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Estimating the Impact on Public Benefits from Changes in Investment in the Environment Agency Waterways Final Report

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Estimating the Impact on Public Benefits from Changes in Investment in the Environment Agency Waterways Final Report Estimating the Impact on Public Benefits from Changes in Investment in the Environment Agency Waterways Final Report 5 June 2014 This page is intentionally blank Impact on Benefits from Changes in Investment in EA Waterways Final Report Estimating the Impact on Public Benefits from Changes in Investment in the Environment Agency Waterways Final Report A report submitted by ICF GHK in association with Aberystwyth University Date: 5 June 2014 Job Number 30259703 Matt Rayment ICF GHK 2nd Floor, Clerkenwell House 67 Clerkenwell Road London EC1R 5BL T +44 (0)20 7611 1100 F +44 (0)20 3368 6960 www.ghkint.com i Impact on Benefits from Changes in Investment in EA Waterways Final Report Document Control Document Title Estimating the Impact on Public Benefits from Changes in Investment in the Environment Agency Waterways Job number 30259703 Prepared by Matt Rayment, Mavourneen Conway, Svetlana Batrakova, David McNeil, Mike Christie and Kyriaki Remoundou Checked by Matt Rayment Date 5 June 2014 ICF GHK is the brand name of GHK Consulting Ltd and the other subsidiaries of GHK Holdings Ltd. In February 2012 GHK Holdings and its subsidiaries were acquired by ICF International. The authors would like to thank the Steering Group for their contributions and comments on the work. The Steering Group members included: Margaret Read, Colin Smith, Arif Al-Mahmood, David Foot and Liz Sheppard (Defra); Tony Kirstein and Angela Quayle (Environment Agency) and Brian MacAulay and Tony Harvey (Canal & River Trust). Professor Nick Hanley acted as an independent peer reviewer and provided helpful comments on the method and results. ii Impact on Benefits from Changes in Investment in EA Waterways Final Report Contents Executive Summary ...........................................................................................................1 1 Introduction .........................................................................................................5 1.1 Policy context ........................................................................................................................... 5 1.2 Aim of the study ....................................................................................................................... 5 1.3 Methods ................................................................................................................................... 5 1.4 This Report ............................................................................................................................... 6 2 Introduction to the EA Waterways ........................................................................7 2.1 The EA Waterways .................................................................................................................. 7 2.2 EA Aims and Objectives for the Waterways ............................................................................ 9 3 The Benefits of the EA Waterways ...................................................................... 10 3.1 Waterways and Ecosystem Services ..................................................................................... 10 3.2 Valuing the Benefits of Inland Waterways ............................................................................. 10 3.3 Existing Evidence of the Value of UK Inland Waterways....................................................... 11 3.4 Benefits of Waterways Investments ....................................................................................... 11 4 Waterways Assets and Investment Needs ........................................................... 13 4.1 Waterways Assets .................................................................................................................. 13 4.2 Types of Expenditure ............................................................................................................. 14 4.3 Purpose of Assets and Investments in them.......................................................................... 14 4.4 Grouping of Assets ................................................................................................................. 16 4.5 Types and number of waterways assets ................................................................................ 18 4.6 Asset Condition ...................................................................................................................... 18 4.7 Location of waterways assets ................................................................................................ 19 4.8 Asset Lifespans ...................................................................................................................... 19 5 Understanding the Benefits of Potential Changes in Expenditure in the EA Waterways ......................................................................................................... 22 5.1 Introduction ............................................................................................................................ 22 5.2 Logical framework .................................................................................................................. 22 6 Valuation survey and methodology ..................................................................... 27 6.1 Introduction ............................................................................................................................ 27 6.2 The survey instrument ............................................................................................................ 27 6.3 Survey administration and sampling strategy ........................................................................ 32 6.4 Survey response .................................................................................................................... 32 7 Results of the Valuation Survey .......................................................................... 35 7.1 Introduction ............................................................................................................................ 35 7.2 Summary of choice experiment results .................................................................................. 35 7.3 Willingness to pay for changes in asset condition ................................................................. 36 7.4 Results: Count travel cost and Contingent behaviour ............................................................ 38 8 Aggregation of benefit estimates to the entire EA navigable rivers network ........ 39 8.1 Introduction ............................................................................................................................ 39 8.2 Estimating Waterway Users ................................................................................................... 39 8.3 Estimating WTP for protecting and improving waterways ..................................................... 40 8.4 Estimates of per visit and per km WTP for improvements to river assets ............................. 42 9 Benefit cost analysis of investing in the waterways assets ................................... 44 9.1 Methodology ........................................................................................................................... 44 9.2 Definition of Expenditure Scenarios ....................................................................................... 44 9.3 Modelling Changes in Asset Condition .................................................................................. 45 9.4 Costs of the modelled expenditure scenarios ........................................................................ 49 9.5 Benefits of the modelled scenarios ........................................................................................ 53 9.6 Comparison of costs and benefits .......................................................................................... 58 iii Impact on Benefits from Changes in Investment in EA Waterways Final Report 10 Conclusions ........................................................................................................ 65 Annex 1 Report of the Valuation Study by Aberystwyth University ....................... 67 iv Impact on Benefits from Changes in Investment in EA Waterways Final Report Executive Summary This report estimates the benefits of investments in the waterways managed by the Environment Agency in England and Wales The Environment Agency (EA) is one of the major navigation authorities in charge of inland rivers, estuaries and harbours in England and Wales, managing approximately 1000km of Britain's rivers, including the Thames, Wye, Medway, Nene and Ouse. In order to assess the costs and benefits of potential management scenarios, Defra commissioned ICF GHK and Aberystwyth University to estimate the value of the benefits of investments in these waterways and to assess how changes in investment will affect the value of these benefits. Waterways provide a range of benefits to people and the economy, but previous studies have not examined the marginal benefits of investments in waterways assets Studies demonstrate that waterways deliver a range of ecosystem services, including provisioning services (such as the supply of freshwater), regulating services (such as protection from flooding) and cultural services (such as recreation, tourism and people’s appreciation of their contribution to landscape, wildlife and cultural heritage). Based on recreation and residential amenity values only, a recent study estimated these values at between £109,000
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