The document discusses using ecosystem service valuation and economic instruments to support scaling up sustainable land management (SLM) strategies. It provides examples from Jordan of valuing services from sustainable pasture management, including increased forage production, groundwater recharge, sediment stabilization, and carbon sequestration. A cost-benefit analysis found the total economic benefits of restoring 100,000 hectares of pastoral lands through a traditional management system exceeded costs by $24-32 million over 25 years. Economic instruments like payments for ecosystem services could help mobilize finance for implementation of SLM practices.

1. The case for using ecosystem service
valuation and economic instruments
to support the scaling up of SLM
strategies.
Vanja Westerberg
IUCN Global Economics Programme
Workshop on alignment and implementation of National Action
Plans with the UNCCD 10 year strategy, Dubai 18-20 June 2014

2. • Why do we need to value ecosystem goods and services
resulting from SLM?
• The case for using ecosystem valuation to support decision
making over land uses.
• Example of sustainable pasture management from Jordan.
• The case for using ecosystem valuation to identify and
mobilize resources for SLM.
• The role of regulatory and economic instruments to help
mobilize finance for implementation of the 10 year strategic
plan
Outline

3. • Reversing land degradation as a national
development priority.
• Benefits to SLM and landscape restoration are
found:
• On-site
• Off-site
Economics of Land Degradation

4.  A problem of externalities

5. • Off-site benefits of SLM
 Private level of investment in SLM < Social
optimal level of investment in SLM
• Off-site costs of Land degradation:
 Actual level of land degradation > social optimal
rate
Explaining the economic rationale
behind Land Degradation

6. • Rate at which topsoil degrades, through agricultural
cultivation or grazing > rates at which it regenerates.
• Since SLM has a positive impact on soils, SLM
implies saving soil for future use.
• Alternatively, farmers may choose to continue to
work the soil intensively at the expense of less soil
available in the future.
The economic rationale behind LD
Farm level economics:

7. ELD theoretical framework
With
SLM
With erosion
(baseline)
Time
Net
Presen
t Value
T2014

8. On-site costs of land degradation may be defined in
terms of
The loss in the long-run net profitability of farming
systems.

9. • Farming households ignore the gains in future
production or income generation
• E.g. due to insecure tenure, lack of understanding of benefits
of SLM, or high private discount rates.
• Any off-site, or external costs or benefits are ignored.
2 CUES
Hence, land degradation is an
economic problem if

10. As for the off-site costs and benefits…
Economists would like to see them:
1) Recognised, valued
2) And accounted for

11. Economic values from
pasture restoration
Direct Use Value
Increased supply of:
Medicinal plants
Fodder
Valued
using
-Avoided
costs
-Stated
preference
Indirect Use Value
Improved:
Carbon sequestration
Sediment stabilisation
Ground water
infiltration
Dry season water
baseflow
Annual water yield
Valued using
-Social cost of
carbon
-Avoided
costs
-Production
function
approaches
-InVEST
-ArcSWOT
-AquaCrop
Biophysical
data
processing
tool
Benefits

12.  Cost Benefit Analysis of SLM strategies in Sudan
(Geradef), Mali (Mopti) and Jordan (Zarqa river
basin)
• ELD initiative
The case for Ecosystem Valuation
•One way to do that
• Ecosystem service valuation

13. An Economic Valuation of
Large-scale rangeland restoration
through the HIMA system within the
Zarqa river basin in Jordan.
Vanja Westerberg
Under the ELD initiative

15. Rationale
 The case for revisiting the
ancient Hima-restoration
principle
o Involving carefully managed
grazing protocols
o « Costs » or necessary efforts
visible.
o Benefits, multiple, but not as
visible
Benefits needs to be translated into a terminology that everybody
(or most people) can relate to  $

16. • We study the value of enhanced:
• Rangeland productivity
• Infiltration of rainfall to groundwater aquifers
• Stabilisation and trapping of sediments
• Carbon sequestration and storage
An economic valuation ecosystem goods and
services associated with HIMA restoration

17. o Define the location
o Bani Hashem Hima
o Within the larger
Zarqa river basin.
Step 1: Where?

18. o MOE MAP
WHERE: ZARQA RIVER BASIN

19. Step 2: Define the baseline scenario
 What would happen over a 25 year time horizon if there is
no changes in current rangeland practices?
 Rangeland productivity rapidly declining – halving of edible
dry matter per ha in 20 years (MoA 2009)
 High livestock numbers compared to carrying capacity of
land (as long as feed subsidy persist)

21. Step 3: Define the future scenario
o …Against which the economic valuation is undertaken
LARGE-SCALE HIMA RESTORATION
USING ROTATIONAL PASTURES

22. Step 3: Define the future scenario

23. o 109’093 ha suitable for HIMA restoration
o Out of a total 359’675.2 ha within the Zarqa river
basin
In TOTAL

26. Value of enhanced rangeland productivity
o We use the experience from Bani Hashem

28. Value of enhanced rangeland productivity –
building blocks
• We have a Hima management principle.
• We know the starting value for plant biomass per
ha.
• We know the plant biomass per ha after 2 years of
protection.
• We know the maximum plant biomass per ha for
the Baadia ecosystem ~ 500 kg/ha (100-200 mm of
rain)

29. Value of enhanced rangeland productivity –
building blocks
 The Noy-Meir sigmoid curve has been shown to accurately
reflect pasture growth in a managed grazing setting (Cacho
1993; Cooper and Huffaker 1997; Ritten 2013)
Growth(biomasst )  *biomasst (1
biomasst
biomass MAX
)

30. Value of enhanced rangeland productivity –
building blocks
We can predict biomass growth within a
HIMA year-by-year.
Biomass per ha in himat1  biomasst Growth(biomasst ) biomass grazedt

31. 0
50
100
150
200
250
300
350
Dry yield per
hectare
DRY BIOMASS ACCUMULATION
AND WITHIN A HIMA SYSTEM

32. 0
10
20
30
40
50
60
70
80
90
Dry yield/ha
BASELINE
Dry biomass grazed in the HIMA versus in
the pure open access baseline scenario
HIMA

33. Value of increased forage availability?
 70-90% of all forage is purchased
Any additional natural rangeland forage will
replace the need to purchase forage.

34. Predicted world market price for barley feed

35. 0
2
4
6
8
10
12
14
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
HIMA with 25% open
access
Open access/baseline
JD/ha
Present Value per ha of rotational Hima pasture versus a
continuation of the current land use/baseline scenario
(r=5%)

36. Value of enhanced rangeland productivity
o Value of additional forage from HIMA restoration (in
terms of barley equivalent) over 25 years
16.8 million JD
o 61 800 JD per 400 ha HIMA

37. The Premium Value of Natural Forage
• Natural forage is praised for its properties:
• Better quality of milk
• Better health of livestock
• We cannot purchase « natural grazing » on the market, nor
« natural forage »
• We therefore need to construct a Hypothetical Market to
elicit values for these ecosystem services

38. Using a Choice Experiment to elicit the value
of rangeland restoration

39. Using a Choice Experiment to elicit the value
of rangeland restoration
ALL FOOD FROM
NATURAL PASTURES 105 JD/month

40. o Households purchase on average 1.7 tons of fodder
per months
o Households are willing to pay a price premium of =
61.8 JD/ton (105 JD/1.7 tons) on natural forage over
‘concentrated feed’.
o True economic value of natural forage over a 25 year time
horizon
o 20.5 million JOD
Using a Choice Experiment to elicit the
value of rangeland restoration

41. o The Zarqa river basin is considered as one of the major
productive ground water basins in Jordan.
o Important to analyse the contribution of rorational pasture
HIMA systems to ground water recharge.
o We use:
o Soil and Water Assessment tool (SWAT model)
Value of enhanced aquifer recharge ?

43. Value of enhanced aquifer recharge and water yield?
2013 2015 2020 2030
Hima
restoration
scenarion
Baseline/
Open
access

44. Value of shallow aquifer recharge
96 000 m3 /year

45. o We look at what pastoralists are Willing To Pay for water
for their flocks
Value of shallow aquifer recharge
~ 2 JD / m3

46. o Present value of water infiltration over a 25 year time
horizon.
o 2.9 million JOD
o Lower bound estimate  Increasing scarcity of water, the
value goes up
Value of shallow ground-water infiltration

47. o Sediments reduce water storage capacity of dams
Value of sediment stabilisation

48. KING TALAL DAM

49.  7.6 Million Cubic Meter (MCM) over 25 years of
sediments are trapped and not deposited in King
Talal Dam as a result of HIMA restoration
Reduced sedimentation from HIMA restoration

50. ……Demand for water will not decline.
o Any lost water storage capacity will have to be
replaced !
Value of sediment stabilisation

51. = 10.9 million JOD
Value of sediment stabilisation
Avoided Dam Construction Cost of replacing 7.6
MCM of water storage:

52.  FOR Soil Organic Carbon we use estimates provided by
the:
 UNEP Global Environmental Facility Soil Organic Carbon
(GEFSOC) system
 Al-Amadat et al., (2007)
 Above ground carbon sequestration is calculated
using IPCC tier 2 guidelines.
Value of Carbon Sequestration

53. Predicted carbon sequestration in HIMA versus
open-access rangelands
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
baseline
hima
Tons/ha

54. Value? Social cost of carbon
JD/ha
0
2
4
6
8
10
12
14
16
The SCC is an estimate of the economic
damages associated with a one ton
increase in carbon dioxide (CO2)
emissions.
Damages include, decreased agricultural
productivity, damage from rising sea levels
and harm to human health related to
climate change

55. Avoided social cost of carbon of Large Scale
Hima restoration
PV of carbon sequestered 
t0
24

Carbon SequestrationSCCt
(1 r)t * Area
Present Value of Carbon sequestration from large-scale
HIMA restoration over a 25 year time horizon
= 6.9 million JOD

57. Implementation costs:
o Community workshops, participatory processes, biomass studies,
observation tower ~ 1 000 JD – 2 000 JD
Management costs:
o Biomass and stocking density studies ~ 800 JD / year for 5-10 years
o Surveilliance by community ~ 8 00 JD / year
Tentative implementation costs and
surveilliance costs:

59. Benefits
Natural forage / Rangeland productivity 21.5 million JD
Groundwater percolation 2.8 million JD
Sediment control 10.1 million JD
Total Present Economic Value 32.1 million JD
Costs
Implementation, community surveillance and
biomass studies
7.3 million JD
Benefits - Costs
Total Net Present Value of HIMA restoration 24.8 million JD
NPV of Cell rotation for 100,000 ha of HIMA including
global carbon sequestration benefits (r=5%)

60. Benefits
Natural forage / Rangeland productivity 20.5 million JD
Groundwater percolation 2.8 million JD
Sediment control 9.1 million JD
Carbon sequestration 32.8 million JD
Total Present Economic Value 64.8 million JD
Costs
Community surveillance and biomass studies 7.3 million JD
Benefits - Costs
Total Net Present Value of HIMA restoration 31.7 million JD
NPV of Cell rotation for 100,000 ha of HIMA including
global carbon sequestration benefits (r=5%)

62. o Costs associated with HIMA implementation and
management will be minimised if
management/land rights are delegated to the
community
o The importance of tenure security
Lessons

63.  Livestock numbers within the Zarqa River Basin
are currently too high for 100% Hima restoration
 Raises a question about fodder subsidies…
 Make fodder subsidies conditional on SLM
practices by the community.
Other lessons

64. o The HIMA system is extremely valuable:
o To pastoral communities in terms of an increased
availability of natural forage
o Also to the Jordanian Society as a whole.
o Large-scale HIMA-restoration can provide
30-60 million JD worth of services over and above
continuing the present land use system over a 25 year
time horizon.
Lessons

65. o HIMA communities are service providers
o Could we imagine schemes whereby ‘beneficiaries’
(e.g. dam owners) help finance SLM providers?
o In general, how to create the necessary incentives
to scale-up HIMA systems, rotational grazing and
SLM practices in general?
Lessons and perspectives

66. The 10-year strategic plan..
Call for affected countries to revise their NAPs into
 Strategic documents supported by biophysical and
socio-economic baseline information
 And include them in integrated investment
frameworks
(Operational objective 2: Policy frameworks)

67. Using economic instruments to
halt land degradation and scale-
up SLM investment

68. o Tackling policy failures
o Cross-compliance schemes
o Economic instruments
o Price based and quantity-based approaches
o Market facilitation approaches
o Regulatory approaches
Enabling policy instruments

69. o Arise when public policies have unintended adverse
consequences. Encourage over-exploitation of the
natural environment.
o E.g. subsidies for cultivation of upland crops that drive
expansion into the marginal lands, subsidies on water and
energy in irrigation schemes, tariff protection for land
degrading crops, and fertilizer subsidies.
The need to tackle policy failures

70. o Example from uplands of Ethiopia (Shifera 2000)
o Subsidies on fertilizer and seeds
o Case for cross-compliance
 Subsidies on productive inputs linked to conservation
(soil stone bunds) can enable poor households to
comply with conservation requirements without the
adverse impacts on their welfare.
The need to tackle policy failures

71. o Those that engender land degradation must pay the
costs either to those directly affected or to the state,
who will act on behalf of the affected.
 China’s soil erosion control fee
 E-VAT in Brazil
 Trading in emission allowances
Principles of economic instruments (PPP)

72. Those entities that provide benefits by lowering, for
instance, off-site impacts of land degradation should
be compensated for their efforts, either directly by
beneficiaries or indirectly by the state.
Economic instruments (BPP)
 PES
Various public payment schemes
 Subsidies, permanent conservation easements,
payments for set-asides, co-finance investments, etc.
 The former can finance the latter

73.  When number of applications to participate in PES
programme exceeds available financing?
 Market facilitation approaches:
 Aim to make existing markets better by enhancing
information or lower transaction costs..
 The case for auction tenders.
 Labels and certification schemes
Innovative financial instruments III

74.  In the absence of economic instruments, insufficient
resources will be devoted to minimizing the impacts
of land degradation
 But, it is also unlikely that SLM can be achieved if
tenure rights are not explicitly considered.
 The classical example relating to tree-tenure…
Economic instruments

75.  Clearly specified, well defined, enforceable property rights
or long term leases:
 Help extend the planning horizon and vest land uses
with the benefits of investing in SLM
 Help improve access to credit for SLM
 The use of economics instruments hinge on property or
management rights.
Regulatory preconditions

76.  Different countries, different context:
 The GM SCORE-CARD approach an effective way of
exploring different mechanisms for resource
mobilization.
Resource mobilization tool-kit

78. Rio convention synergies and co-financing
opportunities

79.  NAPs should translate the principles of the 10-year
strategy into fundable programmes of work.
 Need to increase the scope of resource mobilisation
for SLM.
 Distinct and complementary roles can be played by
different different instruments and sources of
financing:
 Foreign, domestic, public and private, economic and
regulatory
Conclusion

80.  Many possible funding mechanisms.
 Incentives should be implemented with reference to the
problem at hand.
 But fundamentally important first to tackle:
 Underlying policy failures (that promote land degradation)
Can free up significant resources of SLM investment
 Information failures (who pays who benefits from SLM)
The case for Ecosystem Service Valuation
Concluding remarks

81. Thank you for your attention !
Question, comments and suggestions?
vanja.westerberg@iucn.org

82. The case for agroforestry?
 Mopti region in Mali, our initial results point out that:
 Intercropping Acacia Albida trees with millet
May increase soil moisture by 9% throughout the
growing season  Which would increase millet crop
yield of about 10%
 Geradef: Acacia senegal and sorghium intercropped can
increase yields by up to 28% five years after planting
trees

83. Sudan – Geradef : Demonstrating the returns to
acacia senegal and seyal agroforestry.
• The development of mechanized farming systems in
Eastern Sudan has led to a rapid expansion of crop
area…but at the expense of drastically reduced fallow
periods.
• Current farming practices (no nutrient import process +
monocropping) has led to soil nutrient mining: Sorghum
yields declined at a rate of approx. 1% per year over the
last 20 years.
• Crop and water growth model with local climate and soil
data show an agroforestry system (sorghum + Acacia
senegal) has the potential to increase sorghium yield by
28% after only 5 years of planting the trees.