Ecosystem Services

The challenge

Water underpins all benefits that ecosystems provide, notably including agricultural production. The availability of water, in terms of both its quantity and quality, is influenced heavily by ecosystem functioning and therefore understanding the nexus of water and ecosystems and their services related to agriculture is critical in managing water and food security.
A range of important ecosystem services are explicitly linked to the water cycle; from providing clean drinking water to regulating the flow of flood events and creating opportunities for water-based recreation and cultural practices. Management approaches based on the ecosystem services concept are proposed in a range of water contexts; including climate change water-based adaptation, river basin and catchment management, and Integrated Water Resources Management
The challenge is to assess and value ecosystem services in the context of water management. For policy design and the prioritization of investments it is necessary to assess the benefits of conservation and restoration of watersheds. These benefits need to be quantified in biophysical as well as economic terms, for the ecosystem service and spatial scale of interest.

The FutureWater approach

The FutureWater approach to value water-related ecosystem services consists of comprehensive scenario assessment through simulation of flows, analysis and visualization. Improved land management practices are individually assessed in relation to investment portfolios. Impacts are subsequently assessed on hydrological flows and water availability, and finally on financial and/or economic returns.
More specifically, scenario analysis is performed by combing various tools, namely (1) hydrological modelling, (2) remote sensing, to derive indicators of degradation, and natural capacity of the landscape, and (3) return-on-investment analysis. Outputs of the biophysical assessment feed directly into the economic valuation.
In past and current work, FutureWater supports business cases for investing in improved watershed management, e.g. by improving forestry and agricultural practices, benefiting downstream water users. These business cases are then used to set up financial mechanisms in the basin and enable more healthy ecosystems and sustainable river basin management.

Example projects