Possibilities of using the LDN concept for economic valuation of
land
Economic assessment of lands is essential in the search for additional
LDN indicators and measures. Since the concept of LD includes the need
for economic approaches (UNCCD 1994), it is difficult to draw a coherent
picture of LDN achievement only using biophysical indicators without
direct economic assessments in terms of damage-profit, loss-income,
dynamics of value and price, etc. (Tsvetnov et al. 2021) emphasized that
a significant drawback of the LDN concept is that none of indicators, as
well as the PDL indicator, include an economic interpretation. Natural
capital is not monetarized, which makes it necessary to reassess
degradation using an “external” methodology. In (Orr et al. 2017) the
logic of integrated assessment of ecosystem services is announced as it
is coming from the LDN definition, however, actually only the
productivity of aboveground biomass (estimated by NDVI), is analyzed,
and soil features are limited to the carbon stock. (Tsvetnov et al.
2021, Makarov et al. 2021, Makarov et al. 2021a, 2021b, 2021c, Tsvetnov
et al. 2020) demonstrate on pilot sites that through soil parameters of
agro-depletion (main nutrients, humus, pH) or alkalinization the damage
can be monetarized and for different sites ranges from 4 to 153 thousand
rubles. This calculation of damage includes not only the costs of
restoring soil potential, but also the cost of inaction. It is
emphasized that this method is most applicable at local level, whilst at
a regional level a direct method for calculating the cost of restoring
degraded territory is not effective. It is recommended then to apply
formulas considering the area, rate of pollution, degradation and
littering, as well as the regional economic properties and special land
rates assigned by the state regulator.
The development of LDN-based economic assessment is in the early stages,
since from the economic science perspective, these approaches are
simplified and do not take into account the local characteristics of
labor costs, agricultural markets, infrastructure costs and other
indicators that affect the economic efficiency of agricultural
production in addition to soil properties. The resulting cost
distortions are too high, so the damage values obtained by these methods
can be applied only under certain conditions. Furthermore, all of these
methods also ignore the ecosystem services of lands, which greatly
limits the possibilities of their application for solving sustainable
development issues. The need to account soil ecosystem services as part
of the “loss of profits” was demonstrated by (Tsvetnov et al. 2021).