Functions and values of water. Cor de Jong WaterLand International, Wageningen

Transcription

1 Functions and values of water Cor de Jong WaterLand International, Wageningen

2 Water In this presentation water means: water in the landscape water as an integral part of nature water as a complex of ecosystems

3 Functions and values of water (1) Water fulfils a great number of functions All of them have a value Most people have only a very limited awareness of the total economic value of water, let alone of the total value of water, which includes its intrinsic value The same applies to many economists

4 Functions and values of water (2) In most water development projects even the economic value of water is only partly taken into account Nature values are generally completely neglected To reverse this adverse practise, some ecologists, engineers, and economists have joint to develop methodologies to assess the value of water in a more holistic way

5 Functions and values of water (3) As a result of this co-operation, presently, cost-benefit analyses of small-scale nature development projects, and large-scale water development projects as well, are economically evaluated with the help of a function value matrix, wherein all relevant functions of the waters concerned are valued, either in a direct, or in an indirect way

6 Functions of water Water fulfils a great number of functions, providing goods and services These functions are generally clustered into four groups: Regulation functions; Habitat functions; Production functions; and Information functions.

7 Regulation functions Some regulation functions are: Influence on the climate (Gulf Stream) Managing the environment in a basin Supply of water to the soil Regulation of groundwater level Soil formation (erosion, sedimentation) Nutrient cycling Waste treatment (partial)

8 Habitat functions Some habitat functions are: Human habitation Refugium function for delicate species Nursery function for fish and water fowls

9 Production functions Some production (and carrier) functions are: Food (agriculture, fisheries, aquaculture) Reed Facilitating industrial processes Domestic use Hydroelectric power (potential energy) Navigation

10 Information functions Some information functions are: Esthetical information (beauty of the landscape) Recreation (eco-tourism) Spiritual and historical information Cultural and artistic information Scientific and educational information

11 The economic value of water Total economic value Non use values Use values Existence value Optional value Bequest value Production value Regulation value Information value

12 Valuation of water (1) In all its functions, water has an economic value This value has two major components: Use value Non-use, or intrinsic value These values indicate the wellbeing that man derives from the awareness of the existence of nature (water) and from the use of (nature) water, respectively

13 Valuation of water (2) The use value of water consists of: Production (and carrier) value Regulation (and habitat) value Information value The above use values can be expressed in monetary terms an can be used as benefits in cost-benefit analyses of nature (water) development projects

14 Valuation of water (3) The non-use value of water consists of the following components: the existence value the optional value the bequest value

15 Valuation of water (4) The existence value is the value that the present generation attaches to the existence of water, apart from its actual use The optional value is the value that man attaches to the possibility of future use by the present generation The bequest value is the value that man attaches to the possibility of future use by future generations

16 Valuation of water (5) The economic value of water is basically an anthropocentric measure Income or welfare of man is at the centre of the valuation To determine the intrinsic value of water, the value of water (ecosystems) as such, an eco-centric approach by ecologists is required

17 Intrinsic value of water The intrinsic value of water ecosystems can be determined on the basis of criteria such as biotic and abiotic diversity, biotic and abiotic rarity, replacibility, etc. (Scoring the number of specific species) The intrinsic value of an ecosystem reflects the importance of the ecosystem for the preservation of specific species and the importance of the ecosystem for the functioning of other ecosystems

18 Techniques for nature valuation (1) 1. Direct valuation Market prices of marketable goods (fish, reed) and services (recreation, energy, shipping) Until the Eighties of the last Century, so called intangibles could not be valued and were not properly taken into account This has changed, after the development of several indirect valuation methods

19 Techniques for nature valuation (2) 2.1. Indirect valuation methods a) Damage Costs Avoided (Example: water buffering through wetlands along a river) b) Restoration Costs (Example: restoration of lost ecological functions: fish ladders) c) Replacement Costs (Example: WWTP, in stead of natural helophyte vegetation, or construction and maintenance of a dike, in stead of a natural flood plain) d) Private investments in nature preservation e) Similar investment by Public Bodies

20 Techniques for nature valuation (3) 2.2. Derived market value (Hedonic pricing) a)travel Cost Method (Travelling cost spent to visit the Balaton Lake, or the Gabcikovo Dam) b) The extra value of houses along a beautiful lake)

21 Techniques for nature valuation (4) 2.3. Contingent Valuation (Hypothetical valuation) (Example: Ask to a statistically sound sample of Slovak people how much they would be willing to pay for the preservation of the Sirava Lake?) 3. Benefit Transfer Method (Using the data of a similar lake for the valuation of an other one)

22 Economic evaluation of an intervention in a water system Step 1: Function analysis Step 2: Function valuation (direct and/or indirect) Step 3: Assessment of costs Step 4: Cost-benefit analysis

23 The Middelsgraaf (example) 1 Lowland brook in the Province of Limburg Intervention: Brook reconstruction Conflict: Increase of nature values at the cost of decreasing agricultural production Two project variants: A. Meandering of the brook without increasing the water level B. Meandering plus increasing water level with 50 cm

24 The Middelsgraaf (example) 2 Ecological evaluation of scenario A and B Habitat quality (A +, B++) A: Diversity of habitats for aquatic invertebrates increases B: Idem plus the quality of created habitats for aquatic invertebrates increases (through better water quality and hydrological dynamics. Marshy bank zone functions as a corridor for rare amphibians Better conditions for groundwater-bound vegetation

25 The Middelsgraaf (example) 3 Ecological evaluation of scenario A and B Ecological potential (A+, B++) A: Morphology of Middelsgraaf more like that of a natural brook B: Hydrological dynamics more comparable to a natural lowland brook in Limburg

26 The Middelsgraaf (example) 4 Socio cultural evaluation of A and B Esthetical value (A++,B+) A: Landscape looks more attractive B: Landscape looks less attractive, because of wet conditions

27 The Middelsgraaf (example) 5 Cultural-historic importance (A-, B+) A: Decreases, because the brook was dug out for draining the area B: Idem, but better because of more natural situation

28 The Middelsgraaf (example) 6 Economic evaluation of scenario A and B Step 1: increase/decrease of value of ecosystems under scenario A and B (with the help of a function-value matrix) Step 2: costs of scenario A and B Step 3: Cost-benefit analysis Plan area 450 ha 40 ha agriculture nature area Costs and benefits in Dfl

29 Functions Function-value matrix 1 Scenario A Scenario B Market Nonmarket Nonmarket Market 1. FixationCO2 + 30, , Water regulation + 47, , Water supply/ storage No change + 6, Recycling of nutrients No change + 97, Biological control Refugium function + 105, , Recreation + 230, ,600

30 Function-value matrix 2 Functions Scenario A Scenario B Market Nonmarket Nonmarket Market 8. Science and education + 10, ,600 Total benefits nature +346, , , ,200 Damage to agriculture through higher gwt , Less drought damage ,298-0 Total net benefits + 346, , , ,200

31 Conclusions Pilot project (1) In both scenario s, the benefits for nature in market and non-market value- are higher than the loss of agricultural production The benefits for nature result from meandering of the brook (A) plus heightening of the water level (B) This has a positive effect on the ecological, socio-cultural, and economic functions

32 Conclusions Pilot project (2) A higher water level produces 20 % more benefits (mostly in non-market values) In market values, the additional benefits for nature are lower than the costs for agriculture Non-market values are still lower rated than market values The decision-makers have opted for scenario A

33 Foundation for sustainable development/fsd (1) The FSD ha four branches: 1. Ecosystem Analysis 2. Biodiversity and Global Change 3. Integrated Environmental Assessment 4. Integrated water management Ecologists, economists, and engineers closely co-operate in complex nature development projects

34 Foundation for sustainable development/fsd (2) The main objectives of the FSD are: Research on the practical implementation of the concept sustainable development Increase public awareness of nature values Develop training programmes on sustainable land use planning and ecosystem management Information to planners and decision-makers Advise on the application of principles and tools of for sustainable development

35 Foundation for sustainable development/fsd (3) The FSD is a non-profit organization The Foundation has established a platform for Economic Valuation of Nature The organization runs an open international network of interested experts for the exchange of knowledge and experience Admission is free

36 Nature development and water plans Projects like the Middelsgraaf are implemented throughout the country by water boards, provinces, the State The projects are very costly Per year 0.6 to 0.9 billion Euro is available to finance nature (and water) development plans The funds come from various sources: Water boards, provinces, municipalities, the State, NGO s, the EU (?) The stakeholders are generally involved in the planning of the projects

37 Nature development and water plans Large-scale projects are prepared and implemented in the framework of the programme: Space for the river Retention areas are selected Resistance is sometimes strong Communication is essential Other example: the Wadden Sea (exploitation of gas, or not?)

38 Thank you for your attention