Finding Balance Invermere, BC March 2 & 3, 2012 John
Thompson AMEC Environment & Infrastructure
Slide 2
Introduction Presentation follows approach used in economic
impact studies 1. Describe baseline economic conditions 2. Describe
the project conservation and protected areas 3. Describe the
effects conservation and the economy: finding the balance
Slide 3
1. Baseline Economic Conditions Focus on East Kootenay Regional
District Based on information from 1. Statistics Canada (2006
census, 2011 census) 2. BC Stats Main focus on indicators to
describe economic health and well-being
Slide 4
Population 2006 Results of 2006 Census 55,482 people Population
decreased by 1.4% from 2001 Loss of 810 people BC population
increased by 5.3% Population losses in southern areas
Slide 5
Population 2011 Results of 2011 Census 56,685 people Population
increased by 2.2% from 2006 +1,200 people BC population increased
by 7.0% Population losses in northern areas
Slide 6
Labour Force Participation 2006 Higher than the BC average
Higher than other southern BC regions
Slide 7
Unemployment 2006 Lower than the BC average Lower than Greater
Vancouver
Slide 8
Unemployment Since 2006 Has risen Consistent with BC trend
Economic Development Region includes parts of Kootenays with higher
unemployment rates.
Slide 9
Employed Full Time Year Round 2006 Nearly identical to BC
average More part time and seasonal work in the Okanagan
Slide 10
Employment in Agriculture/Resource Industries Much higher than
the BC average Much higher than other southern BC regions
Slide 11
Percent of People with Low Income 2006 Much lower than the BC
average Lower than all but one southern BC region
Slide 12
Median Per Capita Earnings 2005 Nearly identical to BC average
Higher than other southern BC interior regions
Slide 13
Median Family Income 2005 Slightly higher than the BC average
Higher than all southern BC interior regions
Slide 14
Percent of Income from Transfer Payments 2006 Nearly identical
to BC average Less than all other southern BC interior regions
Slide 15
Average Value of Housing 2006 Less than the BC average Less
than Okanagan
Slide 16
Percent without a High School Education 2006 Slightly less
educated than the BC average Better than most other southern BC
interior regions
Slide 17
Income Dependencies Percent of 2006 After Tax Income Fernie
High dependency on mining Cranbook-Kimberley High dependency on
public sector Invermere Balanced ; highest dependency on tourism in
region
Slide 18
Income Dependencies - Mining Percent of 2006 After Tax Income
Fernie Highest in BC Invermere 7th highest in BC
Slide 19
Income Dependencies - Tourism Percent of 2006 After Tax Income
Invermere 2 nd highest in BC Fernie Higher than Kelowna Cranbook-
Kimberley Same as Kelowna
Slide 20
Overall Regional Socio-Economic Index Ranked 5th best out of 26
regions in BC Well above average for three of six components Only
below average for one component - education
Slide 21
Summary of Current Economic Conditions Regional economy in good
condition: + High labour force participation + Low unemployment +
High full time work + High incomes + Low incidence of low incomes
Economic Concerns - Lower educational attainment - Very high
reliance on employment in resource-based industries - Dependence on
single industry in some communities
Slide 22
2. Economic Value of Conservation How do economists put a value
on conservation? 1. Concepts 2. Case studies What do results of
studies mean?
Slide 23
In the beginning.......... Value of something is what people
pay for it Problem: conservation is not bought and sold so no price
So economists focussed on aspects of conservation that they could
measure Recreation activities by local residents Tourism activities
by visitors Value based on expenditures related to recreation and
tourism
Slide 24
Expenditure studies First studies focussed on hunting and
fishing No separate accounts for spending by tourists Used licences
to identify users Used surveys to collect information on
expenditures Examples in BC 1966 Big Game Hunting in the East
Kootenay 1969 The Value of the Kootenay Lake Sport Fishery Resident
fishing $246,000 Non- Resident fishing $32,000
Slide 25
Expenditure studies More recently 1985 Value and
characteristics of resident and non- resident hunting in BC Results
How do you allocate animals among residents and non- residents?
Spending by non-residents is an economic gain for BC Resident
spending is an impact but not a benefit This metric favours
allocations to non-residents Spending/KillResidentNon-Resident
Grizzly Bear$9,650$6,635 Mountain Sheep$7,535$6,245
Slide 26
Expenditure studies - a twist Alberta Parks and Protected Areas
Study 1996 Compared parks to other economic sectors Results Parks
of less economic importance than other industries However....
IndicatorAgri- culture EnergyForestryProv. Parks Nat. Parks All
Parks GDP (millions) $2009$11,851$1,325$69$427$496
Employment87,92069,05015,1602,32512,75015,075
Slide 27
Expenditure studies - a twist What if we look at value per area
of land? Results Economic contributions of parks comparable to or
higher than others sector per unit of land Similar results for BC
and Saskatchewan IndicatorAgri- culture EnergyForestryProv. Parks
Nat. Parks All Parks GDP (millions) $2009$11,851$1,325$69$427$496
Employment87,92069,05015,1602,32512,75015,075 Land (millions ha
)19.528.913.30.15.45.5 GDP/ha$103$410$100$479$79$89
Employment/ha4524111612327
Slide 28
Value is More than Expenditures Non-market benefits (consumers
surplus) Typically measured in terms of willingness to pay Accepted
for use in benefit/cost analysis These values are not included in
economic accounts.
Slide 29
Conservation Values Non-Market Benefits Environment Canada
Importance of Nature to Canadians (1996) Measured expenditures and
willingness to pay Results for BCActivities in Natural Areas
Wildlife Viewing FishingHunting Percent of
Adults47.5%20.8%17.5%3.2% Days/Adult20.124.018.820.3
Expenditures/day$45.00$18.00$29.00$50.00 Consumer
Surplus$8.20$7.60$12.20$17.80 CS/Expenditure18%42% 36% Expenditure
data underestimates value of protected areas by 20% or more These
values are not included in economic accounts
Slide 30
Conservation Non-Use Values People derive benefits from: 1.
Knowing that resources exist even if they dont use them (Existence
value) 2. Knowing that have the option to use resources (Option
value) 3. Knowing that resources will be available for future
generations (Bequest value) Also measured in terms of willingness
to pay These values are also not included in economic accounts.
Relatively few studies have quantified non-use values
Slide 31
Conservation Non-Use Values Bow River Recreation Study 111 km
of river valley valued at $11.6 million (1986) Includes
expenditures, non- market benefits for users and non-use benefits
Non-market (use) benefits accounted for 38% of total Non-use
benefits accounted for 6% of total
Slide 32
Conservation Non-Use Values Existence Values for Northern
National Parks Survey of Canadian households Willingness to pay to
create additional parks in the NWT 4 parks - $235.18, 10 parks -
$261.51 High willingness to pay to create 10 new parks All Canadian
households - $3,252 million However, not all parks have the same
values first park - $1,260 million 10th park - $40 million
Slide 33
Conservation Average vs. Marginal Values What is the value of a
new park? Old studies assumed each new park would create new user
days Each user day assumed to have same value Inconsistent with
measurement of consumer surplus Diminishing marginal value (beer
example) Inconsistent with non-use values Willingness to pay for
new parks example
Slide 34
Conservation Average vs. Marginal Values Highwood/Little Bow
Study in 1994 Measured household use of 24 sites around Calgary
Developed predictive model that based use estimates on 10
attributes for each site (revealed preference method) What are
effects of a new site or change in attributes People switch to
closest sites with preferred attributes No new recreation Economic
benefits measured in terms of Reduced cost of travel (expenditures
- $1.21/trip) Time of travel savings (non-market-benefit -
$0.76/trip) Results confirmed by survey of same households Stated
preference approach
Slide 35
Conservation Values EG&S Protected Areas Provide More than
Recreation and Tourism Ecological Goods and Services (EGS) 1.
Atmospheric regulation (carbon sequestration) 2. Disturbance
regulation (protection from storms) 3. Water supply (water for
economic use) 4. Waste treatment (wetlands) 5. Refugia (habitat for
endangered/migratory species) 6. Genetic resources (source of
medicine) 7. Recreation and Tourism First assessment by Costanza
(1997) Most of these values are also not included in economic
accounts.
Slide 36
Conservation Values EG&S Proposed Ramparts National
Wildlife Area (NWT) 15,000 square kilometres Near Fort Good Hope
(557 people) Protect area from oil, gas and mineral development
Study to examine potential boundary options Economic benefits and
costs from development Economic benefits and costs from EG&S
Boundary option that allowed development only in areas with highest
potential was concluded to be best option
Slide 37
Current Annual Value of Ramparts Area Type of BenefitHighLow
Traditional Resource Use Consumption of fish $8,200 Consumption of
wildlife $115,600 Wood for fuel $51,700 Recreation expenditures
$24,800$48,900 Recreation non-market benefits $5,700$11,300
Commercial Resource Use Trapping $26,600 Outfitting and guided
hunting $500,000 Tourism $39,300 Arts and crafts $19,000 Ecological
Goods and Services Drinking water Unknown Climate regulation
$2,675,000 Migratory waterfowl hunting $21,300 Migratory waterfowl
bird watching $354,600 TOTAL$3,676,000
Slide 38
Conservation Values EG&S Proposed Ramparts National
Wildlife Area Study showed that EG&S benefits can be
significant 83% of current annual benefits Observations Challenging
to calculate EG&S values Dont have information on ecological
functionality Available economic values not applicable Need to
focus on EG&S values that we can quantify
Slide 39
Conservation Values Summary Types of Benefits Recreation and
tourism expenditures Non-market values for users Non-use benefits
(existence values) EG&S values Observations Only one benefit
include in provincial accounts (GDP) All four affect community and
regional well-being Decisions require trade-offs between different
values More tourism can reduce non-market benefits (crowding) More
use can cause reductions in EG&S
Slide 40
3. Conservation and the Economy Current Situation in the East
Kootenays 1. Expenditures 2. Non-market values for users 3. Non-use
benefits (existence values) 4. EG&S values Where do you go from
here?
Slide 41
Visitor Entries to British Columbia, 2005 to 2010 Tourism
Expenditures Mostly from US 22% decline from 2005 to 2009 4%
recovery in 2010
Slide 42
Tourism Expenditures Annual Room Revenues 2000 to 2009 Some
information on tourism (only accommodation) 3.1% of provincial
market Regional trend different from the provincial trend
Slide 43
Monthly Tourism Room Revenues 2009 Tourism Expenditures Summer
and winter tourism Not just tied to one season
Slide 44
Other Conservation Values Expenditures by regional residents No
information Non-market values for resident users No information
Non-use benefits (existence values) No information EG&S values
No information
Slide 45
Is More Conservation a Good Thing? Tourist Spending May
increase tourism and spending Depends on many external factors
Canadian dollar Fuel prices World security What the competitors are
doing High employment per tourist dollar spent Service sector
workers paid less Demands on municipal infrastructure Residents pay
costs Regional economy is already highly dependent on tourism Too
many eggs in one basket?
Slide 46
Too Much Reliance on Tourism Non-basic/Basic Employment Ratio A
high ratio shows: Economic diversity in large areas Economic
vulnerability in small communities Dont want ratio to become top
heavy Too many service sector employment
Slide 47
Is More Conservation a Good Thing? Resident Spending Unlikely
to change but may be redistributed Spending related to income
Non-market values for resident users Unlikely to increase May
actually decline Increased tourism may drive residents to use other
areas
Slide 48
Is More Conservation a Good Thing? Non-use benefits (existence
values) Could be significant increase Formal designation creates
values Could improve Canadian well-being But does not affect
provincial balance sheet EG&S Values Would be maintained or
increased Increased in existence values Does not affect provincial
balance sheet But could preclude resource development Could
adversely affect provincial balance sheet
Slide 49
Is More Conservation a Good Thing? Involves trade-offs Real
dollars (GDP) vs. Non-Market Benefits Tourism vs. Resident
recreation High paying resource jobs vs. Low paying service sector
jobs Uncertainty in tourism markets vs. Uncertainty in commodity
markets Protecting natural values vs. precluding economic
development NO CLEAR ANSWER EACH COMMUNITY MUST MAKE INFORMED
DECISION WHICH DECISIONS ARE REVERSIBLE?