Sustainable Asset Valuation of Land Restoration in Sodo District, Southern Ethiopia

This report presents a Sustainable Asset Valuation (SAVi) of an assisted natural regeneration (ANR) site in Sodo Woreda in the Southern Nations, Nationalities, and Peoples' Region (SNNPR) of Ethiopia. We use spatial models, system dynamics modelling, and economic analysis to assess the societal costs and benefits of land restoration at this site. We show that ANR creates direct economic benefits for farmers and provides climate adaptation and mitigation services.

By Emma Cutler, Marco Guzzetti on November 15, 2022
  • Land restoration creates value in the form of job creation, thatch grass production, livestock fodder, carbon storage, and increased agricultural productivity.

  • Assisted natural regeneration produces more value when it is located upland of cropland and can reduce erosion and land degradation in agricultural areas.

  • Positive externalities and indirect impacts increase the economic attractiveness of nature-based infrastructure, including assisted natural regeneration.

Erosion and land degradation, combined with other social and environmental factors, has damaged soil fertility, reduced livestock quantity and quality, increased flood risk, and lowered food security in Ethiopia. Climate change will exacerbate these impacts. ANR, a process by which people create conditions that promote regrowth and allow land to regenerate on its own, is one strategy to address these challenges.

This SAVi assessment values the societal costs and benefits of an ongoing restoration project that began in 2016 and consists of ANR on 2,868 hectares in southern Ethiopia. Working with the New Climate Economy, we monetized planting and maintenance costs, encroachment penalties, wages, carbon credits, and income associated with this project. We then calculated the net benefits, benefit-to-cost ratio, net present value (NPV), and internal rate of return (IRR), both with and without carbon credits. We show that ANR can be an effective and investment-worthy strategy in Ethiopia to combat land degradation, support rural livelihoods, and increase resilience, adaptation, and mitigation in relation to climate change. These results can support efforts to scale up land restoration in Ethiopia by informing decision-making processes and influencing policies.