Economics forms one of the central pillars of the Water Framework Directive (WFD). SEPA can use the economic evidence to rank the effectiveness of potential measures necessary for Scotland’s waters to achieve and retain good environmental status. Any deterioration from natural status is the result of human economic intervention and the Directive seeks to ensure that the most cost effective (efficient) measures possible are used to remediate any impacts.
SEPA is the competent authority for the delivery of much of the Directive in Scotland and has responsibility for a range of economic and social analysis. A feasibility study was commissioned in early 2003 to establish the scope and direction for delivering the economic analysis and to contribute to the development of Scotland's understanding of exceptions.
- View that study here (550k pdf)
The first deliverable of the Directive is for Member States to provide an economic analysis (characterisation) of water use for each river basin district (RBD) by March 2005. This analysis provides information on:
- the economic importance of water uses;
- trends in water demand, water supply, investments in the water sector; and
- assessing the recovery of the costs of water services.
The economic analysis will also inform future Water Framework Directive work, including:
- identification of the most cost-effective programme of measures for achieving environmental objectives;
- justification of exceptions (i.e. achieving environmental objectives within a longer time frame, or proposing less stringent objectives because of disproportionate costs or technical infeasibility); and
- designation of heavily modified water-bodies.
This work is now completed and covers the Scotland, Solway-Tweed and a small portion of the Northumbrian river basin districts. The background research for these reports has been summarised and submitted to the Department for Environment Food and Rural Affairs (Defra) for inclusion in the UK’s submission to Europe.
To view the published reports for the Scotland RBD and the Solway-Tweed RBD, click here.
These reports have been developed with the assistance of the Economic Advisory Stakeholder Group (EASG) and we are extremely grateful for their continued support and assistance. Some EASG members chose to produce independent sector reports and these are annexed to the Scotland RBD economic report. These sector studies are in the authors own words and do not necessarily reflect the views of SEPA.
The RBD economic characterisation reports were supported by commissioned research. Principally by the three projects described below:
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Valuing Water Use in Scotland and Northern Ireland for WFD Implementation Purposes
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Aim:
To assess how important water is to the Scottish economy and the socio-economic development of the river basin district.
Objectives:
- Identify who benefits from (and would therefore assign value to) water use in Scotland and Northern Ireland for characterisation purposes.
- Develop a practical methodology to value water use in Scotland and Northern Ireland.
- Apply the methodology.
- Identify gaps in information and potential sources of additional information.
View this report here (690k pdf).
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| 2. |
Dynamics of Water Use in Scotland
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Aim:
To provide an accurate picture of the current position (baseline scenario) which will be used as the starting point for forecasting likely future developments.
Objectives:
- Develop the baseline scenario to interpret forecasts in key economic drivers likely to influence pressures and water usage.
- Evaluate trends in water supply and water demand.
- Forecast future patterns of use by focusing on changes in general socio-economic variables (e.g. population growth), economic growth and implementation of planned investments linked to existing regulation.
View this report here (260k pdf).
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| 3. |
Operation of the Scottish Water Market
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Aim:
To describe how cost recovery operates in Scotland and identify to what extent the polluter-pays principle applies.
Objectives:
- Describe the existing institutional framework.
- Assess the current structure and levels of current water pricing and financial cost recovery.
- Examine environmental cost recovery.
- Assess contribution of key water uses/users to the recovery of water services costs.
- Review existing knowledge on incentive pricing and report on options of relevance to Scotland.
View this report here (170k pdf).
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UK Position
Defra is responsible for undertaking the economic analysis for England (and Wales, in conjunction with the Welsh Assembly Government) to meet the requirements of the WFD and has a role in ensuring coordination and consistency in the economic analysis across the UK. The Defra website details how they are tackling the WFD and is the host for the Collaborative Research Programme of research which ensures that there is uniformity of economic decision-making throughout the UK. View their progress here.
