1. Economic Analysis for MSFD: the ESA guidance review.
Marilena Pollicino, Economic advisor Defra, UK
WG ESA meeting
26th/27th October 2015

2. Glass half full
Economics is embodied in MSFD. ESA guidance used by Member States. Anything missing?

3. Key Economic messages contained in the ESA guidance
Socio-economic analysis is specified as part of the process to inform policy from the start
Economic efficiency considerations (are actions cost-effective, do benefits justify costs) are allowed to modify environmental objectives
Economic instruments (e.g. pricing and other voluntary mechanisms) are envisaged to achieve environmental objectives

4. MSFD main drivers
Process: Other legal drivers are already delivering GES (but quantum unknown):
National legislations
CFP;
WFD;
Habitats Directive; etc.

5. MSFD approach Objective: to achieve GES Exemptions can apply:
Not technically feasible
Natural conditions do not allow
Disproportionate: Benefits do not justify costs
Disproportionate: Not affordable
Uncertainty and lack of scientific evidence important 1 1 1 1 2 2 2 3 3
New measures to get GES 5 4 4

6. ESA guidance: key successes
Widely adopted by Member states to assess costs and (when available) benefits to justify the adoption of new measures
More flexible than other Directives on how you want to achieve the MSFD objectives
Share information with experts on case studies and economic data
Disproportionate approaches were discouraged
Any other example?

7. ESA guidance: some limitations
Ecosystem services approach (ARCADIS report provided examples but still more to do)
Few “market benefits” considered (saved treatment)
Stated preference methodology for non-market benefits (WTP survey results)
Check results compatible with recent research and surveys (spatial and temporal limitations)
Describe qualitative/scientific information to make the case where benefits are higher (stakeholders’ process)
Decision-makers still have discretion

8. Process GES established in Phase 1 Phase 2 Monitoring
Phase 3 Assessment. Different countries might follow different approaches.
New measures expected
For which countries?
Additional Costs to businesses
Has the guidance been useful?
Additional Benefits
Is the guidance fit for purpose? If not why not?
Scientific information
How do you treat uncertainties and results from monitoring? Risks/pressures and difficulties in translating this into an economic language

9. An example from the UK Economic and scientific driven Pricing? GES
Litter indicators to be improved?
Invasive species to be improved?
Planned measures
Existing measures
Noise to be improved?
Voluntary mechanisms?

10. Main UK reaction Economics built at different stages but centralized
Exemptions for disproportionate costs
MSFD economic process less demanding and complex than other Directives
Economic analysis heavily relying on uncertain science which enables to postpone decisions
Member States take a different view of economics
Definitions and application of disproportionate analysis and uncertainties remain unresolved
Stakeholders and industry involvement important but mainly at local level by making comparison with data from different countries difficult
Consistency across economic data required.

11. Glass half empty
What next?

12. Action title Step Milestone Who associate? How ? deliverables 1 2 3
MS Leader :
MS participants :
Main objectives :
How action serves the MSFD 2nd cycle implementation Links to art.8, to art. 9, to art.10 or others :
Main steps/packages and associated milestones and intermediary deliverableas
Step
Milestone
Who associate?
How ?
deliverables 1 2 3
. Lead/volunteers
. Deliverables/products
.By when
. April – discussion on WP
May – Mandate from MSCG confirm in june by marine directors
Oct – Esa WG – doc on WP
13th ESA WG meeting Oct 2015