The Economics of Desertification

By Kyra Ward
Economics & International Relations Student 

The Kubuqi desert has never attracted much attention internationally. Even in China it is dwarfed in significance of the Gobi.  Located in the northern region of China, the Kubuqi desert stands on the banks of the Yellow River. Historically, the Kubuqi has been overexploited by its host agrarian population, causing it to steadily succumb to desertification. This process had rendered agricultural production unfruitful and deteriorated the welfare of the local population, turning its traditional farming community into one typified by abject poverty and a growing need for new employment prospects. However, since 1988, this region has transformed into an exemplary case study proving just how successful sustainable development can be. Specifically, the action taken in the Kubuqi has provided a model of how to create a prosperous ‘green’ economy to the international community that will hopefully inspire other such development projects.

In the late 1980s the Chinese government partnered with a private company, Elion Resources Group, in order to combat some of the problems caused by desertification throughout China. As a result of this Public-Private Partnership (PPP), the company created a multi-step plan to stop the growing desert from engulfing the rest of the region. They began by building a highway that intersected the entire desert. This provided transportation links to be established and subsequently, enable more infrastructure to build up the region. The highway, furthermore, provided veins through which the barren land could be supplied with new flora. This was significant in fertilizing the land and laying the foundations for the agricultural industry to take hold once again.

The second stage of Elion’s plan in the Kubuqi desert resulted in the creation of the largest solar farm in China. Elion built 650,000 fixed and sun-tracking solar panels, which covers 6000 sq km of Kubuqi’s roughly 18,000 sq km desert. These panels produce roughly 500 million Kilowatt-hours every year. To put this into context, the average house in China uses around 1,300 Kilowatt-hours a year; so, every year this solar energy could power around 384,615 homes.

Additionally, the energy provided by these solar panels has replaced the unsustainable and environmentally damaging energy sources which used to be obtained from imported gas and coal. In a report done by the United Nations Environment Program, its estimated that the solar panels will reduce coal usage by 17,650 tons and carbon dioxide emissions by 32,930 tons per year.

Yet this is not the only remarkable feat this project has achieved. Close to a thousand people are employed to maintain the panels year round. Such employment entails washing the dust and dirt off the panels with high-pressured hoses. Through the act of cleaning these panels, a positive externality has allowed a second market to flourish. Many people are planting and cultivating licorice farms within the shade created by the solar panels. He Pengfei, a senior executive of Elion states, “The panels shield wind and sand and reduce evaporation, so grass and other plants can grow well under them.” Plants that would usually die from the extreme temperatures of the desert have vigorously multiplied in the optimal conditional underneath the panels. Not to mention they also receive plenty of water that runs off the panels after their daily wash.

Licorice farming was not just chosen simply as of its ability to grow in those conditions. It is one of the most profitable crops in China due to its popularity in herbal medicine, and Kubuqi is now known to have some of the best licorice around. In a TIME article, local woman Wu Zhi Hua says, “We say Kubuqi licorice is the best because it red while other is black.” While there may be some that have the conviction that the Kubuqi licorice’s color is what makes it superior, it should also be noted the licorice’s higher caliber is a consequence of the air quality. The Kubuqi’s isolated location is one of its biggest assets, as it allows for a substantially lower degree of air pollution than in other parts of China. Furthermore, this wonder crop also has the property of enriching soil, and just after four years of cultivation the land became arable enough to plant other vegetables. This process then diversified and expanded the regional agrarian market supplying many more varieties of crop and expanding employment.

Already the greening process of the Kubuqi desert has lifted around 100,000 people out of dire poverty. Tourism has now become one of the largest industries in the area as people flock by the thousands to see the changed landscape, slide down the sand dunes in sleds, or ride over them in buggies. There are new shops, cafés, hotels and restaurants. Far from being littered by desolate and poverty stricken towns the Kubuqi has transformed into a thriving metropolis.

So, the question remains, if the greening of Kubuqi is such a resounding success, why has it not been replicated in deserts worldwide? The answer lies in the fact that desertification is a nuanced problem. There is no ‘one size fits all’ solution to how to combat its effects. Unlike many deserts throughout the world Kubuqi used to be farm land which was then overused. This means that a soil system was merely dormant, and with proper care is being nurtured back to health. That is not the case with many other deserts, including other parts of China’s larger Gobi desert, where it would be nearly impossible to create a self-sustaining ecosystem.

While combating such large-scale issues as desertification demands leadership and concerted action, the United States has politically turning its back on issues of climate change and general environmental degradation. As a result of this leadership void, a number of questions have now arisen. Who will emerge as a leading innovator? Who will be willing to tackle the issues caused by our warming planet? And finally, who will battle with the resistance of environmentally uncooperative nations? As it stands China is beginning to look like the answer to our predicament. It is has surpassed the United States on a number of fronts, making it one of the only leading global superpowers with the drive to combat climate issues by minimizing or reversing the damage that has already been done. Even in the face of difficulties, such as having one of the largest growing populations in the world, it would be tempting not to engage with environmental issues. Avoiding environmental challenges would reduce the costs from their budget that funding new green energy initiatives takes. However, China has decided that the negative externalities of ignoring these problems are far too large to make up for any short-term benefit.

The government has also been incredibly supportive of private industries, like Elion, which are coming up with innovative solutions to help the environment. Currently the project in Kubuqi has already created a 500 billion yuan (roughly 75 billion USD) economy in Inner Mongolia.

There seems to be a pervasive myth that green economies will be less efficient and high yielding than regular oil and gas markets. This has caused inaction on the parts of many nations and a free rider mentality that continues to pass the burden of climate change off onto future generations. However, when nations such as China set an example like this, it shows that you can create incredibly lucrative and profitable markets while also innovating and using green technology. It makes seemingly fictitious ideas of futuristic societies based on green energy less of an unattainable ideal but a concrete reality, which our governments can materialize. These positive steps towards sustainable development have started to tackle the problems that future generations will have to live with for years to come. Hopefully environmental action will provide them with a better chance at achieving at least the standards of living we have all grown accustomed to.

The Kubuqi desert may not provide a perfect solution to desertification around the globe, but it does serve as an important model of how to start thinking creatively about tackling the vexing issues desertification causes.


Image by NASA Johnson/Flickr.

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