The valuation of water for conservation projects in South Africa

A number of water development and conservation programmes are currently being undertaken in South Africa, one of the most notable being the Working for Water Programme. The economic rationale underlying the programme in selected mountain catchments in the Western Cape was presented by Van Wilgen et al. (South African Journal of Science, 93: 404-11, 1997) and Marais (Unpublished, PhD thesis, University of Stellenbosch, 1998). A cost-benefit analysis of the Working for Water Programme in the Mgeni catchment in KwaZulu-Natal was conducted by Gillham & Haynes (Unpublished paper presented at Tenth South African National Hydrology Symposium, 2001). Cost-benefit analysis has also been conducted in the Eastern Cape by Hosking & Du Preez (South African Journal of Science, 95: 442-8, 1999). There are, however, aspects of these assessments which merit more attention than they have been given thus far. One of these aspects is the value of water benefits, and this article examines it from the perspectives of marginal cost and willingness to pay. It is shown that different approaches are appropriate for different project locations, and that significantly different results are being obtained using these approaches. It is concluded that great care is needed in relating the value of water benefits to the specifics of the various locations where the conservation project is being implemented.