A linkage between the biophysical and the economic: Assessing the global market impacts of soil erosion

Abstract

Employing a linkage between a biophysical and an economic model, this study estimates the economic impact of soil erosion by water on the world economy. The global biophysical model estimates soil erosion rates, which are converted into land productivity losses and subsequently inserted into a global market simulation model. The headline result is that soil erosion by water is estimated to incur a global annual cost of eight billion US dollars to global GDP. The concomitant impact on food security is to reduce global agri-food production by 33.7 million tonnes with accompanying rises in agri-food world prices of 0.4%–3.5%, depending on the food product category. Under pressure to use more marginal land, abstracted water volumes are driven upwards by an estimated 48 billion cubic meters. Finally, there is tentative evidence that soil erosion is accelerating the competitive shifts in comparative advantage on world agri-food markets.