Blog posts

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8th December 2015

Big assets don’t guarantee resilient outcomes

You need well managed natural systems and adaptive communities too. So says David Baxter, Indepen’s lead partner for natural capital.

Ofwat’s Resilience Taskforce has reported and the headlines have focused on its proposed definition of resilience:

“Resilience is the ability to cope with, and recover from, disruption, and anticipate trends and variability in order to maintain services for people and protect the natural environment now and in the future.”

Fans of catchment management will welcome the taskforce’s acknowledgement that resilience can be created by actions to support the wider natural system, not just the built assets of a water company. But what about other parts of the system, and how do you work with communities that are more, or less, capable of looking after themselves?

Co-ordinating assets across sectors – the next stage of resilience?

The taskforce’s definition of resilience is about water company services. Yet, as the floods in the Borders have shown again, resilience, or lack of it, as experienced by customers depends on the ‘system of systems’ that supports the infrastructure.

Government has sponsored national infrastructure co-ordination initiatives that acknowledge this, including the National Infrastructure Plan, the National Infrastructure Commission, various research commissions and even guidance from HM Treasury on the benefits of building infrastructure to enable interdependencies to be managed better.

Big asset solutions to resilience are doomed to fail. The people of Carlisle have just experienced this devastating reality, as their brand new £38 million new flood defence, installed after the 2007 floods, was overtopped, prompting the Chief Executive and deputy Chief Executive of the Environment Agency to point out that it is impossible to protect against every weather event.

The UK Regulators Network first phase report on cross-sector interdependency says:

“It will always be true that the infrastructure sectors rely on each other to varying degrees and that however resilient the services offered by each sector become, they will sometimes fail. Despite the many studies and frameworks that have been produced, these realities mean cross-sector interdependency problems will continue to occur. The more the sectors understand of one another’s resilience strengths and weaknesses, the better they can plan their own resilience measures.”

Adaptive capacity – the overlooked capability?

So, even massive, well-coordinated investment in assets cannot prevent disruption. This conclusion begs a number of questions such as how should regulators specify resilience ‘standards’ and how do customers value the benefits of resilience investment? But the more fundamental issue is why our thinking about solutions is so focused on built assets. They evidently have a part to play, but so do the less tangible and politically less appealing capabilities of natural assets and well-organised communities.

A lack of adaptive capacity is a central finding of research into the economics of climate resilience. This defines adaptive capacity as:

The ability of a system/organisation to design or implement effective adaptation strategies to adjust to information about potential climate change (including climate variability and extremes), moderate potential damages, and take advantage of opportunities, or cope with the consequences.

Shortfalls in adaptive capacity are as important in considering resilience as asset performance. Barriers to this being acknowledged and acted on relate to market failures, policy failures, behavioural preferences and ineffective governance.

It is in this latter area that another ‘big idea’ appears in the frame: devolution. This is founded on the concept that local governance will make better use of limited resources in the pursuit of a healthy economy, environment and society. Should the debate on resilience be localised too?

Hope for the future

Some cities are putting resilience at the heart of their vision. In 2013, Bristol became one of only four European cities to be invited to be part of a global network of 100 Resilient Cities, run by the Rockefeller Foundation. Bristol’s draft strategy, to be published in 2016, will set out the steps to becoming a resilient city within 50 years. This will be a partnership approach and community views, capabilities and financing will be central.

If utility companies and their regulators thought of their ‘customers’ as citizens and communities, then big asset solutions and their alternatives would be properly assessed.

Perhaps the devolved alternative to centralised regulation will give local government and local interests the role of governing the resilience of the system of systems?

October 2015

Catchments and communities – building trust and providing value

If you say catchment to a parent, they think: school. To me, catchment is our landscape, the water that flows through it and the people who live in it. Catchment and community are inseparable says David Baxter.

Since 1990, water companies in England and Wales have invested over £120 billion to clean up their act and clean up the water environment. This has helped the UK shake off the ugly, but deserved label, ‘dirty man of Europe’. That investment was hugely successful in taking out gross-sources of pollution, using concrete and process technologies.

Despite this, and an ongoing programme of investment by water companies, problems remain. Fewer than a quarter of England’s waters meet the long-term standards required. It is now clear that the causes of this failure are as much connected to our broader uses of land and water as they are to water companies. Nutrients, sediments, pesticides and slurries from farming (to meet our needs for affordable food) cause as many problems to our water environment as sewage. Physical modifications and drainage (to meet our needs for resilient infrastructure and economic growth) cause many more disturbances than abstractions of water for public supply. These problems are spread out, often with no specific individual polluter.

Perversely, the cost of solving quality problems through land management, urban and rural, is often lower than it would be to use asset based, water company solutions. What is more, the additional benefits of catchment based solutions are widespread. These range from increased flood protection, more resilient water supplies, carbon storage and enhanced biodiversity.

Water companies are alert to the fact that traditional, capital solutions are no longer the whole answer, particularly when the bill for future improvements will exceed £16 billion. Traditional approaches would lock their customers into repaying debt at interest rates that might not always be so kind. But more importantly, catchment based solutions could actually be £1 billion cheaper over the next 15 years and could unlock a further £5 billion of wider benefits to society.

Some final thoughts. Catchment management is not just about our environmental well-being. Catchment solutions are at the heart of enabling economic growth. There is a clear business case for connecting catchments, communities and businesses.

But to work in catchments, with communities, water companies (and other businesses) need to build trust in their brand. They need ambassadors and activists to broker deals and show water customers what catchment projects look like. In fact, what water companies need is to get on to Neighbourly. So congratulations to Wessex Water for doing that, and let’s hope that others follow suit.