The Economics of Desertification, Land Degradation, and Drought

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Framework: Confronting Action versus Inaction The conceptual framework used for the analysis in this report is presented in Figure 1.1. The different elements of the conceptual framework are then discussed in more detail in later sections. Figure 1.1—Conceptual framework for assessing the costs of action versus the costs of inaction regarding DLDD (with net present value outcomes) Source: Author’s creation. Note: SLM = Sustainable land management. Scenarios A and B represent two states of the world—one in which action is taken to prevent or mitigate DLDD or restore land after DLDD took place (Scenario A), and another in which no action against DLDD has been taken (Scenario B). The round-edged gray boxes represent physical elements of the system under consideration that have direct relationships, and the black arrows denote the direction in which the impacts flow. Proximate causes of land degradation are those that have a direct effect on the terrestrial ecosystem. The proximate causes are further divided into biophysical proximate causes and unsustainable land management practices. Examples of the biophysical proximate causes of land degradation are topography, which determines soil erosion hazard, and climatic conditions, such as rainfall, wind, and temperature, all of which could prevent or enhance land degradation. For example, rainstorms could trigger flooding and soil erosion. Rainfall could also enhance land cover and therefore prevent soil erosion. Unsustainable land management, such as deforestation, soil nutrient mining, and cultivation on steep slopes, directly leads to land degradation. The underlying causes of land degradation are those that indirectly affect the proximate causes of land degradation. For example, poverty could lead to the failure of land users to invest in sustainable land management practices. Similarly, policies that enhance investment in land management, such as payment for ecosystem services in China, which enhanced tree planting on steep slopes in northwestern China in the western provinces, can affect the proximate causes of land degradation (erosion on slopes in this case). Population density could lead to intensification (Boserup 1965; Tiffen, Mortimore, and Gichuki 1994) or to land degradation (see, for example, Grepperud 1996), depending on other conditioning factors. The causes of land degradation are discussed in more detail in Section 2. 4
The level of land degradation determines its outcomes or effects—whether on-site or offsite—on the provision of ecosystem services and the benefits humans derive from those services. If actions to halt or mitigate DLDD are taken, the actors involved in halting mitigation are determined by the causes of land degradation that need to be addressed, by the level of land degradation, and by its effects. Actors can then take action to control the causes of DLDD, its level, or its effects. Many of the services provided by ecosystems are not traded in markets, so the different actors do not pay for negative or positive effects on those ecosystems. The concept of externalities refers to the costs and benefits arising from the production or consumption of goods and services for which no appropriate compensation is paid (for example, off-site effects such as sedimentation and indirect effects such as migration and food insecurity). The value of such externalities is not considered in the farmer’s land use decision, which leads to an undervaluation of land and its provision of ecosystem services and, in suboptimal levels, of DLDD. The dark gray boxes indicate the type of economic analysis that is carried out, and the light gray arrows show the flow of information that is necessary to perform the different elements of the global economic analysis. A decrease in the provision of terrestrial ecosystem services and their benefits has direct economic costs to humans, such as decreased food security and increased food prices (via the role of markets). These costs are quantified in the top-right gray box. In addition to affecting the stream of benefits derived from ecosystem services, DLDD also has indirect effects of importance to humans. For instance, it affects land and other agricultural input markets, thus affecting their prices and the prices of the goods produced. Further, the impacts on the agricultural market (on any sector that depends directly on terrestrial ecosystem services and benefits) have intersectoral, economywide effects that are passed to other sectors by what economists call multiplier effects. Thus, these direct and indirect effects of DLDD can widely affect poverty and national income and thus have far-reaching socioeconomic consequences. The indirect effects and their costs are analyzed in the two parallel dark gray boxes. Ideally, all indirect and off-site effects should be accounted for in the economic analysis to ensure that the assessment is from society’s point of view and includes all existing externalities, in addition to the private costs that are usually considered when individuals decide on land use. How the different concepts described so far—externalities, private and social costs, and on-site, off-site, direct, indirect, current, and future costs—relate to each other is depicted in Figure 1.2. Figure 1.2—Costs and benefits—Concepts Source: Author’s creation. Similarly, actions against DLDD have direct benefits and costs—the costs of specific measures and economywide indirect effects—that is, opportunity costs. In other words, resources devoted for these actions cannot be used elsewhere. Thus, mobilizing those resources to prevent or mitigate DLDD affects other sectors of the economy as well. The comparison of the values obtained in the two parallel dark gray boxes—the costs of action versus inaction against DLDD—is the purpose of the global analysis. Institutional arrangements—or the “rules of the game” that determine whether actors choose to act against DLDD and whether the level or type of action undertaken will effectively reduce or halt DLDD—are not represented in the conceptual framework. Nonetheless, it is crucial to identify and 5
Page 1 and 2: IFPRI Discussion Paper 01086 May 20
Page 3 and 4: Contents Abstract vii Acknowledgmen
Page 5 and 6: List of Figures 1.1—Conceptual fr
Page 7 and 8: ABSTRACT Attention to land degradat
Page 9 and 10: ABBREVIATIONS AND ACRONYMS ADB Asia
Page 11: SCAR Soil Conservation in Agricultu
Page 14 and 15: In the present report, the conceptu
Page 18 and 19: understand these arrangements in or
Page 20 and 21: Figure 1.3—Prevention, mitigation
Page 22 and 23: on assessments at the micro level (
Page 24 and 25: does not clearly distinguish betwee
Page 26 and 27: Figure 2.1—GLASOD (1991) global a
Page 28 and 29: International Earth Science Informa
Page 30 and 31: Box 2.1—Continued Normalized Diff
Page 32 and 33: Figure 2.4—Loss of annual NPP, GL
Page 34 and 35: Figure 2.7—Annual loss of NPP in
Page 36 and 37: Table 2.2—Nitrogen application ra
Page 38 and 39: Figure 2.12—Areas affected by hum
Page 40 and 41: output—which is a selection of su
Page 42 and 43: GLADIS also underlines the linkage
Page 44 and 45: Box 2.2—Continued A map on global
Page 46 and 47: Table 2.3—Global land degradation
Page 48 and 49: Table 2.3—Continued Project and d
Page 50 and 51: Table 2.4—Continued Location 10 2
Page 52 and 53: Table 2.6—Extent and severity of
Page 54 and 55: National Level Policies As discusse
Page 56 and 57: Such support has also been directed
Page 58 and 59: Migration, either as outmigration o
Page 60 and 61: The preceding discussion shows the
Page 62 and 63: Results Correlation Analysis Consis
Page 64 and 65: Figure 2.23—Relationship between
Page 66 and 67:
Effects of Land Degradation On-Site
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soils and higher land productivity.
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Acknowledging the work of GLADIS, a
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health, education, security, enviro
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Box 3.1—Recent major economic ass
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An appropriate economic tool for a
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Figure 3.4—Cost of action and cos
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enefit—for example, income. This
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Figure 3.6—Ecosystem services fra
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Replacement Cost Approaches The rep
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Box 3.2—Measuring land degradatio
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land degradation and conservation m
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Flooding and Aquifer Recharge Richa
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year (Diao and Sarpong 2007). Sonne
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Bringing together the different cos
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This section discusses the most imp
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governing land use patterns (Leeman
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promotion of community forest manag
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Box 4.3—Reducing emissions from d
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Soil Nutrient Depletion Soil nutrie
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that the yields of salt-tolerant wh
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Figure 5.3—Forest area as a perce
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Figure 5.5—Per capita water stora
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Introduction 6. CASE STUDIES Five c
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Salinity The effects of salinity on
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Third, to correctly decide which ac
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Costs of Action and Inaction We eva
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The NGOs and religious organization
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have a strong influence on NRM (And
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We estimated the cost of action (de
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Figure 6.15—Costs of action and i
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Of interest to us is the strategy t
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7. PARTNERSHIP CONCEPT The review o
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degradation. All this should be don
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Finally, the global assessment of D
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the experience of and lessons learn
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Table 7.3—Example of E-DLDD resea
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8. CONCLUSIONS Since the publicatio
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lowest in the region. From a socioe
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Table A.1—Land degradation assess
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Table A.2—Continued Author Region
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Table A.3—Continued Author Countr
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Table A.5—Costs of land degradati
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Figure B.1—Land use systems of th
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REFERENCES Abelson, P. 1979. Cost B
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Benin S., E. Nkonya, G. Okecho, J.
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Clark, E. H. 1985. The Off-Site Cos
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De Jager a., D. Onduru and C. Walag
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Foster, V., and C. Briceño-Garmend
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Holden, S. and H. Lofgren. 2005. As
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Lapar, M. L., and S. Pandey. 1999.
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Nachtergaele, F., M. Petri, R. Bian
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Pender, J. L. 2009. “Food Crisis
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Sauer, J., and H. Tchale. 2006. Alt
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Tan, Z. X., R. Lal, and K. D. Wiebe
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———. 2010. “Assessment of L
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RECENT IFPRI DISCUSSION PAPERS For
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