*Despite a tough economy and a challenging 2010-15 price settlement, water companies must keep investing in water quality to fulfil the requirements of the WFD, says Geoff Bateman.*

The water industry deserves a lot of credit for the £20 billion contribution it has already made to improving water quality in England and Wales since privatisation. There has been a continuous improvement in water quality over the past two decades, with 70 per cent of rivers in England and 90 per cent of rivers in Wales achieving the highest quality as determined by the general quality assessment.

But more still needs be done to protect and improve the health of our waters. Hence a more extensive range of quality standards has now been introduced under the European Union's Water Framework Directive (WFD), which aims to improve the ecological (biological and chemical) health of our waters.

*River basin management plans*

Actions to achieve these new standards are set out in river basin management plans (RBMPs). These lay out ambitious proposals to improve more than 9,000 miles of waterways in England and Wales over the next five years.

The RBMPs were approved by ministers in late 2009. They set out how the number of water bodies achieving good ecological status (or good ecological potential) will shift from 27 per cent in 2009 to 34 per cent by 2015. It is important to remember that the RBMPs also prohibit any further deterioration in water quality unless very strict requirements are met, which is a challenge in itself.

Statistics, percentages and headlines do not always tell the full water quality story. Many rivers, lakes, estuaries and coastlines do not achieve "good" status because they fail just one aspect of a comprehensive classification. In addition, the headline statistics tend to overlook improvements in watercourses that are, despite our best efforts, likely to remain in moderate or poor classes.

*Expense*

Environmental quality does not come cheap. As the water industry is aware, dealing with point source pollution has been, and remains, expensive. In the coming years, dealing with the more difficult diffuse sources will prove a challenge and new approaches will be needed. Hence it is important that improvement schemes are justified by good scientific evidence and clear environmental need, if abortive investment is to be avoided and best value solutions found.

The water industry, supported by the Environment Agency, is undertaking investigations in the first RBMP cycle so that spending is justified and targeted to priority areas. But the level of investment that might be needed in subsequent RBMP cycles from 2015-21 and 2021-27 to comply with the WFD could be considerable. This is especially so given that investment in environmental measures will need to increase over the coming years due to the huge strains being put on our water and sewerage system by ageing pipes and water mains, a growing population, pollution problems and the expectation of increasingly severe droughts and floods brought about by climate change.

Under the measures proposed in RBMPs, the water industry will continue to be the largest contributor to meeting the costs for the WFD. This will have an impact on water bills, both now and in subsequent cycles.

*Other sectors not pulling weight?*

Concern has been voiced that the water industry and its customers are bearing a disproportionate share of the costs of delivering the first cycle of RBMPs and that, for example, agriculture is not pulling its weight. However, this ignores the legacy of other directives, previous commitments and the considerable use of voluntary initiatives across the agricultural sector. Such initiatives include agri-environment schemes that contribute much to reducing diffuse pollution and the improvement of polluting point-source discharges from agriculture. Major pollution incidents from agriculture are almost unknown today in comparison with the past.

However, the balance is not yet right and the Environment Agency will continue to work with all sectors to maximise their contribution to further water quality improvements. A major focus of the WFD is to encourage polluters to remove pollution at source and force those causing pollution to fund the costs of remedial action. Traditional end-of-pipe solutions are expensive (and carbon intensive) and control at source can be a cost-effective alternative solution.

The Environment Agency is delighted to see new initiatives aimed at influencing polluter behaviour. These include catchment sensitive farming, the Codes of Good Agricultural Practice, agri-environment schemes and integrated solutions across different industry sectors.

Following the recent final determination, the Environment Agency particularly welcomes the water industry's proposals for sustainable solutions such as catchment management initiatives. These have the potential to reduce the need for expensive and greenhouse gas emitting processes. The water industry and regulators expect these schemes to encourage much wider application of the polluter-pays principle across all sectors, resulting in a fair allocation of the costs of mitigating pollution across the economy.

*Emissions and quality targets*

The RBMPs do not yet strike the correct balance between local environmental improvements and long-term sustainability. There is insufficient consideration of greenhouse gas emissions or the impacts of climate change in setting targets or selecting actions to achieve stated targets. This is explained by the fact that the WFD legislation was enacted in 2000 at a time when the likely implications of global warming were not fully understood.

However, the European Commission is catching up and has now released a report on how future cycles of RBMPs should incorporate measures to address the changing climate. The Environment Agency has also produced reports into the impacts, effects and mitigation consequences of meeting higher water quality standards without increasing the carbon effects of treatment and thus not reducing climate change commitments.

Future plans must seek the balance of water improvements without compromising our ambition to manage the carbon footprint, both of the water industry and our society as a whole. The WFD does enable alternative objectives to be set where achieving good status by 2015 would be technically unfeasible or disproportionately expensive.

The disproportionate costs test does not relate to a simple costs and benefits assessment of individual schemes such as those required for price review determinations. Costs may be spread over a wide customer base but should be transparent and informed by well justified solutions, drawing on comprehensive cost-benefit analysis studies and underpinned by evidence of willingness to pay.

The water industry will continue to lead the way on water quality improvements, combining cost-effective measures with environmental objectives. It must continue to show commitment to improving water quality, and this must not waver in line with income. In spite of the current economic climate, now is not the time to falter. We all have a once in a generation opportunity to seize the agenda and drive forward the improvements needed to create a better place for people and a healthy environment.

Geoff Bateman is head of River Basin Manage­ment Plans at the Environment Agency.