How to do a Cost-Benefit Analysis in ELD:
a case study from the Ethiopian Highlands
Hans Hurni
University 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.
H. Hurni 1998
3
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, compared
to ‘business-as-usual’ (changing nothing). ”
ELD Initiative 2013
ELD Ethiopia Project 2014
Spatially 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 study
2. Geographical characteristics: Assessment of quantity, spatial
distribution, and ecological characteristics
3. Types of ecosystem services: Analysis of ecosystem services
stocks and flows
4. 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
development
5. Land degradation patterns and pressure: Identification of land
degradation patterns, drivers and pressure on the sustainable
management of land resources
6. Cost-benefit analysis and decision-making: Assessment of
sustainable land management options
+1 step: Take action!
UNCCD; in ELD Methodology 2013
7
K. Herweg 1989
400
350
350
300
300
250
250
200
200
150
1)
100
150
100
50
Biomass
Yield of grain and total
biomass [t]
400
Grain
50
0
0
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Cultivated area [ha]
Changes in cultivated biomass and grain yield in an Ethiopian
catchment (110 ha) conserved in 1983
Cultivated area Kremt
Cultivated area Belg
Total harvested biomass (Belg and Kremt)
Total grain yield (Belg and Kremt)
Trend of total grain yield
Trend of biomass yield
9
Source: Mirka Loetscher 2003, based on SCRP data
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
0m
600 m
Comparison of
Landsat classification (left) with high resolution
Google Earth image (below left);
automated mapping and quality
assessment of SWC structures in
Anjeni, Ethiopia (below).
Figure 2: Comparison of Landsat classification with high resolution Google Earth image in Anjeni
23
Crop yield
35
30
25
20
15
10
5
0
0
10
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100
Soil depth
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)
1. Land cover and traditional SWC
2. Soil erosion, crop yield and current SWC
3. Optimum SLM scenario