“After all those cosy years of working together, show me the money”

From economic valuation to real-world investment in

the fynbos biome

Keynote address at Fynbos Forum, Bredasdorp,6 August 2009

byMartin de Wit

Mountains of complexity..

Image: MP de Wit

High value ecosystems, but too little investment. Why?

Investing in Natural Assets

Martin de Wit, De Wit Sustainable Options (Pty) Ltd (Project Leader)Hugo van Zyl, Independent Economic ResearchersDoug Crookes, IndependentJames Blignaut, Beatus CCTerence Jayiya, Jaymat Enviro Solutions CCValerie Goiset, De Wit Sustainable Options (Pty) LtdBrian Mahumani, De Wit Sustainable Options (Pty) Ltd

Prepared by Natural Value Joint Venturec/o PO Box 546Brackenfell7561

Prepared for

Arne PurvesCity of Cape Town

A business case for the environment in the City of Cape Town

• Total Economic Value of Cape Floral Kingdom at least R10bn per year

• Water, tourism, flower harvesting, existence values

From knowledge to investment

• Transmission

• Cognition

• Reference

• Effort

• Influence

• Application

Images: Flickr

Argument

Barriers in the economic argument

• Economic valuation studies are by definition partial and static

• Proving that fynbos has an economic value does not provide the cash

• In many times it is only the start of a long institutional process of market creation

Images: Flickr

Valuation as if decision makers matter

• Valuation of joint products or multiple services

• Values before and after environmental change

• Valuation at different states of ecosystem disturbance

• Include valuation studies in a dynamic systems-wide framework

Predictable receptors?

• Simple behavioural rules can create complex outcomes

• Large number of small, incremental changes in budgets from year to year, followed by sudden rapid changes Image: Flickr

Taking receptors seriously

• Realities of the decision-making process itself need to be explicitly included

• networks and relationships,

• why certain subjects and alternatives are considered for the policy agenda while others are not

• role of knowledge in power dynamics in particular contexts

Image: Flickr

Barriers in transmission

• Divergence between analysts and decision makers

• Mis-communication

Image: Flickr

Know how to listen, and you will profit even from those who talk badly.

Plutarch, Greek biographer & moralist (46 AD - 120 AD)

Transmitting with ease

• Personal relationships and trust between researchers and decision makers are important facilitators of the use of research evidence

• Communication strategy: Who Says What In Which Channel To Whom With What Effect?

Conclusions• Economic argument needs to be

made within the context of Total Systems Value

• Choices by decision makers are driven by heuristic rules leading to complexity

• Deep-seated divergence between the cultures of analysts and decision makers

• Need for effective communicationImages: CoCT

An investment in knowledge always pays the best interest.

Benjamin Franklin (1706 - 1790), US author, diplomat, inventor, physicist, politician, & printer