The calculation of the costs of land degradation includes the total economic values (TEV) of all ecosystem services, both direct use and indirect use ecosystem services. The costs and benefits of land restoration activities are calculated by their net present value (NPV) in year t for the land users planning horizon T:
If land users do not undertake land restoration, the NPV is given by
The benefit of land restoration is given by:
As the first step, the cost-benefit analysis focuses on LULC changes, as measured by the MODIS Land Cover Type Product (MCD12Q1) global maps of land use and cover at 500-m spatial resolution19, that have occurred each year between 2001 and 2018, for the evaluation of LULC trends, and their associated costs and benefits in the Sahel region. Analytically, this would mean calculating (4) below. For example, when a forest is cut down and turned into a cropland, this would mean lower values of ecosystem services because forests usually provide higher TEV of ecosystem services than croplands.
Following the recent IPCC Special report on Climate Change and Land, land degradation is defined here as “a negative trend in land condition, caused by direct or indirect human-induced processes, expressed as long-term reduction or loss of at least one of the following: biological productivity, ecological integrity or value to humans”20.
Hence, by definition of land degradation, P1 >P2.
This means, LULC that leads to higher TEV, i.e. when P1 < P2, is not regarded as land degradation but rather as land improvement. The analysis of LULC trends differentiates between seven biomes, based on their International Geosphere-Biosphere Programme (IGBP) definitions: forests, woodlands, shrublands, grassland, cropland, wetland and bare land (Supplementary material 7).
Secondly, the costs of land restoration activities are comprised of establishment costs for restoring the degraded biomes, maintenance costs, as well as the opportunity costs of the lower value biome which is being replaced by the higher value biome (Table S2.4). There is one exception in the analysis when the opportunity costs are omitted in the case of planting forest in woodlands and shrublands, since it is unlikely that remaining trees and shrubs are cut down before a new forest is planted. On the contrary, these remaining trees and shrubs in woodlands and shrublands are likely to be kept and continue providing their ecosystem services.
This study tracked the outcomes of the land restoration activities during the full establishment period (modelled to vary by biome, see Supplementary material 8), after a 5-year period, after a 10-year period, and after a 30-year period. We have also checked the sensitivity of the results for different assumptions on the discount rate, by running the analysis at the discount rates of 2%, 5%, and 10% for the establishment period scenario. Moreover, once restoration activities are done, the newly established higher value biome will not reach its full potential right away, but will take some time to reach its maturity. For this reason, for restored forests, woodlands, shrublands, and wetlands, a staggered time period was introduced during which they will gradually reach their full ecosystem potential. For other biomes, namely, croplands and grasslands, we estimated that they will reach their full potential in one year after restoration (Supplementary material 8). The information on the survival rates of planted trees and grasses from currently ongoing GGW activities was used to calibrate the amount of generated ecosystem benefits from land restoration activities8. Climate change is expected to alter survival rates of planted trees and grasses, hence, projected variations in survival rates under climate change are used as the means to assess the impact of climate change on land restoration activities. Moreover, climate change is projected to reduce crop yields across the Sahel region, thus also reducing the net profitability of crop production, which is incorporated into the assessment (cf. Scenarios explained earlier). Biome-specific estimation parameters for land restoration activities are given in Supplementary material 8.
Data
Land Use and Land Cover (LULC)
The MODIS Land Cover Type Product (MCD12Q1, here referred to as Modis500 LULC) global maps of land use and cover at 500-m spatial resolution19 are used as the source for the LULC data. Modis500 LULC provides global land cover types at annual intervals (2001-2018). Modis500 LULC is derived using supervised classifications of MODIS Terra and Aqua reflectance data. The supervised classifications then undergo additional post-processing that incorporate prior knowledge and ancillary information to further refine specific classes. The definition of each LULC is given in Supplementary material 7. Modis500 LULC captures several types of forests, namely: evergreen needleleaf forests, evergreen broadleaf forests, deciduous needleleaf forests, deciduous broadleaf forests, mixed forests. In this analysis, these forest types were combined together under single forest category. Similarly, Modis500 LULC has croplands category as well as cropland/natural vegetation mosaics, defined as “mosaics of small-scale cultivation 40-60% with natural tree, shrub, or herbaceous vegetation”. Both of these sub-categories were combined together under single cropland category.
In estimating the costs of land degradation, annual LULC data for all of the 18 years between 2001 and 2018 were analyzed to get a more precise information about year-to-year changes in the total economic value of biomes and associated losses and gains. For the analysis of costs of action, two time periods were considered: 2001 (baseline) and 2018 (end line). The “costs of action” analysis thus provides information about costs and benefits of restoring lands degraded by 2018 to their previous un-degraded state in 2001.
Economic values of ecosystem services
Many previous studies assessing the values of land ecosystem services relied on the economics of ecosystems and biodiversity (TEEB) database (http://teebweb.org/) for their assessments 22,4. The underlying data in this database was compiled from publications produced more than a decade or two ago and contains only a few observations from the Sahel region. These TEEB values of ecosystem services in the region are not enough for a detailed analysis. We conducted a thorough review of all available data from literature published on the values of ecosystem services specifically from the Sahelian countries since the TEEB database compilation. We have also compiled the values of ecosystem services conducted in countries immediately neighboring the Sahel region. Since it is not possible to derive individual ecosystem values for each pixel of the analysis, we used the benefit-transfer approach to assign economic values to ecosystem services in those settings in the Sahel with missing data by using ecosystem values from other locations in the Sahel and in their neighborhood. The Sahelian countries are very similar to each other in terms of income per capita, reliance on agriculture, overall price levels, especially compared to the rest of the world, hence, such benefit transfer is both the only possible approach for ecosystem valuation at the regional level in Sahel, and also justified due to these similarities. Naturally, having pixel-specific values would have been preferable, but currently, there is no such granular information available for Sahel or any other region of the world. A total of about 600 valuation data points were collected for the GGW countries and applied in this current analysis. The full list of 165 papers from which these ecosystem values were derived is given in Supplementary material 9.
The availability of the data on net production value of croplands by country and by year at the FAOSTAT (http://www.fao.org/faostat/en/) enables us to have more precise year and country specific economic net values of what one hectare of cropland in each country was producing during each of the analyzed years. Therefore, the net values of croplands from FAOSTAT were divided by the extent of cropped areas in each country/year to get per hectare values, which were then used in the analysis providing more country-year specific granularity for cropland values. However, these values of provisioning services produced by croplands do not take into account the value of non-provisioning ecosystem services provided by croplands. These values for non-provisioning services by croplands were collected from the literature and added to those values of provisioning services obtained from FAOSTAT.
Costs of land restoration actions
The data on the costs of land restoration actions were similarly collected from existing databases and publications, particularly: WOCAT (https://www.wocat.net/en/), TerrAfrica, World Bank SLM sourcebook23, Economics of land degradation (ELD) database24, FAO publication on Global guidelines for the restoration of degraded forests and landscapes in drylands25. The average values for these costs of land restoration activities used in the analysis are given in the Supplementary material 2.