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Water Science and Policy Center

Seminar Presentation

Dr. Stefano Farolfi

"Water Value and Economic Welfare Cost of Environmental Protection in South Africa: Methods for Decision-making at the Catchment Level"

Abstract: Protection of basic human and ecological needs, economic efficiency and social equity are the pillars guiding water resource allocation and use under the National Water Act (NWA, 1998) of South Africa (SA). The NWA promotes integrated and decentralized water resource management under a renewed institutional environment. New management entities (catchment management agencies - CMAs and water user associations - WUAs) are currently established at regional and local levels. Despite the clear willingness by the Department of water affairs to follow the principles of efficiency and environmental sustainability guiding the NWA, water allocation decisions are currently made on the basis of very limited information on the socio-economic and environmental consequences of policy scenarios. Decision support tools that can integrate in one framework the ecological and socio-economic dimensions of water resource use are accordingly needed to facilitate the design and implementation of decentralized water management strategies. To address this issue, a partial equilibrium water sector model was developed to assist water managers and policy makers in SA design and evaluate alternative water allocation strategies at the catchment level. Secondary and primary information about water uses and values was collected to feed this model. Water values for different sectors were estimated in various areas of SA using stated and revealed preference methods as well as the residual imputation method. These methods and the partial equilibrium model are described and their results discussed as decision support tools for water management and allocation in SA.

About the Presenter: Stefano Farolfi is a senior economist at the French Agricultural Research Centre for International Development (CIRAD). He holds a PhD from the University of Padova (Italy) and a professorship in economics from the University of Montpellier I (France). He is currently a Research fellow at the Centre for Environmental Economics and Policy in Africa (CEEPA) of the University of Pretoria, where he leads a number of projects on water governance and management and teaches courses of environmental economics and policy. He published numerous scientific articles on the economics of water and co-edited a 2006 Earthscan book on water governance and sustainable development. His main research interests refer to the negotiation and coordination aspects of water management and allocation.