This document discusses aids to decision making for sustainable land management. It identifies three main points: [1] the need for robust, cost-effective methods of estimating costs and benefits of land degradation/sustainable land management; [2] better understanding how land users make decisions; and [3] how to reverse 'investment deserts' of degrading land. It analyzes gaps in tools for evaluation and proposes using a total economic value framework combined with the Millennium Ecosystem Assessment to measure various land services. Harmonizing methodology across scales and contexts can help estimate total economic value and inform sustainable land management decisions.

1. Analysis of decision making for
sustainable land management
Richard Thomas
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2. Aids to decision making for SLM
• 3 main points:
• 1. Need for robust cost effective methods of
estimating costs, benefits of land
degradation/sustainable land management and the
value of land – where are the gaps?
• 2. Understand better how land users take decisions
• 3. How to reverse the ‘investment deserts’ of
degrading land
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3. Aids to decision making for SLM
• 1. Need for robust cost effective methods of
estimating costs, benefits of land
degradation/sustainable land management and the
value of land – where are the gaps?
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4. Identified gaps
Technological
Policy gaps
Institutional and private sector
Environmental evaluation
– Lack of harmonized methodology (scales, discount rate ,
low cost)
– Lack of information on social costs of land degradation
– Lack of information on non-market values of ecosystem
services
– Limited understanding of value of ecosystem services to
local livelihoods

5. Categorisation of economic values:
Total Economic Value framework

6. Examples of valuation of ecosystem services
for improved land management
• Provisioning services
– Estimation of costs of soil erosion (productivity loss,
replacement costs
• Regulating services
– Estimation of non-agricultural and non-timber values
to set up carbon payments
• Cultural services
– Estimation of recreational values to develop the
tourism industry

7. Combining the two frameworks:
Millennium Ecosystem Assessment and Total
Economic Value
Components of Total Provisioning Regulating Cultural Supporting
Economic Value services services services services*
Direct use   
Use value
Indirect use   
Option  
Non-Use
value Existence

(Bequest)
* Risk of double-counting
Intuitively, our objective is to ‘sum’ all the ticks to derive the total
economic value of land services

8. Relative ease of
measurement

9. Examples of land services and how they are
measured
Ecosystem service Examples of what is Method used
measured
Provisioning services
Fresh water Drinking and irrigation Direct Market Price, benefit
water transfer (BT)
Regulating services
Water regulation Drainage, drought Cost-based methods (CBM),
prevention, flood risk BT
prevention
Source: Schild et al., 2013

10. What do we know?
Location of dryland observations on land values
and aridity index
Source: Schild et al., 2013

11. Data: Dryland service vs. valuation method
57
Correspondence between
60 specific dryland services and
valuation methods
Number of observations
50
29
40
18
6 10 19
30 2 5 7
11 12 Valuation method
5 4
12
20 1 25 7
1 1 12 1
6 1 Benefit transfer
8 1
10 1 14 Direct market pricing
1 13
6 Factor income
2 5
2 Cost-based
0
1 6 Travel cost
2
Contingent valuation
Other methods
Dryland service
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12. Value of dryland ecosystem services
Recreation& tourism
Biodiversity protection
Pollination
Soil formation
Water flow regulation
Climate regulation
Water provision
Food provision
Raw material provision
0 2000 4000 6000 8000 10000 12000 14000
Source: J. Schild et al., 2013
Mean dryland value $/ha/yr
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13. Decision-making framework
A given piece of land, for a
Starting point: given legal, political and
economic context
3 options for Do nothing Alternative livelihoods
action: Improved productivity
(business as usual) (economic activities)
Estimate total
economic value Net economic Net economic Net economic
of economic benefit from benefit from benefit from
costs and Improved productivity business as usual Alternative livelihoods
benefits:
Choose option with greatest net economic benefit for action (or inaction)
and adapt legal, political and economic context
to enable adoption of chosen option

14. Proposed approach for estimation of the
economic cost of land degradation
Source; Quillérou & Thomas, CAB Reviews 7, 2012
Provisioning Regulating
Components of Total Economic Value Cultural services
services services
Direct use   
Use value
Indirect use  
Option  
Non-Use value Existence

(Bequest)
Costs of extreme
events, costs of
Alternative 1: Productivity loss
externalities Value of (rural)
Total Economic Value as socially model (non
and carbon tourism (demand-
weighted sum of individually demand-based
storage model based approach)
estimated ecosystem values approach)
(non demand-
based approach)
Alternative 2:
Contingent valuation or choice modelling
Direct estimation of Total Economic
(demand-based approach)
Value

15. Conclusions
1. Need for harmonized methodology that reduces
confusion over different methods resulting in
different values.
2. Methods need to suit national environmental,
political, economic and institutional frameworks
and conditions (applicable).
3. Many more case studies are needed to test
methods that should involve capacity building
4. Need to build in decision making processes into
economic valuation methods.
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