Hydropower plants, their dams and reservoirs are usually built to generate electricity and to store water for compensating river flow fluctuations, thereby providing a means for human control of water resources. However, the effectiveness of dam technology in delivering these services is being hotly debated currently, especially from ecological points of view due its numerous adverse biological effects on the aquatic and water-related ecosystems.
Economic valuation (EV) is a tool for valuing ecosystems and their services in monetary terms; it quantifies both the benefits provided by ecosystems and the consequences of their changes for wellbeing of people. In turn, ecosystem services (ES) are the many and varied benefits that humans obtain from the natural environment and properly functioning ecosystems for free. Based on goods the ecosystems provide, their services are categorized into four broad categories:
• Provisioning services: products directly obtained from ecosystems (e.g., food, timber, fish);
• Regulating services: benefits from regulating the natural processes (e.g., climate or water flow regulation);
• Habitat services: everything that an individual plant or animal needs to survive (e.g., food, water, shelter);
• Cultural services: non-material benefits people obtain from ecosystems (e.g., recreation, aesthetic enrichment).
The values that are captured by the EV concept depend on how they are implemented and what approaches and methodologies are used. As a result, there are multiple values and multiple valuation metrics. Based on the analysis of different methods and specific of the BSB165 “HydroEcoNex” project the ES economic valuation, carried out in its framework, has entailed the following main steps:
• Setting the Scene that includes: determination of the spatial boundaries of an area; identification of ecosystems and ecosystem services to be evaluated and their size;
• Identification of valuation method: directly via market prices or through ‘benefit transfer’ (by analogy);
• Assessing the values of selected ecosystems services.
Here, only the part of EV of the Dniester River ecosystems service is presented.
Water. The total cost of water providing includes its full economic cost and environmental externalities, associated with public health and ecosystem maintenance. In this duality, the first component consists from water supply cost, e.g., operating and maintenance expenditures and capital charges. Such approach, as useful for EV of impacts on water resources, was applied to evaluate losses of the Dniester River’s provisioning services due to the Dniester Hydropower Complex (DHPC) operation. The estimations were based on comparing the streamflow volume (Q) upstream and downstream of DHPC in periods before (1951-1980) and after (1991-2015) this complex construction. Q decrease downstream the DHPC in the second period, against its some increase upstream, indicates its adverse impact that resulted in annual economic losses of $90 million (at a water price of $25/m3).