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Chapter 9: The economic costs of conservation response options for climate change
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Presenter Details:
Name: Anthony Letsoalo
Title: Mr
Email: [email protected]
Bio: Anthony is an agricultural economist who specializes in environmental and resource economics. He is currently employed
as a researcher by the CSIR. His interests include economy-wide models, economics of biodiversity, economics of land use
options and linkage between trade and environment.
Slide 1: The economic costs of conservation response options to climate change: the case of the Cape
Floristic Region
Duration: 00:00:22
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The economic costs of
conservation response options to
climate change: the case of the
Cape Floristic Region
Presented by
Anthony Letsoalo
CSIR Environmentek
Notes:
Slide 2: Outline
Duration: 00:00:55
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Outline










Aim and objectives of the economic analysis
Response options analyzed
Concept of cost-benefit analysis
Determinants of cost of PAN (Protected Area
Network)
Types of cost incurred in conservation
Attractiveness of incentive to private landowners
Types of incentives to private landowners
Cape Floristic Region as the study area
Results on the cost of expanded PAN
The benefits of expanded PAN
Notes:
This is a study undertaken to assess the real costs of planning options for conservation in the Western Cape. A brief outline of the contents of this talk are
as follows:
Aim and objectives of the economic analysis
The types of response options available
A quick revision of the concept of cost-benefit analysis
Determinants of cost of a PAN (Protected Area Network)
Types of cost incurred in conservation.
Attractiveness of incentive to private landowners (since it was determined that a large percentage of essential land for conservation was under private
title).
The types of incentives offered to landowners, and their responses to these incentives.
An introduction to the study area, which is the Cape Floristic Region in the Western Cape.
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The total costs associated with an expanded protected area network
The benefits of an expanded protected area network
Slide 3: Aim & objectives
Duration: 00:00:19
Aim & objectives
Aim
- To evaluate cost and benefits of a range of
adaptation options
Objectives
- To develop cost function for a range of adaptation
options
- To establish the benefits associated with different
options
Notes:
The aim of the study was toe evaluate the costs and benefits of a range of adaptation options and response to climate change in the CFR. Following on
from this, the objectives were to develop the cost function for a range of adaptation options, and to assess the benefits that are likely to accrue from each
of these different conservation options.
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Slide 4: Response options to climate change
Duration: 00:00:44
Response options to climate change





No response – loss of species might occur.
Land acquisition – for new reserve
Matrix management – conservation of private land.
Ex-situ conservation – preservation in gene/ seed
banks, botanical gardens, zoo.
Translocation – assisted dispersal
Notes:
The response options for adaptation to climate change include no response at all, in which case species may well be lost due to changing climatic
conditions. Another option is land acquisition for new reserves, although this is likely to be both expensive and politically challenging. An alternative to
purchase would be matrix management, with conservation occurring on privately-owned land. Failing that, ex-situ conservation of species in areas outside
of the wild (such as gene banking, botanical gardens and zoos) is a viable option for species preservation, but not ecosystem maintenance. Translocation
of species or assisted dispersal to areas of higher suitability after climate change might be some sort of middle ground between these options.
Slide 5: Total cost (TC) versus total economic value (TEV)
Duration: 00:00:34
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Total cost (TC) versus total economic
value (TEV)



Net cost of each option will be determined from
estimated direct costs and direct benefits of the
option.
Direct costs include cost of new land acquisition,
translocation and ex-situ conservation
Total economic value include both use and non-use
values of species resource
Notes:
A quick comparison of the net costs of options and their total economic value. The net cost of an option is determined from the estimated direct costs and
the direct benefits of the option. These direct costs include cost of new land acquisition, translocation, and all of the various ex-situ conservation options.
Total economic value, on the other hand, includes both use and non-use values of species resources (ideally including such intangibles as ecosystem
operation and intrinsic species value – which are inevitably almost impossible to ascertain or price).
Slide 6: The components of total economic value
Duration: 00:01:04
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Notes:
The total economic value can therefore be divided into use and non-use options. The use values are obviously more easily assessed, particularly the
direct use values, for which a market value can be provided from those industries already in the area. Indirect use values are more challenging,
incorporating biological support to other industries, and the physical benefits of intact ecosystems (or, conversely, the economic costs of fixing damaged
ecosystems). The non-use values are much more challenging to assess, since they incorporate many intangible values, such as the bequest value (the
value of preserving resources for the use of future generations), and the existence value (the value from knowledge that the resource will continue to exist
– especially for threatened and endangered species). Other non-use values are the option value (preservation for future direct and indirect use), and
quasi-option values (such as the expected new information to be obtained from an untapped system). Clearly, the assessment of the total economic value
of an ecosystem is challenging in the extreme.
Slide 7: Determinants of cost of PAN
Duration: 00:00:56
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Determinants of cost of PAN
1. Size
- An increase in PAN results in lower cost
2. Vegetation type and dominant habitat class
- Open biomes are expensive to manage because of
accessibility.
3. Extent of land transformation
- Higher transformation on the land results in higher
restoration cost, thereby making land expensive to
acquire.
4. Surrounding land uses
- Involvement of the surrounding communities in
conservation is important (CBNRM)
Notes:
Many factors determine the cost of setting up and running protected area networks. First amongst these is size – whilst larger protected areas are
obviously more expensive, the unit cost tends to drop because of the easier functioning of the whole. The vegetation type and dominant habitat class are
important factors as well, since open biomes are more expensive to manage. This is on account of their accessibility – the more people that impact on a
biomes, the more expense involved in maintaining it. The extent of land transformation obviously has associated costs, since highly transformed land
typically requires high restoration costs, and even though the land may be cheap to purchase, the total acquisition costs are driven up. Finally, the land
use in the surrounding area is important, because of edge effects on the PAN. Thus, the engagement of neighboring communities in the conservation
process through community based natural resource management is essential.
Slide 8: Study Area
Duration: 00:00:46
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Study Area
Notes:
The area considered for this study was the Cape Floristic Region in the Western Cape. A biodiversity priority area is defined as an area with high species
richness which is suffering from loss of biodiversity due to land use change and development initiatives. Of all the biodiversity priority areas shown, the
CFR has the highest endemicity, and at least in terms of the lowland renosterveld, the highest rate of habitat loss in South Africa. For the purposes of this
study, the entire biodiversity of the biome was not considered, but rather 316 species of Proteaceae were used as indicator species, particularly since the
effects of climate change on these species have been mapped by Greg Hughes of the South African National Biodiversity Institute.
Slide 9: Habitat classes and associated management requirements
Duration: 00:01:04
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Habitat classes and associated management
requirements
Management requirements
Habitat class
Primary BHU
Represented
Control of
invasives
Wildfire
control
Prescribed
burning
Ecological
monitoring
requirements
Coastal
Dune pioneer, Fynbos/Thicket mosaic,
Strandveld
High
High
Medium
High
Lowland
Sandplain Fynbos, Limestone Fynbos,
Grassy Fynbos, Fynbos/Renosterveld
mosaic, Coastal Renosterveld, Inland
Renosterveld
High
Medium
Medium
Medium
Forest and
thicket
Afromontante Forest, Indian Ocean
Forest, Mesic Succulent Thicket
Medium
Medium
Medium
Medium
Wet Mountain
Fynbos
Mountain complex
Medium
Medium
Medium
Medium
Dry Mountain
Fynbos
Inland Renosterveld, Mountain Complex
Low
Low
Low
Low
Karoo
Vygieveld, Broken Veld, Xeric Succulent
Thicket
Low
Low
Low
Low
Notes:
The management costs of an area tend to vary, depending largely on the vegetation type, but also on several factors associated with both climate and
species richness. Coastal habitats such as dune pioneer vegetation tend to have a high invasive potential, and are highly susceptible to wildfires, driving
management cost up. Prescribed burning is usually necessary, although the costs associated with this are only moderate, but the fine nature of the
vegetation, and the difficulty of access to many parts mean that ecological monitoring costs are high. Lowland vegetation types such as the lowland fynbos
and renosterveld have only moderate fire control and ecological monitoring costs, but are still highly susceptible to invasives, which is typically expensive
to control. The forest and thicket and wet mountain fynbos biomes are typically moderate in terms of management costs, since they are less impacted by
human practices, and both dry mountain fynbos and karoo have very low management costs. In the case of the Karoo, this is largely because of the
sparse, slow-growing nature of the vegetation.
Slide 10: Methods
Duration: 00:00:34
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Methods




Literature review of national and international
studies on adaptation costs
Interview experts in ex-situ conservation
Apply quantity times price approach to derive total
cost
Identify the benefits – avoided ecological damage
Notes:
The assessment of costs was carried out initially through a literature review of the national and international studies on adaptation costs. This was followed
by interviews with experts on ex-situ conservation in order to assess the costs and challenges of this method of preservation. The total costs were derived
through a simple process of multiplying the costs of a process with the quantity required for a given procedure. The benefits of these processes were also
assessed, including the avoided ecological damage (ie: the saving made by avoiding having to repair or work around a damaged ecosystem).
Slide 11: Types of cost
Duration: 00:01:04
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Types of cost
1.
Land acquisition
Involves buying of land
Cost of land differs according to land use
2. Operating cost
include salaries, field allowances, equipment, transport and
maintenance costs and includes provisions for senior field
and research staff (Martin, 2003)
3. Capital requirement
This applies only to new-reserves
Include infrastructure, fencing, etc.
4. Cost of ex-situ conservation
Cost of gene banking
Cost of seed banking

NB: the costs depend on the response option chosen.
Notes:
A quick assessment of the types of cost that have to be considered when looking at the total economic value of conservation options.
The first type of cost is that of land acquisition. This involves the buying of land, and of course, the cost of the land differs according to the use to which it
has historically and is currently being put. Operating costs for a protected area network are highly variable, and include salaries, field allowances,
equipment, transport and maintenance costs. It also includes provisions for senior field staff and research staff, who necessarily command higher salaries
or consultancy fees. The capital requirements apply only to new reserves, and include all manner of infrastructure, as well as the costs of rehabilitation of
newly-purchased land. Finally, the costs of ex-situ conservation include the costs of both gene banking and seed banking. No assessment of botanical
gardens or zoos were made, because it is unlikely that these are options that can readily be embarked upon at this late date, and established institutions
do not have much capacity to expand.
Slide 12: Once-off costs of acquiring different habitat types
Duration: 00:00:59
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Notes:
The purchase costs of coastal areas are far and away the highest of all land types, due to the attractiveness of the area for human settlement (most
particularly holiday homes). The average cost is over US$ 900 per hectare, which is more than double the purchase costs of the lowland areas that are
typically considered prime territory for farming. In comparison, the forest and wet mountain fynbos are relatively cheap to buy, less than 200 and less than
100 US$ per hectare respectively, and both the Karoo and wet mountain fynbos are less than US$50 per hectare. It is important to remember both coastal
and lowland areas also have a high alien invasion potential, which means that management and rehabilitation costs fro these areas are considerably
higher than for many others – but at the same time, it is these areas that are largely under the greatest threat of complete transformation.
Slide 13: Operating cost per various park sizes
Duration: 00:00:42
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Notes:
This graph shows the relationship between the operating costs per km2(X-axis) and the park size. From the graph it can be seen that smaller areas
clearly have a higher operating cost compared with larger areas. This is due to economies of scale, which carry over into many facets of park
management, Furthermore, areas within larger parks are often more inaccessible, which means that there is less human impact and therefore less
management required for these areas. Ecological monitoring is essential in smaller parks, since change can occur very rapidly over a small area, whilst
the concomitant costs are greatly reduced for larger parks. Thus there is a need to identify optimal park size.
Slide 14: Capital requirement per park size
Duration: 00:00:43
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Notes:
In a similar manner, the capital requirements are much higher for smaller parks, (4 1km2 parks will require 16km of fencing, whilst 1 4km2 park will only
require 8km of fencing). This economy of scale carries over into many of the capital requirements, since such management aspects as environmental
monitoring (which requires a large amount of equipment) are also reduced. Once again, some decision on the optimal size for a reserve must be decided
on, based on the capital costs.
Slide 15: Cost of gene/ seed banking
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Cost of gene/ seed banking
Seed Banking costs
Average recording & collecting costs (per species)
Cost to re-establish plants in plantation (per plant)
R1 230
R 10
The Cost of Gene Banking
Consumable cost per DNA extraction (per species)
Genetic fingerprinting for plants (per fingerprint)
Start-up Cost
Ultracentrifuge
-80°C freezer
DNA bank “manager”
R 150
R 200
R572 000
R422 000
R 80 000
R 70 000
Notes:
Gene and seed banking are possibly less expensive in the long run, but should only be resorted to as a final option, since the biodiversity conserved no
longer interacts with the environment, and the entire ecosystem may collapse. The costs for this process are as follows:
The average cost of recording and collecting a species for seed banking are approximately R1230, with an associated cost of R10 per seedling for those
species re-established in the wilderness or plantations. Gene banking is considerably cheaper, with a consumable cost of R150 per species, but the
genetic fingerprinting process is somewhat more expensive, at R200 per fingerprint. However, the start-up costs of genetic fingerprinting are relatively
high, with an ultracentrifuge weighing in at R422 000, a -80°C freezer costing R80 000, and a DNA bank manager costing on average R70 000. This
means that gene banking must be seen as essential before it is embarked upon, and requires very long term funding.
Slide 16: Providing incentives to private landowners
Duration: 00:00:54
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Providing incentives to private landowners
Statement from questionnaire
Agree Unsure Disagree
Offering landowners incentives is a good idea
92.5
2.5
87.5
5
57.5
7.5
5
for promoting conservation on private land.
Protection of plants/animals outside reserves
7.5
should be the responsibility of private
landowners.
CNC or another government organisation
35
should bear the costs for the conservation
of renosterveld on the property.
Notes:
One possible alternative to buying land would be to persuade private landowners to conserve biodiversity on their own land. This could be achieved
through offering landowners incentives to do so, and an initial study to assess the responses of landowners to this suggestion met with a good response,
with 92.5% of the landowners agreeing that incentives might persuade them to engage in conservation. Furthermore, 87% of them thought that
conservation of plants and animals outside the bounds of reserves should be the responsibility of private landowners, although nearly 8% disagreed with
this. Interestingly, though, whilst they thought they should be responsible for conservation, more than half of the landowners also thought that some branch
of governance should bear the costs of conserving renosterveld fragments on their land. This issue was more divided than most, however, with fully 35%
saying the costs should not be borne by government.
Slide 17: Types of incentives
Duration: 00:01:01
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Types of incentives
Incentive
Percentage of
respondents
1. Assistance with fencing and land management
2. Assistance with alien vegetation clearing
3. Rates relief for land conserved
4. Grants or subsidies for conservation
5. Tax deductions
6. Access to scientific advice
7. Tourism incentives
8. Law enforcement
9. Access to farm planning and management support
10. Assistance with fire management
11. Free access to all WCNCB parks and reserves
12. Discounts for accommodation at WCNCB resorts
13. Advice on legal compliance procedure
14. Public/community recognition
72.5
67.5
67.5
65
47.5
45
40
32.5
32.5
30
27.5
27.5
17.5
15
Frequency
29
27
27
26
19
18
16
13
13
12
11
11
7
6
Notes:
This study then assessed what manner of incentives people thought would best persuade landowners to engage in conservation. Top rated amongst the
options were monetary recompense, in the form of assistance with fencing and land management, assistance with alien vegetation clearing (which
legislation considers the onus of the landowner), and rates relief for land conserved. Grants or subsidies for conservation followed shortly after these. The
least popular options included free access to WCNCB parks and discounts at their resorts, as well as advice on the procedure for legal compliance.
Community recognition was rated lowest of all options. The remaining options all weighed in at less than 50% popularity, and could be considered should
the more popular options not be feasible.
Slide 18: Land required in extended PAN
Duration: 00:01:19
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Land required in extended PAN
Description
Area(ha)
% of total
area required
Required to protect all proteas threatened by climate change
430 364
100
Required area already protected in Type 2 reserves
Remaining area required
132 578
297 785
30.81
69.19
Area required that is already protected in conservancies
Remaining area required
44 651
253 135
14.99
58.82
Required area already within the Kogelberg Biosphere Core
Remaining area required
342
252 791
00.08
58.74
Required area protected within biosphere reserve buffer zones
Remaining area required
OF THIS
Area still to be protected that falls within state-owned land
Area still to be protected that falls within private land
5 152
247 639
01.20
57.54
6 182
241 457
02.50
97.50
Notes:
An assessment of the amount of land which would be required to adequately protect all proteas threatened by climate change showed a total area of more
than 430 000 hectares. However, of this land, nearly 132 600 is already in type 2 formal reserves, leaving a shortfall of almost 300 000 hectares. 44 561
hectares of this is already conserved within conservancies, and a further 342 hectares in the core of the Kogelberg Biosphere reserve, leaving 252 000
hectares still required. The biosphere reserve is typified by a buffer area in which minimal impact activities are engaged, including conservation, so another
5152 ha is conserved in this area. Thus, the final area required is 247 639 ha. The state owns just over 6 000 ha of this, and could feasibly grant it as
conservation areas. However, 241 500ha of the required total (just over half) falls within the bounds of privately-owned land. Clearly, this means that
climate change protection for the proteas must necessarily engage with landowners in some form, and on a large scale.
Slide 19: Total costs of expanding protected area network
Duration: 00:01:44
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Total costs of expanding protected area
network
Costs per ha
New reserve system
Land acqusition
Capital cost
Operating cost
Alien species removal
Matrix management
Establing contractual reserves
Annual monitoring
Alien species removal
No of hectares
6,182
6,182
6,182
6,182
Total cost (US$)
10,880,076
655,228
140,386
10,084,461
241,457
241,457
394,901,272
240,000
781,081
393,880,191
10,599
2,271
1,631
3.23
1,631
Costs per species
No of species
Gene banking
Start-up cost
Consumable cost per DNA
extraction per species
Genetic fingerprinting for plants per
fingerprint
Seed banking
Average recording & collection
costs per species
Cost to re-establish plants in a
plantation/ botanical garden costs
per plant
Total cost
Total cost (US$)
95,282
93,228
24
36
880
33
36
1,173
7,276
200.47
36
7,217
1.63
36
59
405,883,905
Notes:
The total costs of expanding the protected area network are considerable. The basics for the protected area network would be a new reserve system
based on the 6182 hectares of state-owned land, which has in principle agreed to donate the land for free. Capital costs and operating costs for this land
would be relatively low, but clearing aliens off the land is likely to be an expensive and time-consuming affair, weighing in at over 10 million US$. The
reserve would then be connected by a matrix of contractual reserves on private land, allowing for gene flow, and movement corridors for the species under
consideration. This area is by far the bulk of the expanded protected area network, and establishment of contractual reserves is estimated to cost as much
as 240 000 dollars, with another 780 000 dollars set aside for annual monitoring. However, once again the alien control and removal costs are likely to be
the bulk of the damage, weighing in at a snip under 394 million US$! Furthermore, the conservation policy needs to take into account those species which
are predicted to go extinct, and therefore can only be preserved through gene and seed banking. The total costs for this process (there are no initial capital
requirements because SANBI already has a gene bank in operation) are approximately 95 000 dollars – a fraction of the cost of setting up and running the
reserve and conservation matrix. In total, then, this theoretical process would cost nearly 406 million dollars, which is considerably more than the Western
Cape is likely to assign to a conservation budget in the near future.
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Slide 20: Benefits associated with different adaptation options
Duration: 00:00:57
Benefits associated with different adaptation
options
Proteaceae to be
conserved
Number of
species
No hopers
36
Persisters
181
Partial dispersers
81
Obligate dispersers 18
Method
Gene/seed banks
Will adapt to climate change
New PA and matrix management
??
Source: Greg Hughes, SANBI
Notes:
So, what are the benefits of the different conservation options presented? Assuming the proteas are a suitable indicator species, we can expect to see
extinction of approximately 10% of the species despite all conservation efforts, and gene or seed banking is the only viable option for these species. 181 of
the proteas are likely to adapt to climate change, or will manage to survive in situ despite changing climatic conditions. For the 81 partial dispersers, which
need to migrate to deal with climate change, the expanded protection area and matrix is necessary for survival. As for the 18 obligate dispersers, it is
unclear what adaptation options they have. They are likely to survive by moving to more suitable areas, but it is unclear to what extent their movement will
be impeded by the current levels of anthropogenic transformation of the land.
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Slide 21: Test yourself
Duration: 00:00:05
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Check your understanding of
Chapter 9
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Notes:
Slide 22: Links to other chapters
Duration: 00:00:05
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Links to other chapters
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter
1
2
3
4
5
6
7
The evidence for anthropogenic climate change
Global Climate Models
Climate change scenarios for Africa
Biodiversity response to past climates
Adaptations of biodiversity to climate change
Approaches to niche-based modelling
Ecosystem change under climate change
Chapter 8 Implications for strategic conservation planning
Chapter 9 Economic costs of conservation responses
I hope that you enjoyed this course on climate
change and conservation planning. If you have any
queries or suggestions, please email James Reeler.
Notes:
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