Using Economic Valuation of Environmental Flows to Integrate Ecological Aspects into Water Management

This paper addresses the potential for using economic valuation of environmental flows to incorporate ecosystem services into decision-making in Integrated Water Resources Management (IWRM). A water allocation decision support tool is presented that has been tested in East Rapti River basin, Nepal. The tool is based on a hydrological simulation model (MIKE BASIN) and allows various water allocation scenarios to be explored. Each water use, including water for ecosystems as represented by environmental flows, is linked to an economic value. In East Rapti River Basin the main ecosystem services supported by environmental flows are biodiversity conservation, recreation and tourism opportunities, fish production, and sediment flushing. These services are valued using a combination of market price methods and costbased methods. Thus, the socio-economic and environmental implication of various water allocation scenarios can be evaluated.