Natural resource dynamics and municipal service provision

The dynamics of natural resource supply and demand have important implications for a City's ability to provide a sustainable level of services.   Based on current research in the City of Cape Town, this is the abstract that was sent to the organisers of the ISEE conference in Nairobi later this year:

Cities are dependent on natural and environmental resources and also impact on the environment.  When the relationship between the city and its environment starts to change, it is expected that the ability of and cost to the city to continue delivering natural resource based services and services that have an impact on the environment will also change.  This paper reports on the possible implications of a city, environment and services delivery system for the City of Cape Town, using a systems dynamics modeling approach.

 Since the early 2000s, natural resources such as freshwater and land have become increasingly scarce due to severe droughts and higher demand due to population growth and a consumer-orientated economy. Electricity supply have become more erratic as the expansion of coal-fired power generation elsewhere in the country and transmission to the City did not keep up with increasing demand.  Wastewater treatment works are operating on full capacity and for three quarters of the time are not able to treat water up to local water quality guidelines. The generation of solid waste has mushroomed in recent years, placing severe pressure on existing landfills and transport systems to alternative sites.

 The obvious breakdown in a sustainable symbiosis between the city, its natural resources and environment has important implications for municipal finances.  While the City was largely self-sustaining in the early 2000s, relaying mostly on tariffs, charges and property rates, in later years, grants-in-aid and other sources of income are increasingly needed to pay for the City’s spiraling operational costs (incl. cost of service delivery).  As capital expenditure is becoming very volatile as the city moves from one crisis to another, it is clear that natural resource shocks play an important part in this instability.

 The City’s response has so far been partial and reactive. Severe water restrictions were implemented, electricity load shedding and rationing occurs (although not only strictly a city problem), and in both cases demand-side management programmes are implemented. Some pilot programmes have been launched to recycle solid waste.  Planning for future services still occurs in the isolation of different city departments, using different assumptions on the implications of population and economic growth and pricing on the demand for electricity, water, waste and sanitation (EWWS) services.  Despite some experiments with demand-side management, the mindset that supply-driven solutions (e.g. dams, power stations, landfills, treatment works) should be sought in the first place is still persistent. 

 This partial, uncoordinated approach to natural resource based service delivery will not be sufficient to steer the City back onto a sustainable development path. The delivery of EWWS services in the City are all reliant on the allocation of funds from municipal finance budgets, which in turn, is influenced by the scarcity of natural resources and the potential risks, liabilities and costs of services and service breakdowns on the environment. 

 At a high level, the city, its inhabitants, its environment and the municipal finances governing the management of the city are all part of one system.  This research attempts to offer new insights by focusing on the dynamics of the city in a systems-wide perspective.

 The approach taken in this work relies on the intellectual roots of systems thinking and has been developed and applied in many areas such as ecological economics, organizational learning, group dynamics and the science of complexity, amongst others.  It builds on earlier work by Van den Belt (2004) and Costanza (1993) on systems dynamics modelling and ecological economics and is inspired by the work by Batty (2007) on cities as complex systems, amongst others.

 The systems dynamics modeling approach that is used (utilizing PowerSim software) plays a key role in a broader understanding of systems (what is going on?) and the counterfactual behaviour (what would happen if?).  The focus of such models is on scoping and to examine what key features drive systems behaviour.  The inclusion of such dynamic relationships leaves space for time lags and feedback loops, concepts ignored in linear thinking processes.  Patterns of non-linear growth and decay can therefore be modeled, providing an explanation for seemingly unexpected behaviour in a system.

 A better understanding of the system was gained by following a two-pronged approach: (i) baseline studies by experts on aspects of the natural resource based services and (ii) workshops with experts and city decision makers on key problems, drivers and impacts of these problems, as well as possible responses to these problems.  A database on the city’s natural resource use, pollution and waste as well as municipal finances was also developed.  Prototype systems dynamics models were developed in close association with experts and decision makers and further focused on key questions that were identified in the process.

 These high-level models provide decisionmakers with a tool to simulate the implications of a changing supply of and demand for natural resources (water and electricity) and impacts on the environment (wastewater, waste) on the operational costs and required capital investments for sustainable service delivery.