Policy Research Corporation SOUND SOLUTIONS BASED ON SCIENTIFIC RESEARCH ECONOMIC EFFECTS OF MARITIME SPATIAL PLANNING Gijon – 19 May 2010

Policy Research CorporationPolicy Research CorporationSOUNDSOUND SOLUTIONS BASED ON SCIENTIFIC RESEARCHSOLUTIONS BASED ON SCIENTIFIC RESEARCH

ECONOMIC EFFECTS OF MARITIME SPATIAL PLANNING

Gijon – 19 May 2010

© Policy Research Corporation 2

TABLE OF CONTENTS

Introduction to maritime spatial planning

The effects of maritime spatial planning

Methodological approach

Results

Conclusions and recommendations


MARITIME SPATIAL PLANNINGA short history

20052005EUROPEAN COMMISSION’S STRATEGIC OBJECTIVES 2005 – 2009

“ There is a particular need for an all-embracing maritime policy aimed at developing a thriving maritime economy, in an environmentally sustainable manner”

EUROPEAN COMMISSION’S STRATEGIC OBJECTIVES 2005 – 2009“ There is a particular need for an all-embracing maritime policy aimed at developing a

thriving maritime economy, in an environmentally sustainable manner”

20062006GREEN PAPER: TOWARDS A FUTURE MARITIME POLICY FOR THE UNION

Launch a debate about a future Maritime Policy for the EU that treats the oceans and seas in a holistic way

GREEN PAPER: TOWARDS A FUTURE MARITIME POLICY FOR THE UNIONLaunch a debate about a future Maritime Policy for the EU that treats the oceans and seas

in a holistic way

20072007

AN INTEGRATED MARITIME POLICY FOR THE EUROPEAN UNIONChange the way policy is made and decisions are taken

Develop and deliver a programme of work in Europe: Roadmap towards Maritime Spatial Planning in Member States

AN INTEGRATED MARITIME POLICY FOR THE EUROPEAN UNIONChange the way policy is made and decisions are taken

Develop and deliver a programme of work in Europe: Roadmap towards Maritime Spatial Planning in Member States

20082008 ROADMAP FOR MARITIME SPATIAL PLANNINGROADMAP FOR MARITIME SPATIAL PLANNING


ROADMAP FOR MARITIME SPATIAL PLANNING

WHY MARITIME SPATIAL PLANNING IS NECESSARYWHY MARITIME SPATIAL PLANNING IS NECESSARY

Increased activity on European seas

Increased activity on European seas Pressure on limited spacePressure on limited space

Need for a more collaborative and integrated approach

to decision-making

Need for a more collaborative and integrated approach

to decision-making

Maritime spatial planning is a tool for improved decision-making, based on 10 key principles

1. Use MSP according to area and type of activity;2. Define objectives to guide MSP;3. Develop MSP in a transparent manner;4. Encourage stakeholder participation;5. Coordinate within Member States – Simplify

decision process.

6. Ensure the legal effect of national MSP;7. Cooperate and consult cross-border-wise;8. Incorporate monitoring and evaluation in the

planning process;9. Achieve coherence between terrestrial and

Maritime Spatial Planning;10. Create a strong data and knowledge base.

MSP aims to integrate administrative functions and to improve predictability and certainty


MARITIME ACTIVITIES IN EUROPEAN SEA AREAS

MARITIME ACTIVITIES

Dumping zones Dumping of dredged materials

Fisheries Fisheries and aquaculture

Marine aggregates Sand, gravel and mineral extraction, sand and gravel transport

Maritime services Research and development, classification and inspection, bunkering, ship supply

Maritime works Dredging and ship wreck dismantling

Nautical cables and pipelines Oil and gas transportation, telecom

Navy and coastguard Defense and rescue

Offshore activities Oil and gas exploration and production, seismic research, carbon capture and storage (CCS)

Offshore supply Construction of platforms, offshore-related transport

Recreational boating Boat chartering and renting, marinas

Renewable energy Wind, waves and tide

Seaports Shipping related storage, port development

Shipping Merchant shipping, short-sea shipping, ferry services, ocean towage

Tourism at sea Diving, sailing, recreational fishing, cruise tourism

ENVIRONMENTAL AND CULTURAL ASPECTS

Coastal protection Construction of dykes, beach nourishment, dune rehabilitation, protection against climate change

Marine protected areas Areas for the sustainable use of marine resources and for the conservation of biodiversity

Quality of Life Preservation of cultural heritage, environment protection


PREVENTING CONFLICTSPressure on limited space?


A DIFFERENT PERSPECTIVE ON (POTENTIAL) CONFLICTSOverlapping, competing and new activities


OBJECTIVE OF THE STUDY

Objectives of the study on the economic effects of maritime spatial planningObjectives of the study on the economic effects of maritime spatial planning

Identify the direct economic benefits of Maritime Spatial Planning

Identify the direct economic benefits of Maritime Spatial Planning

Translate these direct economic benefits into figures

Translate these direct economic benefits into figures

How can maritime spatial planning contribute to strengthening the EU’s maritime economy


PROCESS OF IDENTIFYING AND QUANTIFYING THE ECONOMIC EFFECTS OF MARITIME SPATIAL PLANNING

Literature study Literature study Interviews with stakeholders

Interviews with stakeholders

STE

P 1

& 2

STE

P 3

STE

P 4

STE

P 5

Identifying direct economic benefits Identifying direct economic benefits

Methodology for quantifying economic

benefits

Methodology for quantifying economic

benefits

Analysis of collected data

Analysis of collected data

Identification and elaboration of case

studies

Identification and elaboration of case

studies

CONCLUSIONS AND RECOMMENDATIONSCONCLUSIONS AND

RECOMMENDATIONS


TABLE OF CONTENTS




Results



LITERATURE STUDY AND INTERVIEWS WITH STAKEHOLDERS

LITERATURE REVIEWLITERATURE REVIEW• EU initiatives, research reports, policies and communications• Information from sector associations• Articles from experts within the domain of Maritime Spatial Planning• Articles and information from HELCOM, OSPAR, BALANCE, MEPA,

…

COUNTRY VISITSCOUNTRY VISITS• Country visits in 11 Member States (Belgium, Denmark, France,

Germany, Greece, Ireland, Poland, Portugal, Spain, The Netherlands, The United Kingdom) and Norway

• In total almost 100 stakeholders were interviewed, from more than 60 organisations (governmental institutions, industry, NGOs)

SURVEYSURVEY

• A survey was sent to more than 260 other stakeholders in all European Member States with a coastline in order to collect additional information on the status of MSP, the availability of data, the responsible ministries, …

• More than 30 stakeholders responded to the survey

FEEDBACKFEEDBACK

• The final report, the country reports and the case studies were sent to all stakeholders interviewed and to the stakeholders that reacted to the survey

• More than 50 stakeholders sent us their remarks and comments

STEP 1 & 2


DIRECT ECONOMIC BENEFITS The impact of certainty and predictability

MARITIME SPATIAL PLANNINGMARITIME SPATIAL PLANNING

CERTAINTY AND PREDICTABILITYCERTAINTY AND PREDICTABILITY

1. Lower/higher coordination costs for government

1. Lower/higher coordination costs for government

2. Lower costs for companies(transaction costs)

2. Lower costs for companies(transaction costs) 3. Better investment climate3. Better investment climate

a. Acceleration of investmentsa. Acceleration of investments

b. More investmentsb. More investments

a. Lower search costsa. Lower search costs

b. Lower legal costsb. Lower legal costs

c. Lower administrative costsc. Lower administrative costs

d. Less conflictsd. Less conflicts

STEP 3


ECONOMIC BENEFITS NOT ATTRIBUTABLE TO MSPCombining activities and non-economic effects

If combining activities is economically beneficial, it will be developed by the market itself, so it is not a benefit of MSP

BUT: MSP may enhance market driven combination of uses. This is qualified as an indirect effect and not included in the study

Combining activities

EFFECTS LEFT OUTSIDE THE SCOPE OF THE STUDYEFFECTS LEFT OUTSIDE THE SCOPE OF THE STUDY

Although MSP can have substantial environmental effects, these environmental effects are not within the scope of the study.

Non-economic effects

STEP 3


TABLE OF CONTENTS




Results



METHODOLOGICAL APPROACH Restrictions

Differences between Member States of the European Union in the level of implementing

MSP

Differences between Member States of the European Union in the level of implementing

MSP

Differences between sea areas from a geological and geographical perspective

Differences between sea areas from a geological and geographical perspective

Differences between maritime activitiesDifferences between maritime activities

Measuring the economic effects of a concept like MSP cannot be done without making assumptions on a number of situations and parameters

STEP 3


COORDINATION EFFICIENCYLower/higher coordination costs for governments

The exact level of coordination costs for governments cannot be filtered out

STEP 3

MARITIME SPATIAL PLANNING LEADS TO: MARITIME SPATIAL PLANNING LEADS TO:

Integration within governmental organisationsIntegration within governmental organisations Additional monitoring, coordination and control systems

Additional monitoring, coordination and control systems

Lower administrative, employment and overhead costs per procedure or activity

Additional costs for setting up these systems

EXAMPLE OF THE COSTS AND BENEFITS FOR GOVERNMENTS RELATED TO MSP

Setting up a one-stop-shop model will in a first phase create costs as there are costs of reorganisation etc.; however, in the longer term a one-stop-shop will be more beneficial as procedures will be integrated into a single counter.

EXAMPLE OF THE COSTS AND BENEFITS FOR GOVERNMENTS RELATED TO MSP

Setting up a one-stop-shop model will in a first phase create costs as there are costs of reorganisation etc.; however, in the longer term a one-stop-shop will be more beneficial as procedures will be integrated into a single counter.


REDUCING TRANSACTION COSTSSearch, legal and administrative costs and fewer conflicts

Scenario 1: No conflicts due to industry adaptation

Scenario 1: No conflicts due to industry adaptation

In this scenario maritime industries can co-exist due to industry adaptation. The value of MSP

with regard to conflicts is nil, hence it has limited the impact on transaction costs

In this scenario maritime industries can co-exist due to industry adaptation. The value of MSP

with regard to conflicts is nil, hence it has limited the impact on transaction costs

Scenario 2: Limited and incidental conflicts

Scenario 2: Limited and incidental conflicts

In this scenario limited and incidental conflicts are concentrated around the renewable energy

industry and aquaculture industry. The value of MSP is limited to ad hoc conflicts with these

industries. Transaction costs are therefore slightly higher than in the first scenario

In this scenario limited and incidental conflicts are concentrated around the renewable energy

industry and aquaculture industry. The value of MSP is limited to ad hoc conflicts with these

industries. Transaction costs are therefore slightly higher than in the first scenario

Scenario 3: Frequent conflicts Scenario 3: Frequent conflicts

In this scenario frequent conflicts apply between the maritime industries: shipping, oil & gas,

renewable energy and aquaculture. Transaction costs are high, but are mainly allocated to the new

industries

In this scenario frequent conflicts apply between the maritime industries: shipping, oil & gas,

renewable energy and aquaculture. Transaction costs are high, but are mainly allocated to the new

industries

Scenario 4: Strong conflictsScenario 4: Strong conflicts

In this scenario strong conflicts exist between all maritime activities. Hence economic growth is now limited due to the competition for maritime space in a number of European regions and high transaction costs for all maritime activities occur.

In this scenario strong conflicts exist between all maritime activities. Hence economic growth is now limited due to the competition for maritime space in a number of European regions and high transaction costs for all maritime activities occur.

Search, legal and administrative costs differ between member states, maritime activities and marine areas

In the future, growth of maritime activities, increasing pressure on the environment and increasing claim for maritime space by new players may impose competition issues

Substantial difficulties in making valid assumptions and reliable estimations of the overall impact of MSP

SCENARIO-ANALYSIS

STEP 3


ECONOMIC GROWTH OF THE MARITIME ECONOMYMore investments

STEP 3

STAKEHOLDERSSTAKEHOLDERS Aquaculture will most probably incur more investments due to MSP Aquaculture will most probably incur more investments due to MSP

There are several other factors such as pressure on fish stocks

that will create a strong autonomous growth of

aquaculture

There are several other factors such as pressure on fish stocks

that will create a strong autonomous growth of

aquaculture

There is a lack of data on how many investors are withheld from making investments in

aquaculture

There is a lack of data on how many investors are withheld from making investments in

aquaculture

The estimation of additional growth due to MSP, e.g. within the aquaculture industry, is difficult


ECONOMIC GROWTH OF THE MARITIME ECONOMYAccelerating economic activity

Calculation of accelerated economic activity assuming a 4% interest rateCalculation of accelerated economic activity assuming a 4% interest rate

Step 1: - Analyse what activities are eligible for acceleration

Step 2:- Calculate the capital gains of accelerating economic activity

STEP 3

Based on stakeholder consultation it was found that two industries are eligible for acceleration of planned investments: offshore wind energy and aquaculture


TABLE OF CONTENTS




Results



ESTIMATED VALUE ADDED OF MARITIME ACTIVITIES IN EUROPE

The three maritime activities that create the most estimated value added are: oil and gas, shipping and offshore wind energy

STEP 4

n.a.0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

Shipp

ing

Cruise

tour

ism

Dredg

ing

Oil an

d gas

Offsho

re w

ind

ener

gy

Wav

e and

tida

l ene

rgy

Fishing

Aquac

ultur

e

Mar

ine t

ouris

m

€ m

illi

on 2010

2020

2030

2010: € 104 billion2020: € 134 billion2030: € 178 billion

2010: € 104 billion2020: € 134 billion2030: € 178 billion


RESULTS OF THE STUDYReducing transaction costs

€ million – Δ 1% transaction costs

Scenario 1 Scenario 2 Scenario 3 Scenario 4

20200

170 1 240 1 340

2030 420 1 680 1 790

STEP 4

If MSP is to reduce only 1% in transaction costs for all scenarios, the following value added would be created

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Scenario 1 Scenario 2 Scenario 3 Scenario 4€

mill

ion 2020

2030

Transaction costs could be reduced by almost € 2 billion due to MSP in 2030. This result should however be interpreted with great care as it is only an estimation.


RESULTS OF THE STUDYEnhancing investment climate

Acceleration aquaculture 1 year 2 years 3 years

2020 € 2 € 8 € 19

2030 € 3 € 12 € 27

Acceleration wind farms 1 year 2 years 3 years

2020 € 60 € 260 € 610

2030 € 150 € 650 € 1 570

STEP 4

Acceleration of wind farmsAcceleration of aqua farms

0

5

10

15

20

25

30

1 year 2 years 3 years

number of years of acceleration

€ m

illi

on 2020

2030

0

200

400

600

800

1000

1200

1400

1600

1800

1 year 2 years 3 years

number of years of acceleration

€ m

illi

on 2020

2030

With the expected growth of offshore wind energy, it is especially in this sector that a lot of benefits can be created due to MSP


TABLE OF CONTENTS




Results



CONCLUSIONSSTEP 5

20102010

There are only few places in European Seas where there is limited maritime space

There are only few places in European Seas where there is limited maritime space

The benefits of MSP are limited

2020 - 20302020 - 2030

Due to growing maritime activities and the upswing of new maritime activities

there will be increasing pressure on space

Due to growing maritime activities and the upswing of new maritime activities

there will be increasing pressure on space

The benefits of MSP will increase

Due to lack of data and a large number of parameters (e.g. location and type of activity), there are difficulties in quantifying the economic benefits of MSP

To provide an indication: MSP could create economic benefits of almost € 2 billion in 2020 by reducing transaction costs and about € 1.5 billion by accelerating aquaculture and offshore

wind farms


RECOMMENDATIONS

Traditional versus new industriesTraditional industries such as fisheries should cooperate closely with national governments, to have their interests incorporated in every Member State’s Maritime Spatial Plan

MSP implementation & societal interests

Structuring MSP according to the most valuable activities per Member State will create the highest economic value of MSP

Cross-border cooperationInternational alignment of both environmental and economic regulations and relevant technical aspects will create substantial benefits

Exchanging best practicesThe exchange of best practices should be centralised and easily accessible for contributions of all relevant stakeholders

Data and knowledge baseFor MSP to be successful, the transparency of governmental institutions involved in the maritime arena needs to be enhanced significantly

STEP 5


QUESTIONS?

Tom ThijssensDirector

Policy Research [email protected]

Documents

Policy Research Corporation SOUND SOLUTIONS BASED ON SCIENTIFIC RESEARCH ECONOMIC EFFECTS OF MARITIME SPATIAL PLANNING Gijon – 19 May 2010