Water & Wastewater Treatment Magazine
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20 | JUNE 2018 | WWT | www.wwtonline.co.uk provider which can bring about cost-effec- tive collaboration between farmers and a range of placemakers. That will obviously include water companies but also might include public bodies delivering environ- mental gain, or infrastructure providers like developers who are looking to offset the environmental impact of their devel- opment, in line with the government's 25-year environment plan." As the former chief operating officer of Natural England, Thompson appreci- ates the perspective of the environmental regulators and himself became convinced of the merits of the EnTrade idea while carrying out a secondment at Wessex Water 18 months ago. It's a timely offering. With the arena of agricultural funding facing uncertainty because of Brexit and the removal of subsidies under the Common Agricultural Policy, UK government and regulatory bodies will want to ensure that any new payments they make to agriculture repre- sent the best value for the environment, while farmers are likely to be receptive to any new income stream. Thompson says that coming out of the CAP is a "gamechanger" and provides a unique opportunity to shake up environ- mental funding and benefit nature. While catchment interventions have been shown to be effective at improving the water environment, the question of who pays for them has always been a limiting factor and the market approach embodied by EnTrade could provide part of the answer. The company has inherited the exper- tise of a team of catchment professionals who previously worked for Wessex Water; it prides itself on providing a platform which is both outcome-focused and user- friendly. Farmers taking part have praised how straightforward it is to place bids and to have these bids verified and followed up – for example, EnTrade is usually able to check that a cover crop has been planted as promised using satellite im- agery, minimising the need for visits. Of course, some would argue that incentives paid to farmers - even on this efficient basis - violate the 'polluters pays' principle, and that rather than being paid for their co-operation, farmers should be encouraged and educated into doing the right thing by the environment, or faced with penalties if they do not follow advice. However, Thompson rejects this. "There are always these questions around these types of challenges," he says, "but what EnTrade is seeking to do is to dis- rupt a regulatory and funding framework which is fundamentally fragmented and siloed. We have a water industry national environment programme drawn up every four years in isolation from the govern- ment's seven-year programme and the Common Agricultural Policy. The funding is available to fix these kind of problems – it's just that it isn't allocated to the right outcomes. "Fundamentally we need to change these polluting practices… but the question is, who pays? Should it be the farmers, many of whom are struggling to make their business model work? Or the water companies who abstract water for public use? Or the supply chain – or all of us, through the taxes we pay? These are vexed questions which environmental trading helps to expose. The question of who pays and how much those services are worth to society – that's precisely what EnTrade does, it exposes those ques- tions around opportunity and cost. "Wessex Water, in common with many domestic water companies, have clocked that hiding behind the polluter pays principle doesn't provide the best service to the water customer. By working with the grain of the farming community, and building their capability and know-how and understanding of the impact their practices have, we can reduce the need for more expensive capital investments in assets. We have to break into that circle somewhere." EnTrade – How it works l The trading platform offered by EnTrade is adapted to pursue a specific environmental outcome, such as reducing the amount of nitrogen or phosphorus in a catchment. Through their work with farmers, catchment specialists are able to establish how a range of actions undertaken by farmers in a catchment affect the outcome - e.g. how a particular area of cover crops planted relates to the amount of nutrients removed l The buyer of the environmental services (e.g the water company) sets a figure for the outcome it wants to achieve and then during a set, pre-advertised window, farmers and land managers can place bids for how much they would need to be paid to carry out these actions l The market price for the environmental actions goes down as more bids come in; at the end of the period the most competitively priced bids win and the money is paid l EnTrade verifies that the actions have been carried out and the buyer of the services is then able to demonstrate that, cumulatively, the desired outcome has been achieved. l Over time it is hoped that multiple buyers for environmental services will enter the market, improving environmental outcomes across a number of parameters and providing more earning capability for agriculture l Catchment-wide permitting – which the Environment Agency has piloted with Wessex Water for phosphorus in the Bristol Avon catchment, increases the potential applications of EnTrade as it allows water companies to offset costly interventions at poorer- performing treatment works with cost-effective improvements elsewhere in the catchment. The Talk: interview