Valuing water use in Scotland and Northern Ireland for WFD implementation purposes

March 2005

Executive Summary


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.

Copies of this report are available in electronic format on CDRom at 20.00 +VAT or hard copy at 35.00, less 20% to FWR members.

N.B. The report is available for download from the SNIFFER Website