ACADEMIC

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An Assessment of the Economic Losses Resulting from Desertification

by Ning Datong

Desertification In China

For the purpose of this study, desertification is defined as land deterioration in arid, semi-arid and semi-humid regions, largely as a result of inappropriate human activities.

Geographical Distribution of Desertified Regions

Approximately 15.9 percent of China’s territory, equivalent to 1.533 million km2, is either desert, or undergoing desertification. Desertification alone affects 8 percent of China’s territory. Of the desertified territory, almost half is a result of wind (blowing sand) and water erosion.1 Approximately 170 million people and 21 Mha of farmland face the threat of desertification.2 Desertification affects 10.3 percent of the territory of Northern China (334,000 km2). The desertified land can be divided as follows: a) 120,000 km2 — land that underwent desertification in the past; b) 56,000 km2 — land that has undergone desertification in recent decades; and c) 158,000 km2 — land that is susceptible to future desertification.

On average, desertified land expanded by 1,560 km2 per year between the 1960s and the 1970s. At present, the rate of expansion has risen to 2,100 km2.3 According to some estimates, if China maintains existing land-use patterns, the desertification rate in Northern China will increase to 3.5 percent each year, resulting in an additional 70,000 km2 of desertified area by the end of the century.4

The Impact of Human Activities on Desertification

Desertification in Northern China can be proportionally attributed to the following factors:5 excessive cultivation causes 23.3 percent; excessive grazing causes 29.4 percent; excessive fuelwood collection causes 32.4 percent; misuse of water resources causes 8.6 percent; and construction for industry causes 0.8 percent (this includes mines, urban development projects, and communications networks). The remaining 5.5 percent results from wind blown sand dunes.

In ecologically sensitive regions, such as those in arid or semi-arid climates, increasing populations are invariably a key factor in the desertification process. The expansion of economic activities that results from growing populations adds additional pressure to already distressed regions.

Methodology: Estimating Economic Losses Resulting from Desertification

The methods adopted are the Shadow Project Method; the market value replacement method; the market value method; and the opportunity-cost method. The general expression of these methods is as follows:

M = f( D, E, P)

M: the economic cost of environmental damage
D: the quantitative value of the environmental damage
E: the price coefficient related to this damage
P: P1, P2, P3…. are different variables relating to environmental damage (for the most part derived from results obtained during research).6

Economic Loss Resulting from Desertification

To estimate the economic cost of desertification in China, we rely on the methodology developed by UNEP. Based on the UNEP model, in 1984, the annual direct economic cost of land lost to desertification is 344,000 yuan per km2.7 In Northern China, the area affected by desertification has grown from 176,000 km2 in the 1970s to 201,000 km2 in the 1980s. The average annual increase was 2,100 km2. Based on these figures we can estimate the annual economic cost of desertification by applying the market value method (discounted to 1992 yuan, assuming a 12 percent annual inflation rate). The estimated result is 1.8 billion yuan (lost as a result of desertification).

Economic Loss Resulting from Land Degradation

Wind and water erosion are the main sources of land degradation. Estimates suggest that 40,000 km2 of farmland and 46,700 km2 of grassland face the threat of this type of desertification nationwide. Desertification has caused farmland yields to decrease by between 1,125 kg/ha and 5,250 kg/ha.8 Focusing on China’s farmland alone, and assuming an average drop in yields of 3,000 kg/ha (and a grain price of 1 yuan/kg), the 1992 cost of land degradation to the entire country is approximately 12 billion yuan. The calculation is as follows: 40,000 km2 x 3,000 kg/ha (per annum) x 1 yuan/kg = 12 billion yuan (per annum).

The economic cost of land degradation in 1987, for Shandong Province alone, has been estimated at 690 million yuan (139,000 ha were affected).9 A further example is Gansu Province, where an additional 13,000 ha of farmland is affected by desertification each year. The economic losses resulting from this process are approximately 13,000 ha x 100 yuan/ha = 1.3 million yuan.10

Economic Loss Resulting from Damage to Infrastructure

Desertification resulting from large-scale mining is 1.26 times more severe than desertification resulting from natural causes.11 Since the opening of the coal fields in Shengmu (Shaanxi Province), Zhungeer (Inner Mongolia) and Fugu (Shanxi Province), 119 million tons of silt have entered the Yellow River on an annual basis. This silt constitutes over 70 percent of the total amount of silt in the contiguous border regions of these three provinces and one autonomous region. Desertification as a result of coal mining has become a major source of Yellow River siltation. For example, since the opening of these mines, Longyangxia Reservoir in Qinghai Province has received an additional 1.4 million m3 of silt each year. Based on estimates of investment cost per 10,000 m3 of storage capacity, sedimentation of this reservoir as a result of increased siltation costs approximately 47 million yuan per year. We estimate that these coal fields alone cost the economy 91.73 million yuan a year as a result of artificially induced desertification.12

Desertification causes an increase of shifting sands, resulting in damage to communication arteries such as highways and railways. Preliminary studies have shown that shifting sands damage approximately 1,500 km of highways and 500 km of railways. This damage is most prevalent along the main arteries that connect China’s frontier regions to the center.13 The estimated direct monetary loss resulting from the impact of desertification on highways and railways is 200 million yuan. Desertification also affects air transport. For example, the annual direct economic loss arising from blowing sand at Gongga airport in Tibet is 720,000 yuan.14

Wind-borne sand damages water conservancy facilities and clogs water courses. For example, 48.3 million tons of wind-borne sand are deposited along the section of the Yellow River between Shabotou and the river bend each year.15 If we add to this amount the 50 million tons of silt transported into the Yellow River by its tributaries as they flow through desertified regions, over 100 million tons of wind-borne sand are deposited in the Yellow River in this section alone.

Since much of the sand deposited in the Yellow River is coarse, sedimentation occurs more rapidly, causing the river bed to rise. As the river bed rises, dikes come under increasing pressure, and flooding becomes more frequent, most notably along the lower sections of the Sanmenxia Reservoir. The estimated economic cost of degrading water conservancy facilities due to desertification is several hundred million yuan per year.16

 

CONCLUSION

Desertification is a result of both natural and human factors. Desertification mainly affects Northwestern China, costing the country approximately 14.8 billion yuan per year (Table 1).

 

Table 1: Estimates of Economic Losses Resulting from Desertification in China
Contents Method of Assessment Major Coefficients Results (million yuan) Percentage
Loss of land resources Market value method a) Cost due to land loss (10,000 yuan/km2
b) Increasing rate of desertification
1,800 12.3
Degradation of land quality Market value replacement method Fertilizer content of eroded soil 12,000 81.0
Damage to construction projects and facilities arising from:
a) the mining industry
b) Threats to traffic and transportation
c) Threats to water conservancy and water courses
Market value methodReplacement-cost approach a) Damage to projects and facilities
b) Cost of clearing sand (yuan/km)
c) Construction investment (yuan/km)
1,000* 6.7
Total     14,800 100
* estimated figure

 

Notes to Summary:

  1. China’s Agenda 21 (China Environmental Sciences Press, 1994).

  2. Ibid. It is currently reported that over 3.3 million km2 of land in China is influenced by desertification. This is approximately equivalent to 34 percent of China’s entire territory, affecting nearly 400 million people. “Man and Nature” (CCTV Channel 2, June 8, 1995).

  3. Mao Wenyong, et al. (eds.), Global Environmental Issues and Countermeasures (Chinese Science and Technology Publishing House, 1993). See also, Luo Bin, et al., “Control Measures for Land Deterioration in Desertified areas in China,” Bulletin of Water and Soil Conservation (Vol. 14, No. 2, 1994), and, Jiang Zifan, Farmland Productivity Loss in China, and Control Countermeasure: A Study of Prevention and Cure for Land Deterioration in China (1990), and, Luo Bin, et al., “Global Desertification issue and the Chinese Successful Control Experience,” Desertification in China (Vol. 14, No. 2, 1994).

  4. Mao Wenyong, et al., Global Environmental Issues and Countermeasures.

  5. Zhu Zhenda, et al., Desertification, and its Prevention and Cure: Collected Works on China’s Nature Conservation (China environmental Sciences Press, 1990).

  6. Jin Jianming, et al. (eds.), Green Crisis (China Environmental Sciences Press, 1994).

  7. Zhang Weiming, et al., “Development and Harm Resulting from Desertification Calamities in China,” Journal of Natural Calamities (Vol. 3, No. 2, 1993).

  8. Zhang Huiqin et al., A System Analysis of Environmental Economy: Planning Methods and Models (Tsinghua University Press, 1993).

  9. Jin Jianming, et al., Green Crisis.

  10. Ibid.

  11. Zhang Weiming, et al., Journal of Natural Calamities.

  12. Ibid.

  13. Ibid.

  14. Ibid.

  15. Dong Guangrong, et al., “Desertification, Distribution and Harm in China,” Resources and Environment in Arid Regions (Vol. 3, No. 4, 1989).

  16. Ibid.