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

2. Methodology

2.1 Introduction

The proposed methodology builds on previous marine socio-economic assessments undertaken in Scotland and the assessment undertaken for Marine Conservation Zones ( MCZs) in England ( Defra, 2012). It also takes account of Better Regulation Executive guidance on impact assessment ^[5] , the Green Book methodology for economic assessment (HM Treasury, 2011) and Scottish Government guidance on Business and Regulatory Impact Assessment ( BRIA).

The methodology covers:

• Establishing a baseline against which impacts can be assessed;
• Approach to quantification of impacts; and
• Estimating costs and benefits in terms of Gross Value added ( GVA) and employment.

Development of the methodology was taken forward through consultation with the Project Steering Group on an Inception Report and consultation with the Project Steering Group and Project Advisory Group on a Data and Methods Paper. Comments received from the Project Steering Group and Project Advisory Group were taken into account where possible in the final methodology for the assessment reported here.

A 'Reporting Template' was prepared ( Appendix A), which was used to record results of the analysis for individual MPA sites ( Appendix E). Comments received from the Project Steering Group ( PSG) and Project Advisory Group ( PAG) on the draft Reporting Template were taken into account where possible in developing the final site reporting template.

2.1.1 General Project Assumptions

A number of key assumptions were developed in consultation with the Project Steering Group which have particularly informed the progression of the study:

• It has been assumed that should designation proceed, all sites are designated in 2014, which provides the base year for the assessment. It has been assumed that where management measures are required to be implemented for unlicensed or non-spatially licensed activity ( e.g. fishing licences), these are implemented between 2014 and 2016. Where management measures are required for spatially-licensed activities, these will be implemented at the time licences are applied for;
• An assessment period of 20 years following designation has been selected as providing a reasonable time period within which the main impacts are likely to occur. The assessment period therefore runs from 2014 to 2033;
• Lower, intermediate and upper scenarios have been developed to assess the potential range of impacts on sectors, which reflect uncertainty in the extent of proposed protected features, and a range of possible management options that may be applied (see Section 2.3.1). The management options have been developed for the purposes of the assessment, based on advice from JNCC and SNH, but are the judgement of the study team and do not anticipate JNCC or SNH's final advice on management measures, nor do they reflect the management measures that may be adopted by the Scottish Government for individual features or sites. The actual management measures that may be applied in the future will be developed through a process of consultation with stakeholders.
• Marine Scotland has indicated that its policy presumption is that there will be no review of existing spatially-based consents and licences on the basis that the impacts of such activities are already manifest in the condition of the sites being proposed for designation. This assumption is subject to future monitoring by the Statutory Nature Conservation Bodies ( SNCBs) confirming that such activities are not giving rise to new impacts within sites. As a result, no cost impacts have been identified for existing activities with spatially-based consents or licences, except where such activities are expected to apply for new consents or licences within the assessment period;
• For mobile features, no 'additional protection' will be offered outside of an MPA even if the species is directly linked to the population protected within the MPA. On this basis no cost impacts have been identified for management measures to protect features outside of the site boundaries; and
• Disposal of liquid wastes from coastal point source discharges has been scoped out of the assessment on the basis that the EC Water Framework Directive (2000/60/ EC) requires that measures are implemented to achieve Good Status for waters out to 3nm from the territorial baseline by 2015 (subject to time-limited derogations). It has been assumed that no additional management measures will be required of operators of point source discharges beyond those necessary to achieve Good Status and therefore there will be no significant cost impacts (see Box 2)

Box 2: Possible Costs to Scottish Water

As with the approach taken in England & Wales; the disposal of liquid wastes from coastal point sources has been scoped out of the Impact Assessment ( IA) on the basis that good status will be achieved by Water Framework Directive ( WFD) measures required to be taken by 2015. Therefore any requirements that may be subsequently placed on Scottish Water over and above those required to meet WFD standards are not captured within the report.

In addition Scottish Water, unlike water companies in E&W, is a Public Body and any costs incurred are not captured under section 4 Costs to the Public Sector or section 7 Assessment of Combined Impacts.

Scottish Water considers it likely that additional costs may arise through development of management schemes or voluntary measures, compliance and regulatory costs associated with licensing applications & decisions.

Scottish Water's approach to investment to meet legislative drivers, within the context of defined investment periods, is to ensure that the environmental impacts and needs are fully understood before promoting investment in our assets. This is carried out through a process of studies and, depending on the outcome of the studies, delivering the most appropriate cost effective solution.

Scottish Water ( SW) has identified some areas where it considers it likely that cost will be incurred:

• Requirement to undertake revision of CAR licence standards for discharges near or within MPA (through SNH advice to SEPA);
• New SW projects near or within MPA likely be scrutinised to current standard for SAC;
• Compliance with current licence conditions may come under closer scrutiny where they are within the vicinity of an MPA;
• Staff resources may be required for input to management of sites;
• Other sectors, that are captured within the scope of IA, may require developments that consequently impact on SW activities e.g. WWTW capacity, investment required or rendered unnecessary due to displacement of other activities such as aquaculture and fish processing (farmed and wild stock);
• MPAs will be incorporated into Site Condition Monitoring to determine Conservation Status as applied to European and National designated sites. The information will feed into National Performance Indicator ( NPI) 37. Cost for SW may arise through remedies to maintain or attain Favourable Condition of certain features; and
• More detailed assessments/surveys may be required for new development projects likely to impact on MPAs, with associated costs.

2.2 Collation and Preparation of Baseline Information

Baseline information is required to inform the 'do nothing' scenario against which one or more intervention options can be compared. Requirements for the baseline include:

• Information on the current spatial distribution of activities in the marine environment and their intensity and economic value (turnover, employment);
• Information on how the spatial distribution of activities in the marine environment and their intensity and economic value may change over the time period of the assessment (in the absence of the intervention), in response to existing drivers including current policy drivers; and
• Information on ecosystem service values associated with the marine environment and how these may change over time (in the absence of the intervention);
• Information on pre-existing site designations and management (eg. SACs, SSSIs, SPAs).

In addition, a range of other information has been used with the assessment, for example, information on the costs of management measures for specific human activities. These have been derived from other sources e.g. the Impact Assessment undertaken for English Marine Conservation Zones ( Finding Sanctuary et al, 2012) and through discussions with the various sectors. Full details are provided in Appendix C.

2.2.1 Socio-economic Information on Activities

The following marine activity categories have been used in this study (which are broadly consistent with Charting Progress 2 ( UKMMAS, 2010) and Scotland's Marine Atlas (Scottish Government, 2011) and take account of the need to include activities on coastal land:

• 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).

Much of the required baseline information on activities has been compiled from previous studies, including:

• Scotland's Marine Atlas (largely incorporated in the offshore renewables baseline);
• Data held by SNH and JNCC as part of the NC MPAs project including the Geodatabase of Marine features in Scotland ( GeMS) and various socio-economic data (for example data used to identify Least Damaged/Most Natural Areas (Chaniotis et al, 2011)); and
• The socio-economic baseline data collated to inform offshore renewables assessments ( ABPmer & RPA, 2012) - this data source is particularly useful as it includes detailed descriptions of socio-economic activities at national and regional levels that can be used to construct baseline information for the impact assessments. It also includes information on projections of future activity.

In addition, the study acquired further baseline data in the following areas:

• Processed Vessel Monitoring System ( VMS) data for fishing vessels >15m in length showing spatial distribution of the value of landings, by gear type (provided by Marine Scotland);
• Provisional ScotMap data for fishing vessels <15m in length (provided by Marine Scotland);
• VMS ping data for non- UK vessels for 2011 and 2012, by nationality (Marine Scotland);
• Information on fishing activity by French vessels in certain MPA proposals in 2008 and 2011 ( CRPMEM Nord); and
• Information on the location of recreational anchorages (provided by SNH).

National baseline information is presented in Appendix C for each activity listed above. Assumptions on future activity are also provided which take account of the key drivers of change where relevant. For example, the energy generation sector ( Appendix C8) identifies the projected expansion of offshore renewables in response to Government policies to increase the proportion of electricity generated from renewable sources. The potential consequential impacts of offshore renewables expansion on other activities (such as commercial fishing, commercial shipping and recreation) are also identified where relevant for particular sectors in Appendix C.

2.2.2 Ecosystem Services Valuation Data

There are limited valuation data for marine ecosystem services provided by MPA features. The National Ecosystem Assessment ( NEA) included a synthesis of data available up to 2010 (Austen et al, 2011). Much of this data is aggregated and valuation data for specific features are largely lacking, although some habitats (such as saltmarsh and intertidal mudflat) are relatively well-studied. Additional work has also been undertaken under the NEA follow-on project and Valuing Nature Network ( VNN) and drafts of this work have been used to inform our analysis. The data limitations impose significant constraints on the extent to which changes in ecosystem service ( ES) provision can be quantified.

In addition there is a requirement to collate information on the ES provided by individual MPA features. Bournemouth University and ABPmer (2010) collated information for many benthic habitat and benthic species MCZ features. This has been extended by work under the Valuing Nature Network ( VNN) project to include most Scottish MPA ecological features, which has been used as the basis for assessing potential ecological benefits from the proposed NC MPAs.

2.2.3 Other Information Requirements

In addition to baseline data, a range of additional data and information has been collated to inform the assessment. Information on licensing costs and the cost impacts of potential management measures has been obtained to estimate cost impacts for activities, together with information on enforcement, surveillance and monitoring costs to estimate impacts on the public sector. Relevant information has been drawn from the MCZ IA and for IAs that have accompanied the UK Marine & Coastal Access Act and Marine (Scotland) Act, which are included in the sector scenario summaries in Appendix C. Additional information was obtained through consultation with Marine Scotland, JNCC, SNH and wider stakeholders.

2.2.4 Information Management

All incoming data was checked for validity and accuracy prior to acceptance within the project in accordance with internal quality procedures. Available spatial data has been held and managed within a project-specific spatial database (Arc GIS).

2.3 Quantification of Potential Impacts (Costs and Benefits)

2.3.1 Development of Scenarios

There are a number of key uncertainties associated with the designation of MPAs that influence the scale of potential impacts, including:

• The location and extent of MPA features within MPA proposals;
• The location and scale of some new development activities over the assessment period (for example offshore renewables and carbon capture and storage ( CCS) infrastructure) and the extent to which these new developments might interact with MPA features;
• The nature and scale of management measures that might be required to support achievement of conservation objectives for MPA features; and
• The extent to which MPA features are already protected by existing policy commitments.

For the purposes of this study, to address the uncertainties identified above, three scenarios were developed, which were used to inform the range of possible costs and benefits at site level for each proposed MPA. The scenarios have not taken account of potential differences in the location and scale of new development activity as this would introduce an inconsistency into the future baseline between scenarios. The three scenarios have therefore focused on the following key factors:

• A 'lower' scenario where:
  ˉ Requirements for management measures are at the lower end of a possible range of measures aimed at achieving MPA feature conservation objectives;
  ˉ The spatial extent of the feature requiring protection is towards the lower end of the estimated range; and
  ˉ It is assumed that no additional management measures are required for OSPAR/ BAP features for activities with spatially-based licences.
• An 'intermediate' scenario where:
  ˉ Requirements for management measures are based on SNH/ JNCC's current best view on management options required to address the risks to features;
  ˉ The spatial extent of the feature requiring protection is towards the middle of the estimated range; and
  ˉ It is assumed that additional management measures are required for non- OSPAR/ BAP features and different conditions on management for some OSPAR/ BAP features for activities with spatially-based licences over and above current practice.
• A 'higher' scenario, where:
  ˉ Requirements for management measures are at the upper end of a possible range of measures aimed at achieving MPA feature conservation objectives;
  ˉ The spatial extent of the feature requiring protection is towards the upper end of the estimated range; and
  ˉ It is assumed that additional management measures are required for non- OSPAR/ BAP features and different conditions on management for some OSPAR/ BAP features for activities with spatially-based licences over and above current practice.

There is an acknowledged uncertainty concerning the extent to which impacts to OSPAR/ BAP features might already be fully addressed through existing licensing processes for spatially based activities. On a precautionary basis, this assessment has taken the view that all future licence applications that have the potential to affect MPA features (irrespective of whether they are or are not OSPAR/ BAP features) will incur additional costs in preparing an assessment of impacts in relation to the conservation objectives for these features. In addition, the assessment has also included costs for additional monitoring and mitigation measures for certain OSPAR/ BAP features ^[6] where, in the view of the study team, those features may not currently be afforded the same level of protection that is likely to be provided by the MPA designations.

The nature and type of management measures required will vary by sector. Appendix C therefore sets out a series of assumptions that have been used to identify management measures for the scenarios for each sector/activity. The precise management measures used in the scenarios have been determined based on initial work undertaken by SNH and JNCC to develop management options for each site. The initial management options have been developed based on SNH and JNCC's assessment of risk to MPA features from activities and the draft conservation objectives proposed for each feature. The study team has sought to translate the initial management options into management measures for the three scenarios as indicated above. Necessarily, options with less stringent management measures will pose a greater risk that the conservation objectives will not be met. However, even under the lower scenario, the study team has sought to ensure that the management measures could be compatible with achievement of the conservation objectives.

2.3.2 Approach to Assessments

The designation of NC MPAs will give rise to a range of potential costs and benefits:

• Impacts to activities:
  ˉ Loss or displacement of current (or future) economic activity;
  ˉ Increased operating costs of economic activity (additional costs of applying for licences, implementing in situ management measures); and
  ˉ Benefits to activities ( e.g. from enhanced user experience).
• Social impacts:
  ˉ Social impacts arising as a result of cost impacts on economic activities, assessed through a distributional analysis which considers the distribution of the key quantified economic costs and identifies the social impacts that could be generated as a result.
• Costs to the public sector:
  ˉ Preparation of Marine Management Schemes;
  ˉ Preparation of Statutory Instruments;
  ˉ Development of voluntary measures;
  ˉ Site monitoring;
  ˉ Compliance and enforcement;
  ˉ Promotion of public understanding; and
  ˉ Regulatory and advisory costs associated with licensing decisions.
• Benefits:
  ˉ The contribution to the benefits of an ecologically-coherent network of MPAs (see section 2.3.3 for details of combined assessment);
  ˉ The beneficial impacts of MPAs on the condition of the features that they have been designated to protect; and
  ˉ The provision of ecosystem services (including benefits to activities and to wider society).

The cost impacts to human activities that have been assessed are estimates of the potential costs that may arise. Actual cost impacts may be higher or lower than the estimates derived in this study, depending on the precise management measures required. For example, the cost impacts on the fisheries sector quantify the value of landings affected by the management options, assuming all affected landings are lost, as a worst-case estimate. In reality, a proportion of fishing activity may be displaced to other areas or to other gear types. This would have its own associated costs and benefits, but would result in overall cost impacts which are lower than the worst-case estimates presented. Furthermore, in all cases, quantification (valuation) of both costs and benefits has been carried out where the evidence allows, other impacts are identified qualitatively.

Site impacts have been assessed in the following categories:

• Impacts to activities;
• Social impacts;
• Economic costs to the public sector; and
• Benefits:
  ˉ Benefits to MPA features and the MPA network;
  ˉ Benefits to ecosystem services (including any benefits to activities and social benefits identified in impacts to activities and social impacts above).

The assessment of benefits draws together a range of different benefits and presents them within an overall ecosystem services framework to avoid the risk of double counting. The benefits to MPA features and the MPA network are described separately as these are important reasons for designation in their own right.

An outline of the methods used for each of these categories is provided below. Image 2 provides a schematic of the assessment process.

Image 2. Illustration of Socio-economic Assessment Process

Process for economic Analysis

Most of the assessments have been undertaken at the level of individual sites. However, for some activities, it was only possible to provide national estimates of impacts:

• Finfish and shellfish aquaculture - estimates of future development activity not available at site level;
• Military activities - estimates of impacts not available at site level; and
• Oil and gas - estimates of future oil and gas decommissioning not available at site level.

2.3.2.1 Impacts to activities

The main areas in which impacts might be experienced are listed below, however it should be noted that not all of these impacts will be experienced at each site:

• Costs of management measures ^[7] :
  ˉ Increased operating costs of economic activity (additional costs of applying for licences, undertaking additional monitoring, implementing in situ management measures); and
  ˉ Loss or displacement of current (or future) economic activity.
• Indirect cost impacts:
  ˉ Impact of project delays;
  ˉ Impact on investor confidence; and
  ˉ Consequential impacts to regional and local economies as a result of impacts on economic activities (this will be assessed as part of the distributional analysis for social impacts.
• Benefits to activities arising from management measures implemented by other sectors.

The extent to which cost impacts might be incurred by economic interests depends on the nature and scale of the potential interaction with MPA features and judgements on possible requirements for management measures. The assessment has been progressed through a number of steps, described below.

Step 1 - Assessment of spatial overlap between MPA features and activities

A spatial analysis has been undertaken in GIS to identify, for each activity identified in Section 2.2.1, the extent of spatial overlap with features proposed for designation within possible MPAs. For a number of MPA features there is some uncertainty concerning their spatial extent within MPAs. Different possible extents of features within each MPA were therefore estimated based on various assumptions (see Appendix B) and used within the scenarios to take account of the uncertainty.

The analysis has also included a suitable buffer area around each feature extent to take account of possible indirect effects. Buffers ^[8] have been used in two ways in the analysis:

• To estimate costs to activities as a result of additional assessments required to assess potential risks to MPA features to inform licensing decisions for regulated activities within the buffer zone (for example, when considering risks to protected features within Natura 2000 sites, it is common practice to consider risks arising from licensed activities located outside, but within the vicinity of the designated sites); and
• To estimate costs to activities as a result of management measures to address indirect impacts to features within an NC MPA, from activities occurring outside the NC MPA, for example, in relation to physical process changes, sediment plumes or underwater noise from piling activities.

Based on an initial analysis of the location of MPA proposals relative to human activity categories and the potential vulnerability of MPA features to certain categories of human activity, the following sectors have been scoped out of the analysis:

• Marine aggregates - there are two existing licensed sites for marine aggregate extraction within Scottish waters (although neither is currently in production). These sites are located around 60km from the nearest MPA proposal and there are no impact pathways by which designated features could be affected by activities in these areas. While there may be potential for marine aggregate extraction to be licensed in other areas of Scottish waters in the future, based on the geological distribution of marine sand and gravel resources, there is currently little demand for marine aggregate in Scotland and it is considered that significant future expansion to support traditional markets (general construction aggregate) is unlikely. On this basis no cost impacts to the sector are anticipated. There is the potential for new markets for marine aggregate to emerge in the future in support of coastal development (reclamation), coastal protection (beach nourishment) and renewable energy development (gravity base foundations), however there is no clarity on where these demands may arise geographically or when. Therefore, the cost impacts arising from areas of potential future resource interest are unable to be considered; and
• Shipping - the only impact pathway identified by which shipping activity might impact on features proposed for designation with the current list of MPA proposals is through damage to seabed habitats and associated species from anchoring. The pressure associated with formal and informal anchorage areas for commercial shipping is assessed under Ports and Harbours. On this basis, shipping is scoped out of the assessment. Should additional MPA proposals be brought forward that include marine mammal features, it may be necessary to consider collision risk with shipping traffic as an additional pressure, for which management measures may need to be considered.

Step 2 - Assessment of potential vulnerability of MPA features within MPA proposals to pressures associated with activities screened in on the basis of Step 1

The initial SNH and JNCC advice on management options takes account of the potential risk to MPA features associated with current and possible future activity within MPA proposals. This information has been used to inform assessments of potential vulnerability in this study. Where information on the initial management options was incomplete, additional assessments were undertaken by the study team, making use of the Scottish MPA sensitivity matrix to identify potential vulnerability of features to pressures from relevant activities.

Step 3 - Assessment of implications for activities giving rise to a potential vulnerability

Where a potential vulnerability was identified, consideration was given to the requirement for management measures based on the sector-specific scenarios presented in Appendix C. For activities occurring outside of MPA proposals which have the potential to affect MPA features within site boundaries, the requirement for management measures has been determined on a site-specific basis, having regard to the sensitivity of the features to the relevant human pressures and the likely magnitude of the pressure.

Step 4: Estimating the costs arising from management measures

The information on impacts has been translated into a format suitable for use within an IA in accordance with Better Regulation Executive guidance on impact assessment ^[9] , the Green Book methodology for economic assessment ( HM Treasury, 2011) and Scottish Government guidance on Business and Regulatory Impact Assessment ( BRIA). The assessment has been undertaken for a period of 20 years (2014-2033), assuming designation of all sites in 2014.

The costs and benefits associated with the impacts have been estimated for the relevant intervention option scenarios compared to the 'do nothing' option both for individual sites and for the network as a whole. Monetisation of the costs and benefits has been undertaken where this is possible and where potentially significant impacts have been identified.

Where appropriate, impacts to activities have been estimated in terms of changes to:

• Costs faced by industries ( e.g. increased costs of EIA, additional survey costs, costs of mitigation measures, costs of delays and impacts on investor confidence);
• Gross Value Added ^[10] ( GVA) and employment as a result of restrictions on their activities ( e.g. changes to fishing grounds or development locations); and
• The distribution of economic activity in affected communities.

Quantification of the potential increased operating costs of designation on activities

For most activities the potential costs of designation reflect potential increases in operating costs ( e.g. additional costs of applying for licences, additional survey costs or additional mitigation costs). Unit costs for these elements have been derived from existing published sources or through consultation with the relevant sector.

Full details on the methods used to assess these costs are presented in Appendix C.

Where a potential requirement for management measures was identified, consideration was also given to the potential for additional cost impacts to arise as a result of project delays or as a result of impacts on investor confidence.

It is not possible to quantify the costs associated with potential delays during the consenting, licensing or permitting process or the impact of designation on investment decisions, although during consultation, some industries have flagged these as significant concerns.

Quantification of potential costs of designation on GVA and employment

For some activities, the potential cost of designation is a loss or displacement of current (and future) economic activity. For commercial fisheries, for example, the potential cost of designation is a loss or displacement of current (and future) output, caused by spatial or temporal restrictions on fishing activities.

If there is a decrease in output, then all else being equal, GVA in the fishing sector will fall (this is the direct effect). If the decrease in output reduces this sector's demand on their suppliers, there will also be knock-on effects on their suppliers and so on down the supply chain (this is the indirect effect). This includes all the supporting industries that supply commercial fishing vessels ( e.g. diesel suppliers, equipment suppliers, boat manufacturers and repairers and transport providers).

The potential costs on the commercial fisheries sector and its downstream supply chain have therefore been estimated in terms of:

• value of potential landings foregone - assessed on a gear-specific and feature-by-feature basis;
• reduction in direct GVA ( i.e. reduction in GVA generated by the commercial fishing sector) - estimated by applying fleet segment-specific ratios ( GVA divided by fishing income) to the value of landings affected;
• reduction in direct and indirect GVA ( i.e. reduction in GVA generated by the sector and its supply chain) - estimated by applying the Type I GVA multiplier for sea fishing from the recently revised Scottish Government's Input-Output Tables and Multipliers (2009); and
• reductions in direct and indirect employment - estimated by applying the Type I employment effect for sea fishing from the Scottish Input-Output Tables and Multipliers.

Another supply chain that is highly relevant to commercial fishing vessels is that which the vessels supply, that is, the supply of fish to processing facilities and to the wholesale and retail trades. The potential cost of designation on the fish processing industry has been estimated in terms of the value of potential landings foregone, by port of landing. Again, these have been assessed on a gear-specific and feature-by-feature basis. The potential impacts on GVA and employment in the processing sector have not been assessed as estimating the reduction in this sector would also estimate the reduction in the commercial fisheries sector as an indirect effect and hence would result in double counting.

Full details on the methodology used to estimate the costs for commercial fisheries and the wider economy are set out in Appendix C ( C7.7).

It is appropriate to use multipliers for the commercial fisheries sector given that there is a potential reduction in output, which can be assumed to be similar to a fall in Final Demand (which is what the multipliers relate to). It is also possible to apply the multipliers as specific multipliers and effects are available for fishing (Marine water and Freshwater Fishing) and estimates of the direct impacts upon the industry are available in monetary terms ( i.e. value of landings forgone).

Multipliers have not been applied to other sectors because designation is not expected to generate a change in output or Final Demand. Rather, in most of the other sectors, designation is expected to change the input structure, that is, the same output is produced but more inputs ( e.g. additional licence costs etc.) are needed to produce this output.

It is recognised, however, that for some activities ( i.e. energy generation and oil and gas), the additional costs and delays arising from management measures could potentially render some projects economically unviable and/or lead to a loss in investor confidence particularly in the upper scenario. If the additional costs or loss of confidence generated by management measures, restricted developments (current, planned, or future), or, meant that developments did not proceed, there would be a loss of future GVA and employment in the sectors affected, and knock-on effects on their supply chains and the wider Scottish economy.

Although it is highly uncertain whether designation of the proposed MPAs would affect future economic activity in these sectors, where there is a potential risk that these impacts might be generated, they are highlighted. The potential socio-economic impacts that could be generated as a result are also identified as part of the social impact analysis.

The units of measurement used to assess the costs have been clearly described in presenting information within the Site Reports. Estimates of costs derived from previous years have been uprated to 2012 values using GDP deflators. Estimates of monetary costs have been discounted in line with the Treasury Green Book guidance at 3.5%, providing all financial data in 2012 costs.

The assessments are presented in a series of MPA site reports ( Appendix E), which include the qualitative and quantitative information that underlie the calculations for each site (and the combined assessment), along with any assumptions that have been made.

2.3.2.2 Distributional analysis and consequent social impacts

The social impacts generated by the designation of possible MPAs will be strongly connected to the nature, scale and distribution of the economic impacts. Any change in employment, for example, generated as a result of designation can have significant social impacts ( e.g. on health, crime).

Economic and social impacts have been assessed through a distributional analysis in line with the requirements of the specification.

The distributional analysis has focused exclusively on the commercial fishing sector (and the fish processing sector) as this is the only sector where it has 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). Table 2 summarises the list of groups that have been considered in the distributional analysis.

The social impact analysis identifies 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. The key areas of social impact identified by the Task Force include:

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

In order to assess the impacts of interactions with the sectors the assessment clearly defines what is (and is not) covered under each of the areas of social impact.

Table 2. Groups who may be affected by designation

Location	Groups Distinguished By
	Age	Gender	Fishing Group	Income	Minority	Other
Region Port Rural/ urban/ coastal or island	Children Working age Pensionable age	Male Female	Gear type Vessels type Species type	10% most deprived 10% most affluent Remaining 80%	Crofters 10% most deprived 10% most affluent Ethnic minorities Religion Sexual orientation	With disability or long-term sick Groups

Table 3 provides an indication of the definitions used for each area. The definitions provided in Table 3 are, to the extent possible, related to the need to ensure that stocks of capital (produced, human, social and natural) are maintained so that the potential for wellbeing is non-declining over time ( Defra, 2011).

Table 3. Definition of areas of social impact

Key Area	Access	Experience
Access to services	Change in opportunity to use services or time to access services	Change in quality of service provided or received
Crime	Change in opportunity for criminal activities	Change in level of crime (perceived or actual)
Culture and heritage	Change in opportunity to access culture and heritage Change in existence of culture/heritage, or knowledge of it (especially loss) Change in number of visits to cultural/heritage sites	Change in quality of cultural or heritage through change in context, quality of visits
Education	Change in opportunity to access education services	Change in quality of education services
Employ-ment	Change in employment opportunities	Change in quality of employment opportunities
Environ-ment	Change in opportunity to access environment Change in existence of environment, or knowledge of it (especially change in habitats) Change in number of visits to environmental sites	Change in quality of environment through change in quality of habitats, species supported or change in quality of visits
Health	Change in level of disease or symptoms (physical and mental health)	Change in self-assessed quality of health

2.3.2.3 Economic costs to the public sector

Table 7 of the Final Regulatory Impact Assessment for the Marine (Scotland) Bill (Scottish Government, 2009) identified various costs to the public sector associated with the designation of NC MPAs. Some of these costs have already been incurred or will have been incurred at the point at which decisions to designate individual sites are made (for example, site selection, survey costs, work to develop management options and consultation on site proposals). These are therefore 'sunk' costs and do not need to be considered in this assessment. Additional costs that will be incurred as part of the designation process include the development and implementation of Marine Management Schemes and the preparation of Statutory Instruments (Marine Conservation Orders or national or European (for sites beyond 12nm or sites between 6 to 12nm with historic rights for non- UK vessels) fisheries management measures) for sites for which these are required. It is also possible that some costs could be associated with the development of guidance on voluntary measures for some sites.

Following designation, additional costs will be incurred in relation to on going monitoring of the condition of features within designated sites and in enforcing management measures. Some costs may also be incurred in promoting public understanding of nature conservation MPAs.

Separately, regulatory bodies and their statutory advisors may incur additional costs associated with reviewing developer assessments of potential impacts to nature conservation features within MPAs as part of the licensing process (analogous to the effort currently required to review Appropriate Assessment signposting documents for developments likely to affect Natura 2000 sites).

In addition, 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 (see section 3.12). However, it has not been possible to estimate such potential impacts within this assessment. 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.

Estimates of the cost impacts to the public sector have been based on information contained within the Final Regulatory Impact Assessment for the Marine (Scotland) Bill (Scottish Government, 2009), information within the MCZ IA (Finding Sanctuary et al, 2012) and informal discussions with Marine Scotland, SNH and JNCC.

2.3.2.4 Benefits

Benefits to MPA Features

The benefits to MPA features and to the MPA network as a whole are discussed below. The benefits have been identified based on information contained in the SNH and JNCC Assessment of potential adequacy reports ( SNH & JNCC, 2012a). These reports provide an assessment of the contribution of different sites and features to an ecologically-coherent network of MPAs, in terms of the representation, replication, geographic range and variation, resilience and equivalent ecological value of proposed protected features and sites.

Ecosystem Services Benefits (Including Benefits to Activities and Wider Society)

The biodiversity features of an MPA contribute to the delivery of a range of ecosystem services. Designation of the MPA and its subsequent management may improve the quantity and quality of the beneficial services provided, which may, inturn increase the value (contribution to economic welfare) of them. Impacts on the value of ecosystem services may occur as a result of the designation, management and/or achievement of the conservation objectives of the MPA.

The ecosystem services analysis has provided a qualitative description of the potential changes in ES provision associated with the implementation of management measures to support the achievement of conservation objectives for individual features. This draws on the work of Bournemouth University and ABPmer (2010) and work to extend that analysis to all relevant Scottish MPA features (Valuing Nature Network (Potts et al, 2013)). The list of final ecosystem services that have been considered is provided in Table 4.

Table 4. List of final ES to be considered in the assessment

General Ecosystem Service Categorisation	Final Ecosystem Services to be Used
Provisioning	Provision of fish and shellfish for human and non-human consumption
Cultural	Recreation
	Research and education
	Non-use
Regulating	Natural hazard protection
	Environmental resilience
	Gas and climate regulation
	Regulation of pollution

In applying economic valuation evidence we have sought to clearly link management measures under different management scenarios ('lower' to 'upper') to changes in ecosystem services and the economic value of these. The analysis has been summarised in an assessment table (Table 8 in Appendix A), similar to that used in the IAs of inshore MPAs for Natural England and JNCC. This approach was approved in Defra's peer review of these IAs as a sound application of ecosystem services methodology.

In addition to the summary of anticipated ES benefits under the lower, intermediate and upper scenarios, the summary includes four columns of information to clarify our understanding of the qualitative changes in ecosystem services arising from (non-) designation (see Table 8 in the Reporting Template (Appendix A)):

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

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

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

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

Based on the above categories, an overall level of each ecosystem service has been defined with its own confidence level. Following, an overall level of total benefits has also been defined.

The parameters have been assigned a level for each service from a menu, defined as:

Nil: Not present/none;

Minimal: Present at a very low level, unlikely to be large enough to make a noticeable impact on ecosystem services;

Low: Present/detectable, may have a small noticeable impact on ecosystem services, but unlikely to cause a meaningful change to site's condition;

Moderate: Present/detectable, noticeable incremental change to site's condition;

High: Present/detectable order of magnitude impact on sites condition.

The approach provides a qualitative summary of the expected ecosystem services benefits to ensure all relevant impacts are captured in the analysis.

2.3.3 Approach to Assessing Combined Impacts

The combined assessment considers the costs and benefits of different combinations of proposed MPAs where there are science-based alternatives to the features of recommended MPA proposals, or where alternative proposals are of equivalent ecological value for the same combinations of features. It also explores whether the combined impacts associated with groups of sites at regional or national levels may be larger or smaller than the sum of the individual impacts.

Specific methods have been applied in assessing the combined cost impacts to activities, public sector costs, social impacts and benefits, described below.

2.3.3.1 Impacts to activities

The starting point for assessing the cumulative impacts on activities has been to add together the impacts identified for each individual MPA proposal, taking account of potential alternative sites. In areas where there are concentrations of sites affecting a particular activity (as identified by the distributional analysis), further consideration has been given to the potential combined impact to describe qualitatively whether the combined impact might be larger or smaller than the sum of the individual impacts.

The scale of the sectors affected in Scotland has been used as the context for assessing the significance of combined impacts to activities. Information on key sectors has been drawn (where available) from the Scottish Government's Economic Strategy, or from industry data. The significance of combined impacts will depend on the scale of the impacts incurred by different sectors and the relative importance of each sector to the Scottish economy (now and in the future).

2.3.3.2 Impacts to the public sector

The assessment of impacts to the public sector has adopted a national approach. The national costs therefore represent the cumulative impact on the public sector.

2.3.3.3 Distribution of economic impacts and consequent social impacts

The combined analysis assesses the likely distribution of the potential economic impacts (and hence associated social impacts) which are expected to be generated from designating the suite of MPA proposals as a whole. The approach to estimating the combined distributional impacts differs across the six different aspects that are assessed as part of the distributional analysis:

• Location;
• Age groups;
• Gender groups;
• Fishing groups;
• Income group; and
• Social groups.

For some of the location aspects ( i.e. distribution across regions and ports) and Fishing groups) the distribution of costs has been assessed quantitatively. For others ( i.e. age, gender, income and social groups), the analysis indicates whether designation of the suite of MPA proposals is likely to impact on these groups, and, if so, whether the impact is anticipated to be minimal, negative, or significantly negative.

The approach to estimating the combined social impacts has been based on assigning a significance rating to the social impacts identified for each relevant sector.

2.3.3.4 Benefits

Part of the rationale for an ecologically-coherent network of MPAs is the concept that the value of the network is greater than the sum of its parts. However, scientific understanding of the relationships between individual sites and the network is limited and it is likely to be difficult to provide any quantification of the combined benefits.

The selection of potential MPAs has been based on the Scottish MPA Selection Guidelines (Marine Scotland et al, 2011) ( Box 3). These guidelines include a number of elements that relate to the wider benefits of a network, for example, replication supports resilience and connectivity supports linkages between marine ecosystems.

Box 3: Scottish MPA Selection Guidelines (Marine Scotland et al, 2011)

Representation: To support the sustainable use, protection and conservation of marine biological diversity and ecosystems, areas which best represent the range of species, habitats and ecological processes (for which MPAs are a suitable measure) should be considered for inclusion.

Replication: Replication of features in separate MPAs in each biogeographic area is desirable where it is possible in order to contribute to resilience and the aims of the network.

Size of site: The appropriate size of a site should be determined by the purpose of the site and be sufficiently large to maintain the integrity of the feature for which it is selected.

Adequacy: The MPA network should be of adequate size to deliver its ecological objectives.

Connectivity: The MPA network should take into account the linkages between marine ecosystems and the dependence of species and habitats on processes that occur outside the MPA concerned.

The Site Reporting Template ( Appendix A) has been used to capture information on the contribution that each site makes to an ecologically-coherent network in relation to the Scottish MPA Selection Guidelines, based on information contained in SNH and JNCC Stage 5 Reports ^[11] .

As part of the assessment the scope for monetising the benefits assessments has also been explored. This has made use of market value data where available and investigated value transfer to develop monetary values for the ES changes that cannot be valued directly through market prices. Value transfer has been considered in line with the best practice guidelines developed by eftec (2010) ^[12] .

These guidelines (eftec, 2010) give guidance on how to assess the robustness of value evidence transfer. This takes into account the relevance of the evidence in terms of the geography, the scale and timing of environmental change, the numbers and socio-economic groups of beneficiaries, and the decision-making context. The better the match of valuation evidence to the issues being analysed, the more robust the value transfer. Ideally data are adjusted based on statistical evidence ( e.g. in proportion to the differences in beneficiary populations, or scale of environmental change). However, expert judgement is often necessary, and has been laid out transparently. The different sources of uncertainty inherent in this approach have resulted in a range of values.

Most marine ecosystem services valuation studies have focused on developing methodologies and there are limited studies that value the benefits. However there are some studies available ( e.g. The transfer of values in a study for SE LINK, and recent work by eftec (in prep) for the Dutch Government valuing the recreational impacts of marine litter. Value transfer results are limited by the extent of this evidence base and uncertainty over ecosystem services impacts from MPAs. Limited quantitative data are available on marine ecosystem services changes. The assessment has therefore largely adopted a qualitative approach to assessing the potential benefits from designation of MPAs. On this basis, the combined ecosystem services benefits have been assessed by collating information from individual sites.

2.4 Reporting

Individual Site Assessments are presented in a series of MPA Site Reports ( Appendix E). Figures indicating the location of human activities in each MPA and fisheries over-15m VMS ping data, are also provided in Appendix E. An overview of impacts to activities, the public sector, social impacts and benefits together with an assessment of combined impacts is presented in subsequent sections of this report.

2.5 Communication

The study has been undertaken to a very tight timetable. Advice and guidance has been provided through the Project Steering Group and a wider Project Advisory Group including key socio-economic interests and environmental stakeholders. Wider consultation has also been undertaken with stakeholders identified as attending previous Scottish MPA workshops plus some additional consultees (hereafter 'wider stakeholders'; see list at Appendix F), to seek to clarify methods and assumptions and to obtain additional information as time permitted.