Catchment management in England and Wales: the role of arguments for ecosystems and their services

This study uses document analysis and interviews to explore how the use of arguments for biodiversity and ecosystem services has evolved in recent years in the water industry in England and Wales, with a focus on investments in catchment management programmes. Changes to land management practices within catchment areas can lead to improved water quality and lower treatment costs, and also ancillary benefits to the natural environment and various stakeholders. Our analysis reveals the increasing effectiveness of arguments associated with ecosystem service values in enabling the industry regulator (Ofwat) to support water industry investments in catchment-level conservation projects. Ofwat has adopted a much more flexible approach to regulation, moving from initial resistance to ecosystem service framings and a dominant focus on financial benefits to customers, to acceptance that customers have a legitimate interest in environmental quality and a willingness to accept some ‘beneficiary pays’ solutions. Companies are now required by Ofwat to include environmental impacts in cost-benefit analysis of investments, alongside assessment of customer preferences and support. This has facilitated investments in catchment management with positive results for water companies, customers, farmers and the natural environment. The shift in arguments in this industry matches a broader shift at European and UK levels towards greater use of economic evidence and payment instruments. The challenge now is to stabilise a secure regulatory environment in which companies are encouraged to pursue innovative methods to benefit the wider interest of customers and the natural environment, today and in the future. Arguments based on the value of water quality improvements and of the wider associated ecosystem services benefits have been, and remain, a key tool for achieving the environmental improvements and economic efficiency gains associated with successful catchment management initiatives.