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Valuing Soil's Economic Worth

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Valuing Soil's Economic Worth Valuing Soil’s Economic Worth Matthew Oliver Ralp Loria Dimal VALUING SOIL’S ECONOMIC WORTH DISSERTATION to obtain the degree of doctor at the University of Twente, on the authority of the rector magnificus, prof.dr. T.T.M. Palstra, on account of the decision of the Doctorate Board, to be publicly defended on Wednesday 6 February 2019 at 12.45 hrs by Matthew Oliver Ralp Loria Dimal born on 9 April 1984 in Manila, Philippines This thesis has been approved by Prof.dr. V.G. Jetten, supervisor ITC dissertation number 342 ITC, P.O. Box 217, 7500 AE Enschede, The Netherlands ISBN 978-90-365-4723-9 DOI 10.3990/1.9789036547239 Cover designed by Job Duim Printed by ITC Printing Department Copyright © 2019 by M.O.R.L. Dimal Graduation committee: Chairman/Secretary Prof.dr.ir. A. Veldkamp Supervisor Prof.dr. V.G. Jetten University of Twente Member(s) Prof.dr. P.Y. Georgiadou University of Twente Prof.dr. T. Filatova University of Twente Prof.dr. C.J. Ritsema Wageningen University Dr.ir. L. Fleskens Wageningen University “The soil is the great connector of lives, the source and destination of all. It is the healer and restorer and resurrector, by which disease passes into health, age into youth, death into life. Without proper care for it we can have no community, because without proper care for it we can have no life.” Wendell Berry (1977) Acknowledgements I would like to express my deepest gratitude to my promoter and supervisor, Prof. Victor Jetten, for the guidance, the support and the willingness of helping me find clarity on my work. I am eternally grateful. I would also like to thank John Carranza, Dinand Alkema, David Rossiter, Alexey Voinov and Dhruba Shrestha for your guidance and mentoring particular on the initial part of my PhD when I really needed the support. I would like to thank all personnel from the agencies I worked with, specifically to Agapito Pascual and the Norzagaray Municipal Agriculture Office, all the farmers from Norzagaray, the union leaders, the barangay officials, the local governments of Norzagaray, Guiguinto and the province of Bulacan, the NAPOCOR Watershed Division, the Mines and Geosciences Bureau, the UP Geodetic Engineering Department, the UP College of Engineering, and the Department of Science and Technology. Your cooperation and support have been a real blessing, and this work is my sign of gratitude to you. I would like to thank all the ITC staff, especially to my ESA Department, who have made my years in ITC fruitful and extremely pleasant. I would like to particularly thank Loes, Christie, Mark, Janneke, Cees, Bart, Chris, Teresa, Saskia, Patrick, Reuben, Petra, Esther, Lise-Lotte and Roelof, for your kindness and generosity of spirit. I would like to thank my fellow doctoral students for their support, cooperation and most importantly their friendship. To Oliver, Tang, Riswan and JR, words may not be enough to express my gratitude for the brotherhood and eternal friendship. My deepest thanks to all my previous and current, officemates: Thea, Hakan, Haydar, Saad, Bastian, Evelyn, Anandita, Tolga, Shruthi, Sobhan. My days in the office were nothing short of legendary because of you. To all the ESA PhDS, current and past, to whom I will always remember with distinct fondness and gratitude: Oscar, Sharon, Xuanmei, Sharon, Effie, Islam, Vasily, Yacob, Saman, Frederico, Khamarool, Nugroho, Ploy, Fardad, Jonathan, Sofia. Each one of you I am extremely grateful. My memories with you can last a hundred life times. Thank you, thank you, thank you. To all the Filipino PhD and MSc students, particularly to Bevs, Sonia, Cora and Xsa, maraming maraming salamat. I will forever treasure your advice, your kindness and your friendship. To all other PhDs from other Department, MSc and our interns: Xi, Anahita, Xiaoling, Rosa, Fangyuan, Maria Fernanda, Elnaz, Manuel, Guilia, Arjen, Marcella, Nicoleta, Jiang, Cao, Chao, Yut, Jialong, Mahid and Constanza, you have been some of the nicest and most wonderful people I have ever met. To you I say thank you. Last but not the least, I would like to thank my family: my parents, my lolo and my lola, my brother Mark and Kay, my cousins, aunts and uncles, my best friends, my supportive co-workers and previous students – thank you i supporting me spiritually throughout writing this thesis and my my life in general. Thanking you every day my entire life will never be enough to express my gratitude. Thank you - simply, thank you. ii Table of Contents LIST OF FIGURES .......................................................................................................... vi LIST OF TABLES ........................................................................................................... vii APPENDIX ................................................................................................................... VIII CHAPTER 1. INTRODUCTION TO SOIL VALUE ............................................................ 1 1.1. INTRODUCTION ...........................................................................2 1.1.1. Soil as an Environmental Public Good ..................................4 1.1.2. Environmental Public Good ................................................5 1.2. DEVELOPING SOIL VALUATION FRAMEWORKS ..........................................6 1.3. DIFFERENT FRAMEWORKS FOR SOIL VALUATION ..................................... 10 1.3.1. Ecosystem Services Approach .......................................... 10 1.3.2. Fund and Flow Approach ................................................. 11 1.3.3. Cost-Based Assessment Approach .................................... 13 1.3.4. Total Economic Value Approach ........................................ 15 1.4. THESIS STRUCTURE .................................................................... 17 1.4.1. Research Questions ........................................................ 17 1.4.2. Book Format ................................................................. 18 1.5. CONCLUSION ........................................................................... 19 CHAPTER 2. APPROACHES TO ECONOMIC VALUE OF SOIL ................................. 21 2.1. VALUATION TECHNIQUES .............................................................. 22 2.1.1. Stated Preference Approach ............................................. 22 2.1.2. Revealed Preference ....................................................... 25 2.1.3. Cost-Based Approaches ................................................... 28 2.1.4. Benefit Transfer Analysis ................................................. 29 2.2. SPATIAL MODELS AND ES VALUE MAPPING .......................................... 30 2.3. SOIL QUALITY INDICATORS ............................................................ 32 2.4. SOIL DEGRADATION PROCESSES ...................................................... 32 2.5. STUDY AREA ........................................................................... 33 CHAPTER 3. UNDERSTANDING USE VALUE FROM PRODUCTION FUNCTION METHOD ........................................................................................................................ 37 3.1. INTRODUCTION ......................................................................... 38 3.2. ECONOMETRIC MODEL ................................................................. 40 3.2.1. Impact of Erosion on Productivity ..................................... 42 3.2.2. Survey Design ............................................................... 43 3.3. RESULTS ............................................................................... 43 3.3.1. Demographic statistics .................................................... 43 3.3.2. Agricultural Inputs.......................................................... 44 3.3.3. Total cost, revenue, and profit margin ............................... 45 3.4. ENVIRONMENTAL CONSCIOUSNESS INDEX ............................................ 47 3.5. ECONOMETRIC MODELS ............................................................... 51 3.6. DISCUSSION ............................................................................ 54 3.7. IMPLICATIONS FOR AGRICULTURAL POLICY ........................................... 56 3.8. CONCLUSION ........................................................................... 57 iii CHAPTER 4. ESTIMATING WTP USING OPEN-ENDED CVM..................................... 59 4.1. INTRODUCTION ......................................................................... 60 4.2. SPECIFICATIONS ........................................................................ 61 4.2.1. Survey questionnaire and implementation ......................... 61 4.2.2. WTP Analysis ................................................................. 62 4.3. IMPACT OF SOIL RELATED RISKS ...................................................... 63 4.3.1. Soil Erosion ................................................................... 63 4.4. WTP RESULTS ......................................................................... 65 4.4.1. WTP and socio-demographic determinant .......................... 66 4.4.2. WTP and perceived erosion risk ........................................ 69 4.4.3. WTP and Soil Threats ...................................................... 69 4.4.4. WTP and modelled erosion average annual erosion .............. 70 4.4.5. Cluster Analysis ............................................................. 72 4.4.6. Tobit Model ................................................................... 73 4.5. CONCLUSION ..........................................................................
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