Economic Assessment of Forest Ecosystem Services Losses: Cost of Policy Inaction

This paper presents a bottom-up methodological framework for estimating some of the key ecosystem services provided by forests biomes worldwide. We consider the provision of wood and non-wood forest products, recreation and passive use services, and carbon sequestration. The valuation framework derives per hectare estimates by applying meta-analysis, value-transfer and scaling-up procedures in order to control for the existing heterogeneities across world regions and forest biomes. The first part of the study estimates stock values per hectare for each forest ecosystem service in the baseline year 2000 and in the year 2050. Results differ per geographical region and biome. Carbon stocks represent, on average, the highest value per hectare, followed by provisioning services, passive use and recreational values respectively. The second part provides an estimation of the welfare loss (or gain) associated with policy inaction in the period 2000–2050 leading to a change in the forest area. Welfare results are mixed and require a careful interpretation, ranging from a worldwide annual benefit of + 0.03% of 2050 GDP to an annual loss of −0.13%. The highest damage is expected in Brazil due to the increasing deforestation taking place in tropical natural forests, which is causing a considerable loss of carbon stocks.     

Local financial benefits of rain forests: comparative evidence from Amerindian societies in Bolivia and Honduras

Researchers generally express the local value of tropical rain forests in dollars/ha/year. The approach is problematic because it produces low values to local users, underestimating the importance of the forest expressed as a share of household consumption or earnings. Here we contribute to valuation studies of rain forests by estimating the financial importance of the forest measured in three ways: (1) the contribution of forests to annual household consumption and (2) earnings; and (3) the value of a hectare of rain forest to villagers measured through the biological goods consumed and sold. We collected panel data on consumption and earnings from 81 households in four villages of two Amerindian societies in two nations (Tsimane’, Bolivia; Tawahka, Honduras). Analyses suggest: (1) forests account for a large share of household consumption (median 38.5%; range 14.65–53.11%); (2) forests contribute more to household consumption than to household earnings (median 22.69%; range 16.56–44.81%); (3) the relative contribution of forests to household consumption and earnings falls among villages closer to towns; and (4) the range of values/year of rain forest/ha is US$7.10–9.70 using 1999 dollars or US$18.46–46.56 using purchasing power parity indexes, below previous estimates. Results show much variation in forest values; valuation methods and stakeholder perspectives affect the variation. Given the variation, a useful strategy to promote forest conservation would transfer income to villagers to compensate them for non-local forest values.     

Converting Forests to Farms: The Economic Benefits of Clearing Forests in Agricultural Settlements in the Amazon

Agricultural expansion into tropical forests is believed to bring local economic benefits at the expense of global environmental costs. The resulting tension is reflected in Brazilian government policy. The national agrarian reform program has settled farm families in the Amazon region since the 1970s, with the expectation that they will clear forests in order to farm the land. On the other hand, recent Brazilian policy initiatives seek to reduce deforestation to mitigate climate change. We contribute to the policy debate that surrounds these dual goals for the Amazon by estimating the marginal effects of new agricultural land on the full income and assets of farm settlers over a 13-year period from 1996 to 2009. Using micro panel data from agrarian settlements where forest was being rapidly cleared, and controlling for factors that would otherwise confound the relationship, we estimate the effect of converting forest to agriculture on total household income to estimate the opportunity cost of conserving forest. Our measure of income reflects any re-allocation of resources by utility maximizing households and any productivity effects due to loss of forest ecosystem services. The estimated effect of new agricultural land on income is positive, but small relative to the income per hectare of previously cleared land. However, we show that income increases investment in physical assets, which raises households’ income generating capacity and future accumulation of assets. Thus, while there is only a small immediate income gain from clearing more forest, the long-term effects on wealth are still substantial. This demonstrates that given the right conditions, conversion of forest to agricultural land can be an impetus for asset accumulation by smallholders. It also highlights the importance of considering the indirect and long-term welfare benefits of new agricultural land when assessing the opportunity costs of forest conservation.     

Carbon offsets as an economic alternative to large-scale logging: a case study in Guyana

The objective of this study is to analyze the economic viability of carbon-offset projects that avoid logging in Guyana's forests. The results of this case study illustrate the cost effectiveness of alternative land-use options that reduce deforestation and associated greenhouse gas (GHG) emissions. This analysis demonstrates that using Guyana's rainforests for climate change mitigation can generate equivalent revenue to that of conventional large-scale logging without detrimental environmental impacts. At a 12% discount rate, the break-even price for carbon is estimated to be about US$ 0.20/tC. This estimate falls toward the low range of carbon prices for existing carbon offset projects that avoid deforestation.     

Economic cost of deforestation in semi-deciduous forests — A case of two forest districts in Ghana

The ecological, economic and socio-cultural roles of forests are under threat in Ghana due to the high rate of deforestation. Efforts are being made to combat this problem through rehabilitation measures. However, the costs of deforestation and restoration benefits are not adequately estimated. This paper fills in the gap in knowledge by providing an empirical estimation of the cost of deforestation in monetary terms. Primary data collected regarding timber, non-timber forest products and soils in semi-deciduous forests were analyzed using opportunity cost and replacement cost techniques. The results emphasize differences in the value of these forest goods and services lost annually. The largest losses were in stumpage fees, edible fruits, and avoided carbon emissions values. The results show that US$133,650,000 gross revenue, equivalent to 2.6% of the 2008 agricultural sector Gross Domestic Product, is lost annually. It can be concluded that restoring the degraded forest lands would bring benefits particularly to the local communities through increased stumpage revenues and harvest of non-timber forest products, as well as additional funds from carbon credits. It is recommended that stakeholders of forest resources are made aware of these costs in order to raise awareness of what they are losing through deforestation.     

Timber harvesting versus forest reserves—producer prices for open-use areas in German beech forests (Fagus sylvatica L.)

A strong demand for nature conservation can be ascertained in Germany. Several nature conservation groups argue that in order to provide nature conservation in considerable parts of the forest area forestry should sacrifice timber harvesting. For example, the abandoning of harvesting altogether is supposed to enhance and protect the species richness. This fact and the very low profitability of forestry in Germany motivated the writing of this paper. The paper explains a methodology for deriving producer prices involved in forest reserves, where harvest benefits are sacrificed totally. Such methodology can be useful to form a basis for private contracts between forest owners and nature conservationists, who demand forest reserves. The results of this methodology can also be integrated in financial programs for species and habitat conservation.In a basic theoretical consideration, it is demonstrated that a stand-by-stand evaluation approach may only serve as an initial step in deriving compensation prices for forest reserves. Due to the stochastic character of forest management, a nonlinear programming approach (NLP) was adopted to find an optimal operational plan for a hypothetical beech (Fagus sylvatica L.) forest. In both the constraints and the objective function, the nonlinearity is considered by integrating stochastic components. Additionally, only virtual homogenous forest reserves are considered. Firstly, a basic NLP solution for the hypothetical forest with the objective “maximise the net present value (NPV) of timber harvests adjusted to risk” was obtained when considering several constraints subject to stochastic variation of net revenues and timber harvests without considering forest reserves. Secondly, other solutions allowing for forest reserves were computed. The decrease of the objective function when forest reserves were increased in periodic increments seemed well suited to mirror the opportunity costs of forest reserves.The results showed that a stand-by-stand approach gave much greater compensation prices than the NLP approach. The reason for this lay in the consideration of a nonlinear objective function as well as the nonlinear constraints in the case of NLP. The first 42-ha forest reserve was priced at 11,494 Euro/ha or, 483 Euro/ha/year expressed in infinite yearly compensation. The yearly compensation price for the last forest reserve had an increase up to 607 Euro/ha/year. A stand-by-stand approach, however, resulted with compensation prices from minimally 609 up to maximally 709 Euro/ha/year.Various interest rates (3.2% and 5.2%) caused different compensation price curves. The slope of the curves increased when the interest rate decreased.The limits of the approach, the problem of deriving a demand for forest reserves and the opportunities for applying the presented approach to state forests are discussed.     

Integrated Environmental and Economic Accounting: An Application to the Forest Resources in India

Forests contribute to the economy in several ways. While forests are a source of timber with market values, they also influence local and regional climate, preserve soil cover on site, and in the case of watersheds, protect soil downstream from floods –functions, which are not in the production boundary of SNA. Further, the net value added in forestry sector does not reflect sustainability of forest resources, because it ignores the consumption of natural capital (depletion) that occurs when forests are harvested or converted to other uses. The only costs of depletion considered in the national accounts are the extraction costs and records the potential loss in forest wealth as other changes in assets that have no effect on Gross Domestic Product (GDP). The study tries to incorporate forest resources into the national accounts and adjust the Gross Domestic Product (GDP) for the depletion of forest capital, using the Satellite System of Integrated Environmental and Economic Accounting (SEEA). The value of net accumulation (positive or negative) of forests is calculated and the net Domestic Product is adjusted for the depletion of the forest resources to get Environment adjusted Domestic Product (EDP). The results show that the EDP equals 98.4% of the adjusted net domestic product in 1993–1994. A proper accounting framework would better reflect not only the long term value of the state's natural wealth but also its immediate contribution to the state economy in the current accounts.     

Estimation of forest values using choice modeling: An application to Spanish forests

This paper presents a Choice Modeling application of forest goods and services valuation for an afforestation program in the Northeast of Spain. The results from a random parameter logit model reveal that, on average, individuals would annually pay an average of 11.79 euros for the forests to sequester 68,000 tones of CO₂, 0.12 euros for delaying the loss of land productivity for ten years, and 6.33 euros from picnic users for being allowed to picnic in the new forests. On the other hand, individuals would experience a loss in welfare equivalent to − 9.67 euros if four-wheel driving is allowed in the new forests. Finally, being allowed to pick mushrooms in the new forests is valued at an average of 12.82 euros by those who live in rural areas.     

Accounting for single and aggregated forest incomes: Application to public cork oak forests in Jerez (Spain) and Iteimia (Tunisia)

This study presents an applied improvement in the agroforestry accounting system (AAS) approach to two public cork oak forests in the Mediterranean region: Jerez (Spain) and Iteimia (Tunisia). Both forests have similar environments but differ in land property rights, labour markets and countries (developed and developing economy, respectively).The income analysis considers the differences between forest ownership, and household and landowner economic rationalities. In the case of Jerez, the public landowner has a right to exclude others from using the forest resources; community employment and natural resource conservation criteria determine Jerez's management. In the Iteimia case, the public landowner has regulated free-use rights for livestock grazing, firewood and crops so that local households can meet their needs and improve their income. Households operate by maximizing their income from the full employment of their own family workforce.The results show that Jerez's management generates negative commercial capital income for the public landowner, despite receiving significant public subsidies, while it maintains high internal forestry investment that generates additional local employment. Conversely, Iteimia produces positive commercial capital income for the public landowner and high household self-employed labour income per hectare.     

The opportunity cost of land use and the global potential for greenhouse gas mitigation in agriculture and forestry

This paper analyses the role of global land management alternatives in determining potential greenhouse gas mitigation by land-based activities in agriculture and forestry. Land-based activities are responsible for over a third of global greenhouse gas emissions, yet the economics of land-use decisions have not been explicitly modeled in global mitigation studies. In this paper, we develop a new, general equilibrium framework which effectively captures the opportunity costs of land-use decisions in agriculture and forestry, thereby allowing us to analyse competition for heterogeneous land types across and within sectors, as well as input substitution between land and other factors of production. When land-using sectors are confronted with a tax on greenhouse gas emissions, we find significant changes in the global pattern of comparative advantage across sectors, regions, and land types. Globally, we find that forest carbon sequestration is the dominant strategy for GHG emissions mitigation, while agricultural-related mitigation comes predominantly from reduced methane emissions in the ruminant livestock sector, followed by fertilizer and methane emissions from paddy rice. Regionally, agricultural mitigation is a larger share of total land-use emissions abatement in the USA and China, compared to the rest of the world, and, within agriculture, disproportionately from reductions in fertilizer-related emissions. The results also show how analyses that only consider regional mitigation, may bias mitigation potential by ignoring global market interactions. For example, USA-specific analyses likely over-estimate the potential for abatement in agriculture. Finally, we note that this general equilibrium framework provides the research community with a practical methodology for explicit modeling of global land competition and land-based mitigation in comprehensive assessments of greenhouse gas mitigation options.     

基于我国农地利用方式变化的碳效应特征与空间差异研究

农地利用变化既是重要的碳源,同时也是最主要的碳汇。碳效应测算分析表明,1993—2008年我国农地利用碳排放总量、强度年均分别增长4.08%、2.38%;化肥、农药、农膜、农用柴油、灌溉、翻耕等所产生的碳排放量年均分别递增3.45%、4.65%、7.20%、4.77%、1.22%、0.38%。2000—2008年林地碳汇量增长3.19%,而草地碳汇则呈现微弱的递减态势。农地利用方式变化的碳效应来看,2001—2008年我国因生态退耕产生碳汇年均递减45.16%,由于建设占用所引发碳排量年均递增2.23%。农地利用变化的碳效应区域差异,生态退耕碳汇效应最大是河北,最小的是黑龙江;因建设占用耕地导致碳排放效应最为显著的是江苏,最小为西藏。     

Socioeconomic predictors of forest use values in the Peruvian Amazon: A potential tool for biodiversity conservation

Conservation is a crisis discipline requiring rapid action with limited funds. This study examines the potential of socioeconomic variables to predict forest use values. If natural resource use can be predicted from socioeconomic data, conservation planners could rapidly identify and focus conservation programs on the sectors of local populations that most intensively utilize local flora and fauna. Families in three communities in the northern Peruvian Amazon were surveyed over a 6-month period. Data were collected on use of flora and fauna from six locally determined use categories (food, medicine and poisons, wood, weavings, adornments, and “other”) in forest types of three age classes (fallow fields—very young forests, young secondary forests, and old secondary forests). Forest use values were the dependant variables calculated in $/ha/year. Socioeconomic variables included: age, education, family size, residence time, land worked, land owned, number of fishing nets, chickens, pigs, cows, and/or mules owned (all proxies for productive assets), and level of ecological knowledge (ability of informants to correctly identify forest species and answer basic questions about their biology). Ordinary least square multiple regressions were run independently for each forest type. Regressions were also run separately for the two most valuable use categories, food and wood. Low R² adjusted values (all < 0.3) reflect the difficulty in predicting human behavior due to confounding variables and complex interactions. Residence time and a household's community of residence were the most significant predictors of forest use values. Households in Vista Alegre, the community with the highest density of people and smallest landholdings per household, extracted the highest value of forest products per hectare. The longer a family stayed in any community the higher the value of forest goods they extracted. If families that lived in an area longest are the most intensive extractors of forest products, they should be a major focus for conservation programming. In addition, the higher value of products extracted from forests by some families may make them more open to strategies seeking to protect long-term viability of the resources they utilize. The importance of residence time also indicates that planners need to account for changes in the resource use patterns of stakeholders over time.     

REDD+and community-controlled forests in low-income countries: Any hope for a linkage?

Deforestation and forest degradation are estimated to account for between 12% and 20% of annual greenhouse gas emissions and in the 1990s (largely in the developing world) released about 5.8 Gt per year, which was bigger than all forms of transport combined. The idea behind REDD + is that payments for sequestering carbon can tip the economic balance away from loss of forests and in the process yield climate benefits. Recent analysis has suggested that developing country carbon sequestration can effectively compete with other climate investments as part of a cost effective climate policy.This paper focuses on opportunities and complications associated with bringing community-controlled forests into REDD +. About 25% of developing country forests are community controlled and therefore it is difficult to envision a successful REDD + without coming to terms with community controlled forests. It is widely agreed that REDD + offers opportunities to bring value to developing country forests, but there are also concerns driven by worries related to insecure and poorly defined community forest tenure, informed by often long histories of government unwillingness to meaningfully devolve to communities. Further, communities are complicated systems and it is therefore also of concern that REDD + could destabilize existing well-functioning community forestry systems.     

Valuing ecosystem and economic services across land-use scenarios in the Prairie Pothole Region of the Dakotas, USA

This study uses biophysical values derived for the Prairie Pothole Region (PPR) of North and South Dakota, in conjunction with value transfer methods, to assess environmental and economic tradeoffs under different policy-relevant land-use scenarios over a 20-year period. The ecosystem service valuation is carried out by comparing the biophysical and economic values of three focal services (i.e. carbon sequestration, reduction in sedimentation, and waterfowl production) across three focal land uses in the region [i.e. native prairie grasslands, lands enrolled in the Conservation Reserve and Wetlands Reserve Programs (CRP/WRP), and cropland]. This study finds that CRP/WRP lands cannot mitigate (hectare for hectare) the loss of native prairie from a social welfare standpoint. Land use scenarios where native prairie loss was minimized, and CRP/WRP lands were increased, provided the most societal benefit. The scenario modeling projected native prairie conversion to cropland over the next 20 years would result in a social welfare loss valued at over $4 billion when considering the study's three ecosystem services, and a net loss of about $3.4 billion when reductions in commodity production are accounted for.     

Bioenergy and global land-use change

This is the first article that econometrically estimates the global land-use change impact of bioenergy. Applying time-series analytical mechanisms to fuel, biofuel and agricultural commodity prices and production, we estimate the long-run relationship between energy prices, bioenergy production and the global land-use change. Our results suggest that rising energy prices and bioenergy production significantly contribute to the global land-use change both through the direct and indirect land-use change impact. Globally, the total agricultural area yearly increases by 35 578.1 thousand ha due to increasing oil price, and by 12 125.1 thousand ha due to increasing biofuel production, which corresponds to 0.73% and 0.25% of the total worldwide agricultural area, respectively. Soya land-use change and wheat land-use change have the highest elasticities with respect to both oil price and biofuel production. In contrast, nonbiomass crops (grassland and rice) have negative land-use change elasticities. Region-specific results suggest that South America faces the largest yearly total land-use change associated with oil price increase (+10 600.7 thousand ha), whereas Asia (+8918.6 thousand ha), South America (+4024.9 thousand ha) and North America (+1311.5 thousand ha) have the largest yearly total land-use change associated with increase in biofuel production.     

农业巨灾的成灾机理与金融效应分析

农业是国民经济的基础产业,也是高风险的弱质行业。近年自然灾害的频率和程度增加,农业巨灾风险与迅速增长的经济活动伴生,导致农业经济因灾损失不断加重。农业巨灾风险与一般巨灾风险不同,具有明显的伴生性、相关性和扩散性的特点。导致其发生既有自然因素,也有非自然因素。农业巨灾的金融效应具有双重性,应趋利避害,诱导其有利效应发挥作用。可通过加强农业巨灾的科学研究,提升巨灾预测与评估等科学技术,提高承灾体的风险意识,加强风险监管以降低社会的脆弱性等途径实现。     

Agri-environmental policies for biodiversity when the spatial pattern of the reserve matters

The aim of this paper is to compare different environmental policies for cost-effective habitat conservation on agricultural lands, when the desired spatial pattern of reserves is a random mosaic. We use a spatially explicit mathematical programming model which studies the farmers' behavior as profit maximizers under technical and administrative constraints. Facing different policy measures, each farmer chooses the land-use on each field, which determines the landscape at the regional level. A spatial pattern index (Ripley L function) is then associated to the obtained landscape, indicating on the degree of dispersion of the reserve. We compare a subsidy per hectare of reserve with an auction scheme and an agglomeration malus. We find that the auction is superior to the uniform subsidy for cost-efficiency. The agglomeration malus does better than the auction for the spatial pattern but is more costly.     

土地利用的时空结构分异研究

时空结构分异分析是以GIS叠置分析为辅助手段。目前描述空间结构分异最常用的方法是比较分析不同土地利用类型在空间方位上的差异。由于按方位划分的空间单元并不具有均等的土地面积,因而其变化速度就不具有严格意义上的可比性。文章对上述方法进行了改进,创建性的引入了年均变化强度指数这一具有可比性的指标体系来描述土地利用的时空结构分异特征,它实质就是用各空间单元的土地面积对其年均变化速度进行标准化处理,使各种土地类型的变化速度具有可比性,得出各不同用地类型的时空结构分异情况,对出现这种情况的原因进行综合分析评价,从而达到全面把握土地变化规律的目的。该研究方法有助于从总体上全面掌握土地利用时空结构演变的趋势与特点,对发达地区未来城市土地利用的合理规划有一定的借鉴意义。     

Selling two environmental services: In-kind payments for bird habitat and watershed protection in Los Negros, Bolivia

Marketing several environmental services from a single area can help access diverse sources of funding and make conservation a more competitive land use. In Bolivia's Los Negros valley (Department of Santa Cruz), bordering the Amboró National Park, 46 farmers are currently paid to protect 2774 ha of a watershed containing the threatened cloud-forest habitat of 11 species of migratory birds. In this payment for environmental services (PES) scheme, annual contracts prohibit tree cutting, hunting and forest clearing on enrolled lands. Farmer-landowners as service providers submit to independent yearly monitoring, and are sanctioned for non-compliance. Facilitated by a local NGO, Fundación Natura Bolivia, one service buyer is an international conservation donor (the US Fish and Wildlife Service) interested in biodiversity conservation. The second service users are downstream irrigators who likely benefit from stabilized dry-season water flows if upstream cloud forests are successfully protected. Individual irrigators have been reluctant to pay, but the Los Negros municipal government has on their behalf contributed ~ US$4500 to the scheme. The negotiated payment mode is annual quid pro quo in-kind compensations in return for forest protection. Predominantly, payments are made as “contingent project implementation”, transferring beehives supplemented by apicultural training. With regard to service provision, environment committees and education programs have increased awareness in downstream communities of the probable water-supply reduction effect of continued upstream deforestation. External donors have funded subsequent studies providing basic economic, hydrological and biodiversity data, and covered PES start-up (~ US$40,000) and running transaction costs (~ US$3000 per year over the last three years). The greatest challenges in the development of the PES mechanism have been the slow process of building trust between service buyers and providers, and in achieving clear service-provision additionality.     

The Impact of Land-Use Change on Ecosystem Services,Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota

Land-use change has a significant impact on the world’s ecosystems. Changes in the extent and composition of forests, grasslands, wetlands and other ecosystems have large impacts on the provision of ecosystem services, biodiversity conservation and returns to landowners. While the change in private returns to landowners due to land-use change can often be measured, changes in the supply and value of ecosystem services and the provision of biodiversity conservation have been harder to quantify. In this paper we use a spatially explicit integrated modeling tool (InVEST) to quantify the changes in ecosystem services, habitat for biodiversity, and returns to landowners from land-use change in Minnesota from 1992 to 2001. We evaluate the impact of actual land-use change and a suite of alternative land-use change scenarios. We find a lack of concordance in the ranking of baseline and alternative land-use scenarios in terms of generation of private returns to landowners and net social benefits (private returns plus ecosystem service value). Returns to landowners are highest in a scenario with large-scale agricultural expansion. This scenario, however, generated the lowest net social benefits across all scenarios considered because of large losses in stored carbon and negative impacts on water quality. Further, this scenario resulted in the largest decline in habitat quality for general terrestrial biodiversity and forest songbirds. Our results illustrate the importance of taking ecosystem services into account in land-use and land-management decision-making and linking such decisions to incentives that accurately reflect social returns.