Forest valuation studies in a Nordic context

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1 Forest valuation studies in a Nordic context Henrik Lindhjem Nordic workshop on forest ecosystem services, Oslo, 13. Sept. 2012

2 Motivation: can we have it all? Timber products Non-timber products, other services Source: Future Forests, 2011

3 Content Ongoing review for Norwegian TEEB Forest ES valuation: Nordic perspectives Thoughts on ES trade-offs Where to go from here?

4 Review for Norw. TEEB committee Description of Norw. forest ES Significance and value ES relationships and trade-offs Important knowledge gaps Based on available literature Work ongoing!

5 Pyramid of «recognizing» ES value Monetary valuation Monetary: for example value of carbon sequestered, avoided costs of water purification, value of recreation days Quantitative assessment Quantitative: for example cubic purified water, tonne stored carbon per year, number of recreation days Qualitative assessment Qualitative: Extent and importance of ES, knowledge gaps The total amount of forest ecosystem services supported by biodiversity

6 Key forest ES & valuation methods Food (berries, mushrooms, game meat etc.) Biodiversity: Use values (pollination, pest control, wildlife, sport) Biodiversity: Non-use value (existence values) Raw materials (timber, other) Climate regulation (carbon storage, GHG) Water quantity and quality Flood prevention Pollution remediation Energy Amenity values (landscape, urban green space, etc) Recreation and tourism Health effects Value via adjusted market prices Value via contribution to output Value via avoided costs Value via revealed preferences Value via stated preferences Based on Bateman (2012)

7 Nordic valuation literature overview Provisioning services Regulating & supporting Carbon Flood prev. Raw materials Bioenergy Food (meat, berries, fish) Tourism Cultural services Biodiv (non-use) Recreation: Multiple use forestry Hunting/fishing Mostly stated prefs, some revealed prefs Size of circle indicates number of studies

8 Data availability related to importance and value of (all biotope) ES (TEEB Nordic, 2012) Denmark Finland Iceland Norway Sweden Provisioning services Regulating services Cultural services Supporting processes and functions Relatively good for goods with markets, poor for non-market goods Limited at national level. Case study evidence available. Limited at national level. Case study evidence available. Relatively good for goods with markets, poor for non-market goods Limited at national level. Case study evidence available. Relatively good. Some national level estimates available, several case examples exist Relatively good for goods with markets, poor for non-market goods Very limited Limited at national level. Case study evidence available. Relatively good for goods with markets, poor for non-market goods Limited at national level. Case study evidence available. Limited at national level. Case study evidence available. Poor Poor Poor Poor Poor Relatively good for goods with markets, poor for non-market goods Limited at national level. Case study evidence available. Limited at national level. Case study evidence available.

9 Value of forest products Forest products, export value (US1000) % of Gross Domestic Product (GDP) Denmark Finland Iceland Sweden Norway < 1% 5.5% < 1% 3.5% < 1% Note: these figures are an average of quantities / year from Source: TEEB Nordic (2012)

10 Berries and mushrooms Country Berries Mushrooms Quantity (tonnes / year) Value (mil EUR 1) 2 Quantity (tonnes / year) Value (mil EUR) 2 Finland Sweden Not available Not available Norway Quantities and values of berries and mushrooms picked for markets in 2005 in Finland, Norway and Sweden. 1 Value for mushrooms and berries together 2 Based on the source, the estimated values for NO and FI are based on collector's price whereas in Swedish the value is based on " weather conditions and newspaper information". Source: TEEB Nordic (2012)

11 Hunting Country Finland Sweden Norway Denmark Iceland Greenland Hunters (with licence) Large mammals (catch / year) Eurasian elk Eurasian elk Eurasian elk Roe deer Reindeer Reindeer Bears (catch / year) Other species (catch / year) NA NA Polarbear 124 Mallard Wood pigeon Black grouse Roe deer Mallard Wood pigeon Willow grouse Wood pigeon Red deer Pheasant Mallard Wood pigeon Rock ptarrigan Greylag goose Puffin Guillemot Harp seal Ringed seal Ref. year Value of game meat (catch / year) 83 mil EUR (mainly Eurasian elk) mil SEK (~125 mil EUR) 44 mil EUR NA NA NA Source: Adapted from TEEB Nordic (2012)

12 Table 1 Stated preference studies of forest conservation, multiple-use & biodiversity Stated preference valuation surveys of non-timber benefits from forests in Finland, Norway and Sweden, Main references Year Good 1 Gain/ loss Mode Scope 2 Method # WTP (USD) Finland Kniivilä (2004) 2000 P L Mail R, L CV: DC Lehtonen et al (2003) 2002 P G Mail R CV: DC Pouta et al (2000; 2002) 1997 P G/L Mail N CV: DC Pouta (2003; 2004; 2005) 1998 M G Mail N CV: DC Rekola and Pouta (2005) 1995 M G Mail L CV: DC 1 20 Siikamäki and Layton (2005) 1999 P G Mail N CV: DC, CE Mäntymaa et al (2002) 1999 P, B G Mail N CV: OE Horne et al (2005) 1998 P, M G/L Interv. L CE 1-16 Tyrväinen & Väänänen (1998) 1995 P, O L Mail L CV: OEPC Tyrväinen (2001) 1996 P, O L/G Mail L CV: OEPC Norway Simensen and Wind (1990) 1989 P, M G Interv. L CV: OE Hoen and Winther (1993) 1990 P, M G Interv. N CV: OEPC Veisten et al (2004a; b) 1992 B L Interv. N CV: OE/OEPC Sandsbråten (1997) 1997 M L/G Interv. L CV: DC Leidal (1996) 1996 P L Interv. L CV: DC/OE Skagestad (1996) 1996 P, M G Interv. L CV: OEPC 1 15 Veisten and Navrud (2006) 1995 P L Mail R CV: DC/OE Hoen and Veisten (1994) 1992 M G Interv. L CV: OE 1 50 Hoen and Veisten (1994) 1993 M G Interv. L CV: DC 1 48 Strand and Wahl (1997) 1997 P L Interv. L CV: OE/DC Sweden Bojö (1985) 1985 P G Interv. L CV: DC 1 58 Bostedt and Mattson (1991) 1991 M, O L Mail L CV: OE Mattson and Li (1993) 1991 M, O L Mail R CV: OE/DC Mattson and Li (1994) 1992 M, O L/G Mail R CV: DC, CE Kriström (1990a; b) 1987 P G Mail N CV: DC/OE Johansson (1989) 1987 B L Mail N CV: OE Bostedt and Mattson (1995) 1992 M, O G Mail L CV: OE Fredman & Emmelin (2001) 1998 M, O G Mail R CV: OE 1 92 Total number of estimates 72 1, Good: P = Protection, M = Multiple Use Forestry, B = Primarily forest biodiversity, O = Other; # = Number of estimates in the meta-regression. 2 = Local (L), Regional (R), National (N) Source: Lindhjem (2007)

13 Ex: Norw. biodiv valuation study (work ongoing) Willingness to pay for forest protection Three alternative plans: 2.8%, 4.6% and 10% Mostly biodiversity (existence) values Contingent valuation survey Mean WTP and public conservation budget: Per hhld ~ kr per year for 4.6% Public budget 2012: kr 120 mill or 55 per hhld Voluntary conservation lacks funds REDD budget per year: ca kr 3 billion

14

15 PICTURES OF ENDANGERED SPECIES INCL WITH CV SURVEY 15 Asking for individual or household WTP?

16 WTP FOR ALTERNATIVE FOREST PROTECTION PLANS Asking for individual or household WTP? % protection (today) 2,8% protection (doubling)

17 Info from scenario descriptions Lindhjem (2008, 2011)

18 Willingness to pay question: What is the most your household is willing to pay in an additional annual tax earmarked to a public fund for increased forest conservation from today s level of 1.4% to 2.8% of the productive forest area? Choose the highest amount, if anything, your household will pay. Try to consider what would be a realistic annual amount given your household s budget. Your household must choose whether to spend the amount on the forest conservation plan, or on other things. Lindhjem (2008, 2011) 18 Asking for individual or household WTP?

19 Thoughts on trade-offs 2012 Most important services? Less important or abundant services? Raw materials Carbon storage Recreation & sport around urban areas - Berries, mushrooms etc - Fishing (forest lakes) - Forest-based tourism - Water purification - Water quantity/quality - Pollution remediation - Flood prevention Hunting Biodiversity (existence value)

20 Thoughts on trade-offs say 2060? Most important services? Less important/abundant services? Raw materials Carbon storage Recreation & sport around urban areas - Berries, mushrooms etc - Fishing (forest lakes) - Forest-based tourism - Water purification - Water quantity/quality - Pollution remediation - Flood prevention Hunting Biodiversity (existence value)

21 Example: Where to harvest for bioenergy? Bioenergy resources Redlist species in forests Protected Population areas density Source: Thanks to Anne Sverdrup-Thygeson & Erik Framstad

22 Synergy or trade-off? Forest management Bioenergy* Carbon storage Biodiv Recreation Harvest for bioenergy J L L ( L ) Forest conservation LL J JJ JJ Forestation J JJ LL L *The economic trade-off depends on relative valuation re. market for timber, CO2 market etc Will depend on harvest related to population densities Source: Thanks to Anne Sverdrup-Thygeson & Erik Framstad

23 Where from here ambitions? Norw. TEEB an important step! Synthesize avaliable knowledge BUT gaping holes in the literature Is Norw TEEB the start of comprehensive assessments... or end of story? See to UK National Ecosystem Service Assessment

24 for 2060 Source: UK NEA

25 Could we do something similar in the Nordic countries to guide spatial differentiation of policies? Thank you Source: UK NEA

26 Cooperation and expertise for a sustainable future

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