Natural assets of Cape Town worth billions

The economic value of the City of Cape Town's natural assets, such as fynbos, mountains, rivers and beaches, is estimated at anywhere between R43 billion and R82bn, and the annual market benefit of these is conservatively calculated as being between R2bn and R6bn.

But in 2008/09, when these calculations were made, the city logged just R371 million in operating expenditure in managing these natural assets - 2.5 percent of all municipal "Opex" in that financial year, and just R110m across all departments in capital expenditure - or only 2.1 percent of total Capex for the year.

This is according to a report, Environmental Fiscal Reform, on the value of the city's natural assets, that was before the planning and environment portfolio committee this week.

If the city wants to retain the economic and social value of its natural environment, and the "goods and services" it provides - for example, clean air and water, desirable habitats, and tourism and recreational opportunities - there will have to be a "significant" increase in investment in the management, protection and rehabilitation of the natural environment, the report stresses.

But it notes that the city's environment spend has decreased in real terms in the past 10 years, and is "almost negligible when compared to total expenditure".

The report makes it clear that Cape Town's unique natural environment has been recognised as a central driver of its economy and global desirability, and the importance of its natural assets for economic growth and stability is emphasised in major policy initiatives.

"However, little is understood of the true economic value and flow of goods and services that the natural environment provides the city and its communities," the report's executive summary states.

"All information and data confirm that the natural environment in Cape Town is ever-increasingly under pressure, and that this pressure is likely to increase? as the city grows, as well as through? pressures like climate change."

The report also acknowledges that the city faces "significant social challenges" and that there is a wide disparity in living standards and in access to basic services.

"This service backlog and extensive poverty in the city must remain as the budget priority if social inequalities are to be reversed. Adding additional burden to the budget to accommodate increased environmental investment will remain a challenge."

The report notes key findings of a 2009 study of the economics of investing in the city's natural environment. These included: