Climate Change and Wildlife Utilization on Private Land: Evidence from Wildlife Ranching in South Africa

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Climate Change and Wildlife Utilization on Private Land: Evidence from Wildlife Ranching in South Africa Climate change and wildlife utilization on private land: Evidence from wildlife ranching in South Africa By Jackson Ongong’a Otieno Thesis submitted in partial fulfilment of the requirements for the degree of DOCTOR OF PHILOSOPHY In the School of Economics UNIVERSITY OF CAPE TOWN University of Cape Town August 2016 Supervisor: Professor. Edwin Muchapondwa The copyright of this thesis is vested in the author. No quotation from it or information derived from it to be published without full acknowledgement of the source. The thesis is to be used for private study or non-commercial research purposes only. Published by the University of Cape Town (UCT) in terms of the non-exclusive license granted to UCT by the author. University of Cape Town II Declaration I, Jackson Ongong’a Otieno, do hereby declare that the work presented in this thesis, is my own, except where acknowledged and that this thesis or any part of it, has not been previously submitted for the award of a degree at any university. Signed: J.O.O Candidate: Jackson Ongong’a Otieno. Date: 15-08-2016 III ALL RIGHTS RESERVED IV @2016 Jackson Ongong’a Otieno Abstract This thesis focuses on the economics of climate change and wildlife utilization in privately owned parcels of land in South Africa. A significant proportion of agricultural land in the Southern Africa region has undergone transition with many farmers opting to move away from livestock farming to either wildlife farming, ranching or conservancies. In other instances, farmers in areas which were predominantly under irrigation are also switching to wildlife land use. One of the biggest claims to this transition has been the effects of climate change on livestock and crop production. The increasing cost of production associated with worsening climate continue to force farmers into abandoning livestock and crop production in favor of wildlife, which has been considered more profitable in the marginal areas in the southern Africa region. However, several uncertainties engulf wildlife utilization on private land, this may hinder its ability to bring about development that might improve the welfare of the communities and those individuals who directly participate in wildlife conservation in the private areas. The most pressing issue in wildlife utilization on private land includes; i). Its effects on the welfare of the communities living around the wildlife farms, ranches or conservancies. The livelihood of these communities revolved around livestock and livestock production for employment, food provision and other socioeconomic and cultural provisions. Therefore, the transition from livestock to wildlife production inevitably can improve or worsen the living standards of these communities, ii). Sustainability of wildlife production as alternative land use in the face of prevailing and future climate scenarios. While it has been cited that wildlife and wildlife revenues are more resilient to climate change, there is every indication that climate change affects wildlife conservation, iii). The role of wildlife in climate change adaptation. Farmers in South Africa are known to mix wildlife with livestock as one way of adapting to climate change. Over time, such farms have transited into wildlife ranches. The issue therefore is how vulnerable are wildlife ranches compared to livestock and mixed wildlife-livestock ranches? These issues are explored in three substantive chapters included in this thesis. The thesis consists of five chapters starting with an introduction, followed by the three substantive chapters and finally conclusion and policy recommendations. The second chapter of this thesis has evaluated the impact of private wildlife ranches on socioeconomic outcomes of communities living in the Eastern Cape Province of South Africa. Specifically, the chapter examines the contribution of private wildlife areas to the V changes in poverty levels within the communities around the ranches by considering its impact on three mechanisms; employment creation, infrastructure development and population dynamics. In order to achieve these objectives, the chapter used data on wildlife establishments in Eastern Cape Province, together with socioeconomic indicators derived from the three censuses of 1996, 2001 and 2011. A mechanism-based approach to impact evaluation is applied to estimate the causal mechanism effects of wildlife ranching on poverty. The average treatment effect on the treated and the mechanism average treatment effect on the treated are estimated. The results show that private wildlife ranches contributed approximately 2.7% to the proportion of poor people in Eastern Cape Province between 1996-2011. It turns out that the increase in the proportion of poor people was as a result of lost employment opportunities and displacement of people. The presence of ranches contributed 0.7 per cent to unemployment. Despite this, it also emerges that individuals in areas where wildlife ranches have been established have access to better infrastructure than those individuals in areas where no ranches have been established or those in areas where state protected conservation networks are established in the Eastern Cape Province. Establishment of wildlife ranches in these areas contributed 12.83% in improved access to infrastructure. The results of the net average treatment effect on the treated suggests that a lot of changes in areas where wildlife ranches are established do not seem to be attributed solely to the wildlife ranches, they would have happened anyway because of other factors. For example, most wildlife ranches are established in rural areas where the communities are generally poor and lack access to markets and infrastructure. In comparing these results to poverty or welfare conditions in communities around protected area networks of national parks and reserves, the study found that poverty levels had gone down in communities around the state protected parks and reserves. The reduction in poverty was as a result of increased accessed to employment. However, the infrastructure conditions in communities around the state protected area networks had deteriorated over the same period. The chapter ends by looking at what would have happened in homeland areas of Eastern Cape Province had wildlife ranches been established in them. This is a counterfactual situation. The study postulates that had wildlife ranches been established in homeland areas, poverty level would have gone up in the homeland areas. The third chapter examines the effects of climate change on wildlife utilization on private land. One of the reasons cited for land use change is that wildlife and wildlife revenues are VI more resilient to climate change. However, in the state protected area networks, there is clear evidence that climate change is affecting wildlife. This chapter applies quantile regression by using the median Ricardian model to investigate the effects of climate change on wildlife revenues. The chapter further uses three Atmospheric-Oceanic Global Circulation models, which include the Coupled General Circulation Model, the Parallel Circulation Model and the Hadley Centre Coupled model that have been used to predict the impact of climate change for South African agriculture to estimate the future impact of climate change on wildlife revenues. The chapter finds evidence that temperature and precipitation have a large and significant effect on the net revenues of wildlife ranchers. There exists a non-linear relationship between wildlife revenues and temperature and precipitation. It emerges that summer temperature has a U-shape relationship with net revenues while the summer and winter precipitations have a hill-shaped relationship with net revenues. Across all the provinces in South Africa, wildlife ranches seem to generate the most revenues in summer. However, extended summer conditions and winter reduce the average farm income to about R494/ha. From the quantile regression, it can also be deduced that high value farms are affected differently by climate change when compared to low value ranches. For example at =0.25 and =0.75 winter precipitation is beneficial to both low value and high value ranches, but it is significantly more beneficial to ranches on the higher quantiles than those on lower quantile ranches. Finally, the study predicts that towards 2050, climate change could reduce net revenues of wildlife by up to 28 percent. In contrast, in the Northern Cape Province, the revenue per hectare could increase towards 2100. This could be due to differences in regional adaptation. Revenues of wildlife only ranches could be more affected in the long run when compared to revenues of ranches that practice mixed wildlife ranching. The forth chapter examines the role of wildlife in adaptation. Most land currently under wildlife use was once used for crops or livestock, but South Africa has a long history with wildlife on private land. Legislation also recognizes wildlife ranching as an agricultural activity. However, studies have not included wildlife as an adaptation option especially in the marginal areas. The chapter applies both the probit and multinomial logit models to first evaluate the determinants of land use change in the marginal areas where wildlife and livestock ranching are predominantly practiced. Secondly, the chapter uses the multinomial choice model to evaluate the performance of conditional net revenue of the three types of farms in the marginal areas (wildlife, mixed and livestock farms) after correcting for selection
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