Via the Farmers Guardian, some background detail on the United Kingdom’s Department of Environment, Food, and Rural Affairs (Defra) proposed new ‘Water Shares’ system which would see all water abstractors own a share in their local water catchment. This proposed system is expected to create a sense of mutual responsibility among abstractors to preserve water supply and incentivize the trading of water during times of scarcity, by claiming it could increase the value abstractors place on water, help to bring about more collaborative approach to managing catchments and ultimately help to provide more resilience to the water sector:
FARMERS will be able to trade water more easily under proposed changes to the rules governing water abstraction from rivers and groundwater launched by Defra today.
Environment Minister Dan Rogerson has published a consultation outlining proposals he said will help conserve water resources in England and Wales and modernise the current outdated abstraction system.
Key aims and proposals include:
- Increasing the amount of water that can be used by systematically linking access to water to water availability;
- Incentivising abstractors to manage water efficiently;
- Helping abstractors to trade available water effectively, ensuring water which could be used is not wasted;
- Developing a more effective process to review licences, striking the right balance between providing regulatory certainty for abstractors and managing environmental risk;
- Incentivising abstractors to manage risks from future pressures on water resources, increasing their own resilience and that of river catchments.
Water abstraction is currently controlled by a system of licences set up in the 1960s. The system has become outdated as water supplies were not considered to be as limited then as they are now, according to Defra.
Farmers account for a large proportion of current water abstraction licences, in many cases for the purpose of crop irrigation, and Mr Rogerson wants the reforms to incentivise licence holders to manage their water efficiently and make it easy for them to trade it.
On average, between 2002 and 2011 only 45 per cent of the annual total of water licensed for abstractions in England and Wales was actually abstracted, according to Environment Agency data. But because abstractors are licensed to use that water, the regulator (Environment Agency or Natural Resources Wales) cannot make it available to others who may really need it, the consultation document says.
It adds that under the current system there is little trading or sharing of licences due to the cost, practicalities and time taken to trade.
It also points that only a quarter of licences, generally newer ones, have conditions to reduce or stop abstraction to leave enough water in rivers or groundwater to protect the environment or other abstractors when water availability is low. Equally, the system generally does not allow additional water to be taken during higher flows.
It also difficult, expensive and time consuming to change most licences that are causing damage to the environment.
The consultation outlines two broad policies to change the system (see below for more detail). The ‘Current System Plus’ system would build on the current system by, for example, strengthening the link between water availability and abstraction and facilitating trade in water.
The more radical ‘Water Shares’ option would give abstractors a share in the overall water resource as opposed to the current licences specifying an absolute amount of water they can abstract. This would encourage abstractors to take a shared responsibility for water resources in catchments, Defra said.
Benefits
The Department estimates that the changes could benefit abstractors in England from about £100m up to about £500m over 25 years compared to retaining the current system. The most significant factor driving these estimated benefits is reduction in water company investment costs due to more efficient use of water.
Mr Rogerson said: “The old abstraction system is no longer flexible enough to deal with the challenges of climate change and a growing population.
“That is why it is crucial we introduce these new reforms to safeguard our environment in the future and allow the economy to grow.
“This is really important to get right so I want to encourage everyone who has an interest, including farmers, businesses, and water companies, to tell us their views.”
An Abstraction Reform Advisory Group, made up of major trade associations and environmental groups, has been brought together to help develop the proposals.
Defra said it was also working with Ofwat, the water regulator, and the Environment agency to tackle ‘unsustainable abstraction’ while the reforms were being debated.
It cited the Restoring Sustainable Abstraction programme, by Defra and the Environment Agency, in the River Itchen in Hampshire as an example of this work in action.
The changes introduced ensured that licensed abstraction will not reduce flows in the river to an extent which can cause harm to the wildlife for which the Itchen is so important, Defra said.
The consultation, which applies to England and Wales, will close on March 28, 2014. Defra and the Welsh Government will then make separate decisions on what measures they put in place.
Water abstraction – the options
Two broad options are proposed:
Current System Plus option
- The Environment Agency and Natural Resources Wales would continue to use the tools currently applied to some licences to reduce or stop abstraction to leave enough water in rivers or groundwater for the environment or other abstractors when flows are low.
- We would improve these tools, strengthening the link between water availability and abstraction to allow more water to be abstracted when more is available, helping abstractors to adapt to the risks posed by increasing variability of water availability. This would also improve environmental protection, particularly at very low flows.
- Abstractors would have annual and daily limits in a similar way to now.
- We would make it easier for abstractors to trade water with each other as temporary low risk trades would be pre-approved.
- Groundwater abstraction could be varied over the long term in response to changes in availability.
Water Shares option
- Abstractors would have a share in the available water resource, rather than an absolute amount. This would encourage abstractors to take a shared responsibility for water resources in catchments in line with the broader catchment based approach.
- As currently, in each specified area within a catchment the regulator would assess how much water is required to avoid environmental deterioration.
- The remaining volume of water would then be referred to as the “available resource”. Abstractors then hold shares of different reliabilities in this available resource.
- Abstractors would receive a water allocation for a fixed period based on the available resource at that time and the reliability and size of their share.
- For surface water abstractors this period might be a fortnight, although for most abstractors their allocation would not change except at very low flows. For most groundwater abstractors the allocation period would be at least annual.
- This option allows for pre-approval of shorter-term trading between abstractors and a wider range of trades.
Under both options Defra would also:
- Remove time limits from licences that currently have them and instead introduce a new transparent and risk based process to review catchment conditions that would enable the regulator to change any abstraction permission within each catchment (regardless of whether they have a time limit now or not), with notice, to protect the environment;
- Improve the link between abstraction charges and usage;
- Take an evolutionary and proportionate approach to implementation. We would only introduce the full package of reforms in some catchments where there are clear economic and environmental benefits to doing so.
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