Hirschfeld - Littoral 2010 (Education Centre)

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The role of coastal water qualityfor tourism demand

and the regional economy ±

Coupling ecological and economic models

Jesko Hirschfeld1,

Gerald Schernewski2, Nardine Stybel2, Jürgen Meyerhoff 3, Ralf Scheibe4

1Institut für ökologische Wirtschaftsforschung (IÖW),2Leibniz-Institut für Ostseeforschung Warnemünde, 3TU Berlin, 4Universität Greifswald

LITTORAL 2010 Adapting to global change at the coastLondon 21-23 September 2010, Royal Geographical Society



Socioeconomic Analysis

Socioeconomic effects of improvements in ecosystem services

provision:

How do improvements in water quality (indicator: transparency)

affect the number of visitors?

What is the effect of changes in tourism demand on the regional

economic product?

How are these findings integrated into the into the ecological-

economic Extend model?

Which are the results of the model runs?

Costs and Benefits of measures to improve water quality in the

Odra Lagoon ± does ICZM pay off?

Questions

Jesko Hirschfeld



Model Coupling ± Nutrient Transport Model

Jesko Hirschfeld



Model Coupling ± Estuary Ecosystem Model

Jesko Hirschfeld

Mussel

module

ransparency

utrient-retention



Model Coupling ± Estuary Ecosystem Model

Jesko Hirschfeld

Conceptual Model:

Oder river basin - coast



Baltic Sea ecology

(ERGOM)

Mussel farming

(ecology)

Oder river basin loads

(MONERIS)

Oder lagoon ecology

(ERGOM)

River basin management

options

Tourism (economy)

ater transparency

Mussel farming

(economy)

ater FrameworkDirective (governance)

Conceptual Model:

Oder river basin - coast



Model Coupling ± Regional Economic Model

Jesko Hirschfeld



Tourism demand function - Seasonality

Jesko Hirschfeld

Regional total number of tourist overnight stays per year:

approximately 200,000, plus 340,000 one day visitors

ernight stays at Inner dra Lagoon per month( 006- 008 a erage)

0

5.000

0.000

5.000

20.000

25.000

30.000

35.000

40.000

2 3 4 5 6 7 8 9

0

2

month

o

e r n i g h t s t a y s p e r m o n t h

black: bathing season months, grey: non-bathing season months



Tourism demand function ±

Dependency on water quality (transparency) I

Jesko Hirschfeld

Assumption: Current visitor numbers determined (among other factors) by the status quo of water quality

Empirical survey statements: Improvement of transparencywould make visits more attractive

Empirical survey statements: A significant improvement wouldpursuade 2 % of the summer visitors to come more often

Conservative assumption: An 1.0 m improvement of water transparency would pursuade 2 % of the summer visitors tocome 0.2 times more often, non-bathing season not influenced

Result:

A 1 m increase in water transparency would increase the number of summer overnight stays by , 0, that means + . % of summer stays or +3.4% of annual overnight stays




Dependency on water quality (transparency) II

Jesko Hirschfeld

Further conservative assumptions:Current visitor numbers constant if transparency stays at status quo

Visitor number would be negatively affected if transparency woulddeteriorate to zero ± since more than % of the visitors intend togo swimming

While an 1.0 m improvement of water transparency would pursuade2 % of the summer visitors to come 0.2 times more often, a 2.0 mimprovement would cause 2 % of the summer visitors to come 0.times more often.

Resulting demand function values (cet. par.):

Water transparency - .5m (= m) constant ( .5m) +1m +2m

Overnight stays -3,42 ±0 + , 0 +13, 00

% of overnight stays -1. % ±0% +3.4% + , %




Dependency on income and beach area

Jesko Hirschfeld

Further assumptions:Travel decisions are highly sensitive to income development ± theyvary with squared GDP growth rates *(GDPgrowth rate)²

Current beach area supply: 1 ha. During summer days (May-Sept) every visitor during the bathing season is supplied with an

average of m² beach area per headBeach congestion is negatively connotated. Therefore additionallysupplied beach area per head is slightly increasing visitor numbersopposed to status quo, while increasing congestion reduces it( % stated, that it is important to them having not too many other people at their beach).

If the number of visitors varies at a rate of at least % of the beacharea per head variation, one additional ha beach would theninduce 0.3% or 340 additional annual overnight stays in summer season.



Jesko Hirschfeld

Tourism demand function

Dt = T° * (1 + ss *(0.01 * Wtr t ± 0.034) + (At - A°)*0.0 ) + Tt-1 * (gt)²

Dt = Tourism demand (number of visitors per year t)

T° = Number of visitors in year 200 (vector of different types of visitors:overnight stays, campers and day visitors)

Tt = Number of visitors in year t (vector)ss = Share of summer visitors (0. )Wtr t = Water transparency [m] in year t (Wtr t 0)gt = GDP growth rate in year tAt = Beach area in year t (A° = 1 .000m²)

§t

1

Integration of Socioeconomics into the

SPICOSA Model System (EXTEND)





Jesko Hirschfeld

Tourist expenditures (gross turnover)

Ti * eij

Ti = Number of visitors of type i; i = 1 visitors staying overnight in Hotels withmore than beds, i = 2 visitors staying in hotels < beds,i = 3 campers, i = 4 day visitors

eij = Expenditures of visitors of type i on goods and services of type j per day

Regional net turnover from tourist expenditures

Ti * (eij - VAT j)

VAT j = Value Added Tax on goods and services of type j

§ij

§ij



Jesko Hirschfeld

Regional value added through tourist expenditures

(Ti * (eij - VAT j) * v j ) * v2

v j = regional value added multiplier for goods and services of type j(first round multiplier)

v2 = regional value added multiplier for goods and services (second round)

Municipal tax revenue from tourism

(Ti * (eij - VAT j) * v j ) * v2 * m

m = tax share of tourism generated regional value added that remains at thedisposal of regional municipalities

§ij

§ij





Jesko Hirschfeld

Local jobs dependent on tourism

( Ti * (eij - VAT j) * v j ) * v2 * 1/w

w = average regional income per employee

§ij





Regional economic model: output examples

Jesko Hirschfeld

Overnight guests spend 3 ¼ per head per day on average,

campers 2 ¼, day visitors 24 ¼ per head per day

Taking into account first and second round multiplier effects (on thebasis of a regional input-output analysis) this means an increase inregional economic product by the expenditure of overnight guestsspending of 3 ¼ per head per day and for day visitorsµ spendingby 11 ¼ per head per day

Tourismµs contribution to the regional economic product (inner Lagoon region) currently lies at 13 Mio. ¼ per year, generatingapproximately 1,000 jobs ( % of regional workforce)

Tax revenues for regional municipalities due to visitorsµexpenditures: 0.000 ¼ per year

Model simulation result example: Effects of 1 m transparencyenhancement: +4 0,000 ¼ regional economic product, +20,000 taxrevenue per year, +3 jobs



Cost-benefit analysis ± Choice Experiment

Jesko Hirschfeld



Cost-benefit analysis preliminary results

Jesko Hirschfeld

Costs of the introduction of mussel farming

vs.

Income from mussel farming and additional benefits

Benefits of 1 m enhancement of water transpareny:( calculation of present values over 20 years at 3% discount rate )

because of additional visitors (regional value added): 6,5 Million ¼

because of additional benefits to the visitors (willingsness to pay for 1 m transparency enhancement): 9,5 Million ¼

Result: Benefits of 16 Million ¼ in 2 years

To qualify the results, a sensitivity analysis will be carried out



Socioeconomic Analysis ± Discussion (ICZM-Oder)

Measures to reduce nutrient immissions into the Odra River will not pay off only by benefits within the inner Odra

Estuary region

The beneficial effects on the water quality at the Baltic

coastline and the Baltic Sea in general must additionally betaken into account ± also in light of climate change

Agricultural measures are more cost-efficient than further

improvement of sewage treatment beyond compliance withthe Waste Water Directive (201 )

The most cost-efficient measures could be implemented inPoland. But purchasing power disparities should be taken

into account when discussing a fair burden sharing.

Dr. Jesko Hirschfeld



Life after SPICOSA:

RADOST -Regional Adaptation Strategies for the German Baltic Coastline

www.klimzug-radost.de

Contact:

[email protected]

Institute for Ecological Economy Research, Berlin

Institut für ökologische Wirtschaftsforschung (IÖW)

www.ioew.de

Dr. Jesko Hirschfeld

Hirschfeld - Littoral 2010 (Education Centre)

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