Myles Mander

Investing in Natural Capital and Economic Development: South Africa’s Drakensberg Mountains

We describe a proposed large-scale restoration and land use management project planned for a portion of the Drakensberg Mountains in South Africa. Some 250,000 ha of high-lying land in the Drakensberg range are a protected conservation area and also a World Heritage Site. Bordering this conservation enclave is another 250,000 ha of increasingly degraded land subject to a variety of competing land uses. Conflicting land use objectives could, in theory, be mitigated and reconciled by identifying and developing a market for the delivery of ecosystem services such as water use and quality, carbon sequestration, erosion and siltation reduction, combating desertification, and the promotion of biodiversity conservation. The project we describe here can serve as an example of how long-term investment in the restoration of natural capital (RNC) will benefit both developed and developing countries, with payment for ecosystem services as a key way to finance the restoration work. International investments in the Drakensberg project are being sought in emerging markets for carbon, water, and biodiversity credits—the so-called “umbrella ecosystem services.” Food, water, energy, and income security for local people, however, remain top priorities. We argue that this kind of RNC project is a way to simultaneously pursue the objectives of the global conventions on Biodiversity, Climate Change, and Desertification arising from the United Nations’ Rio Summit of 1992, and to help meet the United Nations’ Millennium Development Goals for alleviating poverty.

Economics of climate change adaptation at the local scale under conditions of uncertainty and resource constraints: the case of Durban, South Africa

This paper describes the design and application of a benefit-cost model to the city of Durban’s (South Africa) climate change adaptation options. The approach addresses the inability to compile an accurate damage-cost function for economic prioritizations at the local level. It proposes that uncertainty over climate impacts and the efficacy of adaptation responses, in conjunction with the lack of economic data, high levels of economic informality and inequality make it difficult to link adaptation efforts to positive GDP impact in Durban. Instead, the research based its calculations of “benefits” on the number of people impacted and the extent of the welfare benefits imparted by the respective adaptation efforts. It also took into account the uncertainty over future events, capacity constraints, priorities of decision makers and the risk of maladaptation. The results were reported as benefit-cost ratios for 16 clusters of interventions (many of which were primarily the responsibility of one municipal department or agency) in each of four future scenarios (defined by minor or major climate change and weak or strong socio-institutional capacity). The paper presents and discusses the benefit-cost ratios and total benefits for each of the intervention clusters in each of the future scenarios. It emphasizes how these are influenced by choices of time frames. It also highlights how the most efficient interventions across all futures and time frames tend to be socio-institutional – for instance the creation of a cross-sectoral disaster management forum, sea level rise preparedness and early warning system, and creating climate change adaptation capacity within the water services unit. Ecosystem-based adaptation measures had moderate benefit-cost ratios, probably because in Durban the land that needs to be purchased for this is relatively expensive. Infrastructure-based clusters generally had the lowest benefit-cost ratios.

Hydrological modelling of water allocation, ecosystem services and poverty alleviation in the Pongola floodplain, South Africa

The Pongola River Ecosystem Services for Poverty Alleviation (PRESPA) project quantified the economic benefits accuring to different livelihood sectors from the water resources of the Pongola floodplain, South Africa. The floodplain carries a diverse economy and ecology which is supported by flood events that once occured naturally but are now regulated by an upstream dam. PRESPA modelled the eco-hydrology which underpins various ecosystem services to determine how this might be managed to alleviate poverty. A model was used to quantify the economic value of the available water, especially the value accruing to the poor. This model linked to three development scenarios to explore trade-offs and outcomes of (1) a status quo, ‘unstructured’ economy; (2) a structured diverse economy; and (3) a structured ‘single sector’ agricultural economy. This model gives decision makers a measure of where water is best used in terms of poverty alleviation and enables them to examine future economic and ecosystem trajectories. In summary, poor households on the floodplain currently have a diversity of income and food sources, making them less vulnerable to economic and climatic shocks, while there is a trend towards intensive agriculture which may deliver higher returns but with greater costs and increased vulnerability.