In this report, the Economics of Land Degradation (ELD) Initiative outlines opportunities and benefits for the private sector in directly and indirectly investing in sustainable land management. These come through improved yields of goods like food, fibre, and timber, new business opportunities and novel markets, and creating and ensuring social “licences to operate”. It builds on the previous report on the assessment of business exposure to land degradation risk from 2013. Understanding the cost of inaction and benefits of
action are important in order for all stakeholders to be able to make sound, informed decisions about the amount and type of investments in land for sustainable use. Even though techniques for sustainable land management are known, many barriers remain and the financial and economic aspects are often put forward as primary obstacles. If the full value of land is not understood by all stakeholders, it may not be sustainably managed, leaving future generations with diminished choices and options to secure human and environmental well-being. A better understanding of the economic value of land will also help correct the imbalance that can occur between the financial value of land and its economic value. For instance, land speculation and land grabbing are often separated from the actual economic value that can be obtained from land and its provisioning services. This divergence is likely to widen as land scarcity increases and land becomes increasingly seen as a ‘commodity’. With around one third of the world’s arable land degraded, estimated annual losses of 6.3 to 10.6 USD trillion, and a projected need to increase food production from land by 70 per cent by 2050, we simply cannot afford to neglect the loss of potential production from careless land management. Whenever land is not producing at its potential, it is an under-performing asset that requires
investments to ensure the future supply chains that many industries depend upon.