Written evidence submitted by Waterwise
EXECUTIVE SUMMARY
The need for greater water efficiency in the water
sector
1. Water efficiency—wasting less water—is
an essential part both of adapting to and tackling climate change,
but the current regulatory framework for water does not reflect
or deliver this.
Barriers to greater water efficiency
2. The regulatory framework for water has
developed piecemeal over the last 20 years. The original structure
reflected a time when the challenges were specific to the sector.
The challenges now are far more long-ranging, uncertain, and common
across all sectors. The current regulatory framework is not fit-for-purpose
to address these.
Of the key issues covered by the consultation
into the draft Bill and the Cave and Walker Reviews, which should
be taken forward as legislative priorities?
3. Waterwise would like to see a Water Efficiency
Commitment on the water companies, delivered through Water Service
Companies as a result of increased retail competition, alongside
reforms to abstraction licensing and a scarcity charge, removal
of the bias towards capital expenditure, and a longer-term investment
framework, all reflecting the full, long-term value of water.
This should be supported by measures which lead to a meter in
every home, alongside greater use of tariffs to protect vulnerable
groups. Legislation should increase the availability of water-efficient
products. Level 3 of the Code for Sustainable Homes should be
mandated so water efficiency keeps pace with energy efficiency
in new homes.
What further policies are required to ensure flood
and water management which delivers optimum social, economic and
environmental outcomes?
4. The new legislative framework for water
should work with those being developed for other sectors, including
energy and housing, rather than existing in parallel. Adaptation
and new carbon-focussed policies and carbon budgets should include
water efficiency. There should be an overall per capita consumption
target for both England and Wales which all other measures support.
Any issues related to the Floods and Water Management
Act 2010?
5. The updated hosepipe ban provisions should
be supported by a Code of Practice involving all key stakeholders.
SUBMISSION
The need for greater water efficiency in the water
sector
6. Water efficiency—wasting less water—is
an essential part of both adapting to and tackling climate change,
but the current regulatory framework for water does not reflect
this. The EFRA Select Committee reports on Ofwat and the draft
Bill recognised this, as did the Defra consultation and the Walker
and Cave Reviews. 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.[1]
7. Water efficiency is vital in adapting
to the climate change we are already seeing and cannot avoid.
Every section of the economy is dependent on water, some areas
of England are already classified as seriously water-stressed,
and it is known that in coming decades there will be more people
and less water in the UK (with patterns of increasing use), so
less water will need to go further, through water efficiency.
8. Wasting less water in homes and businesses
can help meet the UK's carbon targets. Heating water in homes
produces 5% of the UK's greenhouse gas emissions. So wasting less
hot water in homes and businesses can immediately impact on carbon
targets. Wasting less hot and cold water will reduce the carbon
footprint of the water industry (1% of the UK total).
Barriers to greater water efficiency
9. The regulatory framework for water has
developed piecemeal over two decades. The original structure reflected
challenges, such as reducing leakage, which were specific to the
sector. The challenges now—of climate change and population
growth—are far more long-term and uncertain, and common
across sectors. The regulatory framework does not adequately address
this, and throws up barriers to water efficiency playing a greater
role in the supply-demand balance. These include:
— a bias towards capital expenditure;
— limited domestic water metering;
— a lack of flexible mechanisms;
— no regulatory links with other sectors
such as energy and housing;
— an excess of reporting, to different
timescales and owners;
— the same element of risk applied to new
activity as to proven; and
— an over-focus on spot-pricing regardless
of the long-term implications of necessary investment.
10. This latter barrier is one of the most
severe—the full value of water is not reflected, while complex
questions of water availability, climate change and population
growth are distilled into whether customers are prepared to pay
more in the short-term.
Of the key issues covered by the consultation
into the draft Bill and the Cave and Walker Reviews, which should
be taken forward as legislative priorities?
11. There should be a Water Efficiency Commitment
on the water companies, delivered through Water Service Companies
as a result of increased retail competition. Waterwise has developed
some potential models on how a WEC could look (for example what
statutory targets should cover, and whether a priority vulnerable
group should be ringfenced, as in CERT[2])
and how it could be administered, as well as what Water Service
Companies might look like.
12. Reforms to abstraction licensing, a
scarcity charge, removal of the bias towards capital expenditure,
and a longer-term investment framework should all deliver a regulatory
framework which reflects the full, long-term value of water. There
should be a meter in every home by 2020, alongside greater use
of tariffs to protect vulnerable groups. Legislation should increase
the availability of water-efficient products. Level 3 of the Code
for Sustainable Homes should be mandated.
What further policies are required to ensure flood
and water management which delivers optimum social, economic and
environmental outcomes?
13. The new legislative framework for water
should work with those being developed for other sectors, including
energy and housing, rather than existing in parallel, and some
joint mechanisms might be necessary. Retrofitting programmes such
as Green Deal and Decent Homes (both backed by legislation) should
include water efficiency. CERT, and its successor, should work
with existing Water Efficiency Targets and a future Water Efficiency
Commitment, to deliver a single-visit, whole-house sustainability
approach for consumers. Adaptation Reporting Power guidance should
require water efficiency. Incentives for water efficiency should
be delivered through new green financial products from the Green
Investment Bank and the Energy Performance Certificate. Water
efficiency should be included in the government's carbon budgets.
An overall per capita consumption target for both England and
Wales should drive all legislation, measures and policies.
Any issues related to the Floods and Water Management
Act 2010?
14. The updated hosepipe ban provisions
should be supported by a Code of Practice involving retailers
such as garden and DIY stores, and manufacturers, as well as water
companies.
October 2010
1 See Waterwise's White Paper for further details Back
2
Carbon Emissions Reduction Target-a supplier obligation on the
energy industry to undertake energy efficiency measures Back
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