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02 July 21

Planning for a different world – adapting to the Climate Crisis by Pauline Walsh, Affinity Water CEO

I wonder what was going through the mind of the Captain of the Titanic as the ship hit the iceberg.

Why hadn’t he slowed down ?

What else could he or should he have done?

What was now the fate of his passengers and crew – who he was responsible for?

Why did he not listen to the warnings?

And why is indeed the question – he had been warned, he knew the risks - there was evidence available to support them – but he chose to continue at full speed. If he had slowed down or if people were better prepared for the impact of the collision, less lives would have been lost.

I think we are all now in a similar situation with the effects of climate change combined with the ever increasing needs for the world’s natural and limited resources. We have started to experience the effects of climate change – melting glaciers and ice, rising sea levels, more extreme weather causing flooding, droughts & fires, and impacting on food and water security, and on the environment. And we all know it is going to get worse, potentially much worse. The UN predicts there will be between 200 million and 1 billion climate refugees by 2050 – less than 30 years from now!

As captains of our industry – will we look back in the future and ask ourselves why – why didn’t we do more to prevent disaster, why didn’t we act quicker or bolder to protect our planet for ourselves and for future generations? What is a higher priority than that??

Sadly we (in the broadest context) have already failed to act at the first or second signs of trouble.

The latest Climate Change Committee’s report (the UK’s 3rd Climate change risk assessment) confirms that climate change is well and truly underway. And the committee concluded that progress in the UK with adaptation policy and implementation is not keeping up with the rate of increase in climate risk - and that the risks to all aspects of life in the UK have increased over the last 5 years.

We need to act now. Both to slow down our speed to collision to reduce the impact, by reducing our emissions of GHGs and thereby, the global temperature increase – and also we need now to prepare for the inevitable impact of the collision, so we can survive it. We need to prepare for and adapt to life with climate change.

So we need now to plan for, innovate, invest in and build for, a different world – so that we can adapt to that future and have a resilient economy, society and environment – and we don’t allow current and future generations to suffer the consequences of our indecision or inaction.

It will require spending money. But that has not stopped us here in the UK responding quickly and decisively to crises before – in 2009 the UK Government spent £500 billion bailing out banks, more recently we’ve spent more than £100 billion supporting businesses to get through the Pandemic.

By contrast the sums we are talking about – for example to provide resilience to our water sector in England - was estimated to be about £21 billion – in a 2018 report ‘Preparing for a Drier Future’ by the National Instructure Commission.

£500 billion for banks. £100 billion for the pandemic. £21 billion for water sector resilience

In this climate change crisis, to protect a vital, life-critical resource, the question for us is not if we invest that money, but how do we do so – quickly and efficiently.

We know that even if we meet the goals set out in the Paris Climate agreement that still results in a significant increase in global temperature. The agreement aims to “substantially reduce global greenhouse gas emissions in an effort to limit the global temperature increase in this century to 2 degrees Celsius above preindustrial levels, while pursuing the means to limit the increase to 1.5 degrees”.

Some people predict we will not achieve that 1.5 deg target or even 2.0 deg target but we may see increases of up to 4 deg, or even beyond, by the end of the century.

That will have even more drastic consequences.

Should we be planning now for the worst case scenario and hoping for the best??

We have an increased our understanding of the impacts of drought. Droughts will become more frequent and more severe and if we do nothing our resilience will weaken severely. There is a 25% chance of the worst drought in recorded history happening within the next 30 years. And droughts already have a massive impact on the UK economy – the National Infrastructure Commission estimate that a severe drought could cost our economy £1.3 billion a day.

As a drinking water supplier to 10% of London, at Affinity Water we take that responsibility very seriously.

In the UKCP18, which models climate change impacts, the latest project and technical analysis of climate impacts from which our planning assumptions will be taken, indicate that sea levels at the four UK capital cities are projected to rise by between 0.08 m and 1.15 m by 2100, relative to the levels in 1981-2000. Projected rises are generally higher in the south of the country than in the north.

In a projection consistent with 4°C global warming by 2100, local sea level rise at the UK capitals ranges from 0.54 m for Edinburgh to 1.78 m for London. Larger rises are possible with higher warming and/or if the sea level responds more rapidly, for example if marine ice sheets were to collapse.

This puts swathes of Affinity’s supply area under water if we don’t respond and adapt. As an example, Brightlingsea is now only 30cm above sea level.

There will also be an impact on our supply chains and upstream infrastructure.

As an example of that, following flooding of the Port of Immingham in December 2013, the supply of biomass products to power stations was interrupted resulting in critical power and IT services being lost and the cessation of power plant operations for a number of days. Tides exceeded the dock gate height by half a metre. Work has been approved to improve flood protection at the Port but for the water sector many of our key supplies come in through Immingham. We need to be better prepared – these risks have a very long reach through our supply chains.

We need to think hard about interdependencies and to work collaboratively – and urgently - to understand those and to address them, not only within our water sector but across other sectors. This requires a different approach and ways of working. None of us can address these challenges on our own, we are all dependent on each other – businesses, customers, communities, government, regulators, academics.

At Affinity Water we’re about to launch our Strategic Direction Statement. To develop the SDS we imagined our world in 2050 with all of the challenges we know and expect along the way – climate change, population growth, the need to improve the state of nature….to name but a few.

We went out to our stakeholders, our communities and customers and discussed future scenarios and then imagining that, asked them what their priorities were.

They wanted us to ensure a resilient supply of clean water into the future and to protect and improve the environment. They were not willing to compromise one for the other. They were also clear that they expected us to act with pace and to be bold. One MP in particular said – “just get on with it and we’ll support you every step of the way”.

Our stakeholders and communities didn’t see these problems in isolation. They said that we needed to think differently about the changes needed across the whole system. And that we need to think hard about how resilient we are to environmental change and how resilient the environmental system is to us.

I am really pleased Ofwat’s PR24 Framework consultation talks about the need to think long-term and to prioritise public value to minimise costs to the system. And I was really pleased to see the Committee on Climate Change’s report on adaptation risk specifically mention the impacts of drought on our chalk streams. They’re globally rare – 10 times rarer than a coral reef - and 85% of them are located here in England.

I believe most, if not all of us here today, are aligned on where we want to get to and probably on what is required to get there.

But we need to work with more pace.

For example if we could get early sight on what is included in the WINEP we can start creating roadmaps for delivery. We would like to turn off abstraction upstream in the Chilterns in the next AMP – from the Misbourne, the Chess, the Gade, the Bulbourne and the Upper Ver but we need the Environment Agency to give us more certainty. This will ultimately reduce the long-term cost of changing where we get our water from too. By being able to plan over multiple AMPs, we can invest in the right solutions and not shift tack halfway through. If we’re going to end unsustainable abstraction, as Affinity has committed to doing, we need to work very differently.

By working with other sectors in the system such as land managers and farmers we could dramatically benefit the environment and water supply. Researchers at Stanford University are conducting ground-breaking studies into how to manage soils better to actively recharge an aquifer. My own teams, speaking at the Groundswell farming festival last week, are looking into how this can be applied in our own area as a means of helping rivers and providing more reliable water supply.

We need to be seeking out ideas and innovations across the globe.

We need to reduce water demand to sustainable levels – both by reducing leakage and by reducing customer use. At Affinity we have set ourselves very stretching leakage reduction targets. And to reduce customer use, we are trying new approaches.

We ran a campaign two years ago with a ten tonne ice block on front of St Albans Cathedral, to generate interest and start discussions on customers’ use of water

Then last year we ran a community campaign in St Albans which we did differently and measured carefully the water saved using machine learning algorithms to capture every drop.

We learned from those 2 campaigns to use social media influencers to spread the word – rather than us talking down to or at customers. We also found that humour was the best way to get people to see that behaviour needed to change. On the first day that lockdown restrictions were eased, Sandi Toksvig, Mark Watson and the fabulous Helen Arney joined us to give a stand-up comedy gig while standing in one of our chalk streams.

That campaign, Save Our Streams, is really ambitious – we’re aiming to save 21 million litres a day this year. Please sign up at www.saveourstreams.co.uk. We’ve had to think differently, We’ve been criticised in the past for our abstraction from chalk streams and its impact on the health of the chalkstreams and surrounding environment and while that criticism has been painful, we’ve listened. And we’ve used the fact that people do value and appreciate the natural world. So we’ve tried to connect customer water use with extracting water from the environment. The SOS campaign has now been seen 21 million times, with 47,000 users have signed onto our platform. We believe this is the biggest platform of its kind. We’re proud of that - but we’re driving harder – we want to get 120,000 users on our platform!

We’re also changing how were work with other sectors or communities – we’re working with a volunteer group in Cambridge on a data hack around our demand patterns to learn more about reducing water use – and we’re working with NAVs, local authorities and developers to create water efficient communities. We’re working with an SME and the University of Birmingham on quantum sensors to pinpoint leaks by looking through the ground – using technology that was purely theoretical until six years ago.

But we need wider change and faster change. I think Government and regulators have made huge strides in removing blockers to creating a truly sustainable supply of water but we need to do more.

Firstly, we need reform to Building Regulations and we need Mandatory Water efficiency labelling too. Not next year or in the future.

We need it now. We also need to ensure that the medium term ambition on abstraction and the environment is clearly set out and I welcome the work of the National Framework and WRSE and WRE on that. We need to look at affordability. Clearly even more so in the aftermath of the pandemic, we need to make sure that everyone can afford their water bill but we need to think more carefully about what that means. I welcome the recent Consumer Council for Water report which showed that variable tariffs could be useful. I can see a system where those that can afford it pay more but some will pay much less or perhaps even nothing at all. I believe most of us can afford to pay more than 47p per day for the average household fresh water bill.

But we’re seeing customers using up to 9,000 litres per day – is it fair that the first litre costs the same as the 9,000th?

So back to this conference.

There is a fantastic line up of speakers over the next 2 days and we have a great opportunity to learn and share.

As captains of our industry we need to be open and clear about our challenges and to be bold and decisive in taking the necessary actions. I look forward to working with you all to determine and deliver the changes required to ensure a positive future for the next generations.

The Environment Bill

The Government says the main purposes of the Bill are to:

  • Transform our environmental governance once we leave the EU by putting environmental principles into law; introducing legally binding targets; and establishing a new Office for Environmental Protection.
  • Increase local powers to tackle sources of air pollution.
  • Protect nature and improve biodiversity by working with developers.
  • Extend producer responsibility, ensure a consistent approach to recycling, introduce deposit return schemes, and introduce charges for specified single use plastic items.
  • Secure long-term, resilient water and wastewater services, including through powers to direct water companies to work together to meet current and future demand.

The Environment Bill 2019-21 was considered during 22 sittings of the Public Bill Committee between 10 March and 26 November 2020. There was a pause in the Committee’s sittings during this period due to Coronavirus pandemic related restrictions.

The Bill had its second reading in the House of Lords on 7 June 2021, which it passed without division. It has now been committed to a Committee of the Whole House (Lords) for its next stage.

Committee stage: Government amendments and new clauses

Several Government amendments and new clauses were accepted during the Committee Stage. Some of them related to the establishment and functions of the Office for Environmental Protection (OEP). The Government argued that these amendments would bring greater clarity about the OEP’s role and consistency with other legal mechanisms. These included:

  • Clarifying of the remit between the OEP and the Committee on Climate Change, aiming of ensuring no duplication of work, through the production of a memorandum of understanding;
  • Clarification of the threshold for when an environmental review can be initiated by the OEP;
  • Changing the new environmental review process from being held in the upper tribunal to the High Court;
  • Limiting the OEP’s powers to intervene in judicial review proceedings to “serious” cases;
  • Limiting the OEP’s powers to initiate judicial review proceedings to “urgent” cases; and
  • A new power for the Secretary of State to issue guidance to the OEP on matters concerning its enforcement policy.

New Government clauses will provide powers for Natural England (the government’s adviser for the natural environment in England), to implement species conservation and protected site conservation strategies, and changes to how wildlife conservation licences are granted.

The Government also introduced a new clause on the use of “forest risk commodities” in commercial activities, aiming to reduce deforestation caused by agriculture. This means, businesses will be prohibited from using such commodities produced on land that was illegally occupied or used. Examples include soya, palm oil, and cocoa. Businesses will be required to create a due diligence system for regulated commodities to ensure their supply chains do not support illegal deforestation, and will have to report annually. If businesses do not comply, they would be subject to fines.

At day one of Report Stage, on 26 January 2021, only Government amendments were added to Bill. Most of them were described by the Minister, Rebecca Pow, as being “technical” in nature. They included:

  • Clarification that the English inshore and offshore region will be covered by the ‘significant improvement test’. This relates to reviews of the environmental targets that the Bill will establish. The test is met where the Secretary of State considers that meeting the targets will bring about a significant improvement in the natural environment. The first significant improvement test review will be by 31 January 2023.
  • A series of amendments intended to align the clauses relating to the Office for Environmental Protection’s Northern Ireland enforcement functions with the equivalent provisions for England (that were amended previously at Committee Stage). In the debate, Rebecca Pow said that these amendments were personally requested by Northern Ireland Ministers.

On day two of Report Stage, on 26 May 2021, two new clauses tabled by the Government were added to the Bill. They relate to a Government announcement that it intends to set a new biodiversity target and provide powers to amend the Habitats Regulations.

Queen’s Speech 2021 and further Government plans for amendment

In the background briefing notes of the Queen’s Speech 2021, the Government announced plans to further amend the Bill. This included proposals to introduce new duties requiring the Government to publish a plan to reduce sewage discharges from storm overflows by September 2022 and report to Parliament the progress of implementing the plan. These amendments are expected to be tabled during the Bill’s stages in the House of Lords.

In June 2021 the Government confirmed that it intends to amend the Bill to set requirements for biodiversity net gain for New Nationally Significant Infrastructure Projects in England. Nationally Significant Infrastructure Projects are large scale developments (relating to energy, transport, water, or waste) which require a type of consent known as “development consent”.

Ofwat - PR24 and beyond: Creating tomorrow, together document

Climate change threatens resilience, both of our networks and our water supply. We are already seeing drier summers, more frequent and intense rainfall, more variable river flows and biological changes in water bodies. In Wales, the projected reduction in summer rainfall by 2050 significantly exceeds the projected increase in winter rainfall. In England, it is estimated that there is a 25% chance of the worst drought in recorded history within the next 30 years.

At the same time, customers’ interests are evolving and their expectations are growing. Customers are increasingly concerned about damage to the environment from taking water from rivers and chalk streams, discharging waste through storm overflows, and carbon emissions. And companies need to go further to deliver great customer service. Meanwhile, the impact of Covid-19 has amplified concerns about affordability. One third of households in England and Wales already sometimes struggle to pay their household bills, and this figure may rise as the impact of the pandemic on jobs becomes clearer. And there is unlikely to be the same scope for bill reductions from falling underlying financing costs that we saw in PR14 and PR19. Companies and governments have set long-term targets on per capita consumption, drought resilience, leakage, carbon reduction, and water poverty. Further targets are likely to be set under new legislation envisaged by the Environment Bill.

Ofwat propose to overcome these challenges and embrace the opportunities by embedding a sharper emphasis on creating value. Ofwat think that means: an increasing focus on the long term; delivering greater environmental and social value; reflecting a clearer understanding of customers and communities; and driving improvements through efficiency and innovation.

These proposed goals reflect the outcomes that we want to achieve for customers and the environment. They interlink with and complement each other, and the price review must deliver on them all. Focusing on the long term We want the price review to support the right long-term solutions for customers. In PR19, we allowed companies £13 billion for improving services to customers and the environment. Companies will need to continue to enhance their networks, and we need to understand better how their approach in PR24 fits with their long-term strategy.

Companies should specify what long-term outcomes they are aiming to deliver, taking account of the long-term ambitions of the UK and Welsh governments. They should show they have carefully considered how best to work towards these outcomes, taking account of uncertainty and affordability constraints. They should also bring together their water resource management plans, drainage and wastewater management plans, and other statutory plans.

Ofwat are also looking at other ways we can support the long-term focus. Ofwat are proposing to strengthen their approach to resilience so that companies are more strongly incentivised to maintain their assets for the long term. And they will continue our focus on companies’ financial resilience. They are also considering whether to provide greater clarity on our approach to future price reviews. This includes both what Ofwat expects companies to deliver in future periods from their current allowances and what additional incentives we will provide.

Committee on Climate Change Adaptation sub-committee independent assessment of UK climate risk

The Adaptation Committee’s Independent Assessment of UK Climate Risk sets out the priority climate change risks and opportunities for the UK. The report draws on an extensive programme of analysis, consultation and consideration by the Committee involving over 450 people, 130 organisations and more than 1,500 pages of evidence and analysis.

The Advice Report provides the Adaptation Committee’s statutory advice to Governments on priorities for the forthcoming national adaptation plans and wider action. It is informed by extensive new evidence gathered for the accompanying Climate Change Risk Assessment (CCRA3) Technical Report. More than 60 risks and opportunities have been identified, fundamental to every aspect of life in the UK covering our natural environment, our health, our homes, the infrastructure on which we rely, and the economy.

  • Alarmingly, this new evidence shows that the gap between the level of risk we face and the level of adaptation underway has widened. Adaptation action has failed to keep pace with the worsening reality of climate risk.
  • The UK has the capacity and the resources to respond effectively to these risks, but it has not yet done so. Acting now will be cheaper than waiting to deal with the consequences. Government must lead that action.
  • The Committee identifies eight risk areas that require the most urgent attention in the next two years. They have been selected on the basis of the urgency of additional action, the gap in UK adaptation planning, the opportunity to integrate adaptation into forthcoming policy commitments and the need to avoid locking in poor planning, especially as we recover from the COVID-19 pandemic.
  • The Committee also reports on the full set of 61 risks and opportunities. These must be considered in the next set of national National Adaptation Plans, due from 2023.
  • The Committee recommends ten principles for good adaptation planning that should form the basis for the next round of national adaptation plans. These are intended to bring adaptation into mainstream consideration by Government and business.

Caba National Chalk Streams Working Group

We strongly welcome the work of the Group, which I’ve been a part. But it will be important to act and quickly. Already some are critical of what is seen as another good report but that which commits nobody to anything.

The report suggests using a different method of calculating over-abstraction – using abstraction as a percentage of recharge. This gives very similar numbers by 2050 as the National Framework. For instance the report states that as a result of the RSA programme, abstraction on the River Ver, for example, has been reduced from 45 Ml/d to 27 Ml/d today (this is still 35% of the catchment recharge of 79 Ml/d). On the River Misbourne abstraction has been reduced from 32 Ml/d to 25 Ml/d today (still 40% of the catchment recharge of 61 Mld). The abstraction reduction would reduce it less than those planned.

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