INTRODUCTION

Land use change affects economic activity both directly and indirectly. In the process of land colonisation that accompanies economic development and population growth, naturally occurring vegetation is typically affected in one of three ways: (1) available biomass and species are harvested and then left to regenerate before harvesting again, (2) the vegetation is simplified (in terms of its biological diversity) in order to increase production from selected species or (3) the existing vegetation is largely removed to make way for the production of domesticated species, the installation of infrastructure or urbanisation. The direct, and desired, impact of land use change under these circumstances is to raise the economic productivity of the land unit. Of course, many indirect (and perhaps unintentional) environmental impacts result as well. These impacts reflect the economic values attributed to natural vegetation and biogeophysical processes. Conversely, efforts to recuperate degraded lands or to protect natural ecosystems may forsake direct productive benefits in favour of fostering these indirect environmental values.

The loss of biodiversity and alteration of ecological processes accompanying the logging and conversion of forestland have captured the public imagination in the 1990s, with corresponding growth in research aimed at illustrating these indirect ecological and economic impacts (Perrings et al., 1992; Barbier et al., 1994). This chapter concerns itself with another type of environmental value: the impact of land use change on the hydrological cycle.