Economics of Land Degradation Initiative Richard J. Thomas ELD
Scientific coordinator United Nations University Institute for
Water, Environment and Health ELD Business Forum: 23 September,
2013 11.30-11.50 Windhoek, Namibia The nation that destroys its
soil destroys itself . Franklin D. Roosevelt, 1937
Slide 2
Purpose of the Economics of Land Degradation Initiative To
raise political and public awareness of the impacts of land
degradation and benefits of Sustainable Land Management from an
economic perspective. To develop a harmonized cost-benefit analysis
tool box for use in decision making on rural development and food
security via promotion of SLM
Slide 3
Why an initiative on the Economics of Land Degradation? Food
security crisis and increased competition for land Not much action
on reversing/preventing land degradation so far despite well-known
technical solutions Socio-economic consequences of land
degradation: Social tensions; social unrest Lack of development of
existing economic activities Lack of development and establishment
of new economic activities & investment opportunities
Associated growing unemployment, reduced economic wealth, reduced
social progress
Slide 4
The initiative considers the gaps for better decision making
for Sustainable Land Management 1. Need for robust cost effective
economic valuation methods 2. Understand better how land users take
decisions 3. How to reverse the investment deserts of degrading
land
Slide 5
The ELD can help decision makers: Assess true costs and
benefits of investments and policies by quantifying the impact of
changes on provision of environmental goods and services Provide a
rationale to choose between options for economic benefits Support
policy by providing information to correct market failures Raise
awareness of investment opportunities for the private sector Reduce
social tensions eg., between development & conservation by
aiding equitable redistribution processes Identify conditions for
success and non-economic barriers to correct policy and
institutional failures
Slide 6
The ELD approach Cost-benefit analysis based on the total
economic value of ecosystem services derived from land, to compare
the $$$ costs of action to the $$$ benefits from action If benefits
> costs, we should take action!
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Use ValueNon-use Value Direct Use Value Indirect Use Value
Stewardship Value Bequest Value Existence Value Option Value Non
demand based methods Revealed preference methods (demand-based )
Stated preference methods (demand-based) Hedonic price method
Contingent valuation Travel cost method Choice experiment Benefit
transfer Market price, replacement costs, dose-response methods,
damage cost avoided, mitigation costs, opportunity costs Total
Economic Value of Land And Land-based Services
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A given piece of land, for a given legal, political and
economic context Alternative livelihoods (economic activities)
Improved productivity Change nothing (business as usual) Starting
point: 3 options for action: Estimate total economic value of
economic costs and benefits: Net economic benefit from Alternative
livelihoods Net economic benefit from Improved productivity Net
economic benefit from business as usual Choose option with greatest
net economic benefit for action (or inaction) and adapt legal,
political and economic context to enable adoption of chosen option
Decision-making framework
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Targeting the poor as a priority Scaling up SLM practices that
are adopted by the poor and establishing an enabling environment
could bring the greatest and most efficient rewards in achieving
food security and global land restoration Why? Most of the worlds 1
billion poor are fed by hundreds of millions of small holders
(
Next steps for ELD Continue compile & synthesize case
studies (>200 so far) Establish case study research sites for
TEV (3 proposals funded) Build capacity for economic valuation in
developing countries Three working groups to contribute to reports
for private sector, practitioners & decision makers, and
scientific community Harmonize methodologies (tool box)
Slide 14
Shared value created by; Create economic value by creating
societal value through; 1. Reconceiving products and markets 2.
Re-defining productivity in the value chain 3. Building supportive
industry clusters at locations where companies operate
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Take home message A focus on economics can bring balance,
equity and foster stakeholder collaboration Please join us
http://eld-initiative.org