Government Abstraction Reform
and Water ‘Rights’
Henry Leveson-Gower
19 March 2013
Contents
- Context: Water White Paper and Bill
– Abstraction Reform
• Why we are reforming
• Emerging reform options
• Implications for ‘rights’
• Research and engagement process
– Questions
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Water White Paper and Bill
3
The vision from the Water White Paper
A resilient water sector, more efficient and customer focused
companies, and water valued as the precious resource it is.
•Water resources managed in a way that supports growth and needs of
society
•A reformed water industry
•A reformed water abstraction regulation system
•Balance between supply and demand
•An interconnected water supply system which can move water
around easily
•A catchment-based approach to water management
•Sustainable abstraction levels within all catchments
•An affordable water supply for all
•Water efficient behaviour by businesses and consumers
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Why reform is necessary
Long-term risks
Climate
Change
Demand &
increasing
populations
Water
scarcity
Current regime
not adaptive
Not flexible in
sharing water to
get most value
Not responsive in
protecting the
environment
Risks of excessive costs, environmental
damage & system collapse
What do we want to achieve?
• To give clear signals and regulatory certainty on the availability of
water, to drive efficient investment to adapt to climate change and
meet water needs;
• To better reflect the value of water to customers, its relative scarcity,
and the value of ecosystems services to ensure our rivers, lakes and
aquifers are protected;
• To reflect the benefit of discharges to river systems;
• To drive efficiency in water use, using market forces and smart
regulation to lower costs and reduce burdens;
• To be fair to all abstractors, taking into account current licences;
• To be flexible and responsive to changes in supply and demand,
including providing greater access to water when more is available;
and
• To meet our water needs for people and the environment at least cost
to water bill payers, and the consumers of other products and services
which depend on water.
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What will the new system deal with?
•
•
•
•
Water abstraction in England and Wales
Helping to ensure the environment doesn’t deteriorate
Helping to build resilience to climate change
But:
Not drought
Not Current
Environmental
Damage
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Reform Options
• We propose 2/3 new options for the future of
water abstraction, plus business as usual
•
•
•
•
•
Working names:
1. Current system
2. Current system plus
3. Water shares
[4. Pay as you go]
• Basic design challenge: to minimise impacts of
water scarcity while avoiding deterioration of the
environment with smarter regulation
Option 1: Current System
Some time limited
licences
Fixed charge per unit
of water licensed
Abstractor 4
Abstractor 3
Abstractor 2
When flows are low
the environment can
lose out
Trading is rare.
Transaction costs
are high
Abstractor 1
Environmental Water
RSA process used
where environment
needs more water
Option 2: Current system plus
Abstractor 4
‘smarter’ HoFs
Abstractor 3
Abstractor 2
Reviews to ensure
environment is protected
to required level
Abstractor 1
Environmental Water
Shorter term trading
easier
Option 3: Water Shares
Available water divided
into shares.
As water availability
changes abstractors
with less reliable
shares receive
reduced allocations
Shares available
at different levels
of reliability
1
2
3
4
As water
availability
changes, the size
of the pie is
adjusted. This
defines ‘allocation’
Option 3: Water Shares
In this case to
adapt to low flow
Abstractors can
trade allocations
Abstractor 4
Abstractor 3
4
Abstractor 2
Abstractor 1
Wide range of
trading is easy
e.g. Up stream
Environmental Water
Emerging cross-cutting themes
• Proportionate implementation
– Driven by environmental risks and net trading benefits
• Adaptive systems
– Potential to evolve if water becomes scarcer
• ‘Unbundling’ to reduce transaction costs
– System more flexible and easier to trade
• Discharges integrated into the system
– Control based on consumption
– Recognises water re-used downstream
• Catchment management and reviews
– Triggers and hands off periods
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Key Transition principles
• Quasi-grandfathering
– Taking into account use and licensed volumes
– Taking into account current HoFs or lack of
• Not used to address unsustainable abstraction
– WFD, Habitat Directive etc will drive environment
protection levels under current system rules
• No compensation for any loses
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So what might this mean for water ‘rights’?
• Across the board
– ‘Rights’ being more within a collective catchment socioeconomic and environmental stewardship
• While grandfathering relative security and quantity
– Introducing a duty to discharge
– Abstractors facing future water scarcity risks
• Water Shares
– Creating potentially a more secure ‘right’ in the form of
a share, not an absolute right
– And allowing much easier trading, particularly to
promote investment in increased collective water
security
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How are we assessing the options?
•Research project assessing the impacts
that different abstraction reform options
might have on people and organisations.
•Catchment case studies to explore how
water is managed
• within different catchments;
• under different climate scenarios
• to assess the potential benefits,
costs and risks
• Assessment of overall costs and
benefits across England and Wales
What next?
• Digital engagement.
• Consultation and Impact Assessment later this
year
• Bill early next Parliament completed ~2017
• Implementation to follow asap
More information www.defra.gov.uk/abstraction-reform/
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Questions?
Henry.leveson-gower@defra.gsi.gov
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