Highly Protected Marine Areas - policy framework and site selection guidelines: socio-economic impact assessment – methodology

5 Assessment of Costs and Benefits

5.1 Introduction

5.1.1 This section, and the accompanying Appendix B, provides an overview of the proposed methodologies to be used in the SEIA. It is important to note that, as methodologies are constantly evolving, the methods used in the SEIA may also evolve in order to align with the latest guidance available at the time.

5.2 Economic Impacts to Marine Activities

5.2.1 Detailed assessment methods for relevant marine activities scoped in to the assessment are presented in Appendix B.

5.2.2 All the methods generally entail making estimates of the cost of implementing restrictions and/or the impact of implementing the restrictions on operating revenues.

5.2.3 Consistent unit costs are used within most marine activity sectors as a basis for estimating these impacts, although it is recognised that the actual costs that may be incurred by specific activities within individual sites may be higher or lower than these 'average' values.

5.2.4 For some sectors, there may also be impacts associated with delays in consenting as a result of the designations or impacts on investor confidence. However, it is not possible to quantify these potential impacts as it is not possible to predict whether or where they might occur. It is recognised that these costs could potentially be large for some sectors and possibly larger than some of the quantified costs.

5.2.5 Where possible, all impacts are quantified in monetary terms, with these values converted to current prices using the relevant GDP deflators. Where impacts on economic activities have the potential to give rise to a change in the level of output, direct and indirect impacts on Gross Value Added (GVA) and employment are estimated using appropriate multipliers. This is likely to be the case for the fisheries sector, for which the restrictions have the potential to affect output through loss of landings, and may be the case for the aquaculture sector, depending on whether existing affected sites are able to relocate to other areas, or if production at affected sites is lost. Impacts that are anticipated, but for which cost estimates were not possible, are described qualitatively.

5.2.6 The impacts for all the relevant activities for each site are documented in Tables 3 (cost impacts) and 4 (potential benefits) of the Site Assessment Tables (template in Appendix C). Sectors that are unaffected are recorded in Table 5 of Site Assessment Tables (Appendix C).

5.3 Social Impacts on Individuals, Communities and Society

5.3.1 Social impacts are effects on individuals, communities and society. They can vary in their desirability, scale, extent or duration (temporal and spatial), intensity and severity, as well as the extent to which they affect particular groups or are compounded by cumulative effects.

5.3.2 The social impact assessment will be based on the latest guidance available and will involve desk-based analysis of data on relevant impacts, and the collection and analysis of primary data, using appropriate social research methods and where relevant participatory engagement approaches with groups expected to be affected. It will also be informed by stakeholder engagement, including planned consultations by Marine Scotland on the approach to HPMA designations, and engagement with communities in areas identified to be likely to experience greater impacts.

5.3.3 Socio-economic variables will be considered as appropriate based on relevant guidance. Key variables from SEIA guidance for MPAs in inshore waters^[36] (e.g. distribution and type of employment) are already reflected in the social impact analysis approach (as used for previous MPAs), covering the groups shown in Table 2, reported in Tables 6a and b in Appendix C. As described above, prior to undertaking the SEIA, Marine Scotland are planning to consult with affected communities on the HPMA policy through a series of themed workshops. These will work with stakeholders on the approach to identifying HPMAs, including considering their socio-economic impacts, and the distribution of those impacts across communities. This will help inform the content of the social analysis, described below.

5.3.4 The social impacts generated by the proposed management scenarios will be strongly connected to the nature, scale and distribution of the economic impacts (on both income and employment). Any significant change in employment, for example generated as a result of restrictions on fishing activity, can have significant social impacts (e.g. on health, crime). Based on consideration of the distribution of economic impacts and potential benefits in desk-based analysis (as described in Sections 5.2 and 5.5), the assessment of social impact will then consider if any further socio-economic variables as per Box 1 of the SEIA guidance for MPAs in inshore waters^[37] should be included in the analysis.

5.3.5 Employment is recognised as being a particularly important generator of social benefit. It is the key means by which individuals fulfil material wellbeing, as well as being central to social linkages, individual identity, social status and an important contributor to physical and mental health. Conversely, unemployment can be detrimental to physical and mental health and a key cause of deprivation and associated issues of community cohesion.

5.3.6 The distribution of impacts on employment focuses on the likely location on land where those employment impacts are likely to be felt. For the fishing sector, the registered Home Port Districts of the vessels affected can be considered as a proxy for likely location of employment; this can be explored further for sites where impacts likely to be greater than others. The distribution of impacts on the fish processing industry focuses on the ports of landing of the affected vessels’ catches, as a proxy for the linkage between the catches made from an HPMA at sea, and where those catches are landed and processed. This can also be explored further for sites and ports where impacts are likely to be greater than others.

5.3.7 The focus of the distributional analysis is predominantly on groups in Scotland, as this is where the majority of impacts are expected to occur. This includes 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.

Table 2. Groups who may be affected by management scenarios

Location

Region

Port

Rural/ urban/ mainland or island

Fishing group

Gear type

Vessel size

Groups distinguished by:

Age

Children

Working age

Pensionable age

Income

10% most deprived

10% most affluent

Remaining 80%

Social groups

e.g. Crofters

Ethnic minorities

With disability or long-term sick

Gender

Male

Female

5.3.8 The social impact assessment uses the relevant impact-interaction tables (See Table 6a,b and c in Appendix C) to identify the potential social impacts of designating the pHPMAs, for the sectors where designation is expected to have GVA and employment impacts. The tables identify the potential distribution of economic impacts and are then combined with relevant quantitative (e.g. potential employment impacts) and qualitative information (e.g. assessment against a pre-defined scale of the severity of impacts). This information is used to assess whether social impacts are likely to occur, and if so, their potential significance. The relevance of mitigation measures for potentially significant social impacts are also highlighted.

5.3.9 The significance of the social impacts is assessed by putting the socio-economic impact, quantified through the methods described in Section 5.2, in context (e.g. employment impacts are assessed relative to total employment in the sector and/or community). The interpretation of this evidence is made using the following definitions:

• xxx/+++: significant negative/positive effect. This is defined as where it is probable that an impact will be noticed and is potentially significant;
• xx/++: possible negative/positive effect. This is defined as where it is possible than an impact will be noticed;
• +/-: minimal effect, if any. This is defined as where it is probable than an impact is unlikely to be sufficiently significant so as to be noticeable, but that some possibility exists that a negative/positive impact could occur; and
• 0: no noticeable effect expected.

5.3.10 The desk-based analysis of human activities affected in Section 5.2 and the potential benefits (Section 5.5), and the themed workshops, will be captured in stakeholder mapping. This will help identify affected communities, the ways they are impacted, and make reference to the available socio-economic data (from the desk-based analysis) that describes these impacts. This mapping will ensure engagement with interest groups is targeted to where impacts are greatest, and where it can help fill gaps in evidence.

5.3.11 Communities can be defined in different ways, including by:

• Place, groups in certain locations, local communities;
• Practice, groups who undertake particular activities; and
• Interests, groups who hold particular viewpoints (e.g. environmental NGO members).

5.3.12 The community engagement will gather evidence through the most appropriate and proportionate techniques for the groups and impacts being assessed. This may include more specific information on the distribution or timing of impacts, and may be gathered through group or individual meetings, surveys, or use of further evidence sources cited by interest groups. This mapping will enhance understanding of the distribution of impacts, allowing identification of whether any island communities in Scotland could be affected in a significantly different way from mainland communities, as required by the Islands Act 2018.

5.3.13 Evidence gathered from these communities will be included in the SEIA, including through more specific description of the communities expected to be affected by the management measures. This will be an iterative process: as the size, type and distribution of impacts become apparent during the work, appropriate social research skills will be used gather views from the most affected communities.

5.3.14 The engagement process will consider both the positive and negative impacts from HPMAs. While analysis of economic impacts will highlight costs to existing activities, the full range of social costs and benefits will be considered. The social benefits that may positively impact wellbeing could stem from new employment opportunities (e.g. in alternative fishing activities, or related to recreation or research), or from knowledge that there is a healthy/recovering marine ecosystem.

5.3.15 It is important that the community engagement will be undertaken by the appropriate people, which may differ at different stages of HPMA policy implementation and is expected to include:

• Scottish Government representatives, so communities see that officials are hearing their views;
• Those involved in generating the data on expected impacts of HPMAs; and
• Researchers with relevant social research skills, to implement the methods described above.

5.3.16 The social impact assessment is conducted for each individual pHPMA and for the suite of pHPMAs as a whole. The results of the social impact assessment for each site are reported in Table 6 of the Site Reports.

5.4 Impacts on the Public Sector

5.4.1 Following a decision to designate individual sites, costs may be incurred by the public sector in the following broad areas:

• Site monitoring;
• Compliance and enforcement;
• Loss of revenue from seabed leases;
• Promotion of public understanding; and
• Regulatory and advisory costs associated with licensing decisions and review of consents.

5.4.2 Standard assumptions have been developed for the estimation of public sector cost impacts based on information contained within the Final Regulatory Impact Assessment for the Marine (Scotland) Bill^[38], information from the Marine Conservation Zones Impact Assessment^[39], information from the previous impact assessment of Nature Conservation MPAs^[40], the assessment of four new Nature Conservation MPAs^[41], the assessment of a proposed deep sea marine reserve^[42], the assessment of fisheries management measures in offshore MPAs^[43], and informal discussions with Marine Scotland Directorate, NatureScot and JNCC. These agreed assumptions are then used to estimate costs to central government for all sites combined. A national-level assessment is used for public sector costs.

5.5 Assessment of Potential Benefits

Impacts on Ecosystem Services

5.5.1 The biodiversity features of an HPMA are expected to contribute to the delivery of a range of ecosystem services. A natural capital approach will be applied to help assessment of these services^[44]. This defines the sites and features being designated as natural capital assets. The designation and management of the HPMA may improve the extent and/or condition of these assets, which changes the quantity and quality of the beneficial services they provide in future, relative to a ‘no designation’ baseline. This in turn may change their value (contribution to economic welfare). Impacts on the value of ecosystem services may occur as a result of the management and/or achievement of the conservation objectives of the HPMA.

5.5.2 The ecosystem services analysis provides a qualitative description of the potential changes in ecosystem service provision associated with the implementation of management scenarios to support the achievement of conservation objectives for individual features. A healthy marine environment provides a large number of benefits to people. The benefits and the beneficiaries are not uniform and cover a wide range of ecosystem functions and interdependencies. The concept of ‘ecosystem services’ is used to capture the different benefits provided. Ecosystem services are the outcomes from ecosystems that directly lead to good(s) that are valued by people^[45].

5.5.3 The ecosystem services list analysed is based on those in Marine Scotland Directorate’s guidance^[46], using the same definitions of ecosystem services as in previous Scottish MPA impact assessments where possible. The list of final ecosystem services considered is shown in Table 3, alongside some of the goods and benefits that those services support. It splits the benefits provided by UK environments into the following services:

• Provisioning Services – the tangible goods and associated benefits produced by an ecosystem;
• Regulating Services – the benefits from the regulation of ecosystem processes;
• Cultural Services – the non-tangible ecosystem benefits either from experience of the ecosystem or knowledge of its existence;
• Supporting Services – those services whose function underlie all other ecosystem service provision.

5.5.4 Supporting services are not measured separately in economic analysis, since their contribution is reflected in final services and benefits.

5.5.5 The services identified in Table 3 are defined as follows:

• Provisioning services:
  • Fish & shellfish stocks – harvestable wild fish and shellfish for commercial market or personal use / recreational fishing;
  • Harvestable seaweed – seaweed collectable for commercial or personal use;
  • Ornamental material (commercial & personal) – shells or other natural material collected for display or as trinkets/memorabilia, whether for commercial sale or personal use;
  • Genetic resources – species with potential use in, for example, biomedicine, food/nutrition or cosmetics, whether as raw material or isolation of genetic properties;
• Regulating services
  • Carbon storage & climate regulation – storage or sequestration of organic or inorganic carbon within biomass or sediment or geological material;
  • Storm protection / Natural coastal protection - habitats and geomorphology which attenuate or block wave energy from reaching parts of the coast and foreshore with sensitive natural or built assets.
  • Waste breakdown & detoxification of water & sediment – physical or chemical change to organic or inorganic contamination levels of water or sediment by species/habitats that remove contaminants through consumption or filtering, or otherwise help lock contaminants into substrate.
  • Sediment stabilisation - transfer of sediment from water column to seabed caused by the physical structure of habitats changing water movement that would otherwise keep sediment suspended.
• Cultural services
  • Knowledge / Knowledge and education – learning and information gained from study or activities in the marine environment.
  • Recreation / Tourism and recreation – peoples’ use and enjoyment of the environment through direct, in-situ, physical and experiential interactions with. This includes services to both locals and non-locals (i.e. visitors, including tourists) and includes hunting and fishing.
  • Further cultural ecosystem services are listed by the Scottish Government (2020): Spirituality, Health and well-being, Creativity & Art, but no definitions are given for them. These values are partly captured in the ‘Non-use cultural value’ which is a broad category representing a type of value people hold for benefits not deriving from their own use of a resource.

5.5.6 The following services that have been part of past Scottish MPA impact assessments and/or are listed by the Scottish Government (2020), but are not analysed in this work for the reasons given.

• Energy – this is listed as an ecosystem service by Scottish Government (2020), but in this assessment is considered through impacts on the energy sector.
• Aggregate / sand – sediment and rock resources identified as for potential extraction and use in construction. This service is not included as there is currently no marine sand and gravel extraction in Scottish waters.

5.5.7 The typology in Table 3 has been used to identify the services for analysis in relation to the sites’ proposed management scenarios.

Table 3. Typology of Scottish marine final ecosystem services, and resulting goods and benefits

Final ecosystem services

Provisioning

Fish & shellfish

Seaweed

Ornamental materials (commercial & personal)

Genetic resources

Regulating

Climate regulation

Natural coastal protection

Waste breakdown / detoxification

Sediment stabilisation

Cultural

Knowledge (science & education)

Tourism & recreation

Goods/ benefits

Provisioning

Food

Fish feed

Fertiliser

Ornaments (incl. aquaria)

Medicine, cosmetics & biotech

Construction materials

Regulating

Healthy climate

Prevention of coastal erosion

Sea defence

Clean water & sediments

Immobilisation of pollutants

Cultural

Non-use cultural values

Mental & physical health

Spiritual/cultural well-being

Creativity and art

5.5.8 The analysis of changes to ecosystem services will consider both on-site and off-site impacts of management scenarios. Off-site impacts could be positive (e.g. by supporting healthier fish stocks in the area) or negative (e.g. due to the impacts of displaced fishing vessels). On-site costs could arise as a result of alternative fishing gears (e.g. pots) being deployed in MPAs where management has excluded other gears. In assessing impacts, we will clearly link the assessment scenarios to changes in ecosystem services and the economic value of these. The analysis will be summarised in an assessment table (Tables 9a and 9b in Appendix C), similar to that used in previous impact assessments of MPAs in Scottish, English and UK waters.

5.5.9 In addition to the summary of anticipated ecosystem services benefits under the lower, intermediate and upper estimates, the assessments will include four columns of information to clarify understanding of the qualitative changes in ecosystem services arising from the proposed management scenarios (see Tables 9a and 9b in the Site Reports in Appendix C):

• 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 location of benefits, 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.).

5.5.10 Based on the above categories, an overall level of each ecosystem service will be defined with its own confidence level. An overall level of total benefits has wil also be defined.

5.5.11 The parameters have been assigned a level for each service from a menu, defined as shown in Table 4.

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

Table 4. Definition of ecosystem service levels

Level - Nil

Not present/none

Level - Minimal

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

Level - Low

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

Level - Moderate

Present/detectable, noticeable incremental change to site’s condition

Level - High

Present/detectable order of magnitude impact on sites condition

Valuation of Ecosystem Services

5.5.13 There are limited valuation data for marine ecosystem services provided by MPA features. The National Ecosystem Assessment (NEA)^[47] included a synthesis of data available up to 2010 for marine ecosystem services^[48], and there have been subsequent reviews by Potts et al.^[49] and Burdon et al.^[50], expanding it to encompass additional features, including mobile features such as sandeel, basking shark, Risso’s dolphin and minke whale.

5.5.14 A relevant source of evidence for the ecosystem services valuation is Defra's ENCA guidance^[51]. Although its services databook contains limited relevant evidence, the assets databook does include marine and coastal margins evidence, including the studies referenced above. ENCA, and the literature on marine ecosystem services, will be checked for regular updates on the evidence base suitable for marine policy appraisal in the UK.

5.5.15 Recent work on specific UK marine ecosystem services has included:

• Work by the Office for National Statistics (ONS)[52] which establishes overall UK marine values for seven ecosystem services. These provide useful context data, but are not yet subdivided to Scottish waters.
• Work on carbon storage in marine sediments (e.g. Smeaton et al [53], following the work of Burrows et al[54]).
• This work highlights the potential importance of marine habitats for carbon storage and other services, but does not provide a full understanding of sequestration rates, nor of the impacts MPA designation and management could have on the value of ecosystem services.

5.5.16 In addition, there are studies that use economic valuation techniques to assess the impacts of marine conservation measures, such as designation of and implementation of management measures in protected areas. There are a small number of such studies in the UK (e.g. McVittie and Moran^[55]; Kenter et al,^[56] Brouwer et al^[57] and Borger et al^[58]), and some further information is available from the NEA Follow-on Project^[59] and from eftec et al^[60].

5.6 Approach to assessing combined impacts

5.6.1 The combined assessment considers the combined impact of the suite of new pHPMAs.

5.6.2 For impacts to activities, the combined impact of the pHPMAs is estimated by summing the impacts for individual sites. In areas where there are adjacent sites affecting a particular activity (as identified by the distributional analysis), further consideration is 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.

5.6.3 The scale of the sectors affected in Scotland is used to provide context for assessing the significance of combined impacts to activities. Information on key sectors is drawn (where available) from the Scottish Government’s Economic Strategy, or from industry data. The significance of combined impacts is assessed taking account of 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).

5.6.4 For impacts to the public sector, a top-down approach is used to assess costs to the public sector, using national assumptions, applied at site level. Adopting an additive approach therefore provides a reasonable estimate of the combined costs.

5.6.5 For the social analysis, the assessment of combined impacts takes account of the distributional analysis to identify whether specific local communities or groups may be affected by multiple designations. Where there is the potential for multiple impacts, a qualitative assessment of the combined impacts on these communities or groups is provided.

5.6.6 For the environmental impacts, 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. HPMAs are potentially an important part of such a network, supporting healthy ecological communities to increase the resilience and strength of the network. However, scientific understanding of the relationships between individual sites and the network is limited and it is therefore difficult to provide any quantification of the combined benefits. Therefore the network benefits of pHPMAs are expected to be reported in qualitative terms.

5.6.7 A benefit of maintaining healthy marine ecosystems is that they are more resilient to external pressures. An example of this is in relation to Avian Influenza (Bird Flu). Since autumn 2021 the UK has experienced its largest outbreak of avian influenza to date, which has affected commercial and wild birds, including our internationally important seabird colonies.

5.6.8 By contributing to maintaining healthy marine ecosystems, HPMAs will improve the resilience of Scotland’s internationally important seabird populations to avian influenza. Data on the impacts of the current avian influenza outbreak is not currently available, so this benefit cannot be quantified.

5.6.9 The selection of pHPMAs will be based on the Scottish pHPMA Selection Guidelines^[61]. 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. These benefits will be reflected in Table 8 of the Site Reports in Appendix C.

5.6.10 Value Transfer techniques are used to apply existing valuation data for MPA networks to the proposals to designate the pHPMAs using a similar approach to that applied for the Nature Conservation MPA assessment^[62] and drawing on the studies referenced at Paragraph 5.5.16 above.

5.6.11 In addition to the individual site assessments, the ecosystem services impacts of the proposed management scenarios are considered collectively. This is due to the quantification and valuation of changes in individual services often not being possible due to lack of evidence, and because valuation evidence relates to sites (e.g. Kenter et al.^[63]), or networks of sites (e.g. Brander et al,^[64]).

5.7 Cumulative Assessment

5.7.1 A cumulative assessment gives consideration to how the significance of these impacts might vary when taking account of the total impact as a result of all pHPMAs combined, and current or planned renewable energy generation development to date, particularly where there is overlap between or proximity of these and new pHPMAs. Other developments including designation and management of other MPAs (e.g. NCMPAs and SACs) are also taken into account. Qualitative commentary is provided on whether this context might increase or decrease the significance of the impacts considered within this assessment.

5.7.2 This analysis will draw on information contained within:

• the Scottish Nature Conservation MPA assessment[65];
• the socio-economic assessment for the draft plan for offshore wind, wave and tidal energy^[66];
• monitoring of the impact of the implemented phase 1 measures in inshore MPAs[67]; and
• the SEIA of proposed phase 2 fisheries management measures in inshore MPAs[68];
• the SEIA of proposed fisheries management measures in offshore MPAs[69];
• the SEIA of four additional proposed Marine Protected Areas[70];
• the SEIA of the Sectoral Marine Plan for offshore wind energy;
• the SEIA of the Sectoral marine Plan for Innovation of Targeted Oil and Gas Decarbonisation (INTOG).

5.7.3 This information helps to provide context for the additional impacts estimated to occur as a result of implementation of the pHPMAs, particularly where these additional impacts will affect activities and communities that will or are experiencing impacts as a result of earlier decisions on MPAs or offshore renewables developments.

5.7.4 Information on the total impact on ecosystem services as a result of all marine environment protected areas will also be presented to provide context for the estimated impacts of the new pHPMAs on specific marine activities and provide qualitative commentary on whether this context might increase or decrease the significance of the impacts considered within this assessment. The assessments for offshore renewables did not include an assessment of ecosystem service benefits of the proposals so this is not included in the analysis. While offshore renewables developments have the potential to lead to changes in the level of ecosystem services provided by the marine environment, these changes would be expected to be more minor than those associated with MPA and HPMA designations which specifically seek to protect more important national biodiversity and geodiversity interests.