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Publié : 23 mai 2012

EConomic and environmental impacts of the 2012 London’s Olympics Games

Economic Impact of the 2012 London’s Olympic Games

From July 27th 2012 to August 12th 2012, United Kingdom will become the centre of the world. Indeed, one of the most important and biggest international sports events will take place in London : the 2012 Summer Olympic and Paralympic Games. To make it short : 10,500 athletes from 204 nations will participate in the 302 events in 26 different sports.

London was selected as the host city on July 6th 2005 during the 117th International Olympic Committee (IOC) Session in Singapore, defeating Moscow, New York City, Madrid and Paris. Then the London Organizing Committee for the Olympic Games (LOCOG) was created in order to oversee the Olympics Game’s preparation and organization, helped by the Olympic Delivery Authority (ODA) and the Government Olympic Executive (GOE). Everyone knows that the London’s Olympics Game, as the others Olympics Games in the past, are the source of numerous consequences in various domains during the preparations since 2005, during the Games themselves this summer, and in the years which will follow too. To start with, the budget for the London 2012 Olympics was £9.35bn, which included a £2.7bn contingency fund. It has increased fourfold since Britain won the bid in July 2005. £6 billion is coming directly from the British government. This level of public funding, at a time when public services are coming under increasing pressure as a result of the downturn in the economy, has been subject to some criticism in the press. On the other hand, the Government’s spending could be seen as an incentive to stimulate the economy and generate jobs for local people. So, the question is : What are the economic impacts of the 2012 London Olympic Games ?

Firstly, the preparations for the 2012 Olympic Games in London which began in 2005, seems to had a positive impact across several areas, according to a pre-games report funded by the ESRC, the Economic and Social Research Council. Environmental, economic and socio-cultural factors are included in the study. The Impact Study was introduced by the International Olympic Committee to develop an objective and scientific impact analysis for each Olympic Games. In total 56 impact indicators have been developed in the pre-games report which is part of the Olympic Games Impact Study. The indicators - 11 environmental, 23 socio-cultural and 22 economic – range from water quality and transport networks to crime rates and housing market. Nevertheless, for my part, I think that the economical aspect is more important and interesting than the others since the London 2012 Olympic and Paralympic games will impact the United Kingdom economy.
Looking at economy, the researchers found major positive impacts on public transport, jobs creation and local house building, with small impacts on house prices, foreign investment or tourist visits in the area. For example, the government announced in January 2009 that more than 30,000 new jobs would be created between 2009 and 2012. The report concludes that « no negative impacts were found as a result of preparing for the 2012 Games, Some positive impacts were found but many indicators were inconclusive ». The reason for this uncertainty is partly due to the data available, but also to East London regeneration which makes it harder to identify impacts directly related to Games activity.

Some specialist says it may be too early to identify a real positive Games effect in the economic area. However, during the seven weeks of the Games, the United Kingdom is set to benefit from a £750 million consumer spending injection. This intense positive impact on the economy will largely be generated by the massive influx of foreign visitors to the United Kingdom for the Games. Over the seven week period, international visitors are expected to spend a total of £709 million in England, an 18% increase on what would be expected if the Games weren’t taking place. Also, a £41 million spending boost is expected from English residents. This will be driven by the huge public enthusiasm for the Games. What’s more, the retail, leisure and travel sectors will be the biggest winners from the Games, benefiting from a combined spending injection of £508.4 million in seven weeks.

As we can see in the above table, some economic sectors seem to be potentially the most benefiting sectors ; we can take the example of hotels and high street retailers. Some others, as utilities and insurance will not make benefits during the Games or just a little. The inequalities in economics benefits inequalities are numerous between the different sectors. However, in a more general point of view, the £750 million spent by the Game’s audience will generate a real revitalization of the English economy.
There is also good news for the wider economy. A net £1.14 billion increase in economic output across all sectors is expected in order to meet demand caused by this spending injection. It’s important to note that this increase in economic output will also be felt in the pockets of United Kingdom residents, resulting in a potential £229 million net increase for United Kingdom resident’s income over the seven week period.
This immediate economic boost will continue to have positive impacts after the Games. The post-Olympic effects are expected to increase economic output by £1.37 billion per year to 2015, a total £5.1 billion stimulus for the United Kingdom economy including the impact of London 2012. The impacts will continue to be felt by British residents too. Additional incomes generated to United Kingdom residents will be worth £296 million per year by 2015 and an average of 17,900 jobs per year will be sustained across the United Kingdom economy.
Finally, in spite of all these points which seem to be very positive, about the economic impact of the 2012 London’s Olympic Games, some others economic points appear darker and less positive for the London economy. They are often more concrete and less covered by the Britain Media and the Olympic Committee. Today, we can read in the International press that the Games will badly impact the United Kingdom economy and the United Kingdom in general. Just an example : In London, some landlords will evict their renters in order to rent or sell their house or apartment a lot more to wealthy foreigners, during the Games. So, with this example, we see it’s very important to put the economic impacts of games into its own perspective and especially to have a global vision without always trusting what is presented by the Olympic committee. Certainly, there will be positive impacts nevertheless negative impacts will not be outdone, that’s for sure. It only remains to wait for Games to realize a real concrete economic report because at the moment, it’s only a forecast ?

Environmental Impact of the 2012 London’s Olympic Games

The promise was to deliver the ’greenest Olympics ever‘. As the London 2012 planning application is submitted, the possible environmental impact of the Games is causing increasing concern. Now, London‘s Green Party has delivered a damning report on the low environmental standards being set. So just how short does the Games fall in its green credentials ?

We can divide the green projects of the Olympic Games in 6 main fields : Green energy, green technology, water, wastes, green spaces and transports. But are all of them perfect and realizable too ? Let’s study them.

Firstly, we can deal with the projects regarding Green energy. A lot of promises were delivered about it for example the Olympics Delivery Authority (ODA) has pledged that 20 per cent of the site’s energy will come from renewable sources (wind, hydro, solar and biofuel). But there are shortfalls : the Government is aiming for all new housing to get 25 per cent of its energy from renewable by 2010. By 2014, this figure will rise to 44 per cent, and by 2016 all new homes will be zero-carbon. At this rate, the houses in the Olympic Village will use less renewable energy than other new homes in the capital.

After that, we can talk about Green technology. The promise is that 3% of the energy will come from solar and wind-turbine sources. But the shortfall is that though the 3% will no doubt be achieved, the figure is tiny. In 2000, during the first “green Games” every home in the Olympic Village in Sydney had solar panels which allow economizing 20 % of energy.
Then, there were also promises about water : the ODA has said it would reduce the water consumption by 20 per cent on present levels. Indeed, the UK has consumed 14.6 billion litres of water per day in 2010. But it’s not a perfect project because it amounts to a reduction of 130 litres of water per day per person and it seems difficult to achieve. The proposed minimum standard for the Government’s code for sustainable homes is 120 litres per person per day. The Athletes’ Village would be awarded zero stars under the new code.
The London’s green party has also some project about wastes : they want to reuse and recycle wastes on-site as far as possible. The 2012 London Olympic Stadium is the most environmentally infrastructure ever built. Steel resources are limited so they use it for the construction of the stadium. (75% less steel than for other stadium in the world). They also used a low-carbon concrete, produced from industrial waste, the carbon content in the concrete is 40% lower than the usual materials. They want zero waste games so they minimise wastes, maximise recovery and recycle and develop clean waste-to-energy systems. But the shortfall is that no new waste reprocessing or recycling plants are being provided on-site ; some existing plants are being relocated outside the area.
They also want to create 110 hectares of new open space as part of the legacy development to develop the green spaces. But the shortfall is that sites being lost include : Arena Fields (permanently), East Marsh (for up to two years), the Manor Garden allotments (to be relocated)
and parts of the Bully Point Nature Reserve. Although new green spaces are being created, environmentalists are concerned that biodiversity will be affected as a result of the relocation of plants and animals. For example, great crested newts and kingfishers are being moved from areas around Hackney Marshes, but survival rates are low for animals that are relocated this way. In addition all the trees that line the corridor leading from the A12 to Stratford High Street are being cut down, which reduces bird and insect habitats.

Last but not least they propose that the 2012 Games are being touted as car-free. But it’s not so easy : the Olympic planning applications include a 1,300-space multi-storey car park at the media centre and up to 974 car parking spaces to be built as part of the Athletes’ Village. This is in addition to the 5,440 parking spaces that will be provided by the Stratford City development (a retail and office development). Up to 10,000 park-and-ride spaces are planned for spectators. Overall, the application forecasts a threefold increase in traffic in the area in the aftermath of the Games.

As a general conclusion to both parts : Today, the International Olympic committee showed itself very confident. During the last verification survey in London, the committee of coordination and more precisely, the president of the committee Denis Oswald concluded : « London is ready to welcome the world. London feels the fever of the Games. » In spite of some problems of managements at the beginning of the project, the organizing committee succeeded in staying below a 9.3 billion £ of budget. « We have no doubt that this summer will be a summer as any other one in the United Kingdom », declared Oswald in press conference. Finally, « the world expects much on behalf of London, but we know that London is ready and that people will not be disappointed. »

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