The Economics of Desertification, Land Degradation, and Drought

We estimated the cost of action (desalinization) to be about $127 per hectare (Figure 6.13). As seen in
Niger, the cost of action is smaller than the cost of inaction, suggesting the profit incentive is not the
reason for inaction.
India’s Success Stories in Preventing Land Degradation
Community Watershed Management and its Impact on the Water Table in Tamil Nadu
Rising water due to poor drainage has been one of the challenges of agricultural water in India
(Boumans et al. 1988). A study done in Tamil Nadu evaluated the impact of community-based
watershed management through Panchayati Raj institutions (customary governance institutions), local
user groups, and NGOs. Results show that community-based watershed management in Tamil Nadu
lowered the water table, increased perenniality of water wells, and increased the availability of water
for livestock and domestic use (Kuppannan and Devarajulu 2009). This finding is consistent with
other studies that have shown successful community-based natural resource management in India and
elsewhere (see, for example, Kerr 2007; Ostrom and Nagendra 2006). The findings are also consistent
with the discussion in the institutional section, in which we argued for the importance of local
institutions in managing natural resources. The example of India illustrates the importance of
participatory and bottom-up approaches, which places natural resource management into the hands of
local institutions and communities. A review by Darghouth et al. (2008) shows that participatory
watershed management was successful when the programs were of common interest to the
community, were flexible, and were a mechanism for capacity building and empowerment of local
communities.
As a result of the success of community-based watershed management in India, the
government has adopted policies that give mandates to communities to manage watershed issues
(Darghouth et al. 2008). However, community-based watershed management has not been effective in
managing larger areas of watersheds (Darghouth et al. 2008) or where culturally or economically
diverse communities are involved (Kerr 2007). This finding suggests the need for creating wellcoordinated
vertical and horizontal linkages that will address complex watershed management
scenarios, thus further illustrating the argument discussed in Section 4.
Agroforestry Practices and Renewable Energy Programs
India is one of a few countries that has seen a significant improvement in rainfed agriculture. Bai et al.
(2008b) showed improvement in rainfed cropland and pastures in western India. Such an
improvement is evidence of the great effort the country has put into improving agricultural
productivity. A contributing factor to the increased normalized difference vegetation index (NDVI) in
rainfed agriculture is the adoption of agroforestry, which has been a traditional practice in India
(Pandey 2007). Agroforestry trees in India are found on about 17 million hectares of land (Pandey
2007), equivalent to about 10 percent of India’s agricultural area (FAOSTAT 2008). India is one of
the leading producers of jatropha, a crop that can grow on highly degraded soils and in arid areas.
Jatropha has been used to reclaim 85,000 hectares of degraded land (ICRAF 2008) in northern India.
In addition, jatropha production on highly degraded lands has helped lift people out of poverty. With
an initial estimate of $650 per person, beneficiaries of a project in northern India earned on average
$1,200 from sales of jatropha seeds only three years after the initial investment (ICRAF 2008).
Targeting degraded lands is one of the key features of this project and could lead to the reclamation of
about 30 million hectares of severely degraded land in India (ICRAF 2008).
Similarly, some cities in India have been providing incentives for the use of solar energy to
heat water. India spends about 45 percent of export earnings on energy imports (UNEP 2011); but the
country has been working hard to increase production of domestic energy (which includes the
jatropha production program discussed above). India is currently one of the leading countries in the
production and consumption of renewable energy in the world. Investment in renewable energy
increased from $46 billion in 2004 to $173 billion in 2008 (UNEP 2011); non–Organization for
Economic Cooperation and Development (OECD) countries—in particular, Brazil, China, and
India—accounted for 40 percent of this growth. In 2008, India was the sixth country in the world to
produce renewable energy (UN Data 2009). One strategy that India is using to promote the use of
renewable energy is property tax rebates for those who use solar water heaters, and a number of cities
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