1. eftec Economics for the Environment Consultancy Using ecosystem services for cost benefit analysis of forestry decisions Roundtable on Cost / Benefit of Forestry Projects and Programmes Ece Ozdemiroglu Nancy, 30 May 2012

2. eftec Economics for the Environment Consultancy Purpose Approach Example Outline

3. eftec Economics for the Environment Consultancy Understand and use the total economic value forests generate: – Land use planning: forestry vs other – Forest management: Timber Other non-timber products Recreation Biodiversity / wildlife – Capturing total economic value: Timber pricing (e.g. sustainability premium) Payments for Ecosystem Services (inc biocarbon) Biodiversity offsetting Reforestation credits Purpose

4. eftec Economics for the Environment Consultancy Total Economic Value – Direct use, indirect use, non-use – Market and non-market data – Visitors, local residents, wider population Ecosystem Services – General relationships between resource and services, and services – Location specific relationships Cost Benefit Analysis – Appropriate effort – Sensitivity analysis – Transparency and audit trail Approach

5. Qualitative assessment Quantitative assessment Value changes in service levels Which type of forest likely to provide which service, where, how much Measuring service levels and impacts of management options Apply valuation methods (market prices, revealed preference, stated preference, value transfer) Ecosystem Services Approach Input to decision making

6. Provisioning services Timber, renewable energy, food, ornamental goods Direct use Market prices Overlap with cultural values Regulating services Climate, air quality, water and flood, water purification, pollination and pest control Indirect use Official guidance, production function, avoided cost Cultural services Recreation, views / aesthetic enjoyment, historic / cultural values, education, biodiversity (part) Direct use and non- use Market prices, travel cost, hedonic pricing, stated preference Supporting services Photosynthesis / primary production, soil, nutrient cycling, water cycling Incorporated in other services, ‘resilience’

7. eftec Economics for the Environment Consultancy Typology of forests Management options Cost of forest management Benefits Scenario analysis Results Caveats Example: Forestry Commission England study

8. eftec Economics for the Environment Consultancy Vegetation type: broadleaf / conifer / open habitat / other Upland / lowland Slope and aspect Ancient / secondary (ASNW, PAWS, OSNW) Location and size Setting (urban / peri-urban / rural) Availability of alternatives Age / class Species BAP priority habitats Alternative habitats, soil type Management practices Ownership Public access Facilities and accommodation Certification Recreation activities Watershed regulation, wind regulation, carbon sequestration Typology of forests

9. eftec Economics for the Environment Consultancy Forest / woodland ecology: – Broadleaf / mixed, coniferous, open habitat Proximity to users: – Urban community – Peri-urban – Rural Management – Low intensity management – Managed primarily for timber – Managed for multiple objectives Access – No public access – Access encouraged with low level of facilities – Access encouraged with high level of facilities Biodiversity – BAP priority / not BAP priority Typology of forests

10. eftec Economics for the Environment Consultancy Timber / fuelwood: – Market price Greenhouse gas regulation – UK official value for traded / non-traded carbon Recreation – Value transfer from travel cost and stated preference studies Aesthetic values – Value transfer from hedonic pricing and stated preference studies Biodiversity – Value transfer (weak link between typology and values) Watershed services excluded Benefits

11. eftec Economics for the Environment Consultancy Land management – Forestry operations Access provision – Access and facilities for recreation Conservation and heritage – Biodiversity protection and other natural or human heritage conservation Community engagement – Consultation and community involvement in woodland management Costs

12. eftec Economics for the Environment Consultancy Present (status quo) – Maintain public forest estate as is The recent past – Prior to emphasis on community woodlands an recreation Future as planned – Based on current Forest Design Plans People focused – Enhanced emphasis on providing recreation and other services Habitat Action Plan focused – Enhanced emphasis on conversion to open habitats Plantation on Ancient Woodland Sites Timber focused Scenarios

13. eftec Economics for the Environment Consultancy (per ha) benefits and costs in base year Figure 1: Average

14. eftec Economics for the Environment Consultancy Figure 2: Estimated value CHANGES for the year 2070, compared with plan

15. eftec Economics for the Environment Consultancy Simplifying complexity: typology…site specific analysis will reduce this Errors in estimating physical service provision and change: missing data, data transfer Recreation values: uncertainty about visit numbers, value per visit, substitution effects, errors in converting from centres to per hectare Exclude some ecosystem services, not full coverage of others Approximate estimates, NOT applicable elsewhere Caveats

16. eftec Economics for the Environment Consultancy The overall approach works to present all services but missing scientific and economic evidence Project-specific typology needs to be created Move from per hectare averages to spatial distribution (e.g. use of GIS) Appropriate level of effort for CBA? For new forest projects, include the current baseline landuse to the CBA Extend CBA to identify new market opportunities / revisions to existing policies Lessons

17. eftec Economics for the Environment Consultancy Ece Ozdemiroglu ece@eftec.co.uk +442075805383 www.eftec.co.uk Thank you!