Can a payment for flows of ecosystem goods and services system, following appropriate management and restoration of natural capital produced in rural areas of a developing country, be developed in a way that benefits communities, the commercial sector and the environment? This fundamental question acts as rationale for conducting an in-depth assessment as to whether the development of markets for ecosystems is both appropriate and sufficient when dealing with the restoration of natural capital of two degraded study areas within the Maloti-Drakensberg mountain range in southern Africa, which is a fire-prone grasslands ecosystem. The mountain range is South Africa's most strategic source of fresh water. While occupying less than 5% of South Africa's surface area, it produces 25% of the country's runoff through rivers, major dams, and national and international inter-basin transfers. Addressing the question, the study develops an integrated hydrology-ecology-economic model based on the functional relationships between these three aspects in managing and restoring the natural capital of the two study areas. It was found that the benefits of introducing improved management practices exceeds cost in low to medium degraded quinaries, but not in heavily degraded quinaries. The economic return on the water (baseflow) produced by such a system of improved land use management, however, far exceeds that of conventional (construction-based) water development programmes and offers meaningful economic and market development opportunities.

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Use of vultures is an important component of traditional medicine, particularly in South Africa and there is evidence to suggest that traditional use is at least partly responsible for the rapid decline of vulture populations in this country. Until very recently, little information on the extent of the trade in animal parts, particularly vultures, for traditional medicine was available. The secretive and illegal nature of vulture use makes it extremely difficult to obtain reliable data on amounts and turnovers of species traded, which is essential to assess potential impacts on species populations. Research confirms that vultures are used in the traditional medicine industry for a range of purposes, but are believed to be most effective for providing clairvoyant powers, foresight and increased intelligence. The main drivers of demand for these uses are betting and gambling, for improved business success, and intelligence in school children. Vulture is also prescribed by traditional healers for various ailments, including headaches. It is estimated that 160 vultures are sold per annum in eastern South Africa, with some 59,000 consumption events of vulture pieces. The total annual value of sales of vultures to end consumers in eastern South Africa (excluding the costs of vultures as input costs) is estimated at R1,2 million ($US 120k). Various species of vulture are used for traditional medicine; there is no distinct species preference. Vultures traded in the eastern South African markets are harvested by vulture hunters from a range of formally protected and unprotected natural areas in KwaZulu-Natal, Eastern Cape, Lesotho and southern Mozambique. They are killed using shotguns, poisons or traps. Poisoning is the most destructive and widely used method of harvesting as large numbers of vultures are usually killed in one poisoning event. An estimated 1,250 vulture traders, hunters and traditional healers in eastern South Africa are involved in the vulture trade. With small vulture populations and poor breeding success, the current trade in vultures is not sustainable at the present harvest levels. The implication for people using or trading in vultures is that the benefits currently enjoyed will not be available in 15 to 30 years time.

This paper describes the design and application of a benefit-cost model to the city of Durban's (South Africa) climate change adaptation options. The approach addresses the inability to compile an accurate damage-cost function for economic prioritizations at the local level. It proposes that uncertainty over climate impacts and the efficacy of adaptation responses, in conjunction with the lack of economic data, high levels of economic informality and inequality make it difficult to link adaptation efforts to positive GDP impact in Durban. Instead, the research based its calculations of "benefits" on the number of people impacted and the extent of the welfare benefits imparted by the respective adaptation efforts. It also took into account the uncertainty over future events, capacity constraints, priorities of decision makers and the risk of maladaptation. The results were reported as benefit-cost ratios for 16 clusters of interventions (many of which were primarily the responsibility of one municipal department or agency) in each of four future scenarios (defined by minor or major climate change and weak or strong socio-institutional capacity). The paper presents and discusses the benefit-cost ratios and total benefits for each of the intervention clusters in each of the future scenarios. It emphasizes how these are influenced by choices of time frames. It also highlights how the most efficient interventions across all futures and time frames tend to be socio-institutional − for instance the creation of a cross-sectoral disaster management forum, sea level rise preparedness and early warning system, and creating climate change adaptation capacity within the water services unit. Ecosystem-based adaptation measures had moderate benefit-cost ratios, probably because in Durban the land that needs to be purchased for this is relatively expensive. Infrastructure-based clusters generally had the lowest benefit-cost ratios.