4.2 Economic loss
China, the most populous nation, is a developing country and is still overwhelmingly rural, yet aspires for fast modernization of the economy (Smil, 1981). The production and construction activities can bring great economic benefits and value in use for the country, so numerous productive and constructive engineerings are undergoing. However, these projects are causing the overdraft of natural resources and damage to the environment (Du et al., 2017). Also, Cheng et al. (2015) found anthropogenic water and soil losses and huge economic losses caused by productive and constructive projects were more and more serious recently. In 1990, Chinese economic losses caused by soil and water loss totaled RMB 26.4 billion Yuan, such as food loss, nutrition loss, falling crop yields, and cost of Point-of-Use water purification (Jiang, 2007). Ren et al. (1997) estimated that the economic losses caused by water and soil erosion were RMB 49.5 billion Yuan, accounting for 6.5% of Chinese agricultural output value in the same period. Ministry of Water Resources of PRC, Chinese Academy of Sciences and Chinese Academy of Engineering conducted the science review of soil and water erosion and ecological safety in China, 2006. It was found that the economic loss caused by soil erosion was 188.7 billion Yuan in 2000 – the direct economic loss was RMB 64.26 billion Yuan and indirect economic loss was RMB 124.44 billion Yuan, accounting for 2.1% of the total GDP of the year (Jiang, 2007). Resource and environmental problems have become a serious problem in the sustainable development of China. Hence, the management of water and soil erosion is, naturally, of critical importance for China. From the perspective of economics, neglecting the cost of natural resources and the environment are the main reasons for these environmental problems. To put it bluntly, low investment and lack of protection awareness caused by low investment are the cruces of soil and water loss. Scientific estimation of investment in soil and water conservation measures becomes the key.
Previously, the degree of soil erosion in all soil and water conservation plans had never been evaluated and controlled hierarchically, resulting in that investment of soil and water conservation projects had not been determined hierarchically according to different severity degree of soil erosion. All projects were carried out following the same investment standard, leading to investments of some projects were too high, and investments of other projects were unable to control soil and water loss. Thus the degree of soil erosion can be classified according to the amount of soil erosion calculated by the universal soil loss equation (USLE) or its revised universal soil loss equation (RUSLE) and the corresponding economic loss, because this classification method is quite common and widely used in various fields, for example, the classification of the landslide is mainly in accordance with the amount of the landslides, the economic loss of landslides and the death toll (MLRPRC, 2004). Then, a large number of projects are carefully analyzed and summarized to calculate expenses per unit area required for the projects of different grades, in turn, investments of soil and water conservation measures required for different projects can be calculated. Traditional one-size-fits-all computing investment for all projects based on the same standard should be abandoned because the projects that are built with investment calculated by traditional methods still cause soil erosion at many cases even though the soil and water conservation measures have been done, but it is not enough due to low investment, as shown in Figure 4b. Of course, this is only the first step of soil erosion control in productive and constructive projects, and more experts, scholars, engineers, and managers are needed to carefully summarize numerous projects in different regions to determine more effective and reliable investments per unit area. Besides, previously, all the water and soil conservation plans never calculate economic loss as a quantitative index due to soil erosion, usually just give a predicted amount of soil erosion. Actually, the predicted amount of soil erosion has no direct effect on the investment by the decision-makers, because policymakers are concerned about money more. Until the amount of soil erosion is converted into money, policymakers will have an intuitive understanding of the extent of soil loss. If the economic losses of soil erosion are put into the soil and water conservation plan, project earnings and economic loss will be easy to compare, this will help decision-makers make decisions that help protect the environment by increasing investment or improving awareness of environmental protection and so on.
The economic loss caused by soil erosion can be calculated according to the following components. The economic loss includes direct and indirect economic loss. The direct economic loss includes sediment loss, nutrient loss, water loss, while the indirect economic loss is divided into the damage of water resource and ecological environment, and the decline of productivity and water-holding capacity of land, etc. (Wang et al., 2011). Also, the cost of repairing a damaged ecosystem caused by soil and water loss may be considered as economic loss, such as the costs of soil and water conservation measures. These detailed calculation examples can be found in the literatures (Wang et al., 2011; Lv et al., 2012).