Payment for Ecosystem Services (PES)

Ecosystem Services can be described as the benefits that humankind receives from natural ecosystems. These benefits can be in the form of a supply, like water, but are also much broader and include things such as climate control and recreational & cultural value. In recent times many of these ecosystem services are being assigned economic value as their relevance to man's survival becomes more evident.

Payments for Ecosystem Services (PES), according to Wikipedia, "are incentives offered to farmers or landowners in exchange for managing their land to provide some sort of ecological service. These programs promote the conservation of natural resources in the marketplace...the majority of PES programs are funded by governments and involve intermediaries, such as non-government organisations. The party supplying the environmental services normally holds the property rights over an environmental good that provides a flow of benefits to the demanding party in return for compensation."

The ecosystem services supplied by the Maloti Drakensberg region include:

  • Carbon Sequestration
  • Climate Regulation
  • Disturbance Regulation
  • Water Supply and Regulation
  • Erosion Control and Sediment Retention
  • Soil Formation and Nutrient Cycling
  • Waste Treatment
  • Pollination and Biological Control
  • Refugia and Genetic Resources
  • Food Production, Grazing and Raw Materials
  • Recreation
  • Cultural Services

The services listed above have been identified as significant and demand for them is set to increase. Water supply and carbon sequestration have been singled out as the two services that the market is currently ready for.

The mountainous heartland of the AmaZizi and the AmaNgwane is often referred to as the "Upper Thukela catchment" since many of the the tributaries of the Tugela originate from there. The Tugela is the largest river system in KwaZulu-Natal province and one of the most important in South Africa. The importance of this area to South Africa's water supply is readily understood, and the need for proper land-management in the upper catchment to ensure future water quality and quantity is paramount. Payment to the local communities for this ecological service (PES) of water supply and the resultant carbon sequestration is an attractive concept which studies have shown to be economically feasible. It provides a tangible monitory incentive for management of the land towards optimal production of clean water. Naturally this will contribute greatly towards conservation. In this context, the motivation for the CCA is compounded. Not only does the CCA provide a good framework for the communities to be able to supply the water, but the remuneration for these ecological services could in turn provide funding towards sustaining the CCA.

Blignaut, Aronson, Mander and Marais have described a proposal for large-scale restoration and land use management for a portion of the Drakensberg. In an article titled Investing in Natural Capital and Economic Development: South Africa's Drakensberg Mountains 1 the following case study is presented:

The Upper Thukela catchment provides a case study of how restoring natural capital and improving land management can improve water security, especially during southern Africa's dry winter months. The Upper Thukela comprises 1,800 km2, or 3.5%, of the area of the entire research project. We anticipate that by promoting more sustainable land-use practices by local land owners, at least 13 million m3 of additional winter baseflow - or 12% of the winter mean annual runoff - can be added to the catchment's rivers.

In the Upper Thukela catchment large-scale land transformation has taken place through conversion of wild grasslands to cropland and grazing lands. This has led to extreme degradation of the land through overgrazing and subsequent erosion. Our restoration program aims to generate incentives for maintaining livestock at less destructive densities. Preferred practices include rotational grazing instead of unmanaged extensive grazing, and changing the current annual winter burning regime to a biannual spring burn. Incentives to pursuing more sustainable practices will be provided through payments for ecosystem services.

We calculate that improved management practices in the Upper Thukela could reduce sediment yields in the upper catchment by 59% or 1.4 million m3 per year, making a significant positive impact on water quality and prolonging the lifespan of water impoundments. These land-use changes will not only improve winter flow and reduce siltation but also fight against desertification and mitigate the impact of global climate change by sequestrating at least 100,000 t of CO2 annually. Relatively minor interventions can contribute towards improved water security and climate amelioration, and they will also contribute to increased income for the local people through direct payments and employment to the landowners who are, in effect, the potential 'producers' of these services.

These types of investments in the restoration and maintenance of natural capital are gaining recognition among water engineers in South Africa’s Department of Water Affairs as effective ways to improve water supply. Water engineering schemes are very expensive; the recently completed Berg River Scheme in the Western Cape Province was developed at a cost of around $213.3 million U.S. ($1=7.5 Rands) and added 81 million m3 to the water supply of the province. It has been estimated, however, that the clearing of some 19,600 hectares (equivalent to 100% density) of invasive alien trees from riparian areas between 1998 and 2006 yielded 34.4 million m3 of water, or about 42% of the yield of the new Berg River Scheme. The cost of clearing was only $15.46 million, and therefore a very good investment (Marais and Wannenburgh forthcoming). Of course, watershed restoration and maintenance will seldom result in the elimination of water supply shortages, but are part of an integral package of water resource options to optimize supply.


A detailed model demonstrating the economic feasibility of PES for this region of the Drakensberg was published by Mander, Blignaut, Schulze, Horan, Dickens, van Niekerk, Mavundla, Mahlangu, Wilson, and McKenzie in a document titled An Ecosystem Services Trading Model for the Mnweni/Cathedral Peak and Eastern Cape Drakensberg Areas 2 in which they demonstrate that:

In the Thukela, good management practice results in an additional 12.8 million m3 in winter river baseflows, with a sales value of R3.8 million per annum and it adds value to the economy by between R18 million and R88.7 million per year. With only 4 million m3 surplus in the upper Thukela, the additional water represents a 320% increase in surplus or allocable water. In terms of the whole Thukela basin, the additional water represents a 23% increase in allocable water. The same action reduces sediment yields by 1.2 million m3, with a value of R4.1 million per annum in cost savings, while carbon sequestration is worth R8.7 million per annum. In total, the sales of services from the upper Thukela could generate R16.7 million per annum. The costs of management on the other hand are R3.8 million per annum and restoration would cost R31.9 million over the first 7 years.


References
1. James Blignaut, James Aronson, Myles Mander, and Christo Marais
Policy and Management: Investing in Natural Capital and Economic Development: South Africa's Drakensberg Mountains
Ecological Rest. June 2008 26:143-150; doi:10.3368/er.26.2.143
Download as PDF (2.61MB)

2. Maloti Drakensberg Transfrontier Project (2007) Payment for Ecosystem Services: Developing an Ecosystem Services Trading Model for the Mnweni/Cathedral Peak and Eastern Cape Drakensberg Areas.
Mander (Ed) INR Report IR281.
Development Bank of Southern Africa, Department of Water Affairs and Forestry, Department of Environment Affairs and Tourism, Ezemvelo KZN Wildlife, South Africa.
Download as PDF (2.41MB)


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