Environment: Subject Profile 25 May 2016 16/42 Dan Barlow, Flora O’Brien, Tom Edwards, Wendy Kenyon, Alan Rehfisch & Alasdair Reid

The Scottish Parliament and Scottish Parliament Infor mation C entre l ogos.

SPICe Briefing Environment: Subject Profile 25 May 2016 16/42 Dan Barlow, Flora O’Brien, Tom Edwards, Wendy Kenyon, Alan Rehfisch & Alasdair Reid

This briefing is written for the benefit of both new MSPs and those returning to the Parliament. It provides an overview of the main issues within the environment portfolio. It highlights the main legislation and policy developments in previous parliamentary sessions, and potential future developments. More detailed briefings on environment topics will be produced throughout the parliamentary session.

Loch Lomond. Source: VisitScotland Transport Emissions. Source: Scottish Government

CONTENTS

EXECUTIVE SUMMARY ...... 3 INTRODUCTION ...... 5 SCOTLAND PERFORMS ...... 6 AIR QUALITY ...... 7 BIODIVERSITY...... 9 PROTECTED AREAS AND SPECIES ...... 11 PESTICIDES AND HERBICIDES ...... 12 Neonicotinoids ...... 12 Glyphosate ...... 13 WASTE AND CIRCULAR ECONOMY ...... 13 SCOTLAND’S APPROACH TO RESOURCE USE ...... 14 WASTE TRENDS IN SCOTLAND ...... 17 FRESHWATER ENVIRONMENT AND FLOODING ...... 17 WATER INDUSTRY ...... 19 SCOTTISH WATER INDUSTRY LEGISLATIVE FRAMEWORK ...... 20 OWNERSHIP OF SCOTTISH WATER ...... 21 SCOTTISH WATER MANAGEMENT STRUCTURE ...... 21 FUNDING OF SCOTTISH WATER ...... 21 REGULATION OF THE SCOTTISH WATER INDUSTRY ...... 21 SOURCES ...... 23 RELATED BRIEFINGS ...... 28

EXECUTIVE SUMMARY

Issue Key policy action / legislation Future developments Air Quality Air pollutant emissions in The Scottish Government’s 2015 strategy Scotland have substantially Cleaner Air for Scotland: The Road to a declined since 1990, however Healthier Future sets out various targets, pollutants from transport, energy including: production and agriculture are  Achieve compliance with EU limits by still prevalent, in spite of 2020 European and Scottish  10% of everyday journeys made by legislation, and many parts of bike by 2020 Scotland still breach legal air pollution levels at certain times.  Phase out 50% of all petrol and diesel fuelled vehicles from urban environments by 2030  Renewables to generate the equivalent of 100% electricity demand, 11% of heat demand and 30% of overall energy demand, all by 2020. Biodiversity At a Scottish level and Implementation of Scotland’s Biodiversity – A internationally, the target to Route Map to 2020 is ongoing. significantly reduce the rate of biodiversity loss globally by 2010 was missed. In response the Scottish Government published 2020 Challenge for Scotland’s Biodiversity reflecting the new international Aichi Targets. Protected The Birds Directive and the Habitats Directive underpin a European network of Areas and protected areas known as Natura 2000. In Scotland the Wildlife and Countryside Species Act 1981, the Nature Conservation (Scotland) Act 2004, and the Wildlife and the Natural Environment (Scotland) Act 2011 implement these Directives. Pesticides Based on work carried out by the European Food Safety Authority the European and Commission restricted the use of three pesticides - clothianidin, imidacloprid and Herbicides thiamethoxam (known as neonicotinoids). This mainly affects oil seed rape growers in Scotland. The Scottish Government has stated it supports the continuation of the current ban. The approval the weedkiller glyphosate was due to expire in December 2015. In April 2016, the European Parliament voted to support the re-authorisation of the glyphosate. The European Commission has yet to make a final decision on the re-approval of glyphosate.

Waste and The Scottish Parliament passed The SNP manifesto sets out their intention to 3 Circular The Waste (Scotland) bring forward a Circular Economy and Zero Economy Regulations 2012 that set out a Waste Bill. range of measures aimed at The Scottish Government are developing boosting recycling and their next plan that sets how they intend to improving resource efficiency. meet their forthcoming climate change goals. In 2016 the Scottish It is expected that a draft of this plan will be Government published A laid in the Scottish Parliament later in 2016 Circular Economy Strategy for for Parliamentary scrutiny. It is likely that this Scotland. document will include policies and proposals to address emissions associated with waste. Freshwater Key legislation includes the Action to improve the water environment Environment Water Environment and Water centres around the implementation of River and Flooding Services (Scotland) Act 2003, Basin Management Plans. Action to manage and the Flood Risk Management flood risk focuses on the delivery of a series (Scotland) Act 2009. of Flood Risk Management Strategies and Plans. Regulation of Scottish Water is the sole The Scottish Government is committed to the Water supplier of water and waste making Scotland a Hydro Nation, maximising Industry water services to domestic the sustainable economic benefit of the properties in Scotland. It is also country’s water resource, while raising the the wholesale supplier of water profile of Scotland as an international leader and waste water services to the in water management and governance while licensed providers which serve developing an international centre of the competitive non-domestic expertise. market. The strategic direction of Scottish Water is set through directions issued by Scottish Ministers. Scottish Water and the licensed providers are regulated by the Water Industry Commission for Scotland (WICS).

4 INTRODUCTION

The “environment” encompasses the surroundings and conditions in which something or someone exists. It is often thought of in terms of the ‘natural environment’ which generally refers to all living, and non-living things which have been created by ‘natural’ means. However, human beings have been interacting with the non-human environment, and have shaped and been shaped by it throughout history. As humans can’t exist without the natural environment, we are considered to be a part of it, rather than separate from it (Lockwood et al 2008).

The environment can include ecosystems – systems of living organisms interacting with the non-living parts of the environment. These interactions provide us with goods and services that are essential to our survival and wellbeing. For example, living plants take nutrients and energy from non-living soil, air and sunlight, and provide us with oxygen to breathe, fruits, vegetables, seeds and grains, to eat, and timber and fibre for fuel, construction, clothing, and many other uses. Thus human systems such as the economy and society are built upon, and reliant on, a stable and well-functioning environment (World Resources Institute 2005).

However, the environment is finite – this means there are limits to how much we can take out of it without affecting its ability to keep providing us with essentials for survival, as well as the raw materials and energy on which our economies depend. The concept of “sustainable development” seeks to ensure that human and environmental concerns are integrated so that all people throughout the world are able to satisfy their basic needs, while making sure future generations can enjoy the same quality of life. Its goal of a just society living within environmental limits can be supported by means of a sustainable economy, good governance, and sound science (Scottish Government 2012). The Scottish Government has statutory obligations to exercise functions which contribute to sustainable development (as do all public bodies).

Concern for the environment has risen up the agenda for civil society, politicians and business in recent years; however, at a global level, humans continue to degrade habitats, overexploit natural food sources and use finite resources at an extraordinary rate. The human population and consumption levels continue to grow, putting the natural limits of the planet under more and more stress. The role of governments at all levels in protecting the environment has never been more important as the threats from human development are greater than ever. However, there are many initiatives aimed at protecting and restoring the environment while creating a fairer society. Most prominent among these are the global Sustainable Development Goals, which the Scottish Government has committed to implementing (Scottish Government 2015).

Whilst the relative health of a local environment (e.g. levels of river pollution) has a direct and measurable effect on health, well-being and economic opportunity, environmental protection is no longer considered to be simply about ensuring particular habitats are protected from immediate threats - pressures on the global systems, such as the climate system, that keep the environment safe, are regarded to be a more serious threat to humanity (Steffen et al 2015).

The worth of the environment to the human economy is being increasingly evaluated and understood - biodiversity, habitats, and ecosystem goods and services are collectively treated as “natural capital”. This sort of thinking has led to the environmental movement being at the forefront of consideration of proposals for alternatives to GDP as a measure of a country’s success (World Forum on Natural Capital 2015, Oxfam Scotland 2012, Carnegie UK Trust 2011).

Such a multi-faceted subject requires sophisticated and varied solutions, therefore the debate on the environment is now required to be similarly sophisticated, though that does not mean that the underlying natural principles are always particularly complex.

5 This briefing1 introduces some key environmental issues, but it is important to consider that good environmental governance relies on a robust structure which includes:  Sound science and robust and accurate advice  Statutory and regulatory framework  Robust monitoring (e.g. measuring emissions accurately)  Environmental education  Environmental liability (the polluter pays)  Environmental taxation (the polluter pays or a tax is levied for public good)  An integrated policy approach which ensures coherent social, economic and environmental policy.

It is also important to understand Scotland’s position in a global environmental context. Scotland’s environment is regarded as being of generally good quality, but the impacts of decisions made in Scotland, for example the purchase of goods or services from overseas, can and lead to environmental degradation well outwith Scotland’s borders. This principle is recognised in Scotland’s climate change legislation, which requires reporting on the concept of Scotland’s actions which generate greenhouse gas emissions elsewhere. SPICe Briefing SB - 16-41 on Climate Change (Barlow 2016) provides an introduction to this important topic.

As a broad subject area, environment is devolved; however at least 80% of applicable environmental legislation originates from the European Union, global agreements on issues such as climate change and biodiversity also have implications for Scotland, as do decisions made at UK level on reserved issues such as road or air transport.

Key agencies2 relevant to this briefing include:

 Scottish Water is the statutory provider of water and waste water services to domestic properties in Scotland and wholesale services to “Licensed Providers”.  Scottish Environment Protection Agency (SEPA) is the principal environmental regulator, tasked with making “sure that the environment and human health are protected, to ensure that Scotland’s natural resources and services are used as sustainably as possible and contribute to sustainable economic growth”.  Scottish Natural Heritage (SNH) cares “for the natural heritage, enables people to enjoy it, helps people to understand and appreciate it, and supports those who manage it”. Their aspiration “is for the natural heritage to be used and managed sustainably”.

SCOTLAND PERFORMS

At the start of the third Session of the Scottish Parliament, as part of the 2007 Spending Review, the Scottish Government introduced a new outcomes-based National Performance Framework (NPF) to underpin the delivery of its agenda. In June 2008, Scotland Performs was launched, a website designed to present information on the country’s performance against the

1 Separate SPICe Briefings cover the distinct subjects of Climate Change (Barlow 2016), Rural Affairs (Barlow et al 2016), and Marine and Fisheries (Edwards et al 2016). 2 Other relevant agencies include the Committee on Climate Change, Forestry Commission Scotland, and Marine Scotland – which are introduced in separate subject profiles (see above).

6 range of indicators outlined in the NPF. The NPF has been “refreshed” twice, most recently in March 2016, with the inclusion of five new national indicators.

The NPF is divided into four parts (see Table 1) which aim to “support and reinforce” each other, and there is a “green” thread running through all parts, however there is debate over whether sustainable economic growth, and sustainable development are compatible, as it is not possible for the economy to grow indefinitely in a world of finite resources. Neither concept is clearly defined in statute and both are open to interpretation, as is their compatibility (Steffen et al 2015, Ross 2015). Table 1: National Performance Framework PARTS INDICATORS The Government's Purpose and its associated The Purpose of the Scottish Government is to targets focus government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. Five Strategic Objectives that describe where Wealthier and Fairer; Smarter; Healthier; Safer and action will be focussed Stronger; Greener 16 National Outcomes that describe what the The fifth Strategic Objective aims to build a Government wants to achieve Greener Scotland; this is through all of the National Outcomes, however with a focus on the following: We value and enjoy our built and natural environment and protect it and enhance it for future generations We reduce the local and global environmental impact of our consumption and production We live in well-designed, sustainable places where we are able to access the amenities and services we need 55 National Indicators that enable progress to be Of these National Indicators, the following ten are tracked. most relevant to the environment: Key: Improve access to local greenspace Performance Improving Increase people's use of Scotland's outdoors Performance Worsening Improve the condition of protected nature sites Performance Maintaining Increase the abundance of terrestrial breeding birds: biodiversity Increase natural capital Improve the state of Scotland's marine environment Reduce Scotland's carbon footprint Increase the proportion of journeys to work made by public or active transport Reduce waste generated Increase renewable electricity production

AIR QUALITY

Air pollution is defined as the “contamination of the indoor or outdoor environment by any chemical, physical or biological agent that modifies the natural characteristics of the atmosphere”, and now represents the greatest global environmental risk to human health. Poor air quality is linked to a growing number of health problems, including lung cancer and 7 cardiovascular disease, culminating in millions of premature deaths every year. In the UK alone, air pollution is now estimated to cause 40,000 deaths each year, with the most vulnerable groups including children, the elderly and those with pre-existing medical conditions. The economic costs of air pollution are accumulated in health care, loss of workdays through sick leave, rehabilitation of the environment and damaged buildings, and reductions in crop yield (World Health Organisation (WHO) 2016, Royal College of Physicians 2016).

Over recent years the profile of air quality has risen in the media, with events such as the VW emissions controversy placing it at the forefront of the news (BBC News 2015). Since many air pollutants are also greenhouse gases, there is an opportunity for policymakers to address both air pollution and climate change simultaneously. This could benefit the health of humans and the environment alike, but it requires a coordinated and concerted effort across multiple sectors, particularly transport, agriculture and the energy industry (Scottish Government 2015a).

Overall, air pollutant emissions in Scotland have substantially declined since 1990 (Figure 1), however the pollutants currently of greatest concern are nitrogen oxides (NOx) from transport and energy production; and course and fine particulate matter (PM10 and PM2.5) from combustion, industry, agriculture and transport, as these are believed to be most damaging to human health.

Figure 1. Trend in air pollutant emissions in Scotland from 1990 to 2013 relative to 1990 levels (Scottish Government 2015b, Air Quality Consultants Ltd. 2012). N.B. PM2.5 trend represents UK data (Scotland specific data not available). The main sources of air pollution are transport, energy production, agriculture, industry and domestic combustion (e.g. gas boilers); with the transport sector as the biggest source of these emissions. This sector is targeted by many air quality campaign groups (e.g. FoE Scotland 2016). However, some experts believe that policymakers should also turn their attention to agricultural emissions of ammonia, which have largely been neglected (United Nations Economic Commission for Europe 2014, EC Joint Research Centre 2015).

8 The European Commission first introduced regulations on air pollution two decades ago, and has since made several amendments and additions. The limit values3 set in these directives are legally binding objectives that must be met by all Member States. Failure to comply with these rules could lead to legal action and financial penalties, similar to the current EU infraction case against the UK Government for breaching air pollution limits (Client Earth 2016).

It is important to note, however, that the limit values set in these Directives are not necessarily considered to be “safe” and could still have a negative impact on human health (Wilkinson 2015). WHO has published its own set of guidelines for air pollution, some of which are considerably lower than the EU limits.

Air quality is devolved, and the Scottish Government is responsible for developing domestic policies and legislation to improve air quality and reduce risks to human health. This is done in partnership with the other Devolved Administrations and the Department for Environment, Food and Rural Affairs (Scottish Government 2009). The Scottish Government is required to devise its own air quality strategies and policies under Part IV of The Environment Act 1995, and has passed a number of regulations, including the Air Quality (Scotland) Regulations 2000 and associated amendments (Scottish Government 2016).

In contrast to the EU requirements, Scotland has set stricter levels for PM10 and PM2.5. In April 2016, the Scottish Government became the first country in Europe to adopt the WHO recommended guideline value for PM2.5 with the intention of doing the same for PM10 in due course.

Whilst air quality management in Scotland mostly falls to local authorities, SEPA also has a part to play through its roles as a regulator of industrial emissions and an advisor for air quality reviews, assessments and action plans. With the approval of Scottish Ministers, SEPA can demand that any Scottish local authorities it deems are failing to make sufficient progress towards meeting the air quality targets take action to resolve this. The Scottish Government’s “Cleaner Air for Scotland: The Road to a Healthier Future” (2015a) sets out various targets, including:  Achieve compliance with EU limits by 2020  10% of everyday journeys made by bike by 2020  Phase out 50% of all petrol and diesel fuelled vehicles from urban environments by 2030  Renewables to generate the equivalent of 100% electricity demand, 11% of heat demand and 30% of overall energy demand, all by 2020.

However, many parts of Scotland still have air pollution levels above the limits contained in air quality regulations (BBC News 2016). SPICe Briefing 16-35 Air Quality in Scotland (O’Brien 2016) discusses the origins and impacts of air pollution in more detail; it further explores relevant legislation and the various strategies designed to improve air quality.

BIODIVERSITY

Biodiversity is the variety of life on Earth. It is considered essential for sustaining the natural living systems and ecosystems that provide food, fuel, health, wealth, and other vital services. The Scottish Government (2015) has stated that the following pressures are most critical for biodiversity in Scotland: pollution; land use intensification and modification; spread of invasive

3 Maximum allowable emissions

9 species and wildlife; lack of recognition of the value of nature; disconnection with nature; climate change; and marine exploitation.

Biodiversity policy in Scotland sits within a broad legislative context encompassing global, EU and UK legislation and policy. The need to protect biodiversity was identified at a global level ahead of the UN Conference on Environment and Development known as the 'Earth Summit' in Rio De Janerio Brazil in 1992. At that conference the Convention on Biological Diversity was opened for signatures. The Convention entered into force on 29 December 1993 (Convention on Biological Diversity, Undated). The target was to significantly reduce the rate of biodiversity loss globally by 2010. The EU, UK and Scotland signed up to this target.

Scotland's biodiversity strategy, Scotland's Biodiversity: It's in Your Hands, was published in 2004 and set out how the government would conserve biodiversity. The strategy set out a vision for 2030 as well as objectives and desired outcomes. The Strategy aimed "to conserve biodiversity for the health, enjoyment and wellbeing of the people of Scotland now and in the future".

SNH published a comprehensive assessment of Scotland’s performance against the 2010 targets in Scotland’s wildlife. An assessment of biodiversity in 2010 stated that biodiversity loss has not yet been halted: Scotland’s biodiversity indicators, the condition of notified habitats and species on protected areas, and progress towards meeting Scotland’s biodiversity targets demonstrate that biodiversity loss has not yet been halted and will require renewed and sustained effort over a longer period.

Internationally, the 2010 targets were also missed. This led to the UN Convention on Biological Diversity setting new targets for 2020, the Aichi Targets (Convention on Biological Diversity (Undated). In addition new 2020 targets were set for the EU and a new European Biodiversity Strategy was published in 2011. The new international targets call for a step change in efforts to halt the loss of biodiversity and to restore essential services that a healthy natural environment provides.

The Scottish response to the missed targets was the launch in 2013 of 2020 Challenge for Scotland’s Biodiversity. This complements Scotland’s Biodiversity: It’s In Your Hands from 2004. Together they make up the Scottish Biodiversity Strategy.

The State of Nature Report 2013 aims to give an overview of how wildlife is doing across the UK. The associated Scottish document - The State of Nature In Scotland report says that: The main State of Nature report gives an overview of how wildlife is doing across the UK. Here we concentrate on Scotland. Due to a lack of suitable data, we were only able to present quantitative trends for about 5% of the UK’s species, and when we look at a smaller scale, the problem becomes even greater. As a result, although we report the best available data here for Scotland, the picture is far from complete – we simply do not have sufficient knowledge to make a robust quantitative assessment of the state of nature in Scotland. Even population trends for charismatic animals such as wildcats and red squirrels remain unquantified.

Most recently, the Scottish Government (2015) published Scotland's Biodiversity - A Route Map to 2020 (Scottish Government, 2015). It sets out six 'Big Steps for nature and a number of priority projects, as follows: 1. Ecosystem restoration - to reverse historical losses of habitats and ecosystems, to meet the Aichi target of restoring 15% of degraded ecosystems.

10 2. Investment in natural capital - to ensure the benefits which nature provides are better understood and appreciated, leading to better management of our renewable and non- renewable natural assets . 3. Quality greenspace for health and education benefits - to ensure that the majority of people derive increased benefits from contact with nature where they live and work. 4. Conserving wildlife in Scotland - to secure the future of priority habitats and species. 5. Sustainable management of land and freshwater - to ensure that environmental, social and economic elements are well balanced. 6. Sustainable management of marine and coastal ecosystems - to secure a healthy balance between environmental, social and economic elements.

Scotland's Biodiversity Indicators have been developed to monitor changes in nature and landscapes. These are divided into two sets:  Scotland's Biodiversity State Indicators and  Scotland's Biodiversity Engagement Indicators.

Scotland's National Performance Framework also provides a measure of biodiversity through the following indicators:  Visits to the outdoors - Increase people's use of Scotland's outdoors  Conditions of Protected Sites - Improve the condition of protected nature sites  Breeding Birds - Biodiversity: increase the index of abundance of terrestrial breeding birds

Together these provide evidence on how biodiversity is changing in Scotland.

PROTECTED AREAS AND SPECIES

The establishment of protected areas and species is integral to the preservation of biodiversity, under both national and international law. Areas important for wildlife or for their landscape or heritage value are given special protection, while certain species are also protected by law.

The two main pieces of European nature conservation legislation are the Birds Directive (79/409/EEC), resulting from the Bern and Bonn Conventions and requiring the establishment of Special Protection Areas (SPAs); and the Habitats Directive (92/43/EEC), requiring Special Areas of Conservation (SACs). These underpin a European network of protected areas known as Natura 2000.

Within the UK, the Wildlife and Countryside Act 1981 implements the Birds Directive, protecting all wild birds (not including poultry and game) and certain mammals, insects, fish and plants. Its provisions have been strengthened since devolution by the Nature Conservation (Scotland) Act 2004, and most recently by the Wildlife and the Natural Environment (Scotland) Act 2011.

The Habitats Directive, on the conservation of natural habitats and of wild fauna and flora, is implemented within Scotland by the Conservation (Natural Habitats &c.) (Scotland) Regulations 2004 (as amended), which also lists European Protected Species of animals and plants.

Special protection is granted to badgers under the Protection of Badgers Act 1992 (as amended). Seals are protected under the Marine (Scotland) Act 2010 (replacing the Conservation of Seals Act 1970).

11 National protected area designations include Sites of Special Scientific Interest (SSSI) and National Nature Reserves. SSSIs are the key protected area designation in Scotland, notified under the Wildlife and Countryside Act 1981 and further protected under the Nature Conservation (Scotland) Act 2004.

National Parks are areas of outstanding natural and cultural heritage. The National Parks (Scotland) Act 2000 has allowed the creation and subsequent extension of two parks to date, in Loch Lomond and the Trossachs, and the Cairngorms. National Scenic Areas also protect special landscapes, and the Planning etc. (Scotland) Act 2006 saw changes to the way National Scenic Areas can be designated. Listed by UNESCO as of special cultural or physical significance (or in the case of St Kilda, both) Scotland also has 5 World Heritage Sites.

The recognition and control of invasive non-native species is an important part of the management of protected areas and preservation of protected species, due to the potential for negative environmental, economic or social impacts, The Wildlife and Natural Environment (Scotland) Act 2011 strengthens the Wildlife and Countryside Act 1981’s control, imposing a general no-release approach, and requiring control orders to be implemented by relevant bodies (Street 2010).

PESTICIDES AND HERBICIDES

Pesticides and herbicides are used to protect crops and increase agricultural production. This section focusses on neonicotinoids and glyphosate respectively.

Neonicotinoids

The EU has a strict regulatory system concerning the approval of pesticides. All pesticides on the market have been subject to an assessment to ensure protection of both human and animal health and the environment. Insecticides are, by their nature, toxic to bees. However, their use can still be possible if exposure does not occur or is minimised to levels which do not generate harmful effects.

In 2012, new scientific findings indicated that some insecticides belonging to a group of neonicotinoids had high risks for bees. At the request of the European Commission, the European Food Safety Authority (EFSA) assessed these new studies and reviewed the neonicotinoids looking especially at their impact on bees. On the basis of the conclusions made by EFSA the European Commission restricted the use of three pesticides - clothianidin, imidacloprid and thiamethoxam.

As a result in Scotland restrictions on the use of neonicotinoid insecticide products containing clothianidin, imidacloprid and thiamethoxam, widely used to control a range of insect pests, came into force on 1 December 2013. In Scotland this ban largely affects oil seed rape growers.

In July 2015 the UK Government temporarily lifted the ban on neonicotinoid pesticides in certain parts of England following an emergency application by the National Farmers Union (NFU). In Scotland, the ban remained in place, but there has been some pressure to review it.

In a letter to Scottish Wildlife Trust in February 2016 the Cabinet Secretary for Rural Affairs stated “I support Europe’s precautionary approach and the continuation of the current restrictions on the use of neonicotinoids. The European Food Safety Authority (EFSA) are currently assessing all the new research findings and will publish a report summarising their findings by the end of January 2017.”

12 Glyphosate

The approval by the European Commission of a widely used weedkiller glyphosate, was due to expire in December 2015. The review of its approval which had begun in 2012, attracted additional interest because a report from the International Agency on the Research on Cancer (IARC) in the summer of 2015, classified glyphosate as “probably carcinogenic” to humans. In April 2016, the European Parliament voted to support the re-authorisation of the glyphosate. However, this vote is non-binding. The next step is for the European Commission to make a final decision on the re-approval of glyphosate, which Member States are then required to enact.

WASTE AND CIRCULAR ECONOMY

Our economies depend on a range of natural resources to make products, meet our energy needs, provide our food and absorb our pollution. In the past century an 8 fold increase in material use has accompanied a quadrupling of the world population and 20 fold increase in GDP (Maddison 2001).

The implications of our resource demands have been the subject of considerable debate for a long time (Malthus 1798, Meadows et al 1972). Recent studies highlight that constraints on resource use are more complex than physical resource availability alone and reflect economic, political and environmental factors. In a recent assessment of the challenges associated with meeting global demands for materials, energy, food and water McKinsey (2011) highlight that although it has been possible to meet dramatic growth in demand for commodities as a result of significant technical improvements in exploration, extraction and cultivation and the identification of new low cost sources of supply to date, this is unlikely to be a viable response for the future as a result of a number of factors including:  An expected increase in middle-class consumers of up to three billion people in the coming two decades  The climate impact of carbon emissions associated with resource extraction and the associated awareness that significant changes will be required if global carbon emissions are to be reduced in line with limiting global temperature rise  The challenges of expanding commodity supply associated with more marginal, challenging and costly extraction.

A recent briefing paper by Chatham House (Chatham House 2012) states that: “A fundamentally new model of industrial organisation is needed to de-link rising prosperity from resource consumption growth – one that goes beyond incremental efficiency gains to deliver transformational change.”

In June 2013 European Commissioner Potŏcnik gave a speech in the Scottish Parliament (European Commission 2013). In this speech the Commissioner set out his views on the need to reform the current approach to resource use and make a transition to a ‘circular economy’: “But today we see that pressures on the environment are having a real and increasing impact on the economy. The soft laws of economics are coming up against the hard laws of physics as we hit physical resource constraints. We now start to see that tomorrow's growth will depend on making environment part of our economic policy.

Our old resource-intensive growth model is simply not feasible on this scale and on a limited planet. Many of the resources our economies depend on are already scarce (like energy or some raw materials) and others are limited and vulnerable (like clean water,

13 clean air and nature)…we will have to move away from our linear model of resource consumption where we consider it normal to ‘take make-use, then throw away'….The transition to resource efficiency and a circular economic model is inevitable, particularly for Europe.”

The Waste Resources Action Programme (WRAP) define a circular economy as follows:

“A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life.”

In recent years a number of individuals, organisations and businesses including the Ellen McArthur Foundation, BT and Green Alliance have been developing the case for a circular economy to address the resource use challenges set out earlier, in response to concerns that while major strides have been made in improving resource efficiency, boosting recycling and exploring new forms of energy however far less attention has been directed at designing waste out completely to create a ‘closed loop’4.

In 2015 the European Commission (European Commission 2015) adopted a Circular Economy Package that includes a number of legislative proposals. These proposals include the adoption of:

 A target for recycling 60% of municipal waste by 2020 and 65% by 2025  A target for recycling 65% of packaging waste by 2025 and 75% by 2030  A target to limit landfilling of municipal waste to 10% by 2030 and a ban on landfilling separately collected waste  Economic incentives that encourage producers to produce greener products and support recovery and recycling of materials.

SPICe briefing A Circular Economy (Barlow 2013) provides more details on the opportunities and barriers associated with pursuing a circular economy and sets out some approaches and interventions that have been proposed to support the development of such an economy.

SCOTLAND’S APPROACH TO RESOURCE USE

Over the past decade Scotland’s understanding of, and approach to, resource use has developed through a number of initiatives. Some of the most significant developments are set out below.

2003: National Waste Strategy launched - With a focus to boost municipal waste recycling Scotland’s National Waste Strategy:  set targets to boost municipal waste recycling and composting levels to 25% by 2006, and 55% by 2020 (from 10% in 2003)  committed to stop the growth in municipal waste by 2010.

4 Closed loop systems are a conceptualisation of a sustainable approach to managing the entire lifecycle of a consumer product, whereby all material not safely consumed in the use of the product is designed to be a valuable input into the same or other processes. Thus, waste elements that cannot be eliminated are either: a) recaptured and reused in the process of making the same or other products, or b) bio-degraded/composted to become inputs to the broader biosphere.

2008: New Recycling Targets established – In 2008 the Scottish Government announced new household waste recycling targets of 40% by 2010, 50% by 2013, 60% by 2020 and 70% by 2025.

2010: Zero Waste Plan established - Scotland’s Zero Waste Plan set out a vision where all waste is seen as a resource that has a value and should be preserved, captured and used again. The plan:  Proposed that the recycling and composting targets of 70% by 2025 would applied to all waste  Established a target to dispose of a maximum of 5% of Scotland’s waste to landfill.

2012: Zero Waste Regulations - The Scottish Parliament passed The Waste (Scotland) Regulations 2012 that set out a range of measures aimed at boosting recycling and improving resource efficiency. The regulations include:  A requirement for businesses to present dry recyclables and food waste for collection  A ban materials collected separately for recycling going to landfill or incineration (from 1 January 2014)  A ban on biodegradable municipal waste going to landfill (from 1 January 2021).

2013: Resource Efficient Scotland Programme launched - The Scottish Government launched the Resource Efficient Scotland Programme to simplify advice and support to businesses, third sector and public sector organisations on energy, material resource and water efficiency.

2013: Safeguarding Scotland’s Resources Programme - Safeguarding Scotland’s Resources is the Scottish Government’s programme to reduce waste and create a more productive and circular economy. The programme includes:  Targets to reduce Scotland’s waste by 7% by 2017 and 15% by 2025  The establishment of a resource efficiency pledge system for companies  A commitment to explore the viability of business models for consumer products that would support leasing or hiring, rather than purchase, of some products  Collection trials for small waste electronic and electrical equipment  A requirement on retailers to charge for carrier bags from October 2014.

Figure 2, taken from Safeguarding Scotland’s Resources (Scottish Government 2013) sets out how materials can circulate around the economy through reuse, refurbishment, remanufacture and recycling with organic materials used as a source of fertiliser and energy.

15 Figure 2: A Circular Economy

2016: Making Things Last – A Circular Economy Strategy for Scotland - The strategy sets out the Scottish Government’s priorities for moving towards a more circular economy and identifies the following as priority areas:  Food and drink: reducing food waste and seeking opportunities in specific sectors such as the beer, whisky and fish sectors  Remanufacture: cleaning, repairing and rebuilding products  Construction: reducing waste from the construction sector (the sector currently accounts for about 50% of all waste in Scotland)  Energy infrastructure: developing opportunities to reuse equipment for example wind turbines and decommissioned oil and gas platforms.

The strategy also sets a target to cut food waste by a third by 2025.

Much of the emphasis in Scotland over the past decade has focused on the recycling element shown in Figure 2, however examples of initiatives aimed at boosting the remanufacture, refurbishment, reuse and organic waste components include trials of deposit return schemes 5 and the deployment of anaerobic digestion plants6.

The Scottish Parliament’s Rural Affairs, Climate Change and Environment Committee took evidence from a range of stakeholders on resource use and circular economy issues in 2014. The Committee (Scottish Parliament 2014) concluded:

5 Deposit return (also known as ‘reverse vending’) schemes reward people for returning bottles and cans so that they can be reused or recycled. In 2013 the Scottish Government commenced trials of these schemes across Scotland 6 Anaerobic digesters enable organic waste streams (e.g. sewage, food) to be used to generate renewable energy (gas) and fertiliser. In Scotland a number of anaerobic digestion plants are already in operation.

The Committee encourages the Scottish Government to continue to provide leadership in promoting and supporting the development of a circular economy in Scotland and in raising public awareness.

The 2016 SNP manifesto makes a commitment to bring forward a Circular Economy and Zero Waste Bill to ‘build the circular economy, promote recycling and take action to meet our food waste targets’ (SNP 2016).

WASTE TRENDS IN SCOTLAND

In 2014 Scotland generated 10.22 million tonnes of waste. Of this 4.45 million tonnes is construction waste, 3.31 million tonnes is commercial and industrial waste, and 2.46 million tonnes is household waste.

Between 2011 and 2014:  The total amount of waste generated in Scotland has fallen from 11.97 million tonnes to 10.22 million tonnes.  The amount of household waste generated in Scotland has fallen from 2.61 million tonnes to 2.46 million tonnes.  The amount of household waste landfilled in Scotland has fallen from 1.45 million tonnes to 1.21 million tonnes.  The percentage of household waste recycling in Scotland has increased from 40% to 43%.

The rate of household waste recycling remains less than the Scottish Government target (50% by 2013). Analysis on a local authority basis (SEPA 2014) highlights that 20 of Scotland’s 32 local authorities recycled less than 50% of household waste in 2014.

FRESHWATER ENVIRONMENT AND FLOODING

The freshwater environment in Scotland is affected by a range of activities. These include forestry, agriculture, recreation, water abstraction for industrial and domestic use, the building of developments such as roads, engineering works, impounding of water in reservoirs and pollution from chemicals and sewage.

The key piece of freshwater environment legislation is the EU Water Framework Directive (WFD), implemented by the Water Environment and Water Services (Scotland) Act 2003 (WEWS). The WFD requires the introduction of River Basin Management Plans (RBMP); a holistic approach to the management of Europe’s water environment.

The aim in implementing the WFD in Scotland is to achieve an effective balance between the protection of Scotland's water environment and the interests of those who depend on it. The WEWS Act created an RBMP regime which aims to protect and improve the water environment in a sustainable way; and provide for regulations to control activities likely to have an adverse impact on the water environment.

SEPA has responsibility for implementing Scotland’s two RBMPs7, as well as regulating water abstraction, impoundment and engineering regimes. The first RBMP cycle ran from 2009 –

7 Solway Tweed, and Scotland

17 2015; the second series of RBMPs were published in late December 2015 (SEPA 2015). Key actions to deliver the RBMP include measures to:  Improve water quality through tackling rural diffuse pollution and waste water discharges.  Improve the physical condition of water bodies  Improve access for fish migration  Improve water flows and levels  Prevent the spread of invasive non-native species.

At present, 66% of water bodies in Scotland are of good status or better, the RBMP regime aims to increase this to 88% by 2027.

The main piece of legislation pertaining to flooding is the Flood Risk Management (Scotland) Act 2009, which seeks to introduce “a more sustainable and modern approach to flood risk management [FRM], suited to the needs of the 21st century and to the impact of climate change. It will also create a more joined up and coordinated process to manage flood risk at a national and local level” (Scottish Government 2016). Specific measures within the Act include:  A framework for coordination and cooperation between all organisations involved in flood risk management  Assessment of flood risk and preparation of flood risk management plans  New responsibilities for SEPA, Scottish Water and local authorities in relation to flood risk management  A revised, streamlined process for flood protection schemes  New methods to enable stakeholders and the public to contribute to managing flood risk  A single enforcement authority for the safe operation of Scotland's reservoirs.

Responsibilities for flooding are spread through a number of organisations, including landowners, local authorities, SEPA, Scottish Government and Scottish Water.

The WEWS and FRM Acts require the production of annual reports to the Scottish Parliament detailing implementation progress. Some of the progress detailed in the latest report (Scottish Government 2015) is as follows:  Funding: capital funding has been provided to local authorities through the Local Government settlement, and discussions are ongoing with COSLA for future years. Funding has been allocated to projects from Angus Council (Brechin), Scottish Borders Council (Selkirk), Inverclyde Council (Greenock), and Perth and Kinross Council (Almondbank). Local authorities can also allocate additional resources to flooding from within the overall funding provided to them by the Scottish Government and from within their own resources.  Understanding Flood Risk: Improvements made to SEPA’s strategic mapping and modelling, as well as improved coordination and collaboration with communities, local authorities and other responsible bodies.  Flood Risk Management Planning: The National Flood Risk Assessment (NFRA) has allowed the development of FRM Strategies and Plans. The NFRA identified Potentially Vulnerable Areas (PVAs) which are those areas at most risk from the impacts of flooding and where further studies, investment and actions may be required. In turn, this has informed the setting of draft objectives for PVAs which determine how flooding will be managed in the future by linking the source of flooding directly to its impacts and by establishing indicators to measure how risk is to be managed or reduced over time.

18  Consulting the Public: Detailed and coordinated consultation preceded the publication of Flood Risk Management Strategies, with Local FRM Plans to follow in the near future. This first cycle of plans will run from 2016 to 2021 and will be reviewed and updated every six years thereafter.  Flood Maps: Flood maps are now being updated annually; the first update was published in March 2015, with the intention that these maps “remain the most comprehensive national source of information on flood hazard and risk available in Scotland”.  Flood Forecasting and Warning: The Scottish Flood Forecasting Service continues to work with both the Met Office and SEPA in utilising new developments in science and research for the benefit of improved forecasting relevant hazards and impacts. Recent developments include the application of wave and snow melt forecasts.  Natural Flood Management: Natural Flood Management (NFM) is the use of natural features to store and slow down the flow of flood water e.g. removing embankments to reinstate floodplains. The Natural Flood Management Handbook provides practical guidance on delivering NFM. It is informed by a number of demonstration projects and studies commissioned by SEPA and partners in recent years.  Flooding and Planning: SEPA continues to work with the Scottish Government and planning authorities, as well as the Scottish Centre of Expertise for Waters to “ensure effective links are maintained between the Land Use Planning System and the FRM Strategies and assist in the delivery of national and local planning policy through the development of a sound knowledge base for planning decisions, engagement with key stakeholders and supporting the delivery of integrated actions across catchments”.

WATER INDUSTRY

The supply of mains drinking water and the treatment of waste water in Scotland is undertaken by Scottish Water. Scottish Water is the sole supplier of drinking water and waste water services to domestic properties. The market for the supply of water and waste water services to non-domestic properties is a competitive market, in which Scottish Water acts as wholesale supplier to the all providers within the market. The following sections outline key aspects of the role, structure, management and funding of Scottish Water and the legislative framework governing the working of the wider Scottish water industry.

Scottish Water is a publicly owned company that supplies drinking water and waste water services to 2.46 million households and 150,000 business premises in Scotland. It is responsible for 29,986 miles of water pipes, 32,007 miles of sewer pipes, 1826 waste water treatment works and 249 water treatment works. Scottish Water is also responsible for delivering a major water and waste water infrastructure investment programme defined by Scottish Ministers within funding limits set by the Water Industry Commission for Scotland (WICS).

Scottish Water Group consists of Scottish Water, a public corporation, and a number of subsidiaries, as outlined below:

Scottish Water: Scottish Water is the statutory provider of water and waste water services to domestic properties in Scotland and wholesale services to “Licensed Providers”.

Scottish Water Business Stream: Scottish Water Business Stream (“Business Stream”) is a wholly-owned subsidiary of Scottish Water with its own board and independent management team. It provides water and waste water services for business customers in competition with

19 other companies in the competitive retail market for water and waste water services to business customers which began operation on 1 April 2008.

Scottish Water Horizons: Scottish Water Horizons is a wholly-owned subsidiary of Scottish Water that aims to utilise Scottish Water’s physical and personnel assets to assist Scotland’s economy and protect its environment. The services provided by Scottish Water Horizons are discretionary, i.e. Scottish Water is not required to provide such services by statute. Within Scottish Water Horizons there are two distinct elements:

 Horizons Environment: Formerly known as Scottish Water Waste Services, Horizons Environment deals with recycling food waste, composting garden waste, disposing of sludge and liquid waste, emptying septic tanks and handling waste disposal from major events. Horizons Environment also runs an anaerobic digestion facility near Cumbernauld which can produce electricity from food waste.  Horizons Hydro Engineering: Formerly known as OneSource, Horizons Hydro Engineering specialises in the design and construction of water and waste water infrastructure for housing and commercial developments.

Scottish Water International: Launched during January 2012, Scottish Water International aims to utilise Scottish Water’s expertise to offer products and specialist consultancy services to utilities, foreign governments and other international clients.

Scottish Water Horizons, Scottish Water Business Stream Holdings Ltd, Scottish Water Business Stream Ltd and Scottish Water International are the responsibility of Scottish Water Horizons Holding Ltd, a wholly owned subsidiary of Scottish Water. Scottish Water also jointly owns 51% of Scottish Water Solutions 2, the remaining 49% being owned by Thistle Water (a consortium of Jacobs UK Ltd, Laing O’Rourke Infrastructure Ltd and Veolia Water UK Plc.). This company was created to deliver part of Scottish Water’s capital investment programme for the 2010 to 2015 regulatory period.

SCOTTISH WATER INDUSTRY LEGISLATIVE FRAMEWORK

Scottish Water was established by the Water Industry (Scotland) Act 2002 (“the 2002 Act”). It replaced three regional water authorities (North, East and West of Scotland Water) which were established by the Local Government etc. (Scotland) Act 1994. Prior to that water and waste water services in Scotland were provided by regional councils.

Scottish Water exercises statutory water and sewerage functions under the provisions of the Sewerage (Scotland) Act 1968 and the Water (Scotland) Act 1980. The 2002 Act identifies these functions as Scottish Water’s “core functions”. Section 25 of the 2002 Act grants Scottish Water additional “general powers” to:

 engage in any activity (whether in Scotland or elsewhere) which it considers is not inconsistent with the economic, efficient and effective exercise of its core functions  do anything, whether in Scotland or elsewhere, which it considers is necessary or expedient for the purpose of or in connection with its core and general functions, including the power to: o form or promote companies (whether alone or with others) o subscribe for share or loan capital of any person o guarantee the discharge of any obligation (whether financial or not) of any person o form partnerships, enter into arrangements or agreements and co-operate in any way with any person 20 o enter into a contract with any person for the provision or making available of assets or services, or both (whether or not together with goods) whether by Scottish Water or by that person.

The Water Services etc. (Scotland) Act 2005 introduced competition in the retailing of water and waste water services to non-domestic premises in Scotland. Licensed providers, who must obtain a license from the Water Industry Commission for Scotland, purchase wholesale services from Scottish Water and retail them to non-domestic customers. This means that licensed providers are only responsible for billing and other customer facing services, and not the collection, treatment and distribution of water and waste water services. The 2005 Act also gave Scottish Water the power to establish a separate subsidiary, called Business Stream, which has obtained a license, inherited the customer base and competes with new entrants to supply non-domestic customers.

Section 56 of the 2002 Act requires Scottish Ministers to issue directions to Scottish Water on how to exercise its functions. The most recent such direction (Scottish Government 2014), covering the period 1 April 2015 to 31 March 2021, was issued on 1 October 2014.

OWNERSHIP OF SCOTTISH WATER

Scottish Water is a public corporation of a trading nature sponsored by the Scottish Government. A public corporation is a market body that:  Derives more than 50% of its production cost from the sale of goods or services at economically significant prices  Is controlled by central government, local government or other public corporations  Has substantial day to day operating independence so that it should be seen as an institutional unit separate from its parent department(s).

SCOTTISH WATER MANAGEMENT STRUCTURE

Scottish Water is managed by an 11 member board of directors. The board consists of seven non-executive members, appointed by Scottish Ministers, and four executive members. The executive members are the chief executive, Finance Director, Executive Director Capital Investment and Chief Operating Officer.

Scottish Ministers are also responsible for appointing the chairman of the board.

FUNDING OF SCOTTISH WATER

Scottish Water obtains its funding from two sources, i.e. charges for services, to domestic, business and license providers, and borrowing from the Scottish Government to support capital expenditure. Full details of Scottish Water’s financial affairs can be found in its Annual Report and Accounts 2014/125 (Scottish Water 2015).

REGULATION OF THE SCOTTISH WATER INDUSTRY

Five organisations are involved in the regulation and/or monitoring of aspects of the Scottish Water industry. These are:

Water Industry Commission for Scotland: The Water Industry Commission for Scotland (WICS) has three main roles: 21

1. Price Setting: WICS sets price limits for the provision of water and waste water services by Scottish Water for five year periods, current prices were set in the Strategic Review of Charges 2015-21: Final determination (Water Industry Commission for Scotland 2015). 2. Monitoring Scottish Water’s Performance: WICS monitors Scottish Water’s customer service – i.e. whether it meets its Guaranteed Minimum Standards and the terms of its Code of Practice, monitors Scottish Water’s investment performance and ensures Scottish Water provides its customers with value for money. 3. Managing the retail competition framework: All retailers require to obtain a license from WICS before they can compete to supply water and waste water services to non- domestic customers.

Scottish Public Services Ombudsman (SPSO): The SPSO investigates customer complaints about water and sewerage providers operating in Scotland. The SPSO will normally only investigate a case once the complaints handling process of the provider has been exhausted. The SPSO assumed this function on 15 August 2011, following the abolition of Waterwatch Scotland under the provisions of the Public Services Reform (Scotland) Act 2012.

Citizens Advice Scotland: Citizens Advice Scotland is the statutory advocate for the users of water and sewerage services in Scotland. It does not investigate individual customer complaints. Rather, it is required to engage with the key players in the Scottish water industry, which must take account of any views it is given. The purpose of this is to ensure that consumer interests are effectively considered by these organisations when they are taking decisions on issues such as pricing, service levels and industry standards.

Drinking Water Quality Regulator for Scotland: The Drinking Water Quality Regulator (DWQR) ensures that Scottish Water complies with its duties in respect of the quality of public drinking water supplies in Scotland. This is done by auditing and inspecting Scottish Water’s water treatment works, operational activities and laboratories to ensure that the quality of drinking water is maintained at all times and that tests undertaken to check the quality of the water supplied are carried out accurately and reported correctly. The DWQR also supervises local authorities’ enforcement of the regulations governing the quality of private water supplies in Scotland.

Scottish Environment Protection Agency: The Scottish Environment Protection Agency (SEPA) regulates activities which impact on the water environment. These include many activities carried out by Scottish Water, such as discharges to groundwater, discharges to surface water and abstractions.

22 SOURCES

Introduction

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Air Quality

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Water Industry

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RELATED BRIEFINGS

SB 16-44 Marine and Fisheries: Subject Profile

SB 16-43 Rural Affairs: Subject Profile

SB 16-41 Climate Change: Subject Profile

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