This document discusses economic evaluation methods for water resources and presents a case study on prioritizing water management problems in Nigeria. It summarizes the following: - It describes various economic evaluation methods like cost-benefit analysis and different valuation techniques to measure the total economic value of water resources. - It outlines a study that identified and prioritized water management challenges in North Central Nigeria through stakeholder consultations and a Rapid Impact Assessment Matrix approach. Inadequate funding and data for planning were among the top issues. - It also summarizes a contingent valuation survey that estimated the total economic value of restoring ecosystem services in an impaired river basin at $21/month per household on average.

2. ECONOMIC EVALUATION OF WATER

3. GROUP MEMBERS

4. ECONOMIC
EVALUATION AND
VALUATION
METHODS FOR
WATER RESOURCES
PRESENTED BY:

5. ECONOMIC EVALUATION
Process of systematic
identification, measurement and
valuation of the inputs and
outcomes of two alternative
activities, and the subsequent
comparative analysis of these.

6. FORMS OF ECONOMIC EVALUATION
COST BENEFIT ANALYSIS
COST EFFECTIVENESS ANALYSIS
COST UTILITY ANALYSIS
COST CONSEQUENCES ANALYSIS

7. ECONOMICS OF WATER RESOURCES
• Water being an ECONOMIC GOOD is continuously being
degraded and depleted.
• To prevent the excessive degradation and depletion of
environmental resources, it is necessary to establish
framework for decision-making – COST BENEFIT ANALYSIS

8. • analytical tool which is conducted
by aggregating the total costs and
benefits of a project or policy over
both space and time.
COST
BENEFIT
ANALYSIS
• concept in cost–benefit
analysis that refers to the value
derived by people from a natural
resource, a man-made heritage
resource etc.
Total
economic
value (TEV)

9. TOTAL ECONOMIC VALUE OF WATER

10. VALUATION METHODS FOR WATER
RESOURCES
Revealed Preference
Method (Indirect
Methods)
• Hedonic pricing
method
• Travel cost method
• Averting behavior
method
• Residual analysis
Stated Preference
Method (Direct
Method)
• Contingent
valuation method
• Choice experiment
method
Methods not strictly
based on economic
welfare
• Replacement cost
method
• Restoration method

12. PRIORITIZATION OF WATER
RESOURCES MANAGEMENT
PROBLEMS IN NORTH
CENTRAL NIGERIA USING
RAPID IMPACT ASSESSMENT
MATRIX (RIAM)

13. INTRODUCTION
• Nigeria is a developing country with 35% of the population living
below the poverty line.
• The economy relies much on agricultural activities.
• As Nigeria is the most populous country in Africa there is not enough
water supplies.
• With a population of well over 120 million people, less than 30% of
Nigerians have access to safe drinking water.

14. STUDY AREA
The north central
Nigeria consists of six
states, namely: Benue,
Kogi, Kwara, Nassarawa,
Niger, Plateau, and the
Federal Capital Territory
(FCT)

15. OBJECTIVES OF THE STUDY
This study aimed at reviewing and evaluating the status of
water resources management in the north central Nigeria
To identify the challenges and prioritize them to know
which requires the most urgent attention and intervention
using the Rapid Impact Assessment Matrix (RIAM).
This was done through consultation with stakeholders in
the sector with vast experiences and understanding of the
resources of the region.

16. MATERIALS AND METHODS

17. STAKEHOLDER GROUPS
(1) Federal Ministry of Water Resources
(2) State Ministries of Water Resources, Agriculture and Environment
(3) State Water Corporations
(4) Lower Niger River Basin Development Authority
(5) Higher institutions
(6) Water industries in the private sector.

18. A pilot study first carried out using informal
discussions with representatives from the
stakeholder groups.
Out of the 50 questionnaires that were
administered, 34 were completed and retrieved.

19. CATEGORIES OF ASSESSMENT CRITERIA
• 1) Group (A) criteria
• Criteria that are of importance to the condition and which can individually
change the score obtained.
• 2) Group (B) criteria
• Criteria that are of value to the situation but individually should not be
capable of changing the score obtained.
• (A1 x A2) = AT = (1)
• (B1+ B2+ B3) = BT (2)
• (AT x BT )=ES (3)
• AT is the result of multiplication of all (A) scores; BT is the result of
summation of all (B) scores; and ES is the assessment score for the
condition.

20. IMPACT INDICATORS
• The impact indicators were grouped into four components
• 1. Physical/chemical
• 2. Biological/ecological
• 3. Sociological/cultural
• 4. Economic/operation

21. DISCUSSION AND RESULTS

22. DISCUSSION

23. Continue…

24. RESULTS
• No. Water resources management problems −E −D −C −B −A N
• 1 Inadequate funds for further agric. Hydroelectric,
• Navigation and industrial development 14 3
• 2 Poor data collection and banking 13 4
• 3 Indiscriminate groundwater exploitation 11 6
• 4 Bad governance 11 6
• 5 Inadequate data for planning 11 6
• 6 Flood 11 5 1
• 7 Misappropriation of the available funds 10 6 1
• 8 Pollution 9 8
• 9 Contaminated sources of water 9 6 2
• 10 Lack of operational sustainability 8 9
• 11 Limited groundwater in some areas 7 10
• Total 114 69 4

25. CONCLUSION
The RIAM technique has been
successfully applied to the north
central water resources management.
It has made a key contribution to the
prioritization of water resources
management

26. The RIAM obtained result constitutes a
vital guide for decision makers in
articulating effective sustainable policy
and reforms in the management of the
region’s water resources.

27. Measuring the total economic value
of restoring ecosystem services in
an impaired river basin: results from
a contingent valuation survey

28. INTRODUCTION
The South Platte river ranks first in contamination by ammonia and
nitrates of 20 major rivers in the US and it ranks second among the 20
major rivers in contamination by phosphorous.

29. Specific ecosystems services
Dilution of
wastewater
Natural
purification of
water
Erosion
control
Habitat for
fish and
wildlife
Recreation.

30. Economic values of ecosystem services
Dilution of wastewater, erosion control and water
purification improves water quality which reduces
water treatment costs and increases the aesthetics
of water for visitors.
Ecosystem services are without prices, they do
contribute utility to individuals and therefore have
value. This value is monetized as the individual’s
net willingness to pay (WTP) or consumer surplus.

31. Contingent valuation method
• Uses a questionnaire or interview
to create a realistic but hypothetical
market which allows respondents
to indicate their WTP.
• The concern with this method
is the reliability and validity of
the responses.

32. Cont ….
• In-person survey of 200 residents of Denver and Fort collins.
• Individuals were asked to pay a higher water bill to reduce heavy
metal pollution in the South Platte river.
• The resulting mean monthly willingness to pay per household was
$21 per month.
• About half the value was recreation use, with the other half being
existence and bequest values.

33. Survey design
Definition of ecosystem services
Management actions
A ten-mile wide conservation easement along 45
miles of the South Platte river
Restoring native vegetation and eliminating
cropland and cattle grazing
Water diversions to agriculture were reduced from
their current 75 to 50% of the total flow

34. Ecosystem services being valued in survey
1. Dilution of wastewater
2. Natural purification of water
3. Erosion control
4 . Habitat for fish and wildlife

35. Mechanisms for restoring ecosystem services
• Means by which ecosystem services could be restored from their
current level are
1. Restoring vegetation buffer strips along streams, to increase
ecosystem services such as
• Erosion control,
• Water quality,
• Fish and wildlife habitat

36. 2. Leaving more water in the South
Platte River, additional instream flows
in the river can be obtained by:
•purchasing water rights from agricultural users.
•paying farmers to grow crops that use less
water..
•Convert cropland away from the river into
fenced pastureland.
•Changing land management: E.g.

38. Wording of WTP question:
• The purchase of water and 300 000 acres along 45 miles of the South Platte
river and restoring these areas in natural vegetation costs a lot of money.
• To fund these actions a South Platte river restoration fund has been
proposed.
• All citizens along the front range would be asked to pay an increased water
bill to:
• Purchase water from farmers to increase water for fish and wildlife.
• To manage the South Platte river as shown in increased ecosystem services

39. Conclusion
Mean WTP to increase five ecosystem services was $21 per
month in a higher water bill.
When the $21 is generalized to households, this is sufficient
to pay for the conservation easements on agricultural land
along the river and the leasing of water for instream flow.

40. The policy to increase ecosystem services
meets the economic efficiency criteria
that the gaining public could compensate
the farmers and ranchers for the
conservation easement and water