Edited by David Pearce
Chapter 12: Valuing the Environmental Benefits of Water Industry Investment in England and Wales
12. Valuing the environmental benefits of water industry investment in England and Wales Bruce Horton and Jonathan Fisher1 INTRODUCTION The Environment Agency, the main environmental regulator in England and Wales, has undertaken assessments of the beneﬁts of water quality and water resource improvements in order to identify what action might be required by the UK private water companies to address environmental problems. The purpose was to inform UK government ministers on environmental requirements for the 4th Periodic Review of the water industry. This chapter outlines the beneﬁt assessment work undertaken. The next section provides some policy background and introduction to the process, outlining the economic appraisal approach adopted for different types of schemes. The third section details the methodologies employed to assess the environmental benefits associated with 1. the overall environment programme, and 2. a subsection of discretionary schemes that were subject to a detailed cost–beneﬁt analysis. The common and consistent methodology was based on applied beneﬁt transfer techniques. The fourth section presents the main results of the different types of assessment. The ﬁfth section reﬂects on what went well and what problems were encountered during what was a complex process, the like of which had not been attempted on such a scale in the UK before. Section six then takes forward some of the key lessons learnt for the future.2 POLICY BACKGROUND Every ﬁve years, the Ofﬁce of Water Services (OFWAT), which regulates the private water sector, reviews the business plans and...
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