Natural capital: marine and terrestrial economic reliance analysis

Appendix 2: Model Methodology Details

Extended details for Method 1: Marine Natural Capital

The model was updated to reflect these decisions through the following steps:

1. Locate “Method 1 % of total domestic expenditure” column [Inputs>>>Natural Capital Reliance]

2. Update relevant cells as outlined in Table 3.

Details for Method 2: Marine Natural Capital

Downstream Industry Use of Marine Natural Capital Resources

To adapt method 2, the Supply and Use Table (SUT) data (which shows how industries use and supply goods and services across Scotland) would have to be used to calculate the industry dependence on marine natural capital for non-core natural capital industries. Eftec and WSP, the original consultants, and NatureScot analysts were consulted to gain better understanding of how the method could be adapted for marine natural capital.

The following method was agreed upon:

1. Take the columns from the SUT data for each core marine natural capital industry

2. Multiply the entire column by the proportion of the industry that is considered marine (see Table 1)

3. For every industry row, sum the total of each marine natural capital column

4. Add this to Method 1 expenditure to get Method 2 expenditure

5. Divide Method 2 expenditure by domestic expenditure for each industry to get Method 2 % of total domestic expenditure

6. Insert this column into [Inputs>>>Natural Capital Reliance>>>Column J “Method 2 % of total domestic expenditure”]

Details for Method 3: Marine Natural Capital

Wider Ecosystem Service Valuation

The original methodology applies a materiality and substitutability score to the Method 2 results. For more detail on these please see the methodology section in the main publication¹.

This method was applied:

1. Take materiality scores listed in [Inputs>>>Natural Capital Reliance>>>Column M “Materiality Score”]

2. Divide materiality scores by 105 to get “Materiality Score (% Index)”

3. Multiply new Materiality Score (% Index) result by Method 2 % of Total Domestic Expenditure

4. Add result to Method 2 % of Total Domestic Expenditure to get “Method 3% of total domestic expenditure” column

5. Insert this column into [Inputs>>>Natural Capital Reliance>>>Column P “Method 3% of total domestic expenditure”]

Inputting this data to the model will update the following columns:

1. “Method 3% of total domestic expenditure” is multiplied by “Domestic Expenditure” to get Column Q “Method 3 Expenditure”

2. “Method 3% of total domestic expenditure” is multiplied by “Output” to get Column R “Output”

These updated results are then applied to the substitutability scores; so, no further edits are required to update the substitutability calculations.

Details for Method 2: Terrestrial Natural Capital

For method 2, the marine “Method 2 % of total domestic expenditure” was subtracted from the total % used in the original model to give the “Method 2 % of total domestic expenditure” column for spending on terrestrial natural capital.

Details for Method 3: Terrestrial Natural Capital

Method 3 was adapted using the identical process as explained for the marine model, with the terrestrial “Method 2 % of total domestic expenditure” used to calculate the “Method 3 % of total domestic expenditure” for terrestrial natural capital.