Alderney is a small island and therefore has a small and vulnerable economy. Analyses have shown that Alderney’s economy is dominated by tourism, retail, financial and legal services.
Nevertheless, with over a quarter of the population over 65 years of age, significant money flows into the island from pensions that were originally generated elsewhere – a net inflow of money that is characteristic of places that are attractive to retirees.
In some ways, an island economy is similar to economically vulnerable neighbourhoods that have been dependent on a relatively non-diverse income flows, such as former coal mining villages. The New Economics Foundation, in attempting to understand the economics of these communities, concludes that:
'It is not necessarily about too little money flowing into a neighbourhood. Rather, it is what consumers, public services and businesses do with that money. Too often it is spent on services that have little local presence, and so immediately leave the area.'
Plugging the Leaks
This is even more apparent on an island economy which is unable to develop an internal manufacturing base, thus ensuring that much money has to be spent on imported goods – the money ‘leaks’ out of the economy. Where money is spent on goods and services that are generated on the island, money circulates causing a multiplier effect.
| Diverse range of businesses | We envisage a wide range of businesses developing on the back of increased tourism levels – cycle hire, wildlife guides, boat trips, local food producers, retail, accommodation providers, small-scale manufacturing. |
| High local multiplier | With SoA driving the concept forward, using small scale subsidy to address market failures (e.g. land subsidy) and encouraging local consumption, a high multiplier effect can be achieved. |
| Strong local asset base | Based upon the strong natural and heritage assets of the Alderney islands. |
| Responsive public and business sector | A responsive public sector, as the concept is driven by SoA who are able to ‘flex’ existing services toward nature & heritage tourism activities (e.g. using its Works Department service to improve heritage assets and access to those assets) and a responsive business sector given high interest in the concept. |
| Strong community and civic voice | By ensuring that the Alderney Wildlife Trust and the Alderney Society are central to delivery, thus bringing their considerable voluntary resources to bear. |
| Reduced environmental footprint | By using the programme to drive genuine sustainable development and localising economic development as far as possible. |
| Increased understanding of economic, cultural and ecological inter-connections that link communities | By working with the wider Wildlife Trusts partnership, building links with the UK mainland, other UK islands, the Channel Islands and the French mainland as an integral part of the programme. |
New Economics Foundation argues that to increase the multiplier effect, neighbourhoods should seek to ‘plug the leaks’. The Living Islands concept seeks to increase the inflow of money through increased nature and heritage tourism (fundamentally by increasing overnight stays by tourists and all the multiplier benefits of that for food, shops, restaurants etc.). More powerfully and significantly, in seeking to align the Alderney economy to the Living Islands concept, it can also increase the circulation of money through the economy.
New Economics Foundation offers a 7-point framework which we have linked into the Living Islands concept to substantially increase the multiplier effect:
Renewable energy and the French connection
The position of Alderney at the centre of a high energy matrix of tidal streams at the mouth of the English Channel could be the key to its long term sustainability as an island community, outside both the UK and EU. Energy costs are extremely high, at over 35p per kWh, due to the current reliance on diesel generators, and the lack of a natural gas supply.
Local interest expertise in the potential of tidal power has been growing over the past few years. Alderney Renewable Energy (ARE) has been carrying out feasibility studies to mount sets of tidal turbines on the seabed around Alderney, capable of generating three gigawatts, a massive surplus to the island’s requirements. The ARE website states that:
'...Unlike other technologies in the renewable sector, tidal energy is a completely reliable and predictable source of energy given that tides can be predicted in advance. It is also a highly efficient form of energy generation; compared with coal and oil at 30%, tidal power efficiency is rated at approximately 80%....'
'Generation could begin in 2014, with full scale deployment of a 300 Megawatt project reaching completion within the following 5 years. When fully developed, the potential annual energy output will be 6 Terawatt hours, which equates to the annual demand of 1.8 million homes.'
This larger development may take up to 20 years to bring on stream, however.
Computer Generated Image of Installed 2.2 MW 16m Turbine. Picture ARE
Alderney’s renewable energy potential has attracted the interest of both the UK government and the local authorities in France. Joint development could in time yield useful benefits in the form of the FABlink connection to the French and UK electricity grids, securing long term lower cost power, and potentially much improved sea and air links to Cherbourg and Diélette. The ARE website announced in April 2012 that:
'In partnership with French industrial group DCNS, ARE plans to create one of the most significant tidal farms in Europe. ARE is also developing an electricity interconnector between France, Alderney and the UK with partner Transmission Capital and French grid operator RTE. This interconnector, known as the FABLink, will enable the export of up to 4 gigawatts of tidal power from Alderney’s waters and a power trading link between the UK and France. Both projects have the support of the governments of Alderney, the UK and France.'
With a strong foundation of renewable energy, tidal power gives Alderney a potential USP as a centre for testing other sustainable approaches to agriculture, island transport, waste treatment, and tourism.
The Green Island concept
One of the many interesting suggestions put forward at workshops launching the Living Islands project is the concept of Alderney as the Green Island. The ecotourism market is growing globally in the same way as the nature tourism sector, and has a great deal of synergy with it.

The International Ecotourism Society defines ecotourism as:
'Responsible travel to natural areas that conserves the environment and improves the well-being of local people." While "nature-based tourism" is simply describes travel to natural places, ecotourism is a type of nature-based tourism that benefits local communities and destinations environmentally, culturally and economically. Ecotourism represents a set of principles that have been successfully implemented in various global communities, and are supported by extensive industry and academic research. Ecotourism, when properly executed based on these principles, exemplifies the benefits of socially and environmentally sound tourism development.'
The principles are set out on the Society’s website www.ecotourism.org
Ecotourism is about uniting conservation, communities, and sustainable travel. This means that those who implement and participate in ecotourism activities should follow the following ecotourism principles:
- Minimize impact.
- Build environmental and cultural awareness and respect.
- Provide positive experiences for both visitors and hosts.
- Provide direct financial benefits for conservation.
- Provide financial benefits and empowerment for local people.
- Raise sensitivity to host countries' political, environmental, and social climate.
These principles apply very strongly to small island communities, in which the natural assets that visitors are coming to see can easily be damaged by poorly executed development or uncontrolled access to wildlife or heritage. Once Alderney starts to derive most of its electrical energy from renewable biogas and tidal sources, and perhaps even adopts electric vehicles. The island’s continued dependence on aircraft is not necessarily be an issue, given the increasing fuel efficiency of modern turboprops which are being considered for service with Aurigny.