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Resource Management
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The Value of Water
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Environmental Costs and Ecosystem Services  

Attaching a value to water indicates a value for the ecosystems that help ensure maintenance of water supply.

Ecosystem Services

Ecosystem services are the benefits people obtain from ecosystems. These include provisioning services such as food, water, timber, and fibre; regulating services that affect climate, floods, disease, wastes, and water quality; cultural services that provide recreational, aesthetic, and spiritual benefits; and supporting services such as soil formation, photosynthesis, and nutrient cycling. The human species, while buffered against environmental changes by culture and technology, is fundamentally dependent on the flow of ecosystem services.

Source: Millennium Ecosystem Assessment 2005

The linkage between well-functioning aquatic and wetland ecosystems and healthy water resources is increasingly acknowledged. There is growing mutual understanding that the environment is a legitimate water user and that aquatic ecosystems are the basis of a healthy, sustainable water supply.

Negative environmental impacts of projects on ecosystems and their mitigation can be regarded as environmental costs.

Such costs and ecosystem services are regularly considered in environmental impact assessments (EIA) and strategic environmental assessments (SEA). Under both Angolan and Namibian law, such assessments are obligatory when appraising and planning infrastructure investments. Angolan EIA Regulations can be found in Decree 51/04 on Environmental Impact Assessment established under Article 16 of the Environmental Framework Law (Law 5/98)), the Namibian EIA Regulations are based on the Environmental Assessment Policy (1995) established under the Environmental Management Act (2007).

Water fall on Kunene River downstream Gove dam.
Source: Kellner 2010
( click to enlarge )

Environmental Flows

All international water agencies have acknowledged that water is an economic good, to some degree. The next step is creating policies and legislation that allocate this economic good to the environment as environmental flows or ecological requirements (Lange and Hassan 2006).

A certain volume of water is needed to maintain any water resource — estuary, wetland, river, lake — in a desired condition. Water must therefore be allocated from the available stream-flow to meet environmental flow requirements, and to provide dilution where water quality has become a problem. Water provides many values not traditionally assigned a monetary value, such as the value that a good or service has to society in general, from an environmental and social perspective. People are willing to pay for water quality but to date no formal market exists.

Environmental Accounting

Environmental accounting began in the 1970s and was a major step towards placing a value on natural resources previously taken for granted. The System of Integrated Environmental and Economic Accounts (SEEA) were created in 1993 through the cooperation of numerous international organisations, including the United Nations Statistical Commission for environmental accounting. The SEEA guidelines provide a united framework that standardises environmental accounting within and between countries. Because water accounting is not covered in detail in the SEEA handbook, the SEEAW (specific to water accounting) was created in 2006.

Although environmental flows and water quality are only beginning to be addressed through water management strategies in Southern Africa, the SEEA addresses these concepts. The SEEA identifies two ways in which environmental degradation can be valued: cost based, where the value reflects the cost of preventing negative impacts, and damage based, where the value reflects the economic benefits of maintaining environmental integrity. In the case of water, economic damages related to the degradation of water quality could relate to human health impacts and premature death and other issues, including increased in-plant water treatment in industry (Lange and Hassan 2006).




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