Safa Fanaian, Susan Graas, Yong Jiang & Pieter van der Zaag
Valuing ecosystem services linked to river flows in Lower Zambezi basin, Mozambique
WaterNet conference Dar es Salaam, 31 Oct 2013
• Introduction • Problem statement • Research Objective & Research questions • Methodology • Data analysis
• Economic value • Service suitability Curves • Service Provision Index
• Results • Limitations and advantages • Conclusion • Q&A
Con
tent
Intro
duct
ion
Ronco et al., 2010
Back
grou
nd
0
1000
2000
3000
4000
5000
6000
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Flow
in m
3 /se
c
Unregulated (1907-1958)
Post Kariba dam (1959-1970)
Kafue gorge+ Kariba dam (1970-1974)
Post Cahora Bassa dam (1980-2011)
•Cahorra Bassa dam constructed in 1974, with an installed capacity to produce 2075MW. •The dam produces base load power; is owned by the Govt of Mozambique and run by Hidroeléctrica de Cahora Bassa (HCB) through a concession.
0
1000
2000
3000
4000
5000
6000
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Flow
in m
3/se
c
Flows at the Cahora Bassa gorge
Unregulated (1907-1958)
Post Kariba dam (1959-1970)
Kafue gorge+ Kariba dam (1970-1974)
Post Cahora Bassa dam (1980-2011)
Prob
lem
Sta
tem
ent
Operating policy of Cahora Bassa dam caters
to maximize hydroelectricity
production
This leads to uniformity in flows of the river and
removes seasonal high and low flows
Uniformity has caused changes in ecosystems
downstream.
Changing operating policy= Less power = lower economic
return
At present there is no collective economic value of ecosystem
services in the Lower Zambezi Basin
There is not enough information to compare or derive trade-offs between regulation for hydropower or peaks for
environment.
Con
cept
s Ecosystem service
approach
Ecosystem goods
Economic value
Environmental flows
Link flows of the Lower Zambezi river, with the ecosystem goods to estimate their economic value.
Assess the economic trade-offs between the goods that are provided by the ecosystem service in the Lower Zambezi basin as flows change: ? What are the ecosystem goods provided by the
water flows downstream of Cahora Bassa dam? ? How are these goods defined and dependent
on the flows of the Zambezi River? ? What are the economic values of these goods? ? What is the trade-off between the dam
operating flows for environment and those for hydropower production?
Rese
arch
Que
stio
ns
1. Not to double count ecosystem services UK NEA (2010)
2. To assign a value to a flow regime rather than a specific flow or volume Korsgaard (2006)
Cha
lleng
es a
nd In
nova
tion
Six Scenarios
Value goods for different scenarios Analyze trade-offs
Korsgaard et al. (2008a, b) method to link economic value to flows
Calculated Service Suitability Curves
Calculate Service Provision Index
UK NEA (2010) ecosystem classification approach used for
Identification of Ecosystem Goods
Application of economic valuation
Met
hodo
logy
Identification of ecosystem goods
Ecos
yste
m p
roce
sses
/Int
erm
edia
te
serv
ices
Primary production Nutrient cycling Soil formation Water cycle
Fina
l eco
syst
em s
ervi
ces Water for subsistance
Commercial Fish/shrimp/crab Medicinal plants Commercial agriculture Chemical water quality Physical water control Ground water replenishmnet Invasive species regulation Erosion control Carbon trapping Biodiversity conservation wildlife services and goods Cultural /religious / historical actvities
Goo
d(s)
Drinking water Fish/shrimp catch Energy (hydropower) Subsistence crops & fishing commercial crops Recreational fisheries/ hunting Flood damage avoided Invasive species damage livestock Tourism navigation Carbon sequesteration timber Biodiversity existance value Mining
Identification of ecosystem goods
Goods: •Hydropower •Fisheries •Irrigated Agriculture •Wildlife Tourism (Marromeu complex) •Flood damage avoided
Goods Valuation method used
Information used Sources
Hydropower Adjusted market price
-Power generated/ yr -Sale price/yr -Costs
HCB annual reports (2008, 2010) Discussion
Fisheries Adjusted market price
-Catch rate -Current Market price
IIP, IDPPE (2007 fisheries survey), Mafuca (2007) Source data
Irrigated agriculture
Adjusted market price
-Hectare under cultivation -Average Yield/ha -Production cost
Sena sugars, Discussions with planters
Wildlife tourism (Marromeu Reserve)
Adjusted market price
Wildlife stock Hunting permits & tourism
Guveya and Sukume (2009)
Flood damage avoided
Cost avoided -Area flooded -Infrastructure, agricultural, housing asset damage
World Bank (2010)
Application of economic value
(Korsgaard et al. 2008)
Service Suitability curve
where: i = period identification SSi (q) = Service Suitability of period i; q = flow available for a period (m3/s); j = service/good identified; n = total number of periods; Wi = weightage of period i subject to the constraint The final economic value is
Service Provision Index
,
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Flow
s m3/
s
S1
S2
S 3
S 4
S 5
S 6
Baseline 2010
Scenarios
S1 = Pre-dam era flows S2 = post-dam average flows (1997-2011) S3 = December high flow of 6,200 m3/s S4 = January high flow 5,250 m3/s S5 = Jan and Feb high flows of 3,300 & 5,400 m3/s S6 = High flow in February of 8,250 m3/s
• The calculated values are temporally limited to the same year.
• Spatially, the benefits are calculated for only the lower Zambezi basin.
• The valuation is purely financial and does not take into account existence, option or bequest values.
• Future market dynamics are not taken into consideration in scenario calculations.
Ass
umpt
ions
Data
ana
lysis
Good Net value
(million USD)
% of total
Production per good
Average values /unit
Hydropower 154 52% 14,662 GWh 11
USD/MWh
Irrigated agriculture 53 18% 10,850 ha 4,890
USD/ha
Fisheries (Lower Zambezi Basin )
33 11% 23,339 tons 1,403
USD/ton
Fisheries (Cahora Bassa lake)
47 16% 24,017 tons 1,941
USD/ton
Wildlife tourism (Marromeu delta)
4.5 2% 11,000 km2 6,774
USD/ km2 Flood damage avoidance
4.5 2% - -
Total value 296
Actual Economic Value for year 2010
•
Service Suitability Curves Da
ta a
naly
sis
0
0.2
0.4
0.6
0.8
1
Suita
bilit
y
Flow ranges
SS curve for Hydropower (Normal year) Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Feb
Apr
Jun
Aug Oct
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 su
itabi
lity
flow ranges
SS curve for Agriculture Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
•
Service Suitability Curves Da
ta a
naly
sis
•
Service Suitability Curves Da
ta a
naly
sis
Dec
Feb Apr
Jun Aug
Oct
0
0.2
0.4
0.6
0.8
1 Su
itabl
ity
flow ranges
SS curves for fisheries
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
•
Service Suitability Curves Da
ta a
naly
sis
Dec
Feb
Apr Jun
Aug Oct
0
0.2
0.4
0.6
0.8
1
Suita
bilit
y
Flow ranges
SS curve for Flood damage avoidance Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Service Provision Index for the year 2010 Re
sults
• Hydropower: 1.0 • Fisheries: 0.38 • Irrigated agriculture: 0.77 • Flood damage avoided: 0.62 • Wildlife tourism: 0.40
The current flow regime maximises
hydropower generation only
Service Provision Index for the year 2010 Re
sults
• Hydropower
• Fisheries (shrimp)
-
50.00
100.00
150.00
200.00
250.00
300.00
350.00
2006 2007 2008 2009 2010
Econ
omic
Val
ue (m
illio
n M
ZN)
Max
Min
Actual
-
10.00
20.00
30.00
40.00
50.00
60.00
2008 2009 2010
Shrim
p va
lue
(*M
illio
n U
SD)
Max
Min
Actual
Sensitivity analysis
Calculated Economic Values based on scenarios Re
sults
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
Baseline (2010)
S1 S2 S3 S4 S5 S6
Mill
ion
USD
per
yea
r
Scenarios
Flood damage avoidance
Wildlife tourism
Fisheries (CB lake)
Fisheries (LZ)
Agriculture
Hydropower
• The total economic value for 2010 is 296 million of which hydropower is 52%.
• Service suitability curves have shown that: – hydropower and irrigated agriculture love
uniformity of flows – fisheries, wildlife tourism and flood damage
avoidance require peaks to be sustained • Scenario 5 (Jan & Feb high flows of 3,300 & 5,400 m3/s)
gives highest global benefits, with downstream users benefiting a lot (55 Million USD/yr) and hydropower losing less (-7 Million USD/yr)
• So trade-offs are, in theory at least, feasible.
Con
clus
ion
Challenges • Conceptual:
ecosystem goods vs. services
• Variation in values over the years
• Range of SPI values with large uncertainties
• The SPI method is limited, as damages occurring in one months are not carried over to the next month
Strengths • Utilizes the flow regime
rather than marginal value per volume of water
• Avoids double counting of ecosystem services
• Workable even in data scarce region
• Total economic value is likely to be higher, since some services were not included
Con
clus
ion
• Once the annual flooding events are implemented it is necessary to monitor how the ecosystem responds, in order to check and improve the current model.
• What if hydropower generation capacity (HCB left bank; Mpanda Nkuwa) would be increased significantly?
Futu
re c
onsid
erat
ions
…
Guveya, E., & Sukume, C. (2009). The economic value of the Zambezi Delta: WWF.
Korsgaard, L., Jonch-Clausen, T., Rosbjerg, D., & Schou, J. S. (2008). The Service Provision Index (SPI): Linking Environmental flows, Ecosystem Services and Economic Value. Water and Energy Abstracts, 18(1), 34-35.
Ronco, P., Fasolato, G., Nones, M., & Di Silvio, G. (2010). Morphological effects of damming on lower Zambezi River. Geomorphology, 115(1-2), 43-55.
World Bank. (2010). The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis (Vol. 1-4): The World Bank, Washington, D.C
Zambezi Atlas. (2011). Atlas for the Preparation for and Response to Disasters in the Zambezi River Basin- Mozambique: National Institute for Disaster Management (INGC), UEM Geography Department, and FEWS NET.
Refe
renc
es
Sens
itivi
ty te
st??
??
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
2008 2009 2010
Shrimp
high
low
Actual
Annex 1
0
50000000
100000000
150000000
200000000
250000000
300000000
350000000
400000000
450000000
2006 2007 2008 2009 2010
Pres
ent v
alue
(MZN
)
Hydro-power
Sens
itivi
ty
0
100
200
300
400
500
600
700
Max
Flood damage avoidance
Toursim
Fisheries (CB)
Fisheries (LZ)
Agrciulture
Hydropower
0
50
100
150
200
250
300
350
400
450
500
Min
Flood damage avoidance Toursim in Delta (Biodiversity) Fisheries (CB)
Fisheries (LZ)
Agrciulture
Hydropower
Annex 2 ( max-min values)