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

8. Discussion and Conclusions

8.1 Cost Impacts to Activities

Based on the assessments undertaken, it is estimated that there will be no significant cost impacts associated with designation of the proposed MPAs under any of the scenarios for the following activities: aviation, carbon capture and storage, coast protection and flood defence, power interconnectors and transmission lines, tourism and water sports.

It is estimated that relatively minor cost impacts will be experienced by the following activities with greater cost impacts under the intermediate and upper scenarios: finfish and shellfish aquaculture, military activities, ports and harbours, recreational boating and telecom cables. However, there is some uncertainty surrounding the potential scale of impacts to finfish and shellfish aquaculture, as it has not been possible to estimate the potential costs of mitigation measures and actual cost impacts could therefore be greater. It has not been possible to derive monetary estimates for the potential impacts to the recreational boating sector, but based on the limited number of anchorages and moorings likely to be affected, the cost impacts are expected to be minor.

Potentially more significant cost impacts could be experienced by the commercial fisheries, energy generation and oil & gas sectors, particularly under the intermediate and/or upper scenarios. For commercial fisheries, potential impacts on GVA (discounted over assessment period) range from £0.6m (lower scenario), £24m to £30m (intermediate scenario) and £52m to £60m (upper scenario) depending on the offshore site options included. The differences are largely accounted for by differences between the impacts associated with the Fladen options (estimated impact to GVA ranges between £3m to £7m) and inclusion of the Firth of Forth Banks Complex (estimated impact around £5m greater than alternative option).

For energy generation potential PV costs range from £0.1m to £0.2m (lower scenario), £2.6 to £2.7m) (intermediate scenario) and £3.9m to £47.3m (upper scenario) depending on the offshore site options included. The costs are particularly affected by the inclusion of the Firth of Forth Banks Complex in the upper scenario owing to the potential requirement to provide graded scour protection around each installation.

For the oil and gas sector potential PV costs range from £1.4m - £1.5m (lower scenario), £3.6m - £7.6m (intermediate scenario) and £111m - £121m (upper scenario) depending on the offshore site options included. In the lower scenario, the costs relate solely to potential additional assessment costs associated with new oil and gas exploration and development. In the intermediate scenario, some additional survey and mitigation measure costs potentially arise in relation to micrositing oil and gas infrastructure to avoid areas of high density for tall sea pens, particularly in Central Fladen (core) and Western Fladen proposed MPAs. In the upper scenario, potentially much larger costs could be incurred associated with more widespread micrositing of infrastrue and skip and ship of drill cuttings.

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 in the upper scenario, should some of the planned investment be deterred as a result of the additional costs of development. However, this remains uncertain and JNCC's current advice is that the intermediate scenario represents their best view on management requirements.

For the commercial fisheries sector, certain fleet segments may be significantly affected by the designation of several proposed MPAs in a region under the intermediate and upper scenarios. 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 additional 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.

It is recognised that accurate quantification of potential cost impacts is very challenging and confidence in the quantified assessments is generally low. It has not been possible to quantify a number of the potential cost impacts, for example mitigation costs for some sectors, or costs of delays in consenting or deterrent to investment. The quantified cost impacts therefore provide only a partial picture of the potential cost impacts of the draft management options. In addition, some cost impacts have only been quantified at national level. The Site Reporting Templates (Appendix E) therefore do not provide a complete picture of all quantified costs and this should be taken into account when considering the estimated costs for each site.

8.2 Costs to the Public Sector

The main public sector costs relate to the costs of biological surveys to assess the condition of features within sites once designated ( PV around £23m to £25m, depending on the offshore site options included in the network). Other public sector costs associated with Marine Management Schemes, Statutory Instruments to implement fisheries management measures, compliance and enforcement activities, proportion of public understanding and regulatory and advisory costs are estimated to be relatively minor ( PV around £0.5m for all options).

There are some uncertainties surrounding the estimates of costs to the public sector, in particular, the requirements for and costs of enforcement of inshore fisheries management measures and the costs associated with securing CFP measures. However, such costs are likely to remain only a minor component of overall public sector costs. The potential for cost impacts to Scottish Water is also uncertain.

8.3 Distribution of Economic Costs and Consequent Social Impacts

8.3.1 Commercial Fishing Sector and Fish Processing Sector

It is difficult 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 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. 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 being felt in Fraseburgh, 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 they do not find alternative employment;
• 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. 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 most pronounced in the West and North-west inshore regions, particularly for nephrops trawlers (under-15m and over-15m) and dredges.

8.3.2 Energy Generation and Oil and Gas

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

8.4 Benefits

Section 6 reviewed evidence on expected changes in ecosystem services and on the value of those changes. The evidence is extremely limited. It is particularly hampered by the lack of knowledge of the baseline condition of many features in the MPAs, and the impact of management measures on features and ecosystem services from sites.

The available evidence suggests that people do value protection of marine biodiversity and will benefit from increased ecosystem services as a result of MPA designation and management. These changes in ecosystem services are however poorly understood and very difficult to quantify. The conclusion is therefore that the scale of the benefits of designating the MPAs remains unproven, but this should not be interpreted as meaning that these benefits are low.

The same limitations hamper assessment of the cumulative benefits of the proposed MPAs. However, at this scale additional evidence on the network value of MPAs is relevant. The sites can cumulatively contribute to the resilience of marine ecosystem services in a way that is greater than the sum of their parts.

At the network level, economic studies on the value of UK MPAs and halting the loss of marine biodiversity in the UK, discussed in Section 6.3.5, are more relevant. The basis for reliably transferring most of this evidence to the proposed MPAs is uncertain.

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. The non-use value of Scottish households, with assumptions made on 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.

8.5 Limitations and Uncertainties

A number of significant limitations and uncertainties have been identified through the course of the study. The development of the scenarios has sought to encompass some of these uncertainties, in particular:

• Where the spatial extent of MPA features for which management measures might be required is uncertain (and thus the spatial area over which management measures might need to be applied (and over which costs and benefits might accrue) is uncertain) the scenarios have used different estimates of the spatial extent of those features;
• Different assumptions have been used concerning the requirements for management measures within the scenarios to take account of uncertainty in the management requirements. This influences the scale of costs and benefits across the scenarios;
• Different assumptions have been used within the scenarios concerning the extent to which management measures might already be necessary to deliver OSPAR/ BAP requirements. This also influences the scale of costs and benefits across the scenarios.

As a result of incorporating these uncertainties within the scenarios, significant variations in the range of potential costs and benefits have been identified, with estimates of costs typically varying by around two orders of magnitude between the lower and upper scenarios. These differences are particularly driven by assumptions on management measure requirements , but in some instances cost estimates are also sensitive to assumptions about whether management measures might already be necessary to meet OSPAR/ BAP requirements.Further refinement of the management options through the consultation process on the MPA proposals could help to reduce this uncertainty.

Uncertainties in the location and nature of future activity in the marine environment also introduce an uncertainty in the estimation of costs and benefits. For example, some of the estimated offshore renewables impacts are based on the location of Draft Plan Options and indicative export cable routes, which will be the subject of separate public consultation. Similar uncertainties relate to future trends in ongoing activities such as commercial fishing (assumed landings values remain constant over the assessment period). Such assessments are therefore based on a significant degree of speculation about future levels of activity and are thus inherently uncertain.

As identified in section 8.1 above, it has not been possible to provide quantified estimates of cost impacts for a number of potential management measures owing to a lack of data on the location of future activity or a lack of information on the costs of management measures. In addition, it has not been possible to estimate the cost of potential consequential impacts associated with designation, for example the costs of delays to consenting processes or costs associated with reduced investor confidence.

For commercial fisheries, the cost impacts have been based on GVA estimates of the value of potential landings foregone. These values will overestimate impacts to the commercial fisheries sector as they assume that all of the displaced effort will be lost, although in practice a proportion of the displaced effort will relocate and continue fishing in other areas. There is also an inherent uncertainty in the multipliers used to estimate GVA, which are not site specific. Further information on displacement effects could usefully be gathered through the consultation process on the MPA proposals.

The main potential social impacts identified within the assessment relate to impacts on the commercial fishing sector. Given the uncertainties relating to commercial fishing impacts identified above, the social consequences of these impacts are also similarly uncertain.

The assessment of benefits has largely been limited to a qualitative assessment owing to the very limited evidence on expected changes in ecosystem services and on the value of those changes. The assessment has also been hampered by the lack of knowledge of the baseline condition of many features in the MPAs, and the impact of management measures on features and ecosystem services within those sites. However, a significant amount of additional research is in progress, for example under the auspices of the National Ecosystem Assessment Follow-on project and it may be possible to incorporate additional informationduring and following the public consultation on the MPA proposals.

The combined assessment poses particular challenges owing to the complexity of such assessments and the limited scientific understanding of impacts. Within this study, combined effects have generally been assessed as the sum of the individual impacts of on individual sites, but the potential for combined cost impacts has been recognised, particularly in relation to commercial fisheries and possibly also for offshore renewables and oil and gas under the upper scenario. The assessment of combined benefits is subject to the same limitations as those identified for the site assessments. However, at this scale, additional evidence on the network value of MPAs is relevant. For example, the sites can cumulatively contribute to the resilience of marine ecosystem services in a way that is greater than the sum of their parts, but there is little if any quantified evidence available to support this.