The accounts, developed under the United Nations’ System of Environmental Economic Accounting, placed ecosystem services and assets within a spatially explicit framework based on a one-hectare grid. Researchers estimated annual service flows, mapped where those benefits were produced and used, and calculated asset values as the net present value of expected flows over 25 years. Results were expressed in 2010 rand and organized by ecosystem type, service and user, with a 3.66% social discount rate. The pilot predated the finalization of the UN’s Ecosystem Accounting framework in 2021 and contributed to its development.

KwaZulu-Natal provides an unusually demanding test because its landscapes range from forests, grasslands and savannah to crops, plantations, urban areas and estuarine wetlands, while engineered infrastructure supplies much of the province’s water. The province contains several complete catchments from source to sea and 10% of South Africa’s Strategic Water Source Areas, which collectively deliver half the country’s water. In 2011, urban land covered 6.1% of KwaZulu-Natal, while 25.3% was under cultivation or tree plantations. Nearly 30% of the land fell under the traditional authority of the Ingonyama Trust, where communal tenure predominated.

Rather than treating every ecological benefit as a commodity extracted from nature, the study assessed a range of biotic services using methods intended to remain compatible with national accounting. These included land inputs to crop and livestock production, harvested wild resources, carbon retention, pollination, regulation of water flows, sediment retention, water-quality amelioration and experiential values associated with tourism and urban green space. Water itself was recorded separately as a resource rather than a provisioning service, although ecosystem effects on the timing, location and quality of flows were valued. Intermediate services, such as pollination provided to farmland by surrounding natural ecosystems, were assigned to the habitat producing them and subtracted from agricultural inputs to reduce double counting.

Wild resources were grouped into ten broad categories and valued using survey prices, with collection costs treated as negligible. Physical availability was linked to land cover, vegetation type and tenure, while demand was estimated from household surveys and a spatial model assuming a collection range of 5 to 10 kilometres. The asset calculation accounted for unsustainable harvesting: where use exceeded sustainable yield at the one-hectare level, stocks were treated as being eroded, reducing future benefits and sometimes shortening the effective life of the resource. This sustainability adjustment significantly affected asset value and provided a more cautious picture than assuming that ecosystem outputs could continue indefinitely.

Production on cultivated and grazing lands was valued largely through resource rents, calculated by subtracting intermediate expenditure, labour and the user cost of fixed capital from gross income. Livestock numbers were represented in standardised large stock units, while crop and timber output supplied the physical measures for cultivated production. Pollination was estimated mainly for communal farmers producing pollinator-dependent vegetables and fruits, using a benefits-transfer model. For regulating services, the study used avoided costs: ecosystem-controlled water flows reduced the storage infrastructure otherwise needed, vegetation retained sediment that would otherwise reduce reservoir capacity, and natural cover lowered phosphorus loads and treatment costs. A Soil and Water Assessment Tool model represented infiltration and water quality across the province’s catchments.

Carbon retention produced the largest measured component of ecosystem value, accounting for 65% of the 2011 total. Researchers mapped carbon stocks from land-cover data and valued retention through the social cost of carbon rather than market prices, because South Africa did not have a mature carbon-trading system at the time. The analysis used a global estimate of US$31 per tonne of carbon dioxide and a South African estimate of US$3.31, then escalated the values to the accounting years. The carbon estimate was a major source of uncertainty: applying a constant marginal damage cost to every tonne stored can produce an aggregate that rivals a country’s GDP, even though lower replacement costs may eventually apply to the final stored tonnes. The authors therefore described the method as requiring thorough review and potentially representing a gross overestimate.

Regulating services accounted for 73% of the estimated ecosystem-service value in 2011, provisioning services for 23% and cultural services for 4%. Carbon retention alone exceeded the combined contribution of the other regulating services: flow regulation represented 6%, while sediment retention and water-quality amelioration each represented 1%. Cultivated land supplied 62% of provisioning value, and crop production alone accounted for 14% of the province’s total ecosystem-service value. Grassland and savannah ecosystems supplied most regulating value, while urban parks contributed 48% of the partial cultural estimate. Users included the rest of the world, which received 66% of benefits through exported carbon-storage services, agriculture, forestry and fisheries, which received 19%, and households, which received 11%.

The estimated asset value of ecosystems rose from R737 billion in 2005 to R827 billion in 2011, an increase of 12.2%, even though natural ecosystems generally lost extent or condition. The net change combined an estimated 2% loss associated with reduced ecosystem extent with a 10% increase attributed to changes in service-supply capacity or demand. Most physical service volumes declined over the six-year interval. The value of harvested wild resources fell by more than R500 million, the ecosystem contribution to livestock production by just over R200 million, and hydrological services by just under R200 million. Crop and tourism values rose, while carbon-retention value increased because of changing carbon prices even though total ecosystem carbon fell by 40.1 teragrams of carbon, or 3.2%.

The accounts identified substantial data and method limitations. They did not cover all services, omitted several forms of local recreation and excluded marine ecosystems, while data for wildlife ranching, forestry, bioprospecting and ecological condition were sparse. Tourism and property values captured use benefits but not non-use values or the consumer surplus associated with many cultural services. Some hydrological benefits, including flood attenuation outside eThekwini and irrigation flow regulation, were not quantified. The authors also stressed that exchange values compatible with national accounts should not be described as “the value of nature” or treated automatically as measures of welfare. Repeated accounting would nevertheless provide a consistent basis for tracking changes, testing the sustainability of ecosystem use and informing later economic analysis, provided that revised methods were documented and applied consistently across time.

Subject of Research: Monetary and physical ecosystem accounting for KwaZulu-Natal, South Africa

Article Title: Accounting for ecosystem services and asset value: pilot accounts for KwaZulu-Natal, South Africa

Article References: Turpie, J., Letley, G., Weiss, J., & Schmidt, K. (2022). Accounting for ecosystem services and asset value: pilot accounts for KwaZulu-Natal, South Africa. One Ecosystem, 7, Article e86392. https://doi.org/10.3897/oneeco.7.e86392

Image Credits: AI Generated

DOI: 10.3897/oneeco.7.e86392

Keywords: ecosystem accounting, KwaZulu-Natal, ecosystem services, natural capital, environmental economics, national accounts, carbon retention, biodiversity, South Africa, SEEA EA, Accounting, ecosystem