Assessing the Assessing the Feasibility of Economic Feasibility of Economic Analysis for River Analysis for River Basin Management Basin Management Plans in the Ribble Plans in the Ribble Basin in EnglandBasin in EnglandDr Jonathan FisherDr Jonathan Fisher

Senior Water EconomistSenior Water Economist

Environment Agency Environment Agency

Outline of PresentationOutline of Presentation Outline nature and aims of the studyOutline nature and aims of the study Describe integrated appraisal system for Describe integrated appraisal system for

RBMPRBMP Describe the Ribble BasinDescribe the Ribble Basin Facilitated Discussion of 5 worked Facilitated Discussion of 5 worked

examples examples Findings + way forwardFindings + way forward

Aims and Nature of studyAims and Nature of study HowHow to carry out an integrated appraisal of RBMP to carry out an integrated appraisal of RBMP Focused on Ribble to provide reality checksFocused on Ribble to provide reality checks Virtual scoping study:Virtual scoping study:

– focus on how aid decision-making - value addedfocus on how aid decision-making - value added– How will integrated appraisal work in practice?– How to present the outputs of the various

elements of the appraisal process to aid decision-making?

– Assumed illustrative plausible informationssumed illustrative plausible information

• no empirical basis nor policy statusno empirical basis nor policy status

Elements of the appraisal Elements of the appraisal systemsystem

Assess Risks not Comply (Gap)

Option Screening

Option Appraisal

Objective Refinement/Derogation

Plan Agreement

Objective specification

Inputs:Water status, Pressures, Consultation, Appraisal Framework, Appraisal Tools

Outputs:Objectives, Programme of measures, Costs and benefits

Illustrative Worked ExamplesIllustrative Worked Examples Characterisation of Risks, pressures and the Characterisation of Risks, pressures and the

Business as usual case.Business as usual case. Feasibility and effectiveness of measures.Feasibility and effectiveness of measures. Costs, cost-effectiveness and impacts,Costs, cost-effectiveness and impacts, Disproportionate costsDisproportionate costs Consultation and involvementConsultation and involvement Applicability to other BasinsApplicability to other Basins

Description of the Ribble Description of the Ribble BasinBasin

Area: Area: 2128km22128km2

Length: Length: 110km 110km

Tributaries:Tributaries: Calder, Darwen, HodderCalder, Darwen, Hodder

Land UseLand Use 90% rural90% rural

Major Urban Areas: Major Urban Areas: Preston, Blackburn, BurnleyPreston, Blackburn, Burnley

Conservation:Conservation: 28km fishery28km fishery

The Ribble Basin in EnglandThe Ribble Basin in England

Virtual ExamplesVirtual Examples Three stretches of the Ribble, Hodder Three stretches of the Ribble, Hodder

and Darwenand Darwen

Hypothetical contiguous unitHypothetical contiguous unit Hodder - upland rural issuesHodder - upland rural issues Darwen - urban issuesDarwen - urban issues Ribble - downstream receiving waterRibble - downstream receiving water

Characterisation and Risk Characterisation and Risk AssessmentAssessment

Characterisation of Basin (Annex II 1.1)

Initial results

Risk assessment of

non-compliance

Analysis of pressures

(Annex II 1.4)

Assessment of impact(Annex II 1.5)

Economic Analysis(Annex III)

Water Bodies for Appraisal

Consultation

Agreed, Consistent Objective Framework

Inc involvement

Report back

Involvement

Pressures: Point Sources:Pressures: Point Sources:Point Source Ribble Basin Reach 1

(Downstream)Reach 2

(UpstreamRural)

Reach 3(Upstream

Urban)UrbanWater industry STWdischarges

23

Combined sewer overflows 18Septic tank discharges 5 IndustrialIndustrial discharges 14 AgriculturalFarm pollution Incidents 18 Otherinstallations/activitiesWater treatment worksdischarges

6

Private STW discharges 1Mine workings 6Land fills 21 Business practices 3

Pressures: Diffuse SourcesPressures: Diffuse Sources

Pressure Ribble Basin Reach 1(Downstream)

Reach 2(Upstream

Rural)

Reach 3(Upstream

Urban)DiffuseUrban

Contaminated surface water 2 Land drainage practices 22 IndustrialDangerous substances 4 Acidification 1AgriculturalAgricultural diffuse pollution 35 Sheep dip discharge 3Agricultural practices 1Otherinstallations/activitiesContaminated Land

Significant Pressures: RibbleSignificant Pressures: Ribble

Ribble Significant? 2000

to 2

015

2015

to 2

021

2021

to 2

027

G M B G M B G M BWater Industry STW discharges Yes H M L H M L H M L

Landfill No L L L L L L L L L

Land drainage No M L L L L L L L L

Dangerous substances Yes M M L M M L M M L

Agricultural diffuse pollution Yes H H L H H L H H L

Abstraction Yes L L L L L L H M L

Overall (inc. synergies/cumulative effects) H H L H H L H H L

Likely Development in Pressure

202720212015

Likelihood of limiting achievement of quality states in future plan

periods

Characterisation: Characterisation: Outstanding IssuesOutstanding Issues

How define non-compliance?How define non-compliance? – allow for lack of data and uncertaintiesallow for lack of data and uncertainties

Pressures: Identify and Characterise key Pressures: Identify and Characterise key problem segmentsproblem segments => => develop options targeted on themdevelop options targeted on them

How assess likely developments in sig pressures?How assess likely developments in sig pressures?– Qualitative info Qualitative info – Quantitative assessmentsQuantitative assessments

How assess impacts of the pressures?How assess impacts of the pressures?

Option AppraisalOption Appraisal

Cost Assessments

Initial results

Option AppraisalImpact Assessments

Appraisal Tools

Appraised Options

Options for testing

Consultation

Report back

Involvement

Role and purposes of cost-Role and purposes of cost-effectiveness analysiseffectiveness analysis

Systematic and even-handed assessments Systematic and even-handed assessments and treatment of costs and effectiveness of and treatment of costs and effectiveness of options across sectorsoptions across sectors

Help derive packages to achieve various Help derive packages to achieve various water states in RBMPs and HMWB water states in RBMPs and HMWB designation by 2015, 2021 and 2027designation by 2015, 2021 and 2027

Input costs of these packages to determine Input costs of these packages to determine whether or not they are disproportionate (for whether or not they are disproportionate (for derogation decisions - see next eg)derogation decisions - see next eg)

Packages of Measures for Packages of Measures for various statesvarious states

G2015G2015 M2015-->G2021M2015-->G2021 B2015-->M2021-->G2027B2015-->M2021-->G2027 B2015-->M2027-->M2027B2015-->M2027-->M2027

Assessing Effects and costs of Assessing Effects and costs of optionsoptions

Collate info (eg BAT reviews, stakeholder Collate info (eg BAT reviews, stakeholder views):views):– to identify targeted options to identify targeted options – to indicate their effects on water status + to indicate their effects on water status +

reducing risks of non-compliancereducing risks of non-compliance

Estimate Financial costs (NPV or EAV)Estimate Financial costs (NPV or EAV)– pro formas pro formas – scrutiny - benchmark cost estimatesscrutiny - benchmark cost estimates– ?Scope to reduce costs - extend deadline??Scope to reduce costs - extend deadline?

Assessing wider Impacts of Assessing wider Impacts of Options Options

Describe other impacts + explain why Describe other impacts + explain why additional:additional:– Economic impacts Economic impacts

• sectoral or regional employmentsectoral or regional employment• exchequer costsexchequer costs• impacts on inflationimpacts on inflation

– who pays who pays – Non-water environmental impactsNon-water environmental impacts

• impacts on natural habitatsimpacts on natural habitats

Cost-Effectiveness Analysis: Cost-Effectiveness Analysis: RibbleRibble

Target Aggregate risk reduction for nutrients = 50%Effectiveness Cost

(euro k)Measure

2015 2021 2027 U Lag? EAV

OtherImpacts

STW mgtoptimise

20% 20% 20% +/-5%

No 10

STW Opscheme

50% 50% 50% +/-10%

No 300

STW Capscheme

50% 50% 50% +/-10%

Yes? 200

Agri generalbinding rule

10% 50% 70% +/-25%

Yes 60 ImprovedWildlife(bufferstrips)

Agri nutrientcharge

15% 30% 50% +/-25%

Yes 250

Agri EnvAssistance

10% 20% 40% +/-25%

Yes? 100 ImprovedWildlife

Cost-Effectiveness: Cost-Effectiveness: Outstanding issuesOutstanding issues

How assess effects of options on water status? How assess effects of options on water status? How allow for uncertainties about effects on key How allow for uncertainties about effects on key

parameters (esp biological) and costs?parameters (esp biological) and costs? How assess costs and other impacts of options?How assess costs and other impacts of options? How derive summary CE indicators?How derive summary CE indicators? How assess and derive CE packages and balance:How assess and derive CE packages and balance:

– Costs/ImpactsCosts/Impacts– Lagged effects Lagged effects – Uncertainties about effects and costs Uncertainties about effects and costs

Objective RefinementObjective Refinement: : Disproportionate costs?Disproportionate costs?

Benefits Transfer:Quantitative

£ assessment

Initial results

Objective Refinement Stated Preference

Analysis

Stakeholder views

Qualitative assessment

Refined Appraisals

Appraised Options

Packages of Water states

Consultation

Report back

Involvement

Matrix for Appraising Matrix for Appraising PackagesPackages

Effects on water statusEffects on water status Costs (EAV pa)Costs (EAV pa) Environmental impactsEnvironmental impacts

– water quality - aquatic ecologywater quality - aquatic ecology– non-water ecology/natural habitatsnon-water ecology/natural habitats

Recreation, angling etcRecreation, angling etc Wider economic costs and impactWider economic costs and impact

– Economic regenerationEconomic regeneration

Social/distributional Social/distributional Consistency with other policies (eg land use)Consistency with other policies (eg land use)

Appraisal of P Removal and Appraisal of P Removal and agreement with dairy agreement with dairy farmersfarmersBAU Problem Package effects Costs

B2015 ->M2021-> M2027

Excess nutrients M2015->G2021->G2027

EAV 70K pa(Euro)

Impacts Qualitative Quantitative ValuationEnvironment:Ecology of waterbody

Improved waterquality andaquatic ecology

Not quantifiable Notquantified

Angling Improved fisheryquality T2 – T1

8km improvedfor 250 anglers

30k pa

Regeneration Attract investors Not quantified Notquantified

Disproportionate costs: Disproportionate costs: Outstanding issuesOutstanding issues

How assess systematically and How assess systematically and consistently and present wide-ranging consistently and present wide-ranging impacts?impacts?

How present summary qualitative info How present summary qualitative info on non-monetisable impacts on non-monetisable impacts

Identify scope of cases where detailed Identify scope of cases where detailed analyses neededanalyses needed

Appropriate Consultation at Appropriate Consultation at Each StageEach Stage

Compliance Risk Assessment

Option Screening

Option Appraisal

Objective Refinement

Plan Agreement

Objective specification

Inputs: Status, Pressures, Consultation, Appraisal Framework, Appraisal Tools

Outputs:Objectives, Programme of measures, Costs and benefits

Consultation: Outstanding Consultation: Outstanding IssuesIssues

Clarify WFD decision-making contexts Clarify WFD decision-making contexts – mix of local and national decisionsmix of local and national decisions– Issues for discussion/degrees of freedomIssues for discussion/degrees of freedom=> boundaries + role for local and national => boundaries + role for local and national

consultation/involvement consultation/involvement

Take account of existing resources and capabilities - Take account of existing resources and capabilities - both in government agencies and stakeholders both in government agencies and stakeholders (stakeholder fatigue)(stakeholder fatigue)

Proportionate wrt contentiousness of caseProportionate wrt contentiousness of case Link with consultation on related plansLink with consultation on related plans

Lessons from the Ribble + Lessons from the Ribble + Applicability to Other BasinsApplicability to Other Basins

Overall appraisal system broadly OKOverall appraisal system broadly OK– Good outcome oriented focus on decision-makers needs Good outcome oriented focus on decision-makers needs

and how to aid themand how to aid them– Highlighted important links between elements Highlighted important links between elements – Focus on how to identify and refine optionsFocus on how to identify and refine options– Highlight imp challenges of appraising agricultureHighlight imp challenges of appraising agriculture

• Need input WFD concerns into current debate on Need input WFD concerns into current debate on CAP reform and AEP at EC and national levelsCAP reform and AEP at EC and national levels

Ribble = Broadly applicable to other basins and Ribble = Broadly applicable to other basins and other pressures (eg significant low flows) other pressures (eg significant low flows)

• But may need to re-examine re groundwaterBut may need to re-examine re groundwater

Issues for Way forwardIssues for Way forward Need Integrate (eg with HMWBs and with other plans)Need Integrate (eg with HMWBs and with other plans) Need find practical solutions - simplifyNeed find practical solutions - simplify Focus on most important aspects/elementsFocus on most important aspects/elements Be proportionate and Iterative: Start with general broad Be proportionate and Iterative: Start with general broad

brush assessments; then more detailed where neededbrush assessments; then more detailed where needed Explicitly Explicitly present ranges and uncertainties + assumptionspresent ranges and uncertainties + assumptions

As important as research to fill gaps, will be sorting out how As important as research to fill gaps, will be sorting out how to present and communicate (for consultation) the available to present and communicate (for consultation) the available info (from research) with its inevitable uncertaintiesinfo (from research) with its inevitable uncertainties