What's in the Sea for Me?

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report 5872 • february 2009

What’s in the Sea for Me?Ecosystem Services Provided by

the Baltic Sea and Skagerrak

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In his work Oeconomica naturae (the Economy of Nature) Linnaeus pointed out that if we cared more about natural science, we would notice more and greater wonders in nature, and at the same time contribute greatly to ”the improvement of our economy”.

OrdersPhone: +46 (8)-505 933 40fax: +46 (8)-505 933 99e-post: [email protected]: CM Gruppen ab, box 110 93, Se-161 11 bromma, SwedenInternet: www.naturvardsverket.se/bokhandeln The Swedish Environmental Protection AgencyPhone: +46 (8)-698 10 00, fax: 08-20 29 25e-post: [email protected]: Naturvårdsverket, Se-106 48 Stockholm, SwedenInternet: www.naturvardsverket.se ISbN 978-91-620-5872-2.pdfISSN 0282-7298 © Naturvårdsverket 2009 Printed by: CM Gruppen abGraphic design: Johan resele/Global reporting Photo: When no other source is given: Johan resele/Global reporting

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The Swedish Government has instructed the Environmental Protection Agency to compile information on the economic implications of human impacts on the Baltic Sea and Skagerrak1. Katrin Zimmer has been projectleader.

The target groups for this report are politicians and decision makers in the countries bordering the Baltic Sea. Its aim is to gather and describe existing literature on– the economic value of marine ecosystem services;– the economic effects on the Baltic Sea and Skagerrak if no further measures are

taken, as compared with the implementation of further measures;– the cost of measures needed to ensure the most favourable economic outcome pos-

sible and the economic benefit of those measures.

In addition to this report, the Economic Marine Information project includes the seven background reports listed in Appendix 1. Researchers and other colleagues in coun-tries bordering the Baltic Sea, particularly Finland, have also contributed information and research findings.

Stockholm, February 2009Swedish Environmental Protection Agency

Preface

1 The project defines the Baltic Sea and the Skagerrak as the waters of the Bothnian Bay, the Bothnian Sea, the Gulf of Finland, the Gulf of Riga, the Baltic Proper, the Danish Straits, the Kattegat and the Swedish coast of the Skagerrak.

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Contents

What’s in the Sea for Me? 5 Summary and Conclusions 5 1. Introduction 10 1.1. Government Assignment 10 1.2. Background reports 10 1.3. Cooperation with all Baltic Sea States 11 1.4. Synthesis report 11 2. Marine ecosystem Services 12 2.1. Four Kinds of ecosystem Services 14 2.2. Most ecosystem Services are under threat 17 2.3. What is Going to happen? 18 3. the economics of ecosystem Services 23 3.1. eutrophication 25 3.2. Fisheries 27 3.4. tourism and recreation 30 3.5. Hazardous Substances 31 3.6. Invasive alien Species 33 3.7. oil Discharges and Litter 33 4. the Need for further research 35 Background reports on the Sub-projects under the Swedish epA project “economic Marine Information”. 37

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What’s in the Sea for Me?Summary and Conclusions

Everyone living in countries bordering the Baltic Sea and Skagerrak associates these seas with assets of great value. These include fisheries, culture, recreation and tourism. They also include biodiversity and the sea’s ability to cleanse pollutants. There are gaps in our knowledge, yet we know that the value of the many services provided by the sea greatly exceeds the cost of preserving them. The gaps in our knowledge not-withstanding, all the indications are that the collective value of marine ecosystem services is so great that we cannot afford to lose them. We must act now.

“What’s in the sea for me?” is a synthesis report as part of a government-instigated Swedish Environmental Protection Agency project, Economic Marine Infor-mation. The report describes current knowledge on the economic consequences of human impact on the Baltic Sea and Skagerrak. What will it cost if no further action is taken, as compared with the implementation of remedial measures?

This survey of knowledge adds to the background material used as a basis for the economic assessments being made by all countries bordering the Baltic Sea in relation to their commitments under the Baltic Sea Action Plan (BSAP). Assessments of this kind are also an important part of the EC Marine Directives.

The project Economic Marine Information focuses on ecosystem services provided by the sea, i.e. the prod-ucts, services and processes that nature offers man. Twenty-four ecosystem services are examined; almost all of them are dependent on one another.

Cultural ecosystem services offer recreation, such as the opportunity to take a swim, and aesthetic value, such as enjoying beautiful views. They contribute to

education and scientific information. The ecosystem services produced by the sea include the fish and the shellfish we catch, as well as the potential for using wave energy. Almost all services are heavily dependent on supporting and regulating ecosystem services such as biodiversity, habitat and biological regulation.

Although many ecosystem services are far from inex-haustible, they are naturally taken for granted. Osten-sibly, it does not cost anything to use them, which means they are often overused. At present most eco-system services are under threat. Of the 24 ecosystem services described here, only ten are operating prop-erly in the Baltic Sea. Seven are severely threatened, including four of the six supporting services. The four are: the food web, biodiversity, habitats and Baltic Sea resilience, i.e. capacity to recover.

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The influx of nutrients may diminish in the future, but discernible effects will probably not be seen until several decades have passed. Overexploitation of the most commercially sought-after fish species represents a threat to the entire system. Yet this is the area offer-ing the greatest potential for rapid improvements.

Future threats facing many ecosystem services are effects of climate change, including marine eutrophi-cation, and the fact that increasing numbers of invasive alien species are jeopardising the balance of Baltic Sea and Skagerrak ecosystems. The rapid growth of ship-ping also brings a greater risk of oil spills and major incidents involving oil. Awareness that chemicals are hazardous to the environment is growing all the time, and new dispersal routes are constantly being identi-fied. The pressure for development for various purpos-es creates increasingly intense competition for avail-able space. This also creates doubts about the overall effect of many threats and risks. This should be taken into account.

The threats facing Baltic Sea and Skagerrak ecosys-tem services have been well documented, not least in the HELCOM Baltic Sea Action Plan (BSAP). Current knowledge often enables us to specify the impact that various industrial facilities and sectors have on eco-system services. Descriptions of what the sea gives us, expressed in economic terms, are much rarer, as are esti-mates of what it will cost to postpone necessary action.

The major known negative impacts on Baltic Sea eco-system services at present are eutrophication and over-fishing. And it is in these areas that most economic studies have been made – studies that show that action is not only necessary to maintain ecosystem services, but that such action is also economically profitable.

It would be economically profitable to end Baltic Sea eutrophication in line with one of the BSAP objectives. Model calculations and valuation studies suggest an overall profit for all countries of just over €2 billion a year, although there are large differences between the various Baltic Sea States.

The Swedish Board of Fisheries has identified nine economically profitable measures to stop overfishing, thereby increasing the capacity of the Baltic Sea to produce more fish. These include reducing fishing fleet capacity and changing regulations governing fishing methods. One estimate suggests that lower cod quotas could rapidly result in larger catches.

The Economic Marine Information project is based on collaboration between scientists and experts in all Baltic Sea States. In one of the seven background rep-orts representatives from the countries have identified priority areas for research to increase our knowledge of the Baltic Sea’s economic value. Several of the other background reports give further suggestions for data and knowledge that are needed.

Scientific research is needed into the structure of eco-system services and the way they interact, development of models, analysis of uncertainties and risks, and of the cost of various forms of action. There is a need to develop instruments in areas where needs and effects are relatively well known. Studies in the field of politi-cal science can analyse the prospects of implementing international agreements in various countries. There is a need in all areas for further improvement in coop-eration between Baltic Sea States to obtain data and models that the countries are able to accept as a basis for new decisions.

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The effects of eutrophication become immediately visible for short periods when algal blooms create “rhubarb soup” in some coastal areas. But the problems of eutrophication are ever-present below the surface. Excessive quantities of the nutrients nitrogen and phosphorus reach the sea, particularly from agricultural land and sewers. Phytoplankton production explodes, secchi depth (transparency) deteriorates and decomposing plankton consume too much oxygen, which results in dead sea bed areas.

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Growing Interest in the Marine environment in the eu and elsewhere Overfishing, major oil spills and eutrophication have caused the marine environment to climb up the politi-cal agenda over the last ten years, both in the EU and in other international alliances. Over the past few years marine environment, the risk of climate change and globalisation have further added to the interest in marine issues.

The five most important organisations for coopera-tion on our marine areas are HELCOM (the Helsinki Commission, which includes the Baltic Sea), OSPAR (the Oslo-Paris Commission, which covers the North Atlantic), EU, IMO (the International Maritime Orga- nisation, a UN body) and ICES (the International Council for Exploration of the Sea, which covers the North Atlantic, including the North Sea and Baltic). Conventions have been drawn up by some of these organisations.

The marine conventions were originally mainly aimed at pollution. The focus gradually widened to include nature conservation, and later also sustainable devel-opment.

EU member states have an integrated system of regula-tions governing agriculture and fisheries. The first EC Marine Directive, which deals with the marine envi-ronment, entered into force in 2008, and is based on the EU’s marine strategy, which preceded it by a num-ber of years. A draft maritime policy, aimed at ship-ping and fisheries, is currently being formulated by the EU. In 2009 the EU will also present a strategy for the Baltic Sea region, whose objectives will be economic growth, developing infrastructure, increased security and a better environment.

In 2003 the environment ministers under HELCOM and OSPAR adopted a declaration that the two com-missions would work together and with the EU. The

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declaration covers the ecosystem approach, the EU marine strategy, conservation of biodiversity, and also the environmental impacts of fisheries and shipping.

The HELCOM Baltic Sea Action Plan (BSAP) was adopted in November 2007. The aims are that the Bal- tic Sea should be unaffected by eutrophication, undis-turbed by hazardous substances, that it should have environmental friendly maritime activities, and a fav-ourable conservation status of biodiversity. A further feature of BSAP is that the Baltic Sea should serve as a pilot area for implementation of EC Marine Direc-tives.

Resolutions adopted by the EU are binding on member states, unlike convention resolutions, which serve as recommendations. Under the marine strategy, marine areas in the EU should have achieved good environ-mental status by 2021. This is the year that also applies for the objectives of BSAP, whose 150 measures should be initiated by 2016. The EC Water Framework Direc-tive provides that lakes, rivers, streams and coastal waters should achieve good ecological status by 2015.

Other EC directives affecting the Baltic Sea and Skagerrak are the Wastewater Directive, the Nitrates Directive, the Common Agricultural Policy (CAP),

20102009 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

EU strategy for the Baltic

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Definition of“good environ-mental status”


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achievedStatusreport

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policy

“ In order to protect the environment, the precautionary ap-proach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversi-ble damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to pre-vent environmental degradation.”

from the rio declaration, uN Conference on environment

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the Common Fisheries Policy CFP), the Habitats and Birds Directive, as well as chemicals legislation in the form of the REACH Regulation and the EU recom-mendation on integrated coastal management.

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THE BALTIC SEA the surface area of the baltic Sea is 377,400 km2, which is almost as large as Sweden. the surface area of the catchment is approximately 1.7 million km2. this means that the water flowing into the baltic comes from a catchment four times larger than the sea itself – a catchment with a population of 90 million.

the brackish water of the baltic is a mixture of sea water from the North Sea and fresh water from rivers. the salinity of the surface water varies from around 2 per cent in the kattegat to 0.1– 0.2 per cent in the northernmost bothnian bay and easternmost bay offinland, as compared with 3.5 per cent in the open sea. It takes 25– 50 years for baltic Sea water to be re-placed via the öresund and the little and Great belts.

the baltic is a shallow sea. Its average depth is ap-proximately 55 metres. It reaches a maximum depth of 459 metres at landsort deep in the Stockholm archipelago.

only a few species can live in brackish water, and they are more sensitive to change than saltwater and fresh-water species. Sprat, cod and herring are the most common fish. the baltic is also home to salmon, pike, bass, zander (pike-perch), flounder, dab, turbot and eel.

THE SKAGERRAK More species can live here. the salinity of the Skager-rak is around 3.5 per cent, which is the same as the open atlantic. there are around 5,000 species in the Skagerrak, which is ten times more than in the baltic. Some 130 species of fish are found along the bohus coast. the sea bed provides a habitat for several hundred species of algae and several thousand animal species.

the eastern Skagerrak is impacted by brackish water from the kattegat and baltic Sea.

The Baltic Catchment Area

Source: Stockholm Marine research Centre

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2 The Economics of Climate Change – the Stern Review by Nicholas Stern, published in October 2006.

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N Introduction

1.1. Government AssignmentThe Swedish EPA has produced this report at the insti-gation of the Swedish Government. The “Economic Marine Information” project was inspired by the Stern Review2 in 2006, which presented an analysis of the economics of climate change.

The aim of this project is to use existing studies and reports as a basis for a clear description of the eco-nomic implications of human impacts on the Baltic Sea, Skagerrak and their coastal areas. What will hap-pen if no further action is taken, as compared with a scenario where action is taken? The project includesF examining the economic value of, for example,

ecosystem services dependent on the water quality in the Baltic Sea and Skagerrak – services that will decline or be lost entirely if nothing more is done;

F estimating the cost of the measures needed to mini-mise the economic losses;

F estimating the economic benefits of the measures proposed;

F describing gaps in our knowledge.

1.2. Background ReportsThe gathering of existing material resulted in seven background reports in 2007 and 2008, written at the instigation of the Swedish EPA. This synthesis report summarises the background reports, which cover:

F Ecosystem Services Provided by the Baltic Sea and Skagerrak, Kajsa Garpe, Report 5873.

F The Economic Value of Ecosystem Services Provided

by the Baltic Sea and Skagerrak – Existing Infor- mation and Gaps of Knowledge, Linus Hasselström, and Tore Söderqvist, Enveco Environmental Econo- mics Consultancy Ltd., Stockholm, Report 5874.

F Trends and Scenarios Exemplifying the Future of the Baltic Sea and Skagerrak – Ecological Impacts of Not Taking Action, Martina Kadin, Baltic Nest Institute/Stockholm Resilience Center, Report 5875

F The Costs of Environmental Improvements in the Baltic Sea and Skagerrak – A Review of the Litera-ture, Katarina Elofsson, Swedish University of Agri- cultural Sciences, Report 5876.

F Costs and Benefits from Nutrient Reductions to the Baltic Sea. Ing-Marie Gren, Report 5877.

F Tourism and Recreation Industries in the Baltic Sea Area – How are they Affected by the State of the Marine Environment? An interview study. Linus Hasselström, Enveco Environmental Economics Consultancy Ltd., Stockholm. Report 5878.

F Economic Information Regarding Fisheries. Swedish Board of Fisheries, Johanna Andréasson. Report 5879.

1.3. Cooperation with all Baltic Sea StatesThe background reports have been written in English because experts from all countries bordering the Bal-tic have been involved. The relevant public agencies in the Baltic Sea States have had the opportunity to com-ment. The countries have also been invited to partici-pate in a reference group comprising their HELCOM

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(Helsinki Commission) representatives. All countries have received regular information and have been in-vited to two working meetings.

The Baltic Sea States have also been directly involved in the preparation of the reports on valuation studies and interview studies in the tourism industry. The Swe- dish EPA has worked closely with Finland, since Fin-land is involved in a similar project, and we have been able to include the conclusions from the Finnish pre-study in this synthesis report3.

Several of those involved in producing the background reports also belong to the team of scientists and experts who have applied to conduct a larger study: Baltic-STERN4.

1.4. Synthesis Report A draft version of this report – the synthesis report – has been distributed to 57 referral bodies, including water agencies, the Marine Environment Coordina- tion Group and the Marine Environment Council in Sweden.

Sums of money in the synthesis report are given in 2007 prices, based on the average annual consumer prices index in each country, and in euros at the exchange rate in each country on 1 January 2008. Sources of information not specified in the background reports are given in footnotes.

Chapter 2 describes the value of the ecosystem serv-ices we derive from the Baltic Sea and Skagerrak and how those services interrelate, whether they are being used sustainably or are under serious threat. Chapter 3 deals with the economics of ecosystem services based on current knowledge. Conclusions and the need for further information are presented in a concluding chapter.

3 “The Economics of the State of the Baltic Sea – pre-study assessing the feasibility of a cost-benefit analysis of protecting the Baltic Sea ecosystem”, in collaboration between MTT (Agrifood Research Finland), SYKE (Finnish Environment Institute), Helsinki University and the Finnish Marine Research Institute.

4 Baltic Systems Tool for Ecological-economic evaluation – a Refined Nest-model

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2Marine Ecosystem Services

WHAT IS An ECOSySTEm?an ecosystem has no clearly defined boundaries. It is a complicated system, an ecological unit of human beings, plants, animals, fungi and micro-organisms in interplay with their surroundings. a single lake, a river, stream or a whole region can count as an ecosystem. all descriptions of a clearly defined ecosystem presuppose that the ecosystem is in turn dependent on adjoining ecosystems. Most ecosystems are founded on photosynthesis, i.e. conversion of carbon dioxide into oxygen and sugars with the help of solar energy.

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Ecosystem services are the products, services and processes nature offers to man. The fish we catch are an ecosystem service just as much as the degradation of environmental toxins in seabed sediment, clean water to swim in or wave energy. Although many eco-system services are far from inexhaustible, they are often taken for granted.

The definition of ecosystem services is based on the UN Millennium Ecosystem Assessment5 (MA). Between 2001 and 2005 1,360 researchers and other experts were involved in the process of assessing global ecosys-tems and the services they provide for us. According to the assessment,“human activity has changed global ecosystems more rapidly and profoundly over the past 50 years than at any other time in human history”. MA considers that some 60 per cent of the ecosystem serv-ices that support live on earth are being destroyed or used unsustainably. These include fresh water, fisher-ies, natural regulation of air and water quality, climate and the ability to cure diseases. MA warns that the harmful effects of this degradation may become much worse over the next 50 years.

Using MA and the Stern Review as a basis, the EU Commission and Germany have produced “The Eco-nomics of Ecosystem Biodiversity” (2008) as part of a project set to continue until autumn 2010. The report examines the pricing of ecosystem services and the difficulties involved. Like the Stern Review, the report also considers the ethical question of handing on a sustainable environment to future generations.

This chapter, which is mainly based on reports 5873 and 5875, describes the ecosystem services provided by the Baltic Sea and Skagerrak, and whether they being used sustainably or are seriously threatened. Ecosystem services may also be underused, and could provide man and society with more products and serv-ices than is currently the case.

5 See also http://www.millenniumassessment.org/

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2.1. Four Kinds of Ecosystem ServicesMarine ecosystem services can be divided into provisioning, cultural, supporting and regulating services, i.e. the classification used in the UN Millennium Ecosystem Assessment. A total of 24 marine ecosystem services are identified.

These services are interlinked. A provisioning ecosystem service such as fish and a cultural service such as tourism are often valued in economic terms. Yet supporting ecosystem services such as production of phytoplankton, or regulating services such as degradation of environmental toxins are rarely valued, even though they are essential to fisheries, for example.

provisioning ecosystem Services:F Food – fish, shellfish, algae, etc.F Inedible goods – sand, rocks, oil, algae, drinking

water, industrial waterF Energy – wave energyF Space and waterways – for shipping and wind

turbines F Chemicals – in medicines, biotechnology, cosmeticsF Ornamental resources – seashells, driftwood, amberF Genetic resources – DNA

Supporting ecosystem Services:F Biogeochemical cycles – nutrient cycle (nitrogen

and phosphorus), carbon and oxygen, including the water cycle

F Primary production – production of phytoplankton and algae from sunlight and nutrients (photosyn-thesis), which is the basis for all life.

F Food web dynamics – who eats whom? Structure of the food chain from formation of phytoplankton to decomposition of dead animals and plants.

F Biodiversity – variation of plants, animals and other organisms at all levels

F Habitats – the differing habitats of all species, which are essential for a species to grow and sur-vive, e.g., sea grass meadows in which fish fry can hide.

F Resilience – the ability to cope with change, ecosys-tems’ resistance and ability to recover.

regulating ecosystem Services:F Impact climate and air quality – absorption of car-

bon dioxide and production of oxygen. Together, the oceans of the world produce more oxygen than do the rain forests.

F Sediment retention – vegetation binding sediment reduces the risk of erosion.

F Less eutrophication – surplus nitrogen and phos-phorus can be cycled by organisms, particularly mussels.

F Biological regulation – one organism regulates the surplus of another, maintaining the balance between species. One species may also create the right conditions for another, e.g., by grazing a rocky sea bed, thereby enabling bladder wrack to attach itself to the rocks.

F Regulation of pollutants – hazardous substances can be degraded or stored in sediment. By being stored in sediment, environmental toxins are tem-porarily removed from flows in the ecosystem.

Cultural ecosystem Services:F Recreation – tourism, swimming, boating, sport

fishing and bird watching.F Aesthetic value – enjoyment of scenery and silence

(apart from the lapping of the waves and bird calls), clear water.

F Science and education – environmental studies for all ages, research material, data for museums and aquariums.

F Cultural heritage – historic shipwrecks, prehistoric finds, coastal communities, fishing villages and spas.

F Inspiration – source of inspiration for art, literature, music, films and advertising.

F The legacy of the sea – preservation of nature for ethical reasons, from our ancestors for future gen-erations.

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ECOSYSTEM SERVICES are the products, services and processes than nature offers man and that are essential to our survival, welfare and societal development. The various processes below the surface interact and are essential in order to derive economic benefits.

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Source: Report 5873

Sediment retention

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PHoto: Per MaGNuS PerSSoN/JoHNér bIldbyrå

the value the Sea ProvidesWhen we think of the services the sea provides, per-haps we first think of food such as fish, and the oppor-tunity to go swimming. But the sea gives us so much more that many of us greatly appreciate on the basis of economic, cultural and ethical values.

Cultural ecosystem services offer recreation and the opportunity to enjoy beautiful scenery. They contrib-ute to education and scientific information, and to our cultural heritage. Books, films, paintings, folk-lore, music, architecture and advertising often employ motifs from the coast and sea. The Danish “Skagen Group” painters were inspired by the sea and light along Denmark’s north coast.

If tourism reflects concern for nature, it can also con-tribute to local, regional and national sustainable development. Tourism is predicated on clean beaches to visit or clear water to swim or sail in. The sea has also always offered routes for trade and cultural ex-change.

The sea also stimulates children and adults alike to learn more about the environment in general. All the countries bordering the Baltic Sea are committed to increasing awareness and understanding of the marine ecosystem. This includes school trips, museums, nature centres, aquariums, research and seminars. Activities like these also create many jobs.

The Baltic Sea and Skagerrak are also at the centre of numerous research projects. Scientists are studying ancient coastlines, fossils and geochemical changes in sediment core samples so as to better understand how the environment has changed. They will then be better able to predict future changes.

Marine provisioning ecosystem services include more than fish and shellfish. There is a growing market for health foods based on algae and seaweed. Algae from the sea can be used as fertiliser and are often used in the food and cosmetics industries as a thickener in creams. Products derived from algae, kelp and red algae are found in ice-cream, shampoo, paint, tooth-paste, yoghurt and pet food.

Provisioning ecosystem services such as fish, shellfish, sand, industrial water and amber are well known. The technology used to convert sea water into drinking water is fairly new and demand is growing. There are around 400 – 500 desalination plants in the Stockholm archipelago. The cleaner the sea water, the more reli-

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6 Kaj Öhman, land technician at Probitas/Stensnäs Kurs & Konferens, October 2008, www.probitas.se

August Strindberg’s poem “Song of the Waves” and his painting “xxxxxxx”. A quarter of all 20th century paintings on display at the National Museum in Stockholm have motifs from coast and sea. It might be possible to work out the economic value of the sea as a source of inspiration by ascertaining people’s willingness to pay.

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able the quality of drinking water and the lower the cost of maintaining the equipment6.

Another example is glue from mussel excreta, which can be used in dentistry, electronics and construction. The Baltic Sea and Skagerrak also contain many spe-cies that are or can be used in the pharmaceutical and biotechnology industries. The sea provides us with genetic material that may be essential for restoring degraded habitats or endangered populations.

all these types of value are based on the Sup-porting and regulating Services Provided by the Sea.Photosynthesis results in primary production. The two ecosystem services that have greatest impact on the extent of primary production are the biogeochemical cycle (particularly nutrient, water and carbon cycles), and the capacity of the sea to regulate climate. The

biogeochemical cycle and climate regulation impact virtually all other ecosystem services, including each other.

Marine primary production in the form of plankton and marine vegetation form the basis for the diversity, food web and habitats of supporting ecosystem serv-ices. Together, these produce the various products and services that are of direct benefit to man. Diversity, the food web and habitats also preserve resilience, i.e. the capacity of the sea to recover from perturbation.

Perturbations are dealt with by regulating services in a properly functioning ecosystem. In the marine eco-system mitigation of eutrophication, biological regu-lation, sediment retention and regulation of pollutants help to preserve diversity, the food web, habitat and resilience. Regulating services remedy perturbations of natural or, increasingly often, anthropogenic origin.

Energy and space for transport (waterways) and con-struction are among the few services that are not

Song of the Waves

It’s we we the waves who rock the winds when they are weary!We are green cradles, rocking.We are wet waves and salty,we’re like flames of fire,flames of water are we.Quenching and burning andcleansing and bathing andbreeding, cleaning. It’s we we the waves who rock the winds when they are weary!

Translation: Anne-Charlotte Hanes Harvey

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Common sea mussels filter sea water for food and can help to counteract eutrophication by being harvested and used as food, animal feed and ferti-liser. Mussels can even be farmed as a way of treating waste water, although they cannot then be used as food.

directly dependent on supporting and regulating eco-system services. However, they may in turn have an adverse impact on other services such as diversity, the food web and habitats.

2.2. Most Ecosystem Services are under ThreatPerturbations are dealt with by regulating services in a properly functioning marine ecosystem. At present many regulating ecosystem services are under stress, since they are trying to cope with other ecosystem services that are chronically stressed. If the climate changes in the way predicted by scientific climate mod-els, the regulating services will be even more severely affected.

Eutrophication and overfishing are the main causes of ecosystem destruction in the Baltic Sea and the Ska-gerrak. At present there are restrictions on using fish from the Baltic Sea as food because they contain diox-ins and PCBs in concentrations above the permitted limits. One major problem is that we do not yet fully understand the reasons for these high concentrations.

Only 10 of the 24 ecosystem services described are operating properly in the Baltic Sea. This conclusion may be drawn even though there are wide gaps in our knowledge of most of the services. Seven are severely threatened, including four of the six supporting serv-ices. The four under severe threat are: the food web, biodiversity, habitats and Baltic Sea resilience, i.e. the capacity of the sea to recover. The other three threat-ened services are food, genetic resources and aesthetic values.

Some services are relative unaffected by environmental threats. Examples include the ability to produce phytoplankton and algae (primary production) and the availability of space for shipping and shipping lanes. Other services are impacted by several environmental threats simultaneously, e.g., biodiversity, habitats, fish and shellfish production and recreational assets. Most ecosystem services are probably irreplaceable, and the benefit from one service is usually a loss for another.

The most serious perturbations, caused by man to the various ecosystem services are shown in Table 1. The table also presents some of the industries that are dependent on the respective services. Many of these industries in turn affect the services they use.

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The table shows how the most serious perturbations of human origin threaten the marine ecosystem services provided by the Baltic Sea and Skagerrak. The table also presents some of the industries that are dependent on each service. Many of those industries in turn impact the services they use.

table 1. effects of detrimental Human activity on Marine ecosystem Services Provided by the baltic Sea and Skagerrak.

documented increasein ecosystem service

documented decreasein ecosystem service

S1 Support most other services





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Eutrophi-cation

Fishery Hazard.subst.

Shipping Construction& developm.

Climatechange

Excessiveexploitation& bycatch

Habitatdisturbance

fishingInvasive

alien speciesOilspill

Aquaculture Pysicaldamage CO2 C°

Primary production

Food web dynamics

Diversity

Habitat

Resilience Support most other services

R1 Climate & atmosph.regulation

All fossil-burning activities

R2Sediment retention

Construction, property, tourism

R3Eutrophicationmitigation Tourism, fishery, property(mussels)

(mussels)

(mussels)

(mussels)

R4Biological regulation

Food industry, tourism, property

R5Reg. of hazardioussubstances Food industry, tourism

P1 FoodFishery, health, mariculture,food, processing

P2 Inedible goodsAgriculture, livestock, petroleum

P3 Genetic resources Aquaculture

P4Chemical resources

Pharmaceutical, shipping,chemical, health

P5Ornamental resources Amber, tourism

P6 Energy Wave energy

P7Space &waterways

Shipping, offshore windparks

C1 RecreationTourism, sportsfishing, yachting, diving, health

C2 SceneryProperty, construction,tourism, health

C3Science &education

Museums, aquaria, science,education

C4 Cultural heritage Museums, festivals, health,intrinsic

C5 Inspiration Art, ads, film,lyrics, books

C6The legacy of the sea Intrinsic

Ecosystemservice

Impact

Industry,livelihood,service*

*Though beneficiaries of the ecosystem services in question, some industries nonetheless contribute to their demise.

Table 1. Effects of detrimental human activity on marine ecosystem servicesprovided by the Baltic Sea and Skagerrak.

documented thoughvaried impact

potential increasein ecosystem service

potential decreasein ecosystem service

impact expectedthough not described

Annika RöhlTabell 12009-03-16

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There has been a sharp decline in long-tailed duck numbers. Each year some 10,000 of these birds are harmed by oil on the Hoburg Bank. One of the Baltic shipping lanes passes via the Hoburg Bank east of Gotland, which is a Natura 2000 protected site. The IMO has therefore recommended that shipping avoid part of this area, so the number of ships passing the bank has fallen.

7 Source: angervall t., Sonesson u., Ziegler f., Cederberg C. (2008) Mat och klimat – en sammanfattning om matens klimatpåverkan i ett livscykelperspektiv (“food and Climate – a summary of the climate impact of food from a life-cycle perspective”). Swedish Institute for food and biotechnology (SIk).

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2.3. What is Going to Happen?The ecosystem services in the Baltic Sea and Skager- rak are strongly impacted by man. The driving forces of today will probably continue to have a major impact in the future, but they will be joined by other forces, in particular the effects of climate change.

eutrophicationThe influx of nutrients from industrial plants and sew-age will probably diminish and inhibit eutrophication. The prospects for the influx of more widely dispersed diffuse sources, such as agriculture, are less certain. It is possible that the influx of nutrients will decrease,

but visible effects will not be discernible for decades. On the other hand, a warmer climate towards the end of this century might exacerbate eutrophication owing to greater quantities of warmer water and changes in precipitation patterns.

overfishing and fish farmingOver-exploitation of the most commercially sought-after fish species represents a threat to the entire eco-system. Yet this is also the area offering the greatest potential for rapid improvements. Among other things, the development of fish farms in our marine areas may impact on eutrophication and the spread of diseases among wild fish. It takes about three kilos of wild fish caught to produce one kilo of farmed salmon, which produces about 600 grams of fillets7. Choice of feed, management and location, as well as development of fish farming methods need to be the subject of more research (see also Chapter 3).

Climate ChangeRoughly half of the carbon dioxide man has emitted is stored in the oceans. This marine sink means that levels of carbon dioxide in the atmosphere are rising more slowly than they would otherwise have done. International climate simulations focusing on the late 21st century suggest growing acidification of sea water, rising sea levels, stronger winds, lower salinity – in addition to increased eutrophication.

The Swedish Climate and Vulnerability white paper (SOU 2007:60) estimates that rising sea levels during the period 2010 – 2100 may cause damage in Sweden as

23

a result of greater coastal erosion to the tune of €2 – 9 billion, and flood damage to buildings along coasts totalling €1 – 2 billion.

Species composition will change as an effect of climate change. For instance, more acidic sea water consti-tutes a direct threat to the coral reefs in the Skagerrak. At present only one out of six known Swedish coral reefs has living colonies of coral. Lower salinity would probably also have a sharp impact on species diversity in the Baltic Sea. The southern population of ringed seals has already been affected, since they depend on pack ice to be able to give birth to their pups.

Invasive alien SpeciesIncreasing numbers of invasive alien species are chang-ing the balance in the Baltic Sea and Skagerrak. Over three billion tonnes of ballast water is pumped out of ships across the world every year. Ballast water may contain alien species of fish, shellfish, jellyfish, algae and bacteria that can change the structure of the food web. Sea transport will increase substantially over the next decade, bringing with it the risk of increased dispersal of harmful alien species. Compliance in the Baltic Sea and North Sea with the provisions of the Ballast Convention is therefore essential. The EU also needs to formulate a common strategy on invasive alien species.

One example of an invasive species is the American comb jellyfish, which has caused damage in the Black Sea, and was also discovered in 2005 in the Katte-gat and southern Baltic. It has no natural enemies in our waters. Another example is the fish-hook water flea, which may occur in large numbers in the Bay of Finland, forming an extensive jelly-like mass in the water.

Shipping and oil dischargesThe rapid increase in shipping will be accompanied by a growing risk of oil discharges and major oil spills. It is estimated that 50,000 crossings of the Baltic Sea are made each year. Sea freight is expected to increase by around five per cent a year in the Baltic, and oil trans-port is expected to double between 2005 and 2015. In 2006 the International Maritime Organisation (IMO) classified the Baltic as a particularly sensitive sea area, one consequence of this being more stringent controls governing shipping routes.

Accidents involving major oil spills have an immediate impact on seabirds and the tourism industry. But minor oil spills also cause damage. Here too, seabird species are particularly at risk.

Hazardous SubstancesIt will remain difficult to prevent the dispersal of haz-ardous substances. Moreover, new substances are being dispersed so rapidly that we do not have time to assess their effects, e.g., pharmaceutical residues. Awareness of the risks has grown. Consumer awareness provides

24

8 Source: Fortum, November 2008.

Waves contain large amounts of energy. Using the right technologies, wave power may become a major renewable source of energy in the future.

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a strong impetus in this process, as consumers demand that importers and manufacturers offer alternatives. (See also 3.5).

Competition for SpaceThere is enormous development pressure in coastal areas, for housing, recreational facilities, and industrial production. The priority given to the various interests competing for space will impact the prospects of con-serving biodiversity and protecting cultural heritage.

Energy production in marine areas is growing rapidly, particularly from wind power. Denmark has six wind farms out to sea. New wind farms are being built both in the Baltic and in the North Sea. It is considered pos-sible in the future to produce 24 TWh of wave energy per year in the Baltic Sea, which is equivalent to the electricity output from four Swedish nuclear power generators.8

Stressed ecosystem Services may Cause a CollapseThe combined effect of the many threats and risks must be taken into account, because together they may re-sult in a more rapid continual change, and in many cases deterioration in the function of the ecosystems. This may ultimately bring the system to a “tipping point”, where it shifts to a new state without a major single perturbation having occurred. At that point a return to the previous state may no longer be possible. A single major perturbation in a healthy and more robust ecosystem may be less harmful, since the sys-tem then often retains its capacity to reorganise and rejuvenate.

25

3 The Economics of Ecosystem Services

One challenge we face is to manage livestock farming so that it helps to maintain an open landscape, with all the biodiversity that offers, while ensuring that this does not add to emissions of nitrogen and phosphorus.

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Valuing marine ecosystem services economically is a fairly new area of research. Some 40 studies on the economic value of the Baltic Sea have been identified as part of a survey in which all Baltic Sea States parti-cipated. All participants have also made an assessment of the areas they consider to be in greatest need of research. The results are presented in background Report 5874, which consists of an overall summary and reports from nine countries.

The studies that have been made mainly concern eutrophication, fisheries (both commercial fisheries and sport fisheries), oil discharges, litter, recreational values and location of wind turbines. A few studies cover more than one area. Most deal with a limited geographical area. For example, there has been no study covering fisheries in all the Baltic Sea States, or the impact of coastal tourism in the respective countries. This makes it difficult to express in figures the gains to be made from a better Baltic Sea environment. The exception is a comprehensive study from the mid-1990s, which estimated how people in the various Baltic Sea States valued reduced discharges of nutrients into the Baltic (see section 3.1).

The survey shows that there are virtually no economic studies of the value of most ecosystem services (see Table 2). The main areas given priority for future re-search by economists are those in which considerable research has already been carried out. There are two quite different potential explanations for this result:(1) These areas are the most important ones.(2) There is a lack of scientific knowledge to use as a

basis for making an economic evaluation of the non- priority areas.

There are many studies on the cost of remedying vari-ous environmental problems. However, if we concen-trate on studies in which the cost of various measures is compared with their impact on the environment, the selection is more limited. The area that has been most analysed is the cost of reducing nutrient emissions.

No systematic studies of the cost of reducing levels of hazardous substances in the Baltic Sea or Skagerrak are available. Although the remedial cost in relation to some substances has been estimated, it is not known what effect the measures will have on marine ecosys-tem services. Nor have any such studies been made into measures to prevent the establishment of invasive alien species.

3.1. EutrophicationEutrophication of the Baltic Sea and input of the nutri-ents nitrogen and phosphorus are not only one of the greatest threats to ecosystem services, including habi-

26

= the reports from the various baltic Sea States make no specific

mention of this service as a priority for future studies

★ = Important area for future studies according to report 5874

★ ★ = very important area for future studies according to report 5874

★ ★ ★ = top priority for future studies according to report 5874

Description of the economic valuations made of ecosystem services and the areas in which further studies are proposed according the various country reports. (Source: Background Report 5874)

Table 2.

Ecosystem service

Biogeochemical cycles

Primary production

Food web

Biodiversity

Habitat

Resilience

Climate & atmospheric regulation

Sediment retention

Biological regulation

Regulation of pollutants

Reduced eutrophication

Food

Inedible goods

Genetic resources

Chemicals

Ornamental resources

Energy

Space and waterways

Recreation

Aesthetic values

Science & education

Cultural heritage

Inspiration

The legacy of the sea

Degree to which the servicehas been covered by economic research as compared with the other 23 ecosystem services

Low

Low

Low

Medium

High

Low

Low

Low

Low

Low

Low

High

Low

Low

Low

Low

Low

Low

High

High

Low

Medium

Low

Medium

Degree of priority of the need for future studies

Category of ecosystem

service

Supporting services

Regulating services

Provisioning services

Cultural services

27

Table 3.

Nitrogen reduction

Less rearing of livestock, pigs and fowl

Less fertiliser use

Increased wastewater treatment at sewage works

Private sewage treatment systems

Catch crops

More wetlands

Spreading manure at different times of year

Energy forest

Catalytic converters at power plants

Catalytic converters on ships

Catalytic converters in trucks

Grassland

Phosphorus reduction

Less rearing of livestock, pigs and fowl

Less fertiliser use

Increased wastewater treatment at sewage work

Private sewage treatment systems

Catch crops

More wetlands

Non-phosphate detergents

Buffer zones

tat, foods and tourism, it is also an area of knowledge in which the greatest number of economic studies have been carried out. Estimates have been made of eutro-phication throughout the entire Baltic Sea, not only in individual countries.

Achieving the BSAP objective of a general reduction in nutrients in the Baltic Sea will require a reduction in the annual input of phosphorus from the entire catch-ment of 15,000 tonnes, and a 130,000-tonne reduction in nitrogen input.

Cost of Measures to reduce Nitrogen andPhosphorus emissionsThe lowest conceivable cost of achieving this has been estimated using available data and models, which are based on extensive simplifications, however. Potential measures have been split into 14 categories of measure to reduce the input of nitrogen och phosphorus. Several of them also affect each other. A heavy focus on meas-ures at source would reduce the quantity of nutrients reaching the soil. This would therefore increase the cost

per kilo of nutrients of the measures to reduce leaching.

It may generally be said that measures to change land use yield the highest net gains in reducing nitrogen in-put, e.g., by restoring wetlands, reducing fertiliser use and improving wastewater treatment. But the net gain varies depending on the present situation. Reducing the use of artificial fertilisers is a cheap step for those who have previously used more fertiliser than neces-sary. But if fertiliser use has previously been optimal, this will be an expensive measure (since crop yields will fall). The cheapest way of reducing phosphorus emis-sions is at source, e.g., by banning detergents contain-ing phosphates and increasing the degree of phospho-rus removal at sewage works.

BSAP includes an emission target for each HELCOM land. Model calculations suggest a minimum annual outlay of approximately €2,6 billion for a cost-effec-tive combination of measures to achieve the targets for all countries in the Baltic Sea region (see Table 4).

Potential measures to reduce either nitrogen or phosphorus emissions, and some measures capable of reducing emissions of both nutrients, according to literature on the Baltic Sea catchment. The measures have different effects on these nutrients and also vary depending on catchment.

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Table 4.

Country

Denmark

Estonia

Finland

Germany

Latvia

Lithuania

Poland

Russia

Sweden

TOTAL

290

10

10

130

30

220

1,680

90

100

2,560

920

60

610

530

60

80

930

180

1,460

4,830

+ 630

+ 50

+ 600

+ 400

+ 30

- 140

- 750

+ 90

+ 1,360

+ 2,270

Minimum cost of achieving the BSAP targets for emission

reductions in each country

Benefits of avoiding the effects of eutrophication,

estimated on basis of people's willingness to pay

Net gain from achieving

the target

There is great variation between countries. Studies into the cost of reducing nutrient emissions conclude that Poland, Latvia and Lithuania have little economic incentive to participate in cost-effective joint action. Sweden and Finland would gain most from interna-tional cooperation to reduce eutrophication.

The model calculations indicate a need for joint policy instruments to increase cost-effectiveness and create more equal conditions in the various Baltic Sea States. Among other things, there is discussion of joint funds to finance measures and international trade in emission rights for nutrients. The potential for a market of this kind is discussed in the Nefco report: Framework of a Nutrient Quota and Credits System for the Baltic Sea and the Swedish EPA report Förslag till avgiftssystem för kväve och fosfor (“Proposed System of Charges on Nitrogen and Phosphorus”) (NV Report 5913).

benefits of reduced eutrophicationA real reduction in the input of nutrients to the Bal-tic Sea would probably not have any marked positive

effects for several decades. However, local positive effects could occur much more quickly. The benefits of a healthier sea have been estimated using various valu-ation methods, e.g., people’s willingness to pay for a better environment. Several valuation studies have been made in the Baltic Sea States. For instance, one study suggests that the value of better conditions for recrea-tion in the Stockholm archipelago, in the form of im-proved water transparency (secchi depth), exceeds the cost of achieving the improvement. Another study indi-cates that measures to improve Finnish coastal waters in the Bay of Finland are economically profitable.

The only valuation study covering the entire Baltic Sea region concerns eutrophication of the Baltic Sea. A questionnaire survey on public willingness to pay to avoid the effects of eutrophication was carried out in Poland and Sweden in the mid-1990s. Respondents were given descriptions of eutrophication, oxygen defi-ciency, changes in flora and fauna, algal blooms and potential health risks. Inferences could then be drawn about what people in Poland and Sweden respectively

Model calculations of the cost of achieving the BSAP target for reduced nutrient inputs from each country, and the benefits of limiting eutrophi-cation. The results reveal major differences between the countries and a need to analyse joint funding instruments. In millions of euro per year. Source: Report 5877.

29

were prepared to pay to reduce eutrophication to a level with which the Baltic Sea can cope.

The Polish results were processed as a basis for esti-mating the willingness to pay in the “transition states” in the 1990s, i.e. Estonia, Latvia, Lithuania and Rus-sia. The Swedish results were transposed to the established market economies of Denmark, Finland and Germany.

The first results reflected the situation in the mid-1990s. These have since been adjusted to reflect the position in 2005, but are stated in 2007 prices, based on the rapid rate of economic growth in many of the coun-tries and information on how developments in general have impacted people’s willingness to pay. There are great differences between the countries. It is estimated that an average Polish citizen is willing to pay about €2; for a Swede the figure is approximately €13 per month.

Willingness to pay totals approximately €4.8 billion a year, which is almost twice as much as the total mini-mum cost of achieving the BSAP targets for reduced nutrient inputs (see Table 4.)

3.2. FisheriesFood is an ecosystem service that has been well covered by economic research; see Table 3. In volume terms, the main fisheries in the Baltic Sea are sprat and her-ring. The most important fish in economic terms is the cod. A Swedish estimate of commercial cod catches from the Baltic shows that lower cod quotas could rap-idly yield results. Between 1983 and 2005 the annual take was up to 60 per cent of cod stocks. If instead the take had only been 30 per cent of Baltic cod stocks

each year between 1983 and 2005, average landings could have been twice has high from 1985 onwards. Only during the first two years would catches have been lower. See diagram.

Some action has been taken to protect cod. For exam-ple, cod fishing has been banned since 2006 in a zone off the coast of Gotska Sandön, north of Gotland. The ban will be evaluated in 2010. By that time a further six no-fishing zones will have been established in the Baltic and Skagerrak. Three of them are intended to protect cod stocks.

There is no doubt that it is economically profitable to carry out a series of additional measures to allow fish stocks to recover. As may be seen from the example above, overfishing is a result of short-term manage-ment of fishery resources. EU fishing quotas have long been too high. There are too many fishing vessels and they are too large. The method of calculating fishing quotas has meant that large quantities of fish are treated as by-catches and die before they are thrown back. In addition, control procedures and sanctions are inadequate, which has resulted in extensive illegal fishing. This in turn means that many fish stocks are currently being fished below biologically safe limits, with resulting high economic costs.

The Swedish Board of Fisheries has estimated that it would be economically profitable to:F Reduce the capacity of the fishing fleet. F Introduce alternative forms of management, such as

trade in individual fishing quotas or regulation of fishing effort (the “kW-day system”). However, whether a given form of management helps to achieve economically profitable fisheries depends on how the systems are designed. Introduction of tradable indi-

30

* Källa: ICES (2007) Advisory Committee on Fishery Management, Environment, and Ecosystems. Book VII).

1970

500Tonnes, 000s

60% take

30% take

Actual catches1966–2007

400

300

200

100

1975 1980 1985 1990 1995 2000 2005

ICES*

83 84

Record years1983–1984

Potential catches

LESS fISH THEn – mORE fISH TOdAy?the blue area shows actual cod catches during 1966 – 2007, representing a take of 60 per cent. following the record years 1983 and 1984, catches fall dramatically. Cod stocks have declined drastically and are not recovering. this notwithstanding, the take remains at 60 per cent, which has caused stocks to fall below “danger level” over the past 15 years (red line). the green area shows what the situation would have been if the take had only been 30 per cent from 1983 onwards. twice as much cod could now have been caught. during a two-year period catches would have been lower than was actually the case, but for the re-mainder of the period catches could have generated an additional €100 – 200 million each year.

Source: Havsutsikt 2/2008 bengt Sjöstrand, Swedish board of fisheries

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vidual fishing quotas or kW-days does not itself guarantee economically profitable fisheries.

F Introduce joint management where expedient, e.g., by a joint declaration by fisheries organisations, sci-entists and environmental organisations that they accept the materials used as a basis for decisions.

F Divide Swedish waters into zones and specify fish-ing periods and fishing methods, etc. for each zone.

F Further reform fisheries legislation. This is currently the subject of a study in Sweden. The proposals being discussed include not only limiting fishing licences to a given species, but also introducing fees for various types of fishing.

F Develop and introduce more selective fishing meth-ods and gear.

F Improve controls by effective procedures and elec-tronic fisheries monitoring.

F Improve knowledge of fisheries and ecosystem-based management.

F Actively influence the EU to secure greater accept-ance of sustainable use of fishery resources.

Most of these measures will have to be implemented at EU level to achieve the desired result. According to the Millennium Ecosystem Assessment, overfishing is one of the most acute global environmental problems.

Nursery areas for several fish species are also in need of protection, e.g. sea grass meadows on the sea bed. Over 60 per cent of sea grass meadows along the west coast of Sweden have been destroyed by eutrophica-tion and physical impact in the form of road and har-bour construction, for example. Alien species of algae, which do not provide fish with the same protection, are able to establish, which hinders the re-establishment of sea grass. The estimated cost of artificially recreat-ing sea grass meadows is €50,000 per hectare.

31

Various studies of commercial fisheries and sport fisheries have shown that they have a high economic value. There is no doubt that it is economically profitable to take action so that fish stocks can recover.

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Swedish commercial fisheries and sport fisheriesIncome from Swedish commercial fisheries has de-clined, as has profitability. The value of landings fell from €125 million to €90 million between 2002 and 2005, a decline of around 30 per cent. The value of landings rose again to about €110 million in 2006.

Value added (what remains when the cost of fishing vessels and equipment etc has been deducted) was almost €50 million in 2006. The value of the fish also depends on their quality, including their content of environmental toxins. This is discussed in section 3.5.

Some 4,000 people work in the Swedish fisheries industry, which accounts for less than 0.1 per cent of GDP. The number of commercial fishermen has fallen from around 20,000 in 1950 to about 1,800 in 2008. Fisheries infrastructure has more or less vanished from

the Swedish east coast. This is a result of the declining availability of cod and eel, and other obstacles such as the bureaucracy facing small-scale fisheries and dam-age caused by seals and cormorants.

Commercial fishermen make a profit of around €0.1 per kilo of fish caught. This may be compared with sport fisheries, where the net value of each kilo of fish caught is estimated to be €4, calculated on the basis of will-ingness to pay. Yet a study carried out in 2007 shows that commercial fisheries have a high cultural value, for which Swedes are prepared to pay almost €200 million a year. The same study also shows that the willingness to pay in Sweden to increase cod stocks by 70 per cent is just less than €250 million per year.

There are estimated to be one million sport fishermen in Sweden, including all those who fish in lakes, riv-ers and streams. The total willingness to pay for sport

32

One of Sweden’s million-plus sports fishermen.

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fisheries based on their willingness to pay for fishing they did in 2006 was around €265 million a year.

fish and Mussel farmsThe most commonly farmed species in the Baltic Sea region are rainbow trout and salmon for consumption. Salmon and trout are also bred for release into rivers and seas. The main reason for this is to strengthen stocks that have become depleted owing to loss of spawning grounds.

Just under 2,000 tonnes of rainbow trout were farmed in Sweden in 2007, which is almost one-third of all rainbow trout farmed for consumption purposes in the marine environment. Two-thirds of these farms are in the northern Baltic.

Mussels are farmed for various purposes. Mussels from the Skagerrak and Kattegat are sold for consumption. Trials are in progress to ascertain whether mussels can be used to filter out nutrients, e.g., at sewage works. Denmark produces some 20,000 – 30,000 tonnes of mussels each year in the Skagerrak, and Germany pro-duces 10,000 tonnes.

3.4. Tourism and RecreationCultural ecosystem services include the world’s largest industry – tourism. The tourism industry in the Baltic Sea States is estimated to have an annual turnover of about €90 billion, and to provide work for some two million people. This includes all forms of tourism, not merely those linked to the Baltic Sea itself. Other sec-tors that can be valued include the leisure boat indus-try, which had sales of approximately €265 million in Sweden in 2004, including shipyards, marinas and servicing.

Other assets, such as the sea as a source of inspiration for musicians, artists, writers and scientists, are more difficult to measure. The same applies to the impor-tance of outdoor recreation to health and reduced medical costs, or the value of 12,000 shipwrecks at the bottom of the Baltic, which attract many of the region’s 235,000 divers.

In order to gain an idea of the valuation placed by the tourism industry on clean beaches and good seawater, a study was made in spring 2008 involving a total of 87 representatives of beach tourism, boating, sport fishing, cruise companies and real estate. The study included people from all Baltic Sea States. The questionnaire survey was not based on a random selection of repre-sentatives, although the questions were based on the same questionnaire and allow some comparisons and overall conclusions.

The questions covered two main themes: Has business been affected by changes in the marine environment to date, and is it possible that it will be affected in the future? One conclusion is that those interviewed generally consider that tourism is so far relatively un-affected by current problems in the marine environ-

33

Thanks to sewage treatment and treatment of industrial effluents, the beach at Jurmala in Latvia was able in just a few years in the late 1990s to replace the signs reading “Bathing Prohibited” with the “Blue Flag”, the international mark of quality for beaches and marinas. Nowadays most Baltic Sea States have organisations for ecotourism, i.e. tourism that does not harm nature and cultural heritage. Even silence is starting to be protected. For example, there are two stretches of the Skagerrak coast that are protected from noise disturbance.

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ment, but that more widespread algal blooms may cause serious problems, particularly for beach tourism and sport fishing in Sweden, Denmark and Finland. Together with Germany, tourism in these three coun-tries is more dependent on the state of the environment than tourism in Estonia, Latvia, Lithuania, Poland and Russia.

The reports from the various countries give three main explanations of why environmental issues have not so far been of central importance to the industry:1) Those interviewed see algal blooms as a “natural”

phenomenon, rather than an environmental prob-lem.

2) Demand is greater than supply. Resorts are fully booked. Consumers, rather than producers, are af-fected by environmental problems.

3) The Baltic Sea environment is “good enough” to not affect choice of holiday destinations to any great degree.

There are local estimates of the cost of algal blooms. Tourism on the island of Öland lost around €27 mil-lion due to algal blooms in 2005. The Hel peninsula in Poland also saw tourist numbers drop one summer as a result of algal blooms.

Estimates of the cost of increased occurrence of algal blooms vary in the interviews. One person mentions losses of millions of euro per year. Others estimate the decline in sales to be 10 – 15 per cent, depend on the amount of algae. Those interviewed in the real estate sector say that the price of waterfront properties falls if the water is murky or malodorous.

Aside from eutrophication and algal blooms, worries about the future include the fear of oil spills. A major oil spill could cause great harm to tourism in affected areas.

34

WOmEn And CHILdREn SHOULd AVOId OILy fISH fROm THE BALTICthe Swedish National food administration recommends that children and adults eat fish 2– 3 times a week, but that children and women of child-bearing age should not eat herring, wild-caught salmon and trout from the baltic more than 2–3 times a year, owing to their excessively high levels of environmental toxins such as dioxins and PCbs.

there are also research reports suggesting that men who each too much oily fish from the baltic may suffer from a lower sperm count. (Pharmacogenetics and Genomics (2007) 6:391-401. Giwercman, aleksander et al.)

apart from the fact that these fish lose market value, the anxiety about environmental toxins in food is itself an indirect cost, which particularly affects parents and preg-nant women. this is an example of a non-commercial economic cost arising because emissions of hazardous substances harm ecosystem services.

air pollutants from various incineration and combustion processes and other industrial operations, and also per-haps from small-scale combustion and contaminated sites, are currently the predominant source of dioxins, PCbs and hexachlorobenzene (HCb) that end up in the baltic. Concentrations of PCbs and HCb in herring have been falling for many years, whereas concentrations of dioxins fell until the mid-1980s, but have since remained at a fairly constant level. In the early 2000s more than ten per cent of the population ingested quantities of diox-ins and dioxin-like PCbs each day that were in excess of the acceptable daily intake – even though concentration in food have been falling since the 1970s.

Source: “Sources, transport, reservoirs and fate of dioxins, PCbs and HCb in the baltic Sea”, Swedish ePa report 5912

3.5. Hazardous SubstancesHazardous substances also impact several ecosystem services. Here too, most economic research relates to the food service. The value of fish depends not only on the species and how it is caught. Some oily fish caught in the Baltic may not be sold in the EU because they contain environmental toxins such as dioxins and PCBs in concentrations exceeding permitted limits. Sweden and Finland are exempt from this ban, since these countries issue special guidelines for consumers. One major problem is that we have no explanation as to why concentrations are so high.

Heavy metals, brominated flame retardants and trib-utyltin compounds (TBTs, from hull paints) are other examples of environmental toxins that accumulate in fish and shellfish. TBTs are considered to be one of the most dangerous substances released by man into the environment. There are many substances whose poten-tial effects on the environment are as yet unknown, and even less is known about the effects of various environmental toxins in combination. Supporting and regulating ecosystem services are able to break down some hazardous substances, but emissions are much greater than the ecosystems can cope with.

There are no systematic studies on the cost of reduc-ing levels of hazardous substances in the Baltic Sea or Skagerrak. This is complicated by the fact that we do not have a clear picture of the sources of all sub-stances. However, cost studies have been carried out on treatment of contaminated sediment, reduction of quantities of heavy metals and a ban on tributyltin, which may serve as a basis for future efforts in this area.

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THE ROUnd GOByIt is likely that the round goby (Neogobius melanostomus) arrived in the baltic as a freeloader in ballast water. It is spreading and there is a risk that it will outcompete native species, thereby reducing biodiversity. there are economic advantages in taking action to prevent invasive alien species from establishing. taking preventive measures in relation to a species expected to enter the country in the near future costs € 0.1– 0.2 million per species and year. Waiting until the species is already established entails a much higher cost. Control and extermination programmes can cost € 1.5–7 million per species and year.

Source: Swedish ePa report 5910.

foto: GuStav alMqvISt

With a few exceptions, cost studies on heavy metal reduction performed in other parts of the world dis-regard the dispersal of pollutants in the environment, degradation, emissions and storage in biomass. This means that the cost of measures at source cannot be compared with the cost of measures in ecosystems. However, some studies have been made of TBTs.

These indicate the costs and benefits of a ban and also deal with the role of TBTs in relation to the risk of invasive alien species becoming established.

3.6. Invasive Alien SpeciesEconomic research has to some extent covered the bio-diversity ecosystem service. One threat to this service is the introduction of alien species, which may severely disrupt the balance between species. In the marine envi-ronment it is particularly difficult to combat invasive alien species. Working to prevent their introduction is therefore of very great importance. The International Maritime Organization – IMO) therefore adopted the International Convention for the Control and Manage- ment of Ship Ballast Water and Sediment on 13 Febru-ary 2004. The convention includes transitional pro-visions, but from 2016 all ships must have on-board treatment systems for ballast water, and it will no long-er be permitted to empty ballast water into the sea.

Very few impact analyses have been made in relation to invasive alien species. No estimates have been made of economic losses in the Baltic Sea. The difficulty of cal-culating effects generally hinders an analysis of cost- effectiveness in relation to the goal of strengthening and protecting marine biodiversity.

One example of an invasive alien species is the Ameri-can comb jellyfish, which has been found in the south-ern Baltic and Kattegat. This species could out-compete the native common jellyfish and represent a threat to stocks of commercially important species such as her-ring, sprat and cod. It is probable that the comb jellyfish competes with cod, herring, sprat and other species for zooplankton as a source of food. When anchovy stocks collapsed in the Black Sea in the 1990s as a result

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operation fu Shan Hai was one of the largest operations in the Swedish Coast Guard’s history. It cost the Coast Guard around €1 million and the municipalities affected in southern Sweden just under €1.5 million. the total cost, i.e. the loss of the ship and its cargo, rescue work, the repair of Gdynia and the cost of oil clean-up totalled over €100 million.

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of the comb jellyfish, economic losses were estimated at approximately €240 million.9

3.7. Oil Discharges and Litter Much oil is broken down in the sea, thanks to ecosys-tem services. But cold water and a lack of throughflow make the Baltic Sea especially sensitive to oil pollution. Low temperatures increase the viscosity of oil and pre-vent it mixing with water. The microbial decomposition of oil takes place more slowly than in warmer water, and it can take years instead of months for it to break down naturally. Large numbers of seabirds die after a major oil spill; fisheries suffer and the value of rec-reation and tourism disappears. Even small oil spills cause damage and entail high costs. Seabirds are par-ticularly susceptible, and the Baltic Sea provides an important winter habitat for many of these species.

Measures to reduce the risk of collisions and running aground include improved navigation systems, use of modern navigation instruments and more widespread use of pilots. Aerial surveillance of sea areas has also been found to significantly reduce the number of illegal oil discharges.

When an oil spill has occurred, complete clean-up is hardly ever achieved. Cost calculations do not usually include the damage suffered by the environment, e.g., loss and injury of birds and mammals.

An estimate of clean-up costs after the oil spill from the tanker Prestige, which sank off the coast of Spain in 2002, arrived at a figure of €770 million. A total of 59,000 tonnes of oil leaked out over a period of a few years. The cost calculation included clean-up, recov-ery, economic loss incurred by tourism, fisheries and fish farming.

The most serious oil spillages in the Baltic have been when the oil tanker Tsesis ran aground in the Stock-

9 Source: Nationell strategi och handlingsplan för främmande arter och genotyper (“National strategy and action plan for alien species and genotypes”, Swedish ePa report 5910 (in Swedish).

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holm archipelago in 1977, when around 1,000 tonnes of oil leaked out, Baltic Carrier, which leaked 2,700 tonnes of oil in Grönsund (Denmark), and Fu Shan Hai, which sank off the island of Bornholm in 2004, leaking approximately 1,200 tonnes of oil in the process.

A scenario study of a major oil spill affecting parts of the Stockholm archipelago estimated the cost at over €90 million in 2007. The scenario was based on an imaginary situation involving an oil spill of 30,000 tonnes east-northeast of the island of Gotska Sandön, along the route taken by most of the tanker traffic to and from the Bay of Finland. The oil would then drift towards the Swedish coast. Most of the cost would be for the two-year clean-up. Lower tourism revenues would account for just over one-third of the costs, while loss of revenue for fisheries, sport fisheries and fish farming would only account for €1 million.10

Litter, too, impacts the recreation, food and habitat ecosystem services. According to HELCOM, litter is less of a problem in the Baltic than it is in many other marine areas. Problems are greater along the west coast of Sweden. The cost of cleaning beaches in Bohuslän is estimated at €1 – 1.5 million a year. Poland has reported that the cost of removing litter from beaches in five municipalities and two ports totalled around €570,000 in 2006.11

PROTECTEd mARInE AREASMap of marine areas that are protected from development. Marine ecosystem services can only be protected if we change the way we manage these services, e.g., adapt fisheries, stop discharges of oil and hazardous substances etc. Some fish nurseries and other important habitats can be partly protected by creating nature reserves, national parks and other forms of area protection.

(Map: HelCoM)

10 Source: BalticMaster, April 2007.11 Source: HELCOM, http://www.helcom.fi/publications/other_publications/en_GB/

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4The “Economic Marine Information” project was in-spired by the Stern Review – an analysis of the eco-nomics of climate change. The Stern Review was pub-lished in 2006 and estimates the global cost of action to mitigate climate change, as well of the cost of doing nothing.

At present we lack the knowledge to be able to make a similarly comprehensive analysis of the Baltic Sea and Skagerrak.

The background reports in this project and a Finnish pre-study on the same theme as this project contain proposed priority areas for research in the natural sci-ences, economics and political science. These proposals are listed below.

F We need to know more about the way ecosystem services interact and how various measures impact the services. If research focuses on the less well un-derstood fundamental services, such as the food web, habitats, biodiversity and resilience, we will also obtain valuable information about other services.

F It is important to examine any goal conflicts, e.g., whether measures taken to support marine ecosys-tem services result in a decline in terrestrial ecosys-tem services, e.g., being able to control the input of nutrients to the sea, while still conducting efficient agriculture on land.

F Economic studies should be placed in relation to measures relating to specific ecological variables that can be defined and measured.

F The impact of climate change on the Baltic Sea is a key factor to analyse. How are salinity, temperature and sea level affected, for example?

F A new large-scale study is needed to value the will-ingness to pay for the benefit of reducing nutrient input to the Baltic Sea, since rapid development has taken place in the Baltic Sea region over the past decade. The degree of benefit also changes over time and depending on information. In addition, valu-ation methods have been substantially developed, which makes it possible to arrive at more accurate economic appraisals of the value of various assets. A coherent monetary valuation of ecosystem serv-ices in all Baltic Sea States should be carried out.

F Determining an optimal target for reduced input of nutrients will require a valuation of the marginal benefits of reduced eutrophication effects.

F A study of the way a programme to improve cod stocks would affect the fisheries industry. The impact on fisheries could also be compared with potential cultural benefits such as preserving traditional fish-ing villages. There is also a need for more research into the economic value of sport fisheries in the Bal-tic Sea.

F Models and data are also needed for BSAP objec-tives other than eutrophication, so as to analyse the cost and benefit of achieving these objectives. For instance, there has been virtually no economic research on environmental toxins or invasive alien species.

F The cost of not taking certain forms of action in some catchments should also be estimated.

F There is a need for an analysis of uncertainty factors in models to study cost-effectiveness, to evaluate the reliability of results.

The Need for Further Research

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Despite the gaps in our knowledge, we know enough about the value of marine ecosystem services to act now, not least because we care about future generations.

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F We need to know more about risks and threats posed by sea transport (oil spills, alien species, environ-mental toxins, etc). Knowledge is needed about the economic consequences of the effect of oil spills on ecosystems. We also need a valuation of measures to reduce the risk of oil discharges.

F There is a need for economic analyses that take into account future generations and examine the neces-sity of acting in time, e.g., by using a falling discount rate over time.

F There should be a study into the scope for using various policy instruments, including bilateral support between countries, which could create more equal conditions. Among other things, this applies to the potential for an international nutrient quota and cred-its system. International and national policies need to be coordinated to avoid measures that counteract one another.

F A theoretical and empirical analysis of the terms of in-ternational agreements is needed, including the way that countries implement these agreements domesti-cally. The net benefit to a country of a given meas-ure may be of great importance, but other criteria, such as fairness, may also be important if interna-tional agreements are to succeed.

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Appendix 1.

List of Background reports on the sub-projects under the Swedish EPA project “Eco-nomic Marine Information”.

REPORT 5873. Ecosystem Services Provided by the Baltic Sea and Skagerrak. Kajsa Garpe, fil dr. ISBN 978-91-620-5873-9

REPORT 5874. The Economic Value of Ecosystem Services Provided by the Baltic Sea and Skagerrak – Existing Information and Gaps of Knowledge. Linus Hasselström, fil. mag. och Tore Söderqvist, Associate Professor of Economics, Enveco Environmental Economics Consultancy Ltd., Stockholm. ISBN 978-91-620-5874-6

REPORT 5875. Trends and Scenarios Exemplifying the Future of the Baltic Sea and Skager-rak – Ecological Impacts of not Taking Action. Martina Kadin, fil. mag. Baltic Nest Institute/Stockholm Resilience Center. ISBN 978-91-620-5875-3

REPORT 5876. The Costs of Environmental Improvements in the Baltic Sea and Skagerrak – A Review of the Literature. Katarina Elofsson, research assistant, Swedish University of Agricultural Sciences. ISBN 978-91-620-5876-0

REPORT 5877. Costs and Benefits from Nutrient Reductions to the Baltic Sea. Professor Ing-Marie Gren. ISBN 978-91-620-5877-7

REPORT 5878. Tourism and Recreation Industries in the Baltic Sea area – How are they Affected by the State of the Marine Environment? An Interview Survey. Linus Hasselström, fil. mag., Enveco Environmental Economics Consultancy Ltd., Stockholm. ISBN 978-91-620-5878-4

REPORT 5879. Economic Information Regarding Fisheries. Johanna Andréasson fil. mag. och Tore Gustavsson, Head of Development Section, Swedish Board of Fisheries. ISBN 978-91-620-5879-1

All these reports can be downloaded at www.naturvardsverket.se

What’s in the Sea for Me?Ecosystem Services Provided by the Baltic Sea and Skagerrak

The report describes current knowledge on the economic

consequences of human impact on the Baltic Sea and

Skagerrak. What will it cost if no further action is taken,

as compared with the implementation of remedial meas-

ures? This question was included in the terms of refer-

ence for the government-instigated project – “Economic

Marine Information”. The synthesis report – “What’s in

the sea for me?” is the summary report on the project.

report 5872

NaturvårdSverket

ISbN 978-91-620-5872-2

ISSN 0282-7298

Swedish epA Se-106 48 Stockholm. visiting address: Stockholm - valhallavägen 195, östersund - forskarens väg 5 hus ub, kiruna - kaserngatan 14. tel: +46 8-698 10 00, fax: +46 8-20 29 25, e-mail: [email protected] Internet: www.naturvardsverket.se orders ordertel: +46 8-505 933 40, orderfax: +46 8-505 933 99, e-mail: [email protected] address: CM Gruppen, box 110 93, Se-161 11 bromma. Internet: www.naturvardsverket.se/bokhandeln

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What's in the Sea for Me?