Economics of multi-use and co-location

Abstract

Under the right circumstances, multi-use of a marine site through co-location of complementary activities can result in more efficient use of ocean space. We explore the economic dimension of multi-use and co-location, using the general example of an aquaculture operation co-located within an ocean wind farm. Co-locating aquaculture operations and wind farms can produce both public and private benefits (cost savings). The public benefits arise from the fact that an aquaculture operation co-located within the boundaries of a wind farm does not negatively affect the ecosystem services derived from the ocean area it would otherwise have occupied. The private benefits are cost savings that arise from shared permitting, infrastructure, and logistics efforts and systems. The economic value associated with these benefits depends on the scale, location, and nature of the co-located ventures and the natural resources they affect. For locations in open ocean and relatively low-value coastal waters that are candidates for wind farm or aquaculture sites in most countries, the public benefit is likely to be on the order of 500-3,000/year per hectare of area occupied by the aquaculture operation, and the private benefits are likely to be less than $50-100/ton of aquaculture operation output.