ASSET Research partnership with SAEON to benefit communities

Prof James Blignaut (left) and Dr Steve Mitchell sign the agreement with SAEON on behalf of ASSET Research. A study site is examined by students during a field trip. Students monitor restoration at a study site. Biodiversity and land use is an ASSET Research focus area. Here students undertake rehabilitation planting. Restoration patchwork in the Drakensberg. Students get involved in the community during their research.

By Prof James Blignaut, ASSET Research

ASSET Research, a collaboration platform initiated to offer unique development models and learning experiences in the field of resource economics and related fields, has partnered with SAEON.

The new partnership is expected to create synergy and yield many benefits in combining strengths and building on each other's capacities. This will not only benefit ASSET Research and SAEON, but also the communities where they are involved and the country as a whole.

ASSET Research has a wide network of researchers and students from various institutions and multiple disciplines, which allows for integrated and in-depth research and data analysis. The output from this research meets and addresses practical problems in the field.

The focus of ASSET Research's work is on socio-economic and policy issues and therein lies its strength - conducting socio-economic research; using unique approaches to solve problems; networking; and connecting the best people to work on a problem.

SAEON focuses on the bio-physical sector and has much to offer in terms of available data and unique approaches to problems. This means that, in collaboration, ASSET Research and SAEON can reach a much wider audience and impact on a much larger area than before.

Working to restore natural capital

Through this partnership ASSET wishes to, among other things, build on a recently completed Water Research Commission (WRC) funded project titled Determining the economic risk/return parameters for developing a market for ecosystem goods and services following the restoration of natural capital: a system dynamics approach.

The study focused on developing an evidence base for the use of economic tools/instruments in the decision-making process about the restoration of natural capital.

A conventional return/risk economic decision-making framework was applied to eight existing restoration projects to evaluate whether such a decision-making framework could be applied to restoration over a range of environmental conditions and in different contexts. By making both the cost and the benefits of restoration explicit, it was possible to illustrate the potential for the development of markets for ecosystem goods and services (offered by restoration).

This, however, required the investigation of both the bio-physical and socio-economic dimensions of the restoration that was conducted at the eight sites. The study provided some unique perspectives in that it was reflective as well as multi-disciplinary. It was demonstrated that standard economic evaluation methods have limited ability to take system dynamics into account and could, therefore, easily misdirect or reject investment in restoration, potentially leading to disastrous social and ecological consequences.

Systems dynamic approach

ASSET Research proposes a systems dynamic (SD) approach, building on what the economics profession and the literature on complex and dynamic systems already have to offer, but applying this to restoration.

Contrary to some suggestions, there is no need to abandon conventional economic cost-benefit evaluation tools when asking under which conditions markets could make a contribution to restoration. These conventional tools, when enriched with an understanding of system properties and their dynamics, can be used fruitfully to shape decision-making about restoration priorities; furthermore, they can assist in development of markets and/or payment mechanisms for ecosystem services.

By using an SD approach, it is also feasible to simulate repeated random sampling of uncertain inputs, and therefore to generate a measure of risks in restoration investment decisions. ASSET Research demonstrates that the ensuing risk/reward outcomes provide a far more nuanced and thorough way of evaluating any project, including restoration projects, than the conventional net present value outcomes favoured in most natural resource economic evaluation projects.

The benefit of an SD approach is that decision-making about payments for ecosystem services from restored ecosystems is now driven by the known or expected changes in properties of that system. This is quite different and much more nuanced and sophisticated than the application of exogenously determined discount rates. Discount rates are usually used in a static framework of costs and benefits over time, often to account for much more than what they were originally intended for, namely to act as a proxy for people’s preference of holding money over time.

Although a discount rate was used to reflect the value of money over time, it had no bearing on the relative ranking of projects in terms of whether markets can or cannot contribute to restoration. That ranking was decided on bio-physical and socio-economic fundamentals inherent in each project. The market-development decision-making priority list is therefore discount rate neutral. This is a further significant departure from conventional methods.

Using the proposed decision-making framework with respect to the development of markets/payment systems for ecosystem goods and services following restoration can now be taken against the backdrop of the risk involved in achieving such rewards or benefits. Neither SD approaches nor risk quantification by themselves are new, but applications to existing and on-going restoration projects are novel.

Student comments on working with ASSET Research:

"Katie and I have just returned from an extremely successful and incredible two-week field trip in the Kromme Catchment. During this time we met every single farmer in the Kromme and held detailed interviews. We also had a [free] helicopter ride so took amazing photographs! Farmers were so friendly and we got all sorts of extremely valuable information from them regarding income/water-use/farming activities – you name it! Farmers really opened up to us. We even know who the poachers/culprits are in terms of bad land-use practices!

"Most importantly, however, we managed to establish relationships with the people and we have managed to get e-mail addresses, etc to maintain communication. We got wonderful stories and testimonies from the farmers and Katie and I have some excellent ideas for articles we would like to publish in magazines, etc. So lots of exciting things to come.

"I am also extremely inspired to do some kind of a workshop/event with farmers upon completion of my MSc. Whether that happens or not, I will ensure that information is fed back to farmers as they are all so keen to learn – and open to new ideas and advice. Once again Katie and I had an incredible, very educational, interdisciplinary experience and my scientific world views were certainly challenged on more than one occasion!

"I cannot thank everyone at ASSET enough for this wonderful, innovative project that has allowed us to learn and grow so much in just a year."   - Alanna Rebello

"I would like to add my personal thanks to you and ASSET - the trip was so worthwhile and I feel I learnt so much more than what we merely asked in the interviews. I feel that I have gained invaluable life-skills and so I thank you for allowing me the experience."  - Katie Gull

Collaborator comment on working with ASSET Research:

"Collaboration with ASSET on the WRC-funded research project investigating the economic, social and ecological values of restoring natural capital have given Renu-Karoo an opportunity to collaborate in field-scale applied research, the outcomes of which have contributed to the knowledge base of our business.

"Renu-Karoo Veld Restoration cc provides a consulting service to land-users in the arid parts of South Africa, as well as supplying large quantities of indigenous seed for restoration projects. Collaboration in the WRC project has given us a number of networking opportunities and has helped us build capacity and fund the technikon students that our business hosts for their experiential training.

"Renu-Karoo has greatly appreciated the bi-annual research colloquia organised by ASSET Research. These have brought together supervisors, student researchers and other interested and affected parties, including managers and WRC representatives. I believe that the ecology students that I have supervised through the project have greatly benefitted from interaction with researchers and practitioners in the fields of hydrology and economics."   - Prof Sue Milton-Dean