Appendix A: Catchment appraisal process
Published 29 November 2022
Applies to England
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Appendix A to Investment requirements for England’s river basin management plans.
This appendix summarises the process used to define best value water body status objectives.
Water bodies were classified to identify their current status. Environment Agency officers then investigated the causes of any water bodies not being at good status. Next, they identified the best value (most cost-effective) and most practical and locally acceptable ways to fix the problems identified. Because of connections between water bodies through river channels, groundwater and land surfaces, groups of actions (bundles of measures) to fix the problems were considered at operational catchment scale (typically covering 1 to 10 water bodies). The benefits of getting water bodies from their current status to good status were also calculated. This aimed to capture overall improvement to water bodies in the catchment. Benefits included values from the National Water Environment Benefits Survey plus significant other benefits that could be monetised.
The Environment Agency compared the costs and benefits over time in terms of their present value. If benefits were not higher than costs (that is, did not have a positive net present value (NPV), or benefit-cost ratio (BCR) above 1, (using the most cost-effective set of actions), then the actions in a group were reduced, and objectives for the water bodies if necessary. Reductions were repeated until the benefits were higher than the costs of achieving the lowered objectives. Every effort was made to minimise the number of water bodies with an objective status lower than good, but in some cases this was unavoidable.
When the costs were very close to, but higher than the benefits, other benefits not previously monetised were considered. For example, those associated with the creation of wetlands. If possible, these were added to the monetary benefits to make it clearer whether benefits could be higher than costs for the group of actions.
This method of valuation through catchment appraisals is a ‘proportionate approach’ in terms of the amount of work required to fulfil the purpose of the assessment. This approach is to establish a set of objectives as close to good status as possible that delivers benefits greater than costs. It does not attempt to monetise all possible benefits or to optimise bundles of measures to maximise the difference between benefits and costs (NPV or BCR). It monetises some of the benefits expected to result from taking actions in a catchment and compares these benefits to the costs of the action.
Once the benefits and costs had been compared, ‘sensitivity testing’ was undertaken to better understand how uncertainty around inputs affects the results. That is how sensitive the results were to changing inputs or assumptions. The results were tested, for example, by doubling the benefits or halving the costs to find out where the tipping points were. This made sure that no additional costs or benefits which may have been overlooked in the appraisal might affect decisions about whether the benefits of achieving proposed objectives were higher than the costs.