An Economic Analysis of Investment in Assessing Proposed Marine Protected Areas (Round One Assessment – Hero Project)
Project title: Review and assessment of the impacts of the proposed broad areas of interest for MPA development in the SE region (FRDC project 2005/083)
Under international agreements the Australian Government is committed to establishing a network of Marine Protected Areas (MPAs) in Australia by 2012 to ensure long-term ecological viability of existing biodiversity and the marine and estuarine systems. The South East region boasts many species that are not found anywhere else in the world, and hence was a prime target for the establishment of MPAs. Also, there is an agreement between the Australian Government and the States to establish a National Representative System of Marine Protected Areas (NRSMPA) in Australian waters. Further information concerning the development of MPAs is available in Anon (2007).
Planning by Government for the MPA network for the region had commenced in 2002 with a scientific inventory of relevant mapping and research. There were also a Scientific Reference Panel and a Scientific Peer Review Panel. However, in late 2005 there was some political urgency in developing the MPAs. The selection of the MPAs was undertaken according to a set of criteria established by the Australian Government. The MPAs were selected with boundaries identified to make compliance and management easier. While planning was largely conservation driven, there was a commitment by Government to maintain commercial access and sustainable use of the resource by industry.
The Australian Government used the “Securing Our Fishing Future” package to speed up the development of the South-east region MPA in order to align the processes. Hence, in December 2005 a detailed proposal by the Australian Government was released specifying a network of 14 MPAs for the oceans of South East Australia.
In 2005, the then existing regulations to ensure fishing was sustainable were already complex with some fisheries in the region being managed by the Australian Government while others were managed by the southern states (NSW, Victoria, South Australia and Tasmania). Some fisheries were managed jointly. Overall there were over 30 Commonwealth, State or jointly managed open ocean fisheries in the region.
The proposed MPAs and their boundaries were open to negotiation and the Government sought comment. The commercial fishing industry requested a study to:
The study was led by Prof Colin Buxton of the Tasmanian Aquaculture and Fisheries Institute (TAFI) at the University of Tasmania. It was funded by the Fishing Industries Research and Development Corporation (FRDC) and the Tasmanian Department of Primary Industries and Water (DPIW). In addition the project brought together many partners including the Commonwealth, South Australian, Tasmanian and Victorian fishing industries; as well the representative governments of those fishing industries.
The likely benefits are identified in a triple bottom line framework as follows: un-equivocally
The final MPAs provided a significantly lower economic impact on the fishing industry. The displaced gross value of product (GVP) for the original proposal was estimated to be $11.6 m per annum for both Commonwealth and State fisheries. In comparison, the final outcome the estimate of GVP displaced was estimated at $0.9 million per annum. The difference was due in the main to:
The final (agreed) MPA provided a marginally improved set of conservation and biodiversity outcomes to those originally proposed because the original proposal, by nature, included a high level of coverage. The resulting MPA did increase in the area from 171,000sq km to 226,458 sq km or around 30%.
Communities currently engaged in servicing fishing boats and crews (e.g. processors) will lose less infrastructure and employment. The reduced number of personnel losing jobs in the catching and processing industries, particularly in Tasmania, will mean that total disruption and dislocation costs to them and their families is greatly reduced. The initial proposal would have seen over 200 jobs lost across the affected areas.
The report was submitted to the Australian Government and both the Minister for the Environment Heritage and the Arts and Fisheries. A majority of the recommendations were adopted by the Government.
The beneficiaries are the Commonwealth, South Australian, Tasmanian and Victorian fishing industries as well the broader regional communities in each of the states.
The result for the final boundaries and zoning of the Marine Protected Areas in the South–east can be described as a win–win outcome for both industry and the environment. The final MPAs provided a marginally improved set of conservation and biodiversity outcomes to those originally proposed as the MPAs now include more of the shelf areas than in the original proposal. The impact on the fishing industry and its infrastructure and associated communities is far less than what may have been the case under the original proposals.
There is substantial agreement that the University of Tasmania (TAFI) study contributed significantly to this outcome. However, it is difficult to quantify and value this contribution without making a series of assumptions that can be the subject to debate, for example what would have happened if the study had not gone ahead?
Given the assumptions made, the economic analysis suggests that the study and the small investment by FRDC of $37,500 made provided significant benefits to Australia. The net present value for the total investment was estimated at about $70 million at a 5% discount rate, with a benefit–cost ratio of 959 to 1. The estimate of the value of benefits is likely to be an underestimate, given that several identified benefits have not been valued.