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Changing Currents – Chapter 2: Addressing Nature’s Water Needs

Chapter 2

Addressing Nature's Water Needs

Ecosystem Services

Freshwater is vital to ecosystems, biodiversity, and human well-being. Without water, there is no life. Water is also a critical component of Canada’s natural resource sectors. And so the implicit fact is that water must be managed sustainably to ensure the continued economic prosperity of these sectors. International experience has demonstrated that managing water from a supply perspective alone can pose risks to both the environment and society when there is little to no consideration for the needs of the natural environment. The sustainable use of water by the natural resource sectors cannot be achieved in the absence of considerations of the integrity of ecosystems and the services they provide.

The concept of ecosystem services was created to encourage a dialogue about the human dependence on and value of the natural environment, both socially and economically. Ecosystem services are the benefits provided to people, both directly and indirectly, by ecosystems and biodiversity. Direct economic benefits are those materials gained through the use of natural assets (e.g., water, trees, and crops) that provide inputs to production. Indirect benefits refer to all those natural goods and assets that keep soil intact, assimilate pollutants, pollinate plants, provide oxygen, and lead to regeneration of natural assets (Figure 3). These latter functions are a crucial foundation of the economy and human well-being. Moreover, their absence from the price of goods and services, market value, and policy decisions surrounding market drivers, result in numerous hidden costs to society and industry.

FIGURE 3

The UN Millennium Ecosystem Assessment identifies four types of ecosystem services provided by freshwater: provisioning, regulating, cultural, and supporting services (Table 1).

Human alterations to the timing, volumes, quality, and temperature of water can impair ecosystem health and ultimately the services they provide, and the direct economic benefits they bring.[10] Conventional financial markets do not capture the value of these services, yet the value provided to society by freshwater cannot be underestimated. In regions where ecosystems are severely degraded, the economic costs associated with lost ecosystem services and efforts to restore them are considerable and can far outweigh benefits of other water uses. The sustainability of Canada’s water resources is directly related to the ecosystem services they provide to society, and should be placed in that context.

TABLE 1

Human activities that affect ecosystem services

Understanding the nature of water and its movement through the hydrological cycle is necessary to recognize how water can be managed to capitalize on its many uses. Although water is a finite element, its location and availability is constantly shifting. Water circulates from oceans and land to clouds, falls back onto land as rain or snow, absorbs into soils and feeds runoff, with each of these phases playing an important role in supporting ecosystems. It cannot be managed simply as a resource that regenerates in a predictable manner.

Even in watersheds that have been relatively unaltered by human use, freshwater ecosystems are constantly changing. A healthy aquatic ecosystem gains stability from complex interactions of a dynamic series of chemical, biological, and physical fluctuations. In essence, these interactions are the life-support system for all species and maintain a sort of equilibrium. It is the ability of ecosystems to change and adapt that makes them resilient.[12] And it is this resiliency that makes them capable of handling changes in flow, temperature, sedimentation, vegetation composition, and other conditions, such as diminished wetlands and contaminant inputs. However, the timing, frequency, and intensity of each of these pressures, separately and cumulatively, determine the degree to which the health of the ecosystem is compromised.[13] Human activities that occur in one part of a watershed can have effects on other parts of the ecosystem and so are not isolated in geography or time.

Clearly, human water uses and land management decisions change the ecosystem services provided by freshwater. Table 2 illustrates some of these impacts. Within limitations, the environment can adapt to pressures, provided that we take measures to minimize impacts and prevent irreversible damage. However the failure to address cumulative effects of fragmenting waterways — reduced variability in natural flows and increased contamination — in concert with the effects of climate change have already put many of Canada’s rivers and watersheds under considerable stress. When the health of a freshwater ecosystem is compromised and its productivity is diminished, there is a risk that the ecosystem will no longer be able to provide the full range of ecosystem services to humans. To manage these watersheds into the future, a shift away from supply-management toward an approach that is based on demands, including ecosystem needs, is necessary.

TABLE 2

Ecosystems management in the context of competing interests

The challenge in ecosystem management is that ecosystem services do not function in isolation. The services provided by ecosystems are interdependent and often interact in complex ways. Decisions that negatively affect one aspect of an ecosystem will likely negatively affect others; and likewise, those decisions that restore or improve one aspect of the ecosystem will almost certainly have multiple benefits. For example, years of phosphorous pollution from sewage treatment plants and agricultural runoff in Lake Erie caused a biological reaction that lowered levels of dissolved oxygen in the bottom layers of the lake. The low levels of oxygen suffocate many bottom-dwelling species, which provide food for other species. Long-term impacts cause a decline in all lake species, which ultimately impairs the ability of the lake to provide clean water for drinking, fish, and recreational use.[14] Careful monitoring and research of various components of freshwater systems is required in order to recognize when key thresholds of resiliency have been affected and to determine what decisions are required to reverse the changes.

Understanding the quantity and movement of water is a critical component of ecosystem management. Removing or restricting the movement of water from groundwater, lakes, wetlands, or rivers can impact the amount of oxygen in the system, water temperature, and species composition, among other things. Knowing the water requirements to sustain a healthy ecosystem — the “environmental flows” — is critical to water management. To understand requirements for environmental flows, managers must first have a basic knowledge of the ecological functions provided by the watershed.

In Canada, governments in many parts of the country are responding to the concept of environmental flows and acknowledge the interactions between water quality and quantity in surface and groundwater at the watershed level.[17] British Columbia is currently reviewing regulatory tools to legislate environmental flow, and Québec’s Bill 27 (An Act to Affirm the Collective Nature of Water Resources and Provide for Increased Water Resource Protection) provides the legal grounds to restore a water body to its original or a similar state. Yet, no province, to date, has legislated environmental flow protection measures. Canada has yet to develop a widely-acceptable science-based policy framework to define methods for determining environmental flows to be used by provinces and complement the general provisions of the federal Fisheries Act. Evidence and experience therefore point to the need for a national strategy to address environmental flows.

Alberta’s Water Act provides an example of a provincial measure that enables the protection of the aquatic environment in specific watersheds, as witnessed in the Athabasca. The Act enables the Crown to develop in-stream flow requirements and withhold up to 10% of flows through the use of a water conservation objective if it is in the public interest. But specifications for instream flow requirements are not in themselves legislated.

A key challenge of managing watersheds is addressing not only individual impacts, but cumulative ones as well. This requires current and future assessments of the sectors and other users in consideration of the interdependency of cumulative stream uses, as well as groundwater resources.[18] The Mackenzie River Basin demonstrates this well, as it is affected by the upstream development of oil sands on the Athabasca River and the Bennett Dam on the Peace River, and could be further impacted if proposals for hydroelectric development move forward on the Slave River. Governments of British Columbia, Alberta, Saskatchewan, the Northwest Territories, and Yukon recognized the need to work collaboratively to manage water and ecosystem requirements of the Mackenzie River Basin and have been doing so since the 1970s.

Human use of water causes changes to natural systems, but much can be done to ensure that alterations to freshwater flows don’t compromise the resiliency of the ecosystem.[19] Decisions about water allocation, the scale and placement of development, and the location, design, and operation of in-stream infrastructure are all important aspects of sustainable water management. Monitoring and assessment of measurements pertaining to hydrology, physical habitat, water quality, and biological function are needed to inform management decisions and monitor changes in the system.[20] To determine what changes are acceptable requires judgment on the adequate quantity, quality, and timing of flows in rivers required to maintain ecological resilience. As with all quantitative assessments, historical measures based on consistent, reliable data and capacity to assess and communicate results are required to address watershed trends. But ultimately, the determination of ecosystem water requirements will involve societal decisions on the desired condition of the ecosystem and water uses.[21] By making environmental flows a key principle of water policies, stakeholders at the watershed level will have flexibility to make societal judgments about future water uses before those uses are in direct competition with ecosystem needs.

Addressing the value of freshwater ecosystem services

Economic valuation of freshwater ecosystem services, or natural capital, is one method that builds upon the science of watershed assessments, bringing them into the realm of economic decision making. Economic valuation is useful in informing cost-benefit analyses and scenario analysis for land management, restoration, and development decisions. In Canada, valuation studies of freshwater ecosystem services have been conducted in the boreal forest, the Mackenzie River watershed, Lake Simcoe Basin, and in many settled areas of the country.[22],[23]

Because valuation of ecosystem services attempts to put a price on those things that are not normally valued in the marketplace and may not provide consistent “worth” across different landscapes, this type of assessment has certain limitations. Most of the attempts to date have been site-specific. The challenge is to expand these very local economic evaluations to larger scales in a meaningful fashion. Even at the local scale, barriers such as the lack of data and information about the resource and ability to assess ecosystem services in the context of the entire flow regime exist. Without this information, it is difficult to examine the trade-offs between multiple water uses and to make quantifiable determinations of those services (e.g., assessing the potential value of draining a wetland to expand agricultural land). Even with a service value in hand, the transaction of payments for watershed services is complex, although this is a field quickly developing at the regional level.

Ecosystem valuation is just one way markets can be used to conserve nature. Where markets exist for ecosystem services, the economic value of such services can be reflected in prices. Such markets exist in Canada for wetlands providing waterfowl habitat. Outside of Canada, they are increasingly common for in-stream flows protecting fish. An assessment of such instruments used to preserve water for ecosystem services is an area that requires greater attention in Canada.

Addressing ecosystem needs is a foundational area of policy research that has not received significant attention in Canada. Much can be learned from regional efforts to improve and incorporate ecosystem needs in watershed planning. Examples such as the proposed changes to the regulation of the Moses Saunders dam on the St. Lawrence River[25] and the process to incorporate “ecosystem base flow” for the Lower Athabasca River demonstrate this well.[26] Canada has yet to broadly incorporate environmental flows into existing policies. Ecosystem services valuation and environmental flow assessments hold promise in supporting Integrated Water Resource Management. But there is a need to better understand the outcomes of such mechanisms, the most effective roles and responsibility for planning and implementation in watershed management, and the information requirements to achieve these ends. There is also a need for improved knowledge about how to address the economic and environmental trade-offs that come with various water uses.

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(d) The Brisbane Declaration is a non-binding commitment signed by more than 800 delegates from 57 countries, including Canada, in 2007. It focuses on collaborative work to protect and restore the world’s rivers and lakes.

9 N. Abel, S. Cork, R. Gorddard, J. Langridge, A. Langston, R. Plant, W. Proctor, P. Ryan, D. Shelton, B. Walker, M. Yialeloglou. (2003). Natural Values: Exploring options for enhancing Ecosystem Services in the Goulburn-Broken Catchment. Final Report to the Land and Water Resources Research and Development Corporation. Commonwealth Scientific and Industrial Research Organisation (CSIRO) Sustainable Ecosystems, Canberra, Australian Capital Territory.

10 International Union for Conservation of Nature and Natural Resources, Flow: The Essentials of Environmental Flows (Switzerland and Cambridge: 2003). Accessed from http://data.iucn.org/dbtw-wpd/edocs/2003-021.pdf.

11 UN-Water & Global Water Partnership (GWP), “Roadmapping for Advancing Integrated Water Resources Management (IWRM) Processes” (2005). Accessed from http://www. gwpforum.org/gwp/library/Roadmapping%20for%20Advancing%20IWRM.pdf.

12 C.J. Krebs, Ecology, 5th ed. Menlo Park, California: Benjamin Cummings, (2001).

13 World Resources Institute, “Millennium Ecosystem Assessment” in Ecosystems and Human Well-being: Wetlands and Water Synthesis (2005). Accessed from http://www. millenniumassessment.org.

14 S. Postel & B. Richter, Rivers for Life: Managing Water for People and Nature (Washington, DC: Island Press, 2005).

15 U.S. Environmental Protection Agency, “Dissolved Oxygen Depletion in Lake Erie” (2010). Accessed from http://www.epa.gov/glindicators/water/oxygenb.html.

16 The Brisbane Declaration. Proclaimed at the 10th International River symposium and International Environmental Flows Conference, Brisbane, Australia, 3–6 September, 2007. Accessed from http://www.riverfoundation.org.au/index. php?Itemid=65&id=71&option=com_content&task=view.

17 R.C. de Loë, J. Varghese, C. Ferreyra, & R.D. Kreutzwiser, “Water Security in Canada: Initiating a Policy Dialogue for the 21st Century” (2007). Accessed from www. environment.uwaterloo.ca/.../1-de_Loe_et_al_2007_Final_Report.pdf.

18 Stockholm International Water Institute (SIWI) & International Water Resources Association (IWRA), Toward Upstream/Downstream Hydrosolidarity (Stockholm, Sweden: SIWI/IWRA proceedings, 1999).

19 B.D Richter, R. Mathews, D.L. Harrison, R. Wigington, “Ecologically Sustainable Water Management: Managing River Flows for Ecological Integrity,” Journal of Ecological Applications, 13 (1), 207 (2003).

20 G3 Consulting Ltd., Ecosystem Needs of Water Resources. Prepared for the National Round Table on the Environment and the Economy (NRTEE) (Ottawa: 2009).

21 B.D. Richter, R. Mathews, D.L. Harrison, R. Wigington, “Ecologically Sustainable Water Management: Managing River Flows for Ecological Integrity,” Journal of Ecological Applications, 13 (1), 207 (2003).

22 M. Kennedy & J. Wilson, Natural Credit: Assessing the Value of Natural Capital in the Credit River Watershed. (Pembina Institute & Credit Valley Conservation, 2009). Accessed from http://pubs.pembina.org/reports/natural-credit-report.pdf.

23 M. Anielski & S. Wilson, The Wealth of the Mackenzie Region. (Ottawa: The Canadian Boreal Initiative & Pembina Institute, 2009). Accessed from http://www.borealcanada.ca/ documents/MackenzieReport_09_enFINAL.pdf.

24 NRC (National Research Council), “Valuing Ecosystem Services: Toward Better Environmental Decision Making,” Washington, DC: National Academies Press (2005).

25 R.E. Grant & Associates, “St. Lawrence River Discussion Papers: Fish Habitat Changes – Thousand Islands, Middle Corridor, and St. Lawrence” (2002). Accessed from http://www.glfc.org/lakecom/loc/habitat.pdf.

26 Department of Fisheries and Oceans, Joint AENV-DFO water management framework. Accessed from http://www.dfo-mpo.gc.ca/regions/central/pub/water-eau/section3 -eng.htm.