Waterway benefits valuation & economic assessments

Waterway benefits valuation & economic assessments

Background

1 Principles

2 Economic welfare analysis- Waterways in Wales case study

3 Economic impact analysis- Kennet & Avon Canal case study

-4 Sustainability (Quality of Life) indicators- - Droitwich Canal case study

Principles

Appraisals & evaluations

Used to forecast / evaluate change against a baseline

Measurement of absolute change in people‘s quality of life:

Economic welfare analysis / Sustainability indicators

Measure of spatial impacts Economic impact analysis

Welfare analysisIntroduction

Used to compare between alternatives

Alternative may be Do Nothing

Need to consider counterfactual scenario

Cost – benefit analysis

Monetarisation of benefits

Multi-criteria analysis

Welfare analysisEcosystems services approach

Provisioning servicesProducts / services provided by the ecosystem

Transport – cost savingsWater supplyRenewable energyProperty premium valueVolunteering


Regulating servicesBenefits obtained through the regulation of ecosystems processes

Carbon savings – transport & renewable energyDrainage, water conveyance & flood protectionWater regulation and pollution dilutionWater quality


Cultural servicesThe non-material benefits people obtain from the environment

Recreation & tourism (use benefits)Non-use benefits - heritage, environment, visual amenityEducationHealth & well-being

Welfare analysisMeasurement

1.Direct market assessments

2.Value transfersMonetarisation of benefits

3.Non-market valuationRevealed preferenceHedonic pricingTravel Cost MethodStated preferenceContingent valuation (WTP/WTA)Choice experiments

Waterways in Wales (2007)Annual direct revenue & costs

Cost of maintenance / management £3.3m

Income £1.4m

Net annual cost £1.9m

Land drainage £2.4m

Recreation / tourism £5.7 – 8.2m

Non-use £2.5 – 5.0m

Health & well-being £0.0 – 3.2m

Total welfare benefits £10.6 – 18.8m

Annual welfare benefits

Economic impact analysis

Spatial (redistribution) impacts

Employment is often key measureRegional development projects eg.ERDF

Jobs created / jobs retained

Direct employment assessment

Indirect employment assessment – Tourism multipliersBased on growth in annual visitor spend from baseline

Income multipliers – indirect / induced expenditure; money retained in local economy

Employment multipliers – FTE jobs

Deadweight / displacement issues

Economic impact analysis

Other outputs / outcomes may be required, depending upon funding source:-Heritage / environment enhancement / conservation

Training places delivered

Area of derelict / brownfield land improved

Kennet & Avon Canal Restoration

Kennet & Avon Canal

Kennet & Avon Canal Restoration140 km-long waterway, linking R.Thames with Bristol

Opened 1810

Closed to through navigation 1955Gradual re-opening over next 30 years through partnership comprising British Waterways, local authorities, canal trust & association of canal businesses

Re-opened 1990. However re-opening not sustainable in long-term€44m Heritage Lottery-funded scheme approved 1996 to secure the canal‘s long-term future

Canal officially re-opened 2003

Evaluation programme. Latest 2009

Kennet & Avon Canal RestorationImpacts – Tourism & recreation

Tourism & recreation activity 2009

Visits per year – 11.2m

Boats based on the canal – 1,416

Gross direct visitor spend per year - £42m (€49m)

Change in activity 1995 – 2009

Increase in visits – 46%

Kennet & Avon Canal RestorationImpacts – Employment

Tourism & recreation-related

FTE jobs supported 2009 – 1,306

FTE jobs created by restoration – 500

FTE jobs secured through restoration - 700

Waterside developments

Investment in canalside developments 1995-2005 £375m-£435m (€440m-€510m)

2,700 FTE jobs supported in these developments

Kennet & Avon Canal RestorationImpacts – Qualitative

Establishment of developer & investor confidence, especially in derpived areas

Improved canal environments bring forward the development of vacant / under-used sites

Linear nature of canals helps integrate elements of development sites

Canalside sites help enhance vitality & vibrancy of an area – creates market for leisure-related development

Waterside residential developments have premium value – c20%

Sustainability (QoL) IndicatorsBrings together welfare & economic impact assessments into a single framework

Related to sustainability priorities (eg. In England – National Quality of Life Count indicators)

Indicators may be monetarised, other quantitative, qualitative, physical or descriptive

Drives the monitoring & evaluation framework for a project

Helps resolve conflicting priorities

Process and result indicators

Droitwich Canal RestorationQuality of Life Indicators

1.Maintaining high and stable levels of economic growth & employment

Investment in physical assetsAssets created / improvedInvestment realised / resulting

Growth in the waterway-based economyBusiness start-ups

Maintaining high & stable levels of employmentJobs created / secured


2.Social progress which recognises the needs of everyone

Tackling poverty & social exclusionAccess by – disabled people; ethnic minorities; elderly people etc.

Equip people with the skills to fulfil their potentialEducationTraining & skills developmentCommunity action & volunteering

Improve overall health of the populationIncreased physical activity by local people

Reduce crime & fear of crime(Statement outlining measures taken & impacts)


3.Effective protection of the environment

Improved choice in travelSustainable transport impacts.

Improved river qualityWater quality status

Re-using previously developed land„Brownfield“ land restored / reclaimed

Increasing satisfaction with quality of lifeHeritage restored / improved / secured

Development in rural areasEnhanced biodiversity – habitats & species


4.Prudent use of natural resources

Waste reduction, re-use, recycling & recoveryDealing with contaminated landWaste disposed off / used on siteVolume of recycled material / secondary aggregates used

Documents

Waterway benefits valuation & economic assessments