Current UK and EU Policy on Water Management Thames Tunnel Commission 29/7/11

Emerging legislative and policy direction UK Government White Paper UK National Ecosystem Assessment Cave Review TEEB Reports EC White Paper on Adaptation EU Biodiversity Strategy WFD Guidance Documents on Common Implementation Strategy

The Natural Choice: securing the value of nature (June 2011) Nature works as a system Current ecosystems are fragmented and fragile Need for more coherent and large scale approaches Need to restore nature in our cities, towns and rivers Dual problem of reduced flows in the summer and increased demand from consumers

UK White Paper A vision to 2060 –biodiversity, water management, green infrastructure, air quality & ecosystem services Local Nature Partnerships –working at the strategic landscape scale Ten ‘catchment level partnerships’ –businesses, citizens and interest groups Green infrastructure to deliver reduced pollution and greater resilience to climate change

UK National Ecosystem Assessment: Understanding nature’s value to society (June 2011) Natural world is consistently undervalued Ecosystems have changed markedly over the past 60 years and pressures are increasing Decisions made now will have far- reaching consequences Needs a more integrated and holistic approach to deliver sustainable development

Our Life Insurance, Our National Capital: An EU biodiversity strategy to 2020 (May 2011) A 2050 vision – to protect, value and restore biodiversity and ecosystems 2020 headline target – halt the loss of biodiversity and degradation TEEB – the economic value of biodiversity should be factored into decision making and reflected in accounting and reporting systems

EU Biodiversity Strategy: Target 2 By 2020, ecosystems and their services are maintained and enhanced by establishing green infrastructure and restoring at least 15% of degraded ecosystems –Action 5: Improve knowledge of ecosystems and their services –Action 6: Set priorities to restore and promote the use of green infrastructure –Action 7: Ensure no net loss of biodiversity and ecosystem services

Target 2: Action 6 By 2014, Member States, with the assistance of the Commission, will develop a strategic framework to set priorities for ecosystem restoration at sub-national, national and EU level The Commission will develop a Green Infrastructure Strategy by 2012 to promote the deployment of green infrastructure projects and the maintenance of ecosystem services, for example through better targeted use of EU funding streams and Public Private Partnerships.

WFD Common Implementation Strategy: Guidance Document No.24 Principle 7: Favouring robust adaptation measures – “if investments are being planned for infrastructure with long life spans it is prudent to favour measures that are resilient to a wide range of plausible climate conditions … these measures should also work with natural processes and realise multiple benefits (e.g., for flood risk management, drought management, nature conservation, navigation and recreation)”. Principle 8: Maximise cross-sectoral benefits and minimise negative effects across sectors – “measures taken to improve water status through waste water treatment or reuse, artificial recharge of aquifers, inter-basin transfers and so forth, imply higher energy consumption and greenhouse gas emissions”.

Adapting to Climate Change: Towards a European framework for action (April 2009) Water management: “Explore possible ways of improving policies and developing measures which address biodiversity loss and climate change in an integrated manner to fully exploit co-benefits and avoid ecosystem feedbacks that accelerate global warning.”

Changing Course: Delivering a sustainable future for the water industry in England and Wales 20 years since privatisation we have improved customer services, improved standards and increased investment, but: Industry debt has increased from £0 to £33bn Bills are 45% higher in real terms in 2010 than in 1990 Carbon emissions are increasing Future of the sector is unsustainable

Changing Course: the problems Implementation of EU Directives Supply issues addressed regionally, via capital intensive solutions Inflexible environmental regulation Economic regulation incentivises capital investment Lack of innovation Lack of implementation guidelines for the sector’s strategy

Changing Course: the solutions Flexible implementation of WFD Developing competition More flexible approach to consents Improved price setting process Companies driving innovation Prioritising national outcomes in delivering the sector’s strategy

In Conclusion Economic and environmental sustainability is the key underlying principle of emerging national and European legislation and policy Holistic, integrated approaches are the order of the day The policy and regulatory framework of the water industry is a barrier to the development of sustainable, integrated solutions