outer Hebrides	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	4.8	£82,102	2.4	£41,051	1.2	£20,526
MF& NC	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	11	£206,076	5.5	£103,038	2.75	£51,519
Orkney	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	6	£101,683	3	£50,842	1.5	£25,421
East Coast	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	27.6	£635,805	13.8	£317,903	6.9	£158,951
Shetland	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	0.2	£5,081	0.1	£2,541	0.05	£1,270

19.7 Estimating RD's NEV/ CBA Contribution

With respect to RSA we estimated the current magnitude and the change in NEV. With respect to RD, it has been argued that the decline to zero status quo scenario was not relevant. Therefore, if the change in divers' consumer surplus and option (user) value can be estimated directly, there is no requirement to estimate the current contribution magnitude. This simplifies the exercise.

19.7.1 RD's Potential Contribution: Consumers' Surplus Scotland

As explained previously Kenter et al did not estimate current consumers' surplus (i.e. Net WTP), they estimated gross WTP. They also estimated how gross WTP for existing visits would change with management measures. Provided divers actual WTP does not change then the increase in Gross WTP approximates to the increase divers consumers' surplus stemming from their current, but now improved, diving activity. Kenter et al did not estimate how many more trips would be made because diving was better, nor of course the additional consumers' surplus associated with these trips. Despite this, the Kenter's diving estimates are the best direct source available and they are derived from a larger sample of divers than anglers.

Table 19.7.1 Annual Diver User Values (Kenter et al, 2012)

	Visits (000s)		Mean WTP per visit	No Restriction		No Dredge or Trawls		No fishing at all		No Dr/Tr/Anch/Moor
	Low	Upp		Low	Upp	Low	Upp	Low	Upp	Low	Upp
TOTAL	462	772		33.5m	55.8m	33.5m	55.8m	35.5m	59.1m	36.3m	60.5m
MEAN per site (20)	23	39	67.45	1,675	2,791	1,675	2,791	1,774	2,956	1,816	3,027

The problem is that the estimated gross WTP of between £33 m and £55.8 m does not change if dredging and trawling were restricted (see Table above). It does increase by £2 m-£3.3 m if potting and gillnetting are included as restricted activities and by a further £2.8 m-£4.7 m if no anchoring or mooring was introduced as a restriction.

This is perplexing since it is inconceivable that divers would not be better off with no dredging and trawling. The BSAC submission to the Scottish Governments consultation (see above) makes this quite clear. Our interviews with key diver stakeholders confirmed this. It is equally surprising that divers would be better off if they were not allowed to moor or anchor their own or their chartered vessels. In the circumstances we cannot after all make use of the Kenter et al estimates of the change in divers' consumer surplus.

With respect to RSA, the existing anglers' consumers' surplus was increased indicatively by 50%, 25% and 10%. This was possible because an estimate of anglers' consumer surplus was available. We have no such estimate for divers.

One possibility would be to ignore the change in RD's consumers' surplus. Compared with ignoring the consumer's surplus of RSA, this might not be a significant omission. It was previously argued that recovery of demersal stocks were not quite as pivotal for RD as for RSA. Divers can still have rewarding experiences by diving on wrecks, and other marine artefacts. It is reasonable to conclude that divers' consumer surplus but not by as much as their angling counterparts. When analysing the impact of RD on income and employment, the indicative changes were 20%, 10% and 5% to reflect that the diving experience is less sensitive to changes in biomass and biodiversity. Also, there are 74% fewer diving activity days (403,000) than angler days (1,540,206)..

Against that background the only course available was to adjust the estimated change in RSA consumers' surplus to account for the RD lower activity (26%) and greater insensitivity to environmental change (20% 10% and 5%, compared with 50%, 25% and 10%). Thus the RD values were first reduced to 26% of the relevant RSA value. Then the major transformative effect was adjusted by the ratio (20% / 50%) The other two scenarios were similarly adjusted. The Table below presents the adjusted RSA Table 18.4.6.

Table 19.7.2 RD's Potential Consumers' Surplus (Scotland Scenarios)

	Major Transformative Effect (20%)	Some Enhanced Flow (10%)	Minimal Enhanced Flow (5%)
Continued Decline to zero Stability	Not Relevant £1,089,971	Not Relevant £544,985	Not Relevant £272,493

19.7.2 RD's Potential Contribution: Consumers Surplus IFG Areas

The same exercise can be applied to the change in divers' consumer surplus for the IFG areas. The activity level scaling factors for each IFG are given in the Table below

Table 19.7.2 RSA/ RD Scaling IFG Scaling Factors

IFG	Activity Levels Scaling Factor
South West	23.86%
North West	29.43%
Outer Hebrides	20.24%
MFNC	32.14%
Orkney	64.52%
East Coast	25.26%
Shetland	2.92%

The below adjusts the RSA Table 18.4.9 , to reflect the different population sizes and divers' lower sensitivity. The Table below is the result of applying these factors and the lower sensitivity levels of 20%, 10% and 5%

Table 19.7.3 RD's Potential Impact Consumers' Surplus in IFGs Areas

		Major Transformative Effect (20%)	Some Enhanced Flow (10%)	Minimal Enhanced Flow (5%)
South West	Continued Decline to zero Stability	Not Relevant £55,360	Not Relevant £27,680	Not Relevant £13,839
North West	Continued Decline to zero Stability	Not Relevant £45,286	Not Relevant £22,643	Not Relevant £11,321
Outer Hebrides	Continued Decline to zero Stability	Not Relevant £137,096	Not Relevant £68,548	Not Relevant £34,274
MFNC	Continued Decline to zero Stability	Not Relevant £63,918	Not Relevant £31,959	Not Relevant £15,979
Orkney	Continued Decline to zero Stability	Not Relevant £262,291	Not Relevant £131,146	Not Relevant £65,572
East Coast	Continued Decline to zero Stability	Not Relevant £3,134	Not Relevant £1,567	Not Relevant £783.
Shetland	Continued Decline to zero Stability	Not Relevant £268,293	Not Relevant £134,146	Not Relevant £53,659

19.7.3 Estimating RD's Potential Contribution: Option Values

With respect to option values and RSA, it was argued that option value might increase as the quality and value of the angling experience increased. Therefore the insurance premium that users would be willing to pay would also increase. This was reasonable provided that the increased value is subject to the same risk. However, the purpose of the MPA network (and the 1 NM and 3 NM restriction) is to offer ecosystem protection and reduce environmental risk and this would reduce the risk premium. Since we increased value and reduced risk it was more sensible to regard option value as an element of user value which does not increase along with consumers' surplus. This argument applies to RD.

Thus, the current magnitude of RD option value is not relevant, because we do not envisage a status quo scenario where RD declines continually. At the same time the change in option value is not probably relevant because we cannot be certain that it would respond like RD's consumers' surplus as the marine environment improved.

The result of these considerations is that, on balance, RD's option value is not particularly relevant and best excluded from the analysis to avoid an overestimation of the benefits from the 1 NM and 3 NM restrictions.

19.8 RD Summary Results

This Section presents the economic impact and NEV/ CBA results for RD for Scotland and each of the IFG areas

19.8.1 RD Summary Results Economic Impact

As explained above the status quo trajectory of continued decline is not relevant for both Scotland as a whole and each of the IFG areas. Some would argue that this is erring on the cautious side, because continued trawling and dredging will have adverse effects on RD. For example Kenter et al claim that the MPA network will deliver between £33 and £56 million in diver (gross) user benefits annually through protection of existing dive sites. This is a legitimate claim if the status quo trajectory will eventually result in no diving whatsoever. The correct estimate probably lies between these two positions. This study seeks to avoid overestimating the benefits from restrictions on commercial fishing, hence the stance adopted here.

Table 19.8.1 RD's Potential Economic Impact on Scotland (2013 prices)

	Major Transformative Effect (20%)		Some Enhanced flow (10%)		Minimal Enhanced Flow (5%)
	Jobs	Income (£'000s)	Jobs	Income (£'000s)	Jobs	Income (£'000s)
Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
Stability	85	£1,998	42.3	£999	21.2	£500

Table 19.8.2 RD's Potential Economic Impact on IFGs (2013 Prices)

IFG		Major Transformative Effect (20%)		Some Enhanced flow (10%)		Minimal Enhanced Flow (5%)
		Jobs	Income	Jobs	Income	Jobs	Income
South West	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	52.2	£883,377	26.1	£441,688	13.05	£220,844
North West	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	4.8	£79,995	2.4	£39,997	1.2	£19,999
Outer Hebrides	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	4.8	£82,102	2.4	£41,051	1.2	£20,526
MF& NC	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	11	£206,076	5.5	£103,038	2.75	£51,519
Orkney	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	6	£101,683	3	£50,842	1.5	£25,421
East Coast	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	27.6	£635,805	13.8	£317,903	6.9	£158,951
Shetland	Continued Decline to zero	Not Relevant		Not Relevant		Not Relevant
	Stability	0.2	£5,081	0.1	£2,541	0.05	£1,270

19.8.2 RD Summary Results NEV/ CBA

As explained, the current magnitude of RD option value is not relevant, because we do not envisage a status quo scenario where RD declines continually. The change in option value is not probably relevant because we cannot be certain that it would respond like RD's consumers' surplus as the marine environment improved. Since option value is not relevant the NEV of RD collapses to RD's consumers' surplus. For completeness, the tables below are the simply the relabelled consumer's surplus results

Table 19.8.3 RD's Potential Impact Net Economic Values (Scotland Scenarios)

	Major Transformative Effect (20%)	Some Enhanced Flow (10%)	Minimal Enhanced Flow (5%)
Continued Decline to zero	Not Relevant	Not Relevant	Not Relevant
Stability	£1,089,971	£544,985	£272,493

Table 19.8.4 RDs Potential Impact Net Economic Values ( IFG Areas)

Area		Major Transformative Effect (20%)	Some Enhanced Flow (10%)	Minimal Enhanced Flow (5%)
South West	Continued Decline to zero	Not Relevant	Not Relevant	Not Relevant
	Stability	£55,360	£27,680	£13,839.90
North West	Continued Decline to zero	Not Relevant	Not Relevant	Not Relevant
	Stability	£45,286	£22,643	£11,321.55
Outer Hebrides	Continued Decline to zero	Not Relevant	Not Relevant	Not Relevant
	Stability	£137,096	£68,548	£34,274.10
MFNC	Continued Decline to zero	Not Relevant	Not Relevant	Not Relevant
	Stability	£63,918	£31,959	£15,979.35
Orkney	Continued Decline to zero	Not Relevant	Not Relevant	Not Relevant
	Stability	£262,291	£131,146	£65,572.81
East Coast	Continued Decline to zero	Not Relevant	Not Relevant	Not Relevant
	Stability	£3,134	£1,567	£783.42
Shetland	Continued Decline to zero	Not Relevant	Not Relevant	Not Relevant
	Stability	£268,293	£134,146	£53,659