Convention on biological diversity

III.Valuation of forest products and ecosystem services

Forest values include:

(a) Direct use values: values arising from consumptive and non-consumptive uses of the forest, e.g. timber and fuel, extraction of genetic material, tourism.

(b) Indirect use values: values arising from various forest services, such as protection of watersheds and the storage of carbon.

(c) Option values: values reflecting a willingness to pay to conserve the option of making use of the forest, even though no current use is made of it.

(d) Future option values: values of learning about future benefits that would be precluded by loss of forest resources (e.g., values related to the existence of chemical active principles not discovered yet).

(e) Non-use values (also known as existence or passive use values): these values reflect a willingness to pay for the forest in a conserved or sustainable use state. However, the willingness to pay is unrelated to current or planned use of the forest.

(f) Intrinsic values such as moral or ethical value, spiritual, religious and cultural value.

A focus on those values that can be quantified in economic terms can be justified by the fact that forest conservation ultimately has to compete with alternative uses of forest land. Whereas the latter have reasonably clear and identifiable market values, many forest values are currently non-marketed. In a market-oriented world, therefore, forest conservation, which provides few immediate economic benefits, can easily lose out to the market values of alternative land uses, such as agriculture or plantations, unless goods and services are valued in these analyses or long-term conservation becomes more attractive because of positive incentives.

Stakeholder analysis shows that indigenous and local communities are likely to be the major losers from the conversion of forested land to other uses. They could, however, be beneficiaries of processes designed to capture values in markets, although there are serious reservations about whether introducing real markets should be contemplated for indigenous communities, where the introduction of the market economy without appropriate adaptation measures might threaten their way of life. In many parts of the world, the issue of forest use is also very much related to discussions about the rights over land, forested areas and natural resources. Thorough stakeholder analysis at all levels, from local to global, would be a valuable basis for ensuring that the interest and potential contributions of different key groups and organizations are appropriately and fully taken into account.

Sustainable forest management is, in the short term, generally less profitable in monetary terms than ecologically unsustainable forest practices, so that, in order to be favoured in the market, non-timber benefits from sustainable forests must exceed this loss of profit. Analysis of economic values of forest goods and services, including timber, fuelwood, non-timber forest resources, genetic information, recreation and amenity, watershed protection, climate buffering and non-use values suggests, first, that the dominant values are carbon storage and timber. Second, these values are not additive, since carbon is lost through logging. Third, conventional (unsustainable) logging is more profitable than sustainable timber management. Fourth, other values do not compete with carbon and timber, unless the forests have some unique features or are subject to potentially heavy demand due to proximity to towns. Unique forests (either unique in themselves or as habitat for unique species) have high values. Forests near towns have high values because of recreational possibilities and the use of non-timber forest products and fuelwood. Fifth, non-use values for “general” forests are very modest.

There is an urgent need for more research to validate these conclusions and also to establish the direct economic value of biological diversity other than for genetic information. Techniques for economic valuation to deal with all forest goods and services need further development, such as choice modelling methods.

This analysis suggests that immediate effort should focus on removing those economic incentives which currently encourage forest loss and degradation. The development of markets for forest goods and services will be important, especially for carbon storage and sequestration and, on a more local scale, for tourism and sale of genetic material. Establishing clear, enforceable and transferable property rights for individuals or communities is likely to be an important precondition for sustainable long-term conservation and use. Mechanisms are also needed to ensure that the situation of those who receive the benefits from forest goods and services is altered in some way that will compensate those who bear the costs. Some encouraging examples are now being developed. However, the limitations of market mechanisms also need to be explored and recognized in relation to the needs of stakeholders, for example indigenous and local communities. Market mechanisms must complement other mechanisms, including legislation, regulation, certification, capacity-building, and addressing wider underlying causes (see the following sub-section).

IV.Causes of loss of forest biological diversity

Due to the current national and global policy and economic frameworks and mechanisms, it is presently cheaper to log forests in an unsustainable way than to manage them sustainably. This factor has been identified in the present report as one of the primary causes for the high rate of deforestation and forest degradation, and therefore for the current loss of forest biological diversity.

Forest decline and/or loss of associated biological diversity result from many direct causes, some of which are natural but are aggravated by humans, such as climate change. The most important factors are human-induced causes, including conversion to agricultural land, dismantling of agro-forestry systems, overgrazing, unmitigated shifting cultivation, unsustainable forest management including poor logging practices, over-exploitation of timber, illegal logging, fuelwood and charcoal, over-exploitation of non timber forest resources - including bush meat and other living organisms - introduction of alien and/or invasive plant and animal species, infrastructure development (road building, hydro-electrical development, improperly planned recreational activities, urban sprawl), mining and oil exploitation, forest fires caused by humans, and pollution.

The underlying causes of forest decline are the forces that determine, through complex causation chains, the actions of the primary actors. They originate in some of the most basic social, economic, political, cultural and historical features of society. They can be local, national, regional or global, transmitting their effects through economic or political actions, such as trade or incentive measures. They are both numerous and interdependent and the approaches to deal with them are country-specific and will therefore vary among countries. In analysing the increasing literature available on the subject, in particular the recommendations and proposals for actions of the Intergovernmental Panel on Forests (IPF), the Intergovernmental Forum on Forests (IFF) and the work of the Centre for International Forestry Research (CIFOR), the following main underlying causes of forest decline were identified:

(a) Broader macroeconomic, political and social causes, such as population growth and density, globalization, poverty, unsustainable production and consumption patterns, ill-defined and implemented structural adjustment programmes, political unrest and wars;

(b) Institutional and social weaknesses, such as lack of good governance, lack of secure land tenure and uneven distribution of ownership, loss of cultural identity and spiritual value, lack of institutional, technical, and scientific capacity, lack of information, of scientific knowledge and the use of local knowledge, in particular lack of awareness of the value of forest biological diversity for provision of goods and services;

(c) Market and economic policy failures, such as under-valuation of forest biological diversity goods and services; perverse incentives; and subsidies;

(d) Other policy failures, such as ill-defined development programmes, ill-defined or unenforced regulatory mechanisms, lack of clear environmental policies and of environmental impact assessments.