The Value of Land
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Naomi Stewart, Hannes Etter, Nicola Favretto, Tobis Gerhartsreiter, Mark Schauer, Richard Thomas. (15/9/2015). The Value of Land. Bonn, Germany: Economics of Land Degradation Initiative (ELD).
Abstract
Land has long been valued solely for the market
price of crops, or similar commodity-based market
values. The services that ecosystems provide are
now understood to include not only those that have
market values (e.g., charcoal, minerals, crops), but
also those which have non-market values that also
contribute to our economy and social well-being,
albeit in less direct ways (e.g., water filtration,
provision of clean air, nutrient cycling). These
are all collectively known as ecosystem services,
and are categorised as provisioning, regulating,
supporting, and cultural services (see Box 1.1).
Including non-market valuation is critical to inform
decisions on resolving the issues of desertification
and land degradation through economic tools,
as many of these values take place outside of the
current market values, and thus land valuations.
Land degradation is defined by the United Nations
Convention to Combat Desertification (UNCCD)
as ‘a reduction or loss of the biologic or economic
productivity and complexity of rain-fed cropland, irrigated cropland or range, pasture, forest, and
woodland’15. Here, as in previous ELD reports (e.g.,
the ELD Initiative Scientific Interim Report, 2013), it
is referred to as the reduction in the economic value
of ecosystem services and goods of land, as a result of
human activities or natural biophysical causes. As desertification and land degradation have
negative impacts on land and land-based
ecosystems, much of the economic focus on land
degradation to date has been on the costs resulting
from these issues (of inaction, as well as action).
The estimations of both direct and indirect costs
(see Table 1.1) are often imprecise, based mainly
on biophysical information on land degradation
and its impacts, singular – instead of multiple –
estimates of impact costs, unvalued non-market
costs, and variation in estimation methods11, and
this is an even more pronounced issue in indirect
costs. However, assessments of the economics
of land degradation to date have shown that the
costs of action are lower than the costs of inaction,
or ‘business-as-usual’16, which demonstrates the
value of taking action towards sustainable land
management.
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Thomas, Richard https://orcid.org/0000-0002-8009-5681