An economic analysis of water use in the Scotland river basin district

This section considers the economics of water use in Scotland. It focuses on the economic sectors identified as sources of potential pressure or risk of downgrading identified in the environmental characterisation work undertaken in parallel with this economic analysis. It considers all pressures collectively and does not separate them into rivers, lochs (lakes), transitional, coastal and groundwater. Instead the focus is on the main pressures of point source, diffuse, abstraction and impoundment and alteration to physical habitat. Each pressure is not scaled and it is important to remember that they will vary in magnitude considerably. It is important to consider that over 43% of Scotland’s water bodies are not at risk of failing to achieve good status in 2015 and, as such, will require no remediation actions as a result of the Directive.

Before presenting the results it is important to be clear about what is implied by an ‘economic value of water use’. In this analysis we provide estimates for the contribution water makes to an industrial process. In undertaking this work with stakeholders it has become clear that there are differences in views about the range of values that should be considered in this analysis. A full technical exposition of the methodologies and techniques used to establish the values presented can be found in the commissioned research.²¹

The general approach taken is to recognise that water is one of a number of inputs into a process and each input makes a contribution to the final value of the output. In some cases water will become embodied in the product (such as soft drinks) in other cases water will be transformed, warmed, delayed, re-routed, or its assimilative capacity for wastes used: indeed many processes make more than one use of water simultaneously. In some catchments the same volume of water may be used several times by the same or different kinds of users. There are some catchments, for example, with several hydropower generation facilities that make use of the potential energy of the water at several different points.

A similar set of considerations can be appreciated when attempting to value non-industrial uses of water such as recreation. So far, the analysis has attempted to convert the value of water use to a value per m³. Over the coming years other means of illustrating the value of water use will be explored which will be more appropriate for non-industrial use. For the time being we are fortunate in having a number of sector specific case studies and reports provided by representatives of the sectors themselves²².

Table 4 shows how the economic activity of different sectors is associated with the risk of a water body failing to meet good status. Much of the risk is concentrated in certain sectors where the three sectors with the greatest number of impacts (shown in red) account for almost three-quarters of all impacts. Of these three the agriculture, forestry and fishing sector alone accounts for three out of ten risks (mostly associated with diffuse pollution and morphological changes to water bodies). This is followed closely by Energy and Water Supply with almost a quarter of all risks of failure, which are associated with abstraction and flow regulation. Around one in six risks are associated with sewage and refuse disposal and the vast majority of these are related to point source discharges.

There are some risks for which it has not been possible to attribute to a particular sector. These have been allocated to a ‘not identified’ sector. The sector ‘other’ refers to identified pressures that are from the rest of the economy; these would include things such as flood defence walls, urban development and land claim.

Each type of pressure is dominated by particular sectors (shown in red). Table 4 shows that most impacts from abstraction emanate from the energy and water supply sector, while most diffuse pollution risk comes from agriculture. Most flow regulation risk is associated with electricity generation and agriculture is the main source of physical alterations in the form of drainage and land reclaim. The largest cause of point source discharge is waste water treatment. The key role of certain highlighted sectors within the pressure types suggests that the remediation within those sectors will be an important early focus for identifying cost effective measures in affected water bodies.

Further use of this analysis will be made to help to frame the tools we develop to assess the most cost-effective combinations of measures in water bodies. The more pressures of different types from different sectors faced in any particular water body the more complex the decision-making process is likely to become.

Table 5 considers the number of pressures on a water body and shows how many water bodies are affected by multiple pressures. The more pressures per water body the more potentially complex the likely solutions and the more effort will be necessary to identify the most cost-effective combination of measures. Where there are fewer pressures, identifying mitigation measures is likely to be more straightforward.

* There are 3,349 identified water bodies in the Scotland RBD; 1,256 is the total of those at risk or likely to be at risk in 2015

This distribution of pressures is also shown in Figure 4. This indicates that there are relatively few waterbodies which are subject to ‘multiple pressures’ (more than four or five). More than two thirds of all water bodies face three or fewer pressures. This increases the likelihood of a more straightforward solution.

There are a number of water bodies with multiple pressures that emanate from the same sector. This implies that the means by which the pressure might be alleviated could come from the sector itself. Where, for example, a standard set of measures could be applied to reduce the number or complexity of the measures under consideration thereby making the assessment process more manageable.

The following sections analyse the economic use of water made by each of the sectors reported as being the sources of pressures and impacts on water bodies. The commissioned research further builds on this and can be accessed at http://www.sepa.org.uk/wfd/stake/eas