Economic impact of nature conservation management

1. Economic impact of nature conservation management Rob Tinch Environmental Futures Ltd. Environmental Futures Ltd.

2. Outline • Reminder of EEA context • Brief discussion of conceptual and methodological issues • Small, random assortment of evidence • A few suggestions / questions Environmental Futures Ltd.

3. EEA Context Is it feasible to measure, given existing models and data? Environmental Futures Ltd.

4. Strands of EEA context • Valuation of economic damage due to loss of biodiversity; alternatively assessing the economic value of maintaining biodiversity through conservation policy; • Review of cost-effectiveness of (alternative) biodiversity conservation policies and instruments; • Economic impact (gained income, jobs) of biodiversity conservation management; • Developing SEBI2010 indicators. • Not included: assessing the implications for biodiversity of expanding economic activity (drivers). Environmental Futures Ltd.

5. Background text • Expenditures and fiscal advantages on biodiversity management • economic activities • yield income and create jobs • Relevant to Lisbon agenda • Not widely investigated • Inventory / assessment on a case study basis • Test the feasibility of a wider approach. Environmental Futures Ltd.

6. Concepts and Methods Environmental Futures Ltd.

7. Economic and Social • Economic benefits:from ecosystem services, provision of food and timber products, activities such as tourism, training and education, and the direct sale of products. This can lead to significant local income and employment gains as well as wider regional development benefits. • Social benefits: broader employment and diversification opportunities for local people leading to greater economic stability and improved living conditions; strengthened sense of place and social identity; safeguarded cultural/natural heritage; more opportunity for environmental education and leisure, health and amenity. Environmental Futures Ltd.

8. Economic and Social II • Overlapping definitions: double counting? • Focus on distribution not efficiency • Economic value via services and valuation • jobs / expenditure not a good proxy • e.g. digging and filling in holes... • dangerous if confusion on jobs and value • “the focus in the EU seems to be rather on the economic and social objectives... than on the environmental pillar” Environmental Futures Ltd.

9. Focus on social benefits • Remote rural areas: • few alternative jobs • little scope for diversification • Supplementary income opportunities where conservation part of a pattern of pluri-activity • Tourism: secondary employment opportunities • larger economic impact than land management • social or general economic? • Keeps ecologists off the streets... Environmental Futures Ltd.

10. Key measures • Direct jobs from nature conservation • Indirect jobs in tourism • Jobs in industries supported by services • fisheries; forestry; low input agriculture • Social focus (economics covered) • location specific • more than just jobs / income (indicators??) • where are the boundaries? Environmental Futures Ltd.

11. Basic approaches • Econometric models (e.g. expenditure/jobs panel data): • attempt to identify effects of multiple statistical relationships • do not account for underlying economy-wide structure. • Simulation models (e.g. input-output, social accounting matrices) • snapshot of economy-wide linkages • hold these constant when estimating the effects of subsequent changes. Environmental Futures Ltd.

12. Evidence (quickly and randomly selected) Environmental Futures Ltd.

13. Employment Creation and Environmental Policy (PPRA 2000) • Research in three broad categories: • macro effects of environmental policies on competitiveness and consequent levels of employment • sector specific studies • assessment of what skills are required to fill potential new jobs in sustainable industries. Environmental Futures Ltd.

14. Literature evidence • No evidence that environmental policy has damaged the competitiveness of any country • Most models predict positive employment impacts (variety of different assumptions, model types, world regions) • Environmentally sensitive agriculture and forestry is generally thought to be more labour intensive • The creation of better habitats and rural environments also offers spin off employment in the tourism sector Environmental Futures Ltd.

15. Promoting the Socio-Economic Benefits of Natura 2000 (IEEP 2002) • EU: around 125,000 jobs via nature protection related activities in 1999 (ECOTEC, 2001). • 3 to 5 FTE jobs created directly by Natura 2000 site related activities = 1 more job by impact of revenue from site related activities • If site prime reason for tourist visit, one job for site-related activities can support 4–6 additional jobs through tourist expenditure. • Smaller areas suffer more leakage of benefits so have a smaller multiplier effect. • correct level of aggregation to avoid double-counting? Environmental Futures Ltd.

16. Getzner and Jungmeier (2002) • Regional economic impact of Natura 2000 conservation sites in Austria • Establishment of Natura 2000 conservation areas leads to at least small positive economic implications (local and regional value added, increased employment) • In single cases of land use conflicts, there might also be negative economic effects. • Main regional development opportunities are in the fields of tourism; and to a smaller extent in agriculture, forestry, hunting and fisheries. Environmental Futures Ltd.

17. Agricultural payments • Single farm payments: cut UK agriculture labour 3-7 % • In addition to a continuing declining trend • Industries supplying agriculture or dependent on its output: 1-2% fall in employment. • Increased opportunities for employment in higher value added or other land based enterprises. • Stewardship schemes – research to be commissioned by Defra 2006/7 • How to split impacts between conservation, agricultural support, removing distortion of CAP? Environmental Futures Ltd.

18. Suggestions / Questions for further discussion Environmental Futures Ltd.

19. Supporting actions (IEEP) • Benefits not independent of management: • Conservation sites, benefits, values need integrated into local, rural, regional, national development plans • Ensure inclusion of conservation sites in tourist information (often overlooked) • Investment in information centres, tourist accommodation, walking and cycling paths. • How should we account for this in measuring benefits of conservation spending? Environmental Futures Ltd.

20. What about volunteers? • RSPB: over 20,000 volunteers • BTCV: 130,000 volunteers each year • Wildlife Trusts: more than 24,000 active volunteers • Similar picture in Europe? • Volunteers benefit from volunteering • Important part of social sustainability Environmental Futures Ltd.

21. Benefits transfer approach? • Economic value studies used for transfer • Do same for employment / economic multiplier studies? • fits with case-study approach • measure site-specific variables • area, accessibility, catchment, diversity, facilities, publicity, support... • meta-analysis for transfer • could this fit with rapid / remote assessment at EU level? Environmental Futures Ltd.

22. Economic valuation? • “Rather than focusing on income and expenditure ... measures of cost of the sector, WTP gives some idea of the benefits ... to society” (Foster et al, “The Price of Virtue”) • Consider pros/cons of translating social and employment impacts into monetary terms: why not just use shadow wages? • What about other social benefits not covered by jobs or income? Environmental Futures Ltd.

23. Dynamics? • Need to consider dynamics? • changing economies (at different scales) • ecosystem dynamics • climate change • implications for nature conservation • What are the implications for assessment of social benefits of nature conservation? Environmental Futures Ltd.

24. Conclusions • Feasible to assess at EU level? • probably • Worth funding a lit review / feasibility study? • yes • Great care needed to keep concepts and methods clear: • what is being counted • where are risks of double counting • what is not covered at all Environmental Futures Ltd.