Appropriate valuation method for Soil Conservation.

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Information about Appropriate valuation method for Soil Conservation.

Published on February 8, 2014

Author: loknlamsal



Valuation method of Soil conservation

LOK NATH LAMSAL M. Sc First Year Roll no 03 Lamsal 2/7/2014

Outline of the presentation  Introduction  Conceptual framework  Soil valuation  Total value of soil conservation  Appropriate valuation method for soil conservation  Analysis of different methods  Conclusion Lamsal 2/7/2014

  The deteriorating condition of soil in Nepalese hills and mountains first came in to the picture after Eckholm (1975) wrote the ‘Theory of Himalayan Environmental Degradation’ referring that anthropogenic factor is the main causes of accelerated erosion and subsequent degradation across the Himalayan region. Active geology, steepness, fragility, high rainfall etc are also equally responsible for the soil degradation in the Nepalese hills (Ives, 2004; Blaikie, 2001). Lamsal 2/7/2014

 Valuation of the stream of benefit and cost with and without conservation cases would give more accurate picture of the private and social worth of these improved conservation technologies. Lamsal 2/7/2014

  The concept of the conservation of soil takes into account, the strategies for preventing the soil from getting eroded and preventing it from losing its fertility due to an adverse alteration in its chemical composition. Valuation means the act of valuing, esp a formal assessment of the worth of property, jewellery, etc. an appraisal of the value of something. Economic valuation: The process of expressing a value for a particular good or service in a certain context (e.g., of decision-making) in monetary terms. Lamsal 2/7/2014

  The value of soil is determined by the stream of benefits it provides to society. Benefits are reflected in people’s willingness to pay (WTP) as indicated by real market transactions or through evidence on preferences from which values can be derived. However, some soil services, and especially the support of landscapes and biodiversity and the protection of archaeological interest, are not valued in markets. Lamsal 2/7/2014

 Total Economic Value (TEV) =Direct-use value + Indirect-use value + Option value + Existence value Use value Non use value Direct use Indirect use Option value Food , Timber, NTFP. Habitat for animal and micro organism Carbon sequestration and future direct and storage, water storage and indirect uses flow mediation, Nutrient cycling, support construction, support for ecology and biodiversity, climate regulation Lamsal 2/7/2014 1)Existenc e value. 2) Bequest value.

Function Value Method Food, Timber, Direct use value Carbon sequestration and storage Water storage and flow mediation Support for construction Direct and indirect use value Market based approaches, production function approaches Market based and cost based approaches Cost based approaches and stated preference method Cost base approaches ( WTP of buyers ) Production function approaches, contingent valuation method Stated preference method Use and non use value Use value Support for ecological habitat Use and non use value and biodiversity Archaeological site/artifact protection On site and offsite conservation Use and non use value Use and non use value Cost based and stated Lamsal 2/7/2014 preference method

Valuation method Description Strength and Weakness Example Market based approaches Interaction between consumers and producers with regards to the demand and supply of goods and services. Standard, accepted economic techniques. Does not measure TEV. Gross value of crop production. Production function/change in productivity method Estimate the economic value of ecosystem products or services that contribute to the production of commercially marketed goods Single use systems Soil fertility easier. improves Multiple use production crop yield function approach are more problematic. Risk of double counting Cost Based approach 1) preventive expenditure approach Environmental services can be valued by looking at how much it would cost to set in place measures to prevent the damage arising from their loss. Easy, simple. Do not directly measure WTP for environmental goods and services Lamsal 2/7/2014 Flood control, siltation barriers

Valuation method Description Strength and Weakness Example ii)Damage avoided approaches Environmental services help to avoid economic costs Easy, simple. The costs of destruction to Do not directly houses, roads, bridges and measure WTP for farms caused by flooding. environmental goods and services. iii) Replacement or repair expenditure Examining the potential costs of restoring or replacing productive assets lost or degraded due to project impacts or improper management. Easy, simple. Do not directly measure WTP for environmental goods and services. The benefits of implementing improved agricultural practices in upland soil areas can be reflected in the cost of replacing soil and nutrients that would be lost through erosion. Lamsal 2/7/2014

Valuation method Stated preference method Description Contingent valuation a random sample of respondents for their WTP (or WTA) for a clearly defined good. Respondents must be reminded of substitute goods, budget constraints. strength and weakness Example 'constructed market' - i.e. a we can obtain use and non-use hypothetical market which is values. presented to a respondent in a questionnaire. Only generally-accepted method for estimating non-use values, which are not traded in markets. CV is based on what people say they would do, as opposed to what people are observed to do, is the source of its greatest strengths and its greatest weaknesses. Doubts about their reliability for estimating willingness to pay. Lamsal 2/7/2014 Especially for ecological services and biodiversity.

   No single method is enough for appropriate valuation of soil conservation due to its multidimensional role. Cost based approaches and market based approaches are easy and simple but not capture the ecological, biological role of soil and people's willingness to pay. Production function approaches which is complex and tedious for multiple output but gives accurate if data were put appropriately. Lamsal 2/7/2014

  Contigent valuation provides both use and non use value of soil conservation and gives a appropriate valuation which consider all the function that relate on a soil conservation. But due to its hypothetical market. respondent biasness, validity of output may not be reliable. Lamsal 2/7/2014

Lamsal 2/7/2014

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