On 10 October the Environment Agency launched a consultation, Water for Life and Livelihoods, on the Water Framework Directive. There is nothing new about that, you may say – it is the third in two years – and surely there is little in any consultation about the implementation of a European directive to quicken the pulse? What‘s more, it comprises several thousand pages spread across dozens of documents, so one would have to be very enthusiastic to read it, let alone decide how to respond. But any organisation that has an impact on the water environment ignores the consultation at its financial and reputational peril.
For each of the eight river basin districts across England, the Environment Agency has set out the state of the water environment, the pressures upon it, and the sectors responsible for creating those pressures.
In a mammoth economic appraisal exercise, the agency has bravely attempted to describe the measures that are technically feasible and economically viable. The economic analysis has been designed to inform stakeholders and promote debate about the environmental objectives and associated “programmes of measures” (that is, who needs to do what by when).
The responses to the consultation will help to inform the proposals put to ministers in autumn 2015. They will then have to decide whether, for some water bodies, it is disproportionately costly to get them to good status by the next milestone of 2021.
Over the past five years the Environment Agency has made a significant and sustained investment in monitoring and investigating the water environment, complemented by water companies’ investment. This work has gone a long way to reducing uncertainty over the state of the environment and in better understanding cause and effect in terms of the impact of different sectors. It is now even clearer from all that work that the overwhelming majority of the problems with the water environment are a result of agriculture and the water industry – hence the majority of the costs could potentially fall on those sectors, as the scenarios described below demonstrate.
The Environment Agency has used five scenarios to describe the costs and benefits of achieving the environmental objectives. Scenario 1 looks at what would happen if no additional actions were taken: the environment would deteriorate as a result of population and climate change pressures, and the spread of invasive non-native species. Scenario 2 aims to prevent that deterioration and to protect the most important environments for nature conservation, recreational waters (bathing waters), shellfish waters, areas sensitive to nutrients (Urban Wastewater Treatment Directive) and drinking waters. These are, essentially, a given in terms of a minimum level of investment.
Scenario 3 will catalyse debate, which will be ill-informed and potentially hysterical if consultees do not read further. It builds on Scenario 2 by including all the measures that the Environment Agency believes to be technically feasible, with nothing ruled out on the basis of cost, affordability constraints or available funding. The total costs are estimated at £25.8 billion, of which £14.2 billion would fall to the water industry and £6.8 billion to rural land management. But technical feasibility does not necessarily mean that something is worth doing.
Having presented consultees with a vision of what could be done in theory, the agency’s Scenario 4 then excludes all those actions where the benefits do not justify the costs. Here, the total costs could be £16.4 billion, of which £5.9 billion would be for the water industry, and £6.5 billion to land managers (the remaining sectors include other industries and services, and government). This is a critical assessment, because the assumptions used essentially propose the long-term objectives (2027 and potentially beyond) for the water environment.
However, it is Scenario 5 that is the critical one for consultees to ponder upon: it sets out an illustrative level of funding and what that might deliver in terms of environmental improvements. It is not a prediction of what funding will be available, but uses available information (for example, potential PR14 spend on the environment, based on December 2013 business plan submissions), as well as assumptions about levels of voluntary action. It assumes about £2.4 billion for the water industry, compared with £90 million from rural land management.
It does not have to be one-sided in terms of where any investment comes from. The consultation talks about the “catchment-based approach”, which underpins the government’s and the Environment Agency’s philosophy for managing the water environment on an integrated basis. This is fundamental to delivering multiple outcomes for multiple benefits, through the interventions of different sectors working collaboratively.
How far these partnerships are able to go is down to their enthusiasm, commitment and ingenuity. The consultation implicitly throws down the gauntlet to all sectors to explore the art of the possible, and to consider whether there might be other, cheaper options that would allow faster, more affordable progress towards the environmental objectives.
The water companies are critical partners in all this. They operate at a catchment scale – the only organisations to do so apart from the Environment Agency. They have the resources, innovation skills and commercial nous to help create more productive partnerships. And, as Rob Scarrott pointed out in these pages (19-25 September 2014 edition), Indepen estimates that some £100 billion will be spent in catchments in England and Wales over the next 15 years on managing and insuring flood risk, improving the environment, farming subsidies and drinking water and wastewater treatment. It would be surprising, and disappointing, if there were no scope for greater efficiencies – and opportunities – in that spend.
It will be interesting to see how consultees respond. They can recognise the impact their sector has on the water environment, the actions they need to take to reduce it, and signal their commitment to work with others to find innovative solutions which will drive down the Environment Agency’s cost estimates and increase the benefits. Or they can say it is all too difficult, and fail to recognise the cost to society, the economy and their own business of an unhealthy water environment.
Ian Barker, managing director, Water Policy International