The Rivers Trust Autumn Conference: Day 2 - Session 3

Defining Evidence of Catchment Management Effectiveness
and the Water Company PR14 Business Plans
Prof Chris J Spray – UNESCO Centre for Water Law, Policy & Science
University of Dundee

The Holy Grail?
For some of us, the holy grail of adopting a Catchment Management approach
has seen to be all about PROVING its effectiveness…..
………. to the all-important range of key stakeholders:
 Government departments
• Land owners
• Land managers (especially farmers and foresters)
• Regulatory Environmental Agencies (EA, NE, NRW, SEPA, SNH, etc)
• Drinking Water Quality regulators (DWQI)
• Economic regulators (Ofwat, WICS)
• Customer committees
• Water companies (private or public)
• Academics
• Environmental NGOs
• Anglers, Fishery boards, and other water users, and….. most importantly
• The public ………….
But why and to whom do we/they each want to ‘prove’ Effectiveness? – and
what is proof? - is it just an Operational or Financial question?

Testing for CM effectiveness
Over the years many accounts and projects have been set up to do this – examples
are legion…..in research, in NGOs, in partnerships, many at this event, etc…..
Targeted different aspects, including operationally:
 Effectiveness of CM to improve ‘ecological status’ of water bodies under the
WFD RBMP process, incl diffuse pollution controls
 Effectiveness of CM to protect drinking water supplies
• Pesticides
• Nutrients
• Faecal Indicator Organisms (FIOs)
• Water Colour / Dissolved Organic Carbon
 Effectiveness of CM to promote Natural Flood Risk Management (NFM) Scotland
 Effectiveness of CM to enhance Biodiversity
 Effectiveness of CM to help combat Climate Change
 Role in wider Strategic approach to Land use - Scottish Borders Land Use Pilot,
Welsh Environment Act (Sustainable Management of Natural Resources)
 Etc.

• Defra’s Demonstration Test Catchment programme – 40 organisations
• NERC’s Macronutrient Cycles research programme – report June 2016
• Defra’s Mitigation Methods User Guide (2011) - 6 work packages, 83 different measures (£1.4million, 4 years)
• UKWIR Report on Quantifying the Benefits of Water Quality Catchment Management Initiatives (2012)
• UKWIR - Catchment Management: how do we know it has worked? - project RG08D204 (pers com)
• UKWIR - Catchment Management repository and database’ (2013/14, reference WR26a)
• Catchment Management Evidence Review produced by the Westcountry Rivers Trust (2013)
• Catchment Sensitive Farming Initiative (Phase 3) Evaluation Report (Feb 2015), Natural England.
• Scottish Water Sustainable Land Management Initiative – 27 measures
• ADAS Report Effectiveness of Measures database
• Environment Agency - National Water Environment Benefit Surveys (NWEBS 2007 and 2012).
• Environment Agency (2014) Water Appraisal Guidance Assessing Costs & Benefits for River Basin Management
• DPMAG Strategy and Website (Scotland)
• Indepen (July 2014) ‘Discussion paper on the potential for catchment services in England’ commissioned by 3 of
the English water companies: Wessex, Severn Trent and South West Water
A number of major Reviews and Projects have addressed effectiveness

Potential rewards for an Integrated CM - Holy Grail?
• The extent of activity being undertaken in catchments across the UK is vast
• Recent estimate (Indepens 2014) puts this as c£100 billion to be spent in English catchments in
the next 15 years, of which £30 billion would be on meeting the requirements of the EU Water
Framework Directive (WFD), water & waste water treatment
• Of this £30 billion for WFD, they estimate that £300 million to £1 billion costs could be avoided
by the water sector alone through adopting a wider catchment approach, as well as unvalued
wider benefits to biodiversity, flood risk reduction, & carbon management.
• E.G. claim that catchment-based approaches can in certain cases reduce water treatment costs
by 10% and 20% (figures given ‘as seen’ from 2 projects as part of review) due to reduced
suspended solids content, improved colour, and lower pesticide levels (reduced use of GAC)
• Total estimate: applying a cross-sector approach across all catchment activity, avoided costs
might range from £1 - 4 billion over this 15 year period with, in addition the creation of wider
benefits of between £2 - £5 billion to other areas such as biodiversity and flood risk reduction
Report based on literature review & interviews with key stakeholders, and the assessment of potential cost savings from the greater adoption of
catchment based approaches is very high level (estimated from national statistics derived from published sources, extrapolation of other studies
and expert judgement). This is not to challenge the figures per se, as in many cases they pick a low value for their calculations, but to stress that
this is not meant to be a detailed assessment of all costs and potential savings, and its conclusions focus on the requirement for
incentives to encourage investor-owned companies to adopt catchment-based solutions.

The promised land? – New York City & the Catskills watershed system
New York City Water Supply
• Primarily a surface water supply
• 19 reservoirs & 3 controlled lakes
• System Capacity: 550 billion
gallons
• Serves 9 million people (1/2 of
population of New York State)
• Delivers approx. 1.2 billion
gallons per day to the City
• Source of water is a 2,000 square
mile watershed in parts of 8
upstate counties

Multiple Water Quality Issues
• Primary water quality concerns:
– Droughts
– Floods
– Turbidity
– Pathogens
– Nutrients (and algae)
• Varies by district and by reservoir
– Croton – eutrophic reservoirs
– Catskill - turbidity

New York City was Faced with a Decision
To filter or not to filter ( = CM), that was the question
• Concern over whether City could meet subjective criteria
– City owned less than 8% of watershed
– City regulations outdated
• Increased concern by public over safety of drinking water - Milwaukee
incident
Federal regulations require all surface waters to be filtered – Safe Drinking Water Act of
1986 and Surface Water Treatment Rule of 1989
Municipalities can request a “WAIVER” from filtration requirement if it can demonstrate
compliance with regulations through and by effective management of the watershed
Firm belief by New York City that
reliance on end-of-pipe solutions
alone not prudent; best approach
to protect water quality at source

Decision was made to go for CM and not filter!
• City alarmed by potential capital cost of a filtration plant (originally
estimated at $6-8 billion) as the ‘end of pipe’ solution
• $350 million annual operation and maintenance expenses
• City would invest in watershed protection programs at its source,
rather then treat at end of pipe.
Memorandum of Agreement between
multiple catchment stakeholders, consisting of:
• Land Acquisition Program
• Watershed Regulations
• Watershed Protection and Partnership Programs
Includes New York State, New York City, US EPA, 7
Counties, 60 towns & 10 villages, Numerous NGOs
Key role of Farmers Watershed council as ‘trusted
intermediary’

Cost effectiveness? - Catchment Approach vs ‘End of pipe’
Filtration Plant:
Projected cost - $8.0 billion capital
investment
$350 million annual operations and
maintenance ($3.5 billion for 10 years)
Catchment Spend:
Total Spent: $1.06 billion

Challenges for business in defining effectiveness of CM measures to protect
raw drinking water quality
 The list of potential catchment measures and associated models is extremely
long - Defra User guide has 83 measures alone to protect water quality
 Often aimed at different problems
 They are rarely used in isolation, and
 Modelling is used extensively to assess benefits that might theoretically be
realised, with parameters often taken from national data or other studies
UKWIR (2012): Quantifying the Benefits of Water Quality Catchment Initiatives
provides a methodology for measuring costs and benefits associated with catchment
management. However, while taking a holistic approach across economic,
environmental and social benefits, the report concludes that:
‘the evidence base for calculated benefits from catchment management schemes
based on evaluation studies where real impacts have been measured is scant’.

Water Company Duties - drinking water quality
• Water companies are expected to address all statutory drinking water quality
requirements as set out in Defra’s Statement of Obligations. In particular, the
Drinking Water Inspectorate (DWI) ensures companies pay due regard to need for
public water supplies to be safe, clean and compliant with all regulatory standards.
• For PR14, all water companies are expected to ensure that their business plans
make provision to meet all their statutory obligations and that provision is made
for a sustainable level of asset maintenance to maintain public confidence in
drinking water quality.
• Defra, Ofwat, DWI have issued guidance to water companies on requirements in
relation to a range of issues, including:
• Water safety plans.
• Principles for catchment management.
• The revised standard for lead in drinking water.
• An expected new standard for disinfection by-products.
• The management of metaldehyde (along with certain other agricultural
pollutants).

• All companies expect to see catchment management become more widespread in
the future, as a way of delivering against their outcomes.
• Meanwhile, as PR14 is Outcome based, companies have freedom to define how to
achieve (all but 5 of) their outcomes themselves already
• PR14 Water company plans include possibly some 300 catchment schemes,
promoted for a variety of reasons - as investigations, in response to customer
surveys, to maintain company reputation, etc.
• Overall companies identified £206 million for catchment management but
impossible to say how much will be spent.
• Many companies not fully engaged - lack of apparent enthusiasm for CM due to:
• barriers of policy
• lack of regulatory flexibility
• lack of integration across sectors
• lack of data
• lack of incentives and lack of rewards.
Analysis of Water Company Business plans

Defining Costs and Benefits:
Importantly in terms of any attempts to measure economic effectiveness,
most of the justification has been done through customer survey exercises,
and not through direct costs, or a recognised formal cost-benefit process.
Customer surveys did not ask about Catchment Management itself, but about
‘Environmental Improvements’ in general and where they sit in relation to
other potential deliverables form water customer bills
In terms of company business plans, the single and ultimate driver is defined
as failure in Drinking Water quality standards

Southwest Water Business Plan
Southwest Water Business Plan – Protecting the Environment
We strive to minimise our impact on the environment and take opportunities to protect
and improve it where possible. Our customers attach a high importance to the
environment and they expect us to protect it at all times.
When compared to research findings in 2009 there is now even greater concern about
the environment. Our customers attach importance to ‘minimising any impact on the
environment for future generations’ and are generally supportive of our
environmental work although some believe this is less important than delivering
our core services
THE PROGRESS WE’VE MADE:
 Improving areas of moorland and farmland to help enhance habitats and the
quality of the water in our rivers and reservoirs
CHALLENGES:
 Agricultural and industrial practices can affect the quality of the water we source
(e.g. pesticides from farms).

Southwest Water Business Plan
Southwest Water Business Plan – Protecting the Environment
Key findings from their customer research sample:
• In their ranking of priority areas across the whole business Household customers
attached the following rankings to these environmental areas:
- protecting habitats (10th)
- catchment management (12th)
- reducing harmful abstraction (14th)
- reducing energy consumption and our carbon footprint (17th)
• Non-household customers were similar in their ranking of these priorities.
OUR PLANS 2015 - 20
 Additional catchment management initiatives

20
Potential local/regional priorities –
domestic
Consistency across domestic customers
Priorities
Key Priorities
Safe, clean water (40)
Reduce leakage (23)
Prevent pollution (15)
Bathing and shellfish and river quality (12)
Smart compulsory metering (10)
River water quality (9)
Reduce sewer flooding (8)
Resilience in extreme conditions (8)
Habitats (6)
Water conservation (5)
Customer contact excellence (5)
Reducing leakage a priority
because seems a pointless waste
to pay to clean the water and then
let is waste away
Preventing pollution was
also important for the future.
Keeping rivers and beaches
clean was a priority because
it’s ‘where we live’
Safe clean
water
undisputed
that should be
first, with
reducing
leakage 2nd and
preventing
pollution 3rd
I went for leakage control
because you have gone to
all the effort of cleaning it
and then you lose it. It
seems daft.
Exeter domestic
Priority
I think is it so
important to have
clean beaches. It’s
why people come
here.
Bideford domestic
I like that catchment
management. It makes
perfect sense to me.
Bideford domestic

Southwest Water Business Plan – stakeholder differences
Stakeholder thinking is heavily driven by their own areas of involvement/pressure:
Community groups are predominantly focussed upon cost and affordability issues.
Suppliers are heavily focussed upon investment decisions and issues concerning how
planned investment is losing out to reactive problem solving.
Environmental groups are largely concerned with environmental issues but with a
desire for more collaborative working with SWW – in particular for more upstream
thinking - prevention being a better and more sustainable approach than cure.
Note: - Customers tended to see bathing and river quality as an environmental
outcome while not everyone saw that if all the other work was done; the river and
bathing water quality would be provided for. There were a minority who recognised
that much of the work was interlinked and had to be done.
This is the opposite way of thinking to Environmental stakeholders who viewed
Upstream thinking as the necessary focus to deliver these outcomes for bathing and
river water quality.

Communicating the Challenge:
Customer response to What’s in the Pipeline?
Mixed response but starts to explain what SWW does which
helps make bill slightly more palatable
• Informative look at what is going to
happen over next 20 years.
• Starts to provide an explanation for
the sewerage part of the bill.
• Explains the unique challenges facing
SWW on a daily basis with challenging
terrain, low populations, long coastline
, £50 rebate.
• Widespread interest in renewable
energy and ‘clever solutions’ such
as catchment management.
• Future customers appreciated
apprenticeships.
• Future customers were unaware that
SWW dealt with sewage as well as
provided clean drinking water -‘isn’t
that South West Sewage?’
• Glossy and expensive
• Non specific
• Repetitive
• More cynical found it was ‘all about
cost’ and they already knew they paid
a lot for their water
• Some feel that the customers has to
‘stomach’ the increased bills as a
result of investment, not the
shareholders
• Future customers found paragraphs
impenetrable and preferred bullet
points
More positive Less positive
It's just
marketing
blurb.
Bideford
domestic

Customer concerns on why a Water Company should be doing CM
The Yorkshire Water Environment Forum has seen its role to ensure
that the company has challenged regulators to an appropriate degree
whilst recognising the need to address the National Environment Plan in
particular.
In some instances anticipated need to challenge investment that is
planned:
• In response to something that is not strictly a legal obligation
• To deliver quality enhancements where costs significantly outweigh
benefits and/or it is not beneficial to water company customers.
• To address pollution by others, contrary to the polluter pays
principle, that is not customers’ responsibility

Defining Effectiveness - Indicators of Success
• Costs and benefits to water companies of taking a catchment approach,
if and where analysed at all, are not transparent
• Where identified, individual catchment measures (or more commonly a
package of measures) have been assessed through their own indicators,
developed and promoted by the organization(s) involved for the specific
needs of their own project requirements, rather than by any industry
recognised standards or methodologies.
• The key ones identified are mainly direct Outputs (numbers of farms
visited, fences erected, etc.), rather than measures of actual final
Outcomes (reduction in nitrate levels, lower costs of GAC filters, etc.);
the former being easier to measure and less prone to data uncertainties
and assumptions of predictive models

Defining effectiveness - Indicators of Success
Different Typologies of indicators:
• Source – Mobilisation - Pathway - Receptor – In Defra’s Demonstration
Test Catchments, the methods to monitor change are split according to
those associated with these 4 aspects (McGonigle et al 2014)
• Measurement; Budgets; Risk assessment; and Modelling - UKWIR
report on Quantifying the Benefits of Water Quality Catchment
Management Initiatives (2012) follows that of Cherry et al (2008) by
identifying these 4 main methods for assessing effectiveness, along with
their perceived strengths and weaknesses.
• Farmer engagement; Farmer awareness & attitude; mitigation
measures; Reduced pollutant losses; Water quality improvements;
Ecological response; and Wider ‘ecosystem service’ benefits. -
Catchment Sensitive Farming evaluation

Defining Effectiveness - Indicators of Success
Seven Key Measures
1. Land manager behaviour
2. Implementation of measures on the ground
3. Nutrient /Pesticide inputs
4. Nutrient /Pesticide losses
5. Water Quality parameters of the receiving water
6. Risk
7. Financial costs and benefits to water companies

Defining financial effectiveness of CM measures themselves
There has been extensive work on assessing the costs of alternative means of
treatment and, to a much lesser extent the benefits derived from it.
• Each company that responded to our questionnaire was able to cost the
catchment activities they supported - salaries and associated costs of
Catchment Advisers, project funds, sampling, capex for infrastructure, etc
• Equally, it is possible to obtain costs for the ‘traditional methods of
treatment’, with energy, materials, chemicals, staff, etc. all being recorded
internally, though less simple to ascribe precise amounts to individual
plants and processes in isolation.
• Less certain (and about which companies are generally unwilling to share
detailed information) are calculations of any benefits associated with
alternative catchment measures. Those that have costed alternatives and
benefits warn these are theoretical costs based on a ‘swathe of
assumptions’ and predicted rates of change which may not be realised.

Some clear examples of ‘cost effectiveness’ exist
In comparison to a counterfactual (business as usual) position, some of the
CM measures proposed can be shown to be cost beneficial.
• Direct benefits to water company alone in terms of reduced capital and
revenue costs are apparent in some cases:
– Severn Trent report capex savings of c1million from additional treatment being
no longer required following the delivery of a suite of catchment-based
solutions to counter pesticide exceedance at Tittesworth;
– United Utilities and Southwest Water report similar claims for success of
catchment interventions, at least on paper;
– Measures costed by Wessex Water to control nitrates in their Eagle Lodge
catchment set against the hypothetical costs of developing and running a
nitrate removal plant. Since initiation in 2006, these catchment measures have
led to nitrate levels remaining well below those seen before action began, and
well below the drinking water standard.

Many more examples of uncertainty and caution
However…...…elsewhere the case is less clear with the impact of
measures either not proven or not measured.
One water company reported:
‘on the face of it though, all our catchment intervention initiatives appear to fail
and be in vain whenever there is a wet year….’
and another company reported that our:
‘catchment management projects for metaldehyde have yet to demonstrate
they can deliver the water quality improvement required at abstraction points
and which would mean new treatment processes are not required’.
In 2012 New York City built a UV Treatment plant ‘ as an additional
barrier for public health protection

Got a spare £600 million for metaldehyde treatment……
August 2016
Anglian Water releases colossal cost estimates for metaldehyde treatment as industry talks
about tackling the pesticides in drinking water to avoid a hefty toll on farmers and customers
• Almost £600 million pounds would be needed to set-up metaldehyde (slug pellet) treatment
for drinking water in the East of England, according to Anglian Water. The company estimates
it would cost an additional £17million every year to run, too – amounting to a 21 per cent
increase in customer bills.
At the event, Anglian Water presented findings from its catchment management initiatives
including its Slug It Out trial – the UK’s largest ever metaldehyde-free farming trial aimed at
meeting the drinking water directive.
Slug It Out achieved a 60 per cent drop in levels of metaldehyde detected in reservoir tributaries
last year, but it was not enough to meet the legislative limits in all areas. Severn Trent and
Thames Water have also run similar trials.
The results from the three companies show that even removing 100 per cent of metaldehyde
from farmland is still not sufficient to meet the drinking water legislation.

Got a spare £600 million for metaldehyde treatment……
• “If resolving this issue is then left to water companies alone any solution would
likely need to be ‘end of pipe’. Not all pesticides can be removed by conventional
treatment technology meaning end of pipe solutions can’t be relied upon as a
panacea.
• Even if a treatment solution is technically possible on such a large scale, our cost
estimates show that funding it would be hugely costly and unsustainable for
customers’ bills.
• We strongly believe that domestic customers should not be the financial
backstops for this.
• “A collaborative catchment approach across multiple business sectors provides
the best option to safeguard raw water quality effectively while still enabling the
agricultural sector to thrive.
• However, catchment management by its very nature involves many different
stakeholders and therefore shouldn’t be the sole responsibility of water companies
to deliver.
• More organisations need to take responsibility for catchment management as an
essential approach, and for regulators to mirror this in the regulation too.”

Clear that if improvement in the ecological status of receiving water bodies
under WFD are factored in (using the NWEBS and EA’s Stage 1 valuation tool),
then the case for catchment intervention is greatly strengthened.
• Environment Agency’s Water Appraisal Guidance (NWEBS) was developed
to assist the assessment of benefits for economic appraisal of measures
which affect the water environment
• Relies on a ‘benefits transfer’ approach, using information about societal
values from existing academic studies and surveys, but does not cover all
ecosystem services including less easy to establish values, such as flood
regulation, human health and carbon sequestration
• Severn Trent have explored potential costs and benefits of surface water
catchment management to prevent non-compliance with pesticide levels
at the point of abstraction using a wider ecosystem services approach
Defining effectiveness needs to include behaviour, costs & benefits
beyond water companies

Acknowledgements
With thanks to:
• All those Water Companies, Government Departments, Agencies, Regulators,
Customer committees and Environmental NGOs that participated and helped
with follow up discussions, and particularly to David Smith & Lewis Jones
(Southwest Water), Claire Lorenc (Essex & Suffolk / Northumbrian Water),
Luke DeVial & Fiona Bowles (Wessex), Miles Foulger (Yorkshire Water), Steven
Lambert (Sutton & East Surrey Water), Severn Trent Water, Thames Water,
Irish Government, Irish EPA and National Federation of Group Water Schemes,
and Brian Ellor (UKWIR project lead)
• Roger Sokol (Director - Bureau of Water Supply Protection, New York State
Department of Health)
• Robert Holdway (Ofwat)
• Jannette MacDonald (JHI) and members of the Steering Group
• Colleagues on the team from Westcountry Rivers Trust, CEH and Ecologic.
• Colleagues at University of Dundee.
And with fond memories of Dylan Bright

Understanding water company drivers and
performance commitments relating to catchment
management
Rivers Trust Autumn Conference, 12-13 September
2016
Noel Wheatley
Director, Noel Wheatley Consulting Ltd

Setting the scene
• PR14 saw a transformation in Ofwat’s approach to price setting:
• More emphasis on customer and stakeholder engagement in
shaping company business plans
• Companies incentivised to deliver outcomes (performance
commitments) rather than specific schemes
• Rewards for exceeding targets and penalties for falling short
• New cost recovery rules (totex) to address bias in favour of
capital solutions
• Analysis of the performance commitments agreed for 2015-20
can help in:
• Understanding a water company’s appetite for engagement
on catchment partnership work
• Identifying the scope for ensuring enhanced water company
commitment to catchment activities in future price reviews

Overview of Performance Commitments (PCs)
• The 18 water companies (now 17) agreed over 500 performance
commitments
• 60% of PCs have associated outcome delivery incentives (ODIs), i.e.
financial consequences for under-performance or exceeding targets
• 54% of ODIs involve both penalty and reward, 46% are penalty only.
• Potential penalties amount to £2.64bn across all companies in E &W.
Potential rewards amount to just under £1bn
• An average water and sewerage company has a suite of 37 PCs across its
water, sewerage and retail businesses, of which 22 have financial ODIs
• PCs vary considerably across companies, depending on local
circumstances, historic performance, customer engagement, company
culture, risk appetite etc
• Potential penalties range from 11–31% of company turnover and
potential rewards from 1–20%

Potential rewards/penalties by service area (all
companies) 2015-20
30
1916
8
6
6
5
3 2 2 1
Rewards - % of total (£998.7m)
Sewer flooding
Supply
interruptions
Leakage
Pollution incidents
Asset health
Bathing waters
Environmental
compliance
Resilience
Drinking water
quality
Customer service
Environment
30
17
10
9
8
7
4
4
4
4 2 1
Penalties - % of total (£2640.9m)
Asset health
Sewer flooding
Supply
interruptions
Leakage
Drinking water
quality
Pollution
incidents
Environmental
compliance
Resilience
Customer service
Site specific
investment
Bathing waters
Environment

Environmental ODIs - Water and Sewerage
Companies
Company %
Potential
rewards +
penalties
% Potential
rewards
Amount
(£m)
%
Potential
penalties
Amount
(£m)
Financial
ODIs
Reputationa
l ODIs
Wessex 35 59 29 24 25 7 2
Anglian 27 32 39 24 64 4 8
South West 24 31 32 17 20 6 10
Yorkshire 20 37 19 15 24 7 8
Severn Trent 15 17 26 15 54 10 5
United
Utilities
15 9 13 17 75 7 0
Dwr Cymru 14 11 6 15 30 1 3
Thames 12 15 32 10 43 4 6
Southern 9 28 9 7 17 4 2
Northumbrian <1 0 0 <1 <1 1 6
Total 16 21 205 14 352 51 50

Catchment management-related ODIs - Water and
Sewerage Cos
Company %
Potential
rewards +
penalties
% Potential
rewards
Amount
(£m)
%
Potential
penalties
Amount
(£m)
Financial
ODIs
Reputationa
l ODIs
Wessex 28 53 26 16 17 3 0
Severn Trent 8 12 19 6 22 6 3
Anglian 7 - - 10 25 2 2
Thames 6 5 11 6 25 3 1
United
Utilities
4 1 2 4 19 2 0
Yorkshire 2 4 2 2 3 6 1
South West <1 <1 <1 <1 <1 1 3
Northumbrian - - - - - 0 2
Dwr Cymru - - - - - 0 1
Southern - - - - - - -
Total 5 6 60 4 111 23 13

Performance commitments on catchment
management / partnership work 2015-2020
Company Business Description Fin/Rep Pot
rew
Pot pen
Severn
Trent
Water 12 successful CM/partnership schemes
delivered
Fin £5m £6m
Severn
Trent
Sewerage 14 new partnership projects with public
sector/NGOs
Fin <£1m <£1m
Yorkshire Water &
Sewerage
16 schemes delivered by working with
others
Fin <£1m
South West Water 63% increase in farm acreage under
improved management (to 8,154), 115%
increase in farms with plans (to 1,400)
Rep
Thames Sewerage 13 water bodies improved as a result of CM
activities
Rep
Bristol Raw water quality at sources stable as a
result of CM activities
Rep
Sutton &
East Surrey
14 NEP investigations/CM schemes
delivered
Rep

Some issues for PR19
• How to address resilience and encourage longer-term performance
commitments
• How to ensure more comparability, e.g. common definitions of PCs.
• Balance between rewards and penalties and between business areas
(water, sewerage, retail)
• What is a proportionate number of PCs for incentivising good company
behaviour
• Should some companies be able to earn rewards for improving
performance in certain areas (e.g. pollution incidents) whilst others are
subject only to penalties?
• Should there be more consistency on potential reward/penalty per unit
of improved performance?
• How will issues such as retail competition and proposed upstream and
downstream impact on the price review process - not to mention the B-
word……
• How is evidence on CM best brought into the business planning process

Thank you
Email: noelw@noelwheatleyconsulting.co.uk
Tel: +44 (0) 7580 931245
L
LinkedIn: https://uk.linkedin.com/in/wheatleynoel

Prof Richard Brazier
r.e.brazier@exeter.ac.uk
Evaluating the benefits of Upstream Thinking across
multiple scales

Context
• Over the last decade extreme weather in the UK has caused major and costly socio-
economic and environmental damage:
• flooding, diffuse pollution, soil erosion and sediment pollution
• It seems clear that conventional approaches to land management do not work to
mitigate these environmental problems
• Furthermore, solutions to flooding focus on downstream palliative approaches i.e.
building flood defences, dredging channels etc…
• …and ‘solutions’ to water quality problems focus on costly treatment by water
companies
• Upstream Thinking techniques are a complementary approach which may enhance
resilience of downstream flood defences, maintain elevated baseflows during
droughts or improve water quality prior to treatment
• But what is the evidence base to support Upstream Thinking and what else do we
need to know to quantify the multiple benefits (or negatives) associated with a
radically different approach to the norm?

This talk demonstrates how we can quantify the role that Upstream
Thinking might play as a solution to the environmental problems that
(for the most part) we have created…
The talk focuses on two different approaches:
• Moorland restoration
• Reintroduction of the Eurasian beaver
Highlighting data collected across multiple scales to quantify water
quantity and water quality benefits

Mires: Dartmoor and Exmoor Peatland Restoration
Luscombe et al (2014) DOI: 10.1002/eco.1527.
Luscombe et al (2014) DOI: 10.1002/hyp.10285
Grand-Clement et al (2013) DOI: 10.1111/1365-2664.12039
Grand-Clement et al (2014) DOI: 10.1016/j.scitotenv.2014.06.091
Grand-Clement et al (2015) DOI: 10.1016/j.jenvman.2015.06.023
Gatis et al (2015) DOI: 10.1002/eco.1643
• SW Peatlands are an important habitat,
carbon store and source of drinking water
• At risk from:
• Climate change (as most southerly blanket
bogs, provide us with an analogue for
future change further north),
• Anthropogenic drainage,
• Peat cutting,
• Over-grazing
• Erosion
• Combined, these factors have resulted in
damaged peatlands with negative impacts
on ecosystem service provision
• 2010-2015 restoration projects undertaken
across Exmoor and Dartmoor
• Focus on ditch/gully blocking
• UoE research to understanding function
pre- and post- restoration

Dartmoor:
Peatland extent
Green areas = Deep Peat (>0.4m)
Yellow areas = Thin Peat (<0.4m)

Dartmoor:
Peat cuttings
Red areas = overcut peat

Dartmoor:
Drainage features
Green areas = Linear ditches

Processes Driving Bare Peat Expansion pre
Restoration
Averaged cross section of
Water table

Hydrological Restoration - Immediate Effects
Instantaneous
water table Jump
No significant
rainfall
Discharge falls as
pool forms?

Restoration Effects on Water Storage during June – July
(Data Subset)
Water table
depth in the
vegetated
areas
Standing
water depth
in the bare
peat areas
Water table
depth in the
bare peat
areas

Simple upscaling of restoration effects on Summer
water storage across Flat Tor Pan
Using mapping data from the monitoring project and mapping project we can
estimate that:
As Ground Water
Storage increases by
9cm (in data subset)
As Permanent Surface
Water Storage increases
by 14cm (in data subset)
Ground Water Storage in
previously dry areas of
peat = 1.26 million litres.
Across restored area. Assuming a standard bulk density of 50%. A total of 2.87 million litres.
FTP is only 1.26% of the bare peat on Dartmoor.
Extra Water Stored in
bare peat areas = 1.61
million litres.

Devon Beaver Project: Overview
• Fenced 3 ha site in North Devon
• 1st order tributary draining from IMG
• A pair of beavers introduced in 2011
• Dramatically changed site from small
first order tributary running through wet
woodland, to a diverse mosaicked
wetland environment.

Devon Beaver Project: Preliminary Results- Flow Attenuation
December 2014
February 2015

Devon Beaver Project: Results - Flow Attenuation
• Each x is a storm
• Flow in (above beaver) is greater with
higher peak discharge
• Lag times (peak rainfall to peak flow)
much shorter above beaver site than
below
• Demonstrates flow attenuation due
to beaver activity...

Devon Beaver Project: Results - Water Storage
Puttock, A., Cunliffe, A. M., Anderson, K., & Brazier, R. E. (2015). Aerial photography collected with a multirotor drone
reveals impact of Eurasian beaver reintroduction on ecosystem structure. Journal of Unmanned Vehicle Systems,
150429143447007. http://doi.org/10.1139/juvs-2015-0005

Devon Beaver Project: Water Quality 1

Devon Beaver Project Results - Water Quality 2
For all variables apart from DOC, water
quality is better leaving the site, than
entering the site
DOC concns are low entering (carbon
depletion of agricultural soils?), higher
leaving – carbon cycling in the wetland
that has been created…

Summary and Conclusions
• Restoring structure of landscapes through Upstream Thinking approaches has a
significant impact upon hydrological function
• Moorland restoration and beaver reintroduction shown here have led to
attenuated hydrological responses and increased water storage
• There is thus a value of this work in times of drought, enhancing baseflows in rivers
and flood, when more water can be stored in these landscapes
• In addition water quality has improved alongside multiple other environmental
ecosystem services not covered within this talk
• However, proving these benefits has required significant monitoring efforts,
without which it is difficult to quantify the value of land management or
restoration approaches or compare the value of different approaches
• Our next challenge (by 2020) is to adopt these approaches across all catchments
where significant UT works will be undertaken to translate this natural,
environmental science understanding into ‘value’ for the water company

Thanks to all project and associated partners
Devon Beaver Project
Devon Beaver Project is led by Devon Wildlife Trust and the University of Exeter, and funded by Westland Countryside
Stewards. Particular thanks go to John Morgan, the site owner, for hosting the reintroduction project and allowing site
access for researchers. The 3D Robotics Y6 was supplied by the University of Exeter’s Environment and Sustainability
Institute (ESI) environmental monitoring drone lab.
River Otter Beaver Trial
The River Otter Beaver Trial is led by Devon Wildlife Trust, working in partnership with the University of Exeter, Clinton
Devon Estates and the Derek Gow Consultancy. Data has been provided by the Environment Agency. Expert independent
advice is also provided by the Royal Zoological Society of Scotland (Roisin Campbell-Palmer and Simon Girling), Professor
John Gurnell and Gerhard Schwalbe.
Mires Project
This research was funded by South West Water through the Upstream Thinking Program and supported by the Exmoor
Mires Patnership and Dartmoor Mires Partnership (in turn supported by, Environment Agency, Natural England, Historic
England, Exmoor National Park and Dartmoor National Park).

Queen Mary University of London

Scaling up to landscape scale
– the DTC perspective
Iwan Jones
The Demonstration Test Catchments Consortium

Scaling up to WFD level
Laboratory experiments Field experiments Catchment experiments
Control
Realism
Spatial and Temporal Scale

Sediment
0
5
10
15
20
0 20 40 60 80 100
Agricultural Area (Cumulative Percentage)PercentageReduction Plant Protection Products
0
20
40
60
0 20 40 60 80 100
Agricultural Area (Cumulative Percentage)
PercentageReduction
Phosphorus
0
5
10
15
20
25
0 20 40 60 80 100
PercentageReduction
Nitrate
0
5
10
15
20
0 20 40 60 80 100
PercentageReduction
Sheep Dip Disposal
0
20
40
60
0 20 40 60 80 100
PercentageReduction
Veterinary Medicines
0
20
40
60
0 20 40 60 80 100
PercentageReduction
Sediment Reduction
Agri-Environment Monitoring
Technical Services Contract
Lot 3. Soil, Water and Climate ChangeA
< 1
1 - 1.9
2 - 3.9
4 - 7.9
> 8
Percentage
Change (%)
Nitrate Reduction
< 1
1 - 1.9
2 - 3.9
4 - 7.9
> 8
Percentage
Change (%)
Spent Sheep Dip Reduction
< 1
1 - 1.9
2 - 3.9
4 - 7.9
> 8
Percentage
Change (%)
Improvements are not evenly distributed
Jones et al. in press
J Appl Ecol

Issues when scaling up
Farm practice/business as usual
Uptake & combinations of measures
Positioning & density
Installation & maintenance
Landscape scale retention & transformation
Non-agricultural sources
Topography
Climate
Soil

Need to understand the
constraints on delivering
improvements at the catchment
scale cost-effectively

Parallel work streams
Fundamental
evidence: target sub-
catchment monitoring
Evidence synthesis for
national policy
support

‘Weight-of-evidence’ approach
• How do you best characterise
‘the problem’
• what are the technical remedies?
• how do you best change the
attitudes of farmers?
• how do you best assess the
outcomes of targeted intervention?

Baseline characterisation
Pollutant sources
Pollutant pathways
Pollutant impacts
Damage costs
Conceptual
modelling and
monitoring

On-farm interventions
1 – yard roofing
2 – track re-surfacing
3 – settling ponds
4 – stream fencing
5 – stream fencing
6 – arable reversion to
grass
7 extension of riparian
buffer zone

The challenge of detecting change

Farmer baseline survey
One aim of the DTCs is to develop ‘communities of practice’, ultimately with
the objective of improving farm management. To do this it is important to be
aware of current farmer attitudes and activities.
Face-to face interviews with farmers within the DTCs to obtain details on:
- Current adoption of mitigation measures
- Attitudes towards future adoption
- Business characteristics

Attitudes to future uptake of
measures
0% 20% 40% 60% 80% 100%
Grow biomass crops
Establish and maintain artificial wetlands
Establish cover crops in Autumn
Re-site gateways away from high-risk areas
Establish permanent woodlands
Establish riparian buffer strips
Farm track management
Percentage of farmers

Collins et al. (2016) Science of the Total Environment 547: 269-281
Tackling agricultural diffuse pollution: what might
uptake of farmer-preferred measures deliver?
Cost of mitigation Phosphorus reduction Sediment reduction

Concentration
Duration
Exceedance Curves
A Prior to mitigation
B Mitigation farm 1
C Mitigation farm 2
D Post-mitigation
Positive effects on water quality at the sub-
catchment scale

Ecosystem process
rates
medium-
term
Cool’s Cottage Priors Farm

longer-term
15
20
25
30
35
15
20
25
30
35
15
20
25
30
35
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
0
10
20
30
40
50
60
70
80
0
10
20
30
40
50
60
70
80
0
10
20
30
40
50
60
70
80
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
NTAXAPSI
Caudworthy Bridge
(Upper catchment)
Caudworthy Ford
(Lower catchment)
Burracott Bridge
(Control catchment)
WFD Biological
Quality Elements

Integrating data streams
0
1
2
3
4
5
6
7
8
9
10
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Cost (£)
Nitrate(%Reduction)

Scaling up learning for policy support
Source + mobilisation + delivery
Source + mobilisation
Delivery measures
Mobilisation measures
Source measures
Existing prior implementation
NTAXA
ASPT
CoFSI
The
pollutant
delivery
cascade –
variable
uptake

DTC
Academics
NGOs/
delivery
bodies
Government/
policy
Education/
extension
Farmers
Communities of practice

Acknowledgements
Defra
Demonstration Test Catchments Consortium
Farmers, Landowners, Water Companies,
Environment Agency, Natural England, Catchment
Sensitive Farming, Catchment Partnerships, River
Trusts, and Other Stakeholders

Ian Bateman
Land, Environment Economics and Policy Institute (LEEP)
University of Exeter, UK.
Presented at:
Rivers Trust Autumn Conference
The Partnership approach & the assessing the benefits of catchment management
13th September 2016 - Rougemont Hotel, Exeter. EX4 3SP
Valuing the environmental, social, cultural and
economic benefits of catchment management

Catchment management starts with land use

• Physical environment and its changes
• Changes in market forces, prices, costs, etc.
• Policy
Brexit
Catchment management starts with land use
and its drivers

Cereals Beef2014
Low High
Land use is changing - for many reasons
e.g. arising from climate change 2014-63
Cereals Beef20142039Cereals Beef201420392063

Cereals Beef2014
Low High
Cereals Beef20142039Cereals Beef201420392063
Land use change & water quality
Nitrates Phosphates
Linking land use to water quality,
ecological quality and economic values
Water
treatment
costs
Recreation
values
Flood
damage
costs
Non-use
values

1 visit
1 visit
1 visit
8 visits
How much do people value waterside recreation?
• National survey data (MENE 200,000
household diary records over 5 years):
o Home location
o Location of visited sites
o Visit frequency
o Calculate visit travel time & costs
• Obtain data on site quality
£
4 visits
• Observed choices reveal how people trade-
off between site quality and visit costs:
o As costs increase so visits fall
o As quality increases so visits rise
o Reveals recreational value of new or
improved sites
• Analysis of visit patterns

Water
treatment
costs
Recreation
values
Linking land use to water quality,
ecological quality and economic values
Non-use
values
Land use change & water quality
Flood
damage
costs

Estimating non-use values:
Case study area

Estimating non-use values:
Sample home addresses

Choice experiment design
Highest
Recreational
Quality
Lowest
Recreational
Quality
Highest
Ecological
Quality
Lowest
Ecological
Quality
Highest
Price
Lowest
Price
Ecological water quality Recreational water quality Price

£ 10B
A
CHOICE RECREATIONAL
QUALITY
ECOLOGICAL
QUALITY
CHANGE IN
YOUR ANNUAL
WATER BILL
NO
CHANGE
Choice examples

Choice examples
B
A
CHOICE RECREATIONAL
QUALITY
ECOLOGICAL
QUALITY
CHANGE IN
YOUR ANNUAL
WATER BILL
NO
CHANGE
£ 50

Results: willingness to pay
River improvement
Household willingness to pay (£) per year
General public Recreational users
High ecological quality £8.36 £7.68
High recreational quality £3.51 £6.84

Impacts of change on Biodiversity
Data:
Breeding Birds Survey:
Bird diversity indices
• Annual survey of UK 1km grid
squares between 1999-2011
• Total of 35,349 grid square surveys
• Well over 200 species recorded
• All data spatially & temporally
referenced
• Linked to land use, climate & other
variables

Data:
Breeding Birds Survey:
Bird diversity indices
• Annual survey of UK 1km grid
squares between 1999-2011
• Total of 35,349 grid square surveys
• Well over 200 species recorded
• All data spatially & temporally
referenced
• Linked to land use, climate & other
variables
Modelled linkages:
Driver change
(e.g. climate)
Land use
Biodiversity

Modelled linkages:
Driver change
(e.g. climate)
Land use
Biodiversity
Results:
Impact of climate change induced
changes in land use 2014-63:
• Some increases in upland biodiversity
• Offset by losses in lowland areas due
to greater extent and intensity of
arable production.
Changes in bird biodiversity (Simpson’s index) under the BAU (2014-2063)
Measure of
biodiversity
change
Mean* S.E. Mean
Lower 95%
CI
Upper 95% CI St. Dev.
All Birds -0.248 0.006 -0.260 -0.236 1.420
Woodland Birds -0.034 0.004 -0.041 -0.027 0.839
Farm Birds -0.032 0.004 -0.039 -0.025 0.873
Red/Amber Birds -0.092 0.002 -0.097 -0.088 0.573
Table. 13.3 Measures BAU changes in bird biodiversity for 2014-63, using Simpson’s index of bird
diversity. Positive (negative) values indicate increases (decreases) in diversity.
N = 57,230 for all GB level analyses (the number of 2km x 2km squares in Great Britain)
95%CI = 95% confidence interval around the mean
St. Dev. = Standard deviation
*All means are significantly different from zero at p<0.01 (nonparametric test applied due to
significant skew in data)
Climate change impacts
2014-63
• Targets used as decision constraints
Incorporation in decision making:

Water quality below WFD requirements in
much of the River Aire
Status Quo
Comparing benefits & costs of a catchment management scheme

Baseline
20% Fertiliser
reduction
20% Livestock
reduction
20% switching
arable
Load
(kg/ha)
24.9 -1.1
(-4%)
-1.5
(-6%)
-5.5
(-22%)
Concentration
(mg/L)
5.4 -0.2
(-4%)
-0.3
(-6%)
-1.2
(-21%)
Farm income
lost (£m)
-2.39
[-2.50;-2.27]
-1.89
[-2.00 ; -1.79]
-5.53
[-5.23;-5.84]
Effectiveness
(£m L /mg)
-11.3 -6.3 -4.7
The potential for and costs of water quality improvements
Similar analysis conducted for diffuse faecal pollution
Costs to farmersBenefits to societyInterventionsCost-effectiveness of interventions

Costs on the rural farming community
(£5.5 million)
Baseline
20% Fertiliser
reduction
20% Livestock
reduction
20% switching
arable
Load
(kg/ha)
24.9 -1.1
(-4%)
-1.5
(-6%)
-5.5
(-22%)
Concentration
(mg/L)
5.4 -0.2
(-4%)
-0.3
(-6%)
-1.2
(-21%)
DFGM
(£m)
-2.39
[-2.50;-2.27]
-1.89
[-2.00 ; -1.79]
-5.53
[-5.23;-5.84]
Effectiveness
(£m L /mg)
-11.3 -6.3 -4.7
Winners and losers:
Potential for a Payments for Ecosystem Services market
Benefits mainly for the
urban community
(£12.5 million)
CC impact
Status quo Improvement

Flooding
Water
Timber
N2O CO2CH4
Greenhouse gases Recreation
Biodiversity
Food
Incomes
Drivers of change:
Policy, Market &
Environment
Values
Market values
Non-market
values
Social Value
Land use

Bateman, I.J., Agarwala, M., Binner, A., Coombes, E., Day, B.H., Ferrini, S., Fezzi, C.,
Hutchins, M., Lovett, A.A. and Posen, P. (2016) Spatially explicit integrated modeling
and economic valuation of climate change induced land use change and its indirect
effects, Journal of Environmental Management, 181: 172-184,
http://dx.doi.org/10.1016/j.jenvman.2016.06.020
Hampson, D., Ferrini, S., Rigby, D. and Bateman, I.J. (2016) River water quality: who
cares, how much and why?, presented at the 22nd Annual Conference of the European
Association of Environmental and Resource Economists (EAERE), Swiss Federal Institute
of Technology (ETH), Zurich, Switzerland, 22nd – 25th June 2016
References

12th & 13th September 2016
Rougemont Hotel, Exeter

The Rivers Trust Autumn Conference: Day 2 - Session 3

The Rivers Trust Autumn Conference: Day 2 - Session 3

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