The restoration of natural capital and the development of payments for ecosystem services in South Africa: An opportunity for sustainable

natural resource management and use?

Christo MaraisDepartment of Water Affairs and Forestry,

South Africa

The market for ecosystem services relevant to the Southern African context

1. Water regulation and supply

2. Carbon sequestration and maintenance

3. Natural landscapes (biodiversity) for recreation and bequest value.

Environmental and Social Cluster of the Expanded Public Works- Promoting Socio-Economic Development and Improved Livelihoods

1. Working for Water - manages invasive alien plants to enhance the sustainable use and conservation of our natural resources

2. Working for Wetlands - champions the protection, rehabilitation and sustainable use of South Africa's wetlands

3. Working on Fire - enhance the sustainability and protection of life, livelihoods, ecosystem services and natural processes through integrated fire management

4. Working for Woodlands - regain woodland composition, structure and function.

The Opportunities in the Water Sector

1. Yield (utilizable water),

2. Retention (maximize low flows),

3. Water quality (minimize the loss of top soil, siltation of water infrastructure, damage to water services and human health risks) and

4. Risk (minimize impacts of floods and droughts).

The Water Pricing Strategy - Clearing of Invasive Alien Plants (IAP’s)

• The full cost of control of certain IAP’s may be charged to affected water users.

•…. in consultation with affected stakeholders, … the control of IAPs is the best and most cost effective action possible to increase long term water security and availability.

•Once agreement is reached …, the total cost of control must be communicated to all affected stakeholder organisations. These costs may be supported by subsidy where available and appropriate.

Initial and Follow Up Clearing Costs of Australian Acacias

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

Initial 1st 2nd 3rd 4th 5th 6th 7th 8th

Treatment

Costs/ha/Density Class

75-100%

50-75%

25-50%

5-25%

1-5%

0-1%

TIME (Calendar Years)

DEMAND / YIELD (million m/a)

3

Combined Yield of Schemes 1 and 2with no alien vegetation (f )

1

Combined Yield of Schemes 1 and 2 with current level of invasion (g )

1

Combined Yield of Schemes 1 and 2 when fully invaded (h )

1

Yield of Scheme 1 with no alien vegetation (f)

Yield of Scheme 1 with current day level of invasion (g)

Yield of Scheme 1 when fully invaded (h)

Current Year

DEMAND CURVE

C1

B1

D B

A

CE

D1

E1

A1

Estimates of Current & Future Impacts of Invasives in Riparian and Mountain Catchment Areas on Water Yield

-50

100150200250300350400450

BERGBREEDE

CROCODILE(WEST) AND MARICO

FISH TO TSITSIKAMMA

GOURITZINKOMATILIMPOPO

LOWER ORANGELOWER VAAL

LUVUVHU AND LETABA

MIDDLE VAAL

MVOTI TO UMZIMKULU

MZIMVUBU TO KIESKAMMA

OLIFANTS

OLIFANTS/DOORN

THUKELA

UPPER ORANGEUPPER VAAL

USUTU TO MHLATHUZE

WMA's

Million m3

TotalFuture(m3)

TotalCurrent(m3)

Cost of Control and Maintenance of Invasive Alien Trees in Riparian Areas and High Yield Watersheds in South Africa ( US$ Cents per m3 registered water use)

0.12

0.22

0.04

0.16

0.58

0.45

0.070.02 0.01

0.21

0.02

0.93

0.340.30

0.05

0.67

0.01 0.01

0.74

0.24

-

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

BERGBREEDE

CROCODILE(WEST) AND MARICO

FISH TO TSITSIKAMMA

GOURITZINKOMATILIMPOPO

LOWER ORANGELOWER VAAL

LUVUVHU AND LETABA

MIDDLE VAAL

MVOTI TO UMZIMKULU

MZIMVUBU TO KEISKAMMA

OLIFANTS

OLIFANTS/DOORN

THUKELA

UPPER ORANGE

UPPER VAAL

USUTU TO MHLATHUZENational Weighed Average

Water Management Areas

US$ cents/m3 Registered Water Use

Proposed Charges for Invasive Alien Plant Management per m3 Registered Water

Use

0.13

0.06

0.02

0.35

0.17

0.06

0.01 0.00 0.000.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

Domestic & Industrial Agric Forestry

Water Sectors

US$ cents/m3 Registered Water

Use

Average

Maximum

Minimum

Photograph courtesy: Ms. Terry Everson

Impact of Sedimentation on the Siltation of Dams and Water Quality

Photograph: Courtesy Prof. Rudi van Aarde

Photograph: Courtesy Prof. Rudi van Aarde

Photograph: Courtesy Prof. Rudi van Aarde

Preliminary Base Flow Estimates for Strategically Selected Quaternary Catchments in the Thukela Water Management Area for Degraded and Intact States (Maloti-Drakensberg Project)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Months

Runoff in m3

IncreasedBaseflowUnder IntactScenario

Base FlowUnderDegradedScenario

Dry Season

Thukela Water Management Area - Preliminary Estimates of Degradation Impacts on Sediment Loads in Selected Quaternary Catchments (Maloti-Drakensberg Project)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

ANNUAL

Months

% of Sediment Load under Degraded

Scenario

100% -Reduction inSedimentLoad

Reduction inSedimentLoad

Dry Season

Opportunities in the Carbon Market: Working for Woodlands in the Eastern Cape

Thicket Restoration Programme

Degradation of Albany Thicket Biome

The good - 300,000 haSemiarid solid thicket (characterized by a dense canopy of tall shrubs and a Portulacaria afra Jacq. component)

The bad - 600,000 haModerately degraded by injudicious goat-farming

The ugly - 800,000 haSeverely degraded by injudicious goat-farming

Biomass carbon (t ha -1) Soil organic C (%) Semi-arid & arid systems 1 - 4 0.2 - 1.5 Tropical savannas 15 - 30 2.3 - 3.6 Intact semi-arid thicket 80 - 90 6.9 - 9.2 Forests 70 - 460 4.5 - 16.0

Comparing Carbon storage in Semi-arid and Arid Systems with Lilliputian (Rain) forest

Lechmere-Oertel et. al. (2006) Austral Ecology

Above ground

40 ± 3

7 ± 1

Litter

11 ± 1

1 ± 0.4

Roots

25 ± 1.3

11 ± 0.7

Soil

133 ± 27

95 ± 15

and falling?

Total

209 ± 28

114 ± 14

t C ha-1

Mills et. al. (2005) Austral Ecology

Krompoort (MAP 300 mm yr-1)

27 years growth

4.2 ± 0.08 t C ha-1 yr-1

= 15.4 t CO2 ha-1 yr-1

Mills & Cowling (2006) Restoration Ecology

Financial overview

Goat farming $7 – $30 income ha-1 yr-1

Spekboom farmingImplementation costs: $400 – $700 ha-1

- based on large-scale DWAF project in Baviaanskloof

Potential turnover (inclusive of transaction costs):@ $3 $30 ha-1 yr-1

@ $20 per credit $200 ha-1 yr-1

- present carbon price: $5-$10- 2006 high: approximately $ 40 (energy credits)

10 t CO2 ha-1 yr-1

- conservative

Mills & Cowling (2006) Restoration Ecology: 15.4 t CO2 ha-1 yr-1

Large-scale project scenario

•20, 000 hectares•417 people employed over 10 years•Total cost: $26 millionPotential annual earnings: @ $3 per credit $600,000@ $20 per credit $4 million

The Proviso•There is no free lunch. •Sellers must be capacitated to enter the market. •There is money to be made but it needs proper regulation.•A long term view•Transaction costs can be a deal breaker!

Opportunities in Water, Carbon & Biodiversity: Integrated Veld

and Forest Fire Management

Impacts of Fire on Biodiversity, Ecosystem Processes and Services

• Sprouting – a large proportion of plants in fire-prone areas have the ability to sprout after fire,

• Serotiny – some plants (for example, proteas) hold their seeds in “fire-proof capsules” built from the remains of the flowers.

• Smoke-stimulated germination – the seeds of many plant species are stimulated to germinate by the chemical cocktails contained in smoke.

• Fire-stimulated flowering – many species are stimulated to flower, following fires, offering the best opportunity for seed production and germination of these plants.

• Flammability – “killing their neighbours”, and creating space for their own progeny to thrive.

• Dependence on fire-induced nutrient flushes - Some animals, such as Roan antelope, calve in the middle of the dry season, when green grass is scarce. The females need the protein flush that follows a fire to provide enough milk for their calves.

Extent of Fire Prone Landscapes in South Africa

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Pine Eucalyptus Wattle OtherHardwoods

Savanna Fynbos Grassland

Commercial Plantations and Natural Biomes

Area (km2)

Direct Losses of Unwanted Wild Fires in South Africa

0.00

5.00

10.00

15.00

20.00

25.00

Pine Eucalyptus Wattle Other Savanna Fynbos Grassland Livestock

Land Use and Biomes

Losses in $ millions

Total Loss to the Economy (US$ millions per year)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Timber fromplantations

Downstreamtimber

processing

Livestockand grazing

Harvestedproducts

fromsavannas

Harvestedproducts

fromgrasslands

Harvestedproducts

from fynbos

Disruptionsto power

supply

Houses andstructures

Smokehazards*

Alien plantcontrol

Land Use Activities

US$ Million

Two Major Impacts on Soil Movement and Related Ecosystem Services

• Fire (rotation and season)

• Unsustainable use (overgrazing and “nutrient mining”)

Land Use & Management OptionsUnsustainable Fire Regimes

Conclusion

• There is potential for the development of a Payments for Ecosystem Services (PES) Market in South Africa

• The two most promising options at the moment are water regulation and carbon.

• It has the potential to have significant socio-economic benefits to the rural poor where up to 80% of the population are unemployed.

• Restoring Natural Capital and the development of PES could make significant contributions to the alleviation of poverty in developing countries all over the world.

Thank You!