Integrating marine ecosystem services into macroeconomic modelling

Abstract

The anticipated benefits of integrative economic frameworks, that link economic production with ecosystem impacts, have been well documented. However, due to the difficulties of separating the economic contribution of marine activities from those of terrestrial activities, the current size and structure of the marine economy is unknown. In addition, the capacity of natural capital assets to supply specific marine benefits is not comprehensively defined under current applications of the natural capital approach. Consequently, marine benefits have not been systematically linked with production in the economy, and the effect of causal relationships between the economy and marine natural capital assets have not been estimated. In response to these shortcomings, this thesis develops an integrative framework to combine macroeconomic systems with marine and coastal ecosystems under the natural capital approach in the UK. The framework combines marine natural capital assets and the environmental benefits they supply, with economic production. Firstly, the UK marine economy is systematically defined, using input-output tables for 2014. The contribution of all activities in the market economy that occur within, and depend upon, marine and coastal environments in the UK are analysed. Secondly, the way that benefits from natural capital are supplied is defined using a composite index. Characteristics of natural capital, and other forms of capital (i.e. financial, human, social, manufactured), that affect the supply of specific environmental benefits are analysed, and indicators for each characteristic are selected. Indicators are ranked and weighted, and benefit supply is represented as a composite index. Finally, the causal relationships between the economy and natural capital assets are identified and measured. Case studies from the UK marine and coastal environment are used to apply the framework using data from 2013 to 2018. The strengths of the integrative framework, and its shortcomings, are discussed in the context of the natural capital approach and its application to the marine environment.