Title: Capacity Building in Analytical Tools for Estimating and Comparing Costs and Benefits of Adaptation Projects in the Berg River Basin, South Africa
1Capacity Building in Analytical Tools for
Estimating and Comparing Costs and Benefits of
Adaptation Projects in the Berg River Basin,
South Africa
Group AF-47 Daan Louw, Molly Hellmuth, Mac
Callaway, Jabavu Nkomo, Debbie Sparks
AIACC African WorkshopDakar, Senegal, March
2004
ERC Energy Research Centre
2Participating Organisations
- Energy Research Centre, University of Cape Town,
South Africa - Department of Water Resources, Banjul, The Gambia
- UNEP- Risø Centre on Energy, Climate and
Sustainable Development, Denmark
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
3The Project Areas
The Gambia
The Berg River Basin, South Africa
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
4(No Transcript)
5The Berg River Basin, South AfricaThe Context
- The Berg River basin provides water to both the
Cape Town urban center and a variety of
irrigation crops. - In 1999, the managed demand on the dams of the
Western Cape System was 457 MCMs/a compared to
the yield of about 442 MCMs - Winter rainfall region April September, need
for storage capacity, farm dams and other large - The decision to build the Berg River dam is
controversial is it needed? - The impact of climate change was not considered
in the dam feasibility assessment - The total (holistic) economic impact of building
new dams not considered - The impact of the new National Water Act (1998)
a major push to create water markets in South
Africa (there is provision for water trading, a
reserve)
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
6The Berg River Basin, South AfricaObjectives
- Estimate the potential impacts of alternative
climate change scenarios on water supply and
demand in the basin due to changes in runoff,
evapotranspiration and surface evaporation, - Translate these physical impacts into monetary
losses (or gains) for different groups of farmers
and urban water users, - Estimate and compare the benefits costs of the
storage and water market options (adaptations)
of avoiding climate change damages under
different climate scenarios - Estimate the risk of making ex-ante planning
decisions with different than expected ex-post
climate outcomes
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
7The Berg River Basin, South Africa Schematic
ADAPTATION OPTIONS
MANAGEMENT/INVESTMENT DECISIONS
COSTS/BENEFITS
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
8The Berg River Basin, South AfricaSchematic
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
9Climate
- HAD A2 GCM Reference (1961 1990), Near
(2010-2039) and Distant (2070-2099) future time
periods
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
10The Berg River Basin, South AfricaSchematic
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
11Preliminary Impact Results
- This CC scenario results in a decrease in runoff
over the basin - An increase in Potential EvapoTranspiration
losses - Higher crop-water use Higher Evaporation
Potential from Storage
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
12The Berg River Basin, South AfricaSchematic,
cont
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
13The Berg River Basin, South AfricaEconomic Model
- Upper Berg River Spatial Equilibrium Model is an
optimisation model that will simulate - Competition for water between urban and
agricultural water use over space and time - Ex-ante investment in additional reservoir
capacity - Ex-post reservoir operation to meet urban,
agricultural and environmental demands for water - Objective function is based on economic
efficiency, but model can also simulate
alternative allocation systems.
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
14The Berg River Basin, South AfricaAdaptation
Options
- Consider specifically
- Markets develop a system of water rights
- More storage (at an economically optimal level)
collective autonomous adaptation by farmers
and/or government - Marginal costs of environmental reserve flow
- Scenarios
- Current climate
- Climate Change Scenarios (downscaled GCM, what
if) - Partial Adjustment (reservoir capacity and
institutions fixed, farm and reservoir management
variable) - Full adjustment (reservoir capacity and
institutions are also variable, partially and in
combination)
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
15The Berg River Basin, South Africa Schematic
ADAPTATION OPTIONS
MANAGEMENT/INVESTMENT DECISIONS
COSTS/BENEFITS
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
16The Berg River Basin, South AfricaEvaluating
Costs and Benefits
- COSTS (over 30 year time period)
- Changes in farm production costs
- Changes in investment costs for new capacity
- Changes in administrative costs associated with
water market transfers - BENEFITS
- Changes in willingness to pay for water by
farmers and urban users (PV) efficiency
increases - Benefit of delay in new storage
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
17Conclusions
- The methodology allows us to
- Estimate climate change damage without the
alternatives (additional storage capacity, water
markets, both) and - Estimate benefits and costs associated with
reducing climate change damages for each
alternative for each and multiple climate change
scenarios - Determine the optimal storage capacity for each
and multiple climate change scenarios - Estimate the cost of making ex-ante decisions
about reservoir capacity, if the climate change
scenario turns out to be wrong ex-post - Minimizing the cost of making these mistakes
- Preliminary impacts results indicate an expected
reduction in runoff, which will exacerbate the
existing water scarcity
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004
18End
- Thank you, for more information contact
- Jabavu_at_energetic.uct.ac.za
- Debbie_at_energetic.uct.ac.za
- Molly.hellmuth_at_risoe.dk
- Mac.callaway_at_risoe.dk
- Daan_at_dfpt.co.za
- Or, please visit
- http//www.start.org/project_pages/aiacc.html
ERC Energy Research Centre
AIACC African WorkshopDakar, Senegal, March 2004