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Dorset's Environmental Economy Dorset’s Environmental Economy A report for and November 2015 Dorset’s Environmental Economy 1 This proposal has been prepared by: ONO CONO EC M E M I I C • C E S S E C C N N A A L L L L A A V V In association with: VALLANCE VALLANCE ECONOMICS ECONOMICS ONO EC M I • C E S C for: VALLANCE N A ECONOMICS L L A V Dorset County Council Dorset Area of Outstanding Natural Beauty Jurassic Coast World Heritage Site and the Dorset Local Nature Partnership [email protected] www.ashfutures.co.uk 07500 664466 Ash Futures Ltd COMPANY NUMBER: 7769553 VAT NUMBER: 120 1235 85 REGISTERED OFFICE: 74, East Street, Ashburton, Devon TQ13 7AX Ash Futures Ltd uses renewable energy (electricity and gas) purchased From Ecotricity. It uses recycled paper For all printed materials. It recycles and reuses materials where pracJcable. It promotes travel by train to all locaJons in the UK, where pracJcable. Otherwise, it uses a hybrid car to minimise emissions. _______________________________________________________________________________________ Dorset’s Environmental Economy 2 CONTENTS Dorset’s Environmental Economy Introduction 5 Executive Summary 7 1. Definitions and Valuations 10 Summary 10 Descriptive introduction 13 An accounts framework 15 A sector framework 16 A value framework 17 2. Valuation - a micro perspective 19 3. Economic Impacts 27 Placing a value on Dorset AONB 28 Placing a value on the Jurassic Coast World Heritage Site 42 4. Looking Ahead 57 SWOT - linked to the STEEP factors 57 Future drivers of change 59 5. Creating Value from the Environment 67 Should nature be ‘monetised?’ 67 Capturing the value of nature 70 Acknowledgments 88 Annexes Glossary 89 References - for Future Drivers of Change 90 Definitions and Valuations - Full report 92 The Dorset economy The Environment and the Economy Accounting for the Environmental Economy Sector Flows in the Environmental Economy _______________________________________________________________________________________ Dorset’s Environmental Economy 3 _______________________________________________________________________________________ Dorset’s Environmental Economy 4 INTRODUCTION Ash Futures have been commissioned to produce a report on the Dorset Environmental Economy for Dorset County Council and its partners, including specific economic impact studies of the Dorset and East Devon Coast World Heritage Site (the Jurassic Coast) and the Dorset Area of Outstanding Natural Beauty. The five aims of the study are as follows: • To define and describe Dorset’s ‘Environmental Economy’ as a whole; • To scale and scope Dorset’s ‘Environmental Economy’ by a range of economic metrics; • To assess the value of the Dorset and East Devon Coast World Heritage Site (Jurassic Coast) and the Dorset Area of Outstanding Natural Beauty; • To describe the growth potential of Dorset’s ‘Environmental Economy’ outlining strengths, weaknesses, opportunities and threats (SWOT); and • To make recommendations on how Dorset can sustainably exploit its natural assets. This has been a fascinating, and challenging, brief. The brief effectively asks for three very different products within the single commission: valuing the Dorset’s environmental economy; two detailed impact assessments; and a more discursive piece about utilising the natural assets to support the development of enterprise and the economy. As such both the style and substance of these sections of the report are different, but are brought together in one report. Ash Futures have addressed the first two of the five aims by considering the theoretical and applied aspects of the Dorset economy, environmental accounting and environmental economics; depicting Dorset’s particular environmental assets and flows; and assessing a valuation of the environmental economy through four mechanisms. These mechanisms are a ‘top down’ proportionate approach for narrowly defined environmental goods and services, a ‘bottom up’ sector approach to economic flows, an asset-driven model based on wider environmental economic characteristics and a broad employment approach to ‘green’ jobs. We reference these accounting, sector and value frameworks against other studies for equivalent areas within the United Kingdom and internationally. Schematic map of Dorset, the Dorset AONB and the Jurassic Coast East Devon Dorset Bournemouth Poole Jurassic Coast Jurassic Coast influence Dorset AONB _______________________________________________________________________________________ Dorset’s Environmental Economy 5 Based partly on a series of user and business surveys and partly on suitably interpreted sector/ employment benchmarks the third study aim above is covered by two reports. The client requires these reports to ‘stand alone’ as separate pieces of research but they are intellectually consistent and analytically integrated with all the rest of the work. This mutual reinforcement between the macro and micro assessment of value is supported by the findings of an on-line residents’ survey and enhanced by a number of short case studies explaining how real businesses value Dorset’s environmental economy and its environmental designations. Next, a SWOT analysis of the Dorset environmental economy is presented to build a foundation for outlining growth potential. It highlights the tension between ‘traditional’ short-termist practice with respect to the political economy of development and the significant potential for the environment to build capacity, pursue dynamic innovation and generate real value. From this basis, monetisation of environmental economic factors and consideration of potential ‘futures’ and local interventions are reviewed. A wide range, from positive aspects of technological and network change to negative aspects of climate change and land use, are considered. The report reviews what can be controversial approaches to paying for environmental access, for natural benefits, and for eco-system services. Within the limited scale of the commission, the research has covered a wide range of secondary and a few primary sources and provided an array of analytical findings and developments. The result is a large and complex study that requires careful reading and interpretation. Nonetheless, its results are clear and can be quickly summarised. In brief, the environmental economy is a vital, important, indeed indispensable, part of economic, cultural and social life in Dorset. It contributes a significant amount to annual output and employment and the preservation of its productive capacity is key to future living standards and wellbeing. At every stage, planning and policy towards economic development needs to consider environmental assets and service flows as a central part of setting priorities and delivering investment. The assessments and conclusions provided in this study of the Environmental Economy form a solid foundation for Dorset County Council and its stakeholders to influence and direct future development priorities across Dorset. Hopefully, it will remain highly relevant to the process of sustainable and sustained growth and development for years to come. Ash Futures November 2015 _______________________________________________________________________________________ Dorset’s Environmental Economy 6 EXECUTIVE SUMMARY Dorset’s special environment, as we all know instinctively, is crucial to our well being - in every sense. As a society, we depend on the food, fuel, fibres and medicines that the environment provides, just as we depend totally on the clean air and water, the soils and flood alleviation that nature offers us. It is no different for the economy. Without a healthy, diverse, efficiently functioning natural environment, we would not have a functioning economy. Yet we often treat the environment as if it is a subset of our economy, something to be exploited, traded and sometimes ignored, in the pursuit of growth and profit. Governments1, businesses and citizens are increasingly recognising that many important parts of the ecosystem on which we depend have reached their limits of their capacity. Our report acknowledges the vital role played by the natural environment, in general and in Dorset. Nevertheless, we have been asked to demonstrate the economic value of Dorset’s environment and to consider how the environmental assets might be exploited in a sustainable way to create more economic returns - both for the local economy and to be spent maintaining those assets into the future. The value of Dorset’s environmental economy This report uses four different approaches to describing and defining Dorset’s Environmental Economy: Environmental Goods and Services (EGSS) ratios: calculating Dorset’s ‘share’ of the UK national environmental accounts, and using various definitions of environmental goods and services (EGSS), yields ‘top down’ annual GVA and employment figures for Dorset’s environmental economy of about £0.25-0.9 bn (2013 prices) and 3,900-16,750 jobs (FTE) respectively Sector flows: building ‘bottom up’ from a Standard Industrial Classification sector approach, and taking into account aspects of direct and indirect impact, estimates of £1.3-1.5 bn GVA and 25-35,000 jobs respectively are derived Green economy: using a broader definition of the ‘green economy’ based on employment and/or occupational characteristics, the aggregate figures increase to about £2.5bn GVA and 61,000 jobs respectively Asset flows: using Dorset’s natural capital asset base and incorporating aspects of environmental flows not included in ‘traditional’ economic accounts (such as
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