10 minute read
How much is a wetland actually worth?
Understanding the economic value of a wetland can positively influence decisions around wetland management. SRK Consulting was appointed to calculate the value of the ecosystem services provided by the Papenkuils Wetland, as well as the potential change in value of these services, if an existing diversion weir were to be raised. By Kirsten Kelly
Socated within the Western Cape, the vast Papenkuils Wetland is fed primarily by the Breede River, but also the Holsloot River, a smaller tributary of the Breede. A diversion weir redirects a portion of that water into Brandvlei Dam and away from the wetland; raising the weir by 30 cm to improve the supply of irrigation water would further increase the volume of water diverted away from the wetland into Brandvlei Dam.
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The Western Cape Department of Environmental Affairs and Development Planning tasked SRK Consulting with establishing the value of ecosystem services provided by the Papenkuils Wetland, in order to inform its policy and management. The first step was to identify the services of the ecosystem.
Services of the Papenkuils Wetland Wetlands in general sustain unique environments in terms of fauna and flora, and are among the most productive ecosystems in the world. “They provide ecosystem services that have direct use value (these are easier to quantify because they are typically valued in traditional markets) and more discreet indirect and non-use values that are harder to calculate,” explains Matthew Law, principal environmental economist and management consultant, SRK Consulting.
An example of a direct use value is grazing on the wetland itself. The combination of shallow water and high nutrient levels in wetlands creates highly productive agricultural areas; the direct use value of grazing was calculated by establishing the carrying capacity of the wetland and comparing this to the capacity of surrounding dry-land grazing areas. Another example of a direct use value is the waterblommetjies harvested from the wetland and sold by the local community. “We were able to calculate the direct use value of this wetland service per hectare, based on the number of harvesters and waterblommetjies sold,” he continues.
Water quality amelioration is an ecosystem service with indirect use value (as opposed to direct economic benefits), as wetlands remove contaminants and improve water quality. Wetland vegetation can help to trap suspended material, remove nutrients and conduct chemical detoxification. In the absence of these wetland services, farmers downstream will receive poor water quality, adversely affecting agricultural production and causing siltation of irrigation systems, with associated direct costs to farmers.
“As markets for the water quality amelioration function of wetlands do not exist, in order to value this service, we calculated the replacement costs of the construction and operation of a water treatment plant that provides a similar amelioration function of the Papenkuils Wetland,” adds Law.
Other examples of indirect use values provided by the ecosystem services of this wetland include carbon sequestration (calculated from the amount of carbon sequestered by the wetland and the internationally recognised social cost of carbon avoided through the provision of this service), floodwater abatement, and groundwater recharge (both calculated by establishing the replacement cost of a water impoundment or dam of similar capacity).
Another category of ecosystem service value is non-use value – the intrinsic value that people derive from the mere knowledge that an environmental resource exists. For example, people value the Kruger National Park, even though they may never actually visit the reserve. Intrinsic value is not traded in markets and is unpriced. It is therefore necessary to assess the relative economic worth of these unpriced goods and services using non-market valuation techniques, such as the contingent valuation method.
Like most wetlands, the Papenkuils Wetland allows for a concentrated streamflow to spread out over a large area and consequently provides significant temporary storage. Particularly in the Papenkuils, braided channels and large ponded areas (indeed, the word kuil can mean pool, pit or bunker) provide large storage areas. The net effect of this storage is to dampen the peak flow entering the wetland, allowing for longer and lower outflows. In addition, thick grassed, reeded and palmiet areas contribute to slowing the velocity of water and further attenuating the peak inflows – and also providing for longer, lower outflows.
In order to calculate the value of each service provided by the Papenkuils Wetland, SRK Consulting modelled the potential changes in use and non-use value. This calculation was based on the changes in ecosystem service levels – i.e. flood abatement, groundwater recharge, sediment retention, agricultural resource provisioning, harvesting of natural resources, nutrient reduction/ water quality amelioration, carbon sequestration, tourism and recreation, and intrinsic value – that would result from an increase in water abstraction upstream of the wetland. It estimated direct use values, calculated the replacement cost for services providing indirect use values, and conservatively estimated intrinsic values based on the intrinsic value of fynbos in South Africa.
Studies SRK Consulting developed a hydrological model to ascertain the current level of ecosystem services. This was formulated from a number of studies. Initially, a 30-year time series of daily inflows into the wetland was derived using the characteristics of contributing catchments and daily climate time series in an agrohydrological model. These inflows were assigned to the relevant inflow streams and diversion criteria applied to estimate current and future flows
Simon Lorentz, principal hydrologist and corporate consultant, SRK Consulting
Matthew Law, principal environmental economist and management consultant, SRK Consulting
Roanne Sutcliffe, environmental and bioresources engineer, SRK Consulting
into the wetland. Satellite images were then used to determine the areas of inundation of water in the wetland over a few years of record. These inundation states were correlated with the associated time interval cumulative discharge and then extrapolated to the full long-term time series.
An extensive topographical survey was conducted, mapping out the water levels and flows, and the agricultural drains of the wetland. Soil profiling and soil-water status monitoring was done to show how water naturally seeps down and accumulates in and around the wetland, and to evaluate the extent and time it took for soils to dry out. Further water quality and isotope samples were extracted at strategic locations over a five-month period. These short-term observations were used, together with the long-term predictions, to estimate the average and range of water inundation, vegetation health, sediment and nutrient uptake.
Dr Simon Lorentz, principal hydrologist, SRK Consulting, states that parts of the Papenkuils Wetland were already in poor condition – especially in the upper part, where trenches had been dug and water diverted away from the wetland for agricultural use.
“SRK Consulting evaluated the volume of nutrients taken up by the Papenkuils Wetland under various water use conditions,” says Lorentz. “Water samples were taken from water running in streams, the near-surface water and groundwater. We found some fairly high nutrient loads in the streams coming out of the vineyard. This was due to the stockpiling of fertilisers.”
The southern part of the Holsloot River was mostly impacted by agricultural diversion, while the river’s northern part was bunded up to prevent further spillage into the wetland.
Automatic sensors were added to the Holsloot River to measure electrical conductivity (or salinity) as well as depths of flow. Changes in salinity and depths were monitored over time. “We had to conduct our studies over a small portion of the dry period and would have liked to have surveyed changes in the wetland over a dry and wet season, but we had time constraints. We therefore used six years of historic satellite imagery and worked out the relationship between water coming into wetland and water diverted from the wetland, as well as wetland inundation,” says Lorentz.
Wetland inundation (when the wetland is mostly covered in water) is a feature of the benefit of the wetland to sustain vegetation, attenuate peak flows, and take up nutrient loads. This is important because water running through preferential pathways in a wetland can cause soil erosion. Furthermore, if soils, fauna and flora do not have sufficient contact with water, water will merely channel straight through the wetland – and chemicals and nutrients will not be absorbed.
Hydrological and economic model Through the hydrological model, SRK Consulting could anticipate the changes in the Papenkuils Wetland service level provision over a 25-year period, should the weir be raised by 30 cm.
“We were able to establish the cost of treating water diverted from the wetland to the same quality achieved through natural filtration in the wetland, the reduction of grazing areas, and the reduction in the extent of the wetland itself. From there, we modelled the costs over the 25-year period based on the change in flow,” adds Law.
Another interesting component of the economic model was the tourism benefit of freshwater resources. SRK Consulting used the spatial density of photos uploaded on the Flickr website – an online photo management and sharing application – to estimate what percentage of tourism spend in the local municipality was on attractions near freshwater resources, including wetlands. “With Flickr, we georeferenced all photographs to that local municipality and calculated the density of the photographs that were within the range of wetlands and watercourses. By doing this, we were able to demonstrate that tourists are attracted to wetlands and watercourses, and then coarsely estimate the tourism value of wetlands in the region. The theoretical drop in tourism could then be calculated
Water samples for laboratory analysis were collected each month from sample sites
TABLE 1 Existing and modified economic value of the Papenkuils Wetland (in 2020 prices)
WETLAND SERVICE ANNUAL AVERAGE (CURRENT)
NET PRESENT VALUE (MODIFIED)
Flood abatement, groundwater recharge and sediment retention Agricultural resource provisioning Harvesting of natural resources Nutrient reduction Carbon sequestration Tourism and recreation Intrinsic value Total
R311 652 R10 886 603 R293 166 R10 239 675
R2 671 047 R64 029 985 R2 448 065 R59 357 685 R208 000 R4 986 149 R190 636 R4 622 307 R44 239 108 R1 059 484 563 R38 755 795 R928 314 087 R2 717 315 R65 139 131 R2 490 669 R60 390 095 R134 386 R3 221 491 R123 168 R2 986 417 R6 455 R154 727 R5 916 R143 437 R50 287 962 R1 207 902 650 R44 307 414 R1 066 053 704
based on the decreasing size of the wetland from increased abstraction,” explains Law.
Conclusion “One of SRK’s recommendations was to remediate some of the diversions made by farmers. These diversions have an adverse effect on the wetland – possibly more than the weir diversion. When a farmer uses a wetland for grazing livestock, they typically cut a trench down the middle of the wetland to form an agricultural drain, drawing the water down and causing meadowlands to grow. This makes the wetland drier than it ought to be,” says Lorentz.
It was found that raising the weir would significantly reduce the area of the wetland (particularly the southern part). This would potentially have a knock-on effect across all of the wetland habitats identified in the system.
In the end, it was found that the Papenkuils Wetland generates services to the value of R50.3 million per annum. The envisaged weir diversion would reduce the service value of the wetland by an average of about R6 million per annum (i.e. an economic cost of abstraction of R6 million), leading to a total loss in net present value of approximately R140 million (i.e. after time preference discounting of the annual cost stream has been applied) over the 25-year period.
“Most of the studies and work done on wetlands focus on assessing the potential impacts of human demands. This was a study that SRK Consulting was particularly excited to take part in, as it quantified the value of a wetland in economic terms to inform policy. Instead of identifying threats and recommending mitigation measures, this study established the value of the wetland to society, which drives home the message as opposed to simply characterising potential threats and recommending mitigation efforts,” concludes Roanne Sutcliffe, environmental and bioresources engineer at SRK Consulting.
Read the paper here:
Soil profiling was done to show how water naturally seeps down and accumulates in and around the wetland
