Alluvium, along with Natural Capital Economics and Jeremy Cheeseman were engaged to assist the Gold Coast Waterway Authority (GCWA) to understand the contribution to the regional economic activity (locals and tourists) from their waterway assets. This information will be used to assist GCWA with decision making, business cases and investment.
GCWA has significant responsibility for the ongoing management and the subsequent benefits derived from the Goal Coast waterways by residents (primarily recommendation and other social values), businesses (waterways as an asset that underpins business activities) and visitors (waterways are a major drawcard for visitors). GCWA’s responsibilities largely relate to the maintenance of the condition of relevant built and natural waterway assets that deliver the benefits to residents, businesses and visitors.
The use of waterways by residents for recreation, tourists for water-based activities and relevant businesses, creates economic activity. This economic activity stimulates the economy (including flow-on impacts and induced economic activity), creates employment, and triggers ongoing investment. Typically the size of regional economies is measured as its Gross Regional Product (GRP) within a national accounts framework.
However, tourism and recreation are not formal sectors within a traditional national accounts framework. Research has already been undertaken to develop Tourism Satellite Accounts (TSA) that evaluate the tourism industry activity and performance within a national accounting framework. Through the aggregation of relevant expenditures estimated through this project, we focused on determining the approximate proportion of the $9.5 billion tourism industry in the Gold Coast is attributable to the use of waterways.
Our overall framework we delivered considered the broad suite of goods and services. There are four interrelated issues that we reviewed in detail.
1. Waterway categorisation (type, extent, condition, trends). This categorisation process identifies and measures the key waterway assets relevant to the study.
2. Use of relevant waterways by different user groups. This is effectively a measure of the activities undertaken on waterways (type, participation rates and frequencies).
3. The economic contribution of waterways to the Gold Coast and SEQ economies (i.e. what is the contribution of waterways to the Gross Regional product of the Gold Coast?). This effectively provides an understanding of the important commercial role of waterways in the regional economy. This information provides insight to policy makers and investors with an interest in sustainable economic development.
4. The economic value of relevant waterways including both the market and non-market values attributable to the waterways (what is the total economic value of waterways?). This information provides insight to a broader suite of stakeholders as it goes beyond commercial values and incorporates environmental and social values.
We used an ‘ecosystem services’ approach, which provided a robust and logical means to identify, quantify and value the broad suite of relevant values. This framework allowed for the values of the individual ecosystem services to be aggregated into a estimate of the Total Economic Value of the relevant waterways (including the dominant market and non-market values).
Furthermore, through the capitalisation of the estimated stream of annual values of ecosystem services, it was possible to calculate a natural capital value for the waterway assets. This enables better comparison of management decisions between built assets (e.g. a bridge) and natural assets (e.g. a watercourse for ferry transportation).
Importantly, our approach also deliberately incorporates inputs from both economics and science, as it is the risks to waterway assets (condition) that lead to changes in the benefits derived. And it is policies and investments undertaken by the GCWA in managing the condition of waterways and their use that will ensure the continuation and enhancement of benefits derived by the local community, visitors and related businesses for the long-term.