25 Aug 2022

Development of a model for the economic valuation of forest services

WHFF project 2015.11

Project lead: Dr. Bernhard Pauli, Berner Fachhochschule HAFL

 

The most important in brief

  • While increasing attention is paid to forest ecosystem services, their economic value is rarely considered in decisions about managing forest resources.
  • An evaluation model was developed to offer forest enterprise managers a possibility to compare different management scenarios (by comparing the factors “willingness to pay” and “willingness to accept”).
  • It was found that different combinations of willingness to pay and willingness to accept are possible, resulting in different management recommendations.
  • The model can be used by forest managers as a planning tool.

Description of the project

Forests provide numerous services that are important for the common good and hold an economic value. While increasing attention is paid to forest ecosystem services, their economic value is rarely considered in decisions about managing forest resources. The Swiss Confederation has recognized this unsatisfactory situation and calls for the development of basic principles and the creation of framework conditions so that forest services can be better valued in the future. The reason being that the valuation of forest services can provide important information for decision-making in forestry as well as in politics.

In Switzerland, just under one-third of the country’s land area is covered with around 1.2 million hectares of forest. Geographically, it is noticeable that individual forest functions are more pronounced in certain regions than in others.  In the foothills of the Alps and in the Alps (up to the tree line), the protective function clearly dominates. In the more easily accessible forests of the Central Plateau and the Jura (although there are also areas where the protective function clearly dominates), wood production plays a major role. If forests are located in the surrounding area of larger cities, such as Zurich or Basel, or in areas with high tourist traffic, recreation is considered to be more important than the other forest functions.

Within the framework of the project on which this report is based, an evaluation model was developed, the aim of which is to offer forest enterprise managers a possibility to compare different management scenarios, which are determined by considering several decision criteria. Thereby,  the economic influence of different forest services is illustrated. The priority functions serve as a basis for planning.

The value of habitat enhancement and recreation services is incorporated into the valuation model through the willingness-to-pay (WTP), which was determined through surveys of the Swiss population. On the supply side (forest owners and managers), the willingness-to-accept (WTA) and not the willingness to pay  was determined. The WTA shows what amount would be necessary for the forest manager to enable or accept a desired change.

Conclusions

It was found that different combinations of willingness to pay  and willingness to accept (WTA) are possible, resulting in different management recommendations. In any case, because WTP and WTA are determined in terms of different units (CHF per household and CHF per hectare, respectively), they can only be compared in a specific context where the number of households and the relevant forest area is known. Under these conditions, this approach offers the possibility to assess the feasibility of different management scenarios at local and regional levels.

The model makes it possible to compare different management scenarios with each other and can thus be used by forest managers as a planning tool, but also as a basis for argumentation. Keeping this in mind, the model results must not be used as the sole decision criterion.

During the project, it has become apparent that forest owners in particular need to be made more aware, as they often seem to be insufficiently aware of their strategic responsibility and often delegate this to their forest managers. For the forest manager, in turn, the developed model provides decision support and argumentation basis, both towards forest owners and the general public.

The project was supported by the Forest and Wood Research Promotion Switzerland WHFF-CH of the Federal Office for the Environment FOEN.

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