Ecosystem Services

Karl Davies kdavies at igc.apc.org
Wed Nov 5 08:11:25 EST 1997


COMPENSATING LANDOWNERS FOR NONMARKET FOREST VALUES AND
ECOSYSTEM SERVICES



Karl Davies

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.



Techniques for 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 groundbreaking study on
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, nutrtient cycling, waste
treatment, pollination, genetic resources, --in addition to
wildlife, recreation and aesthetic values.



The researchers came up with per hectare values and total global
values for all ecosystems, including open oceans; coastal
estuaries, seagrass/algae beds, coral reefs and shelf; forests
in tropical and temperate/boreal regions; 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).  



It's east to 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 garment
company stocks.  The list could go on and on.  Consider the
military destruction 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 the pesticides persist in
the environment pracitically 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?  



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 online at
www.floridaplants.com/news/article.htm.  Unfortunately this
version lacks the table which shows all the ecosystem dollar
values.  The published version is referenced below, along with a
couple other interesting papers from forestry journals.



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.  J 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.
















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