Nearly US$44 trillion of economic output – more than half of the global GDP – is reliant on natural capital, yet land resources around the world continue to be degraded due to humans. In the latest UN Global Land Outlook report, the UN found that upwards of 40% of the total land area on earth is degraded, or lost some or all of its natural productivity due to humans.

This degradation spans croplands to drylands, wetlands, forests, and grasslands, and affects nearly half the global population. Land as a resource underpins our societies and economies, but the problem is the way in which it’s managed and used.

Much of the degradation is caused by food production or unsustainable farming practices. And once land is degraded, it becomes significantly harder to continue to grow crops as both soil and water resources are depleted.

The UN calls for investment in large-scale land restoration or risk continued climate-related disasters. “If current land degradation trends continue this century, scientists predict that severe climate-induced disturbances will increase,” says the report. “Collectively, these trends increase the risk of declining human health, more zoonotic diseases, and greater conflict over land resources.”

Additionally, the report highlights ‘One Health’ approaches, which recognise the interdependencies between people, plants, animals, and their shared environments. “By restoring the land, we can significantly improve human health and livelihoods, increase food and water security, and reduce the risk of future pandemics.”

It’s clear that land restoration at scale is critical for tackling climate change but the question remains, is that degraded land lost forever, or can it be revived through restoration projects and improved farming practices?

Eduardo Tugendhat, Palladium Director of Commercial Facilities for Natural Resource Systems, notes that restoring nature will be all about working smarter. “The interface of water and land is a super important part of this conversation and making the most of those resources in an intelligent way.”

He shares the example of the western United States, in areas such as California where water was given freely and gave rise to highly water-intensive crops in areas where water is scarce. “An economist would probably say that if you properly priced water, practices like this would stop altogether,” Tugendhat adds.

And while he adds that some areas of degraded land will be more difficult to restore, it won’t be impossible. “The growing desertification in areas that weren’t ideal for agriculture to begin with are very hard to recover from, but it’s possible.” He points to areas of Israel where the desert has been utilised for agriculture but stipulates that it requires water technology and a lot of capital to make it happen. “The capabilities and technologies exist, but the funding is lacking.”

Without the proper technology or practices, farming on degraded land creates a vicious cycle. “A lot of that degraded land is still used but over time, the yields go down and farmers need more chemicals which is worse for the environment, and eventually farmers are a lot less profitable,” explains Tugendhat.

And while there’s plenty of interest in regenerative agriculture – farming practices that are sustainable and good for the land – the economics of those efforts are still being figured out. “It’s critical to ensure that the farmers are getting paid to incentivise better practices, to improve use of land and water, and to invest in the technology needed to ensure their land is sustainable.”

But Tugendhat notes that our current commodities systems are structured in a particular way and bringing about change is not easy. “A lot of actors need to come together to work together, from the consumers to the corporations and ensure that they’re changing how they do their business,” he says.

The UN reinforces the sentiment. “Business as usual is not a viable pathway for our continued survival and prosperity. A rational response begins with a profound reassessment of current land use and management practices.”

There’s money to be made on nature restoration. The UN calculates that for every US$1 spent, there’s a return between US$7 and US$30 in increased production among other benefits. But first there must be a major investment by both governments and the private sector in the next decade to restore about one billion hectares of degraded land if we’re to safeguard our planet’s soils, water resources, and ecosystems.

The solutions and the technology are out there, but it requires a groundswell of funding and a shift in not just how business is done, but how nature is valued and built into business strategies.

For more information, contact info@thepalladiumgroup.com.