Valuing the Non-Timber Valuing the Non-Timber Benefits of Forests in a Benefits of Forests in a

Changing Climate Changing Climate

PRESENTATION TO THE INFF CONFERENCE

NOVEMBER 5TH, 2007 CORK, IRELAND

Dr Douglas C MacMillan

Valuing Non-Timber Benefits of Valuing Non-Timber Benefits of forests in a Changing Climate forests in a Changing Climate

OUTLINE OF TALK

I. VALUING NON-TIMBER BENEFITS

II. WILLIS REPORT TO THE UK FORESTRY COMMISSION

III. FORESTRY IN A CHANGING CLIMATE

IV. CAPTURING VALUES

V. FINAL THOUGHTS

Valuing Non-Timber Benefits Valuing Non-Timber Benefits

Valuing Non-Timber Benefits Valuing Non-Timber Benefits

Economic valueEconomic value are anthropocentric - are anthropocentric - based on the values of humans for based on the values of humans for resources.resources.

Economic values reflect people’s Economic values reflect people’s preferences.preferences.

Economic values are normally Economic values are normally measured in monetary unitsmeasured in monetary units

Valuing Non-Timber BenefitsValuing Non-Timber Benefits

Total Economic Value

Direct Use

Non-Use Values

Use Values

Indirect Use

Bequest Existence

recreationtimber carbon

Valuation MethodsValuation Methods

CategoryCategory MethodMethod

TimberTimber Market PricesMarket Prices

RecreationRecreation Travel Cost MethodTravel Cost Method

LandscapeLandscape Hedonic PricingHedonic Pricing

BiodiversityBiodiversity Contingent ValuationContingent Valuation

Carbon storageCarbon storage Damage Cost AvoidedDamage Cost Avoided

Value of CarbonValue of Carbon Rapid climate change will lead to higher costs (flooding, Rapid climate change will lead to higher costs (flooding,

gale damage, farm & forestry crops)gale damage, farm & forestry crops)

Value of Carbon sequestered:Value of Carbon sequestered: avoided costs due to reduced environmental change avoided costs due to reduced environmental change costs include avoided expenditures and avoided losses (ranging costs include avoided expenditures and avoided losses (ranging

from profits to habitats) from profits to habitats)

Difficult to predict and value as climate changes are Difficult to predict and value as climate changes are uncertain/complex and response to change more souncertain/complex and response to change more so

Willis study 2003Willis study 2003

Value of social & environmental benefits of forests in the UK Value of social & environmental benefits of forests in the UK (from Willis (from Willis et alet al 2003) 2003)

BenefitBenefit AnnualAnnual CapitalisedCapitalised

£ millions at 2002 values£ millions at 2002 values

RecreationRecreation 393393 1121811218

LandscapeLandscape 150150 42924292

BiodiversityBiodiversity 386386 1102911029

Carbon StorageCarbon Storage 9494 28762876

Air pollutionAir pollution 0.40.4 1111

TOTALTOTAL 10231023 29226 29226

Willis study 2003Willis study 2003

SOCIAL & ENVIRONMENTAL BENEFITS: £1023 MILLION PER ANNUM

NET TIMBER REVENUES:

£50-100 MILLION PER ANNUM

Study based on current forest type and age distribution

Forestry in a Changing Climate Forestry in a Changing Climate

Climate for growing trees is changing in ‘3d’: environmental, economic and governance

Environmental

Economic

Governance

Forestry in a Changing Climate Forestry in a Changing Climate

Environmental Change:

We have ‘over-specialised’ and ‘over-optimised’ often on shaky forecasts of what our future needs will be

Need to create diversity in terms of species, age class and sites for woodlands

Forestry in a Changing Climate Forestry in a Changing Climate

Economic Change:

New markets: Carbon trading and biodiversity trading

High Quality markets:

fuel costs & overseas competition will undermine economics of low quality timber

Indirect benefits: Forests can contribute to tourism & local economic development

Forestry in a Changing Climate Forestry in a Changing Climate

Governance:

Shift from direct ‘cost subsidies’ (planting grants) to direct payment for services (carbon, biodiversity)

New or modified ownership structures for post–industrial forests

More flexible and locally responsive management to maximise benefits

Organisational economies of scale required

Future forest practice and Future forest practice and managementmanagement

Timber only one income stream

Shift from short rotation, low management cycles to longer rotations, more interventions (e.g. thinnings)

Create a more diversified forests in terms of age class and species

Strong economic case based on carbon retention, high quality timber and environmental services

Climate Change is an Climate Change is an Opportunity for Opportunity for

Change – seize it!Change – seize it!