How to do a Cost-Benefit Analysis in ELD: a case study from the Ethiopian Highlands

Hans HurniUniversity of Bern

ELD Ethiopia Project

Scope: Soil degradation and sustainable land management in rain-fed agriculture

Location: Ethiopian Highlands

Spatial scale: Multi-scale from local to national

Strategic focus: Provide a spatially explicit model for cost-benefit analysis (CBA) of sustainable land management (SLM). Define further inputs for modelling the total economic value (TEV) of the Ethiopian Highlands. Inform decision-makers about best options for sustainable water and land management in Ethiopia.

3H. Hurni 1998

Definition of Total Economic Value (TEV):

“The full economic value allocated by society as a whole. This includes use value (direct and indirect, option value) and non-use value.”

ELD Initiative 2013

Case study Ethiopian Highlands:- direct use value through agricultural (crop and

livestock) production- indirect use value through water (and sediment)

delivery for lowland irrigation- option value for ecotourism and biodiversity (e.g.

wildlife) conservation- non-use value through water (and sediment)

delivery for lowland irrigation

Cost-benefit analysis:“A comparison of all of the costs and benefits associated with taking action, comparedto ‘business-as-usual’ (changing nothing). ”

ELD Initiative 2013

ELD Ethiopia Project 2014Spatially explicit case study of the direct agricultural use value of land in the Ethiopian Highlands:

- Costs and benefits of past and actual (SWC) action

- Costs and benefits of optimum (SLM) action

- Costs and benefits of ‘business-as-usual’ (inaction)

Recalling the 6+1 steps to estimate the economic benefits and costs of action

1. Inception: Identification of the scope, location, spatial scale, and strategic focus of the study2. Geographical characteristics: Assessment of quantity, spatial distribution, and ecological characteristics3. Types of ecosystem services: Analysis of ecosystem services stocks and flows4. Role of ecosystem services in community livelihoods and economic valuation: Role of the assessed ecosystem services in the livelihoods of the communities; role of overall economic development5. Land degradation patterns and pressure: Identification of land degradation patterns, drivers and pressure on the sustainable management of land resources6. Cost-benefit analysis and decision-making: Assessment of sustainable land management options+1 step: Take action! UNCCD; in ELD Methodology 2013

7K. Herweg 1989

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Cultivated area KremtCultivated area BelgTotal harvested biomass (Belg and Kremt)Total grain yield (Belg and Kremt)Trend of total grain yieldTrend of biomass yield

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Changes in cultivated biomass and grain yield in an Ethiopian catchment (110 ha) conserved in 1983

Source: Mirka Loetscher 2003, based on SCRP data

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ELD Ethiopia Project Approach (2014)

Component 1: Land cover classification - Land cover map at the national level - Classification approach using GIS and Remote Sensing

Component 2: Detection of physical SLM structures - Data availability (high resolution Google Earth) - Automated mapping of SLM structures (remote sensing)

Component 3: Assessment of soil erosion and the relationship to crop yield - RUSLE model and calibration data from field experiments - Soil erosion assessment beyond RUSLE - Relating soil erosion to soil depth and crop yield

Component 4: Evaluating the costs of soil degradation and the economics of SLM practices - Implementation steps of economic valuation - Spatial valuation of SLM measures - Discussion of livelihood options

Country Report CRA Watershed Management Ethiopia Map 47, p. 168

Figure 2: Comparison of Landsat classification with high resolution Google Earth image in Anjeni

Comparison of Landsat classi-fication (left) with high resolution Google Earth image (below left); automated mapping and quality assessment of SWC structures in Anjeni, Ethiopia (below).

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Crop yield (quintal/ha) versus soil depth (cm) relationship for a crop basket in the moist Weyna Dega agroecological zone with Fanya juu soil conservation structures (example no. 23, ELD Ethiopia model)

Crop yield

Soil depth

1. Land cover and traditional SWC

2. Soil erosion, crop yield and current SWC

3. Optimum SLM scenario