Exploring the economic benefits of coast protection at Torbay, UK
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1 Exploring the economic benefits of coast protection at Torbay, UK
2 Locations around the coast. 1 Towyn 2 Blackpool 3 Morecambe 4 Uphill 5 Porlock 6 Hunstanton 7 Scarborough 8 Filey 9 Bridlington 10 Spurn Head 11 Dunwich 12 Walton on the Naze 13 Frinton 14 Clacton 15 Swalecliffe 16 Herne Bay 17 Whitstable 18 Pevensey 19 Fairlight Cove 20 Hastings 21 Peacehaven 22 TE2100 London 23 Hengistbury Head 24 Hurst Castle Spit 25 Chiswell 26 West Bay 27 Teignmouth 28 Torbay 29 Corton 30 Cliftonville 31 St Mildred s Bay 32 Kingston upon Hull 33 Lower Severn 34 North Norfolk 35 Lincolnshire coast Coastal projects undertaken by FHRC Yellow Manual sites
3 What are economic benefits? benefits = losses avoided Economic benefits = the economic losses that is avoided in the future by protecting the coastline from flooding and erosion
4 Torquay The Queen of the English Riviera Torbay
5 8-11 sunshine hours per day on average April - August Residual life of piers = c5 years A reputation for a healthy climate
6 Structural Defects in Haldon Pier and proposed rock armouring Source: Environment Agency (2011) Haldon and Princess Piers Structural Repairs, Project Appraisal Report
7 Tourism economy in decline Local economy now fragile Loss of the harbour could create terminal decline The harbour offers the greatest potential for economic growth 772 berths in the inner and outer harbour
8 Coastal erosion causing crumbling cliffs of limestone, shale and slate
9 Shifting benefit assessment requirements Traditional approach Stage 1 Major funding policy shift in 2011 New approach Stage 2 Central Government investment in sea defences Assessment of national economic losses avoided by the investment Well-developed standard loss/benefit data and appraisal methods exist Flood Hazard Research Centre appraisal methods and data are used Partnership funding of sea and coastal erosion defence investments announced Central Government investment + Local Government and Third Party investment Local economic losses avoided by the investment Principles of loss assessment are different Assessment needs and loss data are different No-one knows how to do it - FHRC called in
10 The Middlesex FHRC* Manuals: From 1977 to 2013/4 Blue Manual Red Manual FLAIR Yellow Manual 2005 Multi- Coloured Manual Centre founded Direct damages Indirect losses Coastal added 2010 All Update topics 2013/14 Why? To seek sensible decisions on where and when to invest our hard-pressed taxpayers money on reducing the risks of flooding.. Routledge, November 2013 * Flood Hazard Research Centre, Middlesex
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12 Options, costs and benefits Options 1 Do nothing 2 Do minimum 3 Structural repairs to piers 4 Allow piers to breach and repair afterwards 1,500,000 emergency structural repairs undertaken in 2009 Change in standard of protection under Option 3 1:5 year standard - 1:75 year standard Potential flood losses (i.e. damage) 110,062,070 Potential economic costs and benefits (discounted) Stage 1 PV costs = 8,505,500 PV benefits = 97,766,380 B/C ratio = Potential economic costs and benefits (discounted) Stage 2 PV costs = 8,505,500 PV benefits = 159,311,343 B/C ratio = 30.22
13 Option comparison Stage 1 Option PV Costs PV Benefits Benefit/cost ratio 1. Do Nothing 0 0 Not applicable 2. Do Minimum 4,325,800 37,934, Structural repairs now 4. Structural repairs after breaching 8,505,500 97,786, ,287,400 37,934, Source: Environment Agency (2011) Haldon and Princess Piers Structural Repairs, Project Appraisal Report
14 The principal categories of flood loss potential Physical damage to property - Stage 1 Commercial Property losses - Stage 2 o Loss of business rates income to Torbay Council due to closure o Loss of GVA to businesses due to closure o Loss of Gross wages to businesses due to closure Residential Property losses Stage 2 o Blight of property sale values Harbour Moorings and Infrastructure losses Stage 2 o Loss of Harbour infrastructure o Loss of Moorings Revenue to Torbay Council o Loss of Moorings Revenue to MDL Marinas Ltd o Loss of Lease Fee from MDL Marinas to Torbay Council o Loss of Cultural Heritage Ferry Services Stage 2 o Loss of Current Seasonal Ferry Revenue o Loss of new all year round Ferry Service Revenue Car Parks Stage 2 o Loss of Revenue to Torbay Council and Private Operators Cruise Ships Stage 2 o Loss of Tourist Revenue from Cruise Ships Tourism - Stage 2 o Loss of Visitor Income from Boat owners o Loss of General Holiday Visitor Income
15 Properties at risk from inundation during a storm surge 218 properties at risk 54 Residential Stage 1 PV of property losses = 97,766,380 C/B ratio = Non- Residential Source: Environment Agency (2011) Haldon and Princess Piers Structural Repairs, Project Appraisal Report
16 Stage 2 additional local economic benefits Present value of losses (benefits) of renewing the piers at Torquay Harbour Business sector % Commercial 26 42,114,783 Residential ,862 Harbour 31 48,477,679 Ferry services 4 6,207,466 Car parks 0.9 1,377,096 Cruise ships 0.8 1,056,666 Tourism 37 59,545,793 Total ,311,343 Overall, B/C ratio is 30.22:1.
17 Money is scarce Conclusions There are competing demands for investment hospitals, roads, coast protection etc. CBA is a very useful tool for choosing the economically optimal options i.e. the options which produce the best return on public investments Without using CBA, public investments may well not generate the best value for the society/community money may be wasted Different flood loss data should be used for national and local economic assessments Economic factors are one important input to decision-making others are important too i.e. social, environmental etc.
18 Acknowledgements Royal Haskoning DHV Torquay District Council Environment Agency Exeter City Council Google Earth Ian West, Visiting Scientist, Southampton University Various local photographers with photographic websites
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