Planning Scotland's Seas: 2013 - The Scottish Marine Protected Area Project – Developing the Evidence Base tor Impact Assessments and the Sustainability Appraisal Final Report

Summary

Introduction

The Marine (Scotland) Act and the UK Marine and Coastal Access Act contain provisions for the designation of a network of Marine Protected Areas ( MPAs) in Scottish territorial and offshore waters in order to protect marine biodiversity and geodiversity and contribute to a UK and international network of MPAs. New Nature Conservation MPAs, along with existing protected sites in Scotland's marine environment, will contribute to achieving Good Environmental Status ( GES) under the Marine Strategy Framework Directive ( MSFD) and deliver Scotland's contribution to the ecologically coherent network of MPAs under the OSPAR convention on the protection of the marine environment in the North East Atlantic.

Proposed sites for Nature Conservation MPAs have been identified, following Scottish Natural Heritage ( SNH) and the Joint Nature Conservation Committee's ( JNCC's) application of the Guidelines on the Selection of MPAs and Development of the MPA Network to MPA search locations in Scotland's territorial and offshore waters respectively. Scottish Ministers reported to Parliament on progress towards developing the Scottish MPA network in December 2012, with their report including up to 33 potential areas for Nature Conservation MPAs ( NC MPAs). A formal public consultation on proposals for designation of specific MPAs will be undertaken in 2013. Following this public consultation, Scottish Ministers will decide on whether to designate specific sites as MPAs.

The identification and selection of MPA sites is primarily a 'science-led' process. However, socio-economic evidence can be considered in Ministers' decisions as to whether to designate specific sites, particularly where several different alternatives may make a similar ecological contribution to the MPA network. Socio-economic evidence can also be taken into account in determining the management approaches adopted for individual MPAs.

The study aims to assess the potential economic and social effects of the proposed suite of NC MPAs in Scottish offshore and territorial waters. The assessment investigates the potential cumulative economic benefits and costs, and associated potential social impacts, of designating each individual proposed NC MPA. It also considers the potential economic benefits and costs, and associated potential social impacts of designating the suite of MPA proposals as a whole.

The assessment provides Marine Scotland with evidence on economic and social effects to inform a Business and Regulatory Impact Assessment ( BRIA) for each NC MPA, and a Sustainability Appraisal for the suite of proposals as a whole.

Methodology

The study has sought to estimate the effects of designation of the 33 proposed NC MPAs both at site level and for the network as a whole in terms of:

• The potential costs to activities:
• A distributional analysis and consequent social impacts;
• The potential costs to the public sector; and
• The potential benefits to activities and wider society.

Within the study, three scenarios ( lower, intermediate and upper) were developed and applied to provide an indication on the following and where necessary seek to reflect uncertainties relating to:

• The precise management measures that might be required to support achievement of conservation objectives for individual features within each site;
• The spatial area over which management measures might need to apply, reflecting uncertainties in the underlying spatial extent of the features proposed for designation within individual sites; and
• The extent to which features might already be protected under existing policies.

The potential cost to activities have been assessed for each scenario in relation to the following interests, based on draft management options provided by SNH and JNCC:

• Aggregates;
• Aquaculture - finfish;
• Aquaculture - shellfish;
• Aviation;
• Carbon Capture and Storage;
• Coast Protection and Flood Defence;
• Commercial Fisheries (including salmon and sea trout);
• Energy Generation;
• Military Interests;
• Oil and Gas (including exploration, production, interconnectors, gas storage);
• Ports and Harbours (including dredge material disposal);
• Power Interconnectors and Transmission Lines;
• Recreational Boating;
• Shipping;
• Telecom Cables;
• Tourism; and
• Water Sports (including recreational angling, surfing, windsurfing, sea kayaking, small sail boat activities (such as dinghy sailing) and scuba diving).

For each sector, potential cost estimates were estimated where appropriate and feasible in terms of additional expenditure that would be incurred and presented as Present Values ( PV) over the lifetime of the assessment period (2014 to 2033). It was not possible to quantify costs associated with some management measures for other sectors or in relation to potential consenting delays or reductions in investor confidence associated with stricter environmental regulation.

For the commercial fisheries sector, potential cost impacts were estimated in terms of impacts to Gross Value Added ( GVA) as the management options for some MPAs may give rise to a reduction in output. This provides a better representation of the true economic cost to the commercial fisheries sector. These impacts were reported as both annual average and PV values.

A distributional analysis was undertaken focusing exclusively on the commercial fishing sector (and the fish processing sector) as this is the only sector where it was been possible to quantify the potential economic costs of designation (on output, GVA and employment). The focus of the distributional analysis was predominantly on groups in Scotland, as this is where the majority of impacts are expected to occur. This has included impacts on specific locations (including regions, districts and ports) and on specific groups within Scotland's population (including, for example, different age groups, genders, minority groups, and parts of Scotland's income distribution).

A social impact analysis has been prepared to identify the key areas of social impact that could potentially be affected by the potential economic costs (quantified and non-quantified) generated by designation and assesses the potential significance of these impacts. This approach is consistent with that put forward by the Government Economic Service ( GES) / Government Social Research ( GSR) Social Impacts Taskforce, which is based on the 'capitals approach' of ensuring that stocks of social capital are maintained over time. It was not possible to estimate the social impacts associated with those that would benefit from the designations so any cost estimates should be treated as gross rather than net. The key areas of social impact identified by the Task Force include:

• Access to services;
• Crime;
• Culture and Heritage;
• Education;
• Employment;
• Environment; and
• Health.

Public sector costs were estimated for the following broad areas based on discussions with Marine Scotland, SNH and JNCC:

• Preparation of Marine Management Schemes;
• Preparation of Statutory Instruments;
• Development of voluntary measures;
• Site monitoring;
• Compliance and enforcement;
• Promotion of public understanding; and
• Regulatory and advisory costs associated with licensing decisions.

It is possible that public bodies such as The Crown Estate ( TCE) could also experience impacts on its revenues from seabed leases should some development projects not proceed as a result of MPA designation or should some existing TCE moorings require relocation. However, it has not been possible to estimate such potential impacts within this assessment. In addition, Scottish Water may also incur some additional costs, although the assumption used for this assessment is that any management measures required to support the achievement of MPA objectives would already be required under the Water Framework Directive.

The potential benefits of MPA designation to activities and wider society have been assessed using an ecosystem services framework. This has largely been undertaken as a qualitative assessment owing to a lack of applicable quantitative evidence.

The combined impact of designating the NC MPAs has been assessed taking account of potential options identified by SNH and JNCC. The combined assessment has largely adopted an additive approach ( i.e. it assumes that the combined impact is equivalent to the sum of the individual impacts within each site), although additional commentary has been provided where the combined impacts on specific sectors are potentially significant.

Detailed assessments for each proposed NC MPA are presented in Appendix E with an assessment of the combined impact presented in the main report (section 7).

Findings

Impacts to Activities

Potential cost impacts were identified for 9 different human activities within one or more proposed NC MPAs. The costs should be treated as partial as it was not possible to estimate cost impacts for all potential management measures, for potential costs associated with delays or for impacts on investor confidence. For commercial fisheries, the values presented represent the estimated GVA associated with the value of landings that could be affected by the draft management measures and will be overestimates if some of the effort that could be displaced continues to fish elsewhere. Given the uncertainties, confidence in the cost estimates is low, although the ranges presented across the scenarios are, for most sectors, considered to adequately capture the uncertainty. The cost estimates for the intermediate scenario are considered to represent the best estimate of impact as they reflect JNCC's current best view on potential management requirements.

Table S1 summarises cost estimates by activity and by scenario. The ranges presented within scenarios reflect the possible range of quantified costs depending on which particular site options are selected. The range in cost between scenarios reflects data limitations, insufficient details on some development plans and projects, the uncertainty in the choice of management measures, the spatial area over which such measures might be required and the extent to which existing policy commitments may already deliver some of the management requirements. The main sectors that are likely to experience additional cost impacts, particularly under the intermediate and upper scenarios are commercial fisheries, energy generation (offshore renewables) and oil and gas.

Table S1. Present value (PV) in £ millions for quantified national cost impacts to human activities (costs discounted over assessment period, 2012 prices) (except for commercial fisheries, expressed as impact to direct GVA)

Human Activity	Scenarios
	Lower	Intermediate	Upper
Aquaculture - finfish	0.36	0.61	0.61
Aquaculture - shellfish	0.14	0.19	0.19
Commercial fisheries (direct GVA)	0.64	23.99 - 38.92	52.12 - 73.53
Energy generation	0.13 - 0.20	2.59 - 2.66	3.90 - 47.34
Military activities	0.19	0.19	0.19
Oil and gas	1.38 - 1.49	3.63 - 8.15	122.67 - 123.20
Port and harbours	0.14	0.15	0.16
Recreational boating	Not quantified	Not quantified	Not quantified
Telecom cables	0.01	0.01	0.75

The combined impact of the designation of proposed MPAs on activities is largely considered to be additive, given the relatively low levels of impact associated with the draft management options assessed within this study. For the energy generation and oil and gas sectors, it is possible that the combined impacts could be more significant, should some of the planned investment be deterred as a result of the additional costs of development. However, this remains uncertain. For the commercial fisheries sector, certain fleet segments may be significantly affected by the designation of several proposed MPAs in a region. This is particularly the case for over-15m and under-15m nephrops trawls in the West inshore and North-west inshore regions, and to a lesser extent for over-15m dredges and whitefish trawls. The displacement of these vessels from their fishing grounds may cause conflict among them and with other vessels in the grounds they are displaced to. There may be other costs associated with moving to new fishing grounds, changing target species or fishing method, and a number of vessels may leave the sector, with resulting employment and social impacts.

Distribution of Economic Costs and Consequent Social Impacts

Commercial Fishing Sector and Fish Processing Sector

A number of challenges have been encountered in seeking to assess the potential socio-economic consequences of designation of proposed MPAs on the commercial fishing sector (and hence the fish processing sector) as, ultimately, this will depend on the extent to which the fleet can access alternative fishing grounds, and that is unknown. The quantitative estimates presented for this sector, therefore, assume there is no redistribution of fishing effort - all affected landings are lost - and hence represent worst-case estimates.

The analysis suggests:

• Designation of ten of the possible MPAs would not require any restrictions on fishing activities and hence would not generate any economic or social costs;
• Under the lower scenario, the economic and social impacts of designation of the other sites would be minimal;
• While designation of the suite of MPAs would have negative impacts on GVA and employment, the impact at the Scottish economy level would not be significant;
• While designation of the suite of MPAs would have negative impacts on the sector's GVA and employment under the intermediate and upper scenarios, these impacts would be relatively small and possible benefits to industry have not so far been quantified. Under the worst-case scenario, there would be a 2% reduction in the sector's GVA and employment;
• The North-east, North-west and West regions, however, would bear a disproportionate share of these costs with the most significant employment impacts likely to be felt in Fraserburgh, Peterhead, Mallaig and Ayr. Designation of the suite of MPAs could put jobs at risk in these and other areas (under the intermediate and upper scenarios) and this could generate significant economic and social costs for the individuals affected (and their families) if the fishing grounds are lost and it wasn't possible to fish alternative grounds;
• It is anticipated that designation of the suite of proposed MPAs would have a negative, but fairly minimal impact, on the Scottish fish processing sector as a whole. Affected landings account for a relatively low proportion of total landings at landing ports (typically 0-3%, and 7% worst case at Mallaig) and it is likely that fish processors will react to reductions in local supplies of fish by importing greater quantities of raw material from other locations. The impacts could be more significant for smaller-scale processors which are more heavily reliant on locally-caught demersal species and shellfish. Designation is not expected to have any impact on the pelagic sector; and
• If the impact of designation on the Scottish fleet was a displacement of fishing activity, the economic and social costs would be smaller than those estimated. These may, however, be partly offset by other economic and social costs associated with displacement such as increased fuel costs and a loss of social cohesion among fleets, as a result of increased tensions among vessels from having to share fishing grounds. Displacement issues are likely to be greater in the West and North-west inshore regions, particularly for nephrops trawlers (<15m and >15m) and dredges.

Energy Generation

It has not been possible to fully quantify the potential costs associated with possible mitigation measures in the energy generation (offshore renewables) sector but these are potentially significant, particularly under the upper scenario. and could render some future development projects unviable. Further, it has not been possible to estimate the costs associated with potential delays or the impact of designation on investment decisions which could be significant under the upper scenario. If designation rendered projects unviable or restricted or deterred investment in development projects (existing, planned or future), this would have potentially more significant socio-economic impacts; not only would it reduce the contribution these sectors make to future levels of GVA and employment but it could have indirect effects on their supply chains and the wider Scottish economy. However it should be noted that SNH and JNCC's current advice is that the intermediate scenario represents their best view on potential management requirements.

Oil and Gas

It has not been possible to fully quantify the potential costs associated with possible mitigation measures in the oil and gas sector but these are potentially significant, particularly under the upper scenario, and could render some future development projects unviable. Further, it has not been possible to estimate the costs associated with potential delays or the impact of designation on investment decisions which could be significant under the upper scenario. If designation rendered projects unviable or restricted or deterred investment in development projects (existing, planned or future), this would have potentially more significant socio-economic impacts; not only would it reduce the contribution these sectors make to future levels of GVA and employment but it could have indirect effects on their supply chains and the wider Scottish economy. However it should be noted that JNCC's current advice is that the intermediate scenario represents their best view on potential management requirements.

Public Sector Costs

Table S2 presents a summary of estimated cost impacts to the public sector. The main potential costs are assessed as relating to future site monitoring

Table S2. Present value ( PV) in £ millions for public sector costs (costs discounted over assessment period, 2012 prices)

Activity	Scenarios
	Lower	Intermediate	Upper
Marine Management Schemes	0.14	0.14	0.14
Statutory Instruments - Inshore Measures	0.02	0.04	0.05
Statutory Instruments - Offshore Measures	0.03	0.05	0.05
Voluntary Measures	-	-	-
Site Monitoring - Inshore	4.63	4.63	4.63
Site Monitoring - Offshore	18.62 to 19.99	18.62 to 19.99	18.62 to 19.99
Compliance and Enforcement	-	-	0.20
Promoting Public Understanding	0.05	0.05	0.05
Regulatory and Advisory Costs Planning applications - aquaculture CAR licences - finfish aquaculture Oil & gas licensing Marine licensing	0.04 0.01 0.14 to 0.15 0.03 to 0.04	0.04 0.01 0.14 to 0.15 0.04	0.04 0.01 0.14 to 0.15 0.04 to 0.05
Total	23.71 to 25.10	23.76 to 25.14	23.97 to 25.36

There are a number of uncertainties surrounding the estimates of costs to the public sector, in particular, the frequency with which offshore biological surveys will be carried out, the requirement for and costs of compliance and enforcement of any inshore fisheries management measures and the costs associated with securing CFP measures.

Benefits to Activities and Wider Society

The review of evidence on benefits has demonstrated that relevant quantified evidence is extremely limited. It is particularly hampered by difficulties in, and a lack of research to, apply available economic techniques to the marine environment, the lack of knowledge of the baseline condition of many features in the MPAs, and of the impact of management measures on features and ecosystem services from sites.

The available evidence to value the benefits of the designation and management of the proposed MPAs is very limited. A range of potential benefits to different ecosystem services can be identified for the proposed sites, and from the network of sites. However, weaknesses in the evidence, including uncertainty in the baseline condition and the impact of management measures on features and ecosystem services from sites, mean that this only provides a partial understanding of the benefits to society.

A recent UK study of the non-use value of protecting marine biodiversity through site designations (McVittie and Moran, 2008) has been translated to value the proposed MPAs in accordance with UK Government value transfer guidelines ^[1] The non-use value of Scottish households, with allowance for the scale of Scottish marine waters and a possible time-lag in the benefits from designation, are estimated at between £239 million and £583 million, at 2012 prices discounted over 20 years, from 2014.