Agriculture, water, and ecosystems: avoiding the costs of going too far
A wide range of methods are available for valuing ecosystems beyond the use of direct market prices. ese include approaches that elicit preferences directly (such as contingent valuation methods) and those that use indirect methods to infer preferences from actions to purchase related services (for example, through production functions, dose-response relationships, travel costs, replacement costs, and mitigative expenditures). ese methods are summarized in box 6.13.
While economic tools may prove useful in striking tradeoffs, they are unlikely to be useful in all circumstances. e more sophisticated the method, the less useful it is likely to be in situations where data are not available or where political issues hold sway. Economic tools can assist in understanding only the economic tradeoffs, not the political tradeoffs or the role of complex social relationships such as the role of gender and culture.
In the last two decades the notion of paying for ecosystem services has begun to emerge (WWF 2006). Such projects typically involve local land and water managers (in- cluding farmers) and use financial initiatives to encourage management changes that in- crease ecosystem services. e idea behind the initiatives is that beneficiaries of the service should compensate those who “provide” the environmental services by conserving natural ecosystems. Some of the better known projects concern watershed restoration (decreased erosion, decreased nutrient runoff).
Environmental water flows. Environmental flows refer to the quantit , seasonalit , and quality of water considered to be sufficient for protecting the structure and function of an ecosystem and its dependent species and services, taking into account temporal differences in water requirements and spatial variability. e allocation of an environmental flow is defined by the long-term availability of water, including the extent of natural and anthropogenic temporal and spatial variability and identified ecosystem responses (Dyson, Bergkamp, and Scanlon 2003). Environmental flows are often established through environmental, social, and economic assessments (King, arme, and Sabet 2000; Dyson, Bergkamp, and Scanlon 2003). Determining how much water can be allocated to consumptive human uses without the loss of ecosystem services is becoming a more common component of efforts to maintain and rehabilitate rivers and wetlands, including estuaries and other coastal ecosystems.
To date, most developing countries with significant irrigation have paid relatively lit- tle attention to safeguarding flows for the environment (arme 2003), but this situation is expected to change rapidly in the coming decades. Water legislation in South Africa and the Mekong Agreement are examples of the recognition of environmental water require- ments in developing countries. More explicit bulk allocation of water to the environment may provide a major challenge to irrigators to manage with smaller and less dependable allocations for cropping. While the assessment of water availability, water use, and water stress at the global scale has been the subject of ongoing research, the water requirements of aquatic ecosystems have not been considered explicitly or estimated globally (Smakhtin, Revenga, and Döll 2004). It could be possible to establish an environmental allocation beyond which substantial degradation of ecosystem services and human well-being results (King, arme, and Sabet 2000). Defining this allocation entails also defining what con- stitutes a degraded ecosystem.
Tools have been developed to assist in making decisions for allocating water for both economic and environmental purposes