<ul><li>Green Water Credit Scheme as a Policy Tool for Managing Water for Sustainable Agriculture:  </li></ul><ul><li>An E...
Introduction <ul><li>High population density in Zambia-  similar human population size but a third of the land size of Zam...
Tree cutting Immediate products
Long term effects
Response? <ul><ul><ul><li>Policy options to challenge?  </li></ul></ul></ul><ul><ul><ul><ul><li>Regulation- “command and c...
Objective <ul><li>General   </li></ul><ul><ul><li>Provide information on cost of degradation of Shire water Basin to make ...
Procedure <ul><li>Consultative meetings & interviews with different stakeholders (utility, NGOs, etc) </li></ul><ul><li>Pr...
Table 1: Stakeholders consulted and overview of the effects of degradation of  .  the Water Basin on their operations in M...
Fig 1 :  Annual cost  (US$) of weeding and remedial actions incurred by electricity utility on power stations on Shire Riv...
Table 2: Cost of lost revenue (US$ per annum) in electricity power stations on Shire River, 2009 Name of power station Cap...
Willingness of consumers to co-finance GWC <ul><li>Degradation of Shire basin is of strategic economic importance: affects...
Summary & “Take home” message <ul><li>Clear consumer support and potential to mobilize local resources to support green wa...
<ul><li>Thank you </li></ul>
 
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Green water credit scheme as a management mechanism for sustainable agriculture: ex-ante assessment in Malawi Ajayi. O.C.; Akinnifesi, F.K.; Sileshi. G; Beedy. T; Ajayi. A.O; Mng’omba. S.; Nyoka. B.I., Senior Policy Economist, ICRAF, Malawi

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Green water credit scheme as a management mechanism for sustainable agriculture: ex-ante assessment in Malawi Ajayi. O.C.; Akinnifesi, F.K.; Sileshi. G; Beedy. T; Ajayi. A.O; Mng’omba. S.; Nyoka. B.I., Senior Policy Economist, ICRAF, Malawi

  1. 1. <ul><li>Green Water Credit Scheme as a Policy Tool for Managing Water for Sustainable Agriculture: </li></ul><ul><li>An E x-ante Assessment In Malawi </li></ul><ul><li>Ajayi OC, Akinnifesi FK, Sileshi G, Beedy T, Ajayi AO, </li></ul><ul><li>Mng’omba S, Nyoka. BI </li></ul><ul><li>Email: [email_address] </li></ul><ul><li>World Agroforestry Centre (ICRAF) </li></ul><ul><li>Southern African Regional Program, Lilongwe </li></ul><ul><li>Presented at the CTA Week </li></ul><ul><li>22 – 26 November, 2010, Johannesburg, South Africa </li></ul>
  2. 2. Introduction <ul><li>High population density in Zambia- similar human population size but a third of the land size of Zambia </li></ul><ul><li>Low per capita land avalability ► deforestation/land degradation & degradation of watersheds ► major constraint in rainfed agric </li></ul><ul><ul><ul><li>CC increases risks of unpredictability in water supplies in rain-fed farming, affects food security </li></ul></ul></ul>
  3. 3. Tree cutting Immediate products
  4. 4. Long term effects
  5. 5. Response? <ul><ul><ul><li>Policy options to challenge? </li></ul></ul></ul><ul><ul><ul><ul><li>Regulation- “command and control” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Moral persuasion- “sensitization” </li></ul></ul></ul></ul><ul><ul><ul><li>Payment for Ecosystem Services- “Green Water Credit” reward land users for good land mgt practices & environmental stewardship. </li></ul></ul></ul><ul><ul><ul><li>Shire watershed- Economically most important, >90% national electricity, 185 persons/km2 (139 nationally) NSO 2008 </li></ul></ul></ul><ul><ul><ul><li>Planning without facts? Cost of degradation of Shire Basin?, Who is affected? How? </li></ul></ul></ul>
  6. 6. Objective <ul><li>General </li></ul><ul><ul><li>Provide information on cost of degradation of Shire water Basin to make informed policy decisions on the prospects for GWC in Malawi </li></ul></ul><ul><li>Specific </li></ul><ul><ul><li>Estimate economic cost of degradation of Shire Basin to stakeholders </li></ul></ul><ul><ul><li>Assess willingness of public electricity consumers to co-finance green water credits </li></ul></ul><ul><ul><li>Evaluate opportunities and challenges to implement Green Water credit in Shire River Basin. </li></ul></ul>
  7. 7. Procedure <ul><li>Consultative meetings & interviews with different stakeholders (utility, NGOs, etc) </li></ul><ul><li>Primary data from the electricity company (ESCOM) to assess remedial actions and operational costs due to the siltation and degradation of River Basin </li></ul><ul><li>Stratified sample of 520 electricity consumers to estimate to estimate “Willingness To Pay” for co-financing GWC </li></ul>
  8. 8. Table 1: Stakeholders consulted and overview of the effects of degradation of . the Water Basin on their operations in Malawi, 2009 Stakeholder Implications of degradation of Shire River Electricity Supply Company of Malawi (ESCOM) <ul><li>Hydro power generation problem due to flow and silt load & weeds </li></ul><ul><li>High operational costs to maintain turbines due to siltation </li></ul><ul><li>Lost revenue resulting from “black outs” </li></ul>Blantyre Water Board (BWB) <ul><li>High cost of treating water </li></ul><ul><li>Lost revenue </li></ul><ul><li>Higher electricity costs for pumping water </li></ul>Private plantation & farm households <ul><li>Reduction of quantity of water for irrigation </li></ul><ul><li>Destruction of water pumping plants & irrigation structure due to floods </li></ul><ul><li>Reduction in soil fertility due to soil erosion </li></ul>Fishermen <ul><li>Destruction of artificial and natural fish habitats </li></ul><ul><li>Reduction of fish stock </li></ul>
  9. 9. Fig 1 : Annual cost (US$) of weeding and remedial actions incurred by electricity utility on power stations on Shire River
  10. 10. Table 2: Cost of lost revenue (US$ per annum) in electricity power stations on Shire River, 2009 Name of power station Capacity relative to Nkula station # of power outage (hours) Energy lost (MegaWatt) Lost Revenue (US $) Nkula 100% 8,316 107,874 770,523 Tedzani 25% 2,079 26,969 192,631 Kapichira 25% 2,079 26,969 192,631 Total lost revenue 12,474 161,811 1,155,785
  11. 11. Willingness of consumers to co-finance GWC <ul><li>Degradation of Shire basin is of strategic economic importance: affects key institutions & generates over 90% of total national electric power. </li></ul><ul><li>The willingness of electricity consumers to pay for GWC is high. Half of electricity consumers (54%) are willing to pay extra to ensure regular power supply. </li></ul><ul><li>The average amount they are willing to pay for co-financing GWC is MK 1229 (US$ 8.8), equivalent to 42% of an average monthly electricity bill </li></ul>
  12. 12. Summary & “Take home” message <ul><li>Clear consumer support and potential to mobilize local resources to support green water credit as a policy option to degradation of Shire Basin. </li></ul><ul><li>GWC as a scheme to ensure water for sustainable agriculture is feasible, subject to hydrological assessments, effective governance arrangements, and appropriate. </li></ul><ul><li>Similar assessments need be carried out to evaluate the cost of degradation of the river basin to other stakeholders (e.g. Water Boards). </li></ul>
  13. 13. <ul><li>Thank you </li></ul>

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