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

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Abstract

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.

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Abbreviations

CBD:

Convention on Biological Diversity

COPI:

Cost of policy inaction

ESs:

Ecosystem services

EVRI:

Environmental valuation reference inventory

FAO:

Food and Agriculture Organization of the United Nations

GDP:

Gross domestic product

IMAGE:

Integrated Model to Assess the Global Environment

MEA:

Millennium Ecosystem Assessment

NWFPs:

Non-wood forests products

PPPGDP:

Purchasing power parity GDP

TEV:

Total economic value

IUCN:

International union for conservation of nature

TEEB:

The Economics of Ecosystems and Biodiversity

WFPs:

Wood forests products

WITCH:

World Induced Technical Change Hybrid model

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Authors and Affiliations

  1. Basque Centre for Climate Change (BC3), Bilbao, Spain

    Aline Chiabai & Anil Markandya

  2. Fondazione Eni Enrico Mattei FEEM, Milano, Italy

    Chiara M. Travisi

  3. University of Bath, Bath, UK

    Anil Markandya

  4. Department of Agriculture and Natural Resources, University of Padua, Padova, Italy

    Helen Ding

  5. The Mediterranean Science Commission, Principauté de Monaco; Department of Agriculture and Natural Resources, University of Padua, Padova, Italy

    Paulo A. L. D. Nunes

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  1. Aline Chiabai
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  2. Chiara M. Travisi
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  5. Paulo A. L. D. Nunes
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Correspondence to Aline Chiabai.

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Chiabai, A., Travisi, C.M., Markandya, A. et al. Economic Assessment of Forest Ecosystem Services Losses: Cost of Policy Inaction. Environ Resource Econ 50, 405–445 (2011). https://doi.org/10.1007/s10640-011-9478-6

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