Compensating Landowners for Nonmarket Forest Values
12/30/97
*******************************
RELAYED TEXT STARTS HERE:
Headline: Compensating Landowners for Nonmarket Forest Values
Source: Costanza, R, et al. 1997. The value of the world's ecosystem
services and natural capital. Nature 387:252-259.
Date: 12/30/97
Author: Karl Davies
COMPENSATING LANDOWNERS FOR NONMARKET FOREST VALUES AND ECOSYSTEM SERVICES
(Message first posted in bionet.agroforestry November 5, 1997)
Karl Davies, Consulting Forester
Northampton, MA
I've been spending some time lately catching up on research in
forest economics. There's a lot of really interesting stuff
going on, particularly in the emerging fields indicated by the
terms in the heading above. Researchers are trying hard to put
dollar values on things like wildlife habitats, recreational
opportunities and aesthetic amenities. These are the forest
values that don't pass through the market, but that the general
public places significant value on.
Assigning values to nonmarket values is inherently difficult,
but the method of contingent valuation (CV) has gained enough
currency to have been accepted for use in assessing damages or
values in court cases. CV involves asking people questions
about their willingness to pay for particular forest benefits
under particular circumstances, including constrained government
budgets.
CV and other techniques were used in a ground-breaking study on
valuing ecosystem services by Costanza et al that was published
in the British journal Nature this past May 15. This study
calculated the value of gas regulation, climate regulation,
disturbance regulation, water regulation, water supply, erosion
control and sediment retention, soil formation, nutrient
cycling, waste treatment, pollination and genetic resources--in
addition to wildlife, recreation and aesthetic values.
The researchers came up with annual per hectare values and total
global values for all ecosystems, including open oceans; coastal
estuaries, seagrass/algae beds, coral reefs and shelf; tropical
and temperate/boreal forests; grass and rangelands; wetland
tidal marshes, swamps and floodplains; lakes and rivers; tundra;
desert; ice/rock. The global total was over $33 trillion per
year. The per hectare temperate/boreal forest value was $277
($112 per acre per year).
One may dispute the validity of the specific calculations in
this study, but the point remains that forest landowners (and
owners of other ecosystems) are providing significant values to
the general public for which they don't receive any
compensation. If owning forest land is viewed as an investment
choice, this lack of compensation appears especially unfair when
one considers that other investment choices such as some
corporate stocks and government bonds do not benefit the general
public, and in fact may significantly hurt the general public.
Consider the pollution that flows from ownership of oil,
chemical, or pesticide company stocks. Consider the
exploitation of labor that flows from ownership of some garment
and toy company stocks. The list could go on and on. Consider
the military destruction and income redistribution that can flow
from owning government bonds.
Of course some timber companies and some landowners are guilty
of ecosystem destruction, but even they are probably doing less
long-term damage than a pesticide company for example, because
the ecosystem recovers in time whereas many pesticides persist
in the environment practically forever. There would be a
baseline ecosystem service value for even a clearcut forest.
And there would be a high end value for old growth forests.
Most forest properties would have mid-range ecosystem service
values. Forests managed for a diversity of habitats and
products would be closer to the high end. Therefore it is
possible to manage for greater ecosystem service value. Since
managing for that high end benefits society, shouldn't the
owners who do so be compensated or rewarded in some fashion?
Isn't this type of management essentially the same as giving
away the development rights to a property? Doesn't the public
benefit in the same manner? And shouldn't good ecosystem
management receive the same type of tax deduction? Could annual
ecosystem services for different forest types be calculated and
capitalized for a range of management regimes to facilitate this
process? Could tax losses to governments be offset by
additional taxes on corporations that pollute or despoil?
Let's have some discussion on this issue and see if there might
be a way of drafting some legislation. It would benefit
landowners, foresters and the general public. Just getting the
issue out there and having some debate would go a long way
towards educating people about what good forest management does
for us all.
The Costanza, et al paper is on-line at www.nature.com.
Supplementary information is also available at this website.
The published version is referenced below, along with a couple
other interesting papers from forestry journals. Much more
information may be found by doing a CAB Abstracts (at most
university science libraries) search for forest valuation,
contingent valuation, or forest economics.
Costanza, R, et al. 1997. The value of the world's ecosystem
services and natural capital. Nature 387:252-259.
Lippke, B and HL Fretwell. 1997. The market incentive for
biodiversity. Journal of Forestry 95(1):4-7.
van Kooten, GC. 1995. Can nonmarket values be used as indicators
of forest sustainability? Forestry Chronicle 71(6):702-711.