Environmental and Resource Economics

, Volume 50, Issue 3, pp 405–445 | Cite as

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

  • Aline ChiabaiEmail author
  • Chiara M. Travisi
  • Anil Markandya
  • Helen Ding
  • Paulo A. L. D. Nunes


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.


Carbon Cultural services Forest ecosystem services Market values Meta-analysis Millennium Ecosystem Assessment Non-market values Non-wood forest products Value-transfer Wood forest products 



Convention on Biological Diversity


Cost of policy inaction


Ecosystem services


Environmental valuation reference inventory


Food and Agriculture Organization of the United Nations


Gross domestic product


Integrated Model to Assess the Global Environment


Millennium Ecosystem Assessment


Non-wood forests products


Purchasing power parity GDP


Total economic value


International union for conservation of nature


The Economics of Ecosystems and Biodiversity


Wood forests products


World Induced Technical Change Hybrid model


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Bahuguna V (2000) Forests in the economy of the rural poor: an estimation of the dependency level. Ambio 29(3): 126–129Google Scholar
  2. Bakkes JA, Bosch PR (eds) (2008) Background report to the OECD environmental outlook to 2030: overviews, details, and methodology of model-based analysis. Netherlands Environmental Assessment Agency (MNP) Report 50011300, Bilthoven, The NeterlandsGoogle Scholar
  3. Bateman IJ, Garrod GD, Brainard JS, Lovett AA (1996) Measurement, valuation and estimation issues in the travel cost method: a geographical information systems approach. J Agric Econ 47(2): 191–205CrossRefGoogle Scholar
  4. Bellu LG, Cistulli V (1997) Economic valuation of forest recreation facilities in the Liguria region, (Italy). Working Paper GEC 97-08, Centre for Social and Economic Research on the Global EnvironmentGoogle Scholar
  5. Bockstael NE, Freeman AM, Kopp R, Portney PR, Smith KV (2000) On measuring economic values for nature. Environ Sci Technol 34: 1384–1389CrossRefGoogle Scholar
  6. Bodeker G, Bhat KKS, Burley J, Vantomme P (eds) (1997) Medicinal plants for forest conservation and health care. FAO (Non-wood Forest Products 11), RomeGoogle Scholar
  7. Bolt K, Matete M, Clemens M (2002) Manual for calculating adjusted net savings. Environment Department, World Bank, WashingtonGoogle Scholar
  8. Bosetti V, Tavoni M, De Cian E, Sgobbi A (2009) The 2008 WITCH model: new model features and baseline. FEEM Working Paper 85.2009Google Scholar
  9. Bosetti V, Massetti E, Tavoni M (2007) The WITCH model. Structure, baseline, solutions. FEEM Working Paper 10.2007Google Scholar
  10. Bostedt G, Mattsson L (2006) A note on benefits and costs of adjusting forestry to meet recreational demands. J For Econ 12: 75–81Google Scholar
  11. Bouwman AF, Kram T, Klein Goldewijk K (eds) (2006) Integrated modelling of global environmental change. An overview of IMAGE 2.4. Netherlands Environmental Assessment Agency (MNP), Bilthoven, The NetherlandsGoogle Scholar
  12. Braat L, Ten Brink P (eds) with Bakkes J, Bolt K, Braeuer I, ten Brink B, Chiabai A, Ding H, Gerdes H, Jeuken M, Kettunen M, Kirchholtes U, Klok C, Markandya A, Nunes P, van Oorschot M, Peralta-Bezerra N, Rayment M, Travisi C, Walpole M (2008) The cost of policy inaction. The case of not meeting the 2010 biodiversity target. Report of the COPI project, Alterra, Wageningen, URGoogle Scholar
  13. Campos P, Riera P (1996) Rentabilidad social de los bosques. Análisis aplicado a las dehesas y los montados ibéricos. Información Comercial Española 751: 47–62Google Scholar
  14. Cavendish W (1999) Empirical regularities in the poverty-environment relationship of African rural households. Working paper 99.21, Centre for the Study of African Economies, Oxford UniversityGoogle Scholar
  15. Chamshama S, Nwonwu F (2004) Forest plantations in Sub-Saharan Africa. Lessons learnt on sustainable forest management in Africa. Report, KSLA, AFORNET, FAOGoogle Scholar
  16. Chase LC, Lee DR, Schulze WD, Anderson DJ (1998) Ecotourism demand and differential pricing of national park access in Costa Rica. Land Econ 74(4): 466–482CrossRefGoogle Scholar
  17. Chomitz KM, Alger K, Thomas TS, Orlando H, Vila Nova P (2005) Opportunity costs of conservation in a biodiversity hotspot: the case of southern Bahia. Environ Dev Econ 10(3): 293–312CrossRefGoogle Scholar
  18. Clark J (2001) The global wood market, prices and plantation investment: an examination drawing on the Australian experience. Environ Conserv 28(1): 53–64CrossRefGoogle Scholar
  19. Costanza R, D’Arge R, de Groot R, Farber S, Grasso M, Hannon B, Limburg K, Naeem S, O’Neill R, Paruelo J, Raskin R, Sutton P, van den Belt M (1997) The value of the world’s ecosystem services and natural capital. Nature 387: 253–260CrossRefGoogle Scholar
  20. Donoghue EM, Benson GL, Chamberlain JL (2004) Sustainable production of wood and non-wood forest products. General Technical Report PNW-GTR-604. U.S. Department of Agriculture Forest Service. Pacific Northwest Research Station, Portland, OregonGoogle Scholar
  21. Emerton L (1999) Mount Kenya: the economics of community conservation. IIED Evaluating Eden Series, Discussion Paper 4, LondonGoogle Scholar
  22. ERM (Environmental Resources Management) (1996) Valuing management for biodiversity in British forests. Report to UK Forestry CommissionGoogle Scholar
  23. Evans D, Associates, Inc. and ECONorthwest (2004) Comparative valuation of ecosystem services: lents project case study. City of Portland Watershed Management Program. Cited 2 July 2009
  24. FAO Food and Agriculture Organization (1999) State of the world’s forests. Third edition, Rome. Cited May 2009
  25. FAO Food and Agriculture Organization (2005) Global forest resources assessment 2005: progress towards sustainable forest management. Forestry Paper 147Google Scholar
  26. FAO Food and Agriculture Organization (2007) The state of food and agriculture. Paying farmers for environmental services. FAO Agriculture Series 38, RomeGoogle Scholar
  27. Florax RJGM, Nijkamp P, Willis KG (2002) Meta-analysis and value transfer: comparative assessment of scientific knowledge. In: Florax RJGM, Nijkamp P, Willis KG (eds) Comparative environmental economic assessment. Edward Elgar Publishing Limited, Cheltenham, pp 3–16Google Scholar
  28. Garrod GD, Willis KG (1997) The non-use benefits of enhancing forest biodiversity: a contingent ranking study. Ecol Econ 21: 45–61CrossRefGoogle Scholar
  29. Ghermandi A, van den Bergh JCJM, Brander LM, de Groot HLF, Nunes PALD (2010) The values of natural and human-made wetlands: a meta-analysis. Water Resour Res 46: W12516CrossRefGoogle Scholar
  30. Gibbs HK, Brown S, Niles JO, Foley JA (2007) Monitoring and estimating tropical forest carbon stocks: making REDD a reality. Environ Res Lett 2:045023Google Scholar
  31. Gordon MJ (1959) Dividends, earnings and stock prices. Rev Econ Stat (The MIT Press) 41(2): 99–105Google Scholar
  32. Gurluk S (2006) The estimation of ecosystem services’ value in the region of Misi rural development project: results from a contingent valuation survey. For Policy Econ 9(3): 209–218CrossRefGoogle Scholar
  33. Hanley N, Willis K, Powe N, Anderson M (2002) Valuing the benefits of biodiversity in forests. Report to the Forestry Commission, Centre for Research in Environmental Appraisal and Management (CREAM), University of NewcastleGoogle Scholar
  34. Hanley N, Wright RE, Adamowicz WL (1998) Using choice experiments to value the environment. Environ Resour Econ 11(3–4): 413–428CrossRefGoogle Scholar
  35. Hoover WL, Preston G (2006) 2006 Indiana forest products price report and trend analysis. Expert review FNR-177-W, Purdue University, USAGoogle Scholar
  36. Hope C (2006) The marginal impact of CO2 from PAGE2002: An integrated assessment model incorporating the IPCC’s five reasons for concern. Integr Asses J Bridging Sci Policy 6(1): 19–56Google Scholar
  37. Horton B, Colarullo G, Bateman I, Peres C (2003) Evaluating non-users willingness to pay for a large scale conservation programme in Amazonia: a UK/Italian contingent valuation study. Environ Conserv 30: 139–146CrossRefGoogle Scholar
  38. Kniivila M, Ovaskainen V, Saastamoinen O (2002) Costs and benefits of forest conservation: regional and local comparisons in Eastern Finland. J For Econ 8: 131–150Google Scholar
  39. Kontoleon A, Swanson T (2003) The willingness to pay for property rights for the Giant Panda: can a charismatic species be an instrument for nature conservation. Land Econ 79(4): 483–499CrossRefGoogle Scholar
  40. Kramer RA, Sharma N, Munashinghe M (1995) Valuing tropical forests. Methodology and case study of Madagascar. World Bank Environment Paper 13Google Scholar
  41. Lewis SL, Phillips OL, Baker TR, Malhi Y, Lloyd J (2006) Tropical forests and atmospheric carbon dioxide: current conditions and future scenarios. In: Schellnhuber HJ, Cramer W, Nakicenovic N, Wigley T, Yohe G (eds) Avoiding dangerous climate change. Cambridge University Press, Cambridge, pp 147–153Google Scholar
  42. Loomis J, Ekstrand E (1998) Alternative approaches for incorporating respondent uncertainty when estimating willingness-to-pay: the case of the Mexican spotted owl. Ecol Econ 27(1): 29–41CrossRefGoogle Scholar
  43. Markandya A, Nunes PALD, Brauer I, ten Brink P, Kuik O, Rayment M (2008) Review on the economics of biodiversity loss—economic analysis and synthesis. Final report for the European Commission, Venice, ItalyGoogle Scholar
  44. MEA Millennium Ecosystem Assessment: (2005) Ecosystems and human well-being: biodiversity synthesis. World Resources Institute, WashingtonGoogle Scholar
  45. Mendelsohn R, Balick M (1995) The value of undiscovered pharmaceuticals in tropical forests. Econ Botany 49(2): 223–228CrossRefGoogle Scholar
  46. Miller K, Tangley L (1991) Trees of life: saving tropical forests and their biological wealth. Beacon Press, BostonGoogle Scholar
  47. Mogas J, Riera P, Bennett JA (2006) A comparison of contingent valuation and choice modelling with second-order interactions. J For Econ 12(1): 5–30Google Scholar
  48. Myneni RB, Dong J, Tucker CJ, Kaufmann RK, Kauppi PE, Liski J, Zhou L, Alexeyev V, Hughes MK (2001) A large carbon sink in the woody biomass of northern forests. Proc Natl Acad Sci USA 98(26): 14784–14789CrossRefGoogle Scholar
  49. Naidoo R, Adamowicz WL (2005) Biodiversity and nature based tourism at forest reserves in Uganda. Environ Dev Econ 10: 159–178 (Cambridge University Press)CrossRefGoogle Scholar
  50. OECD: (2008) OECD Environmental Outlook to 2030. OECD Publishing, Paris. doi: 10.1787/9789264040519-en CrossRefGoogle Scholar
  51. Ojea E, Nunes PALD, Loureiro ML (2010) Mapping biodiversity indicators and assessing biodiversity values in global forests. Environ Resour Econ 47(3): 329–347CrossRefGoogle Scholar
  52. Ojea E, Nunes PALD, Loureiro ML (2009) Mapping of forest biodiversity values: a plural perspective, FEEM Working Papers 4.2009Google Scholar
  53. Pearce DW (1996) Global environmental value and the tropical forests: demonstration and capture. In: Adamowicz W, Boxall P, Luckert M, Phillips W, White W (eds) Forestry, economics and the environment. CAB International, Wallingford, Reading, pp 11–48Google Scholar
  54. Pearce DW (1998) Can non-market values save the tropical forests?. In: Goldsmith B (ed) Tropical rain forest: a wider perspective. Chapman and Hall, London, pp 255–268CrossRefGoogle Scholar
  55. Pearce DW (1999) Can non-market values save the world’s forests?. In: Roper S, Park A (eds) The living forest: the non-market benefits of forestry. The Stationery Office, London, pp 5–16Google Scholar
  56. Pearce DW, Moran D (1994) The economic value of biological diversity. IUCN, the World Conservation Union, Earthscan Publications Ltd, LondonGoogle Scholar
  57. Phillips S, Silverman R (2008) Greater than zero: toward the total economic value of Alaska’s National Forest Wildlands. The Wilderness Society, WashingtonGoogle Scholar
  58. Pimm S, Raven P (2000) Extinction by numbers. Nature 403(24): 843–845CrossRefGoogle Scholar
  59. Portela R, Wendland KJ, Pennypacker LL (2008) The idea of market-based mechanisms for forest conservation and climate change. In: Streck C, O’Sullivan R, Janson-Smith T (eds) Forests, climate change and the carbon market. Oxford University Press, OxfordGoogle Scholar
  60. Portney, PR, Weyant, JP (eds) (1999) Discounting and intergenerational equity. Resources for the Future, WashingtonGoogle Scholar
  61. Prentice C, Cramer W, Harrison SP, Leemans R, Monseruds RA, Solomon AM (1992) A global biome model based on plant physiology and dominance, soil properties and climate. J Biogeogr 19: 117–134CrossRefGoogle Scholar
  62. Scarpa R, Chilton SM, Hutchinson WG, Buongiorno J (2000) Valuing the recreational benefits from the creation of Nature Reserves in Irish forests. Ecol Econ 33(2): 237–250CrossRefGoogle Scholar
  63. Secretariat of the Convention on Biological Diversity (2001) The Value of Forest Ecosystems. CBD Technical Series 4, Montreal 67Google Scholar
  64. Shechter M, Reiser B, Zaitsev N (1998) Measuring passive use value: pledges, donations and CV responses in connection with an important natural resource. Environ Resour Econ 12: 457–478CrossRefGoogle Scholar
  65. Siikamaki J, Layton DF (2007) Discrete choice survey experiments: a comparison using flexible methods. J Environ Econ Manag 53(1): 122–139CrossRefGoogle Scholar
  66. TEEB (2009) TEEB—The Economics of Ecosystems and Biodiversity for National and International Policy Makers. Summary: Responding to the Value of Nature 2009. Cited 20 Dec 2009
  67. Thomas CD, Cameron A, Green RE, Bakkenes M, Beaumont LJ, Collingham YC, Erasmus BFN, de Siqueira MF, Grainger A, Hannah L, Hughes L, Huntley B, van Jaarsveld AS, Midgley GF, Miles L, Ortega-Huerta M, Peterson AT, Phillips OL, Williams SE (2004) Extinction risk from climate change. Nature 427: 145–148CrossRefGoogle Scholar
  68. Toman M (1998) Why not to calculate the value of the world’s ecosystem services and natural capital. Ecol Econ 25: 57–60CrossRefGoogle Scholar
  69. UN (2006) World urbanization prospects: the 2005 revision. United Nations, Department of Economic and Social Affairs, Population Division. CD-ROM Edition—Data in digital form (POP/DB/WUP/Rev.2005)Google Scholar
  70. University of Leeds (2009) One-fifth of fossil-fuel emissions absorbed by threatened forests. ScienceDaily. Cited 19 February 2009
  71. Van Beukering PJH, Cesar HSJ, Janssen MA (2003) Economic valuation of the Leuser National Park in Sumatra, Indonesia. Ecol Econ 44(1): 43–62CrossRefGoogle Scholar
  72. van der Heide CM, van den Bergh JCJM, van Ierland EC, Nunes PALD (2005) Measuring the economic value of two habitat defragmentation policy scenarios for Veluwe, The Netherlands. Milano, Fondazione Eni Enrico Mattei FEEM Working Paper 42.2005Google Scholar
  73. Verma M (2000) Economic Valuation of Forests of Himachal Pradesh. Report to IIED Himachal Pradesh, Forestry Review, Indian Institute of Forest Management, Bhopal, IndiaGoogle Scholar
  74. Walsh RG, Loomis JB, Gillman RA (1984) Valuing option, existence and bequest demand for wilderness. Land Econ 60(1): 14–29CrossRefGoogle Scholar
  75. Weitzman ML (2001) Gamma discounting. Am Econ Rev 91(1): 260–271CrossRefGoogle Scholar
  76. Woodward RT, Wui Y (2001) The economic value of wetland services: a meta-analysis. Ecol Econ 37: 257–270CrossRefGoogle Scholar
  77. Zandersen M, Termansen M, Jensen FS (2005) Benefit transfer over time of ecosystem values: the case of forest recreation. Working Paper FNU-61, Danish Centre For Forest, Landscape and PlanningGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  • Aline Chiabai
    • 1
    Email author
  • Chiara M. Travisi
    • 2
  • Anil Markandya
    • 1
    • 3
  • Helen Ding
    • 4
  • Paulo A. L. D. Nunes
    • 5
  1. 1.Basque Centre for Climate Change (BC3)BilbaoSpain
  2. 2.Fondazione Eni Enrico Mattei FEEMMilanoItaly
  3. 3.University of BathBathUK
  4. 4.Department of Agriculture and Natural ResourcesUniversity of PaduaPadovaItaly
  5. 5.The Mediterranean Science Commission, Principauté de Monaco; Department of Agriculture and Natural ResourcesUniversity of PaduaPadovaItaly

Personalised recommendations