Economics of Land Degradation in China

Land degradation is a complex process that involves both the natural ecosystem and the socioeconomic system, among which climate and land use changes are the two predominant driving factors. We reviewed the status of degradation in grasslands, forests and cultivated lands in China, as well as the major drivers of land degradation in the North China Plain. The previous research shows that an increase in rainfall and temperature would significantly and positively contribute to land improvement. The conversion from cultivated land to grassland and forest land showed positive relationship with land improvement, while conversion to built-up area is associated with land degradation. In addition, human agricultural intensification may help improve the land quality. The overall economic development may exert positive impacts on land quality, while the increased agricultural production may exert negative impacts on land. Infrastructure construction would modify the land surface and further result in land degradation. Finally, our analysis of the costs of actions to address land degradation in China shows that the annual costs of land degradation due to land use and cover change (LUCC) is equal to about 24.5 billion USD. In addition, the cost of grassland degradation, without shifts in LUCC, is estimated to equal about 0.49 billion USD due to losses in livestock productivity resulting from grassland degradation. Moreover, the costs of cropland degradation for three crops: wheat, maize and rice, is estimated to be about 12 billion USD annually. The total cost of land degradation due to LUCC and using land degrading management practices on cropland and grazing land is 2007 US$37 billion or 1 % of China’s 2007 GDP. Finally, the analysis shows that the costs of the rehabilitation of the lands degraded due to LUCC are significantly lower than the costs of inaction, with the returns of up to 4.7 times for every yuan invested over a 30-year period. This underscores the need to take action against land degradation. This is particularly important given China’s new sustainable development and green economy approach reflected in its five year plan (2011–15) and other environmental policies. Results of this study will inform policy makers on the key areas for addressing land degradation.