Value of Mediterranean forests

Published: September 12, 2008, 1:45 pm

Updated: October 4, 2011, 10:13 pm

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Introduction

Mediterranean forests provide a wide array of benefits. Wood forest products (WFPs) come readily to mind, but they often represent just a small part of all benefits. Non-wood forest products (NWFPs), such as cork in Algeria (Value of Mediterranean forests) and Tunisia, can be of greater importance than WFPs and often have a high potential to contribute to local economies. But what Mediterranean forests are especially important for are the public goods and externalities they provide, such as water protection, soil conservation and biodiversity benefits. Despite this multi-functionality, efforts to manage forests appropriately have often been hindered by the lack of information on many of their benefits. As a result, many forests are increasingly degrading and their benefits are diminishing.

The inadequate recognition of forest benefits mainly involves the public goods and externalities. Existing estimates are not only scarce and site-specific, but often poorly disseminated. So far, most valuation efforts have focused on a limited number of forest goods and services, often at a specific site: hydrological services, the option use of pharmaceuticals and other extractive and non-extractive uses. Few have attempted to value a forest in its entirety and fewer still have attempted to estimate the benefits of a nation’s forests as a whole. This is the first time effort to estimate the total economic value of forests on a large scale, in the Mediterranean region.

The countries of the Mediterranean region can be divided into three groups (countries with little or no forest, such as Libya, are omitted):

southern countries: Morocco, Algeria, Tunisia and Egypt;
eastern countries: Palestine, Israel, Lebanon, Syria, Turkey and Cyprus;
northern countries: Greece, Albania, Croatia, Slovenia, Italy, France, Spain and Portugal.

In each country, forests provide annual flows of benefits. The valuation efforts focus on the current harvest of benefits – rather than the potential or the sustainable yield – and refers the estimates to the most recent year for which data are available. To improve cross-country comparability, the estimates reflect average values in terms of US$ dollars per hectare of forests and refer to 2007^[1].

In all countries, forest outputs are identified based on the Total Economic Value (TEV) framework (Table 1). Its breakdown and terminology vary slightly from analyst to analyst, but it generally includes: (i) direct use values, e.g. timber, firewood and forest fruits; (ii) indirect use values, e.g. water purification and soil conservation and (iii) non-use values, e.g. cultural and historical values associated with healthy forests. Many outputs such as timber, recreation and soil conservation have positive value and can easily be located within the TEV categories. Other outputs, e.g. erosion, floods and avalanches due to poor forest management and damages due to forest fires have negative value; as they often affect several categories of value, they are more difficult to separate across the TEV categories. The study estimates both the positive and negative benefits that forests provide annually as they stand now, under current management practices.

Aggregating the results for each forest benefit provides the TEV of forests in each country. Estimates of the TEV of forests in all Mediterranean countries and for country groups are obtained by weighting each country’s TEV with its forest area. Individual estimates that were thought to be particularly unreliable because of the lack of accurate data are omitted from the calculations of aggregate TEV for each country, groups of countries and the Mediterranean as a whole.

Table 1. The Total Economic Value of Mediterranean forests TEV categories Positive outputs Negative outputs 1. Use Values 1.1 Direct use values WFPs: timber, firewood NWFPs: cork, mushrooms, honey, etc. Grazing Recreation Hunting Damages by forest fires Erosion, floods and avalanches due to poor or no forest management Pollen and other allergic factors Loss of recreation opportunities due to intensive plantation forestry and poor management Loss of landscape values to excessive expansion of forest land use Loss of biodiversity and landscape values due to plantation forestry 1.2 Indirect use values Watershed protection: soil conservation, avalanche and flood prevention, water quality Carbon sequestration 2. Option Values Potential unknown source of medicinal plants and pharmaceuticals Personal future recreation and environmental interests Potential source of energy and raw materials, etc 3. Non-Use Values 3.1. Bequest values Landscape, recreation, energy and raw material availability, bio-diversity affecting future generations 3.2. Existence values Biodiversity and environmental conditions e.g. related to carbon storage, affecting other species Source: Merlo and Rojas (2000); Merlo and Croitoru (2005). (Value of Mediterranean forests)

The benefits of Mediterranean forests

The benefits of Mediterranean forests vary widely from area to area, depending on several factors, such as climate, types of forest, soil and management. Table 2 presents the estimates of individual forest benefits for each country, groups of countries and for the Mediterranean region.

Table 2. Total Economic Value of Mediterranean forests (US$/ha, 2007 prices) 2007 US$ Direct use values Indirect use values Option, bequest, existence Estimated TEV WFPs1 NWFPs2 Grazing Recreation Hunting Watershed protection3 Carbon sequestration Morocco 27 5 36 n.a. -5 27 -3 n.a. 87 Algeria -6 1 42 n.a. n.a. 29 -3 n.a. 64 Tunisia 1 29 95 n.a. 3 33 6 8 176 Egypt 8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 South: 15 5 41 n.c. -3 28 -3 n.c. 85 Palestine 10 32 28 n.a. n.a. n.a. n.a. n.a. 70 Israel 6 38 n.a. 215 n.a. n.a. n.a. n.a. 260 Lebanon -9 165 9 3 114 n.a. -14 8 161 Syria 4 9 n.a. n.a. n.a. 94 8 n.a. 208 Turkey 29 5 14 n.a. 1 -8 10 6 50 Cyprus 3 18 n.a. 6 4 n.a. 8 n.a. 35 East: 28 6 13 1 1 -5 10 6 61 Greece 14 9 45 1 5 12 1 3 96 Albania -4 n.a. 23 n.a. n.a. -9 n.a. n.a. 1 Croatia 161 4 6 14 5 13 27 77 307 Slovenia 206 33 n.a. n.a. n.a. n.a. 28 n.a. 268 Italy 104 29 9 26 10 133 10 4 448 France 140 10 n.a. 147 8 10 28 31 377 Spain 37 8 10 5 n.a. n.a. 4 51 115 Portugal 159 183 44 6 8 31 12 n.a. 465 North: 86 20 13 41 4 23 10 32 229 Mediterranean 60 15 17 27 3 18 9 22 170 Source: Croitoru and Merlo (2005), data updated to 2007 US$.Notes: 1 the aggregated value of WFP removals, net growth of standing timber and WFP losses to forest fires; 2 the aggregated value of collection of NWFP and NWFPs losses to forest fires; 3 the aggregated value of watershed protection benefits and the value of erosion, floods and landslides due to poor forest management. The negative values in the table mean that the estimated social costs due to poor forest management are higher than the estimated forest benefits. n.a. = not available; n.c. = not calculated due to insufficient information.

Wood forest products. The estimated WFPs benefits include the value of WFPs removals, of the net growth of standing timber and of the losses of WFPs to forest fires. WFPs removals are estimated using the market price for quantities sold in the market (Value of Mediterranean forests) , and the price of similar goods, for quantities collected for subsistence or illegally. The net growth of standing timber is valued based on half of the timber market price and the annual timber growth, net of removals. The losses to forest fires are generally estimated using the replacement cost or the value of burnt wood and other forest losses.

WFPs removals. Timber and firewood have always been important in the region, however they are not the main benefit of Mediterranean forests. Timber production is important in most northern countries. High timber values are found in Western Europe, reaching about US$90-167/ha in countries like France, Slovenia, and Portugal. Timber values are substantially lower in most southern and eastern countries: less than US$6/ha. In contrast, in most southern and eastern countries, firewood collection dominates, reaching 80-100% of total removals in Tunisia, Morocco, and Lebanon. In these countries, illegal collection of firewood is common, and can account for as much as 69% of total firewood collection (in Morocco). The value of firewood is about US$13-64/ha in Western Europe and about US$8/ha or less in most southern and eastern countries. Overall, removals of WFPs account for about 20-40% of the estimated TEV in most northern countries, but less than 15% in most southern and eastern countries.
Net growth of standing timber. Harvest levels of WFPs are below the annual growth rates in most northern countries, meaning that stocks are growing. The estimated value of net growth ranges within US$26-51/ha in these countries and about 7-15% of TEV. In Slovenia, the most forested country of the region and that with the highest net growth, the estimated value is about US$96/ha. In contrast, harvest levels of WFPs exceed sustainable limits in most southern and eastern countries.
Losses to forest fires. Fires affect extensive forest areas in Western Europe, with losses averaging up to 41,000 ha/year in Portugal and Italy. The highest estimated damage is in Portugal, where average losses of about US$52/ha of forests reduce the TEV of the country’s forests by 12%. In most other countries, the costs of forest fires are much smaller, of less than US$8/ha, representing only a few percent of the countries’ forest TEV.
Overall, the estimated values of WFPs are low in most southern and eastern countries and high in northern countries. These benefits vary widely, from as little as US$1/ha in Tunisia to as high as over US$206/ha in Slovenia. Overall, WFPs account for about 40% of the estimated TEV in most northern countries and about 20-45% in most southern and eastern countries.

Grazing. Grazing is an important activity in the forests of the southern and eastern Mediterranean. Valuation is based on the substitute goods approach: fodder grazed in forests is converted into barley or hay equivalents, based on a comparison of nutrient content, then its value is estimated using the price of those products. The highest values, averaging about US$41/ha, are found in southern countries. Substantially lower values, of US$13/ha, are found in eastern countries, where unsustainable grazing practices have reduced fodder productivity to as little as 30 forage units (FU) per ha in Syria. Grazing values are also low in northern countries, where the importance of grazing has declined considerably—except in a few areas, including the Portuguese montados, Spanish dehesas and in Greece, where grazing remains a traditional rural activity. On average, grazing represents about 20-50% of the estimated forest TEV in most eastern and southern countries and less than 6% of the estimated TEV in the northern countries.

Non-wood forest products. The main NWFPs encountered in Mediterranean forests are cork, mushrooms and honey; other NWFPs include a variety of fruits and plants with lower market value. The value of NWFPs sold in markets are generally estimated using their market prices, or shadow prices if market prices are distorted. The value of some minor NWFPs, whose prices are unknown, are estimated based on the opportunity cost of labor or the cost of harvest (e.g., myrtle and rosemary). The estimated value of NWFPs varies widely across countries, from as little as US$1/ha to as much as US$183/ha. Northern countries—notably Portugal, Italy and Slovenia—have substantially higher values compared to southern and eastern countries. The differences in value may be only apparent, however, reflecting wider data availability in northern countries, where large quantities of NWFPs are marketed and captured by official statistics. In most southern and eastern countries, a large share of NWFPs is self-consumed or sold on thin local markets, for which quantities and prices are not known. Overall, the importance of NWFPs varies considerably, from as little as 1% to as much as 42% of the countries’ TEV.

Recreation. Recreation has always been a significant activity in Mediterranean forests. Its value is estimated using applications of the Contingent Valuation Method (CVM) or the Travel Cost Method (TCM). In countries where no such estimates exist, actual payments (permit prices, cost of travel) are used. Use of different valuation methods (consumer surplus vs. fees) poses problems in interpreting and comparing results across countries. Overall, the estimated value of recreation varies widely, from US$1/ha to US$215/ha. This is partly due to differences in income levels and partly to the disparities in valuation methods employed. Most available estimates are for northern countries, with values averaging to about 18% of TEV. Fewer estimates are found in the eastern countries. Probably the most unexpected result is that the highest estimate throughout the region is for Israel (US$215/ha). This is a result of the small forest areas available for recreation, many of which are subject to congestion, overuse, and degradation. The other available estimates are partial, mainly related to forest parks and other protected areas.

Hunting. In most northern countries, the benefits of hunting often include a part of recreational value. In contrast, in the south and east, hunting is primarily a source of livelihood, and illegal hunting is common. The value of hunting is estimated applying methods similar to those used for recreation. Estimated hunting benefits usually range within US$5-10/ha in the northern countries and within US$1-4/ha in southern and eastern countries. The estimate for Lebanon is exceptionally high, reflecting a great number of illegal hunters and a very small forest area. A surprising result is the negative net benefit for Morocco, where the estimated damage to wildlife exceeds the benefit obtained by hunters. Overall, the value of hunting generally ranges within 1-6% of the countries’ TEV.

Watershed protection. In the fragile Mediterranean environment, the role of forests in water conservation is particularly important^[2]. The value of watershed protection is usually based on the cost avoided approach, reflecting the different impacts of potential forest loss, such as the avoided loss of productivity in nearby agricultural areas or the avoided cost of building water storage capacity. In a few cases, estimates are based on defensive expenditures, such as expenditures on erosion control.

The estimated value of watershed protection tends to be high, both in absolute and relative terms. In a few countries, such as Syria and Italy, it is the single most valuable forest benefit, accounting for more than 50% of the estimated TEV. Watershed protection is also of outstanding importance in the south, coming second only to grazing. The negative values obtained for Turkey and Albania suggest that the estimate of erosion, landslides and avalanches in degraded watersheds exceeds that of water protection benefits provided by well-managed watersheds in these countries.

Carbon sequestration. The estimated value of carbon sequestered in forests is based on the quantity of carbon stored annually in forest biomass and average prices in carbon markets. In most northern countries, forests sequester about 0.01-1.08tC/ha annually. Turkey and Albania are exceptions, as removals are believed to exceed forest growth, mainly due to illegal cuts. In most southern and eastern countries, slow forest growth and strong human pressure mean that forest areas are sources of carbon rather than sinks; for example, net carbon losses in Algeria, Morocco, and Lebanon, vary within 0.08-0.53tC/ha/year. The highest values of carbon sequestered (about US$27-28/ha) are found in Croatia and Slovenia^[3]. Another group of countries, primarily in the northern and eastern Mediterranean have values ranging within US$4-10/ha. In southern Mediterranean countries, net carbon losses from forests are about US$3-14/ha. Overall, carbon sequestration accounts for only a few percent of TEV.

Pharmaceutical value. The option value of pharmaceuticals derived from forest genetic materials could only be estimated in Turkey, at about US$6/ha, or 12% of TEV. Given the Mediterranean forests’ recognized potential to provide genetic materials for pharmaceuticals, this estimate can only suggest positive values also for other countries in the region.

Biodiversity conservation. In a few countries, its value is estimated using results of CVM surveys. In the absence of such estimates, cost-based methods are used, focusing on payments received to preserve biodiversity. National-level estimates could be made only in a few cases, by extrapolating estimates for protected areas (to all protected areas in the country) and other specific sites (to sites with similar conditions). As the efforts to estimate the non-use values are very scarce and site-specific, the estimated value of biodiversity remains almost negligible, with 2% of the countries’ TEV. The average estimates vary widely across countries, between US$3 and US$77/ha, due to the differences in the methodologies used. These estimates are particularly weak and no strong conclusion can be drawn.

How much are forests worth in the Mediterranean?

If national-level estimates of forest benefits are weighted by the forest area in each country, the estimated TEV of forests in the Mediterranean region as a whole is about US$170 per hectare of forests (Figure 1). The average TEV for northern countries (about US$230/ha) is substantially higher than that for southern (US$85/ha) eastern countries (about US$60/ha). Part of the large difference between the estimates for the different groups of countries is due to the greater scarcity of information in southern and eastern countries, resulting in a greater degree of under-estimation.

Forests provide annual benefits of about US$63 per capita to people living in the Mediterranean region. Average benefits are higher in northern countries (about US$90/capita) and lower in eastern (US$14/capita) and southern countries (US$9/capita). The large difference between the estimates for the northern and those for the southern and eastern countries is due in part to the larger extension of forest area relative to population in the north as well as to their relative higher quality due to more favorable climate conditions and lower levels of degradation. To some extent, it is also due to the greater degree of underestimation of benefits in southern and eastern countries compared to northern countries.

Figure 1. Major components of the estimated TEV per country groups. (Source: Author)

Direct use values contribute about 70% of the estimated TEV for the Mediterranean, while indirect use and non-use values contribute around 15% each. This is mostly because direct use values are much easier to measure and data are more readily available. The difficulty in valuation increases considerably when passing to indirect and even more to non-use values. Consequently, both categories are likely to be underestimated.

WFPs account for about one third of the estimated TEV of Mediterranean forests. In southern countries, the value of grazing and NWFPs exceeds by far that of wood. Grazing and NWFPs tend to be less important in northern countries, with the exception of Portugal, the world’s main producer of cork. Recreation and hunting are also important benefits, as a result of increasing demand for tourism. In some northern countries, these benefits even exceed that of WFPs, whereas in the rest of the region they have been imperfectly measured. Watershed protection is an important benefit in countries like Syria and Italy and the three maghreb countries; perhaps it would have been appeared of great importance also in other countries of the region, had it been possible to measure it better. Carbon sequestration provides relatively low benefits in the Mediterranean. Higher estimates are found in northern countries, where the net growth of forests results in carbon sequestration; in some southern countries, the slow forest growth and the deforestation often result in net carbon emissions. The estimates for the option, bequest and existence value are very scarce and partial, suggesting greater values in reality, though not accounted for.

Conclusions

As a first-time attempt to estimate the overall benefits of forests at such a large scale, the valuation (Value of Mediterranean forests) efforts were often constrained by extreme data limitations. In many cases, the scarcity or poor dissemination of available studies prevented estimates for particular benefits, such as indirect use and non-use values, from being arrived at. In other cases, the lack of knowledge of the forests’ potential to provide benefits – such as the cause-and-effect relationship between forests and water-related services – hampered valuation efforts. This resulted into the underestimation of many benefits, especially in southern and eastern countries. These constraints suggest the need to expand and refine data collection. That should include both on-going monitoring of forest uses and one-time studies that clarify the cause-and-effect relationships between forests and many valuable forest benefits.

Despite these limitations, the analysis sheds light over the overall importance of various forest benefits per country, group of countries and for the Mediterranean as a whole. In many countries, WFPs account only for a small portion of total forest value. Watershed protection benefits are often much more important. Grazing and NWFPs are outstanding in the southern countries; recreation is already important in the northern Mediterranean and its importance is likely to grow throughout the region. This multi-functionality needs to be explicitly recognized and incorporated in the forest policy in each country.

Value of Mediterranean forests

Contents

Introduction

The benefits of Mediterranean forests

How much are forests worth in the Mediterranean?

Conclusions

Notes (Value of Mediterranean forests)

Further Reading

Citation

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