Economics of Land Degradation and Improvement: An Introduction and Overview

Land degradation is occurring in almost all terrestrial biomes and agro-ecologies, in both low and high income countries. However its impact is especially severe on the livelihoods of the poor who heavily depend on natural resources. Despite the severe impact of land degradation on the poor and the crucial role that land plays in human welfare and development, investments in sustainable land management (SLM) are low, especially in developing countries. This chapter summarizes the results from global and regional levels as well as 12 case study countries. The chapter also draws conclusions and implications for taking action against land degradation. Land degradation stretches to about 30 % of the total global land area and about three billion people reside in degraded lands. The annual global cost of land degradation due to land use/cover change (LUCC) and using land degrading management practices on static cropland and grazing land is about 300 billion USD. Sub-Saharan Africa (SSA) accounts for the largest share (22 %) of the total global cost of land degradation. Only about 46 % of the cost of land degradation due to LUCC—which accounts for 78 % of the US$300 billion loss—is borne by land users and the remaining share (54 %) is borne by consumers of ecosystem services off the farm. This further illustrates that land degradation is a global problem even though its impact is much greater on poor land users. The cost of taking action against land degradation is much lower than the cost of inaction and the returns to taking action are high. On average, one US dollar investment into restoration of degraded land returns five US dollars. This provides a strong incentive for taking action against land degradation. This study shows that simultaneously enhancing local and national level governments, land tenure security, and improving market access is the most effective strategy for addressing land degradation. Given that LUCC accounts for the largest share of cost of land degradation, t here is a need for developing land use planning that will ensure that forests and other high value biomes are effectively protected. Empirical evidence has shown that involvement of local communities in managing forests and other high value biomes and creating mechanisms for them to directly benefit from their conservation efforts lead to more effective protection than is the case with centralized protection. The assessment in this volume is being conducted at a time when there is an elevated interest in private land investments and when global efforts to achieve sustainable development objectives have intensified. This means, results of this volume will contribute significantly to the ongoing policy debate and efforts to design strategies for achieving sustainable development goals and other efforts to address land degradation and halt biodiversity loss.