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The working for water programme: Evolution of a payments for
ecosystem services mechanism that addresses both poverty
and ecosystem service delivery in South Africa
J.K. Turpie
a,
⁎, C. Marais
b
, J.N. Blignaut
c
a
Percy Fitzpatrick Institute, University of Cape Town, Rondebosch, 7701, South Africa
b
Working for Water Programme, Department of Water Affairs and Forestry, Private Bag X4390, Cape Town 8000, South Africa
c
Department of Economics, University of Pretoria, Pretoria 0001, South Africa
ARTICLE INFO ABSTRACT
Article history:
Received 9 September 2005
Accepted 11 December 2007
Available online 4 March 2008
A payments for ecosystem services (PES) system came about in South Africa with the
establishment of the government-funded Working for Water (WfW) programme that clears
mountain catchments and riparian zones of invasive alien plants to restore natural fire regimes,
the productive potential of land, biodiversity, and hydrological functioning. The success of the
programme is largely attributed to it being mainly funded as a poverty-relief initiative, although
water users also contribute through their water fees. Nevertheless, as the hydrological benefits
have become apparent, water utilities and municipalities have begun to contract WfW to restore
catchments that affect their water supplies. This emergingPES systemdiffers fromothers in that
the service providers are previously unemployed individuals that tender for contracts to restore
public or private lands, rather than the landowners themselves. The model has since expanded
into other types of ecosystem restoration and these have the potential to merge into a general
programme ofecosystemservice provision within a broader public works programme.There is a
strong case for concentrating on the most valuable services provided by ecosystems, such as
watersupply, carbon sequestration, and fire protection,and using these as ‘umbrella services’to
achieve a range of conservation goals. The future prospects for expansion of PES for hydrological
services are further strengthened by the legal requirement that Catchment Management
Agencies be established. These authorities will have an incentive to purchase hydrological
services through organisations suchas WfW so as to be ableto supply morewater to their users.
© 2008 Elsevier B.V. All rights reserved.
Keywords:
Working for Water
Payment mechanisms
Ecosystem services
Water supply
Poverty relief
1. Introduction
South Africa is richlyendowed with biodiversity, much of which
lies outside of the approximately 6% of land area that falls
within its protected area system. As povertyand the demand for
land for urban and agricultural use increase, habitats—and
therefore biodiversity—are increasingly under threat. These
pressures are further exacerbated by climate change, particu-
larly its impacts on water resources (Turpie et al., 2004).
Conservation in South Africa has historically been perceived
as a luxury and the concern of the wealthy, especially since
almost all conservation efforts are focused on the protected
areas, which tend to be geographic, economic, and socio-
political enclaves. Conservation therefore enjoys a low priority
in relation to other more pressing social issues on the political
agenda. There is pressure to utilise land and water resources as
ECOLOGICAL ECONOMICS 65 (2008) 788–798
⁎Corresponding author.
E-mail address: jane.turpie@uct.ac.za (J.K. Turpie)
0921-8009/$ –see front matter © 2008 Elsevier B.V. All rights reserved.
doi:10.1016/j.ecolecon.2007.12.024
available at www.sciencedirect.com
www.elsevier.com/locate/ecolecon
opportunities for economic development, sometimes in direct
conflict with conservation goals. This has serious implications
for the future health of terrestrial and aquatic ecosystems and
their capacity to deliver goods and services that also contribute
to social and economic welfare. Recognising this, there hasbeen
considerable effort todescribe biodiversity values andthe socio-
economic impacts of ecosystem degradation (e.g. Turpie, 2003;
Turpie et al., 2003). This may justify conservation efforts, but
does not guarantee an improvement in the allocation of scarce
government resources to conservation in South Africa. Indeed,
more pragmatic solutions will need to be found to ensure
adequate conservation of biodiversity, and to sustain the values
derived from ecosystems in South Africa.
With dwindling government supportfor conservation within
and outside protected areas, there is increasing pressure to find
innovative and sustainable solutions for promoting and finan-
cing conservation. Payments for ecosystem services (PES) is a
mechanism that could play a key role in achieving conservation
goals and sustaining ecosystem health more generally. A PES
system involves voluntary payments for well-defined ecosys-
tem services (or land uses thatare likely to secure thoseservices)
that are conditional on service delivery (Wunder, 2005). The
transaction involvesat least one buyer and one service provider,
although there can be a number of each, and the buyers or
sellers may be private individuals, companies, non-government
organisations, or the state. PES has an advantage over many
other conservation tools in that it is both an incentive and a
financing mechanism, and is potentially very efficient (Pagiola
et al., 2002; Pagiola and Platais, 2007). Thus targeted conserva-
tion areas may benefit from PES as long as conservation action
results in a measurable increase in the provision of ecosystem
services that can be ‘commodified’and traded.
The international literature on PES shows that most ex-
amples that are actually working are either for carbon or water
(Landell-Mills and Porras, 2002;Pagiola and Platais, 2007). While
carbon is a viable option, this paper concentrates on the role of
water in improving biodiversity conservation through PES in
South Africa. Here we argue thatwater has the potential to be an
‘umbrella service’to other ecosystem services, in that efforts to
better manage and conserve water in mountain catchments
(watersheds) and riparian zones result in the conservation of
other services provided by the improved health of the ecosys-
tem. This is very much like efforts to conserve umbrella species
also helping conserve other species in their habitat. We ex-
amine theunique way in which PEShas emerged in SouthAfrica
through the establishment of the government’sWorkingfor
Water (WfW)programme, and the way in which the new Water
Act has pavedthe way for future development and expansion of
this financing system. We examinepossible ways thatthe South
African situation may develop into a model which could be
valuable in developing countries generally.
2. Water as a key commodity for PES in
South Africa
2.1. Water scarcity
South Africa is a chronically water stressed country with be-
tween 500 m
3
and 1000 m
3
of water available per person per
year (Ashton, 2002). Surface water is heavily committed for
use, water is imported from neighbouring countries, and the
limited groundwater resources do not offer much reprieve
(Scholes, 2001). As a result, water availability is predicted to be
the single greatest and most urgent development constraint
facing South Africa. The need for water is further highlighted
by the fact that water scarcity in developing countries is
closely linked to the prevalence of poverty, hunger, and
disease (Falkenmark, 1994; Ashton and Haasbroek, 2002).
Historically, water resource managers met rising water
demands through a complex system of engineering supply-
side solutions which included major inter-basin transfer and
water pumping schemes, even over mountain ranges and
across vast distances (Smakhtin et al., 2001). Due to the
increasing costs associated with supply-side measures and
the limited remaining exploitable water resource potential,
these solutions are becoming less viable. This is underlined by
the fact that 12 of South Africa's 19 water catchmentareas are in
deficit and receive water through inter-basin transfers schemes
from the remaining surplus areas (Blignaut and de Wit, 2004). It
has therefore become necessary to explore other solutions to
augment andconserve water supplies (Ashtonand Seetal, 2002).
The increasing scarcity of water hasmade it a highly tradable
commodity. It follows that ecosystem services that affect water
supply will also become valuable, and ultimately tradable. In-
deed, a large proportion of the existing PES systems around the
world involve hydrological services such as water regulation
(e.g. maintenance of dry season flows). Wherever catchment
health affects water supply, and water is scarce, there is a po-
tential market for conservation activities in the catchment. In
South Africa, the provision of water is highly dependent on the
conservation of catchment areas (watersheds), riparian zones,
and wetlands. Most of South Africa's surface water originates
from high altitude grassland areas dominated by the Drakens-
berg Mountains (including the adjacent Maloti Mountains of
Lesotho), and in the Cape Mountains that are clad in short,
heath-like, Fynbos vegetation (Fig. 1).
2.2. Threats to water supply
In the grassland catchment areas, seepage wetlands act as
sponges that catch much of thesummer rainfall. The slow sub-
sequent release of the infiltrated water serves to maintain base
flows in the catchments during the dry season. The functionality
of these grassland wetlands is compromised by bad manage-
ment practices such as overgrazing and inappropriate burning
regimes, as well as by damming and reclamation of wetlands.
More serious is the increasing (albeit controlled) tendency
for conversion of grassland by afforestation with alien Pinus
and Eucalyptus species, which negatively affects the quantity
of catchment runoff. These plantations intercept stream flow,
especially when close to watercourses.
In addition, base flows are also intercepted by alien vege-
tation that has invaded stream courses. In the Drakensberg
Mountains, invasion by alien plants such as bramble is linked to
the degree of afforestation (Turpie et al., 2007). In the Cape
Mountainand river systems, infestation by alieninvasive plants
that escaped from commercial plantations and woodlots on
farms—particularly Pinus,Acacia and Eucalyptus species—results
in reductions in runoff. Thealien invasive plantsspecies swamp
789ECOLOGICAL ECONOMICS 65 (2008) 788–798
the indigenous vegetation, their relatively high biomass result-
ing in much higher rates of evapotranspiration. Alien plants
have invaded an estimated 10 million ha of South Africa. The
Western Cape is the most heavily invaded at about a third of the
total area, followed by Mpumalanga, KwaZulu-Natal, and
Northern Province (Le Maitre et al., 2000). A detailed survey of
the Western Cape mountain catchments showed that around
60,500 out of 1,138 million hectares (ha) (5% of the total surface
area) had an invasion density of at least 25% (Marais, 1998).
Initial estimates are that approximately54% of all riparian areas
also have an invasion density of at least 25%, or, effectively,
some 460,000 ha (Versveld et al., 1998; Cullis et al., 2007).
Although this means higher storage of carbon, it is important to
note that themajority of these invasive alienplants are also fire-
prone or fire dependent.
The invasion of river courses and of important catchment
areas is particularly problematic in terms of streamflow reduc-
tion (Versveld et al., 1998). A number of studies have demon-
strated that alien plants have a measurable negative effect on
stream flow (Le Maitre et al., 1996; Scott andSmith, 1997; Baskin,
1996; Van Wilgen et al., 2001; Görgens and van Wilgen, 2004).
The level of streamflow reduction has been quantitatively
linked to the vegetation type and density of invasive plants. Le
Maitre et al. (2000) estimated the total incremental water use of
invading alien plants (i.e. the additional water use compared
with the natural vegetation) at about 3,300 million m
3
of water
per year. Primary catchments in the Western Cape had the
greatest reduction, of up to 31% of mean annual runoff (Le
Maitre et al., 1996, 2000). Cullis et al. (2007) estimate that the
current loss of usable water due to invasive alien plants is
695 millionm
3
, equivalent to 4% of the total registered wateruse.
If left unchecked, this could increase to more than 2,720 million
m
3
, or 16% of total registered water use (Table 1). Given the scale
of the existing impact and the fact that it continues to increase
as the extent and density of the invasions increases, a national
control programme is essential if the country's water resources
are to be protected.
2.3. The restoration process
The control of invasive alien plants involves both manual
clearing and the release of biological control agents. On-going
research and releases of organisms address the latter, but will
not replace the need for physical clearing until all the most
important species are under biological control and are in sig-
nificant decline. Meanwhile, physical clearing is the most costly
form of restoration. It involves the removal of trees with saws
and chainsaws, chemical treatment, and returning to the same
site several times over the five subsequent years to remove new
growth. In many instances, tree removal involves accessing
mountainous areas with climbing ropes, requiring additional
skill and cost. The initial clearing cost is very high (as much as
7000 Rand per ha for densely infested areas) (R6.50–7.50: US$1),
but the costsof subsequent follow-upefforts decreasewith each
treatment. As long as seedbanks remain or there are nearby
seed sources from invasive ornamental trees, windbreaks, or
plantations, maintenance must be on-going, but costs are very
low (less than R50 per ha per treatment which could be at
intervals of 1–3 years depending on the species in question) if
carried out regularly. After clearing, indigenous vegetation is
able to colonise from existing seedbanks. The recoveryis usually
relatively rapid (within a decade) because of the vegetation
types involved. For example, Fynbos is adapted to recovering
from regular fire.
Fig. 1 –Areas of high water yield. Source:Driver et al., 2004.
790 ECOLOGICAL ECONOMICS 65 (2008) 788–798
The Conservation of Agricultural Resources Act (CARA),
promulgated in 2005, makes landowners liable for clearing
invasive alien plants from their lands. However, the reality is
that due to the high costs involved, landowners are not able to
comply unless the level of infestation is very low. To date the act
has simply not been enforced, while in some cases govern-
ment has supported landowners to clear invasions through the
WfW programme. In any case, it is debatable whether making
landowners responsible for past invasion is equitable (Turpie,
2004).
3. The Working for Water Programme
3.1. Background
Payments for Ecosystem Services in South Africa have largely
come about through the establishment of the Working for
Water (WfW) programme in 1995. This government pro-
gramme was initiated in response to the realisation of the
gravity of the threat that alien plants posed to water supplies. A
group of natural resource managers and scientists presented
the idea of the programme to the then Minister of Water Affairs
and Forestry, Prof. Kader Asmal, of the newly elected African
National Congress (ANC) government, in 1995. They proposed
addressing two immediate challenges with one intervention:
clearing invasive alien plants could not only address the effect
of invasive alien plants on the country's scarce water re-
sources, but also had considerable potential for job creation
and economic empowerment.
Today, WfW is a public agency under the jurisdiction of the
Department of Water Affairs and Forestry (DWAF) with the
mandate of controlling invasive alien plant infestation. What
is particularly unusual about the programme is that it was
initiated and is funded primarily asa poverty reliefpublic works
programme. This is reflected in its goal of sustainably control-
ling invasive alien species by 2020 “in order to contribute to
economic empowerment, social equity and ecological integrity”
(DWAF, 2004).
As shown in Table 2, the WfW programme has an annual
budget of more than R400 million (RSA,2003)—the largest single
natural resource based poverty relief and public works expen-
diture in the country. In comparison, the government's total
expenditure on all national and provincial parks and related
activities in 2001/2002 was R728 million (RSA, 2003). The bulk of
the funding over the last 11 years has been generated through
poverty relief programmes (the Reconstruction and Develop-
ment Programme, then the Special Public Works Programmes,
which evolved to become the Expanded Public Works Pro-
gramme).The poverty relief programmes are funded in clusters.
WfW forms part of the Environmental and Social Cluster. DWAF
has also contributed substantial amounts to the programme,
using funding allocated to the Department by the National
Treasury from tax revenue. The National Treasury allocates
Table 1 –Impact of water use by invading alien plants on mean annual runoff in primary catchment areas of South Africa
(including Lesotho)
Primary river system Natural mean annual
runoff
Condensed invaded
area
a
Incremental water
use
Water use
(million m
3
) (ha) (million m
3
) (% of mean annual
runoff)
Limpopo 2,382 122,457 190 8.0
Olifants 2,904 217,855 290 10.0
Vaal 4,567 64,632 191 4.2
Orange 7,148 141,012 141 2.0
Olifants, Sout and Doring 1,008 37,623 36 3.5
Namaqualand coast 25 46,618 23 91.0
W Cape and Agulhas coast 2,057 384,636 647 31.4
Breede and Riversdale coast 2,088 84,398 182 8.7
Gouritz 671 59,399 75 11.2
S Cape coast 1,297 52,993 134 10.4
Gamtoos 495 34,289 97 19.5
PE Coast, Swartkops and
Coega
150 11,358 40 26.8
Sundays 280 3,964 8 3.0
Bushmans and Alexandria
coast
173 22,894 73 42.3
Gt Fish 521 6,980 21 4.1
Border Coast 579 12,483 56 9.6
Great Kei 1,042 30,694 138 13.3
Former Transkei 7,384 68,493 217 2.9
S KwaZulu-Natal 3,121 46,442 126 4.1
Tugela 3,991 62,151 105 2.6
N KwaZulu-Natal 4,742 100,574 230 4.9
Komati to Nwanedzi 2,871 124,494 283 9.9
Total 49,496 1,736,438 3,303 6.7
Source: Based on Le Maitre et al. (2000).
a
Condensed area = % density of invasion × area (e.g. 100 ha at 50% cover is equivalent to 50 condensed ha).
791ECOLOGICAL ECONOMICS 65 (2008) 788–798
budgets are allocated to the departments responsible for pro-
grammes in three-year cycles, known as Medium Term
Expenditure Frameworks (MTEF). Budgets are based on three
main criteria: the functional priority (e.g. water conservation,
biodiversity, productive potential of land), theimpact on poverty
relief and economic empowerment, and the department's
capacity to spend the budget effectively and efficiently. Some
international aid funding was raised of WfW during its early
years, but although it played a catalytic role it made up only a
small proportion of the total budget. Water management agen-
cies also entered into formal partnerships with WfW under
which they contributed to funding the programme. DWAF's
water trading account (funds raised from water charges)
provided another source of income, as discussed in the next
section. The funding from this source is focussed on the control
of invasive alien plants with acknowledged negative impacts on
water resources (DWAF, 2007). For some years WfW reported
matching funding spent by the forestry industry through an
informal partnership through Forestry South Africa (a non-
governmental agency representing commercial forestry). Since
the partnership came to an end, the programme has not re-
corded this expenditure, although private sector companies
continue toclear. Likewise, other sources of funds come and go
for various reasons, but they remain minor contributors.
WfW effectively acts as a conduit for the provision of eco-
system goods and services, predominately water supply,
through the control of invasive alien plants and the provision
of unskilled job opportunities, using predominantly taxpayers'
money. Whether this is justifiable in terms of the spread of
the taxpayers versus the beneficiaries of clearing is uncertain,
although it should be noted that water savings in one area have
geographically widespread ramifications, and biodiversity ben-
efits are also likely to have more than localised benefits. Though
this form of transfer paymentdoes not constitute the creation of
a market for the provision of ecosystem goods and services in
the strict sense, it does constitute a payment for the service
delivery. While much of the earlier work has been done ex-
clusively within national and provincial parks, most (66%) of
WfW's activities over the latter years (2001–2006) was outside of
these conservation enclaves, contributing greatly to conserva-
tion and ecosystem health on unprotected land.
3.2. Mandatory payments by water users
The DWAF includes a water resource management fee in the
water tariff charged to consumers. The water charge levied for
catchment management does not distinguish between richer
and poorer consumers per se, but it is superimposed on a
stepped pricing system that does. Water resource manage-
ment charges include a charge for the control of invasive alien
plants as well as charges for activities such as planning and
implementation, pollution control, demand management,
water allocation and water use control. In the past, charges
for clearing of invasive aliens were levied in 13 of the country's
19 Water Management Areas (WMAs). The aim is to extend
this to all 19 water management areas as some of the most
stressed catchments have not yet been included.
Once fully operational, the charges levied will be based on
WfW's cost estimates, divided by the total volume of registered
water use by the agricultural, domestic and industrial sectors,
weighted according to affordability, assurance of supply and
equity (see also Blignaut et al., 2007). Initially, only domestic
water users were fully charged, while agriculture received a
substantial subsidy and the forestry sector did not contribute
anything, both due to affordability considerations. This practice
is likely to change in the future as the impacts of invasive alien
plants become clearer. A total of between R23 million and
R48 million per annum wasallocated from funds raised through
DWAF's water tariffs (Table 2). Most (63%) of this is generated in
the four Western Cape WMAs (16–19) where the problem of alien
infestation in relation to water supply is greatest.
3.3. Voluntary payments by water users
Certain municipalities have entered into payment agree-
ments with WfW to alleviate localised water shortages. In
1996 the municipality of Hermanus, a coastal resort town in
the Western Cape, responded to critical water shortages by
introducing a block rate tariff system for water that effec-
tively raised water prices for users above other areas. Its main
motivation was water demand management, since increas-
ing demand was outstripping supply. A significant percen-
tage of the revenues collected were paid to WfW for clearing
Table 2 –Funding for the Working for Water Programme, 1995–2006 ('000 Rand)
1995/
96
1996/
97
1997/
98
1998/
99
1999/
2000
2000/
01
2001/
02
2002/
03
2003/
04
2004/
05
2005/
06
Poverty relief programmes 25,000 50,000 150,000 125,426 126,370 232,180 314,813 330,000 330,000 370,121 354,753
DWAF core funding 7000 90,000 115,000 70,700 59,653 57,110 35,250 46,424 17,264 16,608
Water tariffs through DWAF 23,200 27,900 24,400 48,400 38,800 26,335 27,915
Water tariffs through other water
management authorities
4291 11,059 10,000 12,500 2800 500
Local authorities and TCTA 20,000 218 1985 1000 400 50 400 2400 3400
Foreign funding
b
43 377 8915 6693 4687 2300
Private sector
c
2046 5334 975 314 300 300
Total budget 27,046 86,668 251,436 260,534 241,762 328,520 397,523 416,000 415,624 416,120 402,676
Source: Working for Water, unpublished data.
a
Initial partnership with Rand Water (the water management agency for the greater Johannesburg metropole) came to an end without a new
partnership being negotiated.
b
From Finish and Norwegian governments.
c
Formal funding partnership with the private sector agencies came to an end; clearing by private sector companies is still on-going but not
reported on.
792 ECOLOGICAL ECONOMICS 65 (2008) 788–798
invasive alien plants in the catchment areas from which
Hermanus derives its water. Water consumers participated
in developing this arrangement. The formal arrangement
with the local authority continued until 2001. While the
arrangement was in place, WfW treated 3387 ha (763 ha if
condensed to 100% infestation) in the catchment of the De
Bos Dam, the reservoir supplying Hermanus with water, at a
contracting cost of R2.7 million with an estimated total cost
of R4.9 million (including project management costs and all
other overhead costs), generating 91 person years of employ-
ment. Using Cullis et al. 's (2007) very conservative estimates
of the impacts of invasive alien plants in mountain catch-
ments, it is estimated that this action prevented losses of
between 1.1 and 1.6 million m
3
annually. Since 2001, the local
authority has contracted teams directly to continue the
control of invasive alien plants.
Also in the Western Cape, the George municipality has
recently embarked on a new augmentation scheme to sup-
plement the capacity of the Garden Route Dam. After study-
ing the impacts of invasive alien plants on water supply,
George concluded that investing in a clearing programme to
enhance water supply was economically viable. George
municipality has thus recently committed to payments of
R400,000 per year for clearing invasive alien plants in the
Outeniqua Mountain Catchment Area, either through WfW,
or through the Western Cape Nature Conservation Board,
which manages the mountain catchment area. The amount
is collected through the trading account of the DWAF and is
shown as such in Table 2.
Water utilities are financially autonomous and publicly
owned companies that supply water to urban users in South
Africa. Some of these utilities (e.g. Umgeni Water, the largest
bulk water supplier in KwaZulu-Natal province) have estab-
lished contracts with WfW to ensure the continuity of their
water supplies. In the Western Cape, the Trans Caledon
Tunnel Authority (TCTA) is responsible for the implementa-
tion and funding of the R1.6 billion ($250 million) Berg Water
Project, which entails the construction of the Berg River Dam
to supply water to local farmers and the City of Cape Town.
The project will be funded through water sales. This company
concluded that payments for ecosystem services would be a
worthwhile economic investment and signed a contract to pay
R8 million to WfW over three years to clear the mountain
catchment areas that will supply the Berg River Dam. To date
some R11.6 million has been spent on the project, of which
TCTA contributed an estimated R8.4 million, clearing an area
of 13,200 ha. The annual long-term streamflow gains from
clearing the current levels of invasion in the treated area,
based on Cullis et al. (2007), are between 1.8 and 2.6 million m
3
.
On the other hand, if nothing had been done and invasions
had been allowed to increase to 100% infestation, water losses
could have increased to between 4.3 and 6.2 million m
3
per
annum.
4. Characteritics of the WfW programme
According to Wunder's (2005) definition, PES is a voluntary
transaction between two parties. Even after 10 years of
operation, only a small proportion of WfW's funding comes
from voluntary payments, although this proportion is likely to
grow. DWAF's draft Water Pricing Strategy states that the full
cost of controlling certain invasive alien plants (using the most
cost effective possible action) may be charged to affected water
users in order to increase long-term water security (DWAF,
2007), although these costs may also be supported by subsidy
where available and appropriate. It also states that the cost
of control will be allocated to all water user sectors that are
willing to participate, in proportion to their registered water
abstraction, and that these sectors will receive the resultant
additional water (DWAF, 2007). The latter suggests an element
of voluntariness, at least at the sectoral level.
As demand for water grows, there is the potential for
moving from a system that is highly dependent on govern-
ment funding to one based, at least in part, on voluntary
transactions. This potential is demonstrated by the voluntary
agreements that have been entered into to date, as well as by
the expressed willingness of consumers to participate where
they have been consulted. As the role of Catchment Manage-
ment Agencies (CMAs) increases (see section 8 below), the
incentives to enter into such voluntary arrangements with
WfW and similar service providers are likely to increase.
In most PES systems, the sellers are landowners, whether
state, private, or communal. In this case, the ‘sellers’are roving
service providers in the form of small-scale contractors who
perform restoration work on land under any type of ownership.
The seller selection criterion is that contractor staff must have
been previously unemployed. Like some PES systems, where
landowners bid to participate as service providers, potential
contractors tender to win contracts. Contracts specify how
invasive alien plants in a defined area are to be treated, either
chemically, mechanically, or both, depending on the species
and maturity of the stand.
The landowners involved in the transaction include private
landowners, communallandowners, and the state (in the case of
protected areas). Private and communal landowners are mainly
farmers, and typically use the affected areas as rangelands and
to harvest natural resources, such as wild flowers and thatch
(roofing material) for eithercommercialor subsistencepurposes.
Private and communal landowners benefit from having their
land cleared through increased productivity, but the cost of
clearing is too high to make it worthwhile from a private
perspective (Turpie and Heydenrych, 2000; Turpie et al., 2003),
even though they are obligedto do so by law. Most WfW projects
are on public lands, but some projects are on communal or
private lands, usually in important conservation areas. In the
latter cases the landowners do not bear any costs.
Another unique feature of this programme is that the cost
of intervention is relatively low. This is unlike most other PES
systems where conservation action carries a significant and
on-going opportunity cost, typically as a result of decreased
agricultural or forestry production from the lands in question.
In this case, total costs are low because (1) no land use is
displaced, and in fact treated land (if used for agriculture or
natural resource harvesting) is likely to be more productive, so
the opportunity cost portion of the total cost is low or even
negative; and (2) labour costs are low from society’s perspec-
tive as the labour employed has few alternative formal sector
employment opportunities. This leaves materials costs (equip-
ment, travel to sites, etc) as the major costs.
793ECOLOGICAL ECONOMICS 65 (2008) 788–798
With low costs, the programme has the luxury of being able
to prioritise areas for action using ecological and social
rationales. Site selection has been relatively ad hoc in the
past, based on catchments that were perceived to be priority
areas for clearing. There are plans to use an ecologically based
cost-benefit analysis tool developed by Marais et al. (2001) to
increase the economic efficiency of site prioritisation. How-
ever the tool's data intensity and the lack of economic data,
such as nature based and ecotourism and veld and forest fire
management costs, makes it relatively expensive to do.
5. Achievement of programme objectives
The WfW programme has been hailed as highly successful in
terms of its objective of restoring water supply in alien-infested
catchments (Macdonald, 2004). Hobbs (2004) calls it one of the
most successful integrated land management programmes in
the world,referring to the programme's impacts on biodiversity,
water and socio-economic development. Mooney and Neville
(2000) described the programme as an outstanding example of
dealing with invasive alien plants in a holistic manner. Wood-
worth (2006) calls it inspirational in terms of the restoration of
natural capital. Since its inception, the programme has cleared
more than one million ha of invasive alien plants. Marais and
Wannenburgh (2007) estimate that theclearing of invasive alien
plants from riparian areas between 1997 and 2006 increased
stream flow by nearly 46 million m
3
per annum. Whereas costs
have been very well monitored, progress in terms of restoration
of infested lands has not been tracked in detail until the es-
tablishment of GIS-linked monitoring in 2000/01. Based on
available data, it has been established that good progress has
been made with certain species, but that some will not be under
control within the next 50 years (Marais et al., 2004).
While many PES programmes include the objective of
poverty alleviation as a side objective, it is the one of the pri-
mary objectives of WfW. Indeed, the continued political support
of the programme has hinged on its being primarily a poverty-
relief programme. The programme has created thousands of
jobs, with a strong emphasis on gender equity, and provides
considerable benefits such as skillstraining and health and HIV/
AIDS awareness programmes. For example, Milton et al. (2003)
estimate that 24,000 previously unemployed people, 52% of
whom are women, were employed in 2000. It also generates
further income through the development of value adding in-
dustries, such as furniture, fuel wood, and charcoal that use
alien vegetation as inputs.
Although the social aspects of WfW tend to be valued more
highly than water provision, it is likely increasing water scarcity
will lead to the water provision aspects being increasingly de-
manded by the private sector and water utilities. Indeed, if the
programme continues to rely heavily on poverty relief funding,
it might find itself having to compete with other poverty relief
programmes in the future. It is important to increase payments
from service users to secure the continuation of service delivery.
Nevertheless, given the scale of the invasive alien species
problem facing South Africa, and the increasing scientific proof
of its benefits (water delivery and biodiversity protection)
provided by clearing action, the WfW-model is likely to be
sustainable and productive over the long term.
6. Expanding the Working for Water model
The WfW programme has focused primarily on projects that
improve water delivery, and not on ecological restoration per
se. This inherent shortcoming has spawned two new pro-
grammes, Working for Wetlands and Working for Woodlands,
which are engaged in restoration of those habitats. The wet-
lands programme is largely motivated by the impact on bio-
diversity as well as hydrological services. The woodlands
programme is geared towards carbon sequestration services.
The Working on Fire initiative is another offspring of the WfW
programme: it promotes and is actively involved in the re-
sponsible and safe use of fire as an environmental manage-
ment intervention.
Moreover, even under WfW, the control of invasive alien
plants now also takes place in areas where there is no hydrol-
ogical benefit—for biodiversity conservation or to enhance the
productive potential of land. For example, WfW clears Prosopis
in the Northern Cape Province primarily to restore the pro-
ductive potential of grazing lands. Prosopis preferentially in-
vades depressions in the landscape that can have up to four
times the grazing potential of upland areas, according to farm-
ers. The capital costs of clearing dense stands of Prosopis are
simply unaffordable to land users (around R2000 to R2500/ha
for initial clearing alone), where the retail value of the land
varies between R600 and R1000/ha. In the Eastern Cape Prov-
ince, invasive Acacias have been cleared from coastal dune
systems on state land to make way for the cultivation of
indigenous thatching reeds that can yield R60,000–R120,000
per ha every four to six years. WfW plans to recover the cost of
clearing by selling the mature thatch. The project, if well
managed, would have an internal rate of return of 6.0%
(Kleynhans, 2006). This estimate is conservative as it includes
the full cost of clearing but does not include the value of other
ecosystem services, such as a reduction in veld fire intensity
and its related risk to infrastructure and improvements to
biodiversity and the water table. If successful, this project will
lead to more self-sustaining natural resource based commu-
nity development projects being set-up.
Taken together, these developments could be paving the
way for the development of an overarching ‘Working for
Ecosystem Services’organisation that houses nature-oriented
(restoration) poverty-relief programmes. The existing model
and potentially extended model differ substantially from other
PES systems in that restoration is carried out via a contract
with individuals other than landowners, and that there is a
significant poverty-alleviation component. This is not to say,
though, that landowners may not incur opportunity costs. The
certainly may in the case of wetland or woodland restoration
initiatives.
7. The rationale for an ‘umbrella service’for PES
The areas of high water provision in South Africa are also the areas
that contain very important biodiversity. Indeed both the
Drakensberg and Cape mountainsarecentresofendemism,and
the latter form a significant component of the Cape Floral
Kingdom, which has been billed as the world's “hottest”
794 ECOLOGICAL ECONOMICS 65 (2008) 788–798
biodiversity hotspot (Myers, 1990). Thus, a system that encourages
the conservation of catchment areas for water supply will also
make an important contribution to habitat maintenance and
biodiversity conservation. In this way, we suggest that water
provision could be seen as an ‘umbrella service’, in that initiatives
takentopreservethisservicewouldalsoleadtotheconservation
of biodiversity and other ecosystem services. In this regard it is
interesting to note that, in South Africa, both water and carbon
may play this role, but in geographically distinct areas. The high-
biomass areas suitable for carbon sequestration through restora-
tion of high-biomass indigenous vegetation types are completely
separate from the low-biomass mountainous areas that are
important for water provision.
Although it is now well known that ecosystems generate
numerous services, such as nutrient cycling, provision of
refugia, etc. (Millennium Ecosystems Assessment, 2003), some
of these services are inherently more marketable than others.
Their marketability lies in their tangibility or measurability,
and in the context of PES, the ability to prove that changes in
management lead to changes in the output of economically
valuable services. Indeed, in PES systems around the world, it
has been found that most examples are for a few main
commodities, particularly carbon, water, productive potential,
biodiversity and landscape beauty, with markets for carbon
sequestration and hydrological services being dominant
(Landell-Mills and Porras, 2002; Pagiola and Platais, 2007).
Among these commodities, Pagiola and Platais (2007) argue
that water services have the most potential for application of
the PES approach as water users (1) are easy to identify; (2)
receive clear, well-defined benefits; and (3) often already have
financing mechanisms—none of which is true for biodiversity.
Carbon lies somewhere in between. In particular, there are
tight overall limits on the emission reduction credits that can
be generated by land use-based activities under the Clean
Development Mechanism (CDM) and very restrictive rules on
eligibility and methodologies, while the voluntary (‘retail’)
market, though more flexible than the CDM market, is also
smaller and tends to pay less.
Marketing the hydrological and climate regulation functions
of ecosystem restoration projects has many advantages. They
are wellunderstood by the broad populace,making it more likely
that willing-buyer and willing-seller combinations can be found.
The positive externalities of these projects, such as biodiversity
conservation, protection of endemism, nutrient recycling, etc.
are therefore ‘un-priced’coincidental benefits. Should they,
however, be clearly identified, the restoration activity could sell
at a premium over projectswhere these positive externalities are
not clearly identified ornot present. In this way hydrological and
climate regulation restorationprogrammes become an umbrella
for the bundling of various ecosystem services.
It will be pertinent to determine (1) the extent to which the
different benefits are correlated with each other, and (2) the
extent to which the cost and actions of addressing one benefit
also cover that of addressing the others. For example, if bio-
diversity conservation in a given area requires costs additional
to that of improving water supplies, then it would still be
necessary to seek separate financing. As shown in Fig. 2, there
is certainly extensive, though not complete, overlap between
priority catchment areas and areas, which require conserva-
tion action in South Africa (Midgley et al., 1994; Rouget et al.,
2004).
8. Fitting a WfW type model into a broader
PES framework
The way for introducing PES as a broad-scale conservation tool
for achieving both biodiversity conservation and ecosystem
Fig. 2 –Critically endangered, endangered and vulnerable ecosystems in South Africa. Source: based on Rouget et al., 2004.
795ECOLOGICAL ECONOMICS 65 (2008) 788–798
service delivery has been paved by the development and
evolution of the WfW-model. Indeed, conservation planners in
South Africa are currently looking to PES as potentially playing a
major role in realising conservation initiatives (e.g. Diedrichs
et al., 2004), such as the Cape Action for People and the
Environment (CAPE), which has an ambitious conservation
plan for the Cape Floristic Region (Cowling et al., 2003), and the
Maloti-Drakensberg Transfrontier Project, which is embarking
on a conservation plan for the Drakensberg and Maloti
Mountainsof South Africa and Lesotho (Zunckel, 2003).Invasive
alien plant management is seen as one service amongst other
natural resource management activities that will constitute the
supply side of the PES market in South Africa. The other services
will include wetland and riparian restoration (restoration of
erosion gullies, etc.) and management, integrated grazing and
land use regimes and an integrated veld and forest fire
management regime. PES is being seen as an opportunity for
(a) sustainable financing of the publicly owned protected areas,
or leveraging the management costs of these conservation areas
into perpetuity, and (b) providing an incentive for private land
owners to engage in biodiversity conservation in order to meet
conservation targets that cannot be reached by the protected
area systems. Although conservation in both areas stands to
provide a wide range of benefits in terms of maintenance of
biodiversity and ecosystem services, neither meets the neces-
sary criteria for trade in carbon credits, and water is the most
valuable ecosystem service in both cases (Turpie et al., 2003,
2007; Turpie, 2004). Indeed, these two areas are the source of
most of the water used throughout the country.
Where hydrological functioning can be sold as the ‘umbrella
service’, the future potential for successful implementation of
PES has been significantly enhanced by the institutional
arrangements that will be established under South Africa's
new Water Act (Act 36 of 1998, DWAF, 1998). According to the
Act, the CMAs that will be established will effectively ‘own’the
water and finance catchment management through the sale of
water rights. The CMAs will have the incentive to invest in
catchment conservation by means of payments to landowners
and managers, as well as through management agents such as
WfW, as this will yield benefits in termsof more water available
to sell. Thus, in addition to the creation of WfW, the legislated
requirement to establish CMAs has effectively also paved the
way for a very effective institutional arrangement to facilitate
water-related PES in South Africa.
Based on these existing structures, we envisage a future
model for water-related PES in which the CMAs are the direct
buyers of hydrological services, via a type of PES facilitation
agency that brokers deals, and monitors service delivery (Fig. 3).
The service providers might be predominantly nature-oriented
poverty-relief programmes such as WfW, but could also include
landowners and conservation agencies directly. Under this type
of set-up, there is no need to impose specifically labelled levies
to be paid by water consumers for catchment conservation,
although the costs borne by the CMAs would be passed on to
these consumers. A further advantage of such a system is the
fact that water price increases could be designed in such a way
as to achieve water demand management in addition to the
conservation of catchment areas.
9. Conclusions
Whereas links between ecosystem quality and service delivery
have seldom been quantified in physical terms, South Africa
presents a fairly unusual case in that the relationship between
ecosystem quality and water yield are very well understood.
Because of the increasing scarcity of water in South Africa, there
has been a high level of support of research into the impacts of
Fig. 3 –A potential model for establishment of payments for hydrological services.
796 ECOLOGICAL ECONOMICS 65 (2008) 788–798
invasive alien plants on water supply. The quantification of
these impacts spawned a government-funded effort at clearing
invasive alien plants. Although well funded through the tax
base and compulsory charges, voluntary private initiatives have
also been undertaken to boost the funding to WfW. This is not
only testament to the fact that the resultant restorationof water
services makes financing WfW worthwhile, but also that there
is a potentially large voluntary market for these services. The
fact that delivery of these services is labour intensive and
provides opportunities for poverty relief makes it even more
attractive.
The restoration and protection of catchments to improve
water yields also leads to the conservation of biodiversity, a
benefit that is more difficult to commodify and sell. The same
is potentially true for the restoration of woodlands and thicket
for carbon sequestration. With this rationale in mind, major
conservation initiatives in South Africa are looking to PES
systems, mainly for water, as potential financing mechanisms.
With the existence of WfW and its related programmes, and
the legislative environment regarding the control of catchment
water resources, it will be possible to implement these systems
with little need for major innovations or institutional reform.
The key challenges that lie ahead include increasing the
voluntary payments for hydrological services, identifying ways
to monitor changes in service delivery, and linking payments
to service delivery. It is also important to improve under-
standing of the relationships between management actions
and service delivery for a broader range of situations than the
clearing of alien invasive plants, such as the implications of
wetland restoration for water yield.
Acknowledgements
We are grateful to the participants of the Workshop on Pay-
ments for environmental services: Methods and design in
developing and developed countries, held in Titisee, Germany,
in June 2005, for their feedback, and to Stefano Pagiola, Sven
Wunder, Nicola King and two anonymous referees for their
comments on earlier drafts. This paper does not necessarily
represent the official view of the employers of any of the three
authors.
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