eftec Economics for the Environment Consultancy Catchment Management in the UK: The Role of Arguments for Biodiversity envecon 2015: Applied Environmental Economics Conference The Royal Society, London 13 th March 2015 Laurence Mathieu 1, Rob Tinch 1, Allan Provins 1 1 eftec

eftec  The BESAFE project  Case study: UK water industry  Conclusions for catchment management in the UK  Key messages Outline

eftec  Biodiversity and Ecosystem Services: Arguments for the Environment -  FP7, Collaborative Project coordinated by Alterra  eftec co-leading synthesis  4 years from September 2011  WHY: To help policy-makers understand the effectiveness of various types of arguments for biodiversity protection under varying circumstances  Arguments for biodiversity conservation  Effectiveness of arguments  Importance people attribute to arguments The BESAFE project

eftec  BESAFE uses case studies  Outcomes of case studies summarised into a database  Database looks at each case study as consisting of a series of events  At each event one or more stakeholders will use one or more arguments  The database breaks arguments down into:  Biodiversity  Beneficiaries  Benefits  Value  An argument is a reason used to show the importance of biodiversity and justify its protection and restoration BESAFE method

eftec  Privatisation (1989) - 10 water authorities  Regulation:  Environment Agency (environmental regulator)  Drinking Water Inspectorate (drinking water quality regulator)  Ofwat (economic regulator)  Today:  10 water and sewerage companies  13 water only companies The water industry in the U.K.

eftec  Bills paid by customers reflect costs of services, including treatment of raw water  Ofwat needs to be persuaded of validity of investments in catchment management schemes  Catchment management approaches:  better raw water quality  water companies and customers  secondary benefits  other stakeholders Case study: UK water industry

eftec  Remit: to protect consumers’ interests  Price reviews (PRs) - 5-yearly process:  set limits for the prices water companies can charge their customers  review water company business plans and proposed investments  Attention given to environmental improvement within PRs has increased Ofwat

eftec  “An area of land through which water from any form of precipitation drains into a body of water”  Quality of water bodies affected by management activities  Impact on the ecosystem service potential for provision of clean water  Increase in catchment management schemes and investigations Case study: UK water industry

eftec

 Describes arguments used and the regulatory context  Focuses on arguments for biodiversity in the context of catchment management  Looks at the 'coevolution' of arguments and context over the past 15 years Arguments for catchment management

eftec  Review of literature: Ofwat, water industry, Defra  Information from literature review recorded in database  Interviews conducted with Environment Agency, water companies, Ofwat, consultant, policy adviser for the UK water industry  Information from interviews used to verify the findings of the literature review Method and data collection

eftec  Enhancement of water quality (inc. treatment cost savings)  Increasing water storage  Improving carbon storage  Improving human health  Improving visitor’s experience (heritage)  Support to recreational activities  Enhancing and protecting the natural environment  Improving wildlife  Reducing the risk of flooding Arguments identified in the case study

eftec Important changes over the last 10 years CBA of CM Ofwat CM Defra Water Strat. UU SCaMP 1 Totex Ofwat social value SWW UTI 09 Ofwat PR09 CCG

eftec Effectiveness: High; Moderate Evolution of arguments over time Event PR04 Implementation of SCaMP 1 ( ) Government’s water strategy PR09 Upstream Thinking Initiative From catchment to customer PR14 StakeholderOfwatUnited UtilitiesDefraOfwatSW WaterOfwat Date Water quality Water storage Carbon storage Health Heritage Recreation Natural environment Wildlife Flood protection

eftec  “beneficiary pays” as well as “polluter pays”  Requirement to set up customer challenge groups  Interest in future generations and customers  Mention of environment quality and climate regulation  Requirement to propose ‘outcomes’ that are valued by customer and the environment  Requirements to conduct CBA of catchment management schemes  Requirement to provide evidence of customer support  Require approaches for dealing with risk and uncertainty in decision-making Shift in Ofwat’s perspective

eftec  Novel approach but increasing practice across the industry  Uncertainty as to whether water companies picked the best opportunities or implemented schemes as opportunities became available, at the relevant time  Increasing use and effectiveness of arguments  Ofwat position has changed: more flexible approach to regulation  Arguments contributed to those regulatory changes  Shift in arguments follows shift at EU levels  ES arguments  play a central role in UK water policy  played key role in enabling a shift in regulatory focus Conclusions for catchment management in the UK

eftec  Uncertainty use to be an obstacle to the implementation of catchment management schemes  now more accepted  Arguments are multi-faceted  several benefits and beneficiaries  Arguments that reflect this are more effective  “Argument” is a scientific term. For general use, ‘communication’ may be a better term. Key messages

eftec Thank you Contact Laurence Mathieu 18