Securing natural capital on land

By Kumi Kitamori and Shanda Moorghen, OECD Environment Directorate

We have built our economies on the premise that land is a primary factor of production. Much of our natural capital, such as biodiversity and ecosystem services, is based on land and there is little debate over the importance of land use for economic activity and to feed growing populations. The demographic shift in the last few decades – from just over 3 billion in 1960 to more than 7 billion –  has caused a dramatic rise in the demand for food production, with land used for crops and ranching increasing at the expense of natural grasslands and forests. Farmlands account for almost 38% of the global land surface. It is expected that more than 1 billion hectares of additional land, mostly in developing countries, would be converted for agricultural use by 2050 to keep up with current trends. However, the continued pressures on land, and the ecosystem services such as water retention, carbon storage, soil health and all living organisms that it supports, are bound to bring about biodiversity loss and climate change.

For example, notwithstanding varied practices across the world, land use, land-use change, and forestry cause 23% of total greenhouse gas (GHG) emissions globally. Forests also present a significant global carbon stock, and their destruction will affect a large part of the carbon stored on land. We need a transformative change in the way we use land, if we are to continue to reap the benefits of nature and avoid a catastrophic collapse of our planet’s ecosystems. The onus is now on decision-makers to find efficient ways to use land and its natural capital to meet the triple challenge of food security, decent livelihoods for farmers, and environmental sustainability.

The challenges to and solutions for sustainable land use were recently discussed at this year’s OECD Green Growth and Sustainable Development Forum under the theme Securing natural capital: Resilience, risk management and COVID-19. Angel Gurría, OECD Secretary-General, provided opening remarks and highlighted the urgency to protect our natural capital and its ecosystem services, which are worth USD140 trillion per year – more than one and a half times the size of global GDP. Mr. Gurría noted, “We know these facts, we know the evidence, yet global natural capital stocks continue to deteriorate. One-quarter of animal and plant species are facing extinction. On land, deforestation continues, with over 70% of terrestrial land degraded.”

These issues were further explored in a dedicated session on ‘Securing natural capital on land’ during the Forum, with the panellists keen to expand on the realities of sustainable land use in the age of COVID-19.

What were the main takeaways from the discussion on securing natural capital on land?

Here are four actions for governments to promote sustainable land use:

1. Limit the risks of future pandemics. In a year plagued by the COVID-19 pandemic, the intersection of nature and infectious diseases emphasises the need to better use our land and its natural capital. More than 70% of emerging infectious diseases in humans are caused by animals. There are direct and indirect drivers at the heart of this problem. Direct drivers include human encroachment into wildlife habitats through deforestation for crop or livestock farming, wildlife trade, and climate change. In a recent study, researchers found that animals that are more likely to survive in human-dominated landscapes, caused by land use change, are also more likely to carry infectious diseases. Indirect drivers have to do with consumption patterns and population growth. It is crucial to address these issues to prevent future pandemics. For example, there is a lot that can be done to transform agriculture and food systems; reducing harmful subsidies, supporting agri-environmental practices, and promoting sustainable diets can lead to a more sustainable use of land.
2. Promote innovation in agriculture. The agricultural sector is a major GHG emitter, contributing to the bulk of emissions from land use and over 10% of total man-made emissions globally. In addition, there is continued cause for concern with agrochemical pollution of soil and water from excessive use of pesticides and fertilisers. However, agriculture is essential for food security and livelihoods of farmers. To promote more environmentally sustainable agriculture, innovation is key. For instance, the precision agriculture approach would allow farmers to use digital tools to give crops and the soil exactly what they require, in the form of pesticide use or the way these pesticides are sprayed. By harnessing innovation and the digital transformation, the agriculture industry can produce more to meet the needs of the growing world population with less chemical input and less environmental harm.
3. Measure and quantify ecosystem services. You cannot manage what you cannot measure. Better understanding the different facets of ecosystem services and quantifying the benefits they provide through appropriate indicators is hugely important for reliable quantitative assessments. This can better inform decision-making related to land use. These indicators need to capture the different ecosystem services provided by land for different users, from provision of quality soil for crop production for farmers and rainwater storage for water utilities, to geological stability for housing developers. The best way to identify the most appropriate and usable indicators for such quantitative assessments is to co-design them with decision-makers and relevant stakeholders. Such an approach has been put to use, for example, by the Dutch Water boards, which created a tool to quantify ecosystem services and how they are affected by local landscape management; it can show the multifunctionalities of the same ecosystem and its benefits for different users.
4. Engage with local communities and indigenous populations. Some economic activities such as mining, large-scale commercial agriculture, and building oil pipelines can contribute to unsustainable land use, with detrimental effects on local communities and indigenous populations whose livelihoods depend on land-based natural capital. Indigenous populations manage, use or occupy at least 25% of the global land area and 72% of local indicators used by those communities show negative trends, which tell us that nature and their livelihoods are in danger. While trying to find solutions for the sustainable use of their land, to protect biodiversity and their livelihoods, it is fundamental to involve local communities and indigenous populations in the discussions. Existing evidence of community-based conservation highlights the potential in trusting local communities and indigenous populations with the management of natural capital. In Namibia, for example, 86 communal conservancies were created since 1998, covering more than 20% of the country’s total land area, generating more than USD 10 million per year, and producing very positive gains for wildlife. Local communities and indigenous populations should see the tangible benefits that nature and conservation activities deliver to them, if they want to be considered an active part of the conservation efforts.

As we look to recover from the COVID-19 pandemic, land use will play an integral part in addressing many of the key socio-economic challenges ahead, including avoiding possible emergence of new zoonotic diseases. Policy makers have the opportunity to provide an innovative, data-driven response to current obstacles, taking into account local communities and indigenous populations, while also ensuring the preservation of natural capital on land and the ecosystem services it provides. It is time to find a balance between economic prosperity and environmental sustainability in order to preserve our natural capital for generations to come.

Further reading

OECD (2020), Towards Sustainable Land use, OECD Publishing, Paris

OECD (2020), Biodiversity and the economic response to COVID-19: Ensuring a green and resilient recovery, OECD Publishing, Paris

OECD (2019), Accelerating Climate Action: Refocusing Policies through a Well-being Lens, OECD Publishing, Paris