Marine Strategy Framework Directive (MSFD)
Common Implementation Strategy
12th Meeting of the Marine Strategy Coordination Group (MSCG)
Venue:
Conference Centre Albert Borschette, Rue Froissart 36, B-1040 Brussels, Room 0/C
11th February 2014 09.30 – 18:00
Title: / Programme of Measures: progress report and state of play of PoM recommendation
Number: / MSCG12/2014/4bis
Agenda Item: / 4b
Date prepared: / 3February2014
Prepared by:
Background: / DG ENV – Arcadis - NL
According to the CIS work programme, one of the tasks of WG ESA is to organise a workshop dedicated to Cost Effectiveness Analysis and Cost Benefit Analysis, to share relevant experiences and practices.
The following document describes the aim of such a workshop and provides a first agenda.

MSCG is invited to:

a.Take note of the date of the workshop,

b.Discuss the suggested aim of the workshop and the draft agenda,

In addition, MSCG representatives are asked to express interest in providing a presentation during the workshop and designate representatives by 25 February 2014,

MSFD CEA/CBA workshop

Location:

Brussels

Date:

April 1, 2014 (back to back with the WG ESA meeting: 2nd and 3rd of April 2014)

Organisation:

EC DG ENV C2

Chair: delegates from WG ESA from the Netherlands and Germany

Facilitation: ARCADIS Belgium

Objective:

Following the MSFD requirements, it is indicated in Article 13.3 that “Member States shall ensure that measures are cost-effective and technically feasible, and shall carry out impact assessments, including cost-benefit analyses, prior to the introduction of any new measure”.

This is a crucial requirement of the Directive, where a common understanding and exchange of best practice might help to better perform CBA for new measures and ensure the measures are cost-effective.

The overall aim of the workshop is to exchange and learn from MS experiences with respect to CEA and CBA application in MSFD and WFD implementation. The workshop will be based on presentations by the MemberStates and discussions that will focus on certain challenges when applying CEA and CBA in practice. The results of this workshop will be integrated in a “best practice document” to be produced by the summer of 2014. A summary of the most important results will also be included in the recommendations paper on Program of Measures.

Background to the workshop:

The aim of a cost-effectiveness analysis is to arrange a list of potential measures in such a way that measures that contribute most to a given objective at the least cost are located at the top of the list ("biggest bang for the buck"). A cost-effectiveness analysis can thus help to achieve a certain objective at the lowest cost, or which contribute to the target as much as possible given a limited available amount of money.In developing their marine strategies, Member States have to choose the measures that are best suited to cope with environmental pressures or impacts on the marine environment. Measures should be prioritised based on the assessment of their cost-effectiveness. Ideally and in theory, this would require clear (quantitative) target setting and a good knowledge of the functional relationships between measure-pressure-descriptor-environmental target. For both, the WFD and the MSFD, it appears that often there is no quantitative knowledge on these functional relationships available. This means that a theoretically ideal quantitative cost effectiveness analysis will not be possible. But what type of information can economists provide to best support the decision making process?

Cost-benefit analysis (CBA) is designed to show whether the total advantages (benefits) of a project or policy intervention exceed the disadvantages (costs) This essentially involves estimating (as far as possible in monetary terms) all of the costs and benefits, including items for which the market does not provide an observable measure of value, accruing to all affected parties. The affected parties should include not only the policy/program/project participants and consumers, but also third parties who are affected. Basically, a project represents a good investment if the aggregate benefits exceed the aggregate costs.For the cost-benefit analysis and mainly due to the limited knowledge of the functioning of the marine environment, the problems with quantification of potential effects of measures and consequent impacts on the marine environment may prevent a proper estimate of the potential benefits in monetary terms. Therefore, the same question applies: What type of information can economists provide to best support the decision making process?

Target audience:

  • WG ESA members
  • MS MSFD representatives/decision-makers (MSCG), economists and other practitioners involved in MSFD economic analyses and MSFD Programme of Measures development in the various Member States
  • If relevant WG GES, MEG representatives
  • European Commission
  • DG ENV WFD WG Economics delegate(s)
  • Regional Seas representatives?

Since the main aim of the workshop is to discuss the problems encountered when applying standard economic analyses in practise, participants are expected to have some basic knowledge of economic analys.

Expected number of participants:

60

Means:

ARCADIS in cooperation with the chairs, will prepare a background paper before the workshop, so workshop participants can read this in advance and prepare for discussions and questions. Presentations from Member States on CEA/CBA applications will be requested in advance of the workshop and discussed with the organising team. Individual MS presentations will be focussing on specific issues (see Annex 1). After each MS presentation, Arcadis and/or the chairs willbroaden the analysis and give some more examples and discuss potential best practices.

Output:

A summary report of the workshop will be produced and included in Annex II of the PoMs Recommendation.

The workshop presentations, discussions and further analysis after the workshop will be used for building a best practice document on CEA/CBA for the MSFD(to be produced summer 2014).The best practice document should not be considered as a "classical" guidance document, prescribing the one and only method that should be followed. On the contrary, it will be important that different (aggregated) approaches are presented together with their advantages and drawbacks. Considerable attention will be given to examples (cases) illustrating the steps, outputs and potential remaining uncertainties related to each approach.

Broad outline of the set up of the workshop:

Programme / Who / Timing
Registration attendees / ARCADIS / 9-9.30am
Start – Setting the Scene
  • Welcome
  • ‘Setting the scene’:
  • Introduction by Commission on legal framework and role of economic analysis in MSFD
  • Link to other (EC) initiatives (eg WFD; eg Impact Assessment)
/ Chairs
EC
ARCADIS / 9.30-10am
Experiences of CEA/CBA in WFD
Presentation on similarities and differences between WFD/MSFD, and a European overview of lessons learned in WFD economic analyses / tbc / 10-10.30am
(20 min presentation + 10 min questions)
Coffee break / 10.30-11am
Experiences from MSFD – Session 1:
MS presentations: At the WG ESA meeting there were offers from: Germany, France, UK, Finland, Latvia, and Lithuania and NL – MSCG to come forward with cases candidates
3 presentations.
Specific environmental problems, practical execution issues, role of CEA/CBA in the decision-making process… / Member States (3)
ARCADIS
(and/or chairs) / 11am-12.30
(20 minutes MS ppt,5min question per ppt + 15 min framing the issue(s))
Lunch / 12.30-2pm
Experiences from MSFD ) - Session 2
MS presentations – continued (see above)
3 presentations / Member States (2)
ARCADIS (and/or chairs) / 2-3.30pm
(20 minutes MS ppt,5min question per ppt + 15 min framing the issue(s))
Coffee break / 3.30-4pm
Round table discussion – Q&A session
Issues to discuss with MS –opinions from the public
(structured by list of issues)
+ leave some time on questions not part of issues discussion:
  • What do you want to know?
  • What do you want to share?
/ Led by ARCADIS + Chairs / 4-5pm
Way forward:
  • Wrap-up
  • Discussion of wrap-up
  • Next steps
/ Chairs + ARCADIS
EC / 5-5.30pm

Note that the WG ESA will meet on the 2nd and 3rd of April. A summary of the results of this workshop will be presented and discussed there.

Annex 1: Possible issues to discuss

Focus on a more abstract level, relevant for the decision-making (but keep it as practical as possible!):

  • General question:Why are these instruments required and how can they support the achievement of the Directive’s objectives?
  • Who are we performing the analyses for? at society level but what about socio-economic impacts of the different stakeholders (link to impact assessment and sustainability requirement of MSFD)
  • How do we incorporate CEA/CBA results in the overall Programme of Measures development, prioritization of measures and decision-making?
  • How do we deal with governance issues?benefits and costs shared by different Member States, in regional seas, within different regions in a MemberState….

Focus on the environmental problemsmeasures target for which we want to perform CBA/CEA:

  • If various Member States perform analyses on the same topic, there might be an opportunity to perform certain analyses together and may be use each other’s data (and thus reduce costs).
  • Can we identify issues that are relevant across RegionalSeas?

Focus on the practical execution and how to perform cost-benefit /cost-effectivenessanalysis for measures; e.g.:

  • Issues with data: where do we get data on costs, effects, benefits?
  • Issues with assumptions: What discount rate should be used? (and how to discount?) What impacts should be assumed? How long does it take for measures to show effects?
  • Issues with methods: If benefits cannot easily be presented in monetary terms, what alternatives are out there? E.g. Nature point method, but also other alternatives
  • Issues with scale; time, place and population size.
  • Use of initial assessment analysisresults (economic analysis)
  • Specific examples of quick-wins or no-regret measures

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