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Integrating the value of freshwater ecosystems into decision making

Posted by Patrick MacQuarrie on Thursday, February 14 2013 11:17

Economic valuations of ecosystems are being made increasingly that use tried and tested tools for analysis. With ecosystem values in hand, decision makers can then weigh up the costs and benefits of alternate choices for ecosystems such as water infrastructure development and operation, with a more complete picture of the likely impacts on sustainable development. Performing ecosystem valuations, especially in ways that encourage whole communities to participate, also empowers all stakeholders. Better informed decisions can be made and consensus improved for initiatives that sustain both the environment and livelihoods. With knowledge gained from ecosystem valuations, priority can be given to projects that combine investment in natural and built infrastructure.

Strategic Action Programmes (SAP) have been developed that not only form the basis for the GEF approval of IW projects but also include a cost benefit analysis of the benefits of action compared with non-action. The challenge facing most projects is that the only "ecosystem values" readily available are based on global data and have subsequently been challenged on both economic and scientific grounds. Thus, revisions of Transboundary Diagnostic Analyses (TDA) increasingly include the determination of regionally applicable economic values for environmental goods and services. A brief is now available on this platform to direct to learning resources that enables mobilising elements of economic valuations to the TDA/SAP process relevant of GEF IW Projects. Failure to account for, invest in, protect and sustain ecosystem services undermines water security and sustainable development.

Supporting sustainable development requires supporting freshwater ecosystems. As water needs grow so does the need to create solutions for delivering and managing water that are economically viable and sustainable. Investing in ecosystems as water infrastructure provides a basic of valuation while delivering benefits across a range of sectors. Like built infrastructure, natural infrastructure require valuation and costs and benefits of ecosystem services in the investment assessment. A critical component of the assessment is valuation. Wetlands, for example, provide a wide range of ecosystems services such as flood attenuation, support for fisheries, water filtration improving water quality, agricultural production, among others. These services provide essential functions across a number of sectors and are critical to the health of the freshwater ecosystem and sustainable development. The challenge is how create economic incentives and fund these strategies. However, the message is clear – investments in water infrastructure deliver wide-reaching benefits for all.

What should not be forgotten is that in the development agenda, if we account for nature’s services and invest wisely, nature is a source of solutions for water security and sustainable development. The value of water-related ecosystem services – to people’s well-being, to food and energy security, to industry, the economy and to the engines of economic growth in cities – make nature a fundamental building block of water security. Storage of Beijing’s drinking water in Miyun watershed forests is worth US$1.9b annually. The Nakivumbo swamp provides water purification for Kampala, Uganda worth US$2m per year compared to costs of US$235,000. The Tonle Sap lake and Mekong river fisheries supply 70-75% of people’s animal protein intake in Cambodia, are worth up to US$500m annually and employ 2m people. Returns on investment in soil conservation have significantly extended the life expectancy of the Itaipu dam (Brazil, Paraguay).

The Economics of Ecosystems and Biodiversity for Water and Wetlands, or TEEB report, launched recently clarifies the role of wetlands to water security and quantifies the values they provide to multiple ecosystem service, to society, and to the economy. Results show clearly that there is an enormous range of values ecosystems provide to different types of habitat – indicating a cumulative effect of value from rivers and lakes, to coral reefs, to coastal wetlands – the highest value reported (TEEB 2013 – Executive Summary, p.5).

What implications of these results to advancing IWRM integration and implementation? Based on the TEEB results, how would you approach decision making process with this information?

Due to the huge variations in ecosystem values, and their interdependences, how can tradeoffs be made to yield an equitable and sustainable use of water while optimizing the benefits of ecosystem services? Is the TEEB report changing the game or merely stating the obvious?

Let’s get the debate going!


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