SURF nature The Welsh Environment: Understanding the connections with the economy November 3 rd 2011: Parc Hotel, Cardiff

A simple plan.... Welsh economic progress and environmental connections? Welsh environmental/ecological change and economic connections? Neither question easy to answer

What we really need ? A1: Economy to economy transactions (increases in demand for one good create additional demands for other goods A2: Economy environment transactions: output of environmental good per unit of economic good A4: Environment to economy transactions: output of economic good per unit of environmental good – effects of environmental goods on economic activity – effect of global warming on fishing A3: Environment to environment transactions: effects of changes in environmental goods on other environmental goods - SO2 on water quality

How do we measure regional economic progress? Gross value added Welfare; whose? What is included? What is excluded? Use of natural capital? Use of eco-systems?

Reporting environmental information alongside GVA Environmental accounts SD indicators Apples and pears

Environmental Satellite Accounts Environmental Satellite Accounts – demands that economic activity places on the environment Partial ESA now available for Wales – physical flows/resource productivity But still apples and pears…

Table in UK ESA Coverage for Wales 1.1 Oil & gas reserves Partial 1.2 Oil & gas monetary balance sheet Not available 1.3 Land cover account Covered 1.4 Imports and exports of wood products Covered 1.5 Fish stocksCovered Table in UK ESA Coverage for Wales 2.1 Energy consumption (industries) Covered 2.2 Atmospheric emissions (over time) Covered 2.3. Atmospheric emissions (over time) Covered 2.4 Bridging table: Atmospheric emissions Not available (but not relevant) 2.5 Material flowsPartial 2.6 Waste arisingsCovered 2.7 Radioactive waste Covered 2.8 Water consumption by industry sector Covered Table in UK ESA Coverage for Wales 3.1 Government revenue from environmental taxes Covered 3.2 Environmental taxes breakdown by industry Partial 3.3 Environmental protection spending by public sector Covered 3.4 Environmental protection spending by public sector Covered 3.5 Environmental protection spending in industries Not available Coverage of experimental ESA for Wales Natural resources Physical flows Monetary accounts

Adjusting GVA for use of environmental goods and services Green GVA Genuine Progress Indicator Index of Sustainable Economic welfare

Wales: Trends in ISEW and GVA per Capita (£2005/head)

Conclusion Some progress in term of linking economic progress in Wales to environmental effects Other research aims to examine how projects majoring on environmental and ecological improvement impact the economy

Improving the environment: economic connections Large investments in Wales to improve services derived from natural environment how far is it possible to explicitly measure the economic outcomes connected to such projects? projects working with the built & natural environment might influence elements of the regional economy & have economic impacts in terms of GVA and employment improvements Tourism example

+ 1eme Nature and Sports Euro’Meet partners + …

projects aimed at improving the environment might then…… support local employment directly and indirectly improve skills supply side for tourism safeguard existing tourism revenues, stopping leakages extend the season; change the distribution of visitor types: perhaps encouraging more staying visitors; Resident benefits; housing markets….business location

Scale of economic benefits linked to environmental interventions ….. gross spending of project monies and related employment incomes in reference areas; direction of spending i.e. how far is project- related spending tied to employment, and what are monies spent on what is levered tourism spending spent on where spending is on goods and services, then what proportion of these bought within local economy?

Tools to assess linkages Welsh Input-Output tables (Environment Agency Wales) Welsh Tourism Satellite Accounts (TSA)

SPLASH: exploring the economic effects of the water recreation challenge fund for Wales

Splash Splash is the water recreation challenge fund for Wales Assistance available for projects that secure new or improved public access to Wales’ rivers, lakes, canals, reservoirs, and coastal waters for recreational and educational activities. Welsh Assembly Government offered up to 100% grants to projects which help people to enjoy the water resources.

Indirect regional economy effects of SPLASH activity

Tourism effects? SPL2 - Llandysul Paddlers: watersports facility, environmental improvement, training facility, expectation of increase in watersport users on reference water from 9,000 to 16,000 ; land excavation, plans and project supervision etc.

What might these projected increases in visitation mean in economic terms? Assume in Llandysul Paddlers if just 50% increase in the number of users relates to additional day trips then an additional 3,500 day trips is estimated to account for around £84,000 of direct gross spending on Welsh goods and services, and around £73,000 of regional gross value added (direct and indirect).

Conclusion More important to understand connections between economic changes and environment and vice versa Series of tools in development in Wales to assist How changes in the environment/ecology affect the economy? Much work to be done!