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Display PDF in Separate Final Report Project WFD18 Valuing water use in Scotland and Northern Ireland for WFD implementation purposes November 2004 © SNIFFER 2004 All rights reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of SNIFFER. The views expressed in this document are not necessarily those of SNIFFER. Its members, servants or agents accept no liability whatsoever for any loss or damage arising from the interpretation or use of the information, or reliance upon views contained herein. Dissemination status Unrestricted Research contractor This document was produced by: Entec UK Limited 17, Angel Gate City Road London, EC1V 2SH UK SNIFFER’s project manager SNIFFER’s project manager for this contract is: Eric McRory, Scottish Environment Protection Agency (SEPA) SNIFFER’s project steering group members are: Rebecca Badger, SNIFFER (until April 2004) Kirsty Irving, SNIFFER (from April 2004) Craig Campbell, NFU Scotland Clifford Henry, Environment and Heritage Service Northern Ireland Evan Williams, Scottish Environment Protection Agency Tom Harvie-Clarke, Scottish Executive SNIFFER First Floor, Greenside House 25 Greenside Place EDINBURGH EH1 3AA www.sniffer.org.uk SNIFFER WFD18 Valuing water use in Scotland and November 2004 Northern Ireland for WFD implementation purposes Acknowledgements This report has benefited from comments provided by the steering group, which included representatives from the Scotland and Northern Ireland Forum for Environmental Research (SNIFFER), the Scottish Environment Protection Agency (SEPA), the Environment and Heritage Service (EHS) Northern Ireland, NFU Scotland and the Scottish Executive. The report has also been informed by comments and information received from others in the Environment and Heritage Service, from those approached directly in a number of organisations, and from industry representatives who commented on the report through the Scottish Economic Advisory Stakeholder Group. i SNIFFER WFD18 Valuing water use in Scotland and November 2004 Northern Ireland for WFD implementation purposes ii SNIFFER WFD18 Valuing water use in Scotland and November 2004 Northern Ireland for WFD implementation purposes Executive Summary Background The Water Framework Directive (WFD) is a key piece of legislation regulating the water environment to improve the status of inland surface waters, transitional waters, coastal waters and groundwaters within the European Union. There are a number of economic requirements under the WFD that must be reported to the European Commission. The assessment undertaken for this project will contribute to the requirements under Article 5, which requires Member States to undertake an economic analysis of water use for each river basin district. In addition, Annex III of the Directive indicates that the economic analysis undertaken under Article 5 will also be used to contribute to requirements under Article 9 and Article 11. Article 9 requires that Member States introduce pricing policies that provide an incentive for water efficiency and contribute to the recovery of the costs of water use. Article 11 refers to applying economic tests to determine cost-effectiveness and disproportionate cost in selecting and justifying measures to meet environmental objectives. This project was commissioned to undertake an initial study identifying how different sectors of the economy in Scotland and Northern Ireland use water and the benefits of water use for each user. Each sector uses water in different ways and for different purposes, using water from public sources and private abstractions, and discharging water after use. Therefore, the study starts with a characterisation of how water is used in different sectors (including the volume used where data is available) and the contribution that each of these sectors makes to the economy in Scotland and Northern Ireland (measured as gross value added). From this, the project aims to develop and apply a methodology to value water use, identifying gaps in understanding and potential sources of additional information. The valuation makes use of a number of techniques and methodologies, depending on the sector considered and the information available. It should be noted that the study considers the benefits of water use to the individuals and organisations in different sectors of the economy, but does not consider the costs that this use imposes on other users, the water authorities or the environment. iii SNIFFER WFD18 Valuing water use in Scotland and November 2004 Northern Ireland for WFD implementation purposes Water supply in Scotland The supply of water by Scottish Water to large industrial users is shown in Figure ES1. Large industrial users account for 20.7% of total water supplied by Scottish Water (estimated as 1.332 million m3 per day excluding leakage). Small metered users account for a further 19.3%; this sector is likely to include all other small industrial users and commercial premises, representing those sectors that include a large number of small organisations. The remainder of Scottish Water supplies (60.0%) is accounted for by unmetered users. Based on estimates of household water use and direct abstraction, it is likely that households account for 87.7% of unmetered water use, with the remainder supplied to small businesses. However, these estimates do not include private abstractions, which are known to be significant, particularly to some industrial users. Unfortunately, there is no comprehensive assessment of direct abstraction to all water users. Figure ES1 Supply of water by Scottish Water to large industrial users Agriculture, forestry and fishing Mining and fuel Not classified extraction Non-households Manufacture of food and beverages Manufacture of textiles and leather products Manufacture of wood, Commercial premises pulp and paper production Construction Manufacture of Electricity, gas and water petroleum and petroleum supply based products Other manufacturing Manufacture of non- metallic mineral Manufacture of basic products metals and fabricated metal products iv SNIFFER WFD18 Valuing water use in Scotland and November 2004 Northern Ireland for WFD implementation purposes Water supply in Northern Ireland Water supply in Northern Ireland has been assessed as part of the Water Resource Strategy, leading to estimates of water use for domestic and non-domestic users. This is shown in Figure ES2. The majority of water is supplied for domestic use, with industrial and commercial users supplied with approximately 50,000m3 per day. Unfortunately, there is no information on direct abstractions of water; although domestic abstraction is thought to be minimal, industrial abstraction could be more significant. Figure ES2 Water supplied by Water Service Northern Ireland Agriculture 9% Industrial 13% Households Commercial 55% 13% Public sector 7% Miscellaneous 3% The economic significance of industrial water users In order to assess the significance of this water use, the activities for which water is used are considered. These can be consumptive, as for production of mineral water, or non-consumptive, as for cooling of industrial facilities. The value of these processes is considered in terms of gross value added to the economy and employment. Gross value added by sector is shown in Figure ES3 for Scotland and in Figure ES4 for Northern Ireland. v SNIFFER WFD18 Valuing water use in Scotland and November 2004 Northern Ireland for WFD implementation purposes Figure ES3 Gross value added to the Scottish economy, 2000 Agriculture and forestry Fishing Mining and quarrying Manufacture of food and beverages Manufacture of textiles and leather products Manfuacture of wood, pulp and paper Manufacture of petroleum and petroleum-based products Manufacture of non-metallic mineral products Manufacture of basic metals and fabricated metal products Other manufacturing Electricity, gas and water supply Construction Commercial premises Non-households Figure ES4 Gross value added to the economy in Northern Ireland, 2000 Agriculture and forestry Fishing Mining and quarrying Manufacture of food and beverages Manufacture of textiles and leather products Manfuacture of wood, pulp and paper Manufacture of petroleum and petroleum-based products Other manufacturing Electricity, gas and water supply Construction Commercial premises Non-households vi SNIFFER WFD18 Valuing water use in Scotland and November 2004 Northern Ireland for WFD implementation purposes Valuing water use The value of water to an individual user depends on a number of features of the water use. This includes the volume of water used and the nature of use, ranging from water being used as part of the product, to use for cooling, and use for cleaning and discharge of effluent. The value also depends on the degree of necessity, reflecting the extent to which water is an intrinsic part of the product, the efficiency of water use, and the availability of alternatives. This latter characteristic will vary depending on the options available for installing technology or adapting processes to change the volume of water consumed or the processes for which water is used. The study outlines a number of alternative methods for valuing water use drawing on a range of existing information, from market charges to environmental valuation studies, and includes consideration of the following techniques: • The marginal productivity approach.
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