To help address the Big Question ‘How do we remove more carbon than we emit by 2050?’, the UK water industry needs a consistent and legitimate method to account and report the greenhouse gas emissions associated with its landholdings and land management activities. This is not currently available and needs to be developed, building on a piece of work started by Yorkshire Water.

Yorkshire Water have developed a land carbon model to calculate carbon stock and flux across its entire land holdings. The model also allows scenarios to be modelled, such as tree planting and peatland restoration, enabling the company to determine additional potential carbon sequestration opportunities across its land holdings to inform its offsetting strategy. 
The model uses land cover and habitat condition from GIS data to determine a baseline. It then calculates sequestration under different scenarios through time. Appendix A provides more information on the model.

There have been two phases of the project so far. Phase 1 was to appraise the potential options, data and methodologies for the model to assess carbon sequestration on Yorkshire Water’s land and how that might fit into the business planning process. 

Phase 2 of the project saw the processing and combination of GIS data, development of a spreadsheet model and production of three key scenarios - a baseline scenario with storage and flux figures, and an output for two main scenarios (planting one million trees and maximising peatland restoration).

Both phases were tailored to Yorkshire Water’s land types. 
Having completed this work, it is apparent that there are several areas where the model and process can be further developed.
1.    The whole industry is committed to reducing emissions (for example, English water companies have a net zero target by 2030 and there are similar ambitions and commitments in other parts of the UK and Ireland). A detailed route map has been developed, which includes offsetting and insetting. Every water company will have a different mix of options, opportunities and challenges, but at present the UK water industry as a whole does not have a clear picture of the potential for offsetting, nor the risks of emissions arising from its land and how this will fit in with the rest of its carbon route map.
2.    In order to meet reduction targets, it is likely that the UK water industry will need to either buy open market offsets or develop offsets using their own available land bank. Many organisations may use tree planting or peatland restoration as methods to offset any remaining emissions once other options have been exhausted. While detailed and specific methodologies are available to calculate carbon offsets from these regimes, methods for other land types and conditions are less clear, so fully accounting for other land types and conditions has not been possible. There may be other opportunities and risks that need to be included in a company's strategy to better inform their offsetting and land strategy. This may also feedback into wider carbon reduction objectives.
3.    The current model uses an inventory-based approach of land cover and habitat condition to assess the overall net sequestration across landholdings. More detailed and wider research is required to focus on the most appropriate parameters and land cover/condition types as well as potential alternative data sources to improve confidence and accuracy of the model. At present there is not a full representation of uncertainty within the model predictions. This leaves the model open to significant external challenge.
4.    The model has only been stress-tested and peer reviewed in a limited way to date.
5.    We need to ensure the model is as user friendly and transparent as possible and applicable to all UK and Ireland water companies (e.g. by ensuring it includes all relevant land cover, management and habitat types).

Over the last 15 years the water sector has been developing tools for different aspects of its carbon footprint. Through UKWIR the Carbon Accounting Workbook provides a consistent approach for annual operational emissions. Also focused on operational emissions, the Water UK Net Zero routemap programme will culminate in the provision tools for estimating carbon reductions of different options over a given period of time, and the cost per tonne of CO2 avoided.

Now, growing attention is being paid to the embodied carbon of capital schemes and the sector’s supply chain. Already, various tools are available for estimating capital carbon emissions for new assets, (some of which include operational carbon) and with developments such as PAS2080 they are becoming more standardised. But uptake has been variable across the sector.

Two interconnected risks remain. Firstly, that embodied / capital carbon continues to receive less attention than operational emissions and that capital and operational carbon are not assessed in the round – contrary to totex thinking. Secondly, that the sector lags behind regulator and other stakeholder expectations on measuring capital carbon and building it into decision making and reporting

To avoid inconsistent greenhouse gas emissions reporting we need a common method and accounting system. This is achieved through the carbon accounting workbook (CAW).

The CAW requires annual updating - at the very least to incorporate revised emissions factors issued by BEIS. Previous updates have also included broadening the scope of items that are quantified, and improving functionality.

The water sector needs a common position on climate change risk and the measures it will take to adapt.

Context

We know that disruption from climate change has far reaching effects across the environment, the economy and society. Changing rainfall patterns and temperature, as well as more frequent weather extremes mean that our water systems are at the front line for resilience to climate change. The need to adapt touches on all areas of our work, for example: customers service resilience expectations; the capacity and condition of physical assets; regulation (quality and economic alike), planning and investment; all aspects of our water and wastewater services; and the resilience of energy supplies and the wider supply chain.

A number of wider factors point to the need for a step change in our approach:

• the UK hosting the 2021 United Nations Climate Change Conference (COP26) places the spotlight more firmly on climate change risk, as well as decarbonisation, in the UK.
• the National Infrastructure Commission's call for government to set resilience standards, for industry to apply stress tests; and for regulators to support investment
• investors aligning themselves with the Task Force on Climate Related Disclosures which expects consistency in how organisations understand and adapt to climate-related risks.
• the Public Accounts Committee's recent report highlighting very serious water supply risks, and concern about investment planning involving regulators, DEFRA and companies.
• Defra stating in the second National Adaptation Program that it will strengthen the WRMP guidance to improve consistency in how water companies consider climate change

What have and what we need

Previous UKWIIR research has put us in a good position in terms of underpinning evidence and technical tools to assist adaptation work e.g. water resource planning, rainfall intensity for drainage planning. This has included the incorporation of UK climate projections (most recently UKCP18) to reinforce modelling etc.

However, we do not have a common, overarching framework for adaptation work by the water sector that responds to the international, national and sectoral drivers outlined above and also enables climate adaptation issue to be considered consistently across the Big Questions. Such as framework could include:

• a common high level goal for galvanising adaptation action - akin to a Big Question
• a common view of what resilience means to us; how we will measure success;
• a consistent position on the climate scenarios are we using i.e. what future states are we planning for?
• explanation of how we can invest in long term adaptation within regulatory periods.
• evidence that adaptation is integrated into our asset, service and investment planning framework.

In essence, we have good science, tools and understanding within the sector; but common goals, methods and metrics would help make a better case for investment in climate resilience.

Research needs

Much of what is described above involves gathering existing work and knowledge together. However there are some specific knowledge gaps which would benefit from joint research. Namely:

• what climate scenarios should we be working to, for planning and investment purposes? What is the view of our regulators and the wider climate adaptation community on this?
• linked to this, would we need to act differently to be resilient with 4 deg C warming (possible), compared with 2 deg C warming (very likely)
• what climate resilience standards to utilities elsewhere in the world work to?
• what methods of public engagement should we use to build understanding and support