Enticing the private sector to invest in nature

conservationThe Western Cape natural capital costs society around R4.5-billion a year. Most of the costs are due to the impact of invasive alien species on water resources, and the impact of the fisheries industry.

That’s according to Albert Ackhurst of the Department of Environmental Affairs and Development Planning at the 2014 Fynbos Forum in Knysna. The Department is currently investigating ways to encourage the private sector to invest in ecosystems services, given that the public sector can’t handle the costs without support. This includes developing motivating factors to excite institutional investors, companies, industry players and even farmers to become involved.

In order to ascertain what drives potential investors, the Department has undertaken studies to better understand what information the private sector would need to invest, and what kind of returns they would expect. Studies to date have shown that the private sector would want to see financial returns, with relatively low risk, or would hope their involvement could offer them a competitive advantage in the market place.

Ackhurst said key findings have also focused on what ecosystems goods and services are critically important for the economic sustainability and growth of the Western Cape, and where these are most at risk. Both the fisheries industry and the water resource losses cost the economy about R1.3-billion each a year.

The Department is now developing five ‘Deep Dive Projects’ across the province, including a fynbos restoration through honeybush tea project, as well as a project to assess the use of alien biomass for chips, charcoal and energy. It’s also investigating alternative ways for the private sector to engage with conservation, through instruments such as Environmental Impact Bonds – essentially instruments that provide financial returns that are aligned with reaching specific environmental impacts.

The Western Cape government is currently holding workshops with the private sector, municipalities and other players to communicate the developments, and to further understand what actions government can take on to develop this marketplace.