EUC Report: EU Freshwater Policy

Lord Cameron of Dillington Excerpts

Wednesday 5th December 2012 Lords Chamber

[Lord Cameron of Dillington]

My Lords, there is no doubt that water is a valuable commodity. Sadly, we cannot yet control the amount that falls from the sky. Speaking as a farmer in the south-west of England in 2012, I can only say, “I wish!”. But, even after so much rain, we still do not value our water enough in this country.

I believe that we have now reached the stage where the UK needs to introduce compulsory metering. I realise that in some old blocks of flats it is difficult to achieve, but it is not impossible, even if special support funding might be required to disentangle the pipes in all the nooks and crannies, in some instances. But until everyone is on a meter, not everyone will value the water they use. In the UK, we currently use 160 litres per head per day, whereas in Germany, where they have universal metering, they use only 110 litres per head per day.

To go to the other extreme, in India, where until recently the belief was that water should always be provided free by the state, the result was that in some villages you could only get water from a tap for eight minutes per day. However, now they are charging for water, and the service has begun to improve. The Indian Government have at last understood that it is the poor who suffer most from cheap water. The rich can afford private bore-holes or other independent schemes. But the Government have now realised that it is best to put the right price on water and introduce other social measures where help is needed. The lesson learnt was that using water, one of the heaviest commodities around, to transfer wealth, did not make sense.

Back in the UK, although the circumstances are obviously very different, there are parallels with India. If, as at present in the UK, you have voluntary metering, only those who reckon to pay less will apply for a meter. Thus the rest end up sharing a greater overall cost to be averaged out between them. Often this means, as in India, that the poor end up paying more for the water they use than they should do. If we were to introduce metering we could perhaps even go one step further and apply the increasing block tariff method. This is a scheme that is counter to normal economic practice, whereby the more you buy, the more you pay per unit. China, Singapore and several countries in the Middle East and even in the EU now use this method. It is particularly effective for industry, especially for the electricity-generating industry, which can be a huge user of water unless the right capital investment is made. This scheme encourages the right capital investment. The trick is to get the charges and the percentage increase at the right level to encourage good practice without being overly punitive.

Going back to India for a moment, one of the major ongoing problems there is the established right of farmers to take water from the aquifers largely for free, without much control over the quantity. As a result, India removes nearly 100 cubic kilometres of water more from its aquifers than the recharge rate every year. I realise that in the UK, agricultural abstractions amount to only about 2% of all usage, but nevertheless, if we could develop a more flexible system of abstraction licences that looks to future needs, it could be beneficial to industrialists, generators, farmers, environmentalists and domestic consumers alike.

That brings us to Australia, where they are solving the considerable problems in the Murray-Darling river basin by changing or transferring from riparian or historical abstraction rights to tradable rights. It is a sort of water quota system that gives both long- and short-term flexibility to all parties: you can sell or buy, as well as lease, the right you have or need. This, incidentally, includes the Government, who buy entitlements to give to the environment. It means, for example, that in a drought, when water suddenly becomes expensive, rice growers reduce their irrigation or even their total production that year, but survive by selling or leasing their entitlements which, of course, are very expensive that year. Often it is agriculture that sells to mining or electricity-generating interests. Some farmers have actually sold their total allocation but survive on annual licences as and when needed. Municipalities buy excess entitlements and when they have enough for safety, they can rent some back to farmers on a flexible basis. Of course, it is important that the market is properly controlled and regulated, and above all, what is needed is a water trading system for the future, not the past. That means it must allow for the possibility of reducing rains and therefore the ability to reduce the total licensed abstractions.

Of course, the key to success of any system of sharing out this precious commodity called water is overall catchment management, as several noble Lords have already mentioned. Catchment management is about ecosystem services: not only the supply of clean water and the treatment of sewage but landscapes, habitats, irrigation, food, sport, central heating, cooling systems and protection from flooding, among many others. People probably value these services—being the results of water management—more than the water itself. That applies particularly when our population has to face its three biggest worries: drought, flooding and pollution.

Wherever problems exist, the most important thing is to manage our rivers as whole catchments. We are beginning to understand that if problems are caused by the many different activities of too many humans, then the solutions can only be found in the way these activities occur: the way we farm, the way we live, the way we manufacture and consume and the way we plan our urban and rural communities. They can all provide solutions to our water-based problems. We need to understand better how a catchment-based approach can be adopted and how to build the respective capabilities to operate it. Integrated catchment management is in contrast to a piecemeal approach that artificially separates land management from water management. They are inseparable; we rely on the health of both for many of the things we value. Experience shows that considering this locally will help engage communities to take ownership and act.

Catchment management requires leadership to ensure that we get the essential co-ordination covering the many different aspects of land and water management: agriculture, water supply, wastewater, waste management, highway and urban storm runoff, stream corridor restoration and development and, particularly, planning. Working practices are needed that work top-down with standards and guidelines and yet facilitate local partnership arrangements and appropriate delegation, creating local ownership within local catchments. That is the basis of Elinor Ostrom’s famous polycentric system of water governance. It is to be hoped that the revised EU water framework directive will greatly encourage such governance both here and on the continent. When I say “continent” in the context of this debate, of course I mean Europe, but my aspiration is that we might eventually stimulate similar practices and improve water management where it really matters: on the continent of Africa.