Abstract
This study uses document analysis and interviews to explore how the use of arguments for biodiversity and ecosystem services has evolved in recent years in the water industry in England and Wales, with a focus on investments in catchment management programmes. Changes to land management practices within catchment areas can lead to improved water quality and lower treatment costs, and also ancillary benefits to the natural environment and various stakeholders. Our analysis reveals the increasing effectiveness of arguments associated with ecosystem service values in enabling the industry regulator (Ofwat) to support water industry investments in catchment-level conservation projects. Ofwat has adopted a much more flexible approach to regulation, moving from initial resistance to ecosystem service framings and a dominant focus on financial benefits to customers, to acceptance that customers have a legitimate interest in environmental quality and a willingness to accept some ‘beneficiary pays’ solutions. Companies are now required by Ofwat to include environmental impacts in cost-benefit analysis of investments, alongside assessment of customer preferences and support. This has facilitated investments in catchment management with positive results for water companies, customers, farmers and the natural environment. The shift in arguments in this industry matches a broader shift at European and UK levels towards greater use of economic evidence and payment instruments. The challenge now is to stabilise a secure regulatory environment in which companies are encouraged to pursue innovative methods to benefit the wider interest of customers and the natural environment, today and in the future. Arguments based on the value of water quality improvements and of the wider associated ecosystem services benefits have been, and remain, a key tool for achieving the environmental improvements and economic efficiency gains associated with successful catchment management initiatives.
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Notes
“Our main duties are to protect the interests of consumers, wherever appropriate by promoting effective competition, to enable efficient water and sewerage companies to carry out and finance their functions and secure that companies with water supply licences properly carry out their functions” (Ofwat 2007, p. 2).
Stakeholders contacted were from: Ofwat, the Environment Agency (EA), Natural England (NE), four major water companies (Anglian Water, South West Water, United Utilities, and Wessex Water), a policy adviser for the UK water industry, and a consultant specialised in the UK water industry.
Water companies are required by Ofwat to submit an Asset Management Plan (AMP) or Business Plan at each price review (Ofwat, Glossary of terms, http://www.ofwat.gov.uk/aboutofwat/gud_pro_ofwatglossary.pdf).
Customer engagement is defined in Littlechild (2011) as “understanding what customers want and responding to that in plans and ongoing delivery”.
Ofwat’s regulatory approach for PR19 continues this theme, stating that, “At the heart of our regulatory framework for water and wastewater services is the desire to strengthen the approach to customer engagement and outcomes to ensure a continued focus on current and future customers” (Ofwat 2016, p. 4).
This measure provides an indication of the return achieved by the company (Ofgem 2014).
With the exception of any differences in the transactions costs involved in different negotiated or imposed solutions.
Terminology used by an anonymous interviewee.
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Acknowledgments
This research has received funding from the European Community’s Seventh Framework Programme under BESAFE (EC-282743) project. We are grateful to the anonymous interviewees who contributed to this study, and to two anonymous reviewers for valuable improvements; remaining faults are the authors’ responsibility.
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Communicated by Rob Bugter, Paula Harrison, John Haslett and Rob Tinch.
This is part of the special issue on "BESAFE".
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Mathieu, L., Tinch, R. & Provins, A. Catchment management in England and Wales: the role of arguments for ecosystems and their services. Biodivers Conserv 27, 1639–1658 (2018). https://doi.org/10.1007/s10531-016-1176-9
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DOI: https://doi.org/10.1007/s10531-016-1176-9