Review of the economics of sustainable land management in drinking water catchments

Published by CREW – Scotland’s Centre of Expertise for Waters. CREW connects

research and policy, delivering objective and robust research and expert opinion to support

the development and implementation of water policy in Scotland. CREW is a partnership

between the James Hutton Institute and all Scottish Higher Education Institutes supported by

MASTS. The Centre is funded by the Scottish Government.

This document was produced by:

Sue Morris and Kirsty Holstead

The James Hutton Institute

Craigiebuckler

Aberdeen

AB15 8QH

Please reference this report as follows: Morris, S and Holstead, K.L., (2013), Review of

the economics of sustainable land management measures in drinking water catchments.

CREW report CD2012/34 Available online at: crew.ac.uk/publications

Dissemination status: Unrestricted

All rights reserved. No part of this publication may be reproduced, modified or stored in a

retrieval system without the prior written permission of CREW management. While every

effort is made to ensure that the information given here is accurate, no legal responsibility is

accepted for any errors, omissions or misleading statements. All statements, views and

opinions expressed in this paper are attributable to the author(s) who contribute to the

activities of CREW and do not necessarily represent those of the host institutions or funders.

Cover photograph courtesy of: Chris Spray

Contents

EXECUTIVE SUMMARY .............................................................................................................................. 1

1.0 INTRODUCTION ............................................................................................................................... 3

1.1. SUSTAINABLE LAND MANAGEMENT MEASURES .................................................................................... 3

1.2. REGULATORY FRAMEWORK .................................................................................................................. 4

1.3. WATER TREATMENT COSTS AND BENEFITS .......................................................................................... 5

1.4. MEASURING COSTS AND BENEFITS OF SUSTAINABLE LAND MANAGEMENT FEATURES ........................ 5

2.0 UK WATER COMPANIES AND CATCHMENT MANAGEMENT PROJECTS ........................... 6

2.1 SCAMP (SUSTAINABLE CATCHMENT MANAGEMENT PROGRAMME) ................................................... 6

2.2 SUSTAINABLE LAND MANAGEMENT INCENTIVE SCHEME (SCOTTISH WATER) .................................... 7

2.3 UPSTREAM THINKING (SOUTH WEST WATER/ WEST COUNTRY RIVERS TRUST) .............................. 7

2.4 NATURAL ENGLAND UPLAND ECOSYSTEM PILOTS .............................................................................. 8

2.5 WESSEX WATER CATCHMENT MANAGEMENT ..................................................................................... 8

2.6 YORKSHIRE WATER BIODIVERSITY STRATEGY .................................................................................... 9

2.7 NORTHERN IRELAND WATER/RSPB .................................................................................................... 9

2.8 OTHER SUSTAINABLE LAND MANAGEMENT PROJECTS ....................................................................... 10

2.9 OTHER RESEARCH .............................................................................................................................. 10

2.9.1 Peatlands ........................................................................................................................................ 10

2.9.2 Wetlands ......................................................................................................................................... 11

3.0 CONCLUSION ................................................................................................................................ 12

4.0 REFERENCES ................................................................................................................................ 13

Page | 1

EXECUTIVE SUMMARY

Background to research

This report responds to a CREW call down request submitted by Scottish Government. The

aim is to review the economics of sustainable land management measures in catchments

where abstraction for the provision of drinking water takes place.

Objectives of research

The objectives are to:

(i) Collate and review existing evidence from catchment management projects that

are taking place between UK water companies and a range of partners.

(ii) Provide information on the comparative costs of drinking water treatment with

and without sustainable land management measures, and

(iii) Present information on indirect costs and/ or benefits of sustainable land

management, for example in relation to carbon storage, habitat provision and

amenity value.

Key findings and recommendations

Water companies are not able to share data needed to assess the comparative costs of

drinking water treatment with and without sustainable land management measures, as this

information could potentially give competitors an advantage. We conclude that the

commercially confidential nature of water treatment costs mean it is not currently possible to

make direct comparisons of the costs and benefits to water treatments using sustainable

land management measures. We also conclude that:

Despite this, the available evidence suggests that these measures are valuable to

water companies and to improving water quality more generally because of the range

of economic, social, environmental benefits that are produced.

The early stage of many of the projects reviewed means that measuring the

comparative costs of drinking water treatment with and without sustainable land

management measures is still in development.

Restoring peatlands is known to improve water quality and reduce water treatment

costs. Early intervention to restore damaged peatlands further increases cost-

effectiveness.

Investing in sustainable land management measures leads to wider benefits, both

tangible (e.g. carbon sink through afforestation) and non-tangible (e.g. the provision

of desirable habitats and recreational places).

Based on these conclusions, we recommend that:

1. A mechanism is needed to allow water companies’ data on water treatment to be used to

assess the cost-effectiveness of their investments in sustainable land management

measures. We understand that transparency of data does not fit with commercially sensitive

information. We suggest that:

o Water companies should report information to the Water Industry Commission for

Scotland, and Ofwat in England and Wales, so that this information can be used to

Page | 2

evaluate current sustainable land management initiatives and help provide evidence

to shape future water management policy.

2. A method of data collection is needed to ensure future comprehensive cost-benefit

analysis of sustainable land management measures. We suggest that:

o Baseline assessments of environmental status, including water quality and

biodiversity, are made before measures are implemented

o A monitoring strategy is implemented to compare water quality and wider

environmental factors including biodiversity, at appropriate stages of implementation

o Cost benefit analysis should include the tangible and intangible costs and benefits to

water consumers and to society more generally.

Policy implications

There is interest in the use of ‘sustainable catchment management’ to address pollutants

that impact on water resources used for drinking water supply. Our review shows that water

companies are increasingly investing in these measures. The Water Industry Commission

for Scotland (WICS, 2013:14) has stated:

‘We think that in future Scottish Water should have greater opportunities to

consider alternative, more innovative solutions for new investment, even if these

span numerous regulatory control periods. Although these can require greater

collaboration, and may take longer to be delivered, they are often in the best

interests of customers and the environment. This is particularly the case when

factors such as the overall carbon impact are taken into account’.

Given that land management measures are being seen as a sustainable alternative to water

treatment, and are being put into practice in Scotland, it is vital that these measures are

evaluated. Scottish Government and its agencies need access to the most up to date

information regarding the cost-benefit analysis of sustainable land management features in

order to achieve these solutions.

Research undertaken

We reviewed literature on economic assessment of environmental quality to understand

current approaches to cost-benefit analysis in this area. Much of the information was found

within the grey literature (reports, water company web pages) and highlighted a number of

UK projects involving water companies in sustainable land management measures. We

summarised each initiative in terms of aims, partners, measures used and available cost-

benefit information. We contacted key informants from water companies and NGOs involved

in these projects to check for additional unpublished information.

Key words

Sustainable catchment management, drinking water, water management, land management

measures, economic evaluation

Page | 3

1.0 INTRODUCTION

This report responds to a CREW call down request submitted by Scottish Government to

review the economics of sustainable land management measures in catchments used for

drinking water abstraction. The research investigated existing catchment projects to provide

information on costs compared to treatment regimes, and evidence on indirect costs and / or

benefits of sustainable land management. Objectives were to:

(i) Collate and review existing evidence from catchment management projects that

are taking place between UK water companies and a range of partners.

(ii) Provide information on the comparative costs of drinking water treatment with and

without sustainable land management measures, and

(iii) Present information on indirect costs and/ or benefits of sustainable land

management, for example in relation to carbon storage, habitat provision and

amenity value.

1.1. Sustainable land management measures

One of the biggest threats to achieving good water quality status is diffuse pollution, i.e.

contamination that comes from many small and/or scattered sources (SEPA 2010). The

National Audit Office estimated the cumulative cost of water pollution in England and Wales at

between £700 million and £1.3 billion a year (Ofwat, 2011).

The quality of waters within a catchment closely reflects a wide range of natural processes

and human activities which occur throughout the entire catchment (SNH, 2010). Agriculture,

forestry and land use change all affect water resources; different land uses absorb differing

levels of rainfall, in turn affecting the amount of water reaching aquifers, streams and rivers.

Sustainable land management measures are a wide range of features that can be

implemented at the farm/land level to improve water quality in catchments. Table 1 sets out a

list of features and associated benefits. Please note this table is an illustrative example, not an

exhaustive list.

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Table 1: Categories of sustainable land use measures (and associated benefits)

Measure Example Benefit

Implementation of buffer strips and/or

riparian area conservation/restoration

Control of diffuse pollution leaving from

croplands; Fish recruitment; Amenity; Soil

erosion control

Integrated constructed wetlands/

constructed wetlands, and

management and restoration of natural

wetlands

Control of diffuse pollution; Green Corridors;

Optimisation of soil nutrient cycles; Angling;

Tourism

Reforestation, revegetation and forest

conservation

Flow regulation; Carbon storage; Mitigation of

salinity problems; Biodiversity conservation

Land conversion (e.g. forest to

pastureland)

Improvement of the soil fertility; educational

benefit; Amenity; Recreation

Change in agricultural practice (e.g.

Crop rotation)

Increment of water supply; Improve agricultural

production; Soil erosion control

Pesticide controls

Biodiversity conservation; Soil erosion control;

Reduced diffuse pollution

Stock fencing and livestock watering (in association with buffer strips)

Soil erosion control; Reduced diffuse pollution

from livestock

Reducing surface flows e.g. through restoring native woodlands in upland gullies

Improved flood risk, Soil erosion control

Peatland restoration Recreational benefits; Carbon sequestration;

Habitat conservation, Cultural value

Source: Adapted from Martin-Ortega and Raya 2013, personal communication.

Conventional water treatment to remove unwanted contaminants, such as pesticides and

nutrients, are costly in terms of both energy and money. Implementing sustainable land

management measures in drinking water catchments can minimise the entry of pollutants into

water, which has potential to reduce costs at water treatment works. Installation and

maintenance of these measures often incur a cost, but prevention is increasingly asserted to

be economically cheaper than treating polluted water.

1.2. Regulatory framework

It is only recently, that water companes in the UK have been involved in sustainable land

managment measures in the catchments in which they work. Before 2010 there was no

authority for such schemes to be financed by water companies in the UK (RSPB, 2010). The

current period of water company investment (2010-2015) includes approval from water

regulators (Ofwat; Water Industry Commission for Scotland) for water companies operating in

the UK to invest in catchment management schemes, including sustainable land management

measures.

Page | 5

Using these measures to counter rising costs was initially driven by recognition of increasing

problems with pesticides and solvents in the water supply. These problems were revealed by

the introduction of monitoring requirements under the EU drinking water qualiy regulations

(1989). Identification of these problems led to a ‘step change’ in water treatment costs, which

were further increased by subsequent regulatory drivers of water quality, particularly the

European Water Framework Directive 2000 (UKWIR, 2004).

Additional drivers for catchment quality monitoring include the UK’s obligations as signatories

of the UN Convention on Biodiversity 1992, the European Bird and Habitat Directives, and the

Climate Change Acts of 2008 (UK) and 2009 (Scotland).

1.3. Water treatment costs and benefits

The Water Industry Commission for Scotland (WICS, 2012) report that £60m of the £125m

total operating costs, and £143m of the £250m total capital costs for Scottish Water in 2007-8

water were for treatment costs.

Scottish Water has estimated that in a large drinking water catchment, implementing

sustainable land management measures could save upwards of £10m over 25 years.

Implementation of such measures to protect drinking water sources can reduce operational

expenditure due to lower levels of treatment being required and can save capital expenditure

when additional treatment steps are avoided (Scottish Government, 2012).

It is widely recognised that monitoring of alternatives to intensive water treatment is needed to

understand the benefits that accrue from these, and to identify whether cost savings are being

made (Natural England, 2012; RSPB, 2010; Ofwat, 2010).

1.4. Measuring costs and benefits of sustainable land management features

The Water Framework Directive prescribes that action to reach desired quality water

standards should be taken only if the benefits outweigh the costs. This is often determined by

a cost benefit analysis. This technique is capable of measuring benefits that sustainable land

management features may bring that have a market value (such as carbon). However, it is

increasingly recognised that non-market benefits such as wildlife habitat, climate change

adaptation and improved amenity value ought to be included to properly assess the value of

water (Martin-Ortega et al, 2013).

The Water Resources (Scotland) Act 2013 places a duty on Scottish Ministers and Scottish

Water to develop the value of Scotland’s water resources, in ways that are compatible with

sustainable use of these resources. The Act prescribes that the ‘value’ of water consists of:

the value of the resources on any basis (including their monetary and non-monetary

worth), and

the economic, social, environmental or other benefit deriving from the use of the

resources (or any activities relating to them).

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2.0 UK WATER COMPANIES AND CATCHMENT MANAGEMENT PROJECTS

Information from existing catchment projects which include partner water companies is set out

below. For each project we provide a brief description of the project; why and how it was

implemented; and the findings of any economic evaluation of the comparative costs of drinking

water treatment with and without sustainable land management measures and the costs and/

or benefits of these measures.

We found it difficult to gather information on the comparative costs and benefits (tangible and

intangible) of water treatments costs using sustainable land use measures for a number of

reasons:

Data are not shared by water companies

Scientific data and modelling are expensive and limited

There are limited data about how human use varies with ecosystem health

There is limited understanding of non-monetary valuation of benefits

There are a number of time lags involved

Impact of a measure depends on many different factors within a catchment, for

example a broad range of human and environmental factors.

2.1 SCaMP (Sustainable Catchment Management Programme)

SCaMP is a partnership between United Utilities and RSPB which has a 60 year lifespan

(2007-2067). The partnership aims to apply an integrated approach to catchment

management to protect and improve water quality and to deliver a range of other public

benefits, such as improved habitat condition and biodiversity and enhanced landscape value

and recreational experience. United Utilities owns 56,385 hectares of land in North West

England, and extracts drinking water for 7 million people from this area (United Utilities,

SCaMP web pages).

The main problems which affect water quality are agricultural activities and drainage of

the uplands, which has led to peat bogs drying out and erosion releasing colour and

sediment into watercourses.

The project works with farm tenants and partners including Natural England and the

Forestry Commission to carry out a number of catchment improvements strategies,

such as moorland and hay meadows restoration, establishing new woodlands,

stabilising land through scrub planting and providing new farm buildings for indoor

wintering of livestock and for lambing (United Utilities, ScaMP Solution web pages).

The scheme worked by providing farmers with income for 10 years to cover the costs

of the work.

There have been some assessments of the costs and benefits of the land management work

undertaken in this project. Undamaged moorland habitat is estimated to be worth £304/ha/yr

(UK National Ecosystem Assessment, 2011). Assuming that the project will restore habitats,

then this would provide 50% of the way towards restoring the original undamaged condition

over 40 years, so improvements are estimated to deliver benefits worth £152/ha/yr by 2047. In

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addition, the project aims to plant 56 ha of new woodland valued at £180/ha/yr after 60 years

(Snow, 2012)

2.2 Sustainable Land Management Incentive Scheme (Scottish Water)

Scottish Water’s Sustainable Land Management Incentive Scheme is a catchment

management project aimed at improving water quality in river catchments to reduce water

treatment costs. The scheme is working in 6 Scottish catchments- River Ugie; River Deveron;

Loch of Lintrathen; Loch Ascog; Lochgoin/Craigendunton Reservoir; and Dumfries Basin

Aquifer. The approach being used in the scheme is aligned with the stated objective within the

Water Framework Directive-“No deterioration of drinking water sources”.

Specific problems have been identified in these catchments, and investment is to

address problems with pesticides, nutrients, nitrate, and dissolved organic carbon

(colour) through a wide range of eligible measures (Scottish Water, 2011).

The scheme makes payments to land owners and farmers for carrying out actions on

their land with the aim of reducing diffuse pollution of water.

Measures that can be funded include: whole farm diffuse pollution management advice

and technical support; installation of a biobed (a pit lined with compost, soil and straw

to collect, retain and degrade pesticide residues in washings from pesticide handling

activities); stock fencing and livestock watering; and naturalisation of body morphology.

Scottish Water funds up to 100% of the costs of implementing approved measures, up to a

maximum of £20,000 per agricultural business. The best practice incentive scheme is still

developing, and Scottish Water are currently (summer 2013) publicising it at agricultural

events across Scotland. The main benefit from the scheme relates to clean and safe drinking

water (Martin-Ortega et al., 2013).

2.3 Upstream Thinking (South West Water/ West Country Rivers Trust)

South West Water is working with the Westcountry Rivers Trust, and a range of organisations

to deliver sustainable land management measures across Devon, Cornwall and West

Somerset. This project follows on from a successful pilot to restore peatlands on Exmoor.

South West Water provides services in Cornwall and Devon and some areas of Dorset and

Somerset (South West Water, Upstream Thinking web pages).

Upstream Thinking has restored wetlands

The project involved working with farmers to provide them with funding to implement

practices which improve water quality

South West Water (2012:10) envisage that the investment of £9.1m in Upstream Thinking

between 2010 and 2015 will avoid the need for capital investment to upgrade treatment works,

as well as reduce the costs of energy- and chemical-intensive processes of water treatment.

The benefit: cost ratio is estimated at 65:1 over 30 years; costing 65p per customer over the

five year period.

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2.4 Natural England Upland Ecosystem Pilots

United Utilities, Yorkshire Water and South West Water are in partnership with Natural

England to deliver sustainable land management measures in three upland pilot areas: South

Pennines NCA, Yorkshire; Bassenthwaite Lake catchment, Cumbria; and Dartmoor and

Exmoor, South West (Waters et al, 2012). Both the Cumbrian and South West catchments are

in national parks.

Each of the three pilot projects is targeting water quality issues (colour, turbidity,

sediments, pathogens or pesticides).

The Bassenthwaite and South Pennines pilots both produced integrated map-based

delivery plans, consisting of an opportunity map for each land management action,

outlining “what”, “where” and “how” land management action will be undertaken,

including how this can fit with farm businesses.

The South West pilot adopted a farmer led approach through Dartmoor Farming

Futures and working with individual farmers around the Wimbleball Reservoir, on

Exmoor.

Due to limited time and resources by project staff, economic evaluation was only carried out in

the South Pennines, where a marginal valuation of two scenarios was undertaken for a water

supply catchment. This showed that, even with high management costs and only valuing a

limited suite of benefits (water quality, carbon and biodiversity), investment in the catchment

was worthwhile in economic terms.

2.5 Wessex Water Catchment Management

Since 2005, Wessex Water has been working with farmers and land managers who own the

land in its water supply catchments in the south west of England. Wessex Water supplies 1.3

million customers with drinking water, and most water supplied is from groundwater sources

(Wessex Water, 2011).

Catchment advisers work in 15 catchments that are at risk of failure due to

contamination from pesticides and nitrate.

Financial assistance for farmers to change their practice is assessed on a case-by-

case basis.

Wessex Water report that the actual cost benefit ratio varies across sites, but estimate that

implementing catchment management schemes, on average, cost one-sixth of the cost of the

treatment alternative. Cost comparisons carried out by Wessex Water across 11 of their

catchments indicates that sustainable land management measures are more suited to small

rather than large catchments (Wessex Water, 2011).

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2.6 Yorkshire Water Biodiversity Strategy

Yorkshire Water are working in the Don catchment during the period 2010-2015, taking a

holistic approach that involves both engineering solutions and investigating the complex

issues affecting water quality and biodiversity in the river system (Yorkshire Water, 2012). The

main aim is to address problems of colour and metaldehyde to improve water quality and

reduce reliance on energy and chemically intensive treatment processes.

Yorkshire Water (2013) report previous success in enhancing biodiversity:

habitat management at Tophill Low Nature Reserve;

re-introducing red kites to Yorkshire;

river management to increase brown trout populations in Ingbirchworth Dike (fencing to

reduce erosion), Wyming Brook (flow management), and Rivelin Dam (reservoir

release regime trials to ascertain optimal conditions);

moorland restoration (grip blocking, molinia reversion, fencing, and bracken control)

Benefits include moorland agreement to restore 99% of SSSI land; habitat improvements for a

range of birds, fish, reptiles, plants and dragonflies; and successful release of red kites, which

has produced 430 young birds in the area since 1999.

2.7 Northern Ireland Water/RSPB

Northern Ireland (NI) Water is working with a number of statutory and non-governmental

bodies to develop and deliver the Sustainable Catchment Management Area Programme for

Northern Ireland (SCAMP NI). NI Water owns approximately 8,615 hectares of land over

5,182 sites within Northern Ireland and extracts water from a variety of environments (RSPB,

2013).

NI Water has introduced SCAMP NI to protect or improve raw water quality, reliability of water

supply and quantity, and reduce the risks to these.

The focus of the project is on:

Blanket bog restoration

Wildfire prevention

Woodland creation

Heathland management

Land management

Invasive species management (Butler, 2011)

Other benefits envisaged from SCAMP NI are biodiversity in its landholdings, sustainably

improved raw water resources, protection against low flows avoiding abstraction restrictions,

and adaption to, and mitigation against, climate change.

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2.8 Other sustainable land management projects

There are many examples of catchment management projects in the UK and elsewhere that

have implemented sustainable land management measures, although these are not initiatives

by water companies. We include SuRCaSE here to illustrate the potential of such projects for

future research.

Sustainable River Catchments in the South East (SuRCaSE) is a three-year project funded by

the European Union's Life Environment Programme. The project is designed to demonstrate

the value and practicalities of applying the ecosystem approach to achieve sustainable

management of water resources. The project has a number of partners, including two water

companies (Southern Water; South East Water) and promoted catchment-sensitive farming

practices in three catchments (SuRCaSE, 2009).

The project addressed four sustainable development challenges: diffuse pollution;

sustainable drainage water efficiency; improving access and amenity to the waterside

environment.

Management plans were developed for individual landowners, which advised on issues

such as the application of fertilisers and best practice in pesticide application and

handling.

The advice aimed to deliver both water quality improvements and important cost

savings to farmers at a time of rising input costs.

The establishment of unploughed buffer zones around fields near rivers was also

encouraged as a way of controlling diffuse pollution.

Potential savings from carrying out the advice were estimated a by the project and indicated a

benefit/cost ratio of about 3:1. Potentially, savings of £100m could be made if the project was

rolled out across the south east region. Project estimates showed that if the savings advised

in the land holdings of the hotel and education sectors alone were applied to the whole South

East Region, the amount of water saved would be approximately equal to 20% of the annual

flow of the River Darent at Hawley.

2.9 Other research

While we have not been able to directly compare specific land management measures costs

with water treatment costs, evidence indicates that these measures have economic benefits.

2.9.1 Peatlands

Upland peatlands are the primary source for most (70%) of the UK’s drinking water. Healthy

peatlands provide high quality water that can be treated at low cost to drinking water

standards (IUCN, 2011). Drainage of peat from upland catchments damages the land, and

affects the quality of water (Holden et al. 2006).

Damaged peatlands ‘produce higher concentrations of organic ‘brown water’ carbon, which

has to be removed at high cost’ (IUCN, 2011:6). The IUCN calculated that restoring peatlands

has considerably lower costs to society than the price of allowing them to remain

Page | 11

damaged. Cost-effectiveness is due to the subsequent reduction in carbon emissions,

improving water quality (while reducing the costs for drinking water treatment) and conserving

biodiversity. This cost-effectiveness is increased by early intervention, which involves lower

restoration costs (IUCN, 2011:6).

2.9.2 Wetlands

Wetlands offer a number of benefits including areas for recreational activities such as hiking,

fishing, bird watching, photography and hunting. More than 82 million Americans took part in

these activities in 2001, spending more than $108 billion on these pursuits. (Source: USFWS,

Ducks Unlimited).

A wetland’s natural filtration process can remove excess nutrients before water leaves a

wetland, making it healthier for drinking, swimming and supporting plant and animal life. For

example, the Congaree Bottomland Hardwood Swamp in South Carolina removes a quantity

of pollutants from the watershed equivalent to that which would be removed by a $5 million

treatment plant (EPA, 2006). According to one assessment of natural ecosystems, the

monetary value of wetlands worldwide was estimated to be $14.9 trillion (Costanza et al.,

1997).

Page | 12

3.0 CONCLUSION

Water companies are not able to share data needed to assess the comparative costs of

drinking water treatment with and without sustainable land management measures, as this

information could potentially give competitors an advantage. We conclude that the

commercially sensitive nature of water treatment costs means it is not currently possible to

make direct comparisons of the costs and benefits to water treatments using sustainable land

management measures. We also conclude that:

Despite this, the available evidence suggests that these measures are valuable to

water companies and to improving water quality more generally because of the range

of economic, social, environmental benefits produced

Restoring peatlands is known to improve water quality and reduce water treatment

costs; early intervention to restore damaged peatlands further increases cost-

effectiveness.

Investing in sustainable land management measures leads to wider benefits, both

tangible (e.g. carbon sink through afforestation) and non-tangible (e.g. the provision of

desirable habitats and recreational places).

The early stage of many of the projects reviewed means that measuring the

comparative costs of drinking water treatment with and without sustainable land

management measures is still in development.

Based on these conclusions, we recommend that:

1. A mechanism is needed to allow water companies’ data on water treatment to be used to

assess the cost-effectiveness of their investments in sustainable land management measures.

We understand that transparency of data does not fit with commercially sensitive information.

We suggest that:

o Water companies should report information to the Water Industry Commission for

Scotland so that this information can be used to evaluate current sustainable land

management initiatives and help provide evidence to shape future water management

policy.

2. A method of data collection is needed to ensure future comprehensive cost-benefit analysis

of sustainable land management measures. We suggest that:

o Baseline assessments of environmental status, including water quality and biodiversity,

are made before measures are implemented

o A monitoring strategy is implemented to compare water quality and wider

environmental factors including biodiversity, at appropriate stages of implementation

o Cost benefit analysis should include the tangible and intangible costs and benefits to

water consumers and to society more generally.

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4.0 REFERENCES

Holden, J., Chapman, P.J., Lane, S.N., and Brookes, C. (2006) Impacts of artificial drainage of peatlands on runoff production and water quality. Earth Surface Processes, 9: 501-528 IUCN (2011) Report of the Commission of Inquiry on Peatlands, www.iucn-uk-peatlandprogramme.org/commission/findings Martin-Ortega, Julia, Holstead, Kirsty L., Kenyon Wendy (2013) The value of Scotland’s water resources, CREW, The James Hutton Institute Ofwat (2010) Valuing Water: How upstream markets could deliver for consumers and the environment Ofwat (2010a) Delivering sustainable water –Ofwat’s strategy: Water today, water tomorrow www.ofwat.gov.uk/aboutofwat/reports/forwardprogrammes/rpt_fwd_20100303ofwatstrategy.pdf Ofwat (2011) From catchment to customer: Can upstream catchment management deliver a better deal for water customers and the environment? www.ofwat.gov.uk/sustainability/prs_inf_catchment.pdfp5) RSPB (2010) Sustainable Catchment Management: water, wildlife & people, www.scotland.gov.uk/Resource/Doc/1221/0120108.PDF RSPB (2011) Realising the Benefits of Peatlands: Overcoming policy barriers to peatland restoration, www.rspb.org.uk/Images/Microsoft%20Word%20-%20Realising%20the%20benefits%20of%20peatlands_tcm9-282611.pdf RSPB (2013) Peak District, News release, 18.02.13, http://www.rspb.org.uk/news/340365-peak-district Scottish Government (2012) Water resources (Scotland) Bill, policy memorandum, www.scottish.parliament.uk/S4_Bills/Water%20Resources%20(Scotland)%20Bill/b15s4-introd-en.pdf) Scottish Water (2011) Sustainable Land Management Incentive Scheme for the Protection of Drinking Water Sources, www.scottishwater.co.uk/about-us/corporate-responsibility/sustainable-land-management Scottish Water (2013) Sustainable Land Management Incentive Scheme for the Protection of Drinking Water Sources- information booklet, Scottish Water, www.scottishwater.co.uk/About-Us/Corporate-Responsibility/Sustainable-Land-Management/SLM-Documents/Info-Booklet SEPA (2010) Diffuse pollution priority catchments: improving Scotland's waters www.sepa.org.uk/water/river_basin_planning/dp_priority_catchments.aspx South West Water, Upstream thinking http://www.southwestwater.co.uk/index.cfm?articleid=10745 South West Water (2012) Corporate sustainability report, www.sww-cr-report-2012.com/SWW-Corporate-Sustainability-Report-2012.pdf Snow, Kate (2012) Catchment Benefit Assessment Case Study, United Utilities, presentation at RCS conference Protecting Water Catchments from Diffuse Pollution - the Emerging Evidence, 21 February 2012, Birmingham www.rsc.org/images/Kate_Snow_UnitedUtilities_tcm18-216641.pdf Sustainable River Catchments for the South East (SuRCaSE) (2009) Learning from experience: promoting integrated catchment management in South East England, http://ec.europa.eu/environment/life/project/Projects/index.cfm?fuseaction=home.showFile&rep=file&fil=LIFE04_ENV_GB_000807_LAYMAN.pdf UN (1992). Convention on Biological Diversity. United Nations, Rio de Janeiro www.biodiv.org/doc/legal/cbd-en.pdf. UK National Ecosystem Assessment (NEA) (2011) United Utilities, ScAMP web pages, http://corporate.unitedutilities.com/scamp-index.aspx United Utilities, ScaMP Solution http://corporate.unitedutilities.com/The%20SCaMP%20solution.aspx Water Resources (Scotland) Act, 2013 http://www.legislation.gov.uk/asp/2013/5/introduction/enacted Waters, R. Lusardi, J. Clarke, S. (2012) Delivering the ecosystem approach on the ground an evaluation of the upland ecosystem service pilots, Natural England, http://www.google.co.uk/search?hl=en&q=2.6%09Natural+England+Upland+Ecosystem+Pilots&meta= WCS (2012) Value chain analysis www.watercommission.co.uk/UserFiles/Documents/Staff%20Paper%2012.pdf WCS (2013) Strategic Review of Charges 2015-21: Innovation and choice www.watercommission.co.uk/UserFiles/Documents/scr%20innovation%20and%20change%20proof%204.pdf Wessex Water (2011) Catchment management: managing water-managing land, Wessex Water, http://www.wessexwater.co.uk/publications/ Yorkshire Water (2012) Taking responsibility for the water environment for good: turning debate into action, Yorkshire Water, http://www.yorkshirewater.com/policy Yorkshire Water (2013) Biodiversity successes, http://www.yorkshirewater.com/our-environment/biodiversity/biodiversity-successes.aspx

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