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Capacity 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 Workshop Dakar, Senegal, March 2004. ERC - PowerPoint PPT Presentation
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Capacity Building in Analytical Tools for Estimating and Comparing Costs and Benefits of Adaptation Projects in the
Berg River Basin, South Africa
AIACC African WorkshopDakar, Senegal, March 2004
Group AF-47Daan Louw, Molly Hellmuth, Mac Callaway, Jabavu Nkomo, Debbie Sparks
ERCERCEnergy Research Centre
Participating 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
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
The Project Areas…
The Gambia
The Berg River Basin, South Africa
Cape Town
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
The Berg River Basin, South Africa:The 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)
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
• 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
The Berg River Basin, South Africa:Objectives
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
The Berg River Basin, South Africa: Schematic
CLIMATE
WatBal Model:Rainfall/Runoff
Model
Production andResourceAllocation
MANAGEMENT/INVESTMENT DECISIONS
Upper Berg RiverSpatial Equilibrium
Model
IMPACTS: Runoff, Crop
WaterRequirements,
Surface Evaporation
COSTS/BENEFITS
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
ADAPTATION OPTIONS
The Berg River Basin, South Africa:Schematic
CLIMATE
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
Climate
• HAD A2* GCM Reference (1961 –1990), Near (2010-2039) and Distant (2070-2099) future time periods
AIACC African WorkshopDakar, Senegal, March 2004
20
60
100
140
180
jan feb mar apr may jun jul aug sep oct nov dec
Prec
ipita
tion,
mm
Reference PeriodNear FutureDistant Future
ERCERCEnergy Research Centre
The Berg River Basin, South Africa:Schematic
CLIMATE
WatBal Model:Rainfall/Runoff
Model
IMPACTS: Runoff, Crop
WaterRequirements,
Surface Evaporation
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
Preliminary 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
AIACC African WorkshopDakar, Senegal, March 2004
0
10
20
30
40
jan feb mar apr may jun jul aug sep oct nov dec
Ru
no
ff,
MC
M
Reference PeriodNear FutureDistant Future
ERCERCEnergy Research Centre
The Berg River Basin, South Africa:Schematic, cont…
CLIMATE
WatBal Model:Rainfall/Runoff
Model
IMPACTS: Runoff, Crop
WaterRequirements,
Surface Evaporation
Upper Berg RiverSpatial Equilibrium
Model
Production andResourceAllocation
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
The Berg River Basin, South Africa:Economic 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.
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
The Berg River Basin, South Africa:Adaptation 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)
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
The Berg River Basin, South Africa: Schematic
CLIMATE
WatBal Model:Rainfall/Runoff
Model
Production andResourceAllocation
MANAGEMENT/INVESTMENT DECISIONS
Upper Berg RiverSpatial Equilibrium
Model
IMPACTS: Runoff, Crop
WaterRequirements,
Surface Evaporation
COSTS/BENEFITS
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
ADAPTATION OPTIONS
The Berg River Basin, South Africa:Evaluating 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
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
• 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
Conclusions
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre
Thank you, for more information contact:
Or, please visit:
http://www.start.org/project_pages/aiacc.html
End
AIACC African WorkshopDakar, Senegal, March 2004
ERCERCEnergy Research Centre