Green Investment Bank

Written evidence submitted by Waterwise (GIB 01)

Summary

· Water efficiency has an important role to play in tackling and adapting to climate change, and developing the low-carbon and green economy, but is routinely sidelined from programmes and policies in both these areas.

· The Green Investment Bank provides a key opportunity to include water efficiency measures in new green financial products through the Green investment Bank, as well as to help stimulate innovative projects and programmes to mainstream water efficiency in homes, buildings and workplaces across the UK, both within the water sector and more widely.
Bulk of Evidence

Overview of the importance of water efficiency to the UK economy and society

1. Water efficiency – wasting less water – is an essential part both of adapting to climate change and building resilience into our systems, and tackling climate change. Water efficiency is an economic, social and environmental opportunity – it has an important role to play in the green economy, the big society and safeguarding the environment. It can also help reduce the deficit.

Adapting and building resilience

2. Water efficiency is vital in adapting to the climate change we are already seeing and cannot avoid, despite action now – underpinning the statutory National Adaptation Programme for England. Both hot and cold water efficiency measures are important even once the electricity grid is fully decarbonised, because there can be no such thing as a zero water house, and because gas, on which there is a huge reliance for water heating, cannot be fully decarbonised.

3. In the last few years the UK has seen widespread drought and devastating floods, and both of these have led to water supply challenges in homes. The UK Climate Impact Projections published in 2009 show greater unpredictability in rainfall and longer, drier summers in coming decades. Some areas of England are already classified by the Environment Agency as seriously water-stressed. Even Scotland and Wales have experienced pockets of drought or water stress in recent years. And it is known that in coming decades there will be more people and less water in the UK, so less water will need to go further. There is already an increase in single-person households, which use more water per person, and water companies are predicting increases in outdoor watering and personal washing. Population growth will be larger in already water-stressed areas like South East England.

4. So homes, buildings and people will need to be water-efficient: and not just new homes, but existing homes, because two thirds of the UK’s 2050 homes have already been built. Water efficiency should play a central role in any organisation’s climate change adaptation strategy – alongside flood risk management – because every section of the economy is dependent on water. Drought risk management for homes and communities is essential alongside flood risk management. These measures will build resilience to climate change impacts.

Tackling climate change

5. Wasting less water in homes and businesses can help meet the UK’s legally binding goals of a reduction in greenhouse gas emissions of 34% by 2020 and 80% by 2050. Heating water in homes for cooking, personal washing and cleaning produces 5% of the UK’s greenhouse gas emissions and a quarter of CO2 emissions from homes – it is the second biggest use of energy in homes, after space heating, and before gadgets and appliances. So wasting less hot water in homes – through more efficient fixtures and fittings and more efficient use of hot water from taps and showers by people – can immediately impact on carbon targets. Wasting less hot and cold water will reduce the carbon footprint of the water industry, which would as a result need to pump and treat less water and wastewater (in turn making the sector more resilient to climate change). The water industry produces 1% of total UK greenhouse gas emissions, with Scottish Water Scotland’s largest user of electricity. Wasting less hot and cold water will tie in with the Coalition Government’s commitment to use a wide range of levers to cut carbon emissions, decarbonise the economy and support the creation of new green jobs and technologies.

Opportunity

6. Water efficiency is an opportunity – economic, environmental and social.

7. Most UK businesses, schools, hospitals and other public sector buildings are metered for water. This means that if they waste less water – through "domestic" processes such as taps, toilets, urinals and showers, and dishwashers and washing machines, as well as in industrial processes such as cleaning and cooling, they will see immediate reductions in their water bills. For example, many workplaces still have urinals which flush constantly, but there are now UK-manufactured products which flush only when a sensor is triggered, or less frequently, or not at all. Wasting less hot water in workplaces would also cut energy bills.

8. In its most recent annual report on government progress in meeting its SOGE (Sustainable Operations on the Government Estate) targets (between 2006 and 2009), the soon-to-be-abolished Sustainable Development Commission calculates that government saved £25.5m in water bills through water efficiency measures between 2006 and 2009, including £13m in 2008 – 2009. It also suggests that a £3m SALIX (spend-to-save) fund for the public sector would yield 20% water savings and payback within 1 year, and that a further 10% reduction in water use would yield a further annual £5m in savings. As the SDC points out, many savings would be enjoyed year-on-year and so the earlier they can be achieved, the earlier savings can start to be made. The document also shows that MOD is by far the biggest water user in government – accounting for 67% of consumption – where financial savings from water efficiency could free up large amounts for frontline spending.

9. The UK produces a wide range of water-efficient equipment for domestic and non-domestic use – these products are innovative and increasingly "aspirational". Targeted investment and support as part of the green economy, linked with public sector procurement standards, could develop this manufacturing sector through a mass market approach. This could mirror the development of mobile phones which began as an expensive "niche" product but are now cheaper and mainstream. Product standards for homes and businesses, and partnerships with retailers, manufacturers and the third sector would make products which waste less water cheaper for consumers.

10. Including water in energy retrofitting programmes would increase the number of green service jobs. The Coalition Government’s Green Deal will retrofit homes for energy efficiency at an upfront cost of thousands of pounds – a water retrofit of taps, toilets and showers could be included for an additional £40, and for homes metered for both water and energy would payback within one year. Households will save money through wasting less water. Waterwise research shows that the average UK household could save up to £100 a year on their energy bills from wasting less hot water in baths, showers and taps – £76 a year just by replacing a daily bath with a three-minute shower. This would help deliver the Coalition Government’s commitment to increase households’ control over their energy costs. A third of homes in England and a quarter in Wales are already metered for water, and half will be by 2015 – through wasting less water those homes will also see an immediate reduction in their water bills.

Opportunity missed

11. To date, programmes and policies undertaken by both the Coalition Government and the previous administration to tackle climate change, adapt to it, and develop the low-carbon and green economies are energy-heavy and do not reflect or include the important role of water efficiency.

12. UK plans to deliver the low carbon and green economy need to include water. Water efficiency can help make the UK more attractive to investment, reduce carbon emissions and increase green jobs. Water efficiency did not feature in the previous government’s strategy for a low carbon economy, nor is it reflected within the framework of carbon budgeting, and this omission shows signs to date of being repeated by the Coalition Government.

13. Including water efficiency will further stimulate growth and employment. Developing the UK manufacturing base for water-efficient products should be an essential part of the Coalition Government’s sustainable growth and enterprise strategy. There is a strong manufacturing base in the UK for these products, but as they are not included in targeted green growth plans there are already cases of new products going out of the UK to seek investment. Including water efficiency in energy retrofitting programmes will increase the number of green service jobs. This could lead to developing new infrastructures, social innovation, and building on regional and national examples of good practice to deliver water efficiency at the UK level.

14. Within regional sustainability clusters - covering water, energy and waste - businesses, higher education institutions and research organisations across the public or private sector could work together to implement innovative economic development projects. With government support, these could make regional and local economies more competitive, creating jobs and attracting investment.

15. A Green Investment Bank which the Coalition Government intends to "create green financial products to provide individuals with opportunities to invest in the infrastructure needed to support the new green economy" is an important opportunity to mainstream water efficiency in the low carbon and green economy, through linking the green financial products with water efficiency measures in homes and buildings, and stimulating innovation.

Proposal to include water efficiency in the remit of a Green Investment Bank

16. Waterwise would therefore like to see the Green Investment Bank include water efficiency measures in the new green financial products it develops from homes and businesses, and for innovation in water efficiency to be named as a recognised, supported activity under other GIB programmes and measures.

8 October 2010