The Economics of Desertification, Land Degradation, and Drought

• other ecosystems offer benefits to humans that clearly cannot be neglected (see TEEB
reports for illustrations); and
• dynamic interactions between the costs of DLDD and the opportunity costs of changes in
land use—that is, changing the nature of ecosystems and, therefore, of the services and
benefits provided for humans—should be considered.
As stated in the objective that follows, this study will review the current knowledge and the
state of the art of analytical approaches to DLDD; will propose a pragmatic approach for assessing
DLDD; and will describe the nature of the partnership required to implement a global E-DLDD study.
Objectives
The objectives of this report are as follows:
1. To assess the current knowledge and the state of the art of analytical approaches to
DLDD and to identify knowledge gaps; the discussion focuses on
− the causes and driving forces of DLDD;
− the effects of DLDD on land productivity, including changes in the provision of
terrestrial ecosystem services;
− the social and economic costs of DLDD; and
− the costs and benefits of enhancing land productivity and (re-) establishing ecosystem
services.
2. To propose a methodology for an integrated evaluation of the aforementioned costs based
on DLDD assessments at global, regional, and local levels.
3. To describe the nature of the partnerships required for regional and global assessments
and to recommend potential partners.
The outputs are as follows:
1. A wide range of state-of-the-art knowledge in the area of the economic costs of land
degradation and sustainable land use, building, in particular, on the existing literature on
the valuation of DLDD and its effects vis-à-vis the valuation of sustainable land
management. The primary interest is in the comparison of cost of action versus cost of
inaction.
2. A review of the available methodologies for assessing the social and economic costs of
DLDD, with recommendations for selecting a methodology for choosing representative
case studies whose results could be extrapolated to comparable sites in order to obtain an
estimate of the global cost of DLDD and the global benefits of preventing or mitigating
DLDD.
3. Requirements and advice on the methodology for carrying out representative case study
assessments and the global study, as well as a consideration of the nature and type of
partners and partnerships needed.
Conceptual Framework
This report first seeks to assess the existing knowledge and the state of the art of analytical approaches
to DLDD, as well as the costs of DLDD, and to identify knowledge gaps in this regard. Second, the
report proposes a methodology for prioritizing across possible geographic areas of intervention. The
approach we recommend is based on an assessment of the costs of investing in the effective
prevention and mitigation of DLDD against the costs of the loss in terrestrial ecosystem services and
the benefits those services would deliver to human beings—that is, the cost of action versus inaction.
Finally, this report reviews and advises on the methods that attempt to identify activities and areas in
which investments would have the highest expected returns.
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