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Using economic valuation of environmental flows to integrate ecological aspects into water management

LOUISE KORSGAARD^1,2,3, TORKIL JØNCH-CLAUSEN¹, DAN ROSBJERG² & JESPER SØLVER SCHOU³

1 DHI Water • Environment • Health, Agern Allé 5, DK-2750 Hørsholm, Denmark

lok@er.dtu.dk

2 Institute of Environment and Resources, Technical University of Denmark, Bygningstorvet, Building 115, DK-2800 Kongens Lyngby, Denmark

3 National Environmental Research Institute, Frederiksborgvej 399, DK-4000 Roskilde, Denmark

Abstract This paper addresses the potential for using economic valuation of environmental flows to incorporate ecosystem services into decision-making in Integrated Water Resources Management (IWRM). A water allocation decision support tool is presented that has been tested in East Rapti River basin, Nepal. The tool is based on a hydrological simulation model (MIKE BASIN) and allows various water allocation scenarios to be explored. Each water use, including water for ecosystems as represented by environmental flows, is linked to an economic value. In East Rapti River Basin the main ecosystem services supported by environmental flows are biodiversity conser­vation, recreation and tourism opportunities, fish production, and sediment flushing. These services are valued using a combination of market price methods and cost-based methods. Thus, the socio-economic and environment­tal implication of various water allocation scenarios can be evaluated.

Key words decision support systems (DSS); East Rapti River; economic valuation; ecosystem services; environmental flows; Integrated Water Resources Management (IWRM)