Using an ecosystem services approach to assess the cost of soil erosion

Soil degradation from farmland is a significant issue across New Zealand. This study investigates an ecosystem services (ES) approach to estimate the long-term environmental cost of shallow mass movement erosion, and to evaluate the wider environmental and social benefits of soil conservation practices.

Figure 1. Three scenarios: Scenario A – typical east coast hill country sheep and beef grazing; Scenario B – Shallow mass movement erosion followed by recovery; Scenario C – Soil conservation in hill country

The study considers a typical East Coast hill country sheep and beef operation under three scenarios (Figure 1). To quantify the provision of ES from a permanent pasture grazed by sheep and cattle in hill country, information from planners in the region was used. Neoclassical economic valuation techniques (market prices, defensive expenditures, replacement and provision costs) were used to determine the economic value of each service.

We looked at (1) the provisioning of food, wood and support for infrastructures and animals, and (2) regulating services: fl ood mitigation, filtering of nutrients, decomposition of wastes, net carbon accumulation, nitrous oxide, methane oxidation, and pest populations. The study followed the steps below:

Quantification and economic valuation of the provision of ES, to assess the baseline flows of ES under current land use. The assessment was done for rolling and steep landscape units.
Quantification and valuation of the provision of ES following shallow mass movement erosion on steep land to evaluate the loss of services compared with intact pastures.
Characterisation, based on soil recovery data, of the recovery profile of the provision of ES in the 20 years following a landslide on steep land to assess how far the provision of ES recovers.
Assessment of the provision of ES over 20 years from the uneroded steep pasture planted with wide-spaced poplars for soil conservation, to see how trees impact on the provision of services.
Cost–benefit analysis of soil conservation on steep pasture prone to erosion using an ES approach, to assess the return on investment from the soil conservation policy.

The economic value of the services (Figure 2) provided by an uneroded steep pasture grazed by sheep and cattle was estimated at $3,717/ha/yr. Regulating services, usually not considered in decision making, had an economic value four to six times that of the provisioning services for the rolling and steep landscape unit respectively. The economic value of the services dropped by 65% when the topsoil was lost in a single instance of shallow mass movement. Fifty years after erosion, the services only recovered to 61% of the un-eroded value. In contrast, the same land planted with soil conservation trees provided, after 20 years, additional (+22% in dollar value) services from the similar unprotected landscape.

A classical cost–benefit analysis (CBA) of soil conservation practices showed planting conservation trees is only profitable if the trees are harvested for timber (at age 20), and low discount rates (<5%) are used. When the economic value of the extra services from conservation trees is included in the CBA, the net present value of the investment is greatly positive at discount rates ranging from 0 to 10% (Figure 3).

This analysis offers new insights on how to integrate an ES approach and use it on the ground to advance existing governance frameworks for resource management.

E.J. Dominati* and A.D. Mackay — AgResearch
P: 06 351 8216 E: estelle.dominati@agresearch.co.nz