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Preliminary Cost Effectiveness Analysis and WFD economics update

Preliminary Cost Effectiveness Analysis and WFD economics update. Kevin Andrews. pCEA - Aim. To minimise the amount of new cost-effectiveness analysis that is needed by drawing on existing information, expertise and processes, To maximise the amount of analysis done at the national level.

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Preliminary Cost Effectiveness Analysis and WFD economics update

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  1. Preliminary Cost Effectiveness Analysis and WFD economics update Kevin Andrews

  2. pCEA - Aim • To minimise the amount of new cost-effectiveness analysis that is needed by drawing on existing information, expertise and processes, • To maximise the amount of analysis done at the national level

  3. pCEA - scope • Scale and nature of problem • Quantum of costs • Affordability • Sectoral shares • Phasing • Uncertainty • Simplification/guidance

  4. Governance Policy Team

  5. Working Groups • Sector working groups • Water industry (Ofwat) • Industry (DTI) • Non-Ag-Diffuse (Defra) • Flood management and planning (Defra) • Navigation and Ports • Cross sector groups • Water resources (EA) • Nutrients (Defra) • Groundwater quality (Defra)

  6. Progress • All sector groups are up and running • Key inputs to information notes drafted • Strategic assessment • Reference cases • Scenarios • Standards • First round of supporting research commissioned

  7. WFD Economics Update

  8. CRP projects status • Project 1 – scoping – completed. Now being operationalised within the EA • Project 2a/b – CEA methodology – completed. • Projects 2c/e - CEA guidance – completed – database and guidance – Being used in pCEA • Project 2d – Cost proformas - completed but untested in E&W – Being used in pCEA • Project 3 – Evidence for DC – DFR – expected to complete in March – still problems

  9. Ongoing work • Project 4 benefits – appointed project manager - agreed strategic approach • Estimate overall benefits for first plan (envelope) + tools for prioritisation + limited empirical work where needed • Improve science/economics for 2nd RBP: • Water body use an access • Integration of science and economics

  10. Choice experiment • Large sample, face to face • Series of survey questions, prompts, reminders, background facts • Choice cards showing different combinations of: • Objective achievement for different water bodies, timings, certainty • Costs • Econometrics can tell you how much people on average are willing to pay for different improvement scenarios

  11. Progress so far • Completed literature review – few previous examples – but very useful • Completed first round of deliberative research groups • Supporting science work underway – draft descriptors developed • Options for survey design being discussed

  12. Expected use of results • Revision of the overall RIA (summer) • Input into SWMI consultation • Guidance for the EA on CEA and DCA

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