ICLEI/LAB workshop: “Ecosystem Services Mapping in the City of Cape
Town: informing Investment in Ecological Infrastructure”, Rondevlei
Nature Reserve, 28-29 Feb 2012

Why this study?
Influence budget allocations by developing focused economic arguments for investing, maintaining and expanding the City’s natural assets.
Rationale for this study is to develop a financially-motivated business case for investing in natural assets in the City.
Why invest in, maintain and expand natural assets?
Natural assets produce a flow of goods and services that has value for people living in and visiting the City of Cape Town
Degradation of urban natural assets impedes on the ability of the municipality to deliver services in a cost-effective way
What is different from other arguments?
Arguments to preserve the natural environment have traditionally not focused on the financial logic of investing in natural assets.

Distinguishing between:
• Natural assets/capital:
Stock of natural resources owned by the City (beaches, rivers, wetlands, parks, reserves, mountain..)
• Ecosystem Goods and Services
(EGS):
Flows of benefits derived from these assets.
Money in a bank account (capital) a flow of interest.
Natural capital a flow of EGS

NATURAL ASSETS
• Renewable resources: forests, plants, animals • Non-renewable resources: minerals, oil
• Environmental resources: water, coasts, atmosphere • Land
Provisioning
food
freshwater
fibre
fuel
genetic resources
medicine and pharmaceuticals
Ecosystems Goods and Services
Supporting
soil formation
photosynthesis
primary production
nutrient cycling
water cycling
Regulating
air quality regulation
climate regulation
water regulation
erosion regulation
disease regulation
pest regulation
natural hazards regulation
(including fire, flood, storm surge)
Cultural/
Informational
reflection
recreation
inspiration
aesthetic enjoyment
cultural diversity
educational value

Maintaining and expanding EGS flows can contribute to poverty alleviation by:
Helping poorer communities meet their basic needs:
• Water
• Firewood
Increasing :
• secure and sustainable livelihoods,
• health conditions
• income
• property value.
“Nature’s factories” to the benefit of human beings

Anyone can enjoy. At anytime.
NO PRIVATE INCENTIVE TO MAINTAIN AND
INVEST
Lack of management
Urban pressure
Interrupted flow of EGS and loss of value

City functions related to environmental goods and services in the
City are: environmental resources, parks, tourism, heritage, sports and recreation, wastewater, storm-water, solid waste and spatial planning
Participatory rapid assessment with line function managers and senior staff
Staff focus groups to identify and motivate most important linkages between identified EGS in the City and:
- beneficiaries (number and value)
- development objectives (closest links with natural assets)
- City’s environmental mandate and
- ability to influence and ecological and socio-economic risks.

Higher High
Natural hazard regulation Water purification and
Medium
Climate regulation – local
Lower
Climate regulation global waste treatment, (air quality)
Recreation and Tourism assimilation
Space for biota
Aesthetic values and sense
Small scale urban farming Fresh water provision
Water regulation Building materials of place
Natural hazard regulation (buffering function for flooding, fires, sea level rise/ coastal surge) provision
Fish and marine resources Provision of inspirational beauty
Educational users
Cultural and artistic
Provision of natural characteristics that are conducive to tourism and recreation
The improvement of water quality and the assimilation of waste - ecosystems help filter and decompose organic wastes
Provision of space for globally important biota, and
The aesthetics and sense of place provided by the natural environment practices
Religious practices
Erosion regulation
Disease regulation
Harvesting
Materials for craft and fashion
Use in productions, advertising and publications
9

VALUABLE FLOWS TO VARIOUS BENEFICIARIES
Natural/ semi natural environment beneficiaries

VALUABLE FLOWS TO VARIOUS BENEFICIARIES
Tourists
International
National
Local
Residential groups
Rich and Poor
Recreation groups
Beach bathers, sailors, picnic & braai
cyclists, hikers
Natural/ semi natural environment beneficiaries
Industry groups
Film and advertising industry, Shipping,
Tourism
Harvest groups
Fishers, wild plants harvesters, fuelwood gatherers
Informational and
cultural groups
Education,
Scientific research,
Religious experience

Table 1: The value of ecosystem services to the City of Cape Town: 2008: R million: A partial analysis
Tourism
Recreation
Natural hazard regulation
Film industry
Other (est.)
Total
Low
965
408
Medium
1 829
449
High
2 948
494
5
133
453
1 963
18
265
1 024
3 586
60
398
1 950
5 850

Tourism: R965 m - R2.95 bn/a Green open spaces: R270 – R326 m/a
Nature Reserves: R 68 – R83 m/a Beaches: R70 – R85 m/a

– Estimate the travel costs associated with all tourist trips that include Cape
Town in their itinerary (i.e. the cost of transport) (R12bn pa)
– Isolate the relative prominence or weight of Cape Town in the travel decision of tourists including Cape Town in their travel itineraries (15-35% international; 40-60% domestic; R2.1 - R4.6bn)
– Isolate the relative prominence or weight of Cape Town’s natural assets in the travel decision of tourists coming to Cape Town (40-60% based on visitor surveys)
– Add entry fees paid by tourists to access natural areas to their travel costs (R118-R145m)
13

Natural Hazards
Fires
Flooding
Storm surge &
Sea-level rise
Reduced
Consequences
Damages
Management costs
People at risk
Ecosystems: natural barriers and buffers against natural hazards.
• Dune cordons and kelp beds reduce storm surges impact on land.
• Natural pervious ground cover absorb rainfall, impervious ground cover increases water runoff and flood risk.
Lack of management: enhanced natural hazards risk and potential damages.
• Invasive alien species enhance fire risk, frequency, intensity, soil’s vulnerability to erosion !
enhance potential damages, fire fighting costs, and clean up costs.
Nature’s services in hazard regulation: R5m - R60m/a

The increased risks of storm surges and their associated costs in Cape
Town have been assessed recently in terms of:
• Loss of real estate value
• Damage to infrastructure
• Foregone tourism revenue
Natural solutions: natural parts of the coastline which act as buffers are not lost to development
Increase buffering: creating kelp beds, rockier beaches and sand dunes that will increase the absorption capacity of the coastline.

Table 2: Impacts of the July 2008 floods in Cape Town
Informal settlements affected
Damaged structures
People directly affected
People housed at emergency shelters in community halls
People displaced in safety zones
Number of meals served twice a day
Number of blankets distributed
70
7500
30 !
000
3000
2480
22 !
000
13 000
Source: City of Cape Town, media release No 330/2008, 10 July 2008.
Storm water runs off of impervious surfaces and is not absorbed; runoff volume typically increases:
• twofold as the percent catchments’ imperviousness increases to 10–
20%,
• threefold with an impervious surface cover of 35–40%, and
• more than fivefold with an impervious surface cover of 75–100% compared to catchments with natural vegetation cover.

R30 million to R40 million in damages attributable to the March
2009 fires in Somerset West (R25 to R30 million in damages for
Lourensford wine estate and R5 million to R10 million for
Vergelegen wine estate
In January 2000, two wildfires burnt 8 000 ha on the Cape
Peninsula resulting in insurance claims of approximately $5.7 million or R73 million
Invasive Alien Plants lead to higher damage costs, higher firefighting costs and avoidable clean-up costs.

Within assimilative capacities
Wetlands
Water purification function
• processing some of the grey and waste water outfalls
• creation of recreational and economic opportunities
• contribution to a healthy environment for communities.
Services provided by wetlands save cities significant amounts of infrastructural costs which would weigh on them if the natural ecosystem wasn’t present or became inefficient.
Zandvlei
• Replacement cost of a treatment plant: R180 million estimated.
• Replacement cost of a flood storage capacity: R24 million estimated
• Costs of constructing an artificial wetland.
Illustrates the magnitude of the “free” services provided.

Biodiversity needs to be recognised and valued as a critical
‘umbrella’ service without which most other valuable ecosystems services would be diminished or may even become unavailable.
2002 - 2006: International funding = R225 million
2008 - 2009: Environmental Education Programs =
23 781 learners from 500 schools.
Cape Floral
Kingdom
9000 plant species
70% endemic

• Enhanced health and wellbeing (e.g. preference for natural to built environments, restore mental fatigue, attention deficit disorder, lower stress, neighbourhood satisfaction)
• Contribution to the Cape Town brand and an enhanced business environment (desirable living attract key human capital and business, inspiration, creative thinking), as evident by many quality of life awards
• Property value enhancement

Table 3: Number of productions and expenditure in the Cape Town and
Western Cape film industry (2005/2006)
Long form (features)
Local Commercials
Service Commercials
International Commercials
Stills
Provincial Total
Cape Town Total
Source: Standish & Boting (2007)
30
142
400
58
2 100
2 730
Number of productions
Average expenditure per production (Rm
2006)
37,2
0,9
1,8
2,6
0,3
Total expenditure
(Rm 2006)
1 115.6
162,5
631,8
77,9
659,8
2 647.6
2 027.0
Film and advertising total values associated with natural assets of between R133 million and R398 million

Insights into the level of environmental expenditures in relation to the benefits received from the natural environment.
Indicator
1
Net present value of combined natural assets:
!
R43 billion to R82 billion.
Indicator
2
Ratio of environmental expenditure to the value generated EGS
!
R1 spent by municipality on natural assets
"
R8.30 (range
R4.50 - R13.50) of ecosystem goods and services (EGS) generated compared to
!
R1 spent by municipality overall
"
R 7.30 added value generated in local economy
Leverage of municipal expenditure on economic value of EGS
>
Between 1.2 and 2 times
Leverage of municipal expenditure on the broader
City economy.

Investing into underlying natural assets can leverage relatively high economic value in the broader City economy (1.2 - 2 times higher than overall municipal expenditure).
Investing and maintaining the City’s natural assets or ‘ecological infrastructure’ yields highly valuable services which provide the backbone for value addition and employment in City’s economy.
It is conservatively estimated that the City’s natural assets yield a flow of services valued at R4 billion per annum, within a range of between R2 billion and R6 billion per annum.
As an entity focused on service provision and as an enabler of economic growth and development, the municipality has the mandate and opportunity to invest adequately in natural assets to maintain a healthy flow of services to the benefit of people living in and visiting Cape Town.

William Ruckelshaus, Business Week, 18 June 1990