Soil Value On Balance Sheets And In Accounts

Soil Value Could Be On Balance Sheets And In Nation's Accounts

The first steps have been made in placing a financial value on the soil and services it provides to any given piece of land. This value would not only include the ability of the soil to provide water and nutrients for plant growth and the physical support for plants, animals and humans, but also the role the soil plays in regulating the wider environment in which we live.

Estelle Dominati, a PhD student at Massey University and working with AgResearch, has created a framework that links the soil's natural capital to all the services provided by our soils. As well as food fibre production, soil plays a critical role in flood control by absorbing and retaining water lessening the impacts of extreme climatic events. Soils are also important in filtering water to remove nutrients and contaminants, providing clean fresh water. Soils provide physical support for human infrastructure such as roads and buildings, a structure for plant roots to penetrate and grow in and support our grazing animals.

Soils are important in the regulation of greenhouse gases like nitrous oxide. The carbon found in soil organic matter represents a significant reservoir of carbon within the global carbon cycle. For example, a 5% shift in the amount of soil organic C in the 0−2 m soil layer could potentially alter atmospheric carbon dioxide, carbon up to 16%. Soils also provide a habitat for a wide range of living animals and plants including those important in pest and disease control.

AgResearch soil scientist Dr Alec Mackay, who is, along with Dr Murray Patterson of the New Zealand Centre for Ecological Economics, one of Estelle Dominati’s supervisors, says that for the first time we have a framework that which allows a value to be placed on all the services our soils provide.

"At present the capital value of a soil is determined largely by their production levels and associated economic returns. Little attention has been given to the other services they offer, in part because they are often not recognised and hence not valued or included in decision making," said Dr Alec Mackay.

"We're juggling the balance between the need for continuing profitability and economic return growth from our land based industries. But the increasing pressure on environmental management means the services our soils provide in assisting with environmental regulation will become increasingly important and need to be reflected in future values," said Dr Alec Mackay.

Miss Dominati, a Corsican agronomist, who has spent two and half years at Massey University studying this, is about to embark on the second stage of her thesis, which is to take the approach she has developed and use it to value services from two soils. The work will profile soil natural capital using water storage capacity, drainage, ability to filter nutrients and contaminants and carbon storage, in addition to supplying water and nutrients for plant growth.

Dr Alec Mackay says this work is at the meeting point of soil science and economics, "We want to take this scientific knowledge to enable ecological economists, industry and policy makers to better understand the natural capital value of soils and the ecosystem services that they produce to more fully inform decisions regarding future land use. What is often not appreciated is that land is a finite resource and of that land only a small percentage is high class."

ENDS

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