The Council for Scientific and Industrial Research (CSIR) has estimated that
commercial farmers in the Dwars River area of the Western Cape spend R600 000 a
year ridding their irrigation systems of filamentous algae.
The CSIR was in the process of formulating a tradable permit system as a tool to avoid extreme pollution in the river, which served as an important water source to the citizens of Cape Town.
CSIR resource economist Dr Willem de Lange arrived at an estimated R1 887.92 per hectare a year as the cost of eutrophication. The figure also included a management budget for filamentous green algae mitigation strategies specific to the area.
He explained that this figure enabled the calculation of a reserve price for filamentous green algae pollution permits, which was estimated at between R2.25/g and R111/g
of filamentous green algae.
Nutrient enrichment from raw or partially treated sewage, agricultural effluent and other forms of phosphorus-rich pollutants stimulated the growth of filamentous algae, which clogged farmers’ irrigation systems.
The standard practice to manage the impacts of filamentous algae was frequent cleaning of irrigation systems and this provided the basis to establish a cost estimate on the impact of algae.
“Farmers were aware of the algae problem but did not know how big the problem was and how it affected their pockets,” said De Lange.
Commercial agriculture in the Dwars River was dominated by deciduous fruit and viticulture with plums being grown on 70% of the area. As such, De Lange used plums as a representative deciduous fruit crop in his study.
About 307 ha in the study area were dedicated to deciduous fruit and, assuming that all farmers were faced with the challenge of filamentous algae, the deduced R1 887.92 per hectare a year translated to R579 591.44 a year for deciduous fruit in the area – enough to establish 10 ha of plums.
Tradable permits sought to limit pollution at an optimal cost to the polluter, as well as to create an incentive for companies to reduce pollution further, relative to their entitlement, since it was possible to sell the difference to willing buyers.
“Pollution in effect becomes a tradable commodity. This mechanism uses the marketplace to distribute pollution impacts more evenly to support the self-cleansing capability of rivers. The permit is not a system to make the problem go away but is a tool to avoid extreme events,” he stated.