Investing in natural capital and national security: A comparative review of restoration projects in South Africa.

Does restoration pay? We seek to answer this question by reviewing the benefits and costs of 37 economic values derived from five groups of actual restoration-related case studies in South Africa at various scales. The mean opportunity costs of not restoring are the following (a negative value implies an economic loss to society): i) local level single species studies concerned with clearing invasive alien plants (mean = -$27.24/ha/yr, sd = +/-22.93; n = 5); ii) local level multiple species studies concerned with clearing invasive alien plants (mean = -$289/ha/yr, sd = +/-550.6; n = 14); iii) national level studies concerned with clearing invasive alien plants (mean = -$40.2/ha/yr, sd = +/-17.2; n = 3); iv) non-clearing related restoration (mean = -$52/ha/yr, sd = +/-154.2; n = 10); and v) agricultural land rehabilitation (mean = -$428.1/ha/yr, sd = +/-352.7; n = 5). When these annual values are capitalised (i.e. discounted into perpetuity) to reflect the temporal impact of the foregone benefits of restoration, the losses amount to between 16 and 50 times greater than the annual values. Capitalisation of these values is an important step towards an asset-based approach in the management, restoration and conservation of natural capital. It is a step towards viewing the investment in restoration not merely as an expenditure item to be minimised, but as a truly worthwhile investment in the future wellbeing of both people and the planet - an investment in the national security of the country. More work, however, is required to transfer this value onto the balance sheets of companies in order to entice the private sector to invest more as well as to convert the implicit societal benefits of restoration to explicit company-wide value enhancement opportunities.

The economics of restoration: looking back and leaping forward.

Since the publication of the Millennium Ecosystem Assessment in 2005 there has been a surge of interest in ecological restoration (ER) to recover biodiversity, re-establish ecosystem functioning and connectivity, and reactivate the delivery of ecosystem services. In policy spheres, there have also been repeated calls for expansion of restoration efforts. In many countries, new legislation now requires some form of restoration and/or a form of offset investment. All of this will require major increases in financial allocations toward restoration science, technology, and implementation, and much more detailed valuation techniques. The economics of restoration is a new field emerging to support these needs. Our paper here starts with an analysis of the articles and reviews published on this broad subject from 1928 to 2012, as captured in the Scopus academic search platform. Our goal is to present and summarize what has been said and done in this area to date. Next, we map out one possible way forward, illustrated by examples and based on a coherent bundle of decision parameters related to the economics of ER and, more broadly, to the restoration of natural capital. The restoration of natural capital is defined as activities that integrate investment in, and replenishment of, natural capital stocks to improve the flows of ecosystem goods and services, and the preservation of biodiversity, while enhancing all aspects of human well-being. We give special attention to system dynamic approaches and other promising tools and techniques.

The financial and economic feasibility of rural household biodigesters for poor communities in South Africa.

Given the persistence of systemic poverty in, most notably, the rural parts of South Africa, the question is whether the use of biodigesters as a source of energy offers potential solutions to some of the difficulties and development needs faced by people in these areas. At the core, this translates into whether this technology would be financially and economically feasible for installation and use by rural households. Here we conduct both a financial and an economic cost-benefit analysis in one such community based on survey data from 120 households. Analysis of these data and supporting literature reveals that a biodigester is not a financially feasible investment for a rural household. Substantial economic benefits are, however, found to make a biodigester a worthwhile investment from a broader societal perspective. This is a compelling argument for further study and the consideration of government support in the light of broader economy-wide benefits.

Benefits of investing in ecosystem restoration.

Measures aimed at conservation or restoration of ecosystems are often seen as net-cost projects by governments and businesses because they are based on incomplete and often faulty cost-benefit analyses. After screening over 200 studies, we examined the costs (94 studies) and benefits (225 studies) of ecosystem restoration projects that had sufficient reliable data in 9 different biomes ranging from coral reefs to tropical forests. Costs included capital investment and maintenance of the restoration project, and benefits were based on the monetary value of the total bundle of ecosystem services provided by the restored ecosystem. Assuming restoration is always imperfect and benefits attain only 75% of the maximum value of the reference systems over 20 years, we calculated the net present value at the social discount rates of 2% and 8%. We also conducted 2 threshold cum sensitivity analyses. Benefit-cost ratios ranged from about 0.05:1 (coral reefs and coastal systems, worst-case scenario) to as much as 35:1 (grasslands, best-case scenario). Our results provide only partial estimates of benefits at one point in time and reflect the lower limit of the welfare benefits of ecosystem restoration because both scarcity of and demand for ecosystem services is increasing and new benefits of natural ecosystems and biological diversity are being discovered. Nonetheless, when accounting for even the incomplete range of known benefits through the use of static estimates that fail to capture rising values, the majority of the restoration projects we analyzed provided net benefits and should be considered not only as profitable but also as high-yielding investments. Beneficios de Invertir en la Restauración de Ecosistemas.

The road to sustainability must bridge three great divides.

The world's large and rapidly growing human population is exhausting Earth's natural capital at ever-faster rates, and yet appears mostly oblivious to the fact that these resources are limited. This is dangerous for our well-being and perhaps for our survival, as documented by numerous studies over many years. Why are we not moving instead toward sustainable levels of use? We argue here that this disconnection between our knowledge and our actions is largely caused by three "great divides": an ideological divide between economists and ecologists; an economic development divide between the rich and the poor; and an information divide, which obstructs communications between scientists, public opinion, and policy makers. These divides prevent our economies from responding effectively to urgent signals of environmental and ecological stress. The restoration of natural capital (RNC) can be an important strategy in bridging all of these divides. RNC projects and programs make explicit the multiple and mutually reinforcing linkages between environmental and economic well-being, while opening up a promising policy road in the search for a sustainable and desirable future for global society. The bridge-building capacity of RNC derives from its double focus: on the ecological restoration of degraded, overexploited natural ecosystems, and on the full socio-economic and ecological interface between people and their environments.