Partial Business and Regulatory Impact Assessment (Northern North Sea) - Fisheries Management Measures within Scottish Offshore Marine Protected Areas (MPAs)

Annex A

This section explains the methodological approach taken to estimate the benefits and costs of the policy options presented in this BRIA. This approach follows the same approach as the SEIA and was carried out by external consultants ABPmer and eftec.

The appraisal period of assessing the socio-economic impacts covers the 20 year period from 2023 to 2042, although impacts may be delivered for longer if effective management measures remain in place. Monetary impacts have been discounted over the assessment period using a 3.5% discount rate in line with HM Treasury Green Book guidance^[28].

As with any socio-economic assessment related to environmental designations, the findings should be considered as estimates and a range is presented to capture the potential level of impacts under each management option, as far as is possible with available data.

Impacts to Commercial Fisheries

Impacts to commercial fisheries have been estimated in terms of value of landings using Vessel Monitoring System (VMS) data linked to landing records and International Council for the Exploration of the Sea (ICES) rectangle landings data. Data from 2015-2019 were used to calculate an annual average value, uprated to 2022 values to account for inflation. 2020 data was excluded from the analysis due to effect of the Covid-19 pandemic on fishing activity.

The value of landings affected was converted into direct gross value added (GVA) using fleet segment-specific GVA multipliers, and the direct, indirect and induced impacts on GVA and employment were calculated from Scottish (national) multipliers. The impacts were estimated in annual average terms, the total impact over the assessment period (20 years), and the present value (PV) over the assessment period.

The average annual value of landings affected was converted to direct GVA for each fleet segment using segment-specific ratios of GVA as a proportion of fishing turnover calculated from Seafish economic data (Seafish, 2021)^[29] and STECF (2020)^[30].

The reduction in direct and indirect GVA (i.e. reduction in GVA generated by the sector and its supply chain) was estimated by applying the Type I GVA multiplier for sea fishing from the Scottish Government's Supply, Use and Input-Output Tables . The reduction in direct, indirect and induced GVA (i.e. reduction in GVA generated by the sector and its supply chain and the knock-on impacts of a change in household consumption) was estimated by applying the Type II GVA multiplier for sea fishing from the Scottish Government's Input-Output Tables^[31]. Reductions in direct and indirect employment, and in direct, indirect and induced employment, were estimated by applying the Type I and Type II employment effects, respectively, for sea fishing from the Scottish Input-Output Tables and Multipliers.

Impacts to commercial fishing for both options are presented as a range to reflect the potential for the displacement of fishing activity to compensate for loss of landings from MPA sites. A displacement test was applied which considers the fishing activity affected, by vessel size and gear type, and compares it with the activity of that fleet segment in the surrounding area (within the MPA, in the ICES rectangles that the MPA overlaps, and within the UK Marine Strategy Clean and Safe Seas Evidence Group (CSSEG) region). Where the effort affected exceeds certain thresholds, it is considered that displacement of effort will have greater implications for the fishing industry (changes to costs and earnings profiles, conflict with other fleet segments) and potentially greater environmental impacts.

The displacement test included three steps:

• Test 1 – If the proportion of activity affected is less than 10% of activity in the MPA (for that gear type and vessel length), then it is likely that this activity can be absorbed by other existing fishing grounds in the MPA. If the threshold of 10% is exceeded, proceed to Test 2;
• Test 2 – If the proportion of activity affected is less than 10% of activity in the whole ICES rectangle(s) where the MPA is found (for that gear type and vessel length), then it is likely that fishing grounds outwith the MPA, but within the surrounding ICES rectangle(s), can absorb the displaced activity. If the threshold of 10% is exceeded, proceed to Test 3;
• Test 3 – If the proportion of activity affected is less than 1% of activity in the CSSEG region (for that gear type and vessel length), then the region is capable of absorbing the displaced activity. If the threshold of 1% is exceeded, implementation of that management approach has the potential to result in significant adverse environmental effects as a result of fishing activity moving to another area resulting in increased intensity of activity in other areas or activity to currently unfished ground, and should only progress if it is essential to achieve the conservation objectives. It also indicates that the fishing activity affected is a significant proportion of the activity for that fleet segment in the surrounding area, and displacement of effort to other existing grounds may not be possible, resulting in loss of landings and economic impacts to the fleet.

Where a specific fleet segment (gear type for over-12 m or under-12 m vessels) did not pass the three displacement tests, it was assumed that the effort would not be able to be displaced, and would result in a loss of the value of landings affected. Where the displacement test was passed, it was assumed that the affected effort could be displaced without significant environmental or socio-economic consequences, and compensatory landings would be made from other nearby fishing grounds, therefore the impact on landings was reduced to zero under the lower end of the range taking into account potential displacement.

Public Sector Costs

Following a decision to implement management measures at individual sites, costs could be incurred by the public sector in the following broad areas:

• Mechanisms to implement restrictions on fishing activity in offshore sites; and
• Monitoring and control of fishing activity.

The potential costs to the public sector of implementing fisheries management measures have been assessed at a national level, taking into account the number of individual sites that will require management measures. It is assumed that costs for site monitoring (of features and condition) have already been taken account of through previous assessments for designation of sites.

These costs have been informed by discussions with Scottish Government marine compliance and JNCC.

Costs were calculated on the full suite of measures for all 21 sites. To refine the cost estimate or this NNS specific BRIA, Scottish Government Marine Compliance anticipate 60% of full resource costs to be allocated to sites in NNS. This is an estimated allocation and may vary year on year.

Ecosystem Services

The term ‘ecosystem services’ relates to the direct and indirect contributions that ecosystems provide to society. Due to data constraints and scientific uncertainty, it is challenging to monetise the expected change in ecosystem services. Instead, a qualitative assessment has been undertaken.

The analysis of changes to ecosystem services has considered both on-site and off-site impacts of management options. Off-site impacts could be positive (e.g. by supporting healthier fish stocks in the area) or negative (e.g. due to the impacts of displaced fishing vessels). On-site costs could arise as a result of alternative fishing gears (e.g. creels, nets and lines) being deployed in MPAs where management measures have excluded mobile demersal gears.

The ecosystem services included in the analysis are:

• Fish & shellfish;
• Genetic resources;
• Carbon storage & climate regulation;
• Waste breakdown & detoxification of water & sediment;
• Non-use cultural value of the natural environment;
• Knowledge and education;
• Tourism and recreation.

Four parameters were considered for each ecosystem service in the assessment:

1. Relevance: Relating to the amount of ecosystem good or function arising from site;

2. Value weighting: Categorisation of how valuable the amount of ecosystem good or function from the site is in providing benefits to human population;

3. Scale of benefits: Consideration of actual potential to deliver benefits (for example considering location of benefits, delivery to human population, etc.);

4. Confidence: Level of confidence in our current knowledge of all other categories (in other words, scale of benefit, level of improvement, etc.).

The qualitative level of each of these parameters, and to the changes in ecosystem services, are assigned a level, defined as shown in Table A 1. Based on the assessed changes in ecosystem services using these parameters, an overall level of impact on each ecosystem service has been defined with its own confidence level.

Further information on the approach to assessing ecosystem services and detailed site assessments is available in the SEIA.