Aquatic Ecosystems Restoration

Presenter’s name

Aquatic Ecosystems Restoration

Lessons Learned from Asian Development Bank Operations

Qingfeng Zhang, Senior Water Resources Engineer Asian Development Bank

Asian Development Bank

This Presentation will discuss This Presentation will discuss…

•

Challenges for Aquatic Ecosystems in Asia Challenges for Aquatic Ecosystems in Asia

• ADB’s Responses to Challenges ADB s Responses to Challenges

• Lessons Learned from ADB Operations Lessons Learned from ADB Operations

• A Case Study: Payment for Environmental Services A Case Study: Payment for Environmental Services

• Conclusions

• Conclusions

Water Challenges in Asia Water Challenges in Asia

• 1 in 5 Asians (about 700 million) without safe 1 in 5 Asians (about 700 million) without safe drinking water, and 1 in 2 Asians (1.8 billion people) without basic sanitation.

• By 2050, more than one billion Asian will By 2050, more than one billion Asian will

experience negative impact on water resources as a result of climate change.

• Aquatic Ecosystems are threatened by q y y

unsustainable exploitation and pollution.

Key Challenges for Aquatic Ecosystems in Asia Countries

•Severe floods and droughts leads to

th d d d illi k dik

thousands dams and millions km dikes

•Large scale water scarcity emerged as an Large scale water scarcity emerged as an urgent issue with current rapid economic growth

g

•Ecological and environmental problems

b i b i id i

are becoming basin wide issue

•The current river basin management The current river basin management

schemes cannot manage basin wide

conflicts.

ADB R t th Ch ll

ADB Response to the Challenges

St t 2020 ADB’ l t

• Strategy 2020—ADB’s long-term strategic framework

• Water Financing Program for 2006–2010

• Asia Pacific Water Forum and Water Knowledge Hubs

• Network of Asian River Basin Organizations Network of Asian River Basin Organizations

• Climate Changes Funds

ADB Strategies to Help Restore the Aquatic Ecosystems

• Integrated Cross-sectoral Approaches Integrated, Cross sectoral Approaches

• Ecosystem Services Have Real Economic Value

Value

• Water is a socially vital economic good

• Increase Regional Cooperation

• Promote Ecosystem-based IRBM Approach y pp

Wetland Rehabilitation Sanjiang Plain

• Issues:

• Issues:

– The largest area of wetlands in PRC: 108,900 KM2;

– Considerable loss of wetlands due to major focus for agricultural development;

development;

– Increasing pollution from upstream coal and gold mines and non- point pollution;

Water flow more and more controlled by engineering works – Water flow more and more controlled by engineering works,

including reservoirs, drainage and diversions;

– Competing water use between economic development and ecological conservation

ecological conservation.

• Sanjiang Wetland Protection Program

– 5 year program of $55.55 million started in 2007;

Protect the natural resources of wetlands and watersheds – Protect the natural resources of wetlands and watersheds

(biodiversity, water and forests) from continued threats;

– Promote sustainable use of natural resources thru integrated conservation planning;

conservation planning;

– Improve the well-being of local communities.

Lakes Rehabilitation

Tonle Sap Environmental Management Project

• Issues:

• Issues:

– The largest freshwater lake in Southeast Asia, and nominated as a biosphere reserve in October 1997 under the Man and the

Biosphere Program of the UNESCO Biosphere Program of the UNESCO

– Clearing of the flooded forest for cash cropping and illegal fishing threaten the Tonle Sap

– The ecosystems coming under pressure from exploitation of theThe ecosystems coming under pressure from exploitation of the fisheries but also firewood collection, agricultural encroachment, and hunting and collecting of wildlife resources

– Weak natural resources management capacity both at the g p y Government and community levels

• Tonle Sap Environmental Management Project – 5 year program of $19.4 million started in 2003;y p g $ ;

– Strengthen natural resources management and planning – Organize communities for natural resources management – Building management capacity for biodiversity conservationBuilding management capacity for biodiversity conservation

Coastal Ecosystem Restoration

Philippines Integrated Costal Resources Management Project

• Issues:Issues:

– The marine and coastal areas of the Philippines support a large area of productive coastal ecosystems and habitats

– About 1 million coastal residents and their families are directly bou o coas a es de s a d e a es a e d ec y dependent on coastal and marine resources for survival

– Social infrastructure is limited in most coastal areas

– Overfishing, the use of destructive fishing practices, and habitat g, g p , conversion have adversely affected coastal ecosystems;

– Lack of ICRM policy and institutional framework – Poor compliance with laws and regulations p g

• Philippines Integrated Coastal Resources Management Project – 6 year program of $62.32 million started in 2007

– Policy and institutional strengthening and developmentPolicy and institutional strengthening and development – ICRM and biodiversity conservation

– Enterprise development and income diversification Social and environmental services and facilities – Social and environmental services and facilities

Coastal Ecosystem Restoration:

Jiaozhou Bay Water Quality Management and Ecosystem Restoration 5 years program of $105.8 million started in

2009

(i) Improved Water Resources and Flood ( ) p

Management

(ii) Strengthened Wastewater Management and Pollution Control

Pollution Control

(iii) Integrated Water Ecosystem Management (iv) Strengthened Project Management Capacity 2 years TA of $750,000 started in 2009

(i) Strategy Environmental Assessment (i) Water Quality Management

(ii) Wetland and Restoration (ii) Wetland and Restoration

(iii) Climate Change Impact and Adaptation (iv) Integrated Coastal Zone Management

Ensuring Ecological Flow: Hai River Ensuring Ecological Flow: Hai River

TA 3963-PRC: study of the carrying capacity of water resources

of water resources

• Environmental flow requirement levels – high, medium, lowg

• Evaluating environmental conditions

– Water quality index developed for the basin

basin

– Level of environmental flow + water quality indexy

• Ecological areas studied

– river course, wetland, and estuary with different environmental targets with different environmental targets

Ensuring Ecological Flow: Pakistan: Barani IWRM Sector Project PRC: Guiyang IWRM Sector Project

• Dam operational guidelines require Dam operational guidelines require an e-flow

• To maintain basic ecological system t bilit t l i fl ill b

stability, natural river flows will be maintained at no less than 10% of historical average flows.

historical average flows.

• Each subproject considers

ecological water demand with

i t j t d i i

appropriate project design in

allocation of water resources

Ecosystem Services Have Real Economic Value:

Integration of PES into ADB Operations

Issues:

• Nearly two-thirds of the World’s ecological services now under threat (Millennium Ecosystem Assessment, 2005)

• Poor incentives for conserving ecological services is a keyPoor incentives for conserving ecological services is a key contributory factor to the rapid environmental deterioration

ADB Response: Integrating PES Mechanism in the Operations

• PRC GEF Partnership to Combat Land Degradation in Dryland

• PRC-GEF Partnership to Combat Land Degradation in Dryland Ecosystems (GEF supported)

• Preparations of National Guidelines on Eco-compensation in the key

i b i

river basins

• ADBI 2009 Publication: Lessons from PES in Asia (Indonesia, Philippines, India, PRC and Viet Nam)

• PES Practices in Greater Mekong Region

• Recent RETA: Payment for Ecosystem Carbon Sequestration and Sink Services

What Lessons Can Be Learned from these Operations What Lessons Can Be Learned from these Operations

In light of the mixed performance of In light of the mixed performance of lake/wetland restoration program over

years whether any lessons can be learned years, whether any lessons can be learned from these experiences and applied to

current and future efforts

current and future efforts…..

Knowledge Product:

Key for Success in Restoring Aquatic Ecosystem(1):

Strong and consistent political leadership

Restoration take time and resources

that are often beyond the narrow focus of that are often beyond the narrow focus of the typical governmental term (4 or 5

years) Restoration need the consistent years). Restoration need the consistent commitment of political leaders who

f

understand the seriousness of the

problems and have the ability to ensure

p y

the effective cross-sectoral and cross- jurisdictional coordination

jurisdictional coordination….

Key for Success in Restoring Aquatic Ecosystem(2):

Integrated Planning and Analysis

…. All of key factors affecting

wetlands/lakes need to be addressed in

….wetlands/lakes need to be addressed in the project designs to prevent the

reemergence of the same issues that reemergence of the same issues that led to the ecosystem’s crisis in the first place. Plans needs to take into account p

issues governing land use and

management within the catchment as

ll i t d ti

well as maintenance and operation.

Key for Success in Restoring Aquatic Ecosystem(3):

Effective Management Structure

…. Catchment boundaries are rarely the same as jurisdictional

…. the same as jurisdictional

boundaries. Needs effective

management structures taking in management structures taking in particular account the need to

ensure coordination across

ensure coordination across

administrative boundaries

Key for Success in Restoring Aquatic Ecosystem(4) Effective Financial Engineering

Effective Financial Engineering

(i) …. Poor incentives for conserving environmental

services is another key contributory factor to the failure of ….

services is another key contributory factor to the failure of restoration program.

(ii) Too many programs have failed due to the inability of lower level governments to raise financial sources, or

h b di t t d d t th d f l l

have been distorted due to the need for local

governments to focus spending only on activities that create short and medium term revenue raising

create short and medium term revenue raising

possibilities.

Wh i PES i t t f E t

Why is PES important for Ecosystem Restoration?

• Nearly two-thirds of the World’s ecological services now under threat (Millennium Ecosystem Assessment, 2005) ( y , )

• Poor incentives for conserving ecological services is a key contributory factor to the rapid environmental deterioration contributory factor to the rapid environmental deterioration

• Environmental Externality: While the benefits of ecological Environmental Externality: While the benefits of ecological services are public goods, the cost of ensuring their

provision often falls on local communities/land owners

PES for Ecosystem Services in Greater Mekong Subregion: the case for PES in the Biodiversity Corridor in Xishuangbanna

Main Challenge

Uncontrolled rubber i

expansion

•Main Policy Question Main Policy Question

Are rain forests providing ecosystem services valuable

h t j tif enough to justify conservation?

•How would such a PES system look like [nuts &

bolts] and how will it be

bolts] and how will it be

funded?

PES for Ecosystem Services in Greater Mekong Subregion: the case for PES in the Biodiversity Corridor in Xishuangbanna

Q1: What is the value of ecosystem

for PES in the Biodiversity Corridor in Xishuangbanna

y

services in Xishuangbanna BCI Pilot Site?

Q2 Whi h d l t tt i t i bl ?

Q2: Which development pattern is sustainable?

“Business as usual” or conservation with development?

Q3: How to secure and capture the value of ecosystem services? (Policy implications)

Types of Ecosystem Services in the Biodiversity Corridor in Xishuangbanna (a National Nature Reserve in PRC)

• Watershed Protection

• Water Quality Regulation

• Water Quality Regulation

• Soil Erosion Protection

• Nutrient Cycling and

• Nutrient Cycling and

• Carbon Sequestration

• Oxygen Generation

• Oxygen Generation

• Air Purification

• Others

• Others

Ecosystem services Valuation Method Data requirements Data Collection

NTFP(Non M k t ti ti •Biophysical data Local survey and studies

NTFP (Non- Timber Forest Products)

Market estimation •Biophysical data

•Cost inputs

•Prices of outputs

Local survey and studies

Climate Regulation -CO₂

Cost saving •Capacity of CO₂ Sequestration &

O₂ generation

•Prices of CO₂ &O₂

•Local monitoring and studies

•Market prices -O₂

Water Regulation Cost saving •Annual water storage capacity •Local studies -Storage

-Quality

•Reservoir construction cost

•Price of urban water supply

•Benefit transfer

Ecosystem services Valuation Method Data requirements Data Collection

Soil erosion prevention

Damage Cost •Erosivity

•Cost of sediment removal

•Local studies

•Benefit transfer

Nutrient Cycling

Cost saving •Erosivity

•N,P,K contents in ecosystem soil

•Price of fertilizers

•Local studies

•Benefit transfer

•Ratio of pure N,P,K to N,P,K contained fertilizer

Air purification Damage Cost •Capacity of pollutants absorption •Local studies

•Treatment cost •Benefit transfer

Ecosystem Services

Mengla- Shangyong (135,932 ha)

Nabanhe- Mangao (28,981 ha)

Total value ($million)

Unit Value (US$/ha/yr)

1. NTPF 0.2 0.8 1.0 -

2. Carbon Sequestration 303 59 362 2,195

q

3. Oxygen Generation 130 25 155 938

4. Watershed Protection

74 15 89

540

(Storage/Quantity) 74 15 89

5. Water Quality regulation 156 29 185

1,123

6. Soil erosion protection 32 7 39

234

7 Nutrient Cycling 146 36 182 1,104

7. Nutrient Cycling 146 36 182 ,

8. Air purification 122 29 151 913

Total 962 200 1,162 7,047

Scenarios Design

Total Net Present Value (NPV)= NPV

+ NPV

+ NPV

NPV^forest = Forest area (ha) * NPV^forest ($/ha) NPV^forest = Forest area (ha) NPV^forest ($/ha) NPV^Rubber = Rubber area (ha) * NPV^rubber ($/ha)

$

NPVAgriculture = Agriculture area (ha) * NPVagriculture ($/ha)

Results

(10% discounting rate 35 years) (10% discounting rate, 35 years)

Forest conservation 67,962

Forest restoration 29,294

Rubber Plantation 6,386 -17,923

Rice 3,558 – 12,708

Corn 8,895

Sugarcane 6,777

Tea 1,431-12,953

NPV ($) Base case*

Discounting rate Rubber Prices Carbon Price Rice Yield

% % 10 25 20 50 5.4 12

8% 6% 10

RMB/kg

25 RMB/kg

20 USD/t

50 USD/t

5.4 t/ha

12 t/ha

Nabanhe-Mangao Corridor Segment

Status Quo 617 749 749 601 624 776 1253 558 665

Development 449 559 717 387 481 537 798 397 493

Conservation 660 816 1038 648 667 848 1412 624 690

Mengla-Shangyong Corridor Segment

Status Quo 115 142 180 103 120 144 234 114 115

Development 65 85 114 42 77 74 100 65 65

Conservation 117 145 184 107 122 148 244 116 117

Total

Status Quo 731 891 1118 704 745 920 1487 672 780

Status Quo 731 891 1118 704 745 920 1487 672 780

Development 515 644 831 428 558 611 898 462 559

Conservation 777 960 1223 755 788 997 1655 741 808

*Base case: 10% Discounting rate, Rubber 20RMB/kg, Carbon Price 10 USD/ton, Rice Productivity 9ton/ha

PES Case Study:

Findings and Policy Implications

3. Policy implications 1. What is the value of

ecosystem services?

The value should be well considered into decision making in land use, forest

Over $1 billion annually,

$7047 per ha/yr

making in land use, forest

management and BCI Corridor development

2. Which development option?

C i i

1)Incentives for forest

conservation, restoration and

Conservation scenario preserves the value with improvement while

conservation, restoration and watershed protection.

2)Disincentives for uncontrolled expansion of rubber and forest

improvement, while development scenario incurs huge loss.

expansion of rubber and forest conversion on marginal soil and steep slopes.

g

PES Outline for Xishuangbanna

Objective: From monoculture rubber to “jungle rubber”.

Step 1: Valuation of ecosystem services Step 1: Valuation of ecosystem services

Step 2: Determining market value as a basis for compensation and incentives

Step 3: Determining contractual obligations within a conducive, enabling PES policy framework Step 4: Setting up performance standards and

Step 4: Setting up performance standards and monitoring methods

Step 5: Identifying funding source [compensation]

Step 6: PES contract execution with growers and land users and local administration Step 7: Channeling compensation funds through Step 7: Channeling compensation funds through

grass-root based Village Revolving Funds

Step 8: Evaluation, ecosystem check, adjustments

Conclusion

• When there is a political willingness to change the course of the deteriorating ecosystem to realize the ecosystem based IRBM deteriorating ecosystem, to realize the ecosystem-based IRBM approach, ADB DMCs are still facing great challenges in:

– Legal and institutional reform Policy Integration

– Policy Integration

– Capacity of Integrated Planning

– Meaningful Public Participation, and C

– Consistent Political Leadership

• The Knowledge Hub for Healthy Rivers and Aquatic Ecosystems Can Help in:

– Capacity building advisory services on planning for integrating water and the surrounding ecosystem

– Transferring the knowledge and lesson of success stories worldwide to the ADB DMC

ADB DMCs

– Host training on the ecosystem-based Integrated River Basin Management