THE ECONOMICS OF LAND DEGRADATION Economics of Land ... · Total Economic Value The full economic...

THE ECONOMICS OF LAND DEGRADATION

S c i e n t i f i c i n t e r i m r e p o r t

The rewards of investing in sustainable land management

Economics of Land Degradation Initiative:A global strategy for sustainable land management

www.eld-initiative.org

Research consortium:

United Nations University Institute of Water, Environment and Health (UNU-INWEH)

International Food Policy Research Institute (IFPRI)

Center for Development Research (ZEF)

The Global Mechanism of the UNCCD

Stockholm Environment Institute

University of Wyoming

Coordinated and edited by: Richard J. Thomas, Emmanuelle Quillérou, Naomi Stewart (all UNU-INWEH)

Report main contributors: Lucie Andeltova (ELD Secretariat); Edward Barbier (University of Wyoming); Louise Baker and

KugBo Shim (both United Nations Convention to Combat Desertification); Stacey Noel (Stockholm Environment Institute);

Simone Quatrini (The Global Mechanism of the UNCCD); Mark Schauer (ELD Secretariat)

This report was published with the support of the partner organizations of the ELD Initiative and

the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the

German Federal Ministry for Economic Cooperation and Development (BMZ).

Photography: Sylvia von dem Busche (cover); Muhmet Durikov (pg. 56); André Fabian (pg. 37);

Albert Gonzalez Farran (pg. 14); GIZ/Michael Tsegaye (pg. 7); Richard Thomas (pgs. 18, 44, 67);

Carl Purcell (pg. 50); Emmanuelle Quillérou (pgs. 13, 25, 27); Mark Schauer (pg. 35); Ilka Starrost (pg. 47);

Christoph Wiedemann (pg. 62); Alexander Weichert (pg. 52); Jens Wunderlich (pg. 41)

Visual concept: MediaCompany, Bonn Office

Layout: kippconcept GmbH, Bonn

For further information and feedback please contact:

ELD Secretariat

Mark Schauer

c/o Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Godesberger Allee 119

53175 Bonn, Germany

Suggested citation:

ELD Initiative (2013). The rewards of investing in sustainable land management. Interim Report for the Economics of Land Degradation Initiative: A global strategy for sustainable land management. Available from: www.eld-initiative.org/

The rewards of investing in sustainable land management

September 2013

Economics of Land Degradation Initiative:A global strategy for sustainable land management


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Acknowledgements:

The ELD Initiative is very grateful to its Political and Scientific partners for their highly valuable support. The

following experts provided further valuable contributions during discussions held for the first two ELD Scientific

meetings: Walter J. Ammann (Global Risk Forum GRF Switzerland); Maurits Van den Berg (Netherlands

Environmental Assessment Agency PBL); Katharina Biely (University of Vienna Austria); Joachim von Braun (Center

for Development Research (ZEF) Germany); Claire Brown (UNEP World Conservation Monitoring Centre); Michael

Cherlet (JRC, European Commission); Robert Costanza (Australian National University Australia, formerly Portland

State University USA); Steve Danyo (World Bank); Estelle Dominati (AgResearch New Zealand); Olaf Erenstein

(International Maize and Wheat Improvement Center (CIMMYT) Ethiopia); Stefan Van der Esch (PBS Netherlands);

Salvatore di Falco (London School of Economics); Johannes Förster (Helmholtz Centre for Environmental Research,

UFZ Germany); Evan Fraser (University of Guelph); Markus Giger (WOCAT, ICDE, University of Bern); Julian Jäger

(ELD Secretariat); Justin Jonson (Threshold Environmental and Society for Ecological Restoration (SER) Australia);

Anne Juepner (UNDP); Sahibzada Irfanullah Khan (Sustainable Land Management Project (SLMP), Planning and

Development Department, Pakistan); Josh Ross Muleso Kharika (Department of Environmental Affairs, Republic of

South Africa); Pushpam Kumar (UNEP); Alejandro León Stewart (University of Chile); Alisher Mirzabaev (Center

for Development Research (ZEF) Germany); César Morales (Comisión Económica para América Latina y el Caribe

CEPAL Chile); Antonia Corinthia (Cory) Naz (Resources, Environment and Economics Center for Studies REECS The

Philippines); Ephraim Nkonya (IFPRI); Sarah Maryanne Anyoso Odera (ELD Secretariat); Noel Oettlé (Environmental

Monitoring Group South Africa); Alberto J. Palombo (Inter-American Water Resources Network (IWRN) Brasil); Soo

Jin Park (Seoul National University Korea); Philippe Saner (ETH/UZH Switzerland); Jessica Smith (UNEP World

Conservation Monitoring Centre); John Soussan (Independent consultant, formerly Stockholm Environment

Institute); Anneke Trux (GIZ); Patrick Wegerdt (European Commission). We would finally like to thank participants

to the UNCCD Second Scientific Conference 9-12 April 2013, Bonn, Germany for constructive discussions.

S c i e n t i f i c i n t e r i m r e p o r t 2 0 1 3

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K e y t e r m S

Land: The Earth’s surface and natural resources found there

Land degradation: Defined by the United Nations as a reduction or loss of the biologic or economic productivity and complexity of rain-fed cropland, irrigated cropland or range, pasture, forest, and woodland. In this report, it corresponds to the reduction in the economic value of ecosystem services and goods derived from land as a result of anthropogenic activities or natural biophysical evolution.

Ecosystem services: Benefits humans obtain from ecosystems1, and usually interpreted as the contri-bution of nature to a variety of “goods and services”. This term encompasses the following three categories normally used in economics2: (i) “goods” (e.g. products obtained from ecosystems, such as resource harvests, water, genetic material, etc.), (ii) “services” (e.g. recreational/tourism benefits or certain ecological regu-latory and habitat functions, such as water purification, climate regulation, ero-sion control, habitat provision, etc.), and (iii) cultural benefits (e.g. spiritual and religious beliefs, heritage values, etc.). Within the Millennium Ecosystem Assess-ment 1, ecosystem services are classified as provisioning, regulation, cultural, and supporting.

Sustainable The adoption of land use systems that enhance the ecological support functions land management: of land with appropriate management practices, and thus enable land users to

derive economic and social benefits from the land while maintaining those of future generations. This is usually done by integrating socio-economic principles with environmental concerns so as to: maintain or enhance production, reduce the level of production risk, protect the natural resource potential, prevent soil and water degradation, be economically viable, and be socially acceptable.

Natural capital: Inputs used for economic production that are derived from natural resources. This form of capital is complementary to other forms such as monetary and phys-ical or human-made capital (e.g. buildings, machinery).

Total Economic Value The full economic value allocated by society as a whole. This includes use value (TEV): (direct and indirect, option value) and non-use value.

Costs of action: Costs of appropriate actions to prevent and/or reverse land degradation. It includes the costs of implementing interventions such as conservation tillage, or soil and water conservation structures. They are often better known than the benefits from action.

Costs of inaction: The forgone benefits under “business-as-usual”, when no change is taken towards adopting more sustainable management. It is usually associated with estimates of loss in production and productivity, and represents the maximum benefits potentially derived by taking action, which may or may not materialise fully after action is taken. Economic valuation techniques can be used to estimate them before action is taken. The costs of inaction are often not as accurate as the costs of action, and tend to be greater than the actual benefits derived by taking action.

Benefits from action: The actual benefits that are derived from taking action. They can be measured accurately after action is taken if they are exchanged on a market. If not, benefits from action can be estimated using economic valuation. They may correspond fully or partially to the potential benefits from action, are estimated before an action has been taken, and are often lower than the costs of inaction.

Cost-benefit analysis: A comparison of all of the costs and benefits associated with action compared to “business-as-usual”.

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Executive summary

In the face of global land degradation and its impacts on humanity and the environment, the Economics of Land Degradation (ELD) Initiative is dedicated to raising global awareness of the full economic potential of land and land services includ-ing market and non-market values (e.g. carbon sequestration, recreational values, nutrient cycling, etc.) and the costs of land degradation. The ELD Ini-tiative is focused on creating efficient and practical tools and methodologies to fully assess lands value and thus encourage sustainable land management.

Valuing land and related ecosystem services is an urgent and necessary action in order to focus attention on land degradation as a serious global problem. Land’s economic value is chroni-cally undervalued and commonly determined by immediate agricultural or forestry market values. This focus on short-term gain motivates the highest extraction rates possible from land, leading to unsustainable land management and degradation (the reduction or loss in biological or economic pro-ductivity). Between 10 – 20 % of drylands are degraded and 24 % of globally usable land on Earth is degraded at an estimated economic loss of USD 40 billion per year. This particularly affects the rural poor – those who depend directly upon the land for sustenance and income, and number over 1.2 bil-lion.

There are clear economic and environmental actions that can prevent and/or reverse land degradation. Further, the adoption of sustaina-ble land management could deliver up to USD 1.4 trillion in increased crop production. Given the combined global trends of increasing population and decreasing land availability and quality, there is great incentive to increase productivity on par-cels of land already in use and promote sustainable land management.

The costs of taking action to prevent and/or reverse land degradation are usually less than the benefits that can be obtained for investing in and applying sustainable land management practices. The case studies reveal that even with an incomplete assessment of the total value of ecosys-tem services investments in land prove to be benefi-cial to society and the environment.

Several existing options and pathways for action to address land degradation are available for successful change. These options range from adapting to biophysical conditions, to changing livelihood strategies. Examples include: reforesta-tion, afforestation, the adoption of more sustaina-ble agricultural practices, and the establishment of alternative livelihoods such as eco-tourism. Eco-nomic instruments to reverse land degradation trends include: payments for ecosystem services, subsidies, taxes, voluntary payments for environ-mental conservation, and access to micro-finance and credit. In addition, facilitating change requires adaptations to legal, social, and policy-focused con-texts that favour sustainable land management.

The ELD Initiative will inform the private sector of the opportunities available for investment and will help close the gap between better land stewardship and business practices. The compa-nies likely to be the most interested in efforts to pre-vent and/or reverse land degradation will be those that have more direct contact with land and thus be the most sensitive to land degradation. They will be found in resource-dependent sectors, such as the food and beverage, leisure and travel, and basic resource sectors.

The ELD Initiative will provide total economic valuation methods that will aid decision-mak-ing in land investments and land use planning, especially under the various conditions of any country affected by land degradation. Three main outcomes of the ELD Initiative include: (i) a vigorous case study analysis of existing literature and research to analyse the global research status of ELD, separated into three working groups of: Data and Methodology, Scenarios, and Options and Path-ways to action, (ii) the funding of further research that addresses identified gaps in knowledge, tech-nology, policy, and community motivation, and (iii) the development of a series of reports summarizing final conclusions and guidelines, individually tar-geted at policy makers, scientific communities, the private sector and local administrators and practi-tioners. Outputs of the initiative will inform the United Nations Convention to Combat Desertifica-tion (UNCCD) and its proposal for a new Sustainable Development Goal for post-Rio+20 of zero net land


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degradation (defined as the achievement of a state of land degradation neutrality).

African, Asian, and Central and South American countries need to build their capacity in assess-ing the value of land. Current case studies indicate that much of the work done on economic valuation in these areas has been done by the international scientific community without adequate involve-ment or capacity building within the studied coun-tries. The ELD Initiative will incorporate capacity building activities into its projects to ensure that qualified personnel are available and present in affected countries.

The ELD Initiative is uniquely posited to address economic issues surrounding degraded lands, as a collaborative, international collection of researchers and citizens committed to deliver-ing comprehensible, transboundary, scientific,

political, and technological guidelines rooted in peer-reviewed research and designed for on-the-ground, customizable applications. This interim report is a reflection of work that has been performed, synthesized, and analysed, hitherto, building on earlier studies and ELD contributions to the conclusions and recommendations of the UNCCD Second Scientific Conference.

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Acronyms and abbreviations

BMZ Germany’s Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung)

ELD Economics of Land Degradation

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

IFPRI International Food Policy Research Institute

PES Payment for Ecosystem Service

REDD United Nations Reducing Emissions from Deforestation and Forest Degradation

REDD+ United Nations Reducing Emissions from Deforestation and Forest Degradation (plus conservation)

SLM Sustainable Land Management

TEEB The Economics of Ecosystem Services and Biodiversity

TEV Total Economic Value

UNCCD United Nations Convention to Combat Desertification

UNEP United Nations Environment Programme

UNU-INWEH United Nations University Institute for Water, Environment and Health

WTP Willingness to pay

ZEF Center for Development Research, University of Bonn, Germany


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Table of contents

Key terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Acronyms and abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Table of contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Chapter 1 Why are the economics of land degradation and sustainable land management important? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Adopting sustainable land management: Securing environmental services, increasing food security, and alleviating poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Speaking the language of public and private decision-makers . . . . . . . . . . . . . . . . . . . . . . . . 15

What needs to be considered in order to achieve sustainable land management? . . . . 15

Determining current and future land use practices and rationale: An example of behaviour patterns beyond farmers’ land-use decision-making . . . . . . 16

Choosing a way forward: Agricultural and alternative livelihoods . . . . . . . . . . . . . . . . . . . 17

Goals of the ELD Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Chapter 2 The ELD methodology in assessing potential economic improvements; using and expanding upon existing approaches and frameworks . . . . . . . . . . . . . . . . . . . . 20

How do we know sustainable land management is economically worth adopting? . . . . . 20

Why value nature (and not price it)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

The Ecosystem services framework: Ecosystem services classified, valued independently, then aggregated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

The Total Economic Value framework and valuation methods . . . . . . . . . . . . . . . . . . . . . . . . 29

Valuing the costs of inaction or the benefits from action: What are the differences and implications? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Framework for decision-making: A comparison of the economic benefits of action (or costs of inaction) against the costs of action, and decision-making criteria . . . . . . . . 35

Six steps to estimate the economic benefits and costs of action, and one to take action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Other economic approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Shadow interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Multi-Criteria analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Macro-economic approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

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Condition for improved decision-making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Sampling method for extrapolation of existing case studies and global comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Method to assess the relevance of existing case studies and commissioning new case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Chapter 3 Existing case studies on the economics of land degradation and sustainable land management: The known and unknown (preliminary results) . . . . . . . . . . . . . . . . . . 48

Heightened interest in land value after the food crises security, in relation to addressing food security issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

A need for capacity building in Africa, Asia, Central and South America . . . . . . . . . . . . . . 48

A need to progress beyond use value and the agricultural sector . . . . . . . . . . . . . . . . . . . . . 51

Application of the ELD Initiative framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Options and pathways for action: Scaling up and out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Scenarios: Looking forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

What are the opportunities for the private sector? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Going beyond knowledge gaps: Case studies commissioned by the ELD Initiative and links with parallel initiatives and projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Selected case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Preliminary analyses of case studies: A summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Appendix Appendix 1 – Economic valuation methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Appendix 2 – Required data for drivers of land degradation and their availability (global level analysis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Appendix 3 – Case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

List of figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

List of tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

List of boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

List of selected case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122


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Introduction

The ELD Initiative is a global endeavour focused on land degradation and sustainable land man-agement in an economic context. The ELD Initia-tive aims to provide a methodology for total eco-nomic valuation that is both locally applicable and globally relevant, and based on peer-reviewed research and viable economic strategies. Land deg-radation is a serious global concern, particularly in light of increasing populations and a slowing down of crop yield increases. Rectifying this issue will necessitate a trans-disciplinary, multi-faceted approach that integrates sound economic valua-tions, and can be applied practically to inform deci-sion-makers.

The first chapter of this report analyses the current state of affairs; a review of degradation and decreas-ing crop yields demonstrate this issue is on the rise, and is a serious global concern when compounded with increasing population. The complexity of land-use decision-making is comprehensively explored. The second chapter looks at the ELD methodology, including a justification and breakdown of the Total Economic Value approach, and how it can be applied. The final chapter is a preliminary synthesis and analysis of the 186 case studies compiled thus far. It points to a preponderance of research per-formed in developing nations by researchers from developed nations that is focused on agricultural valuations, with studies increasing over the past 5 years. These conclusions demonstrate a lack of capacity within developing nations despite increas-ing interest as a result of the recent food price spikes, and a focus on market valuations. The ELD seeks to rectify these issues with a practical, supportive approach to full economic valuation.

c H A p t e r

01

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Why are the economics of land degradation and sustainable land management important?

Land and the benefits that can be derived from it have been taken for granted and undervalued by civilizations both past and present, despite warn-ings of the need for careful land stewardship found

throughout ancient writings3, 4. Today, the pressure on land has reached such a critical point that serious doubts have been raised on the capacity of land to meet the demands of a human population rapidly increasing to 9 billion5. Demands for land include tradi-tional demands for food and water

flow regulation, and newer demands for biofuel production, climate regulation (including carbon sequestration and storage), spiritual, aesthetic, and recreational activities. Furthermore, during the last 20 – 30 years, land has been degrading globally6. This is mainly the result of land mismanagement, drought related-famines, and misperceptions of plentiful food production, large food stocks in Europe, open land frontiers, relatively cheap subsi-dized food, low land prices, and abundant energy and water resources.

Land degradation threatens fertile land throughout the world. The consequences are alarming: food insecurity, pests, reduced availability of clean water, increased vulnerability of affected areas and their populations to climate change, biodiversity loss, presence of invasive species, and much more. It is estimated that 1 to 1.5 billion people in all parts of the world are already directly negatively affected by land degradation7.

Adopting sustainable land management: Securing environmental services, increasing food security, and alleviating poverty

The realization that land has actually been neglected is belatedly beginning to gain traction, especially following the recent food crises. Between 10 – 20 % of drylands are degraded and 24 % of glob-

the nation that destroys its soil destroys itself.

Franklin D. Roosevelt [1937]

ally usable land on Earth is degraded at an esti-mated economic loss of USD 40 billion per year 7, 8. This includes a startling loss of grain worth USD 1.2 billion yearly. By 2050, at least a 70 – 100 % increase in food production from existing land resources may be needed in order to be able to feed current and future generations 9, 10. If agricultural land pro-ductivity remains at its current levels, an estimated 6 million hectares (ha) of land (roughly equivalent to the size of Norway) would need to be converted to agricultural production every year until at least 2030 to satisfy this growing demand. Thus, aware-ness of the seriousness and extent of land degrada-tion is gradually reversing the traditional disregard for its impacts on both economic and social develop-ment in affected countries. The combination of land prices that have been increasing since 2007/2008 and the proliferating rush of foreign investors seek-ing to buy or lease land is a signal that the world is waking up to threats from land degradation and closing frontiers 11. Despite this interest, levels of investment in land remain far below those needed to meet the rising demands for food and land-related services. Agricultural investments to the order of USD 30 billion per year are needed to feed our growing global population10, 12.

Answering the economic questions of land degra-dation and providing integrated frameworks for informed action are particularly important in the context of increasing land scarcity. Globally, the human population has reached a stage where culti-vated areas can no longer be expanded except in limited areas of South America and Sub-Saharan Africa, and even then the geographical extent of exploitable land may be over-estimated 13.

Furthermore, land degradation most directly impacts one of the most vulnerable human popula-tions – the rural poor. More than 1.2 billion people live on fragile lands in developing nations, where they are clustered in fragile environments, remote areas, and/or on marginal lands, and depend directly upon the most degraded land for their sus-tenance and income14, 15. Poverty and land degrada-


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Total economic valuation and the establishment of national and international markets for ecosystem services (Turner et al. 2012 17, as reported in The Guardian’s Global Development18)

c A S e S t U D y 1

If the world’s poor were paid for the services that they indirectly provide to the rest of the planet by preserving some of the world’s key biodiversity hotspots, they could reap up to USD 500 billion, as shown by a study entitled Global Biodiversity Con-servation and the Alleviation of Poverty17. 17 of the world’s most important areas for biodiversity were accordingly analysed in this study led by a team from Conservation International, and co-authored by scientists at NatureServe, the United States National Fish and Wildlife Foundation, and the Uni-versity of Wisconsin-Madison.

The researchers found that the monetary ben-efits derived from safeguarding these habitats (such as providing valuable services from food, medicines, clean water, or absorbing carbon diox-ide from the air) are more than triple the costs of conserving them. Some of the ecosystem service benefits were directly used by the local people themselves (e.g. using forests as sources of food, medicine, and shelter) while the rest of the ben-efits exist on regional or global scales.

Many conservation and ecosystem service benefits are invisible; e. g., maintaining the vege-tative cover of wooded lands can help prevent mudslides during heavy rainfall and also provides valuable watersheds that keep rivers healthy, pro-vide clean drinking water, and absorb carbon diox-ide from the air. These benefits are economic losses that are only obvious once it is too late.

There were some fledgling schemes reviewed that could help raise funding for sustainable land management – e. g., the United Nations-backed system called REDD (Reducing Emissions from Deforestation and forest Degradation), which uses carbon trading to generate cash and pre-serve trees – but they are all currently rather small in scale.

In regards to the value of nature and the impacts of environmental valuation for the rural poor, Will Turner, vice-president of Conservation International and lead author of the study, said: “Developed and developing economies cannot continue to ask the world’s poor to shoulder the burden of protecting these globally important ecosystem services for the rest of the world’s benefit, without compensation in return. This is exactly what we mean when we talk about valuing

natural capital. Nature may not send us a bill, but its essential services and flows, both direct and indirect, have concrete economic value.”

In this study, the “action” is the provision of compen-sation to local providers of environmental services (the poor), who directly depend on and benefit from good management of natural capital, while also delivering benefits at a regional and global scale. Total Economic Value can help assess the needs and opportunities for such compensation mechanisms, and the tools to scale them up and out. This is also one way to help the poor leave the poverty-environ-ment trap they may be stuck in.

C H A P T E R 0 1 Why are the economics of land degradation and sustainable land management important?

14

tion have a mixed relationship, as examined in Bar-bier14 and described by von Braun and Gerber16 and Barbier15, and can either increase the impact of or be one of the drivers of land degradation.

Under certain conditions, the rural poor can find themselves perpetuating patterns of land degrada-tion, because they have no alternative ways to ensure their survival in such hostile environments. These “asset-less” poor are most likely to suffer from extreme land degradation, resulting in a “poverty-environment trap” 14. Better land management must provide immediate beneficial impacts to household livelihoods in order to alleviate poverty, especially for the rural poor. Provided that they are

rewarded for their maintenance of/contribution to the services that land can provide which are benefi-cial at the global level (such as carbon storage) or regional level (such as water purification) (see Case Study 1), fostering the adoption of sustainable land management by the poor could enable the greatest and most efficient rewards in achieving food secu-rity and global land restoration.

However, if the poverty-environment trap does not close up on them, the poor naturally act as caretak-ers of the land they depend upon, as they are the first to most directly benefit from good land man-agement. Through this, they effectively limit land degradation. In this case, scaling up practices


15

adopted by the poor and establishing an enabling environment could bring the greatest and most effi-cient rewards in achieving food security and global land restoration.

As part of discussions focused on the post Rio+20 sustainable development goals, the United Nations Convention to Combat Desertification (UNCCD) has proposed a target of zero net land degradation. In order to attract the necessary investments to pre-vent and/or reverse land degradation, this goal will require a focus on the economic value of land and the economics of land degradation. The provision of monetary figures reflecting these assessments and potential returns on investment are extremely valuable tools when presenting sustainable land management options to investors. For example, closing yield-potential gaps and reaching 95 % of potential maximum crop yields (assuming the adoption of sustainable land management) could create an additional 2.3 billion tonnes of crop pro-duction per year 19, equivalent to a potential gain of USD 1.4 trillion. Furthermore, when the numerous values of alternative and complementary land uses are added in, it is quite clear that there are huge investment opportunities for those committed to achieving improved land management that will not result in environmental degradation.

Speaking the language of public and private decision-makers

The scientific rationale for adopting sustainable land management is now well established in the academic literature20 and often recognised by prac-titioners. In spite of this, there is a noticeable lack of adoption of such practices. There is a range of rea-sons for this gap, including a lack of financial resources required to switch to sustainable land management21, as well as technical, political, legal, cultural, social, environmental, and economic con-texts that render these practices unsustainable in the long run. Technological interventions to pre-vent or reverse land degradation are available and well documented20, 22, 23, 24, but are rarely analysed in terms of cost and benefits. They also lack identifi-cation of the contextual conditions required for suc-cess. As a result, there is a need to identify where the adoption of sustainable land management is eco-nomically justified, and to remove any barriers to implementation.

Governments and policy/decision-makers are faced with a multitude of demands on limited resources, and require common metrics to compare options. These metrics usually work on monetary terms, so it is important that land is given its full value, meas-ured from the point of view of society as a whole. When valued in this manner, appropriate policies and finances can be directed towards land steward-ship, sustainable land management, and risk man-agement.

What needs to be considered in order to achieve sustainable land management?

The known discrepancies in land management practices between knowledge and action further exposes a need for concise data and harmonized methods. These methods will provide answers to questions about the social and economic costs of land degradation, and the benefits of greater invest-ments in land based productivity. These answers will then foster long-term win-win scenarios over just short-term gains.

An initial assessment of the economics of land deg-radation showed that in many cases the cost of action against land degradation is lower than the cost of prevailing actions25. More scientific knowl-edge is necessary, especially regarding the valua-tion of non-use ecosystem services and off-site effects of sustainable land management. To that end, several case studies have been or are being piloted in different world regions in order to assess the costs and benefits of sustainable land manage-ment as well as to contribute to further methodo-logical developments26. The technical, political, legal, cultural, social, and environmental contexts should also be analysed and suitably adapted to enable successful economic situations for improved land management. This will enable governments, decision-makers, and the public and private sectors to make informed, defendable choices based on a sound economic approach beyond market values, thus establishing a favourable environment to pro-mote the adoption of sustainable land management.

Market prices for land are generally based on the direct productive potential (i. e., the market value/actual retail price of timber, crops, etc.), but it is rec-ognised that these prices often do not accurately reflect the full value of land. This is especially the case when land values do not comprehensively


16

include the four types of ecosystems services that land provides (Box 1). These services include not only products used for food, fibres, and shelter, but also the regulation of water quality and quantity, and biodiversity maintenance. When these additional values are factored in, the worth of land easily increases several-fold27. The need to fully value land has become more urgent in response to the afore-mentioned increases in foreign land investments. Sometimes called “land grabbing” by its opponents, as much as 80 million ha globally may already be leased or otherwise negotiated with foreign inves-tors28. Access to water resources is also often key in these land deals, but rarely accounted for explicitly despite its importance29. Under these types of con-ditions, better economic land valuations can pro-vide a basis for fairer financial compensation for countries and their citizens, particularly if the latter are displaced from or dispossessed of land that they have traditionally used (see Case Study 3 and Case Study 4 for illustrations).

Determining current and future land use practices and rationale: An example of behaviour patterns beyond farmers’ land-use decision-making

Studies on why available sustainable land manage-ment technologies are not being adopted have given way to questions about how land users actu-ally make land management decisions. This area of research evolved as a result of the failure of past efforts to promote technological interventions and strategies that consider the decision-making pro-cess. Part of the issue is that perceptions of degrada-tion vary with and between different land users, scientists, and research/extension agencies. The complexity of decision-making for land use is illus-trated in Table 1.

Table 1 shows a hypothetical example of three pos-sible actions that could limit land degradation on hillsides. As shown by weighting the variables, bench terraces may seem like the most effective technique technically, but are in reality are often beyond farmer’s capabilities as they may not have the financial or labour assets to construct them. Bench terracing also requires additional labour beyond that which is normally available at a house-

t A b l e 1

Options for action

Criterion for decision-making

Bench terrace

Grass strips or trash lines

Intercropping

Technical performance + + + + + +

Fits with existing practices

– + + +

Cost related to importance of problem

– + + +

Cost related to famers’ capabilities

– – +

Short-term benefits – – +

Fits with farmers‘ understanding

– + + + +

Fits with existing land tenure system

+ + + + + +

Fits with local institutional framework

+ + + +

Hypothetical evaluation of three options for soil and water conservation practices that address land degradation on hillsides (adapted from Biot et al. 1995 30)

b o x 1

Ecosystem services (adapted from the Millennium Ecosystem Assessment 1)

Provisioning goods provided such as food, water, fibre, timber, fuel, minerals, build-ing materials and shelter, and bio-diversity and genetic resources

Supporting primary production, soil formation, and nutrient cycling

Regulating benefits from regulation of pro-cesses such as climatic events, water flows, pollution, soil erosion, and nutrient cycling

Cultural non-material benefits such as spir-itual or aesthetic, and education, as well as more material benefits linked to recreation (tourism) and hunting


17

Sustainable landmanagement

and livelihoods

Generate incomefrom alternative

livelihoods

Implement alternative livelihoods

through diversificationand market access

Identify viablealternative livelihoods

Further improve landand water productivity

Increased land andwater productivity

Invest in land and waterproductivity

Invest in enabling policy environment

and humanresource development

f i g U r e 1

Pathways to sustainable land management, considering agricultural (green) and alternative livelihoods (orange) (adapted from Adeel & Safriel 2008 35, sourced from Thomas 2008 34 pg. 599)

hold level, thus requiring either substantial social capital for collaborative work or access to monetary capital to hire the necessary labour. This need for additional labour and associated costs may out-weigh financial benefits derived from the increased technical performance, and could act as an eco-nomic barrier to adoption.

Often land users either do not have a clear idea of the economic costs/benefits within their decision-making time frame, or the total costs and benefits may be over- or under-estimated. In a context like that shown in Table 1, an alternative option like inter-cropping may be preferred, as it meets more of the decision-making criteria and is therefore per-ceived by the decision-makers (farmers) as more desirable and feasible. As analyses of potential options demonstrate, failure to understand the eco-nomic, political, legal, cultural, social, and environ-mental factors as well as their interactions, can result in continued land degradation even when technology is available to prevent it. Table 1 is a sim-plified example of just one gap that can be bridged by focusing on a more detailed assessment of the costs and benefits, and taking into account the deci-sion-making process and potential barriers to adop-tion.

Choosing a way forward: Agricultural and alternative livelihoods

The achievement of sustainable land management requires not only economic considerations based on primary production from land but an in-depth understanding of how people obtain their liveli-hoods and how they can build up their assets in order to invest in sustainable land management. This is especially important in areas with high incidences of degradation, such as drylands.

For many and perhaps the majority of people living on degraded land, over 50 % of their income is not directly derived from the productivity of the land through agriculture or forestry, but rather through alternative livelihood strategies that have minimal dependence (or pressure) on land resources31, 32, 33. Examples of alternative livelihoods include: aqua-culture, apiculture, artisanal craft production, eco-tourism, renewable energy generation (solar and wind), high value horticultural production (under plastic-covered housing), and adding value to exist-ing plant and animal products through process-

ing34. Integrating these current alternative liveli-hoods into sustainable land management plans is thus integral to a comprehensive strategy.

Pathways to sustainable land management and human well-being are depicted in Figure 1. The left side of Figure 1 (green) represents a traditional agri-cultural/pastoral livelihood where investments are facilitated by enabling policies, regulations, access to agricultural markets and research/extension ser-vices, and include inputs such as agrochemicals, water, and seeds. This pathway is often comple-mented by alternative livelihood options that are independent from agricultural production (e.g. eco-tourism), and is depicted on the right side of Fig-ure 1 (orange). These alternative livelihoods could


18

reduce pressures exerted on currently exploited land, thereby promoting more sustainable land management and alleviating poverty. Both path-ways require private investments that are sup-ported by public sector investments and training in skills, knowledge, and capacities to manage liveli-hood strategies.

The choice of a livelihood pathway can be informed by economic cost-benefit analyses. These analyses can make use of valuation techniques to estimate the benefits derived directly or indirectly from land management, including situations when benefits are not formally traded through monetary exchanges. This type of analysis can help guide investment decisions, (i.e., in determining the flow of financial assets generated through alternative livelihoods into land and water productivity versus other options). Additionally, to achieve public sector investments and public support for private sector investments, there remains a need to integrate: (i) land degradation issues into mainstream govern-

ment policies, and (ii) economic analysis into policy implementation and design. This integration will require raising awareness of the monetary costs and benefits of sustainable land management. It is important to note that any strategy trying to increase the allocation of funds to sustainable land management must be appropriate to an individual country’s national environmental, political, eco-nomic, and institutional frameworks and condi-tions36.

In the decision-making process for the manage-ment of land and land based services, numerous elements must be considered. These elements exist on scales ranging between the household, commu-nity, regional, national, and international, and include:

❚❚ The perception of the symptoms of degradation and impacts on crop yields and water quality to determine how easily (costly) land degradation could be addressed


19

❚❚ A diagnosis of degradation causes and drivers to determine the kind of action required for the reduction of land degradation

❚❚ A prioritization of needs and corresponding actions

❚❚ The identification of solutions (i.e., alternative agricultural and non-agricultural livelihood options for action)

❚❚ An assessment of the technical feasibility of the solutions

❚❚ An economic analysis of costs, benefits, and risks

❚❚ An assessment of access to monetary capital

❚❚ An analysis of policy incentives and disincen-tives, price distortions, and political context

❚❚ An assessment of the legal context (i.e., formal (land tenure) or informal property rights)

❚❚ An assessment of the need for collaboration and extent of access to social capital (social network)

❚❚ An analysis of the cultural context, including gender aspects (who owns land, makes deci-sions, and conducts work)

❚❚ An analysis of expected environmental impacts and potential environmental trade-offs

Given the heterogeneity in the assets and capabili-ties of land users, there is an urgent need to go beyond classical or linear programming models that only focus on increasing agricultural produc-tivity37. Also, in addition to considering the full value of land-based ecosystem services, there is a need to examine and adapt the decision-making process for effective action against land degrada-tion and the loss of livelihoods it induces. The ELD Initiative aims to facilitate this process with glob-ally available, adaptable, and functional guidelines.

Goals of the ELD Initiative

Based on this understanding of the economic issues of land degradation, the aim of the ELD Initiative is to transform the global understanding of land value, and create awareness of the economic arguments for considering both market and non-market values in sustainable land management. This will be achieved by undertaking cost-benefit analyses of land degradation/sustainable land management

while systematizing scientific studies on the eco-nomics of land degradation, in an effort to move towards a harmonization of approaches and meth-ods. Additionally, the initiative will provide coun-tries with a robust, cost-effective toolbox of methods that are usable under the varying conditions of all countries affected by land degradation.

The ELD Initiative will produce another three sepa-rate reports in addition to this interim report: one aimed at the scientific community, one aimed at political decision-makers and one aimed at private decision-makers. These reports will rely on the dis-cussions and work of the three inter-related work-ing groups of the initiative: (i) Data and Methodology, (ii) Scenarios (economic valuation of options), and (iii)) Options and Pathways for Action. Existing and new case studies will provide a scientific basis in establishing the cost-effective toolbox of methods. Further details of the working groups and the ini-tiative can be found at www.eld-initiative.org.

Chapter 2 provides an outline of the approach to estimate the economic benefits and costs of action and assess whether action is economically justified.

C H A P T E R

02

20

The ELD methodology in assessing potential economic improvements; using and expanding upon existing approaches and frameworks

The ELD Initiative draws from existing frameworks and approaches of environmental economics, adapting and expanding them to include features specific to land management. The questions these frameworks and approaches attempt to address include:

❚❚ From an economic perspective, how can we decide whether it is worth taking action to foster sustainable land management or not?

❚❚ Why and how should the economic value of land and land-services be estimated, especially when they do not have a market price?

❚❚ What kind of problems exist in relation to land management, what kind of economic analysis can be used to decide how to address them, and what possible actions can be taken once informed by an economic analysis?

❚❚ How is complexity reduced to estimate the eco-nomic value of land and land-services more eas-ily using the ecosystem services framework?

❚❚ In addition to the ecosystem services frame-work, how is complexity reduced using the Total Economic Value framework? What steps can be taken to pragmatically identify a relevant valu-ation method based on available data and resources, local capacity and objective of the study?

❚❚ Is there a difference between the costs of inac-tion or the benefits of action, and which of those should we compare against the costs of action? What kind of economic solutions can be adopted for given problems?

❚❚ How is the best economic option chosen for action? What criteria can be used to identify which option should be chosen?

❚❚ What other economic approaches could be used for decision-making as alternatives to cost-ben-efit analysis?

❚❚ What are the necessary conditions for economi-cally desirable actions to be successful?

❚❚ How can we answer all the previous questions by adopting a sequential approach? Can we identify simple steps to implement informed action?

❚❚ How can we identify representative case studies to scale results up and obtain a global estimate of land degradation?

❚❚ How do we know which case studies to select to inform the analysis of a given problem, and if there are none, how do we choose case studies to be commissioned?

This chapter briefly details the frameworks and approaches that have been established to answer these questions, and discusses how they are con-nected. It builds on the previous work commis-sioned by Germany’s Federal Ministry for Economic Cooperation and Development to the Center for Development Research (ZEF) and the International Food Policy Research Institute (IFPRI) 38, and consid-ers the conclusions of the second scientific confer-ence of the UNCCD 39. These frameworks and approaches are all rooted into an economic per-spective and allow stakeholders to consider alterna-tive options for action. These options for action are based on alternative livelihood options, which include agriculture as well as other economic sec-tors of land-based activities (e. g., eco- or wildlife-based tourism, arts/crafts, medicines, mining, etc.). Other perspectives (technical, political, legal, cul-tural, social, and environmental) can be taken to inform action. Because of the nature of the ELD Ini-tiative, this report focuses on an economic perspec-tive only, with conditions for success derived from complementary perspectives.

How do we know sustainable land management is economically worth adopting?

Land is a viable asset in and of itself, and the ELD Ini-tiative focuses on the costs and benefits derived from sustainable land use and sustainable land-


21

based economic activities. The overarching goal is to provide an economic rationale for promoting good land stewardship and related policies, to com-plement the existing well-recognised scientific rationale.

Cost-benefit analysis is a tool derived from account-ing that compares the costs of undertaking an action or a project (in this case, of adopting sustain-able land management practices) against the ben-efits derived from it. The costs of adoption of sus-tainable land management practices (“action”) are fairly well known 22, but the full economic benefits of action are often missing or only partially known. This information gap exists either because changes to the land have not yet occurred and thus cannot be measured in practice, or only a fraction of the economic benefits are being translated into market prices and the true value of these economic benefits are therefore imperfectly measured by market prices. Economic valuation methods can be used to estimate the true value of economic benefits of action and address some of this information gap.

In this context, a cost-benefit analysis will compare the economic benefits of adopting sustainable land management practices (for agricultural or alterna-tive land-based economic livelihoods) against the associated costs. The costs and the benefits of adopt-ing these practices or land-based livelihoods depend upon the level of action taken and change achieved, which in turn depends on the causes of land degradation and the processes driving it. Once both the costs and benefits derived from action have been estimated, the net economic benefit from action, equal to the economic benefits minus the costs of action, can be estimated.

One of the major advantages of a cost-benefit analy-sis is that it quantifies everything monetarily, either through market prices or economic values. This homogenous unit of measurement allows for direct comparisons between costs and benefits across dif-ferent scenarios. Quantifying costs and benefits in monetary units can also help provide an idea of the scale of desired implementation (i. e., from a village market to international trade).

Cost-benefit analysis can help identify the most eco-nomically efficient practice for a given scientific, political, legal, cultural, or social context. Long-term change requires that the chosen practice iden-tified as having the greatest net economic benefit is

not associated with economic as well as non-eco-nomic barriers (technical, political, legal, cultural, social, or environmental) in order to ensure this practice is actually implemented. When such barri-ers to adoption exist, then ensuring the actual adoption and successful implementation of the cho-sen action framework requires the removal of these other barriers. Cost-benefit analysis can be helpful in identifying how to best enable action through the setting up of economic incentives or policy instru-ments. This analysis simulates and scales the impact that the introduction of such instruments will have, simulates the removal of existing incentives that have adverse economic and environmental impact on land management, and identifies potential social consequences of change in land-based eco-nomic activities. Removing barriers to adoption requires a good understanding of landholders’ atti-tudes, behaviours and incentives towards the adop-tion of sustainable land management if sustainable land management is to be effectively promoted and adopted.

Why value nature (and not price it)?

Economists make a clear distinction between mar-ket price (also called financial price) and value. The economic value of a good or service reflects the pref-erences that society as a whole has for (and therefore allocates to) this good or service. A price is deter-mined by the market as the result of interaction between demand and supply. However, markets and market prices do not always exist although the goods or services themselves exist. For example, simply because one cannot buy a litre of clean air on the market does not mean that clean air does not have a value to soci-ety. Additionally, markets that do exist may be imperfect and have prices that do not reflect eco-nomic values perfectly. When this is the case, econ-omists refer to market failures. These failures lead to a sub-optimal use of scarce resources. Action can be taken to correct such failures for instance through the setting up of economic instruments, and cost-benefit analysis used to inform the setting up of such instruments.

By adopting the perspective of society as a whole, sound economic analysis can help decision-makers:

nowadays people know the price of everything and the value of nothing.

Oscar Wilde, The Picture of Dorian Gray [1890]

C H A P T E R 0 2 The ELD methodology in assessing potential economic improvements

22

❚❚ Assess the true costs and benefits of projects, investments, and policies by quantifying the economic impact of changes in provision of environmental goods and services

❚❚ Provide a rationale to choose between alterna-tive options for economic improvements

❚❚ Support environmental policy by providing information on how to correct market failures

❚❚ Raise awareness of potential investment oppor-tunities and their returns on investment to the private sector

❚❚ Reduce social tensions (e.g. development vs. conservation) by informing the setting up an equitable redistribution process from those who economically profit from action (“winners”) to those who lose out (“losers”), and informing the establishment of new markets

❚❚ Identify conditions for success and non-eco-nomic barriers, to correct for policy and institu-tional failures

Table 2 provides examples of common problems relative to land management faced by decision-makers, how economics can assist in the decision-making process, and what possible actions can be informed by adopting an economic perspective. This assumes that there are no technical, political, legal, cultural, social, and environmental barriers to the adoption of economic action.

Type of problem Decide between options (e.g. development vs. conservation)

Redistribute from winners to losers

Set up new markets

Examples Case Study 2 Case Study 3 and Case Study 4

Case Study 5

What is economic valuation used for?

Make an informed choice/ decision-making between options

Assess the level of compen-sation to be implemented within the economy

Assess the potential for livelihood diversification as a form of risk management and resilience building

Tools Perform a cost-benefit analysis, with estimated, non-marketed (unpriced), but existing economic benefits

Perform a cost-benefit analysis, explicitly identify-ing the economic link be-tween winners and losers

Create and establish the new market

Action(assuming a favourable technical, political, legal, cultural, social, and envi-ronmental context)

Choose the option with the greatest value to society as a whole

Set up an economic instru-ment (standard, subsidy, tax, tradable permit): determine the scale of the economic instrument, who it will pay for it and who will receive it (i.e., the re-distribution from winners to losers), and who and how the instrument will be administered

Transform values into prices for existing non marketed or new economic activities (e.g. payments for ecosystem services such as REDD for carbon storage, eco-tourism for biodiversity, eco-certified products, etc.)

t A b l e 2

Problems related to land management, economic analyses, and possible actions


23

Deciding between alternative land options when trade-offs must be made: Vietnam (DO 2007 40)

c A S e S t U D y 2

The problem and trade-offs involved:

This case study was carried out on Tram Chim National Park in Vietnam. The park is enclosed by a dyke that was built in 1985, and was intended to retain water during the dry season in an effort to restore wetlands damaged during the Vietnam War. In 1996, local authorities raised the height of the dyke to prevent any fires, which has had two consequences: first, that the water level in the park is now consistently higher than the ecologically optimal level, leading to degradation in the wetland ecosystem, and second, that the higher dykes now protect many farms from flooding, allowing farm-ers to grow more rice and thus earn a higher income.

This study investigated the impact of proposals by the Park Management Board to reduce the height of dykes in Vietnam’s Mekong River Delta. Changes in the park dyke will change water levels in farms in adjacent areas, and hence have impacts on farmers. It is estimated that a reduc-tion in water level in the park by one meter can lead to an increase of 0.2 – 0.3 m of water in adja-cent farms. This will have considerable impacts on farmers’ farm dykes, cropping, and livelihood due to prolonged flood durations. The changes in wetland management will involve improved veg-etation control, increased hydrological and bio-logical monitoring, and stronger enforcement against illegal encroachments.

Method for valuation of economic impact:

In this study, the cost of the dyke conversion is the local farmers’ reduced income from rice produc-tion, and was estimated using the production func-tion approach and market values. The benefits derived from the improvements in environmental quality (wetland biodiversity) that the proposals should produce were estimated using an environ-mental choice modelling technique (non-market values).

Two scenarios were considered: one with a reduction in the height of park dykes and one with a reduction in the height of farm dykes. The park dykes surrounding the wetland protected areas were built by local authorities to maintain a high water level in the dry season for fire fighting and prevention. Farm dykes surround villages and paddy fields were constructed by local farmers with support from local governments to protect

agricultural land, villages, and other infrastruc-ture from annual flooding.

Results:

The study finds that far from being a ‘trade-off’ between conservation and rural development, pro-posed changes could produce both an improve-ment in the Delta’s ecology and a net benefit to society.

Scenario 1 (park dykes): It was found that the con-version of park dykes in Tram Chim would reduce rice yields by 0.03 tonnes/ha/year or 1,500 tonnes/ha/year for local farmers in an adjacent area of 50,000 ha around the park. This income loss of about USD 91,875 per year, together with compen-sation paid by the government for “farmer chang-ing livelihood” costs (costs of adapting to new con-ditions/jobs after the dyke conversion) and engi-neering costs, brings the total costs of the proposed five-year programme to USD 3.4 million. On the other hand, respondents were willing to pay for increased biodiversity values of Tram Chim that would result from the changes proposed in the dyke and wetland management. The aggregated non-market values ranged from USD 3.94 – 5 mil-lion, suggesting that park dyke conversion can gen-erate a net social benefit.

Scenario 2 (farm dykes): It was found that the con-version to lower farm dykes would reduce rice yields by 0.24 tonnes per ha per year, or VND 0.98 million per household per year. It would also reduce the income from livestock rearing. The esti-mated cost of the dyke conversion would be VND 15.4 million per household per year, and VND 614 billion or USD 38.4 million for the whole MRD. On the other hand, the biodiversity values of all wet-lands in the MRD were estimated between USD 41.7 – 53 million. Therefore, the net social benefits would range from USD 3.3 – 14.6 million.

Possible options for action:

The proposed plans represent a win-win for both nature and people. Since society as a whole bene-fits, there is a rationale for making money available to individual farmers to compensate them for any income losses. The maximum level of compensa-tion to be provided should be equal to the net social benefits.


24

A “south-south” (developing country – developing country) demonstration of concern over land deals: Ethiopia (sourced from The Guardian 2012 41)

c A S e S t U D y 3

This example is centred on Ethiopia’s leasing of 600,000 ha (1.5 million acres) of prime farmland to Indian companies. Further deals involving approx-imately 200 million ha of land are believed to have been negotiated in the past few years, mostly to the advantage of speculators and often to the detri-ment of local communities. This has led to environ-mental destruction, and the imprisonment, intimi-dation, repression, detentions, rapes, and beatings of journalists and political objectors, according to a new report by the United States-based Oakland Institute.

Nyikaw Ochalla, director of the London-based Anywaa Survival Organisation, said, “People are being turned into day labourers doing backbreak-ing work while living in extreme poverty. The gov-ernment’s plans … depend on tactics of displace-ment, increased food insecurity, destitution and destruction of the environment.” Ochalla, who stated that he was in daily direct contact with communities affected by “land grabbing” across Ethiopia, said the relocations would only add to hunger and conflict, “Communities that have sur-vived by fishing and moving to higher ground to grow maize are being relocated and say they are now becoming dependent on government for food aid. They are saying they will never leave and that the government will have to kill them. I call on the Indian authorities and the public to stop this pil-lage.”

Karuturi Global, the Indian farm conglomerate and one of the world’s largest rose growers, has leased 350,000 ha in the Gambella province for under USD 1.10 ha/year, to grow palm oil, cereals, maize, and biofuel crops. They declined to com-ment on these claims, and spokesman for the company stated, “This has nothing to do with us.”

In response to the controversy, the Ethiopian government defended its policies publicly. “Ethio-pia needs to develop to fight poverty, increase food supplies, and improve livelihoods, and is doing so in a sustainable way,” said a spokeswoman for the government in London. She pointed out that 45 % of Ethiopia’s 1.14 million km2 of land is arable, but only 15 % is in use. In contrast, Asish Kohtari, author of a new book on the growing reach of Indian business, noted that the phenomenon of Indian companies “grabbing” land in Africa is an

extension of what has happened in the last 30 years in India itself. “In recent years the country has seen a massive transfer of land and natural resources from the rural poor to the wealthy. Around 60 million people have been displaced in India by large scale industrial developments. Around 40 % of the people affected have been indigenous peoples,” he said. The land develop-ments have included dams, mines, tourist devel-opments, ports, steel plants, and massive irriga-tion schemes. Thus far, this complexity is not yet resolved in either nation.

In this case, the winners are both the Ethiopian gov-ernment and Indian investor, and the losers are the Ethiopian farmers. The problem is a lack of a redis-tribution mechanism in place so that farmers can also benefit from the deal. One potential action that could provide a win-win situation would be for either the government or investor to provide compensation to farmers. A total economic valuation of land could help this strategy by:

❚ determining how much compensation is needed for farmers to be at least as well off after the deal as before, and

❚ determining what fraction of the investor’s prof-its should go back to the government and/or farmers, thereby reducing social unrest.

This assumes that farmers are those holding the property rights over the land they use and that these property rights can be financially recognised. Land property rights can help determine whether com-pensation to farmers should be paid by government or the investors: whether the government or investor provide the financial compensation to farmer depends on the modalities defined the land deal agreement, and more specifically how responsibili-ties have been legally allocated between the two in the agreement.


25

Conflict arising from undervaluing land: Sierra Leone (sourced from The Guardian 2012 42)

c A S e S t U D y 4

In Sierra Leone, farmers receive USD 5/ha/year for leasing land to a foreign plantation investor under a 50 year contract. However, this payment has been perceived as “unacceptable” to many, as it does not fully compensate farmers for the loss of valuable trees and plants destroyed in the clearing of the land, or more specifically, for the loss of services previously provided by these trees and plants. This perceived unfairness led to social unrest and wide-spread demonstrations in 2012, turning what could have been a win-win situation into a lose-lose one. Such contestation from the local populace can deter foreign investors and limit further opportuni-ties for development.

In this case, the winner from the deal is the foreign investor, and the losers are the Sierra Leone farm-ers. The problem is that the redistribution mecha-nism in place is so small that farmers feel that they have lost out from the deal. Consequently, both farm-ers and the foreign investor lose out from the deal: farmers because of the reduction in their livelihoods and livelihood options, and the investor because of the costs and negative image associated with social unrest. One action could be to revise the level of com-pensation provided by the investor to the farmers, A total economic valuation of their land and services derived from it could help assess a “fair” level of compensation for the farmers (which should be higher than their current USD 5/ha/year), and thereby reduce social unrest.


26

Pioneering a system of payments for ecosystem services for carbon storage and watershed services: Costa Rica 43, 44, 45

c A S e S t U D y 5

The problem:

In the late 1900s in Costa Rica, forest on privately owned land was rapidly being converted to agricul-tural land and pastures. This conversion was done without consideration of the value derived from these forests by others, both in Costa Rica and abroad. In response, Costa Rica adopted a law in 1996 that formally recognised the value of environ-mental services provided by these forests in terms of carbon fixation, hydrological services, biodiver-sity protection, and the provision of scenic beauty. The country has aimed to provide payments to for-est owners for each of these values, but has so far only been successful for carbon fixation, hydro-logical services, and some biodiversity protection.

What is the level of payment?

Levels of payments have generally been set based on previous payment level provided to forest own-ers in a different form, and/or after consultation of stakeholders and negotiation. Environmental valu-ation studies were not used to determine the level of payments, even when available (e.g. the willing-ness to pay for water quality in Honduras). Payment levels typically tend to be fixed and at a lower level than the costs of provision (opportunity costs). For-est owners around Heredia (Central Valley of Costa Rica) are paid USD 51/ha/year for forest conserva-tion, USD 124/ha for reforestation their first year, USD 100/ha for their second year of restoration, and USD 67/ha for the third to fifth years.

Who pays?

In the case of carbon and other greenhouse gases fixation, polluters (mostly fossil fuel users) foot for the bill – the “polluter-pays” principle. This is in accordance with the Kyoto Protocol on emission reductions which has now become mandatory. On the contrary, beneficiaries can choose to pay for hydrological services on a voluntary basis – the “beneficiary-pays” principle. The Global Environ-ment Facility, which represents global users, granted a budget to fund agro-forestry contracts for biodiversity conservation and carbon seques-tration benefits, but the local tourism industry has not yet committed any funds to conserve the ben-

efits of natural ecosystems. Users may or may not be aware of the available payment for ecosystem services in place.

How is the budget levied?

Most of the budget is levied through a mandatory, dedicated tax on fuel sales, with one third of the tax (5 % of fuel sales in 1999) earmarked to forestry. A much smaller part of the budget comes from nego-tiated voluntary payments by water users such as bottlers, municipal water supply systems, irriga-tion water users, and hotels. This voluntary contri-bution changed in 2005 to a mandatory conserva-tion fee earmarked for watershed protection as part of a water tariff.

Who benefits?

Costa Rican forest owners benefit directly from the scheme because they receive a financial compen-sation for forest maintenance. Evidence however suggests that the level of compensation is too low compared to the opportunity costs of conservation. Polluters benefit because they can keep operating on the global market while looking for less pollut-ing technologies or inputs. Users benefit because of the improved environmental quality. They also have a way of expressing their voice through pro-viding for these payments, which was not previ-ously an option.

Ultimately, Costa Rica directly benefits as a country: new institutions have been set up to administer these payments with either with the government or NGOs acting as intermediaries, with the associated creation of employment opportunities and increased economic activities. Costa Rica has also received payments from other countries for this system of payments for ecosys-tem services (e.g. from the Norwegian govern-ment, private companies, Global Environmental Facility).

Who administers the programme?

The Costa Rican government and its administra-tions facilitate the budget collection and imple-mentation of payments. Local-level intermediaries have been created in order to reduce the trans-


27

action costs associated with payment implementa-tion, and take advantage of economies of scale. These local level intermediaries have helped forest owners fill in the paperwork and liaised between forest owners and the government (e.g. FUNDE-COR, a Costa Rican non-governmental organiza-tion).

What are the conditions for success?

The ecosystem service values to society are recog-nised by the Costa Rican legal system. The govern-ment has been proactive in establishing such pay-ments on a decentralised basis, letting intermedi-aries establish themselves, obtaining commitments from both stakeholders and providers, and ensur-

ing environmental objectives are met. These com-mitments are crucial to ensure long term sustain-ability of the payments for ecosystem services system.

Being pioneers in payments for ecosystem services meant that Costa Rican stakeholders and institutions have had to be flexible enough over time to evolve and take lessons learnt and changing circumstances into account.


28

f i g U r e 2

The provision of ecosystem services from natural capital: Linkages between ecosystem services and human well-being (adapted from Millennium Ecosystem Assessment 2005, Figure A, pg. vi 1)

Basic material for good life

3 Adequate livelihood3 Sufficient nutritious food3 Shelter3 Access to goods

Freedomof choiceand action

Being ableto do whatan individualvalues beingand doing

Health

3 Strength3 Feeling well3 Access to clean air & water

Good social relations

3 Social cohesion3 Mutual respect3 Ability to help others

Provisioning

3 Food3 Fresh water3 Fuel and fibre3 …

Regulating

3 Climate regulation3 Flood regulation3 Disease prevention3 Water purification3 …

Supporting

3 Nutrient cycle3 Soil formation3 Primary production3 …

Cultural

3 Aesthetic3 Spiritual3 Educational3 Recreational

Security

3 Personal safety3 Secure resource access3 Security from disasters

OP

TIO

N V

AL

UE

Ecosystem Services

The Ecosystem services framework: Ecosystem services classified, valued independently, then aggregated

Estimating the true economic value of land is not easy or straightforward, as land provides society with so many different services. The method sug-gested here is to deconstruct these services into independent categories that can be valued sepa-rately without duplicating the value of a single ser-vice across categories. The total economic value of the land is then the sum of the values of the identi-fied individual services.

Decision-makers can use the Ecosystem services framework developed in the Millennium Ecosystem Assessment 1 to identify a complete list of services provided by land that have an economic value to society as a whole. There are four general types of services: provisioning (food, water, fibre, timber, fuel, minerals, building materials and shelter, and biodiversity and genetic resources), regulating (ben-efits from regulation of processes such as climatic events, water flows, pollution, soil erosion, and nutrient cycling), cultural (mostly experienced through tourism or religious practices) and support-ing (primary production, soil formation, and nutri-


29

ent cycling). These ecosystem services collectively provide the basis of human well-being and eco-nomic welfare. In such a context, and seen from an economic perspective, land degradation is the loss or reduction in services provided by land to society as a whole. This definition also includes the reduc-tion of land on which these services are based, even if the services themselves are maintained through time (e. g., a forest with a river running through can be reduced in size as a result of external develop-ment pressure, even though the river itself is still providing its services). The reduction in this natural capital threatens the long-run sustainability of cur-rent pathways of exploitation (this is sometimes referred to by economists as the strong sustainability concept).

Figure 2 shows the relationship between ecosystem services and well-being, and the flow from ecosys-tem services to human sustenance and well-being and ultimately to freedom in choice and action. There exist several variations of Figure 2, with more

or less details 25, 46, 47, but the main concept and structure behind all of them is essentially the same.

Box 2 details some examples of what valuations of these ecosystem services could be used for, in terms of both the type and scale of economic incentives that can be set up.

The Total Economic Value framework and valuation methods

Increasing competition for land demonstrates that an assessment of the total economic value of land is urgently required, so that land is not undervalued or undersold. This will allow concerned parties to make the most of all of their potential economic opportunities. However, the following challenges of this type of assessment must be considered: (i) total economic valuation is currently perceived as too complicated, too costly to estimate, and/or its results are not considered appropriately in the deci-sion-making process, (ii) to the knowledge of the authors, there is no unique method to measure total economic values, (iii) there is not yet a complete set of methods that are simple to implement and lead to robust estimates of the total economic value of land, and (iv) there are no studies to date that esti-mate the full economic value of a piece of land based on the range of provided services. Valuations have thus always been only partially complete, making comparisons between sites difficult, if not impossi-ble, as different aspects of land and ecosystem ser-vices can be measured in very different ways.

Nonetheless, valuation methods can capture vari-ous components of the total economic value for a given service. The fundamental idea is to decon-struct the total economic value into components that can then be summed up together again, while avoiding overlap between these components and preventing duplicate counts. This framework has already been used in ZEF and IFPRI’s initially com-missioned work on the Economics of Land Degrada-tion25 and their current ELD project26, as well as in complementary initiatives like the Economics of Ecosystem and Biodiversity48 and the UK National Ecosystem Assessment27. What remains a necessity is a systematic, empirical estimation of total eco-nomic value in relation to land management, in order to get a sounder economic assessment of cur-rent land management practices and alternative options.

b o x 2

Examples of improved land management derived from economic valuations of ecosystem services

Provisioning services

❚❚ The estimation of the costs of soil erosion and the assessment of whether investment in soil erosion is economically viable, using produc-tivity loss, replacement costs, and participa-tory contingent valuation methods.

Regulating services

❚❚ The estimation of non-agricultural and non-timber values can be used to inform the amounts of carbon payments.

❚❚ The estimation of pollution costs can be used to inform the establishment of payments for pollution clean up.

Cultural services

❚❚ The estimation of recreational values can be used to estimate the potential benefits from establishing or developing the tourism indus-try.

❚❚ The estimation of aesthetic and spiritual values can be used to inform the protection of high value cultural and spiritual assets.


30

The total economic value can be deconstructed into use value and non-use value (Figure 3). Use value is the economic value associated with using the land for economically profitable activities. It can be broken down further into direct use value and indi-rect use value. Direct use values encompass mostly provisioning services such as food or timber, and indirect use values are those entities not consumed directly but which indirectly support directly con-sumed goods such as food and timber (e.g. the val-ues of regulating services – nutrient cycling, water flow regulation, soil erosion prevention, etc.). Non-use value is the economic value of land that is not associated with consumption. This non-use value can be broken down further into existence value,

bequest value and stewardship value. Existence value is the economic value allocated to land or what it supports, simply because it exists. Bequest value is the value of land that is passed on to future genera-tions. Stewardship value is the value of land that is kept in good conditions for both direct economic production and the maintenance of surrounding ecosystems. Option value is based on how much individuals or societies are willing to pay for the option of keeping the asset or future direct and indirect uses, including: drought, flood, and pro-tection from other natural disasters. This is essen-tially the economic value allocated to strategies that have been adopted to manage potential threats to profits or livelihoods. It is sometimes con-

f i g U r e 3

Total economic value with types of ecosystem services and examples (adapted from Nkonya et al. 2011, pg. 70, and Soussan and Noel 2010 38, 49)

Food, fibres andtimper production

(provisioning);Carbon storage

(regulating);Tourism,

recreationalhunting

(cultural)

DirectUse Value

IndirectUse Value

Option Value

ExistenceValue

BequestValue

Use Value Non-use Value

StewardshipValue

Pollination(provisioning);

Watershedprotection, flood

attenuation;pollution

assimilation(regulating and

cultural);Nutrient cycling,

micro-climate(supporting)

Premium from useof biodiversityresources by

pharmaceuticalindustry inthe future

(provisioning);Area that

becomes ofrecreational value

(cultural);Area used for

waste recycling(regulating)

Biodiversityhotspot,symbolicspecies,

e.g. blue whale,tiger, panda,

mountaingorillas

(cultural)

Land passed ontoour children

(cultural)

Landmaintained ingood workingconditions forboth humans

and theirsurroundingecosystems

Total Economic Valueof land and land-based services


31

t A b l e 3

Examples of calculation of the total economic value for alternative land-based activities

Land

-bas

ed e

cono

mic

act

ivit

ies

agri

cult

ure

(n

on-p

asto

ral)

past

ure

min

ing

carb

on

stor

age

tour

ism

relig

ious

pr

acti

ces

agri

cult

ure

(non

-pas

tora

l)

and

tour

ism

Use value

Dir

ect u

seva

lue

of a

gric

ultu

ral

prod

uctio

nva

lue

of m

eat

prod

uctio

npr

ofit f

rom

m

inin

gpa

ymen

ts

rece

ived

fr

om R

EDD

+ m

echa

nism

valu

e of

tour

ist

fees

, e.g

. for

en

try

into

a

natio

nal p

ark

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

valu

e of

agr

icul

tura

l pr

oduc

tion

and

tour

ist

fees

, e.g

. for

ent

ry in

to a

na

tiona

l par

k

Indi

rect

us

eca

rbon

seq

uest

ratio

n pa

ymen

ts, i

ncom

e fr

om

on-f

arm

gue

st h

ouse

s

carb

on s

e-qu

estr

atio

n,

recr

eatio

n

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

valu

e of

hot

el

and

rest

aura

nt

indu

stry

aro

und

the

natio

nal

park

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

valu

e of

car

bon

sequ

es-

trat

ion

paym

ents

and

val

ue

of h

otel

and

res

taur

ant

indu

stry

aro

und

the

natio

-na

l par

k

Opt

ion

valu

e of

kee

ping

fore

st

stan

ds fo

r fu

ture

tim

ber

sale

s

past

ure

set

asid

e to

be

used

on

ly in

ext

rem

e ci

rcum

stan

ces

su

ch a

s a

drou

ght

futu

re p

rofit

by

leav

ing

som

e m

inin

g re

sour

ces

into

the

grou

nd

valu

e of

ag

ricu

ltur

al

prod

uctio

n un

der

an

alte

rnat

ive

land

use

valu

e of

po-

tent

ial p

rofit

to

be m

ade

from

to

uris

m if

land

w

ere

deve

lope

d fo

r th

is p

urpo

se

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

valu

e of

kee

ping

fore

st

stan

ds fo

r fu

ture

tim

ber

sa

les

and

valu

e of

pot

en-

tial p

rofit

to b

e m

ade

from

to

uris

m if

land

wer

e de

ve-

lope

d fo

r th

is p

urpo

se

Non-use value

Exis

tenc

eno

t usu

ally

mea

sure

d in

ec

onom

ic te

rms

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

min

ing

rese

rves

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

valu

e of

em

ble-

mat

ic s

peci

es,

e.g.

tige

rs, b

lue

wha

le, p

anda

s,

mou

ntai

n go

rilla

s

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

valu

e of

em

blem

atic

sp

ecie

s, e

.g. t

iger

s, b

lue

wha

le, p

anda

s, m

ount

ain

gori

llas

Beq

uest

valu

e of

inhe

rite

d la

nd

or it

s pr

oduc

tion

valu

eva

lue

of

inhe

rite

d la

nd

or p

rodu

ctiv

e va

lue

of th

e he

rd s

ize

that

th

e in

heri

ted

land

can

car

ry

valu

e of

in

heri

ted

min

es

valu

e of

fu

ture

pa

ymen

ts

inhe

rite

d w

ith th

e la

nd

valu

e of

tou-

rism

inco

me

inhe

rite

d fr

om

pare

nts

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

valu

e of

inhe

rite

d la

nd,

e.g.

agr

icul

tura

l and

to

uris

m in

com

e fr

om

inhe

rite

d la

nd

Stew

ard-

ship

not u

sual

ly m

easu

red

in e

cono

mic

term

s, b

ut

can

be e

mbe

dded

into

ag

ricu

ltura

l sys

tem

s, e

.g.

Him

as in

Wes

tern

Asi

a

or th

e m

ulti-

func

tiona

lity

of a

gric

ultu

re in

Eur

ope

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

not u

sual

ly

mea

sure

d in

eco

nom

ic

term

s

not u

sual

ly m

easu

red

in

eco

nom

ic te

rms

Tota

l Eco

nom

ic V

alue

sum

of a

ll

the

abov

esu

m o

f all

th

e ab

ove

sum

of a

ll

the

abov

esu

m o

f all

th

e ab

ove

sum

of a

ll

the

abov

esu

m o

f all

th

e ab

ove

sum

of a

ll

the

abov

e


32

sidered a use value, but can also be considered a non-use value, as it does not correspond to current use, but rather to future consumption.

The framework provided in Figure 3 is a simple method to ensure that no part of the economic value is left out when estimating the total economic value, thereby ensuring an accurate portrayal of the economic information. In turn, this will allow for fully informed decision-making. Table 3 gives exam-ples of these values for a range of different land-based economic activities.

As shown in Table 4, the existing literature on land degradation and sustainable land management quantifies:

❚❚ Provisioning services: mostly by direct use and option values

❚❚ Regulating services: by direct and indirect use values, and option value

❚❚ Cultural services: by direct and indirect use val-ues, and existence value

It is worthwhile to note that not all components of the total economic value have been estimated for all types of ecosystem services. This is because such economic valuations can be costly to undertake, and there is generally an incentive to obtain the

most relevant information first. Relevance will depend on the cultural, social, and environmental contexts, as well as the objective(s) of the economic valuation and assessment.

Several methods of valuation can be used to capture the economic value of an environmental good. These are described briefly in Appendix 1 with an assess-ment of their advantages, limitations, and potential use. These valuation methods have been used for valuation of the environment, mainly since the 1980s. Some are still being refined to improve the accuracy of estimated environmental values, but can provide relatively good estimates of value when the context of the study is taken into account appropriately.

Market price, replacement costs, dose-response meth-ods, damage cost avoided, mitigation costs, and oppor-tunity costs can be referred to as non-demand based methods as they do not involve the estimation of a demand curve for services.

The hedonic price method, travel cost method, contin-gent valuation, and choice experiment all rely on esti-mating a demand for a good or service, and are therefore all demand based methods. The hedonic price method and the travel cost method are called revealed preference methods as they estimate a use value from surrogate markets; the use value is “revealed” from these other markets. Contingent

Provisioning services

Regulating services

Cultural services

Supporting services

Use value

Direct use ◊ ◊ ◊

Indirect use ◊ ◊ ◊

Option ◊ ◊ ◊

Non-use value

Existence ◊

Bequest

Steward ship

t A b l e 4

Economic value types that are typically estimated for each ecosystem service (from Quillérou and Thomas 2012 50)

Supporting services are represented in italics as they are not valued on their own, but rather through other eco system services. This is to avoid the issue of double-counting.


33

valuation and choice experiment rely on people stating their willingness to pay for a service (linked to the total economic value allocated to this ser-vice), and are therefore stated preference methods.

Figure 4 builds up from Figure 3 and shows the differ-ent valuation methods (detailed in Appendix 1) that can be used for each sub-component of the total economic value, as there is not just one way to esti-mate economic values.

In addition to the objective of the study, the choice of method depends on the data, resources, and local capacity available to undertake such economic valuations52. Each method has its advantages and

f i g U r e 4

The Total Economic Value concept and existing valuation methods (adapted from Bertram & Rehdanz 2013, pg. 28 51)

Non demand basedmethods

Revealed preferencemethods

(demand-based)

Benefit transfer

Hedonic pricemedthod

Market price, replacementcosts, dose-response

methods, damage costavoided, mitigation costs,

opportunity costs

Travel costmedthod

Contingentvaluation

Choiceexperiment

Stated preferencemethods

(demand-based)

DirectUse Value

IndirectUse Value

Option Value

ExistenceValue

BequestValue

Use Value Non-use Value

StewardshipValue

Total Economic Valueof land and land-based services

limitations, both in terms of method and data, and is used in relation to a specific problem (Generic limitations to the applications of methods in devel-oping countries are highlighted in Box 7). The choice of method to be applied can be very pragmatic, and the following steps can be used to determine which method to select and apply from those detailed in Appendix 1 52:

(1) deciding the type of environmental problem to be analysed;

(2) reviewing which valuation method is appropri-ate for the environmental problem to be ana-lysed;


34

(3) considering what information is required for the identified environmental problem and chosen valuation method;

(4) assessing what information is readily available, how long it would take to access it and at what monetary cost.

Valuing the costs of inaction or the benefits from action: What are the differences and implications?

Most people confuse the costs of inaction with the benefits of action, which sometimes correspond and sometimes do not. For example, Figure 5 demon-strates a piece of agricultural land operating at only 40 % of its productive capacity (e.g. with crop yields reaching 40 % of the crop yield potential for the region). Failure to protect the land from degradation is considered inaction and corresponds to the differ-ence between the piece of land producing only 40 % of its potential yield, and a piece of land operating at 100 % productive capacity (Arrow 1). If the piece of land is effectively restored from 40 % to 100 % of its productive capacity (Action 1), then the benefits from that action (Arrow 2) are equal to the costs of inaction (Arrow 1). However, if action restores land to only 70 % of its productive capacity (Action 2), then

the benefit from action is the difference between those derived for land at 70 % productive capacity and land at 40 % productive capacity (Arrow 3). In this case, the benefits from action (Arrow 3) are less than the costs of inaction (Arrow 1).

The costs of inaction have been considered by previ-ous and on-going studies such as the Stern Review on Climate Change 53, The Economics of Ecosystems and Biodiversity 48, the UK National Ecosystem Assessment 27, and the Economics of Land Degrada-tion research project led by the Center for Develop-ment Research (ZEF) and International Food Policy Research Institute (IFPRI) 26. However, since the costs of inaction are greater or equal to the benefits from action, using the costs of inaction as the pri-mary focus may lead to overestimations of the actual benefits from action (Case Study 6). This will in turn lead to disappointment and frustration, especially for private investors, as they won’t see the expected benefits materialise. This could limit fur-ther action and investment and thereby be counter-productive. Theoretically, this approach also gives a better estimate of actual economic benefits and associated money flows that occur after action, and allows for consideration of partial land restoration.

Based on the merits of discussions that have evolved amongst environmental economists, the ELD Initia-

f i g U r e 5

Continuum of land states between fully functioning and fully degraded, and the relationship between the costs of degradation and potential benefits from restoration (adapted from Quillérou & Thomas 2012 50)

Arrow 1 (orange) corresponds to the costs of land degradation; Arrow 2 (dark green) corresponds to the potential benefits of land restoration; Arrow 3 (light green) corresponds to the effective benefits from land restoration.

Fully functioning (restored) land(100% crop yields/timber/biodiversity/ …)

Fully degraded land, no economic activity(0% crop yields/timber/biodiversity/ …)

Land under consideration

Action 1

2

3

1 Action 2

100%

70%

40%

0%


35

tive tends to give more weight to the benefits from action rather than the cost of inaction. This approach is also supported by the Offering Sustain-able Land Use Options (OSLO) consortium.

Framework for decision-making: A comparison of the economic benefits of action (or costs of inaction) against the costs of action, and decision-making criteria

Previous studies estimate the costs of land degrada-tion at USD 40 billion per year 10, 54. This is a high cost to pay for land degradation and begs the question of whether or not the potential benefits of reversing land degradation are worth acting upon. Will the adoption of sustainable land management or alter-native land-based economic activities lead to greater benefits than costs? A cost-benefit analysis is a powerful tool that helps to answer this question.

In this context, a cost-benefit analysis will compare the benefits of adopting sustainable land manage-ment or alternative land-based economic activities against the associated costs of taking such action (Figure 6). This deviates slightly from the methodol-ogy of comparing the costs of action to the costs of inaction developed by ZEF and IFPRI 25. The reason-

Expected benefits prior to action did not fully translate into economic benefits after action

(sourced from Kosey et al. 2007 44)

c A S e S t U D y 6

Three technical studies, including an economic valuation, were conducted in Honduras to inform the provision of a payment scheme for water-related environmental services. Regardless of the quality of these studies and the reliability of their results, the fee charged to fund the payment scheme was only 3.6 % of the water users’ estimated willingness to pay. This means that not only was the valuation study not used to inform policy, and therefore ren-dered useless for policy design but also that the necessary budget that should be leveraged for such services is not enough and will lead to under-provi-sion of water-related environmental services com-pared to what water users would prefer. This means that the expected economic benefits prior to action

(estimated based on the valuation study results) could not fully translate into economic benefits after action. The fee charged to water users was instead decided through the voting of representatives from the different urban water sectors. The level of fee to be charged was in this case decided based on polit-ical considerations over economic ones.


36

ing for the deviation stems from the aforemen-tioned fact that the costs of inaction will most likely overestimate the actual economic benefits that arise with action such as land restoration.

The costs and the benefits of adopting sustainable land management and alternative land-based eco-nomic activities depend upon the level of action taken and change achieved, which in turn depends upon the causes of land degradation and the pro-cesses driving it. Once both the costs and benefits derived from action have been estimated using the

f i g U r e 6

Economic benefits and costs from action from preventing land degradation (adapted from Nkonya et al. 2011, pg. 4 38)

Proximatecauses

Underlyingcauses

Processes

Proximatecauses

Underlyingcauses

Processes

Levels of land

Outcomes

Institutionalarrangements

Benefits from action Costs of action

All effects of levels of land improvement on:❙ The provision of ecosystem ❙ services❙ Human well-being/society❙ Economy

(Discounted) benefits from action:❙ On-/off-site benefits❙ Direct/indirect benefits❙ Current/future benefits

Action or inaction

(Discounted) costs of action:❙ On-/off-site costs❙ Direct/indirect costs❙ Current/future costs

Outcomes

All effects of levels of land improvement on:❙ The provision of ecosystem ❙ services❙ Human well-being/society❙ Economy

Actors

Action againstland degradation:❙ Sustainable land ❙ management❙ Institutional and❙ policy settings

Actors

Action againstland degradation:❙ Sustainable land ❙ management❙ Institutional and❙ policy settings

Levels of land

methods detailed in the previous sections, one can then estimate a net economic benefit from action that will be equal to the benefits minus the costs. It is important however, to consider both the eco-nomic costs and benefits from action in sound deci-sion-making (Case Study 7).

It is also important to note that there is often not just one option, but several possible alternatives for action. For instance, investments could be made to improve productivity or alternative livelihoods (such as arts/crafts and eco-tourism), or simply


37

Increased cost-effectiveness when both benefits and costs are considered (Naidoo and Iwamura 2007 55)

c A S e S t U D y 7

It is important to consider both the economic costs and benefits from action in sound decision-mak-ing. Naidoo and Iwamura (2007) calculated and mapped the annual gross economic rents of the world’s cropping and grazing lands (i.e., the profits predominantly derived from food production). They identified areas where conservation would be most cost-effective, taking both biophysical ben-efits and economic costs into account, and com-pared them to existing conservation hot spots. They showed that only considering the benefits from conservation without considering the costs

forgone (i.e., the lost profit from agricultural pro-duction) leads to suboptimal allocation of resources for conservation. Conversely, taking only the costs forgone but not the economic ben-efits of conservation into account would not be economically optimal either.

Moving one step beyond this study would involve the translation of the biophysical benefits in monetary terms, comparing them to the costs of conservation, and including economic activities other than those linked to the agricultural sector (e.g. tourism).

carrying on with business as usual (“changing nothing”). From an economically logical perspec-tive, the option that leads to the greatest economic benefit should be the top choice. Box 3 details an

example of decision-making to identify an action to be implemented based on the level of economic gains to be made.


38

b o x 3

Calculation of the Total Economic Value

This box details an example of economic decisions based on land values for illustrative purposes. A comparison is drawn between two pieces of land which provide similar ecosystem services; one has many existing economic activities (Land A, e.g. at a city’s periphery), and another only has a few existing economic activities (Land B, e.g. in rural areas). The information is summarized in Table 5. There are sev-eral decisions that can be derived from this com-parative analysis:

1) Choose one option that has the greatest benefit between both pieces of land: invest in alternative livelihoods on Land B – the land with little existing economic activity, where one will get the greatest net economic benefit from action.

2) Choose one option that has the greatest benefit for both pieces of land: invest in productivity on the Land A – the land with many existing economic activities, and also in alternative livelihoods on Land B – the land with little existing economic activity.

3) Choose two options that have some benefits for both pieces of land: potentially invest in both land productivity in Land A and alternative livelihoods in Land B. The proportion of investment allocated between the two will depend upon overlap/trade-offs and the economies of scale and scope between the two options considered. Whether action needs to be prioritised between Land A and B also depends on the available budget that will trigger action on both pieces of land.

4) Choose at least one option and adapt the broader environment: the legal, political, social, and eco-nomic context can be adapted to allow for and/or foster action. Outreach and education activities can also complement this.

Option for action Economic cost of action

Economic benefit from action

Net economic benefit from action

Land A – Piece of land with many existing economic activities

Change nothing (inaction) USD 40 USD 30 – USD 10

Invest into productivity USD 100 USD 120 + USD 20

Invest into alternative livelihoods USD 130 USD 140 + USD 10

Land B – Piece of land with few existing economic activities

Change nothing (inaction) USD 60 USD 30 – USD 30

Invest into productivity USD 20 USD 25 + USD 5

Invest into alternative livelihoods USD 50 USD 100 + USD 50

t A b l e 5

Economic options for investments into land-based activities and results


39

f i g U r e 7

A decision-making framework with net economic benefit as choice criterion (i.e. economic benefits minus costs) (Source: report authors)

Starting point:

3 options for action:

Estimate totaleconomic value ofeconomic costsand benefits:

Improved productivityChange nothing

(business as usual)

A given piece of land, for a given legal,political and economic context

Choose option with greatest net economic benefit for action (or inaction)and adapt legal, political and economic context

to enable adoption of chosen option

Alternative livelihoods(economic activities)

Net economicbenefit from

improved productivity


business as usual


alternative livelihoods

Following upon this, Figure 7 provides a summary of the economic decision-making pathways to action. The costs and benefits associated with the three options for action (change nothing, invest into pro-ductivity, and invest into alternative livelihoods) are estimated to derive the net economic benefit from the action associated with each option (for the “change nothing” option, this is the economic ben-efit of inaction) and identify the option with the greatest net economic benefit. It is sometimes nec-essary to adapt legal, political, and economic con-texts in order to enable the adoption of the most economically desirable option, and also to remove existing barriers to adoption. The same approach can be repeated as many times as necessary for the same (improved) piece of land until the economic gains are exhausted. The main advantage of this approach is that is allows for a consideration of the agricultural sector. Agriculture is a key sector in addressing our food security issues as we need to produce more food, and ensure global food security and access. However, part of managing land more sustainably is reducing human pressures on land currently exploited for agriculture. One option

could be to foster the uptake of alternative liveli-hood options by poor farmers in such areas, so that land can become more sustainably managed and poor farmers can maintain or expand their income levels. This approach would allow us to go beyond the agricultural sector and consider other eco-nomic sectors that are linked to alternative liveli-hoods (e.g. tourism, conservation). Alternative live-lihood options like this should be an integral part of strategies addressing land degradation and sus-tainable land management. There are quite a few options and pathways for action (Box 4) and the choices to be implemented for effective land man-agement depends on specific context, with given technical, political, legal, cultural, social, and envi-ronmental conditions.


40

b o x 4

Options and pathways for action

There are a range of possible practical options and pathways where sustainable land management is tied in with increased economic viability for the greatest net social and economic profit. The follow-ing options are commonly found in the existing literature.

❚ Adoption of alternative land managementThese can refer to the adoption of more sustainable agricultural practices to improve agricultural yields and livestock production, afforestation/reforestation to control water flows, etc. Alternative land manage-ment detailed in the literature is advocated as provid-ing greater economic benefits than associated costs. These profits often materialise though increased rev-enues as a result of increased production, certifica-tion schemes (e.g. FairTrade Foundation®), increased land market prices (e.g. land rents 11), reduction of droughts, flood occurrences, etc. Increased benefits usually accrue directly to stakeholders and generally require access to the right information for the imple-mentation of change.

❚ Establishment of alternative livelihoodsA typical example would be the establishment of eco-tourism activities that contribute directly to conser-vation efforts and practices 56, 57, 58, 59, or fair trade production of arts and crafts. Stakeholders usually reap benefits directly, but this requires access to information and resources in order to develop the facilities, skills, and capacity required to establish market routes to potential customers and undertake advertisement campaigns to promote these alterna-tive livelihood activities.

❚ Establishment of payment for ecosystem service schemes

Land managers are rewarded for conserving ecosys-tem services for those who use them 45, 60, 61, 62, 63, 64. The stakeholders usually reap the benefits directly, but this requires access to information, and national or international redistribution mechanisms to ensure payments. This can include payments to store carbon or to preserve biodiversity. The United Nations Reducing Emissions from Deforestation and Forest Degradation (REDD) is an effort to offer incentives to developing countries to reduce emissions from for-ested lands and invest in low-carbon paths to sus-tainable development through the creation of a finan-cial value for the carbon stored in forests. Another

programme, REDD+, goes even beyond deforestation and forest degradation to include the role of conser-vation, sustainable management of forests, and the enhancement of forest carbon stocks. Additionally, private companies (e.g., Vittel Water®, Hydroplants) or NGOs (World Wildlife Fund in Kenya) might pay land users for ecosystem services.

❚ Establishment of new markets for ecosystem services: carbon store and sequestration

Within most markets, most ecosystem services have no or little value assigned to them. A specialised pay-ment for ecosystem services works within the mar-ket scheme to create the potential to assign mone-tary values to services previously not or under-val-ued 65. This goes beyond payments for ecosystem services by letting the price for carbon be determined through a market. This can directly benefit stake-holders, but depends on the fluctuations in the mar-ket price and could lead to a switch in land manage-ment strategies by stakeholders. It also requires monitoring of the market operation, and some finan-cial speculation. Examples of new market establish-ment include the carbon market in Europe and China.

❚ Provision of subsidy schemesThese involve government action and can target a range of stakeholders such as farmers or small land holders. They can be provided on a one-off basis to lower establishment or switching costs (e.g. the UNDP/GEF Small Grants Programme 66), or linked to land use or type of production in order to lower costs of operation (e.g. United States and European Union agricultural policies). It requires both stakeholder access to information and the targeting of stakehold-ers by donors. The maintenance of a subsidy scheme in the long term usually requires strong lobbying from interest groups.

❚ Establishment of taxesTaxes aim to raise the cost of production or consump-tion of environmentally damaging goods, thereby reducing or limiting demand for these goods, and thus reducing or limiting the environmental damage. It involves government action and monitoring and social acceptance of these taxes. An example of this is the eco-tax in Europe on plastic-based products, which then directly funds their recycling.


41

❚ Implementation of bansThese require strong government action and moni-toring and can be costly to enforce. An example of this is in Rwanda, where plastic bags are being banned to reduce environmental pollution.

❚ Provision of opportunities to make voluntary payments for environmental conservation or offset

An example of this is voluntary payments to offset carbon consumption, or the provision of monetary support to environmental conservation charities and non-governmental organizations, which are cur-rently being promoted by some airline and train organizations.

❚ Provision of microfinanceMicrofinance focuses on promoting local, small-scale business establishments. Credit facilities are provided at a lower interest rate than those offered by traditional banking establishments, who consider these initiatives as too small or too risky. Microfi-nancing is seen by economists as a good alternative to subsidies which tend to have adverse conse-quences on society and behaviours 67. Access to microfinance has successfully contributed to poverty reduction in Bangladesh at the individual level (espe-cially for women), as well as at the village level 68. Recent evidence suggests that access to microfi-nance is not sufficient on its own to lead to improve-ments in health, education, and women’s empower-ment 42, 69, but it is an integral part of the “action option mix” to promote sustainable land manage-ment.

❚ Establishment of research, policy, and stakeholder networks and platforms for exchange

The development of networks and platforms leads to greater information exchange between local stake-holders and decision-makers, as well as increasing the scientific basis for informed decision-making 70.

❚ Improving data availabilityThe current spatial variations in data availability impair scientific research activities and active inter-national communications 71. Data availability depends on the wealth level (per capital GDP), language (Eng-lish), security level, and geographical location in relation to the country. Through scientific education, communication, research, and collaboration, data

availability can be improved by building capacity in low-GDP countries with fewer English speakers that are located far from the Western countries that host global databases, and in countries that have experi-enced conflict.

The pathways to the provision of these options rely mostly on the policy-making process and government action, and can provide direct benefits to private stake-holders. The provision of funding from external donors or private investors depends on their incentives to do so (which may change over time), but private investors will act if they can be convinced that they will get a return on their investment. Short term funding will be effective in promoting change if it lowers financial bar-riers to change.


42

Six steps to estimate the economic benefits and costs of action, and one to take action

The approaches, frameworks, and methods detailed in previous sections have been summed up into a 6-step methodology conzeptualised by the Global Mechanism of the UNCCD 52 and further developed by Noel and Soussan (2010) 49 for the OSLO Consor-tium, with each step further disaggregated as required in order to meet the specific objectives of individual studies:

1. Inception: Identification of the scope, location, spatial scale, and strategic focus of the study, based on stakeholder consultation and the prep-aration of background materials on the socio-economic and environmental context of the assessment.

2. Geographical characteristics: Assessment of the quantity, spatial distribution, and ecological characteristics of land cover types, categorized into agro-ecological zones and analysed through the use of a Geographical Information System (GIS).

3. Types of ecosystem services: Analysis of ecosys-tems services stocks and flows for each land cover category, based on the ecosystem service frame-work.

4. Role of ecosystem services and economic valu-ation: The role of the assessed ecosystems ser-vices in the livelihoods of communities living in each land cover area, and also the role of overall economic development in the study zone. This implies estimating the total economic value of these services to estimate the benefits of action or the cost of inaction.

5. Patterns and pressures: Identification of land degradation patterns, drivers and pressures on the sustainable management of land resources, including their spatial distribution and the assessment of the factors causing the degrada-tion. This is to inform the development of sce-narios for cost-benefit analysis. The following sub-steps can be taken to choose the appropriate valuation method under available data, resources, local capacity, and specific objective to be achieved: (a) deciding the type of environ-mental problem to be analysed; (b) reviewing

which valuation method is appropriate for that problem and the type of environmental value to be captured (use value or total economic value); (c) considering what information is required for the identified environmental problem and cho-sen valuation method, and; (d) assessing what information is readily available, how long it would take to access it, and at what monetary cost.

6. Cost-benefit analysis and decision-making: The assessment of sustainable land management options that have the potential to reduce or remove degradation pressures, including the analysis of their economic viability and the iden-tification of the locations for which they are suit-able.

7. Take action: Implement the most economically desirable option(s). This may require adapting the legal, political, and economic contexts to enable the adoption of most economically desir-able option(s), and removing existing barriers to adoption.

A range of tools have been released for mapping ecosystem services, such as the Natural Capital Pro-ject’s Integrated Valuation of Environmental Ser-vices and Tradeoffs (InVEST) tool or the ARtificial Intelligence for Ecosystem Services (ARIES) model-ling platform. These tools aim to help map ecosys-tem service provision and model their evolution with time, associate them to an economic value, identify scenarios, and help decision-makers assess trade-offs between these scenarios for informed decision-making. GLUES (Global Assessment of Land Use Dynamics, Greenhouse Gas Emissions and Ecosystem Services) is a project led by the German Ministry of Education and Research that publicly shares datasets and data related to sustainable land management and optimal use of land and land ser-vices. The Australian INFFER (Investment Frame-work for Environmental Resources) is a privately operated system that aims to develop and prioritise projects addressing environmental issues such as reduced water quality, biodiversity, environmental pests, and land degradation. MIMES (Multiscale Integrated Models of Ecosystem Services) 72 is an ini-tiative lead by the University of Vermont which also aims to evaluate ecosystem services. All of these tools can in theory produce results for various levels of available data but with a level of uncertainty that decreases with the level of available data.


43

The drivers of land degradation have been described by Geist and Lambin 73, and further elaborated by Nkonya et al.74. Indications of the data and potential sources required to identify these drivers is included in Appendix 2 26.

Other economic approaches

There are other economic approaches which adopt a slightly different but complementary perspective to cost-benefit analysis.

Shadow interest rateThe shadow interest rate is similar to the rate of interest charged by banks for loans, and is applied to the natural capital we borrow from future genera-tions. It is the interest that society as a whole pays for not managing natural resources sustainably. The lower the shadow interest rate, the more sustainable the management pathway will be. Case Study 8 is an example of this, showing that fishers who overfish the stocks end up borrowing natural capital at much higher rates than they would pay to borrow money in a bank (at a typical 6 % rate of interest).

The shadow interest rate concept can be applied directly to a land management context, and is one way of communicating effectively with a private sector driven by economic goals and comprehen-sion.

Multi-Criteria analysisMulti-criteria analysis, also called multi-criteria decision analysis, is a semi-qualitative procedure used to compare or determine overall preferences between alternative and often conflicting options. It helps identify a preferred option in multi-discipli-nary contexts without requiring preliminary con-sensus between stakeholders on how costs and ben-efits will be measured.

Multi-criteria analyses assess options (scenarios) along several quantified or scored criteria (attrib-utes). Assessment criteria can be quantitative or qualitative (scores) and can relate to social, techni-cal, environmental, economic, and financial changes. It is easy to use and has a wider scope than cost-benefit analyses because it includes qualitative as well as quantitative data.

Shadow interest rate: An example from Europe (Quaas et al. 2012 75)

“’We borrow the earth from our children,’ environmentalists say – but at what rate of interest?”

c A S e S t U D y 8

Fish stocks can be considered a natural capital stock that provides harvestable fish. Overfishing from these stocks means borrowing from the nat-ural asset. While fishing for a particular quantity above the sustainable population threshold gener-ates immediate profits and income, an interest rate has to be paid in terms of foregone future fishing income, as the fish stock’s reproductive capacity will remain low, and fishing costs will remain high. The concept of the shadow interest rate can be interpreted as the interest that has to be paid by fishermen in future years on the fishing income earned this year. It can quantify the degree of over-fishing and make its economic consequences transparent, as well as evaluate the profitability of short-term catch reductions as investments in long-term natural capital stocks. It also quantifies the economic return on reducing the catch to just slightly below a given (sustainable) value. Accord-

ingly, such a catch reduction can be regarded as an investment in the natural capital stock. The shadow interest rate incorporates the relevant biological and economic information and can be used to com-pare fish stocks. The shadow interest rates below have been computed for 13 major European fish stocks, and range from 10 % to more than 200 %. This means that fishers pay considerable interest when mismanaging fish stocks. Recent manage-ment improvements and catch reduction (e.g. in the Eastern Baltic cod or North Sea herring fisheries) have led to a decrease in the shadow interest rates in recent years, indicating greater economic returns. Fishers would thus benefit from managing the fish stocks more sustainably.

The difference in rate of interest paid is graph-ically highlighted in this study on a map with fish shapes proportional to the rate of interest for each fish stock.


44

Multi-criteria analysis is not an environmental valu-ation method but rather helps to identify preferred scenarios without using economic valuation tech-niques. This analysis tends to be adopted as an alter-native to cost-benefit analyses when decision-making is influenced by political rather than economic forces. However, this method has limits. There is a risk of double-counting for overlapping objectives, it relies on expert judgement which does not always corre-spond to the preferences of society as a whole, and the scoring of qualitative impacts can be arbitrary in some cases. Furthermore, it is subject to small sample biases which arise when the sample is too small to allow for proportional extrapolation to an entire population, which can make it difficult to derive a scenario that would be acceptable to all groups.

Multi-criteria analysis does not always translate into economically sound decisions compared to cost-benefit analysis 76 and cost-benefit analysis should be preferred. In certain situations however, it may constitute a more acceptable exercise to stakehold-ers. It can also be used as a preliminary screening to environmental valuations that analyses scenarios

and identifies a preferred choice and criteria that can then be more formally economically valued.

Macro-economic approachesThe approaches detailed in previous sections focus on estimating potential flows of money within soci-ety or changes in existing monetary flows to make them match on economically and socially optimal levels. As such, they are micro-economic approaches.

On the other hand, macro-economic approaches focus on government macro-economic accounting at the national or regional level to estimate indica-tors similar to the GDP, while taking the environ-ment into account. The objective of macro-eco-nomic analyses is therefore different from that of micro-economic analyses which use economic val-uation and cost-benefit analysis to assess whether action is economically worth doing or not. Because of this difference in objective, macro-economic approaches can be used as complement to the micro-economic approach and frameworks detailed above and used for the ELD Initiative.


45

Examples of macro-economic approaches include the UN System of Environmental-Economic Account-ing (SEEA), which describes stocks and changes in stocks of environmental assets, and the Wealth Accounting and the Valuation of Ecosystem Services (WAVES) global partnership, which provides a method for natural capital and national ecosystem accounting. Due to their focus on improving national accounting methods by including economic values of environmental goods and services, these macro-economics approaches focus on use values only. These use values are mostly measured through non demand-based methods (market price, replacement costs, dose-response methods, damage cost avoided, mitigation costs, and opportunity costs).

Condition for improved decision-making

The appropriate technical, political, legal, cultural, social, and environmental conditions are needed to ensure the successful implementation of economic action and instruments for long-term sustainabil-ity. The most economically desirable option has to be technically and legally feasible, and environ-mentally and socially acceptable. Additionally, physical and monetary resources to achieve the practical implementation of sustainable land man-agement should be accessible and available.

Economic sustainability of land use and land-based economic activities depends on how the property rights for these land uses are allocated and formally recognised, with both the type of property right owner (open access, individual property, common property) and the type of use (cropping and plant-ing, passage on the land, passage in the air over the land) formally recognised 77. When customary prop-erty rights are not formally registered, they can be easily ignored or overlooked by governments or international investors to the detriment of local and poorer populations, and leading to social unrest. Establishing formally recognised land registers and enforcing individual and collective property rights can help to identify the appropriate stakeholder(s) who should be taking action against land degrada-tion or be receiving compensation when property rights are transferred to another land manager (e.g. foreign investors). The FAO has already established a set of voluntary guidelines regarding responsible governance and land tenure, which could act as a policy template or blueprint for governments, pol-icy-makers, and practitioners in determining what constitutes acceptable or fair practices for all 78.

Legal systems need to recognise total economic valuation as a principle for sound decision-making and action. Unless total economic values and prop-erty right ownerships are recognised by legal sys-tems and compensation is provided to those who depend on the land, it will be difficult to avoid social unrest 79. This is even more so the case when inter-national investors, perceived as ‘rich’ by the local populations, are involved.

Education and outreach activities may also be required to provide access to information at the local level. Physical, technical, and monetary resources should also be made available at the local level to ensure action is effectively taken. A lack of access to these resources and information about sustainable land management is particularly acute in Sub-Saharan African countries.

The most important condition for success is to establish discussions and identify win-win options between all stakeholders, including local popula-tions and their representatives. This is referred to as a “participatory” approach, and can be applied to methods used to derive economic values. This pro-cess considers the opinions of stakeholders to be on an equal footing regardless of their bargaining power and thereby goes beyond mere consultation.

b o x 5

Examples of adaptations to facilitate and foster action

❚ Formalise informal property rights regimes and allocation and change them if necessary to promote improved land management 77

❚ Provide some microfinance scheme to promote access to monetary capital to small holders 80

❚ Implement a payment for ecosystem services scheme 81

❚ Conduct local consultation 82 through partici-patory valuation and policy-making

❚ Remove institutional constraints

❚ Consider gender aspects


46

The 6 (plus 1) steps build a process that takes a range of informed actions from economic valuations and scenario-building suited to specific social, political, legal, and economic contexts. The focus on the total economic value of economic benefits from action will help assess the potential gains for society from adopting sustainable land management through improved agricultural production or the provision of alternative livelihoods. This process builds upon previous initiatives and partnerships with parallel initiatives. The remaining challenge is to translate existing academic methods into pragmatic applica-tions for wider practice, by building stakeholders’ capacity to gather this information and then take informed action.

Sampling method for extrapolation of existing case studies and global comparison

One of the problems faced by the initiative is how to scale up local estimates of the costs of land degrada-tion or economic benefits from sustainable land management estimated for specific case studies to derive global estimates. To tackle this issue, a solu-

tion is to group case studies based on identified characteristics, which can be accomplished by sev-eral methods.

The first option is to use a methodology based on the drivers of land degradation. This is the approach taken by ZEF and IFPRI, who have devel-oped a three-step sampling strategy for grouping case studies based on the drivers of land degrada-tion. This is to ensure the analysis can be extrapo-lated to a global context in an accurate and rele-vant manner. The first step aims to group countries of the world based on their socio-economic and institutional underlying factors of land degrada-tion by: GDP per capita, government effectiveness, population density, and agricultural intensifica-tion 25. The second step is to check that the groups of countries are valid, by verifying that the follow-ing are different between groups: other socio-eco-nomic and biophysical indicators of land degrada-tion, share of rural population, share of agricul-ture in GDP, and average cereal yields per ha. An example of the heterogeneity in the groups can be seen in Table 6. These first two steps ensure that the case studies selected are representative of global

Clu

ster

s

GD

P p

er c

apit

a

Gov

ernm

ent

effe

ctiv

enes

s

Pop

ulat

ion

de

nsit

y

Agr

icul

tura

l in

ten s

ifica

tion

Maximum changes in normalised differenced vegetation index values

between the baseline (1982–84) and endline (2003–06)

Cer

eal y

ield

s

Shar

e of

ag

ricu

ltur

e in

GD

P

Shar

e of

rur

al

popu

latio

n in

tota

l

1 lower lower higher lowerhighest dispersion,

both biggest decreases and increaseslower higher higher

2 mid mid higher higher smaller decreases mid mid higher

3 mid mid higher mid smaller decreases mid mid mid

4 mid mid lower mid larger decreases mid mid lower

5 mid mid lower lower mid lower mid mid

6 higher higher mid higher larger decreases mid mid lower

7 higher higher higher smaller decreases higher lower lower

t A b l e 6

Clustering and validation results (Nkonya et al. 2013 26, Table 1, pg. 13)


47

heterogeneity in terms of socio-economic, institu-tional, and land degradation characteristics.

The third step is to choose countries from each group to commission new in-depth case studies, based on regional representativeness, existing data, and/or data being collected. This driver-of-land-degradation-based approach is most relevant when the drivers are addressed directly (e.g. to reduce agricultural land erosion).

Alternatively a methodology based on the type of objective to be achieved can be used when alternative livelihood options are being considered as the action. In this case, the driver-based method is limited and a similar method based on objectives rather than drivers may be more appropriate. For instance, the drivers of land degradation will not inform the setting up of eco-tourism as much as other economic factors such as access to the loca-tion, flora and fauna, risk of kidnapping, political stability, etc. This amounts to grouping relevant

case studies by the ecosystem service of interest for statistical analysis to ensure that the findings can be extrapolated to a global context.

Method to assess the relevance of existing case studies and commissioning new case studies

Moving forward from the methodologies discussed in this chapter, the ELD case studies presented in Chapter 3 are categorized so as to facilitate the future identification of relevant case studies and analyses by the ELD Initiative working groups, depending on specific objectives (e.g. increasing agricultural productivity or setting up new eco-nomic activities). The literature has been catego-rized by: world region, type of ecosystems, type of ecosystem service (food, fibres, carbon storage, tourism, amenity, etc.), type of economic value, and type of valuation method (when applicable). They have also been allocated to one or more of the ELD working groups (Data and Methodology, Scenarios, and Options and Pathways for action).

The selection of new case studies commissioned by the ELD Initiative was made based on knowledge and practice gaps, as well as to ensure a comprehen-sive geographical and thematic scope (Box 6).

b o x 6

Criteria for selection of case studies to be commissioned by the ELD Initiative

Proposals have been evaluated according to the following criteria:

(a) scientific quality and “value for money”

(b) use of top-down or bottom-up approaches or innovative aspects of both

(c) use of non-market valuations as well as market valuations

(d) potential for integration of results across scales

(e) consideration of land rehabilitation, prevention of land degradation, and alternative livelihoods for action

(f) capacity to involve and/or reach out to a range of audiences (scientific community, decision-makers, private sector)

(g) selected location(s) is (are) representative of its (their) specific region(s) of the World

(h) addresses one or more of the identified gaps (list in annex of this document)

(i) well-defined time plan and adequate proposed budget

C H A P T E R

03

48

Existing case studies on the economics of land degradation and sustainable land management: The known and unknown (preliminary results)

This report re-emphasizes the conclusions of previ-ous reviews that there are insufficient case studies to draw definitive conclusions on the economics of land degradation mainly because there have been no comprehensive studies on the total economic value of land. First estimates indicated that the costs of land degradation were in the order of 3 – 7 % (up to a maximum of perhaps 10 %) of agricultural produc-tivity 83, with the cost of remedial action being an order of magnitude less than the costs of degrada-tion. Other estimates indicate costs of environmen-tal degradation to be of the order of 4 – 8 % of GDP in developing countries, 2 – 7 % of GDP in North African and West Asian dryland countries 84, and 3.3 – 7.5 % of global GDP 85. A review by Nkonya et al. 38 in 2011 showed that in general the costs of taking action to prevent/reverse land degradation were less

than the costs of not taking action. Nkonya et al. 2011 also showed that there is a global loss of arable land per capita to the order of 40 – 50 m2 per year 74. For the 2 billion peo-ple living in drylands this can amount to a loss of 8 – 10 mil-lion ha per year. The value of drylands has recently been estimated to range from USD 101 – 5,640 per ha 86, meaning

a loss of value to the order of USD 0.8 – 56.4 billion per year from land degradation in drylands. These figures are probably underestimated because the values were not based on total economic values, but rather on what each particular study had measured in terms of ecosystem services. The estimates are thus of a similar order of magnitude to global esti-mates of costs of desertification of USD 42 billion/year, amongst others 87, 88.

To address the deficiencies in data the ELD Initia-tive sent out a call for existing case studies that reflected research on and analyses of the econom-ics of land degradation. The received case studies were complemented by additional literature searches, with over 200 studies referenced. This list

our doubts are traitors, and make us lose the good we oft might win by fearing to attempt.

William Shakespeare, Measure for Measure

(Act 1, Scene 4) 1603

is non-exhaustive and is being expanded and updated continuously. The preliminary analysis below is based on the first 186 resources refer-enced, of which 121 were identified as case studies, and the other 65 as reviews and theoretical frame-works. Within these preliminary results, several trends were revealed.

Heightened interest in land value after the food crises security, in relation to addressing food security issues

Temporally, most research related to the economics of land degradation has taken place over the past 5 years (Figure 8). This coincides with the first food price spikes and the pioneering use of economics for global assessments of environmental action by the Stern Review on Climate Change (2007) 53.

A need for capacity building in Africa, Asia, Central and South America

Case studies were further broken down into their world region, in order to determine if there are par-ticular zones that were being targeted for analyses on the economics of land degradation more than others (Figure 9). Most studies tended to focus on Africa or Asia, or had a global context, whereas the Americas, Oceania, and Europe had relatively few studies by comparison. This demonstrates a gener-ally predominant focus on developing regions (excluding areas like Oceania, which are considered developing states, but have proportionally much lower populations).

However, close to two thirds of the study authors were based in developed country regions. This reflects the fact that environmental economic valu-ation methods have primarily been developed in developed countries, as well the lack of academic and institutional capacity in developing countries in order for them to undertake valuation studies themselves (Box 7). Further, 47 studies (26 %) had


49

f i g U r e 8

Recent interest in land-related publication, in line with food security issues

0

5

10

15

20

25

30

unpu

blis

hed

mul

tiple

yea

rs

Num

bers

of r

esou

rces

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

f i g U r e 9

Geographical repartition of resources

World24%

Oceania5%

Europe7%

Asia18%

Americas13%

Africa33%

UN world regions(Total: 186, of which 121 are case studies)

C H A P T E R 0 3 Existing case studies on the economics of land degradation and sustainable land management

50

b o x 7

Issues faced when implementing valuation techniques in developing countries (from Christie et al. 2008 89)

The focus of this study is on biodiversity, but the same points apply to land valuation.

Practical issues:

❚ Many developing countries are affected by extreme environmental conditions which may affect the researcher’s ability to access areas or effectively undertake research.

❚ In many developing countries there may be a lack of local research capacity to design, administer, and analyse research projects. However, the involvement of local people is considered essential within the research process to ensure that local nuances/values are accounted for.

❚ There is some evidence that it may be easier to administer valuation studies in developing coun-tries as: response rates are typically higher; respondents are receptive to listening and consid-ering questions posed; and interviewers are rela-tively inexpensive (allowing for larger sample sizes).

Policy issues:

❚ The lack of local research capacity in many devel-oping countries may result in a lack of awareness of valuation methods and of the importance of natural assets (e.g. land or biodiversity) to people. A capacity building programme focused on these issues is important if developing countries are to effectively address environmental issues.

❚ The lack of empirical valuation studies in develop-ing countries is an issue when trying to effectively illustrate the importance of natural assets to peo-ple and for future input into benefits transfer.

❚ Much of the existing valuation research on the management of natural assets has been extrac-tive, with little input or influence on local policy. Incorporating ideas from action research into valuation is essential if this type of research is to meaningfully influence policy.

Methodological issues:

❚ Low levels of literacy, education, and language creates barriers to valuing complex environ-mental goods, as well as creating difficulties for using traditional survey techniques like questionnaires and interviews. More delibera-tive and participatory approaches to data col-lection may overcome these issues.

❚ Many developing countries have informal or subsistence economies, in which people may have little or no experience of dealing with money. The consequence of this is that they would find it extremely difficult to place a mon-etary value on a complex environmental good.

❚ Most of the methods reviewed have been devel-oped and refined by researchers from devel-oped counties. There is evidence that the cur-rent best-practice guidelines for these meth-ods might not be appropriate for applications in developing countries.


51

authors based out of at least two different world regions (Figure 10).

A need to progress beyond use value and the agricultural sector

Most valuation studies have focused on estimating the use value of agricultural production, i. e. food and to a lesser extent, raw materials. This almost exclusive focus on use value and agricultural pro-duction (which periodically includes tourism) is well illustrated by the case studies undertaken by ZEF and IFPRI 38. In their study of 5 countries and 8 production systems losses of crop production were used to estimate costs of action against various land degradation processes versus no action. In 7 of the 8 case the costs of action were less than the costs of inaction, ranging from 11 to 90 %. However, all stud-ies recognise that economics based solely on crop losses from land degradation misses important un-quantified benefits of other ecosystem services.

f i g U r e 1 0

Geographical repartition of authors

World0%

Oceania8%

Europe36%

Asia9%

Americas27%

Africa20%

These case studies demonstrate a need to move beyond use value and consider the total economic value of land, as well as alternative livelihood poten-tial (Figure 13). Land may be too degraded to be eco-nomically worth restoring for agricultural produc-tion, but may still be viable for other uses (e.g. to build tourist accommodations or act as buffer zone for water pollution regulation). The agricultural sector plays a great role in land values because of food security issues, but it is important to consider a broader, more comprehensive picture to make the most of land’s full economic potential.

Economic valuation methods have been so far imple-mented in relation to their perceived ease-of-use, which does not always reflect how easy the methods actually are to use (Figure 13). However, for each eco-system and ecosystem service, there is at least one available starting point from which inspiration can be drawn (Figure 11, Figure 12, and Figure 13).

UN world regions for authors(Total: 186, of which 121 are case studies)


52

f i g U r e 1 1

Proportion of resources for each ecosystem

Arid and Semi-Arid Farmland

10%

All Ecosystems in a given

Geographical Area 6%

Wetlands 5%

Urban 3%

Valleys 1%

Tropical Forests 4%

Rangelands 5%

Plains 2%

Mountains and Highlands and Uplands

8%

Hills 2%

Grasslands and Pastures

14%

Freshwater and Water Bodies

5%

Forests and Woodlands (Non Tropical)

13%

Floodplains 1%

Non-Arid Farmland 13%

Dunes 2%

Desert 3%

Coastal 3%

Ecosystems(Total: 186, of which 121 are case studies)


53

f i g U r e 1 2

Number of resources for each ecosystem service

Ecosystem services – Provisioning

Ecosystem services – Regulating

Ecosystem services – Cultural

Num

bers

of r

esou

rces

0

10

20

30

40

50

60

70

Oth

er C

ultu

ral S

ervi

ces

Spir

itual

Am

enity

Hun

ting

Rec

reat

ion

Oth

er R

egul

atin

g Se

rvic

es

Pol

lutio

n C

ontr

ol

Clim

ate

Reg

ulat

ion

Soil

Reg

ulat

ion

Wat

er F

low

Reg

ulat

ion

Oth

er P

rovi

sion

ing

Serv

ices

Bio

dive

rsity

and

Gen

etic

Res

ourc

es

Wat

er S

uppl

y

Non

-Tim

ber

Fore

st P

rodu

cts

Min

ing

Hon

ey

Hor

ticul

ture

Bio

fuel

s

Pas

tora

lism

and

Mea

t

Fore

st T

imbe

r

Fibr

es

Food

s

64

11

36

43

2

12 12

1714

74

1

119

1618

30 3028 28

8

18

Ecosystem services (Total: 186, of which 121 are case studies)


54

f i g U r e 1 3

Number of resources for each quantified value and valuation method

Non-demand based

Type of valuequantified

Revealedpreferences

Statedpreferences

Valuation method

Num

bers

of r

esou

rces

0

10

20

30

40

50

60

70

Oth

er V

alua

tion

Met

hod

Agg

rega

tion

Acr

oss

Serv

ices

Ben

efit

Tran

sfer

Cho

ice

Expe

rim

ent

Con

tinge

nt V

alua

tion

Trav

el C

ost M

etho

d

Hed

onic

Pri

ce M

etho

d

Opp

ortu

nity

Cos

ts

Miti

gatio

n C

osts

Dos

e-R

espo

nse

Met

hod

Mar

ket P

rice

Met

hod

Tota

l Eco

nom

ic V

alue

(TEV

)

Use

Val

ue O

nly

67

28

38

19

5

17

41

9 8

21

12

21

* Aggregation across services is a specific form of benefit transfer which takes trade-offs into account

(Total: 186, of which 121 are case studies)


55

f i g U r e 1 4

Repartition of resources across the ELD working groups

Scenarios24%

Options an pathways for action

39%

Methodology and data

37%

f i g U r e 1 5

Cost of action as a % of cost of inaction – case studies (von Braun et al. 2013 11)

Per

cent Break-even point

0

20

40

60

80

100

120

140

160

Kenya (sorghum):

soil nutrient depletion

Kenya (rice): soil nutrient

depletion

Kenia (maize): soil nutrient

depletion

India (rice): salinity

Peru (maize): soil erosion

Peru (rice):salinity

Niger: overgrazing

Niger (rice): salinity

Collected resources for each ELD working group(Total: 186, of which 121 are case studies)


56

Application of the ELD Initiative framework

In terms of the ELD Initiative framework, the resources collected and analysed thus far are fairly equitably distributed across the 3 ELD working groups on Data and Methodology, Scenarios, and Options and Pathways for action (Figure 14). This shows the diversity of avail-able resources, which cover:

❚❚ The potential scale for action, such as estimat-ing the scale of taxes, subsidies and payments for ecosystem services through valuation methods (Data and Methodology working group),

❚❚ The different choices and avenues for future decisions, such as payments for ecosystem ser-vices, policies, private sector investment, action on the drivers of adoption, etc. (Options and Path-ways for action working group),

❚❚ The predictions for future situations to adjust the scale and scope for action, such as current biophysical trends, climate change impact, and human pressures, and how to take the most rel-evant option and pathway for action (Scenarios working group).

It is important to note that economic valuation (data and methodology) and the consideration of scenar-ios provide information for more economically sound decision-making, but options and pathways for action can be adopted independently.

Options and pathways for action: Scaling up and out

The focus on the value of the agricultural sector in the current literature is in accordance with con-cerns for food security, but fails to consider the eco-nomic use values that could be derived from con-verting land from agriculture use to alternative economic activities, such as tourism and mining. It also ignores the non-use value of land-based ser-vices. Collectively, this means that the true eco-nomic value of land and land-based services is underestimated. There are two consequences of this: (i) decision-making based on use-value esti-mates will not reflect values to society as a whole and could generate more losers than winners, and (ii) not measuring the non-use value leads to missed opportunities in setting up new economic activi-ties, which could capture at least some of this non-use value. A more comprehensive approach to the total economic value of land involves combining both use and non-use values, and would show more


57

balance between the different methods used and the different services valued.

Adoption of more sustainable land management (decreasing land degradation) was touted in almost all studies as the most economically sensible future, in line with what was presented in Nkonya et al. 2011 (Ch. 6, pgs. 149 – 181) 38 and von Braun et al. 2013 (Fig-ure 15) 11. The actual options and pathways suggested and analysed in the studies demonstrated a range of possible actions for implementation of sustainable land and land-based ecosystem service manage-ment. Alternative land practices (e.g. afforestation or reforestation, conservation for tourism) were pro-posed and determined to have positive values even when considering associated costs. Recommended profits can come from numerous sources, including; increased crop and livestock production, increased

Driver Proximate Underlying NaturalAnthropo-

genic

Topography ◊ ◊

Land Cover ◊ ◊ ◊

Climate ◊ ◊

Soil Erodibility ◊ ◊

Pest and Diseases ◊ ◊

Unsustainable Land Management ◊ ◊

Infrastructure Development ◊ ◊

Population Density ◊

Market Access ◊

Land Tenure ◊

Poverty ◊

Agricultural Extension Service Access ◊

Decentralization ◊

International Policies ◊

Non-farm Employment ◊

t A b l e 7

Drivers related to land degradation and their causes (adapted from von Braun et al. 2013 11, Table 1)

tourism, increased market prices (for land), pay-ments for carbon sequestration. Overall, the case studies provide a rather holistic practical path for-ward, where sustainable land management is tied in with increased economic viability for the greatest social and economic net profit.

Pathways to provide these options rely mostly on the policy-making process and government action, and can provide direct benefits to private stakehold-ers. These private investors will act if they can be convinced that they will get a return on their invest-ment The provision of funding from external donors or private investors thus ultimately depends on their incentive to do so, which may change over time. Shorter term funding can be effective in pro-moting change if it lowers financial barriers to change.


58

b o x 8

Pressures and drivers of land degradation for consideration in economic assessment of action (sourced from von Braun et al. 2013 11)

When considering something like land degradation that has potentially large-scale temporal and spatial impacts, it is important to be able to identify potential outcomes based on all the different variables at play. Thus far, the main pressures on land that have been considered in the literature include:

❚ Changes in biophysical factors, including climate change 90, 91, 92, 93, 94

Climate, that is, precipitation and temperature, com-bined with topography, determine vegetative cover and growth in any region. Alterations in these param-eters will affect vegetative ability to adapt, leading to loss of cover, soil erodibility and erosion, soil salini-zation, poor organic matter production, and increased oxidation, amongst other things.

❚ Impact of pests, diseases and invasive species 95, 96, 97, 98, 99

Pests and diseases can lead to loss of biodiversity, crop and livestock productivity and other forms of land degradation. Invasive species can also lead to a loss of economic benefits associated with tourism when tourists value native species more than inva-sive ones.

❚ Changes in land use 25, 100, 101, 102, 103

Land clearing, overgrazing, bush burning, pollution of land and water sources by agriculture or indus-tries, and soil nutrient maiming are amongst the major causes of land degradation. For example, the conversion of grasslands, rangelands, and forests to irrigated farming can result in increased soil salinity and loss of forest services.

❚ Changes in price levels and speculation over agricultural prices 104, 105

During the period from 1970 – 1985, maize and ferti-liser prices influenced forest conversion to planted agricultural area in Mexico. Beef prices, credit dis-bursement, and population numbers have also influ-enced cattle numbers and associated land uses. Relative change in prices can therefore provide strong incentives to change land use, especially for poorer populations.

❚ Changes in income (poverty) level and number of income sources 103, 106, 107, 108, 109, 110, 111

The poor are often associated with land under high levels of degradation. It is not always clear whether

it is poverty that leads to land degradation or land degradation that leads to poverty. On the other hand, the poor’s livelihoods often depend heavily on their land and they have therefore a strong incentive to invest into maintaining their land in a good state. As a result of this context-dependent relationship, an increase in income level (decrease in poverty level) could either help achieve more sustainable land management, or further drive land degradation. It would seem that land management is more sustain-able for people depending directly on land and less sustainable when livelihoods are less directly derived from land use. Investment and development of alternative livelihoods could help farmers rest their lands or use non-farm income to invest into land improvements.

❚ Increase in population numbers and/or density 7, 112, 113, 114, 115, 116, 117, 118

Increasing demand on the productivity of the land (without increasing the yield of a singular land unit both long-term and sustainably) by a rapidly growing human population or population density can lead to more rapid and less sustainable extractions that fur-ther land degradation. However, bigger populations can also put more pressure on land owners to main-tain their land in good condition. Whether population and population density lead to land improvements or land degradation depend on the specific case study context.

❚ Changes in consumption patterns, access to market and level of supply chain development 73, 103, 119, 120

There is a marked increase in consumption of meat and “westernized” food staples in rapidly emerging economies. This shift to resource-intensive con-sumption can result in widespread deforestation, over-grazing, and further resource consumption by livestock. Land degradation can also occur in asso-ciation with the development of infrastructure as well as new processing and storage facilities, which improve market access. This is because these facil-ities can lead to increased demand and thereby intensification of production. Improved market access also increases the opportunity cost of labour which in turn increases land degradation when labour-intensive practices are also the most sustain-able. On the other hand, land users in area with good


59

market access have more incentives to invest in good land management.

❚ Changes in land tenure and property right allocation 104, 121, 122, 123, 124, 125, 126, 127

There is some mixed evidence showing that well-defined and secure land tenure can help achieve more sustainable land management. Insecure land tenure has been shown to be associated with adop-tion of less sustainable land management practices. However, this is not always the case, as farmers may still invest in sustainable land management despite insecure property rights. The problem of property right security and allocation is therefore not relevant when land is already managed sustainably, but is relevant when land is managed unsustainably. When land is managed unsustainably, there is almost always potential to improve land management by making property rights more secure or better allo-cating them.

❚ Changes in foreign direct investment 159

Multi-national enterprises and nations now com-monly invest directly in foreign lands to meet their own resource needs, or to capitalise on resources found elsewhere. They however do not necessarily have an incentive to maintain the land quality over-time as they can always choose to invest somewhere else. A lack of policy within host countries (often developing nations) can lead to over-exploitation and unsustainable practices that directly affect the land people traditionally use for self-sustenance and income.

❚ Changes in institutional settings 110, 132, 133, 134,

135, 136, 137, 138, 139, 140, 141, 142, 143

Access to agricultural extension services has the potential to enhance the adoption of more sustaina-ble land management, depending on the capacity and orientation of the extension providers. Setting up cooperative systems can also improve land manage-ment by fostering knowledge exchange and bulk buy-ing. Increasing school age and providing training specific to land management may also increase land management sustainability. Sustainable land man-agement can also be enhanced through decentraliza-tion allowing local institutions to set up land regis-tration systems to effectively secure property rights. Also, strong local institutions with a capacity for land management are likely to enact bylaws and other regulations.

❚ Changes in domestic and international policy 125, 144, 145, 146, 147, 148, 149, 150

Domestic policies that will impact land management are extremely varied and go beyond the agricultural sector and land tenure. Policies can foster adoption of sustainable land management are for instance stable agricultural pricing policies, policies increas-ing returns to sustainable land management enough, labour policies that balance “pulling” workers to the manufacturing sector and “pushing” them out of agriculture with food production needs, policies that helped provide access of poorer rural households to land and credit markets, to the necessary key infra-structure, provided support private sector initiatives, provided effective rural extension service and mar-keting services to the poor in rural areas, success-fully reduced corruption. The removal of perverse subsidy programmes can also be just as effective as implementing new policies. These policies are usu-ally not enough to promote sustainable land manage-ment on their own, requiring a coherent series of policy measures to be adopted. This requires also the adoption of relevant macro-economic policies for international trade. It also requires the assessment of trade-offs with other sectors of the economy. For instance, building a dam will help improve the coun-try’s energy production and control of water flows, but also means the loss of agricultural land in the areas that are flooded.

International policies through the United Nations and other organizations have influenced interna-tional and national policy formulation and land management. The World Trade Organization offers a platform for exchange and negotiation to remove policies that are detrimental to trade (i.e. western subsidy schemes for farmers that distort world prices and are detrimental to poorer countries).


60

t A b l e 8

Potential scenarios, from most ideal (darker green) to least (darker brown) (adapted from the UK National Ecosystem Assessment 2011 27)

Conservation Fully Implemented

This amounts to protecting the ecological environment. Ecosystem services are promoted for maximal environmental health. There would be a decline in income derived from intensive agri culture, and changes to the market. However, this would see the largest net social benefits, increases in long-term sustainability, green space, social and recreational values, and declines in greenhouse gas emissions and loss of viable land.

Green and Pleasant Land

A moderate reduction in agricultural intensity will lead to a decline in farm income. The focus is pro-environmental and will result in greenhouse gas reductions, and increases in green space, recreational, and social values. However, it can greatly impact a nation’s overseas ecological footprint, if they are unable to meet their own food needs. This should be done respecting cultural values.

Local Stewardship

Society is concerned with their immediate, local surroundings, and strives to make sustainable life a focus in this area. There is not much focus on intervention or assistance to other nations, or concern about an overseas ecological footprint. This is a small scale win-win, but not a global one.

Maintain Current Practices

The status quo is maintained. At best, market prices, agricultural incomes and recreational values will increase, but be negated by an increase in greenhouse gases and continued loss of viable land. In developing nations with drylands, living conditions will decline as viable land becomes scarce and degraded.

National Security

Climate change will result in increased global energy prices, and force many countries to focus on self-sufficiency. Market prices and agricultural income may increase, but there will be continued decline in land availability and greenspace that will dominate the other monetary values generated, resulting in an overall negative value. Governance and intervention will dominate.

Focus on Market Growth

In this scenario, a focus on the highest economic growth possible will drive land management decisions. With only a focus on market value for goods, this will trigger incre-ases in greenhouse gases and steady loss of viable land. This situation is expected to result in the most substantial reduction in the net social values of any of the scenarios.

Scenarios: Looking forward

The main pressures on and drivers of land use change that have been considered in the literature include: climate change, population increase, changes in consumption patterns, and changes in foreign direct investment. In combination with increasing land degradation and desertification, several scenarios can be constructed based on these identified pressures (Box 8, Table 7, and Table 8).

It is further possible to construct a matrix of poten-tial scenarios involving a series of variables (climate change, market growth, social values, etc.), and chart the likely outcomes of different balances in choice. This has already been done in various con-texts, including an in-depth analysis performed for

the United Kingdom by the UK National Ecosystem Assessment in 2011 27. Table 8 is an adaption of their research on future scenarios, but with a more tar-geted focus on land use management and choices.

What are the opportunities for the private sector?

These case studies reveal that there are not only eco-nomic benefits from sustainable land management, but also new opportunities for the business sector to invest and contribute to beneficial social and envi-ronmental impacts through better production and livelihood strategies. Studies have demonstrated that addressing land degradation, mitigating the negative impacts caused by industry, and/or improving raw material availability by ensuring


61

sustainable land management, can result in busi-ness opportunities 151.

Businesses can also gain through involvement in partnerships with other private and civil society sectors. For example, Coca-Cola India partnered up with an irrigation company (Jain Irrigation) to improve mango production and reduce soil erosion. By investing EUR 0.75 million each, mango produc-tion was doubled, and around 50,000 farmers were

educated in better land management practices. Farmers invested around EUR 1,050 per acre in bet-ter cultivation and irrigation systems, and since 2011, some 60 % of the mango pulp needed by Coca-Cola India has been sourced within the region tar-geted by the project 151.

In an analysis of risks from land degradation to the private sector (commissioned by the ELD Initiative), the highest at-risk sectors were: basic resources (for-estry, papers and metals), food and beverages, con-struction materials, leisure and travel, water and electricity utilities, and personal, household, and industrial goods 151. This study shows the benefits from sustainable land management extend beyond the agricultural sector. In particular those busi-nesses that had direct contact with land, food and beverage, leisure and travel, and basic resources were most sensitive to land degradation. They are also likely to be the most interested in efforts to pre-vent and/or reverse land degradation.

Going beyond knowledge gaps: Case studies commissioned by the ELD Initiative and links with parallel initiatives and projects

The ELD Initiative aims to build from and move beyond the initial case studies undertaken by ZEF and IFPRI 38 by estimating the total economic value of land, and better reflecting the true worth of land to society as a whole. The initiative also aims to move beyond the sole consideration of agricultural production (foods and raw materials) and include other land-based economic activities for improved identification of the most economically viable and desirable type of action.

Contrary to current perceptions, the range of case studies collected so far shows that valuation approaches do not have to be necessarily complex and complicated 83, 152, 153, 154, 155, 156.

The ELD Initiative is addressing the issue of land degradation and economic valuation through sev-eral key projects. With funding support from its partners, new case studies focused on these issues are in the process of being funded by the ELD Initia-tive. Research projects were selected based on sci-entific merit and the ability of the project to address the following identified knowledge gaps (Box 9).

b o x 9

Knowledge gaps

Technological

1. Overall costs/benefits of different land management interventions (trade-offs with focus on livestock and rangelands)

2. Understanding of drivers of changes (case studies)

3. Relationship between population density and land degradation

4. Identify system tipping points for land degradation

Environmental evaluation

5. Lack of harmonized methodology (scales, discount rate)

6. Lack of information on social costs of land degradation

7. Lack of information on mapping ecosystem services

8. Lack of information on non-market values of ecosystem services

9. Lack of robust low cost methods applicable by affected countries in short term

10. Limited understanding of value of ecosystem services to local livelihoods

Policy

11. Lack of plausible scenarios12. Lack of monitoring and evaluation for total

ecosystem assessments13. How can policies promote sustainable land

management

Institutional and private sector

14. Lack of incentives for sustainable land management

15. Greater interdisciplinary approaches (incentives)

16. Lack of knowledge management


62

Out of 64 proposals received, 3 research proposals were competitively selected for funding by the ELD Initiative to address some of the gaps identified above. They were chosen based both on a series of criteria listed in the call for proposals, and to ensure a comprehensive geographical and the-matic scope.

The first proposal is from the University of Wyo-ming, with an objective to provide a more system-atic spatial and econometric analysis of the concen-tration of the world’s rural population and poor on degraded and less favoured land. It includes impli-cations of this concentration for the incidence of poverty across low and middle income economies, and suggests improved policies for sustainable land management.

The second proposal is between the University of Leeds (Sustainability Research Institute), Birming-ham City University, and the University of Bot-swana. It seeks to advance knowledge on the costs, benefits, and trade-offs associated with land use and management strategies in southern Africa, including: private ranches, communal grazing, parks, and wildlife management areas, with a focus on capacity building and interdisciplinary meth-odological development.

The third proposal is between the International Union for the Conservation of Nature and project partners in Mali, Jordan, and Sudan. It is an eco-nomic valuation of rangeland ecosystem services and degradation, and a cost-benefit analysis of sus-tainable land management methodologies. It will identify management options, relevant ecosystem goods/services to be valued, and policy and invest-ment pathways and recommendations.

Through collaborative funding focused on the key areas of land degradation and environmental eco-nomics, the ELD Initiative aims to provide on-the-ground research that reaches all levels of stakehold-ers and results in efficient, tangible changes towards sustainable land management. Having useful and practical examples can provide guid-ance to decision-makers, private industries, various levels of governments, and any practitioner, in a global effort to achieve economically viable, improved land management. Joining forces with complementary initiatives and projects promotes the cohesive, multidisciplinary, multi-tiered approach that is needed to effectively trigger action in tackling this complex global issue.

The collection of knowledge and research assem-bled by the initiative demonstrates that it is possible to arrive at a basic starting point for valuation in any situation, and then make the estimation of the eco-nomic value of land more complex and relevant over time. The ELD Initiative aims to make these methods simpler to understand and apply by pro-viding establishing a series of likely scenarios, iden-tifying potential options and pathways for relevant action, and then providing a practical, useful tool-box for valuation.


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The contribution of forest products to dryland household economies: Kenya (Ngugi et al. 2011 154)

c A S e S t U D y 9

Selected case studies

SummaryAn ethnobotanical survey was undertaken in the Kiang’ombe forests found in the Mbeere District of Kenya, using an amalgamated method of participa-tory rural appraisal (PRA), participatory environ-mental valuation (PEV), household surveys, group discussions, and forest walks with informed locals. The use of PEV in this region, where no formal for-est use records exist, was important when assign-ing monetary value to elements of biodiversity essential to survival, but presumed to be “free for the taking”. Assigning monetary values gives cre-dence to non-monetary values that are recognised by locals, but otherwise ignored as they do not enter “formal markets”. PEV is a recommended method when estimating the value of forest resources in a non-monetary environment (“non-cash economy”).

The average annual forest value to a household was found to be KSh. 16,175.6 (USD 256.80), approximately 55.4 % of the average household income. There were ten forest uses found, with the service most depended upon being the supply of building materials and medicine. Medicine had the highest average annual household value, at KSh 2953 (USD 47).

ContextKiang’ombe hill forest is under Trust Land tenure, and as such exposed to over exploitation, with une-qual access to products and benefits by the adja-cent communities because of poor management and lack of control by the local county council. The forest is surrounded by an increasing population which is encroaching on it with heightened pres-sure. As a result, there are anthropogenic distur-bances such as subsistence cultivation, charcoal production, and frequent forest fires which are set annually in preparation for the rains.

There is a need for better management plan-ning, but it can only be effective if the needs of the local community are respected. This can be achieved either by maintaining current uses, or providing alternatives. Any action requires deter-mining which forest services and products have the most value to the local community. This study thus aimed to estimate the value of the forest to the local community by valuing plant products

extracted from it and activities held within it, both of which contribute to the household economy.

Method overviewThis study uses participatory environmental valu-ation; a form of contingent valuation where people state how much they value a good or service using an item of value that can easily be translated into a monetary amount. This was particularly appropri-ate to the study context because of the lack of for-mal forest-use records, and the fact that some of the surveyed activities are officially banned.

Thirteen villages across three locations around Kiang’ombe Hill were selected. Participants were asked to identify and rank forest uses along the importance they had to them, and then assign a number of counters to reflect these values to them. Participants were also requested to identify the priced good associated with the counters, its average lifespan, and its market price. The house-hold survey questionnaire used is published as an annex of the paper.

In addition, a household wealth ranking was undertaken during group discussions with village elders to check for differences in forest use across different wealth groups. This wealth rank-ing assessment relied on livelihood analysis and household survey for plant usage and annual fam-ily earnings. Data gathered during direct inter-views was used to estimate average household resources.

ResultsParticipants chose the value of a bicycle in the local economy (KSh 3000, ~USD 47.6), with a discount rate of 3 % and lifespan of 5 years, to measure the value they attach to each forest use. The main value of the forest to participants was associated with medicinal products (6 – 9 % of annual household income), then fuel wood, building material, bee farming, veterinary medicine, food, timber, fibre, weaponry, stimulants, and thatch. There were a few variations across wealth groups, but the over-all tendency remains the same.

Valuation results are represented for each wealth group, but do not show any change in the level of dependence on the forest based on wealth status.


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Issues (theory and practice)Participatory environmental valuation technique allows villagers to express the value of forest prod-ucts within the context of their own perception, needs, and priorities rather than through conven-tional cash-based techniques. Its strength is that it relies on local knowledge.

However, wealth ranking was found to be a flawed technique, because of personal relation-ships between people assisting with the ranking and the interviewees. The most accurate method was found to be accompanying resource users into their fields, to observe the parts of plants gathered and gauge the volume of harvest. This method can be time consuming however, and becomes increasingly challenging when there is an increase in participants involved.

Participants were not willing to value the use of the forest for rituals and cultural ceremonies. They stated was that it was the realm of the com-munity sages and therefore the value of such ser-vices was above their wisdom.

Conclusions and recommendationsDependency upon the forest by locals cannot be ignored if forest management plans are to be suc-

cessful. Understanding forest income-dependence is important in guiding plans for forest product use at all levels of governance. It is also very important to find win-win solutions, such as conservation strategies that involve local people and provide for sustainable livelihoods. For instance, local com-munities could cultivate more of the useful trees for household use and sale, whilst forest management activities could be developed to support indigenous tree planting for reforestation. In addition, govern-ments could help build partnerships with local communities and NGO’s, so as to reduce population pressure on the forest. This could be done by focus-ing on improved health and nutrition for improved family planning as well as improved education of local populations for forest conservation.

The original publication includes a figure showing wealth levels and forest resource dependence per household near Kiang’ombe hill forest. This figure could be used to inform prioritizing action over current forest uses. The most important use of the forest is for medicinal purposes – therefore, action could be taken to ensure sustainability of this use, or to provide suitable alternatives that would be accept-able to and preferred by the local community.

c A S e S t U D y 1 0

South East Asia: The values of land resources in the Cardamom Mountains in Cambodia (Soussan & Sam 2011 156)

Objective of the studyEcosystems in the Mekong region contain biodiver-sity resources of global significance and provide services to both locals and non-locals. This study attempted to value all ecosystem services provided by a smaller area of the Mekong region, the Central Cardamom Mountains in Cambodia. This area con-tains globally threatened species and high levels of endemism, and its services include: carbon sequestration, non-timber forest products, and watershed protection functions. This study identi-fied the role and value of land resources to liveli-hoods of local communities, and aimed to generate evidence to support sustainable land management policies and investments, based on existing and potential contributions to national development and poverty reduction.

Method overview (including aggregation method)This study used the 6-step methodology (detailed in Chapter 2) to assess the value of sustainable

land management and the cost of land degradation. It also informed potential action by identifying sus-tainable land management policies and options that would contribute to the maintenance of eco-system integrity and land resource values of the Cardamom Mountains and comparable areas in Cambodia. This study involved assessing the dis-tribution and inherent quality of land resources, analysing the role of these resources in the liveli-hoods of local communities and wider ecosystems services functions, and assessing the main degra-dation pressures on these resources.

Economic valuation of timber (provisioning service) was based on the benefit transfer approach from recent studies in the same region. Two alternatives were taken for valuation: the value of the stock of timber available if forests were clear-felled, and the value of the timber services provided by the forest through sustain-able harvesting and thus for a longer period of time.


65

Economic valuation of agricultural lands (pro-visioning service) was based on two methods of estimation: the first one was the market price of rice (border export price for South East Asia) mul-tiplied by the quantity of rice produced to estimate the overall value of rice production in the area; and the second estimated the value of rice pro-duction as a proportion of household income. Non-marketed crops values were not estimated in this study.

Economic valuation of watershed functions (regulating service) was based on a benefit trans-fer approach, from a recent study of the value of watershed functions in relation to hydropower in Vietnam.

Economic valuation of biodiversity (regulating service) was based on a benefit transfer approach, derived from a study on the value of biodiversity for high quality forests. The value was updated based on inflation and increased biodiversity pressures, as well as on international compari-sons. Appropriate values were also estimated for other land cover types (with an unspecified valu-ation method).

Economic valuation of carbon sequestration (regulating service) was based on the value of the carbon stored by the forest in the study area, and estimated using the market price and quantity of carbon stored by tropical forests from REDD-related studies in the Mekong region.

Economic valuation of tourism and other cul-tural (spiritual) services (cultural service) was not specifically assigned in this study. Biodiversity richness and the beauty of the landscape make the central Cardamom Mountains an area of great (eco)tourism potential (high value niche market). However, the lack of facilities and poor transpor-tation means that tourism is small scale and con-fined to limited parts of the region that are close to main access points. The extent and value of potential tourism is a matter of speculation, and will depend on the level of investments made in transport, accommodation, and other facilities. Cultural (spiritual) values are of great signifi-cance, but difficult to quantify in monetary terms, and so this study did not estimate them.

Contextual pressuresLivelihoods of the communities in and around the study area are completely dependent upon access to land resources. The main sources of livelihoods are derived from a combination of farming (rice), livestock rearing (with fodder collected from or grazing in the forests) and the collection of fuel, foods, and other forest products. There are also a

small number of traders and shopkeepers who service the rest of the population, and a few people employed by the government or other outside agencies as rangers or similar positions. They do not depend directly on the land resources for their livelihoods, but rather indirectly through their cus-tomers or because of the nature of their jobs.

This study has identified a “livelihood support zone” surrounding each village, as the forest and land resources of these zones underpin the villag-ers’ livelihoods. Access to these resources is essential for basic survival.

There are concerns over the extent and sever-ity of land resource degradation in this area due to soil erosion and deforestation. Traditional and sustainable systems of land resource manage-ment are increasingly under pressure following recent influxes of migrants to the area, which has led to new forms of land resource exploitation and encroachment as well as increased use pres-sures. Pressure on land resources have also increased because of illegal forest exploitation (e.g. illegal logging or wildlife trade), and are threatening the ecological integrity of vulnerable ecosystems.

Economic valuation resultsEconomic value of timber (provisioning service): total stock values were estimated as high as USD 20,000/ha if forests were clear-felled, and the total timber service value with sustainable harvesting ranged from USD 200 – 450/ha/year, depending on forest type and quality. If the entire area was sus-tainably harvested, this would have an aggregate income of nearly USD 440 million annually.

Economic value of agricultural lands (provi-sioning service): the average rice production is 758 kg per household per year, which is lower than subsistence needs. The border price for South-East Asia available from FAO at the time of the study was USD 460/ton, making rice production worth USD 349 per household per year. This pro-vides a total of just under USD 1,400,000 per year for the whole study area. A second method of esti-mation gave the same estimates: rice production amounts to 66 % of household income, represent-ing about USD 363 per household per year and a total of just over USD 1,450,000 per year for the whole study area. The total economic value of the 6,682 ha of agricultural lands in the study area is thus estimated to amount to USD 1,500,000 per year.

Economic value of watershed functions (regu-lating service): estimated annual benefits to hydropower schemes from erosion protection


66

were USD 55/ha/year, and from water conserva-tion were USD 15/ha/year. Thus, the value of watershed functions of the study area are over USD 75 million a year.

Economic value of biodiversity (regulating ser-vice): biodiversity value was estimated at USD 650/ha/year for the richest forests, and USD 550 for the remaining forest areas, amounting to an estimate of USD 1.36 billion per year for the study area.

Economic value of carbon sequestration (reg-ulating service): sequestration was estimated at USD 3,669 million, one of the highest value for an ecosystem service in the region. This is a globally significant resource.

Economic value of tourism and other cultural values (cultural service): there was no available value estimate, but they are suspected to be eco-nomically significant.

Issues (theoretical and practical)An issue in this study was the lack of data in the area of estimating potential economic benefits from tourism in the Mekong region. Additionally, some of the values estimated reflect potential ben-efits (e.g. carbon storage) rather than actual ben-efits, and may not be realised fully.

Conditions for successful actionAll of the values cannot be realised at the same time (e.g. clear-felling trees and storing carbon), so choices will have to be made amongst the options. Further, it should be clear who would pay for each of these services and how. For there to be successful management of service-providing resources, there must be effective, legitimate, and understood governance in sustainable land man-agement, as well as access to the benefits of eco-system services.

Conclusions and recommendationsThe land resources of the Cardamom Mountains have multiple values, many of which have tradition-ally not been taken into account in planning deci-sions. These resources underpin local livelihoods and are of national and global significance. There are several options to develop sustainable land management strategies that reflect local dynamics of change and can provide a more harmonious relationship between desirable development (e.g. livelihood changes, hydropower investments) and long-term sustainability of land resources.

The livelihood of local communities depends on sustainable access to a variety of resources gath-ered from local forests and lands, in addition to farming. Most of the resource uses are based on a customary rights system rather than land own-ership, and come from a zone within five kilome-tres of villages. This zone could be placed under a form of communal management, with safe-guards for sustainable management. Local com-munities have shown great interest in being involved in the management of the resources they depend upon.

Hydropower schemes currently being devel-oped in the area will bring great benefits to Cam-bodia’s overall development. In turn, they would gain enormous economic benefits from effective watershed conservation that conserves water and reduces sedimentation. A payment for ecosystem service could be implemented, with income for this scheme levied based on electricity consump-tion.

The forest conservation measures already in place in the Cardamom Mountains should be con-tinued and strengthened, so as to maintain the high value biodiversity, watershed maintenance, and carbon sequestration ecosystems services that are contingent upon continued integrity of its large forest ecosystems. A payment for ecosys-tem service could be implemented, with income for this scheme levied from tourists and down-stream water users.

There is also a need to better regulate and limit the impact on resources from ‘outsiders’ who ille-gally occupy land newly made accessible by road transport improvements. This could be achieved through working with existing and new migrants to assist them in developing sustainable systems of land management compatible with the actions taken by local communities. These systems could include the development of appropriate and sus-tainable upland farming systems on permanent plots closer to the villages, which would also help reduce “slash-and-burn” farming.


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Preliminary analyses of case studies: A summary

This non-exhaustive review of sound, global research has demonstrated many important ideas that will be integral to the foundation of the ELD framework. The groundwork for this can be found in Appendix 3, which includes the 87 case studies in the ELD database that have provided monetary val-ues for land and land-based services. The appendix provides further particulars on geography, valua-tion method, valuations, etc. that were discussed in Chapter 3. As demonstrated in these details, the cur-rent focus on economic valuation as it relates to land has been primarily within the last 5 years, targeted at developing nations by researchers in developed nations, and has focused on use and agricultural values. Within the scope of the current research available in this database, knowledge gaps were identified that could easily be addressed, and that will provide great progress in tackling the issue of land degradation from an economic perspective.

Overall, parties involved on all levels should strive to create a relatively balanced focus between the means (valuations and scenarios) and the end (options and pathways for action). This can be achieved through a focus on capacity development in developing nations (which often contain the most degraded lands) that is locally targeted and applicable, with valuations that analyse the full economic value of land, and the development of tools created at appropriate scales that will ensure maximal uptake of sustainable, economically sound, land management practices for the most optimal benefits for society as a whole.

R e f e R e n c e s

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Appendix

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atio

ns

Non

dem

and

base

d

Mar

ket p

rice

Giv

es a

n es

timat

e of

the

tota

l ec

onom

ic v

alue

(p

eopl

e’s

actu

al

will

ingn

ess

to p

ay)

in th

eory

, oft

en o

f th

e di

rect

use

val

ue

in p

ract

ice

❚ C

osts

to b

uy o

r se

ll a

good

or

prod

uct

❚ C

olle

ct m

arke

t dat

a on

pri

ces

❚ Es

timat

e qu

antit

y co

nsum

ed/s

old

❚ M

ultip

ly p

rice

by

quan

tity

Tota

l eco

nom

ic

valu

e in

theo

ry

(in p

ract

ice,

use

va

lue)

Cro

p pr

ices

Met

hod:

dir

ect

estim

atio

n of

val

ue,

asso

ciat

ed to

act

ual

mon

ey fl

ows

Met

hod:

mis

sing

or

dist

orte

d m

arke

ts

Dat

a: m

arke

t pri

ces

can

be r

ecor

ded

easi

lyD

ata:

mar

ket p

rice

s ca

n be

mis

sing

or

inac

cura

tely

rec

orde

d

Rep

lace

men

t co

sts

Estim

ates

the

cost

s of

rep

laci

ng

ecos

yste

m s

ervi

ces

and

good

s

❚ A

scer

tain

ben

efits

ass

ocia

ted

with

go

od/s

ervi

ce

❚ Id

entif

y m

ost l

ikel

y al

tern

ativ

e to

pr

ovid

e eq

uiva

lent

leve

l of b

enefi

ts

❚ C

alcu

late

cos

ts o

f ins

talli

ng a

nd

runn

ing

repl

acem

ent

Use

val

ueC

osts

of f

ertil

iser

s to

re

plen

ish

soil

nutr

ient

s

Met

hod:

eas

y to

im

plem

ent

Met

hod:

the

assu

mp -

tion

that

the

artifi

cial

re

plac

emen

t is

equi

vale

nt m

ay n

ot b

e tr

ue a

nd th

e re

plac

e-m

ent c

ost m

ay o

nly

refle

ct p

art o

f the

tota

l ec

onom

ic v

alue

.

Dat

a: m

arke

t pri

ces

of

repl

acem

ents

can

be

reco

rded

eas

ily

Dat

a: r

epla

cem

ent

cost

s ca

n be

inco

m-

plet

e or

inac

cura

tely

re

cord

ed


77

Met

hod

Des

crip

tion

Step

s in

impl

emen

ting

th

e m

etho

dTy

pe o

f ec

onom

ic v

alue

ca

ptur

ed

Exa

mpl

eD

ata

and

met

hods

: A

dvan

tage

sD

ata

and

met

hods

: Li

mit

atio

ns

Dos

e-re

spon

se

met

hods

Estim

ates

by

how

m

uch

pric

e or

qu

antit

y ch

ange

for

a ch

ange

in p

rodu

c-tio

n in

puts

qua

ntit

y.

Also

cal

led

prod

uctio

n fu

nctio

n–ba

sed

or

prod

uctiv

ity

chan

ge

appr

oach

es.

❚ D

eter

min

e co

ntri

butio

n of

goo

d/se

rvic

e to

rel

ated

sou

rce

of p

rodu

ctio

n

❚ Sp

ecify

rel

atio

nshi

p be

twee

n ch

ange

s in

goo

d/se

rvic

e an

d ch

ange

s in

rel

ated

ou

tput

❚ R

elat

e ch

ange

in p

rovi

sion

of g

ood/

serv

ice

to p

hysi

cal c

hang

e in

out

put

❚ Es

timat

e m

arke

t val

ue o

f cha

nge

in

prod

uctio

n

Use

val

ueEs

timat

ion

of

chan

ges

in c

rop

yiel

ds (c

ausi

ng

loss

es in

agr

icul

tura

l pr

ofits

) for

a c

hang

e in

fert

ilise

r qu

antit

y.

Met

hod:

eas

y to

im

plem

ent i

n a

prod

uctio

n se

ttin

g, w

ith

clea

r in

puts

and

ou

tput

s re

latio

nshi

ps

Met

hod:

the

rela

tion -

ship

bet

wee

n ch

ange

in

ecos

yste

m s

ervi

ces

(dos

e) a

nd p

rodu

ctio

n (r

espo

nse)

is n

ot a

lway

s ea

sy to

mod

el o

r es

timat

e, a

nd m

ay n

ot

be a

pplic

able

in

diff

eren

t set

tings

Dat

a: b

ased

on

biop

hysi

cal d

ata

with

re

cord

s of

ten

avai

labl

e in

a p

rodu

ctio

n se

ttin

g

Dat

a: fa

irly

dat

a in

tens

ive

to b

uild

a

mod

el

Dam

age

cost

av

oide

dEs

timat

es th

e us

e va

lue

of th

e av

oide

d co

sts

of la

nd

degr

adat

ion

❚ Id

entif

y pr

otec

tive

func

tions

of g

ood/

serv

ice

❚ Id

entif

y da

mag

es c

ause

d by

loss

of

diff

eren

t deg

rees

of p

rote

ctio

n

❚ Lo

cate

infr

astr

uctu

re, o

utpu

t or

popu

latio

n th

at w

ould

be

affe

cted

❚ O

btai

n in

form

atio

n on

like

lihoo

d an

d fr

eque

ncy

of d

amag

e oc

curr

ing

❚ C

ost d

amag

es a

ssoc

iate

d w

ith g

iven

lo

ss o

f goo

d/se

rvic

e

Use

val

ue

(indi

rect

)B

enefi

ts fr

om

redu

ced

(avo

ided

) si

ltin

g of

wat

erco

urs -

es, r

educ

ed (a

void

ed)

coas

tal e

rosi

on

Met

hod:

eas

y to

im

plem

ent

Met

hod:

pro

ne to

ov

eres

timat

ion.

Avo

ided

da

mag

e co

sts

may

not

be

equ

al to

eco

nom

ic

bene

fits.

It is

not

alw

ays

easy

to e

stim

ate

beca

use

it ha

s be

en

avoi

ded

(hyp

othe

tical

si

tuat

ion)

Dat

a: b

ased

on

a m

ix o

f bi

ophy

sica

l and

ec

onom

ic d

ata

Dat

a: a

void

ed d

amag

e co

sts

can

be d

ifficu

lt to

m

easu

re (h

ypot

hetic

al

situ

atio

n)


78

Met

hod

Des

crip

tion

Step

s in

impl

emen

ting

th

e m

etho

dTy

pe o

f ec

onom

ic v

alue

ca

ptur

ed

Exa

mpl

eD

ata

and

met

hods

: A

dvan

tage

sD

ata

and

met

hods

: Li

mit

atio

ns

Miti

gatio

n co

sts

Estim

ates

the

use

valu

e as

the

cost

s of

miti

gatin

g or

av

ertin

g th

e lo

ss o

f ec

osys

tem

goo

d or

se

rvic

e

❚ Id

entif

y ha

zard

s ar

isin

g fr

om lo

ss o

f go

od/s

ervi

ce

❚ Lo

cate

are

a an

d po

pula

tion

that

wou

ld

be a

ffec

ted

❚ O

btai

n in

form

atio

n on

peo

ples

’ re

spon

ses

and

mea

sure

s ta

ken

to c

ope

with

eff

ects

of l

oss

❚ C

ost t

he m

itiga

tion

resp

onse

Use

val

ue

(indi

rect

)C

osts

of m

aint

aini

ng

hedg

es o

r dr

y st

one

wal

ls to

red

uce

soil

eros

ion

Met

hod:

eas

y to

im

plem

ent

Met

hod:

pro

ne to

ov

eres

timat

ion

Dat

a: e

asy

to m

easu

reD

ata:

miti

gatio

n co

sts

can

be in

com

plet

e or

in

accu

rate

ly r

ecor

ded

Opp

ortu

nity

co

sts

Estim

ates

use

va

lue

as th

e pr

ofit

mad

e un

der

the

next

bes

t al

tern

ativ

e la

nd u

se

❚ Id

entif

y th

e ne

xt b

est a

ltern

ativ

e la

nd-u

se

❚ Es

timat

e co

sts

and

bene

fits

of th

is n

ext

best

alte

rnat

ive

❚ C

alcu

late

the

forg

one

profi

t fro

m th

is

next

bes

t alte

rnat

ive

as th

e m

easu

re o

f op

port

unit

y co

sts

Use

val

ueTh

e op

port

unit

y co

st

of a

fore

st s

tand

is

the

profi

t fro

m

agri

cult

ural

pr

oduc

tion

that

cou

ld

be m

ade

by

conv

ertin

g fo

rest

ed

land

to a

gric

ultu

re.

This

opp

ortu

nity

cos

t is

usu

ally

low

er th

an

the

econ

omic

val

ue

of c

urre

nt la

nd u

se

(fore

st),

or th

e la

nd

wou

ld a

lrea

dy b

e co

nver

ted

to

agri

cult

ure

Met

hod:

allo

ws

to

cons

ider

alte

rnat

ive

land

use

s co

nsid

erin

g th

at th

e cu

rren

t one

is

the

mos

t eco

nom

ical

ly

profi

tabl

e

Met

hod:

sec

ond-

best

al

tern

ativ

e un

der-

estim

ates

the

bene

fits

from

the

curr

ent

(firs

t-be

st) o

ne

Dat

a: e

asy

to m

easu

re

for

exis

ting

near

by

alte

rnat

ive

land

use

s

Dat

a: a

ltern

ativ

e la

nd

use

cost

s an

d be

nefit

s ca

n be

diffi

cult

to

tran

sfer

to a

giv

en

cont

ext (

hypo

thet

ical

si

tuat

ion)


79

Met

hod

Des

crip

tion

Step

s in

impl

emen

ting

th

e m

etho

dTy

pe o

f ec

onom

ic v

alue

ca

ptur

ed

Exa

mpl

eD

ata

and

met

hods

: A

dvan

tage

sD

ata

and

met

hods

: Li

mit

atio

ns

Dem

and-

base

d m

etho

ds: R

evea

led

pref

eren

ce (u

se v

alue

)

Hed

onic

pr

ice

met

hod

Estim

ates

use

va

lue

as a

pr

opor

tion

of

surr

ogat

e m

arke

t pr

ices

❚ Fi

nd a

sur

roga

te m

arke

t whe

re th

e va

lue

of th

e go

od o

r se

rvic

e to

be

valu

ed is

em

bedd

ed in

to

❚ Id

entif

y ch

arac

teri

stic

s th

at in

fluen

ce

the

surr

ogat

e go

od m

arke

t pri

ce

❚ D

ecom

pose

the

pric

e of

the

surr

ogat

e m

arke

t goo

d in

to in

divi

dual

ch

arac

teri

stic

pri

ces

❚ Es

timat

e th

e de

man

d cu

rve

and

com

pute

the

will

ingn

ess

to p

ay.

Alte

rnat

ivel

y, ta

ke th

e un

it pr

ice

for

the

good

or

serv

ice

to b

e va

lued

.

Use

val

ueVa

lue

of a

nea

rby

park

or

sea

view

ca

ptur

ed in

hou

se

pric

es to

det

erm

ine

entr

y fe

e or

tax

leve

l

Met

hod:

rel

ies

on a

n ex

istin

g su

rrog

ate

mar

ket

Met

hod:

the

surr

ogat

e m

arke

t may

be

dist

orte

d or

impe

rfec

tly

reco

rded

, and

may

im

perf

ectl

y ca

ptur

e th

e us

e va

lue

of th

e go

od o

r se

rvic

e to

val

ue

Dat

a: c

an b

e ea

sy to

ob

tain

Dat

a: m

ay b

e in

com

-pl

ete

or in

accu

rate

ly

reco

rded

Trav

el c

ost

met

hod

Use

s tr

avel

cos

ts to

es

timat

e us

e va

lue

❚ Id

entif

y ar

ea fr

om w

hich

vis

itors

com

e,

how

muc

h tim

e an

d m

oney

they

spe

nt

to g

et to

the

area

to b

e va

lued

, and

th

eir

soci

o-ec

onom

ic c

hara

cter

istic

s

❚ Es

timat

e th

e co

st o

f one

trip

as

a fu

nctio

n of

the

num

ber

of v

isito

rs,

trav

el c

osts

, tra

vel t

ime

and

visi

tors

’ so

cio-

econ

omic

cha

ract

eris

tics

❚ In

trod

uce

a hy

poth

etic

al e

ntry

fee

and

calc

ulat

e th

e ex

pect

ed n

umbe

r of

vi

sito

rs fr

om th

e ne

w to

tal c

ost

(dem

and

curv

e)

❚ C

alcu

late

con

sum

er s

urpl

us fr

om th

is

dem

and

curv

e

Use

val

ueVa

lue

of a

nat

iona

l pa

rk in

ferr

ed fr

om

obse

rved

trav

el c

osts

to

set

an

entr

y fe

e

Met

hod:

can

be

easi

ly

impl

emen

ted

thro

ugh

a su

rvey

of v

isito

rs a

t a

give

n ge

ogra

phic

al s

pot

Met

hod:

lim

ited

to

recr

eatio

nal b

enefi

ts

linke

d to

a tr

ip

Dat

a: e

asy

to c

olle

ct

thro

ugh

surv

ey o

f vi

sito

rs

Dat

a: d

edic

ated

da

taba

se w

hich

is

spec

ific

to a

giv

en s

ite

and

time

of s

urve

y


80

Met

hod

Des

crip

tion

Step

s in

impl

emen

ting

th

e m

etho

dTy

pe o

f ec

onom

ic v

alue

ca

ptur

ed

Exa

mpl

eD

ata

and

met

hods

: A

dvan

tage

sD

ata

and

met

hods

: Li

mit

atio

ns

Dem

and-

base

d m

etho

ds: S

tate

d pr

efer

ence

(Tot

al E

cono

mic

Val

ue)

Con

tinge

nt

valu

atio

nEs

timat

es th

e ec

onom

ic v

alue

fr

om s

tate

d am

ount

pe

ople

are

will

ing

to p

ay (o

r ac

cept

)

Surv

ey o

f res

pond

ents

:❚

Pre

sent

a h

ypot

hetic

al s

ituat

ion

desc

ribi

ng th

e en

viro

nmen

tal g

ood

or

serv

ice,

the

inst

itutio

nal c

onte

xt a

nd

paym

ent m

eans

(tax

, fee

) in

a cr

edib

le

way

❚ A

sk r

espo

nden

ts th

eir

will

ingn

ess

to

pay

(acc

ept)

for

incr

ease

(los

s) in

goo

d or

ser

vice

❚ D

raw

up

freq

uenc

y di

stri

butio

n re

latin

g w

illin

gnes

s to

pay

(acc

ept)

st

atem

ents

to n

umbe

r of

peo

ple

mak

ing

them

❚ C

ross

tabu

late

will

ingn

ess

to p

ay

(acc

ept)

resp

onse

s w

ith e

xpla

nato

ry

vari

able

s (in

com

e, a

ge, e

duca

tion)

❚ C

arry

out

mul

tivar

iate

ana

lysi

s to

co

rrel

ate

resp

onse

s to

exp

lana

tory

va

riab

les

❚ Su

m u

p sa

mpl

e re

sult

s

Tota

l eco

nom

ic

valu

eSt

ated

val

ue o

f a

near

by p

ark,

bi

odiv

ersi

ty h

otsp

ot,

sym

bolic

spe

cies

(b

lue

wha

le, t

iger

s,

mou

ntai

n go

rilla

s,

pand

as)

Met

hod:

eas

y to

un

ders

tand

and

im

plem

ent

Met

hod:

is p

rone

to

man

y bi

ases

and

oft

en

lead

s to

ove

rest

imat

e th

e ac

tual

will

ingn

ess

to p

ay, a

nd it

doe

s no

t al

low

to e

stim

ate

trad

e-of

fs b

etw

een

diff

eren

t goo

ds o

r se

rvic

es

Dat

a: e

asy

to c

olle

ct

thro

ugh

surv

ey o

r fo

cus

grou

ps

Dat

a: d

edic

ated

da

taba

se w

hich

is

spec

ific

to a

giv

en s

ite

and

time

of s

urve

y


81

Met

hod

Des

crip

tion

Step

s in

impl

emen

ting

th

e m

etho

dTy

pe o

f ec

onom

ic v

alue

ca

ptur

ed

Exa

mpl

eD

ata

and

met

hods

: A

dvan

tage

sD

ata

and

met

hods

: Li

mit

atio

ns

Cho

ice

expe

ri-

men

tEs

timat

e th

e ec

onom

ic v

alue

fr

om s

tate

d w

illin

gnes

s to

pay

(o

r w

illin

gnes

s to

ac

cept

) for

a r

ange

of

att

ribu

tes

(like

d to

the

sam

e or

ot

her

econ

omic

ac

tiviti

es) a

nd th

e tr

ade-

offs

bet

wee

n th

em.

Surv

ey o

f res

pond

ents

:

❚ P

rese

nt a

hyp

othe

tical

situ

atio

n de

scri

bing

the

envi

ronm

enta

l goo

d or

se

rvic

e, th

e in

stitu

tiona

l con

text

and

pa

ymen

t mea

ns (t

ax, f

ee) i

n a

cred

ible

w

ay

❚ Es

tabl

ish

alte

rnat

ive

optio

ns, e

ach

of

whi

ch a

re d

efine

d by

var

ious

att

ribu

tes

and

a pr

ice

❚ D

esig

n un

ique

cho

ice

card

s by

se

lect

ing

com

bina

tions

of a

ltern

ativ

e op

tions

. The

res

pond

ent s

houl

d ch

oose

on

ly o

ne o

ptio

n fr

om e

ach

choi

ce c

ard

❚ Ag

greg

ate

resu

lts

and

estim

ate

will

ingn

ess

to p

ay o

vera

ll an

d fo

r ea

ch

attr

ibut

e

Tota

l eco

nom

ic

valu

eTr

ade-

offs

bet

wee

n co

nser

vatio

n m

easu

res

such

as

the

pres

erva

tion

of

embl

emat

ic s

peci

es,

a bi

odiv

ersi

ty h

otsp

ot

or a

nea

rby

park

, and

ot

her

econ

omic

ac

tiviti

es s

uch

as

agri

cult

ural

pr

oduc

tion

or m

inin

g

Met

hod:

onl

y m

etho

d th

at a

llow

s to

est

imat

e bo

th th

e to

tal e

cono

mic

va

lue

and

trad

e-of

fs

betw

een

good

s an

d se

rvic

es

Met

hod:

pot

entia

l bi

ases

; con

text

spe

cific

Dat

a: c

ompl

ete

data

set

Dat

a: v

ery

data

in

tens

ive

Ben

efit t

rans

fer

Ben

efit t

rans

fer

Res

ults

obt

aine

d in

a

spec

ific

cont

ext

are

tran

sfer

red

to

ano

ther

co

mpa

rabl

e si

te

❚ Id

entif

y “s

ourc

e” s

ite(s

), th

at is

, the

si

te(s

) fro

m w

hich

the

econ

omic

val

ue

will

be

tran

sfer

red

from

, and

thei

r ch

arac

teri

stic

s (in

com

e le

vels

, typ

e of

la

nd u

se, a

rea

cove

red,

type

of a

rea:

ho

t spo

t or

othe

r, ge

ogra

phy)

❚ Es

timat

e th

e w

illin

gnes

s to

pay

as

a

func

tion

of th

e so

urce

site

(s)

char

acte

rist

ics

❚ U

se th

e ch

arac

teri

stic

s of

the

site

to b

e va

lued

in th

e w

illin

gnes

s to

pay

eq

uatio

n ob

tain

ed a

nd d

eriv

e th

e w

illin

gnes

s to

pay

Dep

ends

on

the

met

hod

used

in

the

orig

inal

co

ntex

t, be

fore

tr

ansf

er

The

valu

e of

a

biod

iver

sity

hot

spot

is

est

imat

ed fr

om

valu

es o

f sev

eral

ot

her

biod

iver

sity

ho

tspo

ts a

nd

adju

stin

g fo

r sp

ecifi

c ch

arac

teri

stic

s (s

ize,

in

com

e le

vel o

f st

akeh

olde

rs …

).

Met

hod:

eas

y to

co

ncep

tual

ise

and

impl

emen

t

Met

hod:

can

be

very

da

ta in

tens

ive.

Res

ults

ca

n be

inac

cura

te

depe

ndin

g on

how

di

ffer

ent s

ocia

l pre

fer-

ence

s in

diff

eren

t pla

ces

are

and

econ

omie

s of

sc

ale

and

scop

e.

Dat

a: b

ased

on

data

av

aila

ble

in p

revi

ous

stud

ies

and

does

not

re

quir

e pr

imar

y da

ta

colle

ctio

n

Dat

a: p

revi

ous

stud

y re

sult

s ca

n be

bia

sed

A p p e n d i x 2 Required data for drivers of land degradation and their availability (global level analysis)

82

App

endi

x 2

– R

equi

red

data

for

driv

ers

of la

nd d

egra

datio

n an

d

thei

r av

aila

bilit

y (g

loba

l lev

el a

naly

sis)

(from

Nko

nya

et a

l. 20

13 2

6 , Tab

le 5

)

Dat

aD

ata

sour

ceW

ebsi

teA

vail

abil

ity

Acc

esse

d

ND

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IMM

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tp:/

/glc

f.um

d.ed

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imm

sFr

eeYe

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Glo

bal A

dmin

istr

ativ

e B

orde

rsG

AD

Mw

ww

.gad

m.o

rgFr

eeYe

s

Glo

bal S

oil P

rope

rtie

sIS

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Ew

ww

.isri

c.or

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ta/d

ata-

dow

nloa

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eeYe

s

FAO

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SAw

ww

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org/

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/har

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ld-s

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il-qu

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op-p

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Afr

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Soil

Info

rmat

ion

–

Geo

refe

renc

ed D

ata

on

Lan

d D

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datio

n Su

rvei

llanc

e

AFS

ISw

ww

.afr

icas

oils

.net

Free

No

Bio

dive

rsit

yP

BL

Net

herl

ands

Env

iron

men

tal A

sses

smen

t Age

ncy

Free

No

Clim

ate

Con

ditio

nsEa

st A

nglia

Clim

ate

Res

earc

h U

nit

ww

w.c

ru.u

ea.a

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Free

Yes

Land

Man

agem

ent P

ract

ices

FAO

(Rat

e of

fert

ilise

r us

e,

cons

erva

tion

agri

cult

ure,

etc

.)FA

OST

AT; A

QU

AST

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eeYe

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Topo

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e C

entr

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erva

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D

EM fr

om F

AO

ww

w.y

ale.

edu/

ceo/

Doc

umen

tatio

n/de

m.h

tml

Free

Yes

CC

IAR

-cor

rect

ed S

RTM

ww

w.c

giar

-csi

.org

/dat

a/sr

tm-9

0m-d

igita

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data

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tp:/

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odel

s/ir

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asp

Free

Yes

Acce

ss to

Info

rmat

ion

Mob

ile p

hone

cov

erag

eIT

UFr

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s


83

Dat

aD

ata

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Acc

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Land

Ten

ure

WR

I, U

nive

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Wis

cons

inw

ww

.wri

.org

/map

/sta

tus-

land

-ten

ure-

and-

prop

erty

-rig

hts-

2005

Free

Yes

Nat

iona

l Pol

icie

sEn

viro

nmen

tal P

erfo

rman

ce In

dex

http

://e

pi.y

ale.

edu

Free

Yes

Inst

itutio

nsG

over

nmen

t eff

ectiv

enes

sw

ww

.gov

indi

cato

rs.o

rgFr

eeYe

s

Soci

o-ec

onom

ic In

dica

tors

Wor

ld D

evel

opm

ent I

ndic

ator

sw

ww

.wor

ldba

nk.o

rgFr

eeYe

s

Pop

ulat

ion

Den

sity

CIE

SIN

http

://s

edac

.cie

sin.

colu

mbi

a.ed

u/da

ta/c

olle

ctio

n/gp

w-v

3Fr

eeYe

s

A p p e n d i x 3 Case studies

84

App

endi

x 3

– C

ase

stud

ies

(A r

epos

itory

of r

efer

ence

s in

rel

atio

n to

the

appr

oach

use

d fo

r th

e Ec

onom

ics

of L

and

Deg

rada

tion

initi

ativ

e as

wel

l as

case

stu

dies

is a

cces

sibl

e at

w

ww

.Ref

wor

ks.c

om (G

roup

Cod

e: R

WM

cMas

terU

, Log

in: u

nu-i

nweh

, Pas

swor

d: in

weh

).

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

1K

ing,

D.A

. and

Sin

den,

J.A

., 19

88. I

nflue

nce

of s

oil

cons

erva

tion

on fa

rm la

nd

valu

es. L

and

Econ

omic

s. 6

4(3)

: 24

2 – 2

55.

1988

Aust

ralia

(M

anill

a Sh

ire,

N

ew S

outh

W

ales

)

Oce

ania

food

s;us

e va

lue

only

; he

doni

c pr

ice

met

hod

Cos

ts p

aid

thro

ugh

prop

erty

pri

ces

for

cons

ervi

ng th

e la

nd r

ange

from

AU

D 0

/ha

to

AUD

11/

ha, a

nd th

e co

st o

f tre

atm

ent (

i.e.

adop

ting

prac

tices

red

ucin

g la

nd e

rosi

on) i

s AU

D 1

/ha

2N

elso

n, R

.A.,

Dim

es, J

.P.,

Silb

urn,

D.M

., P

anin

gbat

an,

E.P.

and

Cra

mb,

R.A

., 19

88.

Eros

ion/

prod

uctiv

ity

mod

ellin

g of

mai

ze fa

rmin

g in

the

Phi

lippi

ne u

plan

ds: P

art I

II:

econ

omic

ana

lysi

s of

alte

rna -

tive

farm

ing

met

hods

. Ag

ricu

ltur

al S

yste

ms.

58(

2):

165 –

183.

1997

Phi

lippi

nes

(upl

ands

)A

sia

food

s;us

e va

lue

only

; do

se-r

espo

nse

met

hod;

m

arke

t pri

ce

met

hod;

Net

pre

sent

val

ue r

angi

ng fr

om

PH

P -2

,000

/ha/

yr to

PH

P 40

,000

/ha/

yr

(10%

dis

coun

t rat

e)

3B

isho

p, J

. and

Alle

n, J

., 19

89.

The

on-s

ite c

ost o

f soi

l ero

sion

in

Mal

i. En

viro

nmen

t Wor

king

P

aper

No.

21.

The

Wor

ld B

ank,

W

ashi

ngto

n D

.C.

1989

, ba

sed

on

data

from

19

81–1

988

Mal

i (u

sing

dat

a fr

om B

urki

na

Faso

)

Afr

ica

food

s; fi

bres

use

valu

e on

ly;

dose

-res

pons

e m

etho

d;

mar

ket p

rice

m

etho

d;

Aver

age

loss

of N

, K, P

on

crop

land

ran

ging

fr

om U

SD 0

.79/

ha (C

FA 2

36/h

a) to

U

SD 5

.46/

ha (C

FA 1

,638

/ha)

; nat

ionw

ide

of

USD

7.4

1 m

illio

n (C

FA 2

,225

mill

ion)

, i.e

. 0.3

7% G

DP

of M

ali a

nd 0

.95%

of

agri

cult

ural

GD

P

4R

ocke

l, M

.L a

nd K

ealy

, M.J

. 19

91. T

he v

alue

of n

onco

n -su

mpt

ive

wild

life

recr

eatio

n in

th

e U

nite

d St

ates

. Lan

d Ec

onom

ics.

67(

4): 4

22 –

434.

base

d on

da

ta fr

om

1980

Uni

ted

Stat

esA

mer

icas

recr

eatio

n (n

on-c

onsu

mpt

ive

use

of w

ildlif

e);

use

valu

e on

ly;

bene

fit tr

ansf

er;

othe

r va

luat

ion

met

hod

(tim

e sp

ent w

ildlif

e w

atch

ing)

Aggr

egat

ed w

elfa

re e

stim

ates

from

pa

rtic

ipat

ion

rang

e fr

om U

SD 7

.8 –

161

billi

on,

depe

ndin

g on

the

valu

e al

loca

ted

to ti

me

and

func

tiona

l for

m u

sed


85

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

5G

arro

d, G

.D. a

nd W

illis

, K.G

. 19

94. V

alui

ng b

iodi

vers

ity

and

cons

erva

tion

at a

loca

l lev

el.

Bio

dive

rsit

y an

d C

onse

rvat

ion.

3:

555

– 56

5.

1994

Gre

at B

rita

inEu

rope

recr

eatio

n;

amen

ity;

ot

her

cult

ural

se

rvic

es

Tota

l Eco

nom

ic

Valu

e (T

EV)

; co

ntin

gent

va

luat

ion

Tota

l ave

rage

WTP

: GB

P 10

.045

/yr/

mem

ber

of th

e w

ildlif

e tr

ust.

The

CVM

res

pons

es

sugg

este

d th

at m

embe

rs w

ould

be

will

ing

to

pay

an a

ggre

gate

of G

BP

2,40

4/yr

tow

ards

th

e co

nser

vatio

n of

Bor

der

mir

es;

GB

P 9,

444/

yr fo

r th

e co

nser

vatio

n of

the

red

squi

rrel

in K

ield

er F

ores

t; bu

t onl

y

GB

P 1,

492/

yr to

war

ds th

e pr

ovis

ion

of

new

Tru

st h

eadq

uart

ers

6N

avru

d, S

. and

Mun

gata

na,

E.D

. Env

iron

men

tal v

alua

tion

in

deve

lopi

ng c

ount

ries

: The

re

crea

tiona

l val

ue o

f wild

life

view

ing.

Eco

logi

cal E

cono

mic

s.

11: 1

35 –

151.

base

d

on d

ata

from

199

1

Ken

ya

(Lak

e N

akur

a N

atio

nal P

ark)

Afr

ica

recr

eatio

n;us

e va

lue

only

; tr

avel

cos

t m

etho

d; c

ontin

-ge

nt v

alua

tion

Ann

ual r

ecre

atio

nal v

alue

of w

ildlif

e vi

ewin

g in

Lak

e N

akur

u N

atio

nal P

ark

in K

enya

was

fo

und

to b

e U

SD 7

.5 –

15 m

illio

n.

7P

imen

tel,

D.,

Har

vey,

C.,

Res

osud

arm

o, P

., Si

ncla

ir, K

., K

urz,

D.,

McN

air,

M.,

Cri

st, S

., Sh

pritz

, L.,

Fitt

on, L

., Sa

ffou

ri,

R. a

nd B

lair,

R.,

1995

. En

viro

nmen

tal a

nd e

cono

mic

co

sts

of s

oil e

rosi

on a

nd

cons

erva

tion

bene

fits.

Sci

ence

. 26

7(52

01):

1117

– 11

23.

1994

Glo

bal

Wor

ldfo

ods;

pa

stor

alis

m/m

eat;

w

ater

flow

re

gula

tion;

so

il re

gula

tion;

re

crea

tion

use

valu

e on

ly;

repl

acem

ent

cost

met

hod;

do

se-r

espo

nse

met

hod;

op

port

unit

y co

sts

Inve

stm

ent o

f USD

6.4

bill

ion/

yr (4

0/ha

/yr

for

cons

erva

tion)

to r

educ

e U

S er

osio

n ra

tes

from

abo

ut 1

7 to

ns/h

a/yr

to a

sus

tain

able

ra

te o

f 1 to

n/ha

/yr

on m

ost c

ropl

and,

and

an

addi

tiona

l USD

2.0

bill

ion/

yr (U

SD 5

/ha/

yr fo

r co

nser

vatio

n) to

red

uce

eros

ion

on p

astu

re-

land

. Ero

sion

cau

ses

abou

t USD

44

billi

on/y

r in

dam

ages


86

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

8B

arne

s, J

. 199

6. C

hang

es in

the

econ

omic

use

val

ue o

f ele

phan

t in

Bot

swan

a: th

e ef

fect

of

inte

rnat

iona

l tra

de p

rohi

bitio

n.

Ecol

ogic

al E

cono

mic

s. 1

8(3)

: 21

5 – 2

30.

1989

– 19

92B

otsw

ana

Afr

ica

recr

eatio

n;

hunt

ing

(saf

ari

hunt

ing

by q

uota

, lic

ence

d hu

ntin

g

by c

ount

ry

natio

nals

by

quot

a,

culli

ng p

ro-

gram

me)

;

use

valu

e on

ly

(dir

ect u

se o

nly)

; m

arke

t pri

ce

met

hod;

op

port

unit

y co

sts

(o

f alte

rnat

ive

elep

hant

non

- co

nsum

ptiv

e us

e);

othe

r va

luat

ion

met

hods

(s

hado

w p

rici

ng)

Econ

omic

cos

t of g

over

nmen

t exp

endi

ture

s at

trib

utab

le to

ele

phan

t man

agem

ent:

U

SD 7

.52/

m2 in

199

2, e

xpec

ted

to r

ise

to

USD

116

/m2 o

ver

15 y

ears

(200

7);

Net

pre

sent

val

ue (v

alue

add

ed o

ver

15 y

ears

to

nat

iona

l inc

ome,

net

of g

over

nmen

t ex

pend

iture

s, a

fter

dis

coun

ting

at 6

% a

nd

afte

r sh

adow

pri

cing

) ran

ging

from

G

BP

99.8

mill

ion

(199

2) to

GB

P 20

2.3

mill

ion

(199

2), w

ith to

uris

m th

e m

ain

cont

ribu

tor

to

the

econ

omic

pre

sent

val

ues

of e

leph

ant

use

in B

otsw

ana.

9R

. Cos

tanz

a, R

., d’

Arg

e, R

., de

G

root

, R.,

Farb

erk,

S.,

Gra

sso,

M

., H

anno

n, B

., Li

mbu

rg, K

., N

aeem

, S.,

O’N

eill,

R.V

., P

arue

lo, J

., R

aski

n, R

.G.,

Sutt

on, P

. and

van

den

Bel

t, M

. 19

97. T

he v

alue

of t

he w

orld

's

ecos

yste

m s

ervi

ces

and

natu

ral c

apita

l. N

atur

e. 3

87:

253 –

260

.

1997

Glo

bal

Wor

ldfo

ods;

fibr

es;

fore

st ti

mbe

r;

hort

icul

ture

; bi

odiv

ersi

ty/

gene

tic r

esou

rces

; ot

her

prov

isio

ning

se

rvic

es;

pollu

tion

cont

rol;

clim

ate

regu

latio

n;

wat

er fl

ow

regu

latio

n;

soil

regu

latio

n;

othe

r re

gula

ting

serv

ices

; am

eniti

es;

recr

eatio

n;

spir

itual

Tota

l Eco

nom

ic

Valu

e (T

EV)

; be

nefit

tran

sfer

; ag

greg

atio

n ac

ross

ser

vice

s

For

the

entir

e bi

osph

ere,

the

valu

e

(mos

t of w

hich

is o

utsi

de th

e m

arke

t)

is e

stim

ated

to b

e in

the

rang

e of

U

SD 1

6 – 5

4 tr

illio

n (2

012)

/yr,

with

an

aver

age

of U

SD 3

3 tr

illio

n/yr

. Bec

ause

of t

he n

atur

e of

th

e un

cert

aint

ies,

this

mus

t be

cons

ider

ed a

m

inim

um e

stim

ate.

Glo

bal g

ross

nat

iona

l pr

oduc

t tot

al is

aro

und

USD

18

trill

ion/

yr.


87

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

10G

arro

d, G

.D. a

nd W

illis

, K.G

. 19

97. T

he n

on-u

se v

alue

of

enha

ncin

g fo

rest

bio

dive

rsit

y –

A co

ntin

gent

ran

king

stu

dy.

Ecol

ogic

al E

cono

mic

s. 2

1:

45 –

61.

1995

Gre

at B

rita

inEu

rope

biod

iver

sity

/ ge

netic

res

ourc

es;

Tota

l eco

nom

ic

Valu

e (T

EV)

; ot

her

valu

atio

n m

etho

d

(dis

cret

e-ch

oice

co

ntin

gent

ran

king

ap

proa

ch);

Estim

ated

WTP

for

an a

dditi

onal

uni

t of

Stan

dard

A (b

asic

sta

ndar

d of

bio

dive

rsit

y co

nser

vatio

n) fo

rest

var

ied

betw

een

GB

P 30

.3 a

nd 3

3.4/

yr; w

hile

for

Stan

dard

B

(des

ired

sta

ndar

d of

bio

dive

rsit

y co

nser

va-

tion)

fore

st it

var

ied

betw

een

GB

P 51

.7 a

nd

56.4

/yr.

WTP

was

low

est f

or S

tand

ard

C

(con

vers

ion

to n

ativ

e w

oodl

and)

fore

st,

vary

ing

betw

een

GB

P 18

.5 a

nd 2

0.7/

yr. T

hese

es

timat

es w

ere

alm

ost c

erta

inly

infl

ated

due

to

non

-res

pons

e bi

as, a

nd 't

rue'

val

ues

may

m

ore

clos

ely

corr

espo

nd to

thos

e in

Tab

le 4

.

11A

nda,

A.,

1999

. Why

the

new

m

inin

g re

gula

tions

can

not

yet

as

sure

a s

ucce

ssfu

l min

e re

habi

litat

ion?

An

anal

ysis

of

the

regu

lato

ry fr

amew

ork

of

min

e re

habi

litat

ion

in th

e P

hilip

pine

s. U

npub

lishe

d.

Que

zon

Cit

y, P

hilip

pine

s.

1999

Phi

lippi

nes

(Ben

guet

)A

sia

min

ing;

n/a

n/a


88

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

12B

lam

ey, J

., R

olfe

, J.,

Ben

nett

, J.

and

Mor

riso

n M

. 200

0.

Valu

ing

rem

nant

veg

etat

ion

in

Cen

tral

Que

ensl

and

usin

g ch

oice

mod

ellin

g. T

he

Aust

ralia

n Jo

urna

l of

Agri

cult

ure

and

Res

ourc

e Ec

onom

ics.

44(

3): 4

39 –

456.

2000

Aust

ralia

(D

eser

t U

plan

ds

regi

on)

Oce

ania

past

oral

ism

/mea

t;To

tal E

cono

mic

Va

lue

(TE

V);

choi

ce e

xper

imen

t

Impl

icit

pric

e fo

r th

e at

trib

utes

for

a on

e un

it im

prov

emen

t:

❚ Jo

bs lo

st in

loca

l reg

ion:

AU

D 3

.04

❚ Lo

ss in

reg

iona

l inc

ome

(AU

S m

illio

n):

AUD

5.6

0

❚ N

umbe

r of

end

ange

red

spec

ies

lost

: AU

D 1

1.39

❚ P

erce

ntag

e re

duct

ion

in p

opul

atio

n of

no

n-th

reat

ened

spe

cies

: AU

D 1

.69

❚ P

erce

ntag

e lo

ss in

are

a of

uni

que

ecos

yste

ms:

AU

D 3

.68

Will

ingn

ess

to p

ay fo

r m

ore

stri

ngen

t tre

e cl

eari

ng g

uide

lines

ran

ging

from

AU

D 7

6/ho

useh

old

to A

UD

117

/hou

seho

ld

13K

ulsh

resh

tha,

K.,

Lac,

S.,

John

ston

, M. a

nd K

inar

, C.

2000

. Car

bon

sequ

estr

atio

n in

pr

otec

ted

area

s of

Can

ada:

An

econ

omic

val

uatio

n. E

cono

mic

Fr

amew

ork

Pro

ject

Rep

ort

549.

Par

ks C

anad

a. W

arsa

w,

Ont

ario

, Can

ada.

2000

Can

ada

Am

eric

ascl

imat

e re

gula

tion;

Tota

l Eco

nom

ic

Valu

e (T

EV)

; re

plac

emen

t cos

t m

etho

d; b

enefi

t tr

ansf

er

Aver

age

valu

e of

car

bon

in th

is s

tudy

was

ba

sed

on r

epla

cem

ent a

nd s

ubst

itute

cos

t m

etho

ds. F

ores

ts w

ere

take

n as

the

mos

t lo

gica

l rep

lace

men

t for

seq

uest

ratio

n.

Ref

ores

tatio

n w

as a

ssum

ed. A

cos

t of

CD

N 1

6.25

/ton

ne (C

DN

200

5) w

as e

stim

ated

fo

r th

is o

ptio

n. T

he n

ext b

est o

ptio

n w

as

conv

ertin

g th

e m

argi

nal a

gric

ultu

ral l

ands

in

to fo

rest

s th

roug

h af

fore

stat

ion.

Th

is o

ptio

n w

as C

DN

17.

50/t

onne

. In

addi

tion

to th

e m

edia

n va

lues

, car

bon

sequ

este

red

was

eva

luat

ed a

t a lo

w p

rice

sce

nari

o

– C

DN

2.3

0–3.

00/t

onne

and

und

er a

hig

h pr

ice

scen

ario

, CD

N 5

00/t

onne

.


89

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

14C

BD

. 200

1. T

he v

alue

of f

ores

t ec

osys

tem

s. C

BD

Tec

hnic

al

Seri

es N

o. 4

. Sec

reta

riat

of t

he

Con

vent

ion

on B

iodi

vers

ity.

M

ontr

eal,

Can

ada.

2001

Glo

bal

Wor

ldfo

rest

tim

ber

(tim

ber,

fuel

woo

d);

NTF

P;

othe

r pr

ovis

ioni

ng

serv

ices

(cha

rcoa

l);

clim

ate

regu

latio

n;

wat

er fl

ow

regu

latio

n (w

ater

shed

pr

otec

tion)

; re

crea

tion

Tota

l Eco

nom

ic

Valu

e (T

EV)

; be

nefit

tran

sfer

; ag

greg

atio

n ac

ross

ser

vice

s

USD

40

per

ha p

er y

ear

for

fuel

woo

d,

20 –

4400

/ha/

yr in

trop

ical

fore

sts

and

U

SD -

4000

– 70

0/ha

/yr

in te

mpe

rate

fore

sts,

U

SD 0

– 10

0/ha

/yr

in tr

opic

al fo

rest

s, a

nd

USD

15 –

850

/ha/

yr fo

r w

ater

shed

ben

efits

❚

Fuel

woo

d: U

SD 4

0/ha

/yr

in tr

opic

al

fore

sts

Non

-tim

ber

fore

st p

rodu

cts:

U

SD 0

– 10

0/ha

/yr

in tr

opic

al fo

rest

s ❚

Gen

etic

info

rmat

ion:

USD

0 –

3,00

0/ha

/yr

in

trop

ical

fore

sts

❚ R

ecre

atio

n: U

SD 2

– 47

0 fo

r tr

opic

al fo

rest

s;

USD

770

for

trop

ical

fore

sts

near

tow

ns;

USD

100

0 fo

r un

ique

trop

ical

fore

sts;

U

SD 8

0/ha

/yr

in te

mpe

rate

fore

sts

❚ W

ater

shed

ben

efits

: USD

15 –

850

/ha/

yr in

tr

opic

al fo

rest

s; U

SD 1

0 – 5

0/ha

/yr

in

tem

pera

te fo

rest

s ❚

Clim

ate

bene

fits:

USD

360

– 22

00/h

a/yr

(g

ross

pre

sent

val

ue o

f one

-off

pay

men

t in

initi

al y

ear)

in tr

opic

al fo

rest

s an

d

USD

90 –

400

/ha/

yr (a

ffor

esta

tion)

in

tem

pera

te fo

rest

s ❚

Opt

ion

valu

e: U

SD 7

0/ha

/yr

in te

mpe

rate

fo

rest

❚

Exi

sten

ce v

alue

: USD

2 –

45/h

a/yr

and

U

SD 4

400/

ha/y

r fo

r un

ique

site

s

15H

erat

h, G

., 20

01. E

stim

atin

g th

e us

er c

ost o

f soi

l ero

sion

in

tea

smal

lhol

ding

s in

Sri

Lan

ka.

Aust

ralia

n Jo

urna

l of R

egio

nal

Stud

ies

7(1)

: 97 –

111.

1999

– 20

00Sr

i Lan

kaA

sia

food

s;us

e va

lue

only

; do

se-r

espo

nse

met

hod;

mar

ket

pric

e m

etho

d;

Mar

gina

l use

r co

sts

rang

ing

from

LK

R R

s 0–

7332

1.19

/cm

/ha;

Ag

greg

ate:

LK

R R

s 73

.1 m

illio

n/yr


90

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

16K

reut

er, U

.P.,

Har

ris,

H.G

., M

atlo

ck, M

.D. a

nd L

acey

, R.E

. 20

01. C

hang

e in

eco

syst

em

serv

ice

valu

es in

the

San

Ant

onio

are

a, T

exas

. Eco

logi

cal

Econ

omic

s. 3

9: 3

33 –

346.

base

d on

da

ta fr

om

1982

– 19

97

Texa

s

(San

Ant

onio

), U

nite

d St

ates

of

Am

eric

a

Am

eric

asfo

ods;

fibr

es;

fore

st ti

mbe

r;

hort

icul

ture

; bi

odiv

ersi

ty/

gene

tic r

esou

rces

; po

llutio

n co

ntro

l, cl

imat

e re

gula

tion;

w

ater

flow

re

gula

tion;

so

il re

gula

tion;

am

eniti

es;

recr

eatio

n;

Tota

l Eco

nom

ic

Valu

e (T

EV)

; be

nefit

tran

sfer

;

Tota

l eco

syst

em s

ervi

ce v

alue

s ar

ound

U

SD 2

2 m

illio

n/yr

. Clim

ate

bene

fits:

USD

36

0 – 2

200/

ha/y

r (g

ross

pre

sent

val

ue o

f on

e-of

f pay

men

t in

initi

al y

ear)

in tr

opic

al

fore

sts

and

USD

90 –

400

/ha/

yr (a

ffor

esta

tion)

in

tem

pera

te fo

rest

s

17B

arne

s, J

., M

acG

rego

r, J.

and

W

eave

r, L.

C. 2

002.

Eco

nom

ic

effic

ienc

y an

d in

cent

ives

for

chan

ge w

ithin

Nam

ibia

's

Com

mun

ity

Wild

life

Initi

ativ

es.

Wor

ld D

evel

opm

ent.

30(4

): 66

7 – 6

81.

2001

Nam

ibia

Afr

ica

past

oral

ism

/mea

t; hu

ntin

gTo

tal E

cono

mic

Va

lue

(TE

V);

mar

ket p

rice

m

etho

d;

oppo

rtun

ity

cost

s (o

f con

serv

ancy

re

sour

ce u

se);

othe

r va

luat

ion

met

hod

(n

on-u

se v

alue

, do

nor-

fund

ed);

Inte

rnal

rat

e of

ret

urn

(dep

endi

ng o

n th

e ac

tivit

y): E

cono

mic

: 22 –

132%

; Fin

anci

al

(pro

ject

): 8 –

19%

; Fin

anci

al (c

omm

unit

y):

23 –

220%

Rec

eipt

by

cons

erva

ncie

s of

don

or

gran

ts e

nhan

ces

retu

rns,

but

onl

y in

wea

kly

viab

le c

onse

rvan

cies

wou

ld r

emov

al

jeop

ardi

ze fi

nanc

ial i

ncen

tives

to p

artic

ipat

e.

In th

ree

or fo

ur o

f the

five

con

serv

anci

es,

dire

ct u

se v

alue

s sh

ould

be

suffi

cien

t to

attr

act c

omm

unit

y in

vest

men

t.


91

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

18B

erry

, L.,

Ols

on, J

. and

C

ampb

ell,

D.,

2003

. Ass

essi

ng

the

exte

nt, c

ost a

nd im

pact

of

land

deg

rada

tion

at th

e na

tiona

l lev

el: fi

ndin

gs a

nd

less

ons

lear

ned

from

sev

en

pilo

t cas

e st

udie

s. G

loba

l M

echa

nism

, Rom

e, It

aly.

2003

(b

ased

on

data

from

19

86-1

999)

Chi

na,

Ethi

opia

, M

exic

o,

Uga

nda,

R

wan

da,

Chi

le,

Indo

nesi

a

Wor

ldso

il re

gula

tion;

use

valu

e on

ly;

oppo

rtun

ity

cost

s3 –

7%

of a

gric

ultu

ral G

DP

❚ C

hina

– C

ost o

f lan

d de

grad

atio

n:

USD

7.7

6 bi

llion

dir

ect /

USD

31

billi

on

indi

rect

/ 4%

GD

P; L

evel

of r

espo

nse:

U

SD 1

– 2

billi

on a

nnua

lly; T

ype

of r

espo

nse:

fo

rest

ry, p

hysi

cal s

truc

ture

s

❚ Et

hiop

ia h

ighl

ands

– C

ost o

f lan

d de

gra-

datio

n: 4

% G

DP

dire

ct / a

cute

pov

erty

; Le

vel o

f res

pons

e: 0

.2 –

0.5%

Ag

GD

P;

Type

of r

espo

nse:

fert

ilise

r, ph

ysic

al

stru

ctur

es

❚ M

exic

o –

Cos

t of l

and

degr

adat

ion:

U

SD 3

.5 b

illio

n / m

igra

tion;

Lev

el o

f re

spon

se: v

arie

d /h

ard

to q

uant

ify; T

ype

of

resp

onse

: pol

icy

chan

ge, r

efor

esta

tion

❚ U

gand

a –

C

ost o

f lan

d de

grad

atio

n: 4

% G

NP

?;

Leve

l of r

espo

nse:

har

d to

qua

ntify

; Ty

pe o

f res

pons

e: p

olic

y, te

rrac

ing

in S

W

❚ R

wan

da –

Cos

t of l

and

degr

adat

ion:

3.

5% A

g G

DP

dire

ct / a

cute

pov

erty

; Le

vel o

f res

pons

e: h

ard

to q

uant

ify;

Type

of r

espo

nse:

cen

tral

ised

terr

acin

g po

licy

❚ C

hile

(Coq

uim

bo) –

Cos

t of l

and

de

grad

atio

n: 5

0% o

n w

heat

/ 23%

goa

t;

Leve

l of r

espo

nse:

not

kno

wn;

Ty

pe o

f res

pons

e: n

ot k

now

n

❚ In

done

sia

– C

ost o

f lan

d de

grad

atio

n:

0 – 4%

cro

p va

lue;

Lev

el o

f res

pons

e:

not k

now

n; T

ype

of r

espo

nse:

long

term

so

il &

wat

er m

anag

emen

t


92

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

19Tu

rpie

, J.K

. 200

3. T

he

exis

tenc

e va

lue

of b

iodi

vers

ity

in S

outh

Afr

ica:

how

inte

rest

, ex

peri

ence

, kno

wle

dge,

in

com

e an

d pe

rcei

ved

leve

l of

thre

at in

fluen

ce lo

cal

will

ingn

ess

to p

ay. E

colo

gica

l Ec

onom

ics.

46(

2): 1

99–2

16.

2002

Sout

h A

fric

aA

fric

abi

odiv

ersi

ty/g

enet

ic

reso

urce

s;To

tal E

cono

mic

Va

lue

(TE

V);

cont

inge

nt

valu

atio

n

WTP

for

cons

erva

tion

was

rel

ativ

ely

high

(U

SD 3

.3 m

illio

n/yr

for

fynb

os, 5

8 m

illio

n

for

natio

nal b

iodi

vers

ity)

, and

com

para

ble

with

gov

ernm

ent c

onse

rvat

ion

budg

ets.

W

TP in

crea

sed

dram

atic

ally

(to

up to

U

SD 1

5 m

illio

n an

d 26

3 m

illio

n/yr

, re

spec

tivel

y) w

hen

resp

onde

nts

wer

e

face

d w

ith th

e pr

edic

ted

impa

cts

of

clim

ate

chan

ge o

n bi

odiv

ersi

ty.

20Ad

ebis

i, A

., 20

04. A

cas

e st

udy

of G

arci

nia

kola

nut

pro

duc -

tion-

to-c

onsu

mpt

ion

syst

em in

J4

are

a of

Om

o Fo

rest

Res

erve

, so

uth-

wes

t Nig

eria

(Cha

pter

7)

. In:

Sun

derl

and,

T. a

nd

Ndo

ye, O

., Fo

rest

pro

duct

s,

livel

ihoo

ds a

nd c

onse

rvat

ion:

C

ase

stud

ies

from

non

-tim

ber

fore

st p

rodu

cts.

CIF

OR

, Bog

or,

Indo

nesi

a.

base

d on

da

ta fr

om

1990

-199

9

Nig

eria

(O

mo

Fore

st

Res

erve

, So

uthw

est

Nig

eria

)

Afr

ica

NTF

P (G

arci

nia

kola

Hec

kel n

uts

also

kno

wn

as

'bitt

er k

ola'

);

othe

r cu

ltur

al

serv

ices

use

valu

e on

ly;

mar

ket p

rice

m

etho

d;

NG

N 5

37.5

–687

.5 (U

SD 5

.37–

6.87

)/25

kg

bask

et o

r ab

out 2

,500

nut

s at

farm

gat

e; to

N

GN

2,0

16–2

,383

(USD

20.

16–2

3.83

)/25

kg

bask

et o

r ab

out 2

,500

nut

s fr

om it

iner

ant

vend

or

21D

eini

nger

, K.a

nd C

ham

orro

, J.

S., 2

004.

Inve

stm

ent a

nd

equi

ty e

ffec

ts o

f lan

d re

gula

risa

tion:

the

case

of

Nic

arag

ua. A

gric

ultu

ral

Econ

omic

s. 3

0(2)

: 101

–116

.

base

d on

da

ta fr

om

2000

Nic

arag

uaA

mer

icas

food

s;

fore

st ti

mbe

r;

past

oral

ism

/mea

t; so

il re

gula

tion

(fallo

w la

nd);

use

valu

e on

ly;

mar

ket p

rice

m

etho

d;

Rec

eipt

of r

egis

tere

d tit

le is

foun

d to

incr

ease

la

nd v

alue

s by

30%

and

at t

he s

ame

time

grea

tly

incr

ease

the

prop

ensi

ty to

inve

st,

brin

ging

suc

h in

vest

men

t clo

ser

to th

e op

timum


93

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

22H

olde

n, S

.and

Shi

fera

w, B

., 20

04. L

and

degr

adat

ion,

dr

ough

t and

food

sec

urit

y in

a

less

-fav

oure

d ar

ea in

the

Ethi

opia

n hi

ghla

nds:

a

bio-

econ

omic

mod

el w

ith

mar

ket i

mpe

rfec

tions

. Ag

ricu

ltur

al E

cono

mic

s. 3

0(1)

: 31

–49.

2002

(b

ased

on

data

from

19

86-2

000)

Ethi

opia

(h

ighl

ands

)A

fric

afo

ods;

pas

tora

lism

/m

eat;

use

valu

e on

ly;

mar

ket p

rice

m

etho

d; o

ppor

tu-

nity

cos

ts;

ETB

213

9 (n

o cr

edit

cons

trai

nt) t

o E

TB 2

679

(cre

dit c

onst

rain

t) lo

st in

dro

ught

yea

r

(res

p 0.

79 a

nd 0

.99%

of p

over

ty li

ne).

Loss

es

incr

ease

to E

TB 2

408

(no

cred

it co

nstr

aint

) to

ETB

255

8 (c

redi

t con

stra

int)

the

4th

year

af

ter

the

drou

ght y

ear

(res

p 0.

81 a

nd 0

.86%

of

pove

rty

line)

.

23M

oral

es, C

., D

asca

l, G

., A

rani

bar,

Z. a

nd M

orer

a, R

., 20

00. M

easu

ring

the

econ

omic

co

sts

of la

nd d

egra

datio

n an

d de

sert

ifica

tion

in s

elec

ted

Sout

h A

mer

ican

cou

ntri

es.

Sech

eres

se. 2

3(3)

: 168

–176

.

base

d on

da

ta fr

om

1985

-200

8

Latin

Am

eric

a/C

arib

bean

Am

eric

asfo

ods;

pa

stor

alis

m/m

eat

use

valu

e on

ly;

oppo

rtun

ity

cost

sla

nd d

egra

datio

n lo

wer

s ag

ricu

ltur

al G

DP

by

8–14

% a

nnua

lly


94

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

24Sp

ence

ly, A

. & B

arne

s, J

. 200

5.

Econ

omic

ana

lysi

s of

rhi

no

cons

erva

tion

in a

land

-use

co

ntex

t reg

ion.

SA

DC

Reg

iona

l P

rogr

amm

e fo

r R

hino

C

onse

rvat

ion.

Har

are,

Zi

mba

bwe.

2005

Sout

h A

fric

a,

Zim

babw

e,

Swaz

iland

, Ta

nzan

ia,

Mal

awi,

Bot

swan

a,

Zam

bia

Afr

ica

recr

eatio

n;

hunt

ing

use

valu

e on

ly;

mar

ket p

rice

m

etho

d

Con

trib

utio

n of

0.4

6–.0

60 (U

SD 2

004)

per

ha

/yr.

C

umul

ativ

e ne

t pro

fit fr

om th

e sa

le o

f 243

w

hite

rhi

no fr

om H

luhl

uwe-

Imfo

lozi

sin

ce

2000

was

USD

4,9

95,4

41, w

hile

the

net p

rofit

fr

om 1

3 bl

ack

rhin

o w

as U

SD 6

87,7

3123

(p

ublic

man

agem

ent)

. It s

houl

d be

not

ed

that

this

rev

enue

doe

s no

t acc

rue

dire

ctly

to

Hlu

hluw

e-Im

folo

zi P

ark,

but

cen

tral

ly to

KZN

W

ildlif

e. T

hus

profi

t gen

erat

ed b

y in

crea

sed

rhin

o po

pula

tions

due

to c

onse

rvat

ion

man

agem

ent i

n H

luhl

uwe-

Imfo

lozi

is u

sed

for

the

bene

fit o

f oth

er p

rote

cted

are

as in

the

prov

ince

too.

Si

nce

2002

, Phi

nda

(a p

riva

te c

ompa

ny) h

as

sold

14

whi

te r

hino

thro

ugh

nego

tiate

d sa

les.

Th

e av

erag

e pr

ice

over

3 y

ears

was

USD

17

,256

, pro

vidi

ng a

tota

l tur

nove

r of

USD

24

1,00

0, a

nd a

net

pro

fit o

f USD

192

,800

aft

er

dedu

ctin

g co

sts.

Not

e P

hind

a’s

perc

eptio

n th

at c

usto

mer

s pa

y pr

emiu

m v

alue

s fo

r P

hind

a’s

rhin

o be

caus

e th

ey w

ere

habi

tuat

ed

to v

ehic

les

(per

s. c

omm

. Pre

tori

us, 2

005)

.

25Tu

rpie

, J.K

., N

gaga

, Y.M

. &

Kar

anja

, F.K

. 200

5. C

atch

men

t ec

osys

tem

s an

d do

wns

trea

m

wat

er: T

he v

alue

of w

ater

re

sour

ces

in th

e P

anga

ni

Bas

in, T

anza

nia.

Wat

er, N

atur

e an

d Ec

onom

ics

Tech

nica

l P

aper

No.

7, I

UC

N. G

land

, Sw

itzer

land

,

2003

Tanz

ania

(P

anga

ni B

asin

)A

fric

aw

ater

sup

ply;

use

valu

e on

ly;

mar

ket p

rice

m

etho

d; b

enefi

t tr

ansf

er

Dep

ends

on

usag

e co

nsid

ered

– A

gric

ultu

re

alon

e co

ntri

bute

s TZ

S 3,

310,

977

mill

ion

(10,

000

TZS

= 1

USD

(200

3)).

Valu

e of

wat

er T

ZS 1

–2 m

illio

n/ha

.


95

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

26C

osta

nza,

R.,

Wils

on, M

., Tr

oy,

A.,

Voin

ov, A

., Li

u, S

. and

D

’Ago

stin

o, J

. 200

6. T

he v

alue

of

New

Jer

sey'

s ec

osys

tem

se

rvic

es a

nd n

atur

al c

apita

l. G

und

Inst

itute

for

Ecol

ogic

al

Econ

omic

s. V

erm

ont,

Uni

ted

Stat

es.

2004

-200

6N

ew J

erse

y,

Uni

ted

Stat

esA

mer

icas

wat

er fl

ow

regu

latio

n;

pollu

tion

cont

rol;

soil

regu

latio

n;

othe

r re

gula

ting

serv

ices

; re

crea

tion;

am

enit

y

Tota

l Eco

nom

ic

Valu

e (T

EV)

; he

doni

c pr

ice

met

hod;

be

nefit

tran

sfer

; ag

greg

atio

n ac

ross

ser

vice

s;

The

serv

ices

pro

vide

d by

New

Jer

sey’

s ec

osys

tem

s ar

e w

orth

, at a

min

imum

, U

SD 1

1.6–

19.4

bill

ion/

year

. For

the

mos

t par

t, th

ese

serv

ices

are

not

cur

rent

ly a

ccou

nted

fo

r in

mar

ket t

rans

actio

ns.

27IU

CN

. 200

6. H

idde

n co

st is

va

lue

lost

. The

eco

nom

ic

impo

rtan

ce o

f dry

land

goo

ds

and

serv

ices

in th

e IG

AD

reg

ion

[Pol

icy

brie

f]. In

tern

atio

nal

Uni

on fo

r th

e C

onse

rvat

ion

of

Nat

ure.

Gla

nd, S

witz

erla

nd.

2006

IGA

D r

egio

nA

fric

apa

stor

alis

m/m

eat;

wat

er fl

ow

regu

latio

n; s

oil

regu

latio

n; c

limat

e re

gula

tion;

oth

er

regu

latin

g se

rvic

es

(mov

emen

t of

wild

life

and

hum

an

com

mun

ities

)

use

valu

e on

ly;

bene

fit tr

ansf

er;

An

estim

ate

of th

e va

lue

of g

oods

and

se

rvic

es d

eriv

ed a

nnua

lly fr

om d

ryla

nd

ecos

yste

ms

thro

ugh

the

prod

uctio

n of

liv

esto

ck w

ithin

eac

h IG

AD

cou

ntry

sho

ws

that

the

aver

age

asse

t val

ue o

f the

dry

land

s is

abo

ut U

SD 1

,500

–4,5

00/h

a (U

SD 2

007)

.

28O

dhia

mbo

, M. 2

006.

Rev

iew

of

the

liter

atur

e on

pas

tora

l ec

onom

ics

and

mar

ketin

g:

Ken

ya, T

anza

nia,

Uga

nda

and

the

Suda

n. R

epor

t pre

pare

d fo

r th

e W

orld

Initi

ativ

e fo

r Su

stai

nabl

e P

asto

ralis

m, I

UC

N

EA

RO

REC

ON

CIL

E, K

enya

.

2006

Ken

ya,

Tanz

ania

, U

gand

a,

Suda

n

Afr

ica

past

oral

ism

/mea

t;us

e va

lue

only

; ot

her

valu

atio

n m

etho

d (%

GD

P)

Tota

l con

trib

utio

n of

pas

tora

lism

for

lives

tock

pr

oduc

tion

in K

enya

is K

ES

4,85

2 m

illio

n (a

bout

8%

of t

he to

tal l

ives

tock

sec

tor

valu

e).


96

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

29C

ampo

s, P

., D

aly-

Has

sen,

H.

and

Ova

ndo,

P.,

2007

. Cor

k oa

k fo

rest

man

agem

ent i

n Sp

ain

and

Tuni

sia:

Tw

o ca

se s

tudi

es

of c

onfli

cts

betw

een

sust

ain-

abili

ty a

nd p

riva

te in

com

e.

Inte

rnat

iona

l For

estr

y R

evie

w.

9(2)

: 610

–626

.

2007

Spai

n (C

adiz

), Tu

nisi

a

(Ain

Sno

ussi

)

Euro

peN

TFP

(cor

k);

hunt

ing;

ot

her

cult

ural

se

rvic

es

use

valu

e on

ly;

mar

ket p

rice

m

etho

d;

oppo

rtun

ity

cost

s;

Cap

ital g

ain/

loss

from

cor

k oa

k fo

rest

pe

rman

ent n

atur

al r

egen

erat

ion

vers

us c

ork

oak

depl

etio

n (E

UR

200

2/ha

, pre

sent

di

scou

nted

val

ues)

: ran

ging

from

EU

R -

5,25

3.7/

ha (1

0% d

isco

unt r

ate)

to

EUR

14,

890.

3/ha

(1%

dis

coun

t rat

e).

30D

avie

s, J

. 200

7. T

otal

eco

nom

ic

valu

atio

n of

Ken

yan

past

oral

-is

m. W

orld

Initi

ativ

e fo

r Su

stai

nabl

e P

asto

ralis

m.

Glo

bal E

nvir

onm

ent F

acili

ty,

UN

EP, a

nd IU

CN

.

base

d on

da

ta fr

om

1997

-200

6

Ken

yaA

fric

afo

ods;

fo

rest

tim

ber;

pa

stor

alis

m/m

eat;

biod

iver

sity

/ ge

netic

res

ourc

es;

othe

r pr

ovis

ioni

ng

serv

ices

; ho

ney;

cl

imat

e re

gula

tion;

ot

her

regu

latin

g se

rvic

es;

Tota

l Eco

nom

ic

Valu

e (T

EV)

; co

ntin

gent

va

luat

ion;

mar

ket

pric

e m

etho

d;

miti

gatio

n co

sts;

op

port

unit

y co

sts

USD

499

/hou

selh

old/

yr fo

r ec

osys

tem

s;

USD

40,

625/

hous

elho

ld/y

r fo

r Li

vest

ock

asse

ts; U

SD 4

82/h

ouse

lhol

d/yr

for

lives

tock

sa

les;

USD

3,5

88/h

ouse

lhol

d/yr

for

lives

tock

pr

oduc

ts; U

SD 5

,578

/hou

selh

old/

yr fo

r tr

ee/

fore

st r

esou

rces

; USD

63/

hous

elho

ld/y

r fo

r ag

ricu

ltur

al p

rodu

ctio

n

31D

iao

X. a

nd S

arpo

ng D

.B.,

2007

. C

ost i

mpl

icat

ions

of a

gric

ultu

r -al

land

deg

rada

tion

in G

hana

. IF

PR

I Dis

cuss

ion

Pap

er 6

98.

Inte

rnat

iona

l Foo

d P

olic

y R

esea

rch

Inst

itute

, Was

hing

-to

n, D

.C.

data

from

19

89/1

999

and

2000

-200

4

Gha

naA

fric

afo

ods;

pa

stor

alis

m/m

eat;

soil

regu

latio

n

use

valu

e on

ly;

othe

r va

luat

ion

met

hod

(eco

nom

y-w

ide

mul

timar

ket

mod

el)

Land

deg

rada

tion

redu

ces

agri

cult

ural

in

com

e in

Gha

na b

y a

tota

l of U

SD 4

.2 b

illio

n ov

er th

e pe

riod

200

6–20

15, w

hich

is

appr

oxim

atel

y fiv

e pe

rcen

t of t

otal

agr

icul

-tu

ral G

DP

in th

ese

ten

year

s. S

oil l

oss

is

pred

icte

d to

incr

ease

s th

e po

vert

y ra

te b

y

5.4

perc

enta

ge p

oint

in 2

015


97

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

32D

o, T

.N.,

2007

. Im

pact

s of

dy

kes

on w

etla

nd v

alue

s in

Vi

etna

m’s

Mek

ong

Riv

er D

elta

: A

case

stu

dy in

the

Pla

in o

f R

eeds

(PhD

The

sis)

. Eco

nom

y an

d En

viro

nmen

t Pro

gram

for

Sout

heas

t Asi

a, S

inga

pore

.

base

d on

su

rvey

s in

20

06

Viet

nam

(Tra

m

Chi

m N

atio

nal

Par

k, P

lain

of

Ree

ds/M

ekon

g R

iver

Del

ta)

Asi

afo

ods;

bio

dive

rsit

y/ge

netic

res

ourc

es;

othe

r re

gula

ting

serv

ices

(gen

eral

ec

osys

tem

hea

lth)

;

Tota

l Eco

nom

ic

Valu

e (T

EV)

; m

arke

t pri

ce

met

hod

(cos

ts);

dose

-res

pons

e m

etho

d (p

rodu

c -tio

n fu

nctio

n);

choi

ce e

xper

imen

t (s

ocia

l ben

efits

); ot

her

valu

atio

n m

etho

d (c

osts

of

actio

n, tr

ansa

ctio

n co

sts)

;

The

prop

osed

par

k dy

ke c

onve

rsio

n of

Tr

am C

him

wou

ld r

educ

e ri

ce y

ield

by

0.

03 to

nnes

/ha/

yr o

r 1,

500

tonn

es/y

r fo

r lo

cal

farm

ers

in a

n ad

jace

nt a

rea

of 5

0,00

0 ha

ar

ound

the

park

. Thi

s in

com

e lo

ss o

f abo

ut

USD

91,

875/

yr, t

oget

her

with

com

pens

atio

n pa

id b

y th

e go

vern

men

t for

“fa

rmer

cha

ngin

g liv

elih

ood”

cos

ts (c

osts

of a

dapt

ing

to n

ew

cond

ition

s/jo

bs a

fter

the

dyke

con

vers

ion)

an

d en

gine

erin

g co

sts,

bri

ngs

the

tota

l co

sts

of th

e pr

opos

ed fi

ve-y

ear

prog

ram

me

to U

SD 3

.4 m

illio

n. O

n th

e ot

her

hand

, re

spon

dent

s ar

e w

illin

g to

pay

for

incr

ease

d bi

odiv

ersi

ty v

alue

s of

Tra

m C

him

res

ultin

g fr

om th

e pr

opos

ed c

hang

es in

dyk

e an

d w

etla

nd m

anag

emen

t. Th

e ag

greg

ated

no

n-m

arke

t val

ues

rang

e fr

om

USD

3.9

4–5

mill

ion,

sug

gest

ing

that

the

park

dy

ke c

onve

rsio

n ca

n ge

nera

te a

net

soc

ial

bene

fit.T

he c

onve

rsio

n fr

om h

igh

to lo

w

farm

dyk

es w

ould

red

uce

rice

yie

lds

by

0.24

tonn

es p

er h

a/yr

or

VND

0.9

8 m

illio

n

per

hous

ehol

d/yr

. In

addi

tion,

it w

ould

red

uce

the

inco

me

from

live

stoc

k re

arin

g. T

he

estim

ated

cos

t of t

he d

yke

conv

ersi

on w

ould

be

VN

D 1

5.4

mill

ion/

hous

ehol

d/yr

and

VN

D 6

14 b

illio

n or

USD

38.

4 m

illio

n fo

r th

e w

hole

Mek

ong

Riv

er D

elta

. On

the

othe

r ha

nd, t

he b

iodi

vers

ity

valu

es o

f all

wet

land

s in

the

Mek

ong

Riv

er D

elta

wer

e es

timat

ed a

t U

SD 4

1.7

mill

ion

and

USD

53

mill

ion

for

the

low

er a

nd h

ighe

r bo

unds

res

pect

ivel

y.

Ther

efor

e, th

e ne

t soc

ial b

enefi

ts w

ould

ra

nge

from

abo

ut U

SD 3

.3 –1

4.6

mill

ion.


98

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

33H

ein,

L. 2

007.

Ass

essi

ng th

e co

sts

of la

nd d

egra

datio

n: a

ca

se s

tudy

for

the

Pue

ntes

ca

tchm

ent,

sout

heas

t Spa

in.

Land

Deg

rada

tion

and

Dev

elop

men

t. 18

(6):

631–

642.

2003

Spai

n (P

uent

es

catc

hmen

t, so

uthe

aste

rn

Spai

n)

Euro

pefo

ods;

pas

tora

lism

/m

eat;

hort

icul

ture

; w

ater

flow

re

gula

tion;

soi

l re

gula

tion;

re

crea

tion;

hun

ting

use

valu

e on

ly;

mar

ket p

rice

m

etho

d; r

epla

ce-

men

t cos

t met

hod;

EUR

8–1

350/

ha/y

r (2

006)

. The

cos

ts o

f er

osio

n on

cro

plan

d va

ry fr

om a

roun

d

EUR

5/h

a/yr

on

slop

es b

etw

een

5 an

d 10

%,

to a

roun

d EU

R 5

0/ha

/yr

on s

lope

s be

twee

n 30

and

50%

.

34N

aido

o, R

. & Iw

amur

a, T

. 200

7.

Glo

bal-

scal

e m

appi

ng o

f ec

onom

ic b

enefi

ts fr

om

agri

cult

ural

land

s: Im

plic

a -tio

ns fo

r co

nser

vatio

n pr

iori

ties.

Bio

logi

cal C

onse

r-va

tion.

140

: 409

–49.

base

d on

da

ta fr

om

2005

Glo

bal

Wor

ldfo

ods;

pas

tora

lism

/m

eat;

oppo

rtun

ity

cost

s;Va

ried

from

0–6

,480

/ha,

with

a m

ean

55

/ha/

yr a

nd s

tand

ard

devi

atio

n of

13

0/ha

/yr

(USD

200

5)

35Ta

kim

oto.

200

7. C

arbo

n se

ques

trat

ion

pote

ntia

l of

agro

fore

stry

sys

tem

s in

the

Wes

t Afr

ican

Sah

el: A

n as

sess

men

t of b

iolo

gica

l and

so

cioe

cono

mic

feas

ibili

ty

(Doc

tora

l the

sis)

. Uni

vers

ity

of

Flor

ida.

Gai

nesv

ille,

USA

.

2003

-200

7Sa

hel

Afr

ica

clim

ate

regu

latio

n;

use

valu

e on

ly;

mar

ket p

rice

m

etho

d

C sa

le c

hang

ed th

e pr

ofita

bilit

y: U

SD 1

3.9

mor

e in

net

pre

sent

val

ue (N

PV)

of a

vera

ge-

size

live

fenc

e (2

91 m

), an

d 20

.5 m

ore

in N

PV

of a

vera

ge s

ize

fodd

er b

ank

(0.2

5 ha

). W

ith

the

acco

untin

g m

etho

d th

at is

in fa

vor

for

the

inve

stor

s, th

e ex

pect

ed p

rofit

s fr

om C

sal

e in

th

e sa

me

mod

el p

rodu

ced

an in

crea

se in

NP

V of

onl

y ab

out U

SD 0

.3 in

bot

h sy

stem

s, w

hich

is

alm

ost n

othi

ng fo

r a

25-y

ear

proj

ect e

ven

in th

e lo

cal c

urre

ncy

with

farm

er‘s

mon

etar

y va

lues

. Sen

sitiv

ity

anal

ysis

and

ris

k an

alys

is

show

ed th

at C

pri

ce d

id n

ot h

ave

a m

ajor

in

fluen

ce o

n ch

angi

ng th

e co

st a

nd b

enefi

t flo

w o

f bot

h sy

stem

s.


99

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

36Ti

lahu

n, M

., O

lsch

ewsk

i, R

., K

lein

n, C

. and

Geb

rehi

wot

, K.,

2007

. Eco

nom

ic a

naly

sis

of

clos

ing

degr

aded

Bos

wel

lia

papy

rife

ra d

ry fo

rest

from

hu

man

inte

rven

tion:

A s

tudy

fr

om T

igra

y, N

orth

ern

Ethi

opia

. Fo

rest

Pol

icy

and

Econ

omic

s.

9: 9

96–1

005.

2003

Ethi

opia

(T

igra

y, T

anqu

a A

berg

elle

)

Afr

ica

food

s;

fore

st ti

mbe

r;

past

oral

ism

/mea

t; N

FTP

(fra

nkin

-ce

nse)

use

valu

e on

ly;

mar

ket p

rice

m

etho

d;

dose

-res

pons

e m

etho

d;

The

finan

cial

Net

Pre

sent

Val

ues

wer

e

8622

ETB

/ha

for

clos

ed a

nd 6

468

ETB

/ha

fo

r op

en fo

rest

land

s. R

ural

hou

seho

lds

ea

rn a

bout

74%

of t

he a

nnua

l tot

al r

even

ue

(ETB

/ha)

from

clo

sed

and

open

are

a as

wag

e fo

r ta

ppin

g an

d co

llect

ing

fran

kinc

ense

and

us

ing

of g

rass

.

37Yi

ng, Z

., 20

07. T

he o

ptim

al

fore

st e

colo

gica

l pro

gram

min

g in

Hai

nan

Pro

vinc

e. F

ores

try

Econ

omic

s. 1

76(0

3): 4

9–52

.

2007

Chi

na (H

aina

n pr

ovin

ce)

Asi

afo

rest

tim

ber;

bi

odiv

ersi

ty/g

enet

ic

reso

urce

s;

wat

er fl

ow

regu

latio

n;

soil

regu

latio

n;

clim

ate

miti

gatio

n;

othe

r re

gula

ting

serv

ices

(a

ir p

urifi

catio

n ca

paci

ty);

ot

her

cult

ural

se

rvic

es

use

valu

e on

ly;

othe

r va

luat

ion

met

hod

(sha

dow

pr

ice)

;

The

aver

age

shad

ow p

rice

rea

sona

bly

used

fo

r fo

rest

land

s of

diff

eren

t kin

d of

fore

sts

is

CN

Y 25

12.4

6/ha

, and

the

optim

al e

stim

atio

n pr

ice

for

spec

ial p

urpo

se fo

rest

is

CN

Y 43

76.0

4/ha

, whi

ch is

not

C

NY

6888

.50/

ha c

urre

ntly

.


100

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

38O

mon

di, I

., B

alte

nwec

k, I.

, D

ruck

er, A

.G.,

Oba

re, G

. and

Za

nder

K.K

. 200

8. E

cono

mic

va

luat

ion

of s

heep

gen

etic

re

sour

ces:

Impl

icat

ions

for

sust

aina

ble

utili

zatio

n. T

ropi

cal

Ani

mal

Hea

lth

and

Pro

duct

ion.

40

: 615

–626

.

2006

–200

7K

enya

(M

arsa

bit

dist

rict

)

Afr

ica

othe

r pr

ovis

ioni

ng

serv

ices

(val

ue o

f sh

eep

gene

tic

char

acte

rist

ics)

;

use

valu

e on

ly;

choi

ce e

xper

imen

t;D

isea

se r

esis

tanc

e im

plic

it va

lue

for

wel

fare

im

prov

emen

t of u

p to

KSh

s 15

37 m

ore

for

anim

als

that

nev

er g

et il

l in

the

rain

y se

ason

, w

hich

is s

imila

r to

the

actu

al a

vera

ge c

ost

paid

by

the

lives

tock

kee

pers

(KSh

s 18

98)

with

reg

ards

to h

ealt

h ca

re o

f the

ir s

tock

(p

urch

asin

g ve

teri

nary

dru

gs a

nd s

ervi

ces

–in

clud

ing

tick

cont

rol).

The

se h

ighe

r co

sts

are

pass

ed o

nto

lives

tock

pro

duce

rs b

ecau

se

of m

arke

t im

perf

ectio

ns c

ause

d by

hig

h tr

ansa

ctio

n co

sts

incu

rred

by

the

play

ers

in

the

anim

al h

ealt

h pr

oduc

ts a

nd s

ervi

ces

mar

ket.

Thes

e tr

ansa

ctio

n co

sts,

whi

ch

mig

ht b

e as

a r

esul

t of p

oor

infr

astr

uctu

re

that

cha

ract

eriz

e th

e st

udy

area

, are

se

emin

gly

tran

sfer

red

to th

e liv

esto

ck

prod

ucer

s w

ho r

esul

tant

ly p

ay m

ore

than

th

ey a

re w

illin

g to

pay

. D

roug

ht to

lera

nce

(ani

mal

’s “

body

con

ditio

n in

dry

sea

son”

): im

plic

itly

valu

ed a

t KSh

s 69

4 m

ore

for

stro

ng/g

ood

tole

ranc

e (p

in b

ones

an

d ri

bs n

ot o

utst

andi

ngly

vis

ible

) tha

n w

eak/

poor

tole

ranc

e (b

ony

with

ver

y co

nspi

cuou

s ri

bs),

whi

ch is

low

er th

an th

e lo

ss in

curr

ed

from

the

deat

h of

a s

heep

from

dro

ught

(p

erce

ived

equ

al to

KSh

s959

by

the

past

oral

-is

ts).

It is

ther

efor

e ec

onom

ical

ly w

orth

im

prov

ing

and/

or m

anag

ing

drou

ght

tole

ranc

e in

she

ep.

Fat d

epos

ition

trai

t: im

plic

itly

valu

ed a

t K

Shs

738

mor

e fo

r an

ani

mal

bod

y fu

ll of

fat

(mai

nly

arou

nd r

ibs,

bri

sket

/bre

ast,

belly

) th

an n

ot fu

ll of

fat.

Bod

y co

nfor

mat

ion

(“

rum

p sh

ape

and

size

”): i

mpl

icitl

y va

lued

at

KSh

s 54

8 m

ore

for

rum

ps th

at a

re b

ig r

ound

an

d er

ect/

rais

ed to

war

ds th

e re

ar e

nd th

an

for

rum

ps th

at a

re s

mal

l and

slo

ping

do

wnw

ards

tow

ards

the

rear

end

.


101

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

39R

odri

guez

, L. 2

008

A gl

obal

pe

rspe

ctiv

e on

the

tota

l ec

onom

ic v

alue

of p

asto

ralis

m:

Glo

bal s

ynth

esis

rep

ort b

ased

on

six

cou

ntry

val

uatio

ns.

IUC

N. N

airo

bi, K

enya

.

2006

–200

8Et

hiop

ia,

Iran

, K

yrgy

zsta

n,

Mal

i,

Per

u,

Spai

n

Wor

ldpa

stor

alis

m/m

eat;

recr

eatio

nus

e va

lue

only

; ot

her

valu

atio

n m

etho

d (%

GD

P);

Res

ults

indi

cate

des

pite

the

wid

espr

ead

opin

ion

that

pas

tora

lism

is n

ot a

n ec

onom

i -ca

lly v

iabl

e or

rat

iona

l liv

elih

ood

it co

ntri

bute

s si

gnifi

cant

ly to

GD

P in

man

y de

velo

ping

co

untr

y ec

onom

ies:

e.g

. ~8.

5% in

Uga

nda,

9%

in

Eth

iopi

a,10

% in

Mal

i. Ec

onom

ic c

ontr

ibu-

tions

of p

asto

ralis

m d

epen

ds o

n im

port

ance

of

live

stoc

k an

d ag

ricu

ltur

al s

ecto

r.

40B

orre

sch,

R.,

Maa

s, S

., Sc

hmitz

, K. a

nd S

chm

itz, P

.M.

2009

. Mod

ellin

g th

e va

lue

of a

m

ultif

unct

iona

l lan

dsca

pe -

A

disc

rete

cho

ice

expe

rim

ent.

Con

trib

uted

pap

er p

repa

red

fo

r pr

esen

tatio

n at

the

Inte

rnat

iona

l Ass

ocia

tion

of

Agri

cult

ural

Eco

nom

ists

C

onfe

renc

e (A

ug 1

6–22

), B

eijin

g, C

hina

.

2007

Ger

man

y (W

ette

rau

regi

on)

Euro

pebi

odiv

ersi

ty/

gene

tic r

esou

rces

(p

lant

and

ani

mal

bi

odiv

ersi

ty);

w

ater

flow

re

gula

tion;

am

enit

y

Tota

l Eco

nom

ic

Valu

e (T

EV)

; ch

oice

ex

peri

men

t;

oppo

rtun

ity

cost

s

Impl

icit

pric

es o

f lan

dsca

pe fu

nctio

ns:

❚ P

lant

bio

dive

rsit

y (p

er p

lant

spe

cies

):

EUR

1.5

8 fo

r a

chan

ge to

the

next

bet

ter

leve

l.

❚ A

nim

al b

iodi

vers

ity

(per

% a

nim

al s

peci

es):

EUR

3.2

6 fo

r a

chan

ge to

the

next

bet

ter

leve

l

❚ W

ater

qua

lity

(per

mg/

l nitr

ate)

: EU

R 4

.24

for

a ch

ange

to th

e ne

xt b

ette

r le

vel

Impl

icit

pric

es o

f lan

dsca

pe a

esth

etic

s (c

hang

e fr

om c

urre

nt la

ndsc

ape

aest

hetic

s to

):

❚ G

rass

land

dom

inat

ed la

ndsc

ape:

EU

R 4

8.48

❚ M

ultif

unct

iona

lity

scen

ario

: EU

R 8

7.68

❚ H

igh

pric

e sc

enar

io (w

ith h

igh

rate

of

cere

als

area

): EU

R -1

6.43

❚ In

tens

ive

scen

ario

(with

larg

er fi

elds

):

EUR

-13.

17

Neg

ativ

e va

lues

indi

cate

that

the

resp

onde

nt

has

to b

e co

mpe

nsat

ed to

acc

ept t

he c

hang

e to

this

land

scap

e ae

sthe

tics

(cor

resp

onds

to

will

ingn

ess

to a

ccep

t for

tota

l sce

nari

os).


102

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

41B

rain

ard,

J., I

Bat

eman

, I.J

. and

Lo

vett

, A.A

. 200

9. T

he s

ocia

l va

lue

of c

arbo

n se

ques

tere

d in

G

reat

Bri

tain

's w

oodl

ands

. Ec

olog

ical

Eco

nom

ics.

68:

12

57–1

267.

base

d on

da

ta fr

om

2001

Gre

at B

rita

inEu

rope

clim

ate

regu

latio

n;us

e va

lue

only

; ot

her

valu

atio

n m

etho

d

(soc

ial v

alue

of

car

bon)

The

min

imum

sug

gest

ed N

PV

(dis

coun

t ra

te =

3%

and

soc

ial v

alue

of c

arbo

n =

1 (U

SD)

of G

B w

oodl

ands

alr

eady

exi

stin

g in

200

1 is

U

SD 8

2 m

illio

n, w

ith a

furt

her

USD

72

mill

ion

that

mig

ht b

e ad

ded

by fu

ture

aff

ores

tatio

n.

Thes

e fig

ures

ris

e dr

amat

ical

ly if

a d

isco

unt

rate

of 1

% a

nd s

ocia

l val

ue o

f seq

uest

ered

ca

rbon

= 1

09.5

/t (U

SD) a

re a

ssum

ed.

42Em

erto

n, L

., Er

dene

saik

han,

N

., D

e Ve

en, B

., Ts

ogoo

, D.,

Janc

hivd

orj,

L., S

uvd,

P.,

Enkh

tset

seg,

B.,

Gan

dolg

or, G

., D

oris

uren

, C.,

Sain

baya

r, D

. an

d En

khba

atar

., A

. 200

9. T

he

econ

omic

val

ue o

f the

Upp

er

Tuul

Eco

syst

em (M

ongo

lia).

Mon

golia

Dis

cuss

ion

Pap

ers,

Ea

st A

sia

and

Pac

ific

Sust

ain -

able

Dev

elop

men

t Dep

eart

-m

ent.

The

Inte

rnat

iona

l Ban

k fo

r R

econ

stru

ctio

n an

d D

evel

opm

ent.

Was

hing

ton,

D.C

.

2008

–200

9U

pper

Tuu

l R

egio

n,

Mon

golia

Asi

afo

rest

tim

ber;

pa

stor

alis

m/m

eat;

NTF

P;

wat

er s

uppl

y;

recr

eatio

n;

hunt

ing

use

valu

e on

ly;

mar

ket p

rice

m

etho

d;

aggr

egat

ion

acro

ss s

ervi

ces

The

stud

y fo

und

that

the

land

and

res

ourc

es

of th

e U

pper

Tuu

l cur

rent

ly c

ontr

ibut

e in

com

e an

d m

arke

ted

prod

ucts

wor

th a

roun

d

MN

T 28

bill

ion/

yr in

tour

ism

, her

ding

, and

fo

rest

-bas

ed s

ecto

rs. M

eanw

hile

, the

val

ue

of w

ater

use

in U

laan

baat

ar is

est

imat

ed to

be

wor

th M

NT

90 b

illio

n/yr

at t

he m

inim

um.

43Fe

to, M

.S.,

2009

. The

rol

e of

no

n tim

ber

fore

st p

rodu

cts

to

rura

l liv

elih

oods

and

fore

st

cons

erva

tion:

A c

ase

stud

y at

H

aran

a B

ullu

k D

istr

ict O

rom

ia

Nat

iona

l Reg

iona

l Sta

te,

Ethi

opia

(M.S

c. T

hesi

s). W

ondo

G

enet

Col

lege

of F

ores

try

and

Nat

ural

Res

ourc

e, W

ondo

G

enet

, Eth

iopi

a.

base

d on

da

ta fr

om

2007

–200

8

Ethi

opia

(H

aran

a B

ullu

k D

istr

ict,

Oro

mia

N

atio

nal

Reg

iona

l Sta

te)

Afr

ica

food

s;

past

oral

ism

/mea

t; ho

rtic

ultu

re

(cof

fee)

; ho

ney;

ot

her

prov

isio

ning

se

rvic

es (…

);

use

valu

e on

ly;

mar

ket p

rice

m

etho

d

(sub

stitu

te g

oods

);

The

tota

l ave

rage

ann

ual h

ouse

hold

inco

me

is E

TB 2

2,20

6. In

term

s of

con

trib

utio

n to

the

hous

ehol

d an

nual

inco

me,

cro

p pr

oduc

tion,

N

TFP

s (fo

rest

pro

duct

s), a

nd li

vest

ock

and

off f

arm

con

trib

uted

in th

e or

der

of th

eir

impo

rtan

ce 4

4 %

, 35%

, 14%

, and

7%

to th

e an

nual

hou

seho

ld in

com

e, r

espe

ctiv

ely.


103

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

44M

mop

elw

a, G

., B

ligna

ut, J

.N.

and

Has

san,

R. 2

009.

Sou

th

Afr

ican

Jou

rnal

of E

cono

mic

an

d M

anag

emen

t Sci

ence

s.

12(2

): 24

2–25

5.

base

d on

da

ta fr

om

2003

Bot

swan

a (O

kava

ngo

Del

ta)

Afr

ica

food

s; fi

bers

; fo

rest

tim

ber;

ot

her

prov

isio

ning

se

rvic

es;

use

valu

e on

ly;

mar

ket p

rice

m

etho

d

The

aver

age

annu

al d

irec

t use

val

ue p

er

hous

ehol

d of

nat

ive

plan

ts h

arve

sted

, suc

h as

pal

m le

aves

for

bask

etry

, gra

ss fo

r th

atch

ing,

fuel

woo

d, e

dibl

e fr

uits

and

pla

nt

part

s us

ed b

y th

ree

villa

ges

adja

cent

to th

e O

kava

ngo

Del

ta d

urin

g th

e 20

03 c

alen

dar

year

is e

stim

ated

at U

SD 1

,434

/hou

seho

ld/y

r (o

r U

SD 4

3.41

/ha/

yr).

This

val

ue is

alm

ost

equa

l to

the

aver

age

hous

ehol

d fin

anci

al

inco

me

of U

SD 1

,416

/yea

r. Th

e ne

t pre

sent

va

lue

of th

e ov

eral

l ben

efit f

rom

the

dire

ct

use

of th

e ve

geta

tive

reso

urce

s is

est

imat

ed

at U

SD 1

01.9

mill

ion.

45N

orto

n-G

riffi

ths,

M. a

nd S

aid,

M

.Y.,

2009

. The

futu

re fo

r w

ildlif

e on

Ken

ya's

ran

gela

nds:

A

n ec

onom

ic p

ersp

ectiv

e, in

W

ild R

ange

land

s: C

onse

rvin

g w

ildlif

e w

hile

mai

ntai

ning

liv

esto

ck in

sem

i-ar

id

ecos

yste

ms

(eds

; du

Toit,

J.T

., K

ock,

R. a

nd D

euts

ch, J

.C.),

Jo

hn W

iley

and

Sons

Ltd

, C

hich

este

r, U

K.

2009

Ken

yaA

fric

afo

ods;

pa

stor

alis

m/m

eat;

recr

eatio

n

use

valu

e on

ly;

mar

ket p

rice

m

etho

d;

oppo

rtun

ity

cost

s;

Agri

cult

ural

: 1.9

3 bi

llion

of p

oten

tial r

ents

( =

Diff

eren

tial n

et r

etur

ns to

pro

duct

ion*

ar

ea p

oten

tially

ava

ilabl

e fo

r cu

ltiv

atio

n ou

tsid

e of

the

prot

ecte

d ar

eas)

, 67

0 m

illio

n/yr

(35%

of p

oten

tial)

have

bee

n fu

lly c

aptu

red.

Liv

esto

ck: 5

73 m

illio

n/yr

. W

ildlif

e: c

once

ssio

n an

d ac

cess

fees

pai

d to

la

ndho

lder

s by

the

tour

ism

car

tels

ave

rage

10

.2/h

a/yr

but

are

som

etim

es a

s hi

gh a

s

50/h

a/yr

. Pot

entia

l wild

life

rent

s to

land

-ho

lder

s ( =

Diff

eren

tial n

et r

etur

ns to

pr

oduc

tion*

are

as o

f the

ran

gela

nds

ac

tual

ly u

sed

by to

uris

ts) o

f bet

wee

n

20–1

00 m

illio

n/yr

.


104

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

46Sa

yadi

, S.,

Gon

zále

z-R

oa, M

.C.

and

Cal

atra

va-R

eque

na, J

., 20

09. P

ublic

pre

fere

nces

for

land

scap

e fe

atur

es: T

he c

ase

of a

gric

ultu

ral l

ands

cape

in

mou

ntai

nous

Med

iterr

anea

n ar

eas.

Lan

d U

se P

olic

y. 2

6(2)

: 33

4–34

4.

2002

Spai

n (m

ount

ain

area

of

the

Alpu

jarr

as)

Euro

peam

enit

y;(p

art o

f)

use

valu

e on

ly;

cont

inge

nt

valu

atio

n

Aver

age

WTP

of E

UR

31.

60/d

ay fo

r ac

com

mod

atio

ns w

ith v

iew

s of

the

mos

t hi

ghly

app

reci

ated

land

scap

e (la

ndsc

apes

w

ith a

n ir

riga

tion

agri

cult

ural

com

pone

nt o

n an

inte

rmed

iate

slo

pe w

ith a

vill

age

or

trad

ition

al h

ouse

s vi

sibl

e in

the

land

scap

e);

Aver

age

WTP

of E

UR

21.

48/d

ay fo

r th

e le

ast

valu

ed i.

e. la

ndsc

apes

of a

band

oned

ag

ricu

ltur

al la

nds

with

out a

ny v

illag

e in

vie

w

and

with

a s

teep

slo

pe

47SO

S Sa

hel E

thio

pia.

200

9.

Pas

tora

lism

in E

thio

pia:

It's

to

tal e

cono

mic

val

ue a

nd

deve

lopm

ent c

halle

nges

. W

orld

Initi

ativ

e fo

r Su

stai

nabl

e P

asto

ralis

m –

GEF

UN

EP a

nd

IUC

N.

2009

Ethi

opia

Afr

ica

past

oral

ism

/mea

t; fib

ers;

N

FTP

; re

crea

tion;

ot

her

cult

ural

se

rvic

es

use

valu

e on

ly;

mar

ket p

rice

m

etho

d; c

ontin

-ge

nt v

alua

tion;

The

sam

ple

hous

ehol

ds e

stim

ate

the

cu

rren

t val

ue o

f the

ir li

vest

ock

hold

ing

at

ETB

3.5

7 m

illio

n. M

ean

and

tota

l Max

imum

W

illin

gnes

s to

pay

by

the

past

oral

hou

se-

hold

s to

con

serv

e th

e E

xist

ing

Pas

ture

land

s is

ETB

148

.13

and

10,2

21/y

r, re

spec

tivel

y.

Alte

rnat

ivel

y, P

asto

ral h

ouse

hold

s ar

e w

illin

g to

con

trib

ute

som

e am

ount

of

lives

tock

in o

rder

to c

onse

rve

exis

ting

past

urel

ands

. The

ave

rage

and

tota

l m

axim

um a

mou

nt o

f mon

ey th

at th

e pa

stor

al

hous

ehol

ds a

re w

illin

g to

pay

per

ann

um is

E

TB 1

33 a

nd 9

,070

, res

pect

ivel

y, to

impr

ove

the

exis

ting

past

urel

ands

. Giv

en th

e to

tal

past

oral

hou

seho

lds

(abo

ut 1

.9 m

illio

n), t

he

tota

l am

ount

of m

oney

pas

tora

l hou

seho

lds

are

will

ing

to p

ay fo

r th

e im

prov

emen

t of t

he

exis

ting

past

urel

ands

is E

TB 2

53 m

illio

n (U

SD 2

8.1

mill

ion)

per

ann

um.


105

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

48Ti

lahu

n, M

., Vr

anke

n, L

., M

uys,

B

., D

ecke

rs, J

., G

ebre

gzia

bher

, K

., K

. Geb

rehi

wot

, K.,

Bau

er,

H.a

nd M

athi

js, E

., 20

13. R

ural

ho

useh

olds

' dem

and

for

fran

kinc

ense

fore

st c

onse

rva-

tion

in T

igra

y, E

thio

pia:

A

cont

inge

nt v

alua

tion

anal

ysis

. La

nd D

egra

datio

n an

d D

evel

opm

ent (

onlin

e).

2009

Ethi

opia

(T

igra

y)A

fric

aN

TFP

(fran

kin -

cens

e);

Tota

l Eco

nom

ic

Valu

e (T

EV)

; co

ntin

gent

va

luat

ion;

A ho

useh

old

is w

illin

g to

pay

at l

east

U

SD 4

.86/

hous

ehol

d/yr

or

cont

ribu

te

7.17

labo

r da

ys/h

ouse

hold

/yr

whi

ch

amou

nts

to U

SD 6

.64/

hous

ehol

d/yr

at

per

capi

ta d

aily

inco

me.

49Ad

ams,

V.M

., P

ress

ey, R

.L. &

N

aido

o, R

. 201

0. O

ppor

tuni

ty

cost

s: W

ho r

eally

pay

s fo

r co

nser

vatio

n? B

iolo

gica

l C

onse

rvat

ion.

143

: 439

–448

.

2010

Par

agua

y (M

bara

cayu

Fo

rest

B

iosp

here

R

eser

ve)

Am

eric

asfo

ods;

pa

stor

alis

m/m

eat

use

valu

e on

ly;

oppo

rtun

ity

cost

s;

aggr

egat

ion

acro

ss s

ervi

ces;

Tota

l opp

ortu

nity

cos

ts fo

r th

e st

udie

d ar

ea

(nea

rly

300,

000

ha) r

ange

from

2,5

00,0

00–

6,00

0,00

0 (U

SD) s

umm

ed a

cros

s th

ree

land

us

es: s

mal

l hol

der

agri

cult

ure,

ran

chin

g an

d so

ybea

n fa

rmin

g) d

epen

ding

on

the

scen

ario

co

nsid

ered

.

50B

atke

r, D

., K

ocia

n, M

., M

cFad

den,

J. a

nd S

chm

idt,

R.

2010

. Val

uing

the

Pug

et S

ound

ba

sin

– R

evea

ling

our

best

in

vest

men

ts. E

arth

Eco

nom

ics.

Ta

com

a, U

SA.

2008

–201

0 (im

prov

ing

a 20

08

stud

y)

Was

hing

ton

Stat

e (P

uget

So

und)

, U

SA

Am

eric

asbi

odiv

ersi

ty/

gene

tic r

esou

rces

; ot

her

prov

isio

ning

re

sour

ces

(med

ical

); w

ater

flo

w r

egul

atio

n; s

oil

regu

latio

n; c

limat

e re

gula

tion;

po

llutio

n co

ntro

l; re

crea

tion;

am

enit

y

Tota

l Eco

nom

ic

Valu

e (T

EV)

; be

nefit

tran

sfer

;ag

greg

atio

n ac

ross

ser

vice

s

Par

tial v

alua

tion

of 1

4 ec

osys

tem

ser

vice

s ac

ross

17

land

cov

er ty

pes

in th

e P

uget

So

und

Bas

in s

how

s an

ann

ual fl

ow o

f U

SD 9

.7–8

3 bi

llion

. Pre

sent

val

ue o

f ec

osys

tem

ser

vice

of t

he P

uget

Sou

nd B

asin

es

timat

e ra

ngin

g fr

om U

SD 9

67 b

illio

n to

8.

3 tr

illio

n fo

r a

0% d

isco

unt r

ate

over

10

0 ye

ars;

and

from

USD

305

bill

ion

to

2.6

trill

ion

for

a 3%

dis

coun

t rat

e ov

er

100

year

s.


106

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

51B

haru

cha,

Z. a

nd P

rett

y, J

. 20

10. T

he r

oles

and

val

ues

of

wild

food

in a

gric

ultu

ral

syst

ems.

Phi

loso

phic

al

Tran

sact

ions

of t

he R

oyal

So

ciet

y. 3

65: 2

913–

2926

.

2010

(b

ased

on

data

from

19

80–2

009)

Asi

a an

d A

fric

aA

sia

and

Afr

ica

othe

r pr

ovis

ioni

ng

serv

ices

(wild

-fo

ods)

;

use

valu

e on

ly;

bene

fit tr

ansf

erFr

om th

e lim

ited

data

ava

ilabl

e, it

is c

lear

th

at w

ild p

lant

s an

d an

imal

s ca

n pr

ovid

e

USD

170

–90

0 (U

SD 2

009)

wor

th o

f val

ue to

ru

ral h

ouse

hold

s in

Sou

th A

fric

a an

d Ta

nzan

ia. I

n G

hana

, the

bus

hmea

t mar

ket

is w

orth

USD

275

mill

ion

annu

ally

.

52B

rand

er, L

. and

Sch

uyt,

K.

2010

. TEE

BC

ase:

Ben

efits

Tr

ansf

er: T

he e

cono

mic

val

ue

of th

e w

orld

’s w

etla

nds.

TEE

B.

Gen

eva,

Sw

itzer

land

.

2010

Glo

bal

Wor

ldfo

ods;

w

ater

sup

ply;

bi

odiv

ersi

ty/

gene

tic r

esou

rces

; ot

her

prov

isio

ning

se

rvic

es;

wat

er fl

ow

regu

latio

n;

soil

regu

latio

n;

clim

ate

egul

atio

n;

pollu

tion

cont

rol;

othe

r re

gula

ting

serv

ices

; re

crea

tion;

sp

iritu

al;

amen

ity;

ot

her

cult

ural

se

rvic

es

Tota

l Eco

nom

ic

Valu

e (T

EV)

; be

nefit

tran

sfer

;

The

tota

l eco

nom

ic v

alue

of 6

3 m

illio

n he

ctar

es o

f wet

land

aro

und

the

wor

ld

was

est

imat

ed a

t USD

3.4

bill

ion/

yr.

Wet

land

s in

Asi

a ha

ve th

e hi

ghes

t val

ue a

t U

SD 1

.8 b

illio

n/yr

. TE

V m

ay e

ven

be h

ighe

r, ba

sed

on th

e es

timat

e by

Ram

sar

of g

loba

l w

etla

nd a

rea

of 1

2.8

mill

ion

km s

q. In

this

ca

se, t

he T

EV

of th

e w

orld

’s w

etla

nds

can

be

estim

ated

at U

SD 7

0 bi

llion

/yr.

Sedi

men

t wet

-la

nds

have

the

high

est v

alue

s, fo

llow

ed b

y fr

eshw

ater

woo

ded

wet

land

s (U

SD 3

74 a

nd

USD

206

/ha/

yr r

espe

ctiv

ely)

(Sch

uyt a

nd

Bra

nder

, 200

4). T

he h

igh

valu

e of

Asi

an

wet

land

s ca

n be

exp

lain

ed b

y hi

gh p

opul

atio

n de

nsit

y, w

hich

to h

ave

a hi

gh d

eman

d fo

r w

etla

nd g

oods

/ser

vice

s, tr

ansl

atin

g in

to

high

er e

cono

mic

val

ues.

It m

ay a

lso

corr

espo

nd to

incr

easi

ng p

ress

ure

on

biod

iver

sity

and

oth

er im

port

ant w

etla

nd

valu

es (s

cien

tific,

soc

io-c

ultu

ral)

as w

ell a

s w

etla

nd’s

eco

logi

cal p

roce

sses

. The

inve

rse

appl

ies

for

Latin

Am

eric

an w

etla

nds,

re

sult

ing

in lo

wer

val

ues.

Pop

ulat

ion

dens

ity

is g

ener

ally

low

in L

atin

Am

eric

a an

d th

ere

is

a re

lativ

e ab

unda

nce

of w

etla

nds.


107

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

53B

renn

er, J

., Ji

men

ez, J

.A.,

Sard

a, R

. and

Gar

ola,

A. 2

010.

A

n as

sess

men

t of t

he

non-

mar

ket v

alue

s of

ec

osys

tem

ser

vice

s pr

ovid

ed

by th

e C

atal

an C

oast

al Z

one,

Sp

ain.

Oce

an a

nd C

oast

al

Man

agem

ent.

53: 2

7–38

.

2010

Spai

n (C

atal

an)

Euro

pepo

llutio

n co

ntro

l; cl

imat

e re

gula

tion;

w

ater

flow

re

gula

tion;

so

il re

gula

tion;

ot

her

regu

latin

g se

rvic

es;

recr

eatio

n;

amen

ity;

sp

iritu

al

Tota

l Eco

nom

ic

Valu

e (T

EV)

; be

nefit

tran

sfer

(s

patia

l);

In 2

004

a su

bsta

ntia

l eco

nom

ic v

alue

of

USD

3,1

95 m

illio

n/yr

was

del

iver

ed to

loca

l ci

tizen

s by

sur

roun

ding

eco

syst

ems.

54B

irch

, J.C

., N

ewto

n, A

.C.,

Aqui

no, C

.A.,

Can

tare

llo, E

., Ec

heve

rría

, C.,

Kitz

berg

er, T

., Sc

hiap

paca

ssee

, I. a

nd T

ejed

or

Gar

avito

a, N

., 20

10. C

ost-

ef

fect

iven

ess

of d

ryla

nd fo

rest

re

stor

atio

n ev

alua

ted

by

spat

ial a

naly

sis

of e

cosy

stem

se

rvic

es. P

roce

edin

gs o

f the

N

atio

nal A

cade

my

of S

cien

ces.

10

7(50

): 21

925–

2193

0.

2010

Nah

uel

Hua

pi,

Río

Neg

ro/

Neu

quén

(Arg

entin

a),

El T

ablo

n,C

hiap

as(M

exic

o),

Cen

tral

Vera

cruz

(Mex

ico)

,Q

uilp

ue,

Valp

araí

sore

gion

(Chi

le)

Am

eric

ascl

imat

e re

gula

tion;

N

FTP

; fo

rest

tim

ber;

re

crea

tion;

hu

ntin

g;

past

oral

ism

/mea

t

use

valu

e on

ly;

mar

ket p

rice

m

etho

d; d

ose-

re

spon

se m

etho

d;

oppo

rtun

ity

cost

;

Net

pre

sent

val

ue o

f eco

syst

em s

ervi

ces

(USD

/ha/

yr) f

or 2

0-y

time

hori

zon

at 5

%

disc

ount

rat

e, e

xclu

ding

res

tora

tion

cost

s,

for:

❚ C

arbo

n se

ques

trat

ion:

USD

0–3

0/h/

yr;

❚ N

TFP:

USD

0.0

45–0

.065

/ha/

yr;

❚ tim

ber:

USD

0.1

–0.8

/ha/

yr;

❚ to

uris

m: U

SD 0

.3–1

.1/h

a/yr

;

❚ liv

esto

ck p

rodu

ctio

n: U

SD -

2.7–

0/ha

/yr.

Net

soc

ial b

enefi

t of r

esto

ratio

n (i.

e. th

e ne

t ch

ange

in v

alue

of t

he e

cosy

stem

ser

vice

s as

soci

ated

with

land

cov

er c

hang

e m

inus

the

cost

s as

soci

ated

with

ref

ores

tatio

n):

❚ fo

r pa

ssiv

e re

stor

atio

n: U

SD 5

–597

/ha/

yr;

❚ fo

r pa

ssiv

e re

stor

atio

n w

ith p

rote

ctio

n:

USD

-16

to -

496/

ha/y

r;

❚ fo

r ac

tive

rest

orat

ion:

USD

-21

–772

/ha/

yr.


108

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

55C

ross

man

, N.D

., C

onno

r, J.

D.,

Bry

an, B

.A.,

Sum

mer

s, D

.M.

and

Gin

niva

n, J

., 20

10.

Rec

onfig

urin

g an

irri

gatio

n la

ndsc

ape

to im

prov

e pr

ovis

ion

of e

cosy

stem

ser

vice

s.

Ecol

ogic

al E

cono

mic

s. 6

9(5)

: 10

31–1

042.

2009

Aust

ralia

(T

orru

mba

rry

Irri

gatio

n A

rea

in n

orth

ern

Vict

oria

, par

t of

the

Mur

ray

Dar

ling

Bas

in)

Oce

ania

food

s;

wat

er fl

ow

regu

latio

n;

use

valu

e on

ly;

dose

-res

pons

e m

etho

d;

miti

gatio

n co

sts;

be

nefit

tran

sfer

;

Mod

el e

stim

ates

a p

oten

tial i

ncre

ase

in n

et

pres

ent v

alue

of e

cosy

stem

ser

vice

s up

to

AUD

347

mill

ion

(hor

izon

of 3

0 ye

ars

at

disc

ount

rat

e of

7%

.). In

crea

se in

eco

syst

em

serv

ices

incl

ude

reco

veri

ng 6

2 G

L of

wat

er

for

envi

ronm

enta

l flow

s, s

eque

stra

tion

of

10.6

mill

ion

tonn

es o

f CO

2e/y

ear,

12 E

C

(μS/

cm) r

educ

tion

in r

iver

sal

init

y, a

nd 9

%

incr

ease

in th

e ag

ricu

ltur

e va

lue.

With

out a

sp

atia

lly ta

rget

ed p

lann

ing

appr

oach

a 2

0%

wat

er r

educ

tion

for

irri

gatio

n co

uld

resu

lt in

a

loss

of A

UD

68.

7 m

illio

n in

eco

nom

ic

retu

rns

to a

gric

ultu

re, m

ay o

nly

be m

argi

n-al

ly o

ffse

t by

incr

ease

d va

lue

of e

cosy

stem

se

rvic

es r

esul

ting

from

ret

urn

of 6

2 G

L of

w

ater

to th

e en

viro

nmen

t.

56C

roito

ru, L

. and

Dal

y-H

asse

n,

H.,

2010

. Usi

ng p

aym

ents

for

envi

ronm

enta

l ser

vice

s to

im

prov

e co

nser

vatio

n in

a

Tuni

sian

wat

ersh

ed. M

ount

ain

Foru

m B

ulle

tin. 1

0(1)

: 89–

91.

2009

Tuni

sia

(Bar

bara

w

ater

shed

)

Afr

ica

food

s;

soil

regu

latio

n;us

e va

lue

only

; m

arke

t pri

ce

met

hod;

m

itiga

tion

cost

s;

Net

ret

urns

from

alte

rnat

ive

land

use

s:

❚ C

erea

ls w

ith n

o co

nser

vatio

n m

easu

re in

gu

llies

: TN

D 8

15/h

a fo

r fa

rmer

s;

TND

-55

/ha

for

natio

nal e

cono

my

afte

r se

dim

enta

tion

cost

s

❚ C

erea

ls w

ith s

tone

wal

ls in

gul

lies:

TN

D -

330/

ha fo

r fa

rmer

s; T

ND

-43

0/ha

for

natio

nal e

cono

my

afte

r se

dim

enta

tion

cost

s

❚ C

erea

ls w

ith s

tone

wal

ls a

nd a

caci

a in

gu

llies

: TN

D -

450/

ha fo

r fa

rmer

s;

TND

-38

0/ha

for

natio

nal e

cono

my

afte

r se

dim

enta

tion

cost

s

❚ C

erea

ls w

ith a

caci

a in

gul

lies:

TN

715

/ha

for

farm

ers;

TN

D 1

60/h

a fo

r th

e na

tiona

l ec

onom

y af

ter

sed.

cos

ts


109

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

57M

obar

ghei

, N.,

Liag

hati,

H. a

nd

Moh

seni

, A.S

. 201

0. E

stim

atin

g th

e w

ater

con

serv

atio

n va

lue

of

fore

st e

cosy

stem

s. P

rese

nted

at

the

"Wor

ld F

ood

Syst

em –

A

Con

trib

utio

n fr

om E

urop

e",

Sept

, 14–

16, 2

010.

Zur

ich,

Sw

itzer

land

.

2010

Iran

(Cas

pian

fo

rest

)A

sia

wat

er s

uppl

y;

wat

er fl

ow

regu

latio

n

use

valu

e on

ly;

repl

acem

ent c

ost

met

hod;

IRR

102

,000

(deg

rade

d fo

rest

) – 4

64,0

0 (e

rode

d pa

stur

e)/h

a/ye

ar (I

RR

201

0).

58R

olfe

, J. 2

010.

Val

uing

re

duct

ions

in w

ater

ext

ract

ions

fr

om g

roun

dwat

er b

asin

s w

ith

bene

fit tr

ansf

er: T

he G

reat

A

rtes

ian

Bas

in in

Aus

tral

ia.

Wat

er R

esou

rces

Res

earc

h.

46(6

): W

0630

1.

2009

Aust

ralia

(G

reat

Art

esia

n B

asin

)

Oce

ania

wat

er s

uppl

y;

wat

er fl

ow

regu

latio

n;

clim

ate

regu

latio

n;

othe

r re

gula

ting

serv

ices

(bio

dive

r-si

ty p

rote

ctio

n);

othe

r cu

ltur

al

serv

ices

(Abo

rigi

-na

l cul

tura

l he

rita

ge);

use

valu

e on

ly;

bene

fit tr

ansf

er;

Dir

ect u

se v

alue

s fo

r re

crea

tion

and

tour

ism

: be

twee

n 0.

4–0.

7 m

illio

n/yr

(AU

D 2

007)

. B

iodi

vers

ity

prot

ectio

n va

lues

for

nativ

e bi

odiv

ersi

ty: A

UD

10.

3 m

illio

n pe

r an

num

fo

r ar

tesi

an s

prin

g ec

osys

tem

s an

d

5.8

mill

ion/

yr fo

r on

e en

dang

ered

spe

cies

. B

iodi

vers

ity

prot

ectio

n va

lues

for

rem

oval

of

pest

s an

d w

eeds

: val

ue in

clud

ed in

est

imat

es

of b

iodi

vers

ity

bene

fits

Opt

ion

valu

es, f

or

both

futu

re u

se a

nd n

onus

e pu

rpos

es:

AUD

0.2

mill

ion/

yr fo

r a

0.76

% c

hang

e in

to

tal w

ater

sto

cks

over

25

year

s.

Ecos

yste

m s

ervi

ces

linke

d to

the

redu

ctio

n in

gr

eenh

ouse

gas

em

issi

ons:

app

roxi

mat

ely

AUD

1.1

4 m

illio

n/yr

in c

ost r

educ

tions

to

mee

t em

issi

on ta

rget

s if

redu

ctio

n in

gr

eenh

ouse

em

issi

ons

is a

ccou

nted

for

in

natio

nal t

arge

ts a

nd tr

adin

g ca

ps.

Cul

tura

l her

itage

pro

tect

ion

valu

es:

impo

rtan

t, bu

t lac

k of

dat

a do

es n

ot a

llow

as

sess

men

t. C

omm

unit

y pr

otec

tion

valu

es:

impo

rtan

t, bu

t not

rel

ated

to c

hang

ing

pres

sure

leve

ls.


110

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

59B

arro

w, E

. and

Sha

h, A

., 20

11.

TEEB

case

: Tra

ditio

nal f

ores

t re

stor

atio

n in

Tan

zani

a. w

ww

.te

ebw

eb.o

rg.

2011

Tanz

ania

(S

hiny

anga

re

gion

)

Afr

ica

fore

st ti

mbe

r;

past

oral

ism

/mea

t; bi

ofue

ls;

hort

icul

ture

; ho

ney;

ot

her

prov

isio

ning

se

rvic

es;

clim

ate

regu

latio

n;

wat

er fl

ow

regu

latio

n;

soil

regu

latio

n;

othe

r cu

ltur

al

serv

ices

;

use

valu

e on

ly;

mar

ket p

rice

m

etho

d;

oppo

rtun

ity

cost

s;

The

econ

omic

val

ue o

f a r

esto

red

Ngi

tili

is U

SD 1

4/pe

rson

/mon

th, w

hile

na

tiona

l ave

rage

rur

al c

onsu

mpt

ion

is

USD

8.5

0/pe

rson

/mon

th.

60B

enne

tt, J

., W

ang

X., G

uaan

g -cu

i, D

., Xi

e, C

., Xu

, J.,

Zhan

g, H

., G

uo, H

.and

Eig

enra

am, M

., 20

11. I

mpr

ovin

g th

e ef

ficie

ncy

of la

nd u

se c

hang

e in

Chi

na.

Fina

l Rep

ort.

Aust

ralia

n G

over

nmen

t. Au

stra

lian

Cen

tre

for

Inte

rnat

iona

l Agr

icul

tura

l R

esea

rch.

Can

berr

a, A

ustr

alia

.

2009

-201

1C

hina

(S

ichu

an

prov

ince

, so

uthw

est)

Asi

afo

ods;

fo

rest

tim

ber;

ot

her

prov

isio

ning

se

rvic

es;

othe

r re

gula

ting

serv

ices

(a

ir q

ualit

y)

Tota

l Eco

nom

ic

Valu

e (T

EV)

; ch

oice

exp

eri-

men

t;

n/a

(ave

rage

cos

t sav

ings

of C

NY

84.6

per

la

nd u

nit w

hen

carr

ying

out

land

man

age-

men

t and

aff

ores

tatio

n sc

hem

es).

61G

asco

igne

, W.R

., H

oag,

D.,

Koo

ntz,

L.,

Tang

en, B

.A.,

Shaf

fer,

T.L.

and

Gle

ason

, R.A

., 20

11. V

alui

ng e

cosy

stem

and

ec

onom

ic s

ervi

ces

acro

ss

land

-use

sce

nari

os in

the

Pra

irie

Pot

hole

Reg

ion

of th

e D

akot

as, U

SA. E

colo

gica

l Ec

onom

ics.

70(

10):

1715

–172

5.

2010

(b

ased

on

data

from

20

00,

2007

–200

8)

Pra

irie

Pot

hole

R

egio

n of

the

Dak

otas

, U

SA

Am

eric

asbi

odiv

ersi

ty

(wat

erfo

wl);

cl

imat

e re

gula

tion;

so

il re

gula

tion;

re

crea

tion;

hu

ntin

g

use

valu

e on

ly;

dose

-res

pons

e m

etho

d;

bene

fit tr

ansf

er;

Ove

rall

net p

rese

nt v

alue

val

ue r

angi

ng fr

om

USD

-14.

17/h

a fo

r E

xten

sive

Con

vers

ion

to

3.63

/ha

for

Aggr

essi

ve C

onse

rvat

ion.


111

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

62G

herm

andi

, A. &

Nun

es, P

. 20

11. A

glo

bal m

ap o

f coa

stal

re

crea

tion

valu

es: R

esul

ts

from

a s

patia

lly e

xplic

it ba

sed

met

a-an

alys

is. F

onda

zion

e En

i En

rico

Mat

tei.

Mila

n, It

aly.

2010

Glo

bal

Wor

ldre

crea

tion;

use

valu

e on

ly;

bene

fit tr

ansf

er;

aggr

egat

ion

acro

ss s

ervi

ces;

Estim

ated

val

ues

for

coas

tal e

cosy

stem

s

up to

USD

71,

112/

ha/y

r.

63K

assi

e, M

., K

ohlin

, G.,

Bul

ffst

one,

R. a

nd H

olde

n, S

., 20

11. A

re s

oil c

onse

rvat

ion

tech

nolo

gies

“W

in-W

in?”

A

case

stu

dy o

f Anj

eni i

n th

e no

rthe

rn w

este

rn E

thio

pian

hi

ghla

nds.

Nat

ural

Res

ourc

es

Foru

m. 3

5: 8

9–99

.

2001

Ethi

opia

(A

mha

ra

regi

on;

Dis

tric

t: D

embe

cha;

Lo

catio

n:

Anj

eni)

Afr

ica

food

s;us

e va

lue

only

; do

se-r

espo

nse

met

hod

Sust

aina

ble

land

man

agem

ent p

ract

ice

(Fan

ya ju

u te

rrac

es) h

ave

the

pote

ntia

l to

redu

ce n

et c

rop

inco

me

in th

e ra

nge

of E

TB

74–1

28/h

a.

64Li

ljens

tolp

e., C

. 201

1. V

alua

tion

of e

nvir

onm

enta

l im

pact

s of

th

e R

ural

Dev

elop

men

t P

rogr

am -

A h

edon

ic m

odel

w

ith a

pplic

atio

n of

GIS

. Pap

er

prep

ared

for

the

122n

d E

AA

E Se

min

ar “

Evid

ence

-bas

ed

agri

cult

ural

and

rur

al p

olic

y m

akin

g m

etho

dolo

gica

l and

em

piri

cal c

halle

nges

of p

olic

y ev

alua

tion.

” A

ncon

a, It

aly.

2011

Swed

enEu

rope

amen

ity;

use

valu

e on

ly;

hedo

nic

pric

e m

etho

d

Acco

mm

odat

ion

stan

dard

SEK

0,1

06/u

pgra

de

❚ U

rban

: SEK

-0,

050

whe

n cl

ose

to u

rban

ar

eas

❚ A

nim

al: S

EK 0

,102

whe

n an

imal

s ar

e pr

esen

t on

the

farm

❚ R

ipar

ian

with

500

0 m

buf

fer

zone

: SE

K 0

,342

e–2

for

incr

ease

d bu

ffer

zon

e

❚ C

ultiv

ated

land

with

500

m b

uffe

r zo

ne:

SEK

-0,

030

for

incr

ease

d bu

ffer

zon

e

❚ Se

mi n

atur

al p

astu

res

with

300

m b

uffe

r zo

ne: S

EK -

0,45

2e–2

for

incr

ease

d bu

ffer

zo

ne

❚ G

razi

ng la

nds

with

300

m b

uffe

r zo

ne:

SEK

-0,

408e

–2 fo

r in

crea

sed

buff

er z

one.


112

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

65M

a, S

. and

Sw

into

n, S

.M. 2

011.

Va

luat

ion

of e

cosy

stem

se

rvic

es fr

om r

ural

land

-sc

apes

usi

ng a

gric

ultu

ral l

and

pric

es. E

colo

gica

l Eco

nom

ics.

70

: 164

9–16

59.

base

d on

da

ta fr

om

2003

–200

7

Mic

higa

n (s

outh

wes

t),

USA

Am

eric

asfo

ods;

fo

rest

tim

ber;

pa

stor

alis

m/m

eat;

wat

er s

uppl

y;

othe

r pr

ovis

ioni

ng

serv

ices

; w

ater

flow

re

gula

tion;

so

il re

gula

tion;

po

llutio

n co

ntro

l; cl

imat

e re

gula

tion;

ot

her

regu

latin

g se

rvic

es;

recr

eatio

n;

hunt

ing;

am

enit

y

use

valu

e on

ly;

hedo

nic

pric

e m

etho

d

Sale

s pr

ice

of U

SD 1

577–

108,

104/

ha (U

SD

2003

).

66M

ajul

e, A

.E.,

Yand

a, P

.Z.,

Kan

gala

we,

R.Y

.M. a

nd L

okin

a,

R. 2

011.

Eco

nom

ic v

alua

tion

asse

ssm

ent o

f lan

d re

sour

ces,

ec

osys

tem

s se

rvic

es a

nd

reso

urce

deg

rada

tion

in

Tanz

ania

. Glo

bal M

echa

nism

. R

ome,

Ital

y.

2011

Tanz

ania

Afr

ica

food

s

(cro

ps a

nd fi

sh);

fore

st ti

mbe

r;

biod

iver

sity

/gen

etic

re

sour

ces;

w

ater

flow

re

gula

tion;

cl

imat

e re

gula

tion;

re

crea

tion;

am

enit

y

use

valu

e on

ly;

mar

ket p

rice

m

etho

d

Exi

sten

ce v

alue

: USD

2/h

a/yr

to 4

5/ha

/yr

and

4400

/ha/

yr (U

SD) f

or u

niqu

e si

tes

Tota

l lan

d co

ver

of 7

, 643

, 115

ha:

❚

Pro

visi

onin

g se

rvic

es v

alue

is

USD

1,4

49,3

79,3

89/y

ear

❚ W

ater

reg

ulat

ion

valu

e is

U

SD 9

08,5

82,7

00/y

ear

❚ B

iodi

vers

ity

valu

e is

U

SD 6

5,31

8,10

6,00

8/ye

ar

❚ To

uris

m &

Cul

tura

l/Ae

sthe

tic v

alue

is

USD

91,

466,

196/

year

❚ C

arbo

n se

ques

trat

ion

(on

tota

l sto

ck v

alue

) is

USD

44,

837

,504

,000

❚ To

tal v

alue

of 1

12,6

05,0

38,2

93, o

r

USD

1,4

73,2

87/h

a.


113

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

67M

ekur

ia, W

., Ve

ldka

mp,

E.,

Tila

hun,

M. a

nd O

lsch

ewsk

i, R

., 20

11. E

cono

mic

val

uatio

n of

la

nd r

esto

ratio

n: T

he c

ase

of

excl

osur

es e

stab

lishe

d on

co

mm

unal

gra

zing

land

s in

Ti

gray

, Eth

iopi

a. L

and

Deg

rada

tion

and

Dev

elop

men

t. 22

(3):

334–

344.

2008

Ethi

opia

(N

orth

ern

Hig

hlan

ds o

f Ti

gray

)

Afr

ica

clim

ate

regu

latio

n;

soil

regu

latio

nus

e va

lue

only

; m

arke

t pri

ce

met

hod;

oth

er

valu

atio

n m

etho

d;

The

Net

Pre

sent

Val

ue o

f exc

losu

re’s

ec

osys

tem

ser

vice

s un

der

cons

ider

atio

n

(i.e.

res

tore

soi

l nut

rien

ts a

nd to

seq

uest

er

carb

on fr

om th

e at

mos

pher

e) w

as a

bout

28

per

cen

t (U

SD 8

37) h

ighe

r th

an a

ltern

ativ

e w

heat

pro

duct

ion.

68N

gugi

, G.W

., N

ewto

n, L

.E. a

nd

Mua

sya,

A.M

., 20

11. T

he

cont

ribu

tion

of fo

rest

pro

duct

s to

dry

land

hou

seho

ld e

cono

my:

Th

e ca

se o

f Kia

ng’o

mbe

hill

fo

rest

, Ken

ya. E

thno

bota

ny

Res

earc

h an

d A

pplic

atio

ns.

9: 1

63–1

80.

2011

Ken

ya

(Kia

ng’o

mbe

hi

ll fo

rest

)

Afr

ica

food

s;

fibre

s;

fore

st ti

mbe

r;

past

oral

ism

/mea

t; ho

rtic

ultu

re;

hone

y;

othe

r pr

ovis

ioni

ng

serv

ices

; hu

ntin

g;

othe

r cu

ltur

al

serv

ices

Tota

l Eco

nom

ic

Valu

e (T

EV)

; co

ntin

gent

va

luat

ion;

ot

her

valu

atio

n m

etho

d (p

artic

ipa-

tory

)

Aver

age

of K

Sh 1

6,17

5.56

/hou

seho

ld/y

r

(USD

256

.8/h

ouse

hold

/yr)

.

69P

olas

ky, S

., N

elso

n, E

., P

enni

ngto

n, D

. and

Joh

nson

, K

.A.,

2011

. The

impa

ct o

f la

nd-u

se c

hang

e on

eco

syst

em

serv

ices

, bio

dive

rsit

y an

d re

turn

s to

land

owne

rs: A

cas

e st

udy

in th

e st

ate

of M

inne

sota

. En

viro

nmen

tal a

nd R

esou

rce

Econ

omic

s. 4

8: 2

19–2

42.

base

d on

da

ta fr

om

1992

-200

1

Min

neso

ta

(USA

)A

mer

icas

fore

st ti

mbe

r;

clim

ate

regu

latio

n;

wat

er fl

ow

regu

latio

n;

soil

regu

latio

n;

othe

r re

gula

ting

serv

ices

; ot

her

cult

ural

se

rvic

es (u

rban

de

velo

pmen

t)

use

valu

e on

ly;

dose

-res

pons

e m

etho

d;

mar

ket p

rice

m

etho

d;

oppo

rtun

ity

cost

s

Ret

urns

to la

ndow

ners

are

hig

hest

in a

sc

enar

io w

ith la

rge-

scal

e ag

ricu

ltur

al

expa

nsio

n. T

his

scen

ario

, how

ever

, gen

er-

ated

the

low

est n

et s

ocia

l ben

efits

acr

oss

all

scen

ario

s co

nsid

ered

bec

ause

of l

arge

lo

sses

in s

tore

d ca

rbon

and

neg

ativ

e im

pact

s on

wat

er q

ualit

y. F

urth

er, t

his

scen

ario

re

sulte

d in

the

larg

est d

eclin

e in

hab

itat

qual

ity

for

gene

ral t

erre

stri

al b

iodi

vers

ity

and

fore

st s

ongb

irds

.


114

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

70So

ussa

n, J

. & S

am, C

. 201

1.

The

valu

es o

f lan

d re

sour

ces

in

the

Car

dam

om m

ount

ains

in

Cam

bodi

a. G

loba

l Mec

hani

sm.

Min

istr

y of

Agr

icul

ture

, Fi

sher

ies

and

Fore

sts

(Cam

bodi

a), G

loba

l M

echa

nism

, Con

serv

atio

n In

tern

atio

nal a

nd th

e A

sian

D

evel

opm

ent B

ank.

2010

Cam

bodi

aA

sia

food

s;

fore

st ti

mbe

r;

past

oral

ism

/mea

t; ho

rtic

ultu

re;

NTF

P;

wat

er s

uppl

y;

wat

er fl

ow

regu

latio

n;

clim

ate

regu

latio

n;

soil

regu

latio

n (fe

rtili

ty, e

rosi

on

prot

ectio

n);

Tota

l Eco

nom

ic

Valu

e (T

EV)

; be

nefit

tran

sfer

; ag

greg

atio

n ac

ross

ser

vice

s

USD

5,0

00 (U

SD 2

010)

per

ha/

year

.

71Sz

erén

yi Z

.M.,

Ker

ekes

S.,

Flac

hner

Z. a

nd M

ilton

S.,

2011

. Th

e po

ssib

ility

of t

he e

cono

mic

ev

alua

tion

of e

cosy

stem

se

rvic

es d

escr

ibed

thro

ugh

a do

mes

tic c

ase

stud

y. In

: N

agy,

G.G

. and

Kis

s, V

. (ed

s.),

Bor

row

ing

serv

ices

from

na

ture

- M

etho

dolo

gies

to

eval

uate

focu

sing

on

Hun

gari

an c

ase

stud

ies.

C

EEw

eb fo

r B

iodi

vers

ity,

B

udap

est,

Hun

gary

.

base

d on

da

ta fr

om

1965

–201

0

Hun

gary

Euro

pew

ater

flow

re

gula

tion;

Tota

l Eco

nom

ic

Valu

e (T

EV)

; co

ntin

gent

va

luat

ion;

ch

oice

exp

eri-

men

t;

Con

tinge

nt v

alua

tion:

Ave

rage

will

ingn

ess

to

pay

of H

UF

6,53

3/ho

useh

old/

year

; ran

ging

fr

om H

UF

2,55

2/ho

useh

old/

year

for

non-

user

s to

HU

F 7,

094/

hous

ehol

d/ye

ar fo

r us

ers.

Cho

ice

expe

rim

ent:

HU

F 0

for

redu

ctio

n of

floo

d fr

eque

ncy;

ove

r EU

R 2

1.2

(HU

F 5,

300)

/hou

seho

ld/y

ear

for

wat

er q

ualit

y im

prov

emen

t fro

m m

ediu

m to

goo

d/ve

ry

good

.


115

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

72Ta

it, P

., B

aska

ran,

R.,

Cul

len,

R

. and

Bic

knel

l, K

., 20

11.

Valu

atio

n of

agr

icul

tura

l im

pact

s on

riv

ers

and

stre

ams

usin

g ch

oice

mod

ellin

g: A

New

Ze

alan

d ca

se s

tudy

. New

Ze

alan

d Jo

urna

l of A

gric

ultu

ral

Res

earc

h. 5

4(3)

: 143

–154

.

2008

New

Zea

land

(C

ante

rbur

y re

gion

)

Oce

ania

wat

er fl

ow

regu

latio

n;

othe

r re

gula

ting

serv

ices

(hea

lth,

ex

cess

nut

rien

ts in

ri

vers

);

Tota

l Eco

nom

ic

Valu

e (T

EV)

; ch

oice

exp

erim

ent

Aver

age

WTP

in N

ZD 2

008

(Low

er, u

pper

qu

artil

es o

f WTP

dis

trib

utio

ns) f

or:

❚ R

isk

of p

atho

gens

from

ani

mal

was

te 1

0:

NZD

27/

hous

ehol

d/yr

(20,

35)

❚ lo

w-fl

ow ir

riga

tion

impa

cts

1:

NZD

52/

hous

ehol

d/yr

(42,

66)

❚ ec

olog

ical

eff

ects

of e

xces

s nu

trie

nts

good

: N

ZD 8

4/ho

useh

old/

yr (6

2, 1

05)

❚ ec

olog

ical

eff

ects

of e

xces

s nu

trie

nts

fair

: N

ZD 6

4/ho

useh

old/

yr (5

0, 8

0)

Aver

age

annu

al h

ouse

hold

com

pens

atin

g su

rplu

s in

NZD

200

8 (L

ower

, upp

er q

uart

ile

of c

ompe

nsat

ing

surp

lus

dist

ribu

tion)

:

❚ M

anag

emen

t fai

r: N

ZD 1

54 (1

25, 1

87)

❚ M

anag

emen

t goo

d: N

ZD 2

13 (1

69, 2

60)

73W

atso

n, R

. and

Alb

on, S

. (le

ad

auth

ors)

, 201

1. T

he U

K N

atio

nal

Ecos

yste

m A

sses

smen

t: Sy

nthe

sis

of th

e K

ey F

indi

ngs.

p.

42-

44. U

K N

atio

nal

Ecos

yste

m A

sses

smen

t, C

ambr

idge

.

2010

Wal

es (U

K)

Euro

pefo

ods;

fo

rest

tim

ber;

pa

stor

alis

m/m

eat;

recr

eatio

n;

amen

ity/l

ands

cape

;

Tota

l Eco

nom

ic

Valu

e (T

EV)

; m

arke

t pri

ce

met

hod;

ag

greg

atio

n ac

ross

ser

vice

s

rang

ing

from

‹ -5

0/ha

/yr

to

› + 1

00 G

BP/

ha/y

r.

74W

atso

n, R

. and

Alb

on, S

. (le

ad

auth

ors)

, 201

1. T

he U

K N

atio

nal

Ecos

yste

m A

sses

smen

t: Sy

nthe

sis

of th

e K

ey F

indi

ngs.

p.

49–

52. U

K N

atio

nal

Ecos

yste

m A

sses

smen

t, C

ambr

idge

.

2010

Gre

at B

rita

in

(UK

)Eu

rope

food

s;

fibre

s;

fore

st ti

mbe

r;

biod

iver

sity

/ ge

netic

res

ourc

es;

clim

ate

regu

latio

n;

recr

eatio

n;

amen

ity

Tota

l Eco

nom

ic

Valu

e (T

EV)

; m

arke

t pri

ce

met

hod;

ag

greg

atio

n ac

ross

ser

vice

s

Ran

ge fr

om G

PB

-20

,670

/yr

to G

PB

32,

980/

yr

depe

ndin

g on

sce

nari

o.


116

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

75W

OC

AT, 2

011.

Pla

ntin

g pi

ts a

nd

ston

e lin

es: N

iger

– T

assa

ave

c co

rdon

pie

rreu

x. S

WC

Te

chno

logy

.

1999

, up

date

d 20

04

Nig

er (T

ahou

a)A

fric

afo

ods;

w

ater

flow

re

gula

tion;

so

il re

gula

tion

use

valu

e on

ly;

othe

r va

luat

ion

met

hod

(cos

ts o

f ac

tion)

;

Esta

blis

hmen

t inp

uts

and

cost

s: U

SD 2

45/h

a;

Mai

nten

ance

cos

ts: U

SD 3

5/ha

/yr.

76C

haba

la, L

.M.,

Kun

tash

ula,

E.,

Ham

ukw

ala,

P.,

B.H

. Chi

shal

a,

B.H

. and

Phi

ri, E

. 201

2. A

sses

s -in

g th

e va

lue

of la

nd a

nd c

osts

of

deg

rada

tion

in Z

amib

ia (fi

rst

draf

t). G

loba

l Mec

hani

sm (G

M)

and

Stoc

khol

m E

nvir

onm

ent

Inst

itute

(SEI

).

2012

Zam

bia

Afr

ica

food

s (fi

sh);

fore

st

timbe

r; p

asto

ral -

ism

/mea

t; w

ater

flo

w r

egul

atio

n (h

ydro

elec

tric

po

wer

gen

erat

ion)

; re

crea

tion

use

valu

e on

ly;

mar

ket p

rice

m

etho

d;

repl

acem

ent c

ost

met

hod;

ag

greg

atio

n ac

ross

ser

vice

s;

❚ P

rodu

ctiv

e va

lue

is Z

MK

303

, 317

, 906

,000

❚ C

ultu

ral &

aes

thet

ic v

alue

is

ZMK

56,

690,

100,

000

❚ W

ater

reg

ulat

ion

is Z

MK

840

,914

,000

,000

❚ To

tal o

f ZM

K 1

,200

,922

,006

,000

ZM

K 1

= U

SD 0

.02

(201

2)

77D

eGro

ot, R

., B

rand

er, L

., va

n de

r P

loeg

, S.,

Cos

tanz

a, R

., B

erna

rd, F

., B

raat

, L.,

Chr

istie

, M

., C

ross

man

, N.,

Ghe

rman

di,

A.,

Hei

n, L

., H

ussa

in, S

., K

umar

, P.,

McV

ittie

, A.,

Por

tela

, R

., R

odri

guez

, L.C

., te

n B

rink

, P.

and

van

Beu

keri

ng, P

. 201

2.

Glo

bal e

stim

ates

of t

he v

alue

of

ecos

yste

ms

and

thei

r se

rvic

es

in m

onet

ary

units

. Eco

syst

em

serv

ices

. 1: 5

0–61

.

2012

Glo

bal

Wor

ldfo

ods;

fib

ers;

pas

tora

l-is

m/m

eat;

bi

ofue

ls;

biod

iver

sity

/ ge

netic

res

ourc

es;

othe

r pr

ovis

ioni

ng

serv

ices

; w

ater

flow

re

gula

tion;

so

il re

gula

tion;

cl

imat

e re

gula

tion;

po

llutio

n co

ntro

l; ot

her

regu

latin

g se

rvic

es;

recr

eatio

n;

amen

ity;

spi

ritu

al;

othe

r cu

ltur

al

serv

ices

Tota

l Eco

nom

ic

Valu

e (T

EV)

; be

nefit

tran

sfer

; ag

greg

atio

n ac

ross

ser

vice

s

The

tota

l val

ue o

f eco

syst

em s

ervi

ces

is

cons

ider

able

and

ran

ges

betw

een

49

0 in

t/ye

ar fo

r th

e to

tal b

undl

e of

eco

syst

em

serv

ices

that

can

pot

entia

lly b

e pr

ovid

ed b

y an

‘ave

rage

’ hec

tare

of o

pen

ocea

ns to

al

mos

t 350

,000

int/

year

for

the

pote

ntia

l se

rvic

es o

f an

‘ave

rage

’ hec

tare

of c

oral

re

efs.

Mor

e im

port

antl

y, o

ur r

esul

ts s

how

th

at m

ost o

f thi

s va

lue

is o

utsi

de th

e m

arke

t an

d be

st c

onsi

dere

d as

non

-tra

dabl

e pu

blic

be

nefit

s.


117

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

78K

aufm

an, M

. 201

2. H

umbo

ldt

Stat

e U

nive

rsit

y. E

cosy

stem

se

rvic

e va

lue

of w

ater

sup

ply

bene

fits

prov

ided

by

fore

st

stan

ds in

the

Mat

tole

Riv

er

wat

ersh

ed, C

alifo

rnia

: A

bioe

cono

mic

and

ben

efit

tran

sfer

-spa

tial a

naly

sis

appl

icat

ion

(Mas

ters

thes

is).

Hum

bold

t Sta

te U

nive

rsit

y.

Arc

ata,

USA

.

2010

–201

2C

alifo

rnia

(M

atto

le R

iver

W

ater

shed

), U

SA

Am

eric

asw

ater

sup

ply;

use

valu

e on

ly;

bene

fit tr

ansf

erTh

e re

mai

ning

old

gro

wth

sta

nds

in th

e M

atto

le W

ater

shed

pro

vide

mor

e th

an

USD

1,9

10,8

00 a

yea

r in

wat

er s

uppl

y be

nefit

s to

the

regi

on.

79N

elso

n, F

. 201

2. N

atur

al

cons

erva

tioni

sts?

Eva

luat

ing

the

impa

ct o

f pas

tora

list l

and

use

prac

tices

on

Tanz

ania

's

wild

life

econ

omy.

Pas

tora

lism

: R

esea

rch,

Pol

icy

and

Pra

ctic

e.

2:15

.

2011

Tanz

ania

(n

orth

ern)

Afr

ica

recr

eatio

n;us

e va

lue

only

; be

nefit

tran

sfer

Ann

ual v

alue

of p

asto

ralis

t lan

d us

es to

the

wild

life-

base

d to

uris

m in

dust

ry in

nor

ther

n Ta

nzan

ia is

est

imat

ed a

t app

roxi

mat

ely

U

SD 8

3.5

mill

ion,

Tot

al v

alue

of t

ouri

sm in

th

e no

rthe

rn c

ircu

it is

USD

547

.8 m

illio

n


118

Cas

e st

udy

Sou

rce

Stud

y pe

riod

Loca

tion

of

cas

e st

udy

UN

w

orld

re

gion

Eco

syst

em

serv

ices

Valu

atio

n

met

hodo

logy

Est

imat

ed c

osts

, cur

renc

y,

year

of c

urre

ncy

esti

mat

e

80N

ill, D

., Ac

kerm

ann,

K.,

van

den

Akk

er, E

., Sc

höni

ng, A

., W

egne

r, M

., va

n de

r Sc

haaf

, C.

and

Pie

ters

e, J

., 20

12.

Wat

er-s

prea

ding

wei

rs fo

r th

e de

velo

pmen

t of d

egra

ded

dry

rive

r va

lleys

: Exp

erie

nce

from

th

e Sa

hel.

Deu

tsch

e G

esel

l-sc

haft

für

Inte

rnat

iona

le

Zusa

mm

enar

beit

(GIZ

), G

erm

any.

2011

Bur

kina

Fas

o,

Nig

er,

Cha

d

(deg

rade

d

dry

valle

ys)

Afr

ica

food

s;

past

oral

ism

/mea

t;us

e va

lue

only

; m

arke

t pri

ce

met

hod;

In N

iger

, ave

rage

gro

ss r

even

ue o

f ~. E

UR

760

pe

r us

er w

as a

chie

ved,

but

var

iatio

n w

as

cons

ider

able

, fro

m E

UR

200

–1,9

00 (T

able

4).

Exp

ense

s fo

r gr

owin

g th

e cr

ops

still

nee

d to

be

ded

ucte

d fr

om th

ese

estim

ates

. Cos

ts o

f w

ater

-spr

eadi

ng w

eirs

var

y, d

epen

ding

on

phys

iogr

aphi

c se

ttin

gs, s

truc

ture

, and

cos

t fo

r co

mpa

nies

. In

Bur

kina

Fas

o an

d N

iger

, th

e co

sts

per

wei

r ra

nge

from

EU

R 6

00–

1,50

0/ha

, dep

endi

ng o

n co

nstr

uctio

n (e

.g.

with

or

with

out a

ford

) and

phy

siog

raph

ic

sett

ing.

Indi

vidu

al w

ater

-spr

eadi

ng w

eirs

in

Bur

kina

Fas

o co

st o

n av

erag

e ~1

2 m

illio

n C

FA

fran

cs (~

EUR

18,

000)

per

wei

r, an

d be

twee

n 30

–36

mill

ion

CFA

fran

cs (E

UR

46,

000

and

55,0

00) p

er w

eir

in C

had.

Ave

rage

ann

ual

mai

nten

ance

cos

ts a

re e

stim

ated

to b

e 0.

5%

of c

onst

ruct

ion

cost

s. 9

wei

rs c

ostin

g 25

3 m

illio

n C

FA fr

ancs

(EU

R 3

90,0

00) w

ere

built

in

Gag

na, B

urki

na F

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121

List of figures Figure 1 Pathways to sustainable land management, considering agricultural (green)

and alternative livelihoods (orange) (adapted from Adeel & Safriel 2008 35, sourced from Thomas 2008 34, pg. 599) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Figure 2 The provision of ecosystem services from natural capital: Linkages between ecosystem services and human well-being (adapted from Millennium Ecosystem Assessment 2005, Figure A, pg. vi 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Figure 3 Total economic value with types of ecosystem services and examples (adapted from Nkonya et al. 2011, pg. 70, and Soussan and Noel 2010 38, 49) . . . . . . . . . . . . . . . . 30

Figure 4 The Total Economic Value concept and existing valuation methods (adapted from Bertram & Rehdanz 2013, pg. 28 51) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Figure 5 Continuum of land states between fully functioning and fully degraded, and the relationship between the costs of degradation and potential benefits from restoration (adapted from Quillérou & Thomas 2012 50) . . . . . . . . . . . . . . . . . . . 34

Figure 6 Economic benefits and costs from action from preventing land degradation (adapted from Nkonya et al. 2011, pg. 4 38) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Figure 7 A decision-making framework with net economic benefit as choice criterion (i. e. economic benefits minus costs) (Source: report authors) . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Figure 8 Recent interest in land-related publication, in line with food security issues . . . . . . . . . 49

Figure 9 Geographical repartition of resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Figure 10 Geographical repartition of authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Figure 11 Proportion of resources for each ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Figure 12 Number of resources for each ecosystem service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Figure 13 Number of resources for each quantified value and valuation method . . . . . . . . . . . . . . . . 54

Figure 14 Repartition of resources across the ELD working groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Figure 15 Cost of action as a % of cost of inaction – case studies (von Braun et al. 2013 11) . . . . . . . . . . . 55

List of tables Table 1 Hypothetical evaluation of three options for soil and water conservation

practices that address land degradation on hillsides (adapted from Biot et al. 1995 30) . . . . 16

Table 2 Problems related to land management, economic analyses, and possible actions . . . . . . . 22

Table 3 Examples of calculation of the total economic value for alternative land-based activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Table 4 Economic value types that are typically estimated for each ecosystem service (from Quillérou and Thomas 2012 50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Table 5 Economic options for investments into land-based activities and results . . . . . . . . . . . . . . . . 38

Table 6 Clustering and validation results (Nkonya et al. 2013 26, Table 1, pg. 13) . . . . . . . . . . . . . . . . . . . . 46

Table 7 Drivers related to land degradation and their causes (adapted from von Braun et al. 2013 11, Table 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Table 8 Potential scenarios, from most ideal (darker green) to least (darker brown) (adapted from the UK National Ecosystem Assessment 2011 27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

122

List of boxes Box 1 Ecosystem services (adapted from the Millennium Ecosystem Assessment 1) . . . . . . . . . . . . . . . . . . 16

Box 2 Examples of improved land management derived from economic valuations of ecosystem services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Box 3 Calculation of the Total Economic Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Box 4 Options and pathways for action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Box 5 Examples of adaptations to facilitate and foster action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Box 6 Criteria for selection of case studies to be commissioned by the ELD Initiative . . . . . . . . . . . . . 47

Box 7 Issues faced when implementing valuation techniques in developing countries (from Christie et al. 2008 89) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Box 8 Pressures and drivers of land degradation for consideration in economic assessment of action (sourced from von Braun et al. 2013 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Box 9 Knowledge gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

List of selected case studies Case Study 1 Total economic valuation and the establishment of national and

international markets for ecosystem services (Turner et al. 2012 17, as reported in The Guardian’s Global Development 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Case Study 2 Deciding between alternative land options when trade-offs must be made: Vietnam (DO 2007 40) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Case Study 3 A “south-south” (developing country – developing country) demonstration of concern over land deals: Ethiopia (sourced from The Guardian 2012 41) . . . . . . . . . . 24

Case Study 4 Conflict arising from undervaluing land: Sierra Leone (sourced from The Guardian 2012 42) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Case Study 5 Pioneering a system of payments for ecosystem services for carbon storage and watershed services: Costa Rica43, 44, 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Case Study 6 Expected benefits prior to action did not fully translate into economic benefits after action (sourced from Kosey et al. 2007 44) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Case Study 7 Increased cost-effectiveness when both benefits and costs are considered (Naidoo and Iwamura 2007 55) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Case Study 8 Shadow interest rate: An example from Europe (Quaas et al. 2012 75) . . . . . . . . . . . . . . 43

Case Study 9 The contribution of forest products to dryland household economies: Kenya (Ngugi et al. 2011 154) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Case Study 10 South East Asia: The values of land resources in the Cardamom Mountains in Cambodia (Soussan & Sam 2011 156) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

THE ECONOMICS OF LAND DEGRADATION

Investment in sustainable land management pays off

The Economics of Land Degradation Initiative is a global study on the economic benefits of land-based ecosystems. The initiative highlights the value of sustainable land management and provides a global approach for analysing the economics of land degradation. The ELD Initiative is uniquely positioned to make this focus an integral part of policy strategies and decision-making.

This Interim Report of the Economics of Land Degradation Initiative is a step towards a comprehensive study of the benefits of practicing sustainable land management and costs of neglecting sustainable land stewardship.

By focusing on obtaining the total economic value of land including the provision of ecosystem services, the initiative brings together a collaborative, international group of researchers, policy-makers and private business in order to alert public and private descision-makers to the forgone opportunities and associated costs of continued land degradation.

This Interim Report highlights the background to the study, including the importance of estimating the potential economic benefits derived from addressing land degradation, suggests a methodological framework whereby countries can undertake their own evaluations and briefly reviews case studies which indicate that the overall economic benefits of adopting sustainable land management far outweigh the costs involved.

The initiative will further produce three separate final reports aimed at the scientific community, policy makers, and private decision-makers.

This report was launched and presented at the Eleventh Conference of the Parties to the United Nations Convention to Combat Desertification (UNCCD COP11) held in Windhoek, Namibia in September 2013.


THE ECONOMICS OF LAND DEGRADATION Economics of Land ... · Total Economic Value The full economic...

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Transcript of THE ECONOMICS OF LAND DEGRADATION Economics of Land ... · Total Economic Value The full economic...