Value of Biodiversity in Cape Town


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Value of Biodiversity in Cape Town

  1. 1. THE VALUE OF BIODIVERSITY IN THE CITY OF CAPE TOWN WHY INVESTING IN NATURAL ASSETS MAKES SENSE presented at the Cape Town launch of the The Economics of Ecosystems and Biodiversity (TEEB) D2 Report, SANBI Kirstenbosch, 9 Sep 2010 presented by Martin de Wit as based on
  2. 2. Overview presentation • Biodiversity and ecosystems goods and services (EGS) • Economic value of EGS in City of Cape Town • Business case for investment and economic development Based on study done by City of Cape Town: De Wit, M.P., Van Zyl, H., Crookes, D.J., Blignaut, J.N., Jayiya, T., Goiset, V. & Mahumani, B.K. 2009. Investing in Natural Assets. A Business Case for the Environment in the City of Cape Town. Report prepared for the City of Cape Town.
  3. 3. Biodiversity, ecosystems, wellbeing Biologically Delivering more Additional diverse systems More resilient and/or better contribution to are more functioning quality goods and human well-being productive services Increasingly, ecosystems are seen as capital assets, with the potential to generate a stream of vital life-support services meriting careful evaluation and investment (Turner & Daily 2008)
  4. 4. Prioritised ecosystem services for Cape Town Higher High Medium Lower Natural hazard regulation Water purification and Climate regulation – local Climate regulation global waste treatment, (air quality) assimilation Recreation and Tourism Space for biota Small scale urban farming Fresh water provision Aesthetic values and sense Water regulation Building materials of place provision Fish and marine resources Provision of inspirational beauty Natural hazard regulation (buffering function for flooding, fires, sea Educational users level rise/ coastal surge) Cultural and artistic practices Provision of natural characteristics that are conducive to tourism Religious practices and recreation Erosion regulation The improvement of water quality and the assimilation of waste - Disease regulation ecosystems help filter and decompose organic wastes Harvesting Materials for craft and Provision of space for globally important biota, and fashion Use in productions, The aesthetics and sense of place provided by the natural environment advertising and publications Based on Participatory Rapid Assessment with line function managers and senior staff 4 Criteria: Beneficiaries, Development Objectives, Environmental mandate, Socio-ecological Risks
  5. 5. Valuable flows Table 1: The value of prioritised ecosystem services to the City of Cape Town: 2008 (A partial analysis) (!!!" '!!!" &!!!" !"#$%%$&'" %!!!" $!!!" #!!!" !" B,+"1,C"9:3"."1234" )*+,-"."1234" 9:;6:,<*="."1234" >2-8"?=@57+6A"."1234" D+4:6"."1234" )*56278"."1234" )*+,-"."/*0" B,+"1,C"9:3"."/*0" >2-8"?=@57+6A"."/*0" )*56278"."/*0" 9:;6:,<*="."/*0" D+4:6"."/*0" !"#$%&'()(*+,( -+.$+/0"1()(*+,( 2%3'(41,#&5$6()*+,7( 8/5(9/:(-+;()(*+,( <5=+$()(*+,(
  6. 6. Nature’s Value in Tourism and Recreation Green open spaces: R270 – R326 m/a Tourism: R965 m - R2.95 bn/a Nature Reserves: R 68 – R83 m/a Beaches: R70 – R85 m/a These values are an estimation of nature’s share in the production and consumption of ecosystem goods and services.
  7. 7. Natural Hazards Regulation Natural Hazards Reduced Fires Consequences Flooding Damages Storm surge & Management costs Sea-level rise People at risk Ecosystems: natural barriers and buffers against natural hazards. • Dune cordons and kelp beds reduce storm surges impact on land. • Natural pervious ground cover absorb rainfall, impervious ground cover increases water runoff and flood risk. Lack of management: enhanced natural hazards risk and potential damages. • Invasive alien species enhance fire risk, frequency, intensity, soil’s vulnerability to erosion → enhance potential damages, fire fighting costs, and clean up costs. Nature’s services in hazard regulation: R5m - R60m/a
  8. 8. Sea-Level Rise and Storm Surge: Investing in the coast line The increased risks of storm surges and their associated costs in Cape Town have been assessed recently in terms of: • Loss of real estate value • Damage to infrastructure • Foregone tourism revenue Natural solutions: natural parts of the coastline which act as buffers are not lost to development Increase buffering: creating kelp beds, rockier beaches and sand dunes that will increase the absorption capacity of the coastline.
  9. 9. Flooding: Investing in rivers and catchments Table 2: Impacts of the July 2008 floods in Cape Town Informal settlements affected 70 Damaged structures 7500 People directly affected 30 000 People housed at emergency shelters in community halls 3000 People displaced in safety zones 2480 Number of meals served twice a day 22 000 Number of blankets distributed 13 000 Source: City of Cape Town, media release No 330/2008, 10 July 2008. Storm water runs off of impervious surfaces and is not absorbed; runoff volume typically increases: - twofold as the catchments’ imperviousness increases to 10–20%, - threefold with an impervious surface cover of 35–40%, and - more than fivefold with an impervious surface cover of 75–100% when compared to catchments with natural vegetation cover.
  10. 10. Fires: Investing in alien control R30 million to R40 million in damages attributable to the March 2009 fires in Somerset West (R25 to R30 million in damages for Lourensford wine estate and R5 million to R10 million for Vergelegen wine estate In January 2000, two wildfires burnt 8 000 ha on the Cape Peninsula resulting in insurance claims of approximately $5.7 million or R73 million Invasive Alien Plants lead to higher damage costs, higher firefighting costs and avoidable clean-up costs.
  11. 11. Water Purification and Waste Assimilation: Investing in rivers and wetlands Within assimilative capacities Wetlands • processing some of the grey and Water waste water outfalls purification • creation of recreational and economic opportunities function • contribution to a healthy environment for communities. Services provided by wetlands save cities significant amounts of infrastructural costs if the natural ecosystem wasn’t present or became inefficient. Zandvlei: • Replacement cost of a treatment plant: R180 million estimated. • Replacement cost of a flood storage capacity: R24 million estimated • Costs of constructing an artificial wetland. Illustrates the magnitude of the “free” services provided.
  12. 12. Space for Biota: Investing in biodiversity Biodiversity needs to be recognised and valued as a critical ‘umbrella’ service without which most other valuable ecosystems services would be diminished or may even become unavailable. Cape Floral Kingdom 9000 plant species 70% endemic 2002 - 2006: International funding = R225 million 2008 - 2009: Environmental Education Programs = 23 781 learners from 500 schools.
  13. 13. Film making: Investing in scenery and aesthetics Table 3: Number of productions and expenditure in the Cape Town and Western Cape film industry (2005/2006) Average expenditure Total Number of per production (Rm expenditure productions 2006) (Rm 2006) Long form (features) 30 37.2 1 115.6 Local Commercials 142 0.9 162.5 Service Commercials 400 1.8 631.8 International Commercials 58 2.6 77.9 Stills 2 100 0.3 659.8 Provincial Total 2 730 2 647.6 Cape Town Total 2 027.0 Source: Standish & Boting (2007) Film and advertising total values associated with natural assets of between R133 million and R398 million pa
  14. 14. 3. MAKING A BUSINESS CASE Insights into the level of environmental expenditures in relation to the benefits received from the natural environment. Net present value of combined natural assets: Indicator 1 → R43 billion to R82 billion. Ratio of environmental expenditure to the value generated EGS → R1 spent by municipality on natural assets ≈ R8.30 (range Indicator 2 R4.50 - R13.50) of ecosystem goods and services (EGS) generated compared to → R1 spent by municipality overall ≈ R 7.30 added value generated in local economy Leverage of municipal expenditure on economic value of EGS > Between 1.2 and 2 times Leverage of municipal expenditure on the broader City economy.
  15. 15. CONCLUSION Investing into underlying natural assets can leverage relatively high economic value in the broader City economy (1.2 - 2 times higher than overall municipal expenditure). Investing and maintaining the City’s natural assets or ‘ecological infrastructure’ yields highly valuable services which provide the backbone for value addition in the City’s economy. It is conservatively estimated that the highest priority natural assets in the City yield a flow of services valued at R4 billion per annum, within a range of between R2 billion and R6 billion per annum. As an entity focused on service provision and as an enabler of economic growth and development, the municipality has the mandate and opportunity to invest adequately in natural assets to maintain a healthy flow of services to the benefit of people living in and visiting Cape Town.
  16. 16. Nature provides a free lunch, but only if we control our appetites. William Ruckelshaus, Business Week, 18 June 1990