An ecological economic assessment of flow regimes in a hydropower dominated river basin: The case of the lower Zambezi River, Mozambique

The flow regime of rivers, being an integral part of aquatic ecosystems, provides many important services benefiting humans in catchments. Past water resource developments characterized by river embankments and dams, however, were often dominated by one (or few) economic use(s) of water. This results in a dramatically changed flow regime negatively affecting the provision of other ecosystem services sustained by the river flow. This study is intended to demonstrate the value of alternative flow regimes in a river that is highly modified by the presence of large hydropower dams and reservoirs, explicitly accounting for a broad range of flow-dependent ecosystem services. In this study, we propose a holistic approach for conducting an ecological economic assessment of a river's flow regime. This integrates recent advances in the conceptualization and classification of ecosystem services (UK NEA, 2011) with the flow regime evaluation technique developed by Korsgaard (2006). This integrated approach allows for a systematic comparison of the economic values of alternative flow regimes, including those that are considered beneficial for aquatic ecosystems. As an illustration, we applied this combined approach to the Lower Zambezi Basin, Mozambique. Empirical analysis shows that even though re-operating dams to create environmentally friendly flow regimes reduces hydropower benefits, the gains to goods derived from the aquatic ecosystem may offset the forgone hydropower benefits, thereby increasing the total economic value of river flow to society. The proposed integrated flow assessment approach can be a useful tool for welfare-improving decision-making in managing river basins.