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Cross-Sectoral Policy Linkages andEnvironmental Accounting in ForestryYves C. Dubé a , Glenn-Marie Lange b & Franz Schmithüsen c da Forestry Officer (Planning), FAO Forestry Department , 00100,Rome, Italyb Center for Economy, Environment and Society , The EarthInstitute, Columbia University , 2910 Broadway, Room 110, NewYork, NY, 10025, USAc Institute of Human Environment Systems, Department ofEnvironmental Sciences , CH-8092, Zurich, Switzerlandd Swiss Federal Institute of Technology , CH-8092, Zurich,SwitzerlandPublished online: 08 Sep 2008.
To cite this article: Yves C. Dubé , Glenn-Marie Lange & Franz Schmithüsen (2007) Cross-SectoralPolicy Linkages and Environmental Accounting in Forestry, Journal of Sustainable Forestry, 23:3,47-66, DOI: 10.1300/J091v23n03_02
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Cross-Sectoral Policy Linkagesand Environmental Accounting
in Forestry
Yves C. DubéGlenn-Marie LangeFranz Schmithüsen
ABSTRACT. It is important to analyze cross-sectoral policy linkagesand to quantify their effects by using the system of integrated environ-mental and economic accounting in order to ensure effective integrationof forestry into national development. This paper reviews relevant pol-icy linkages in the forestry sector, policy applications of forestry ac-counts, and challenges to their implementation. It argues for the need todevelop regional or local accounting methods providing social, environ-mental, and economic data to allow assessment of the combined impactsof different public policies. It emphasizes the urgency of strengtheningthe management capacity of public agencies in dealing with complexpolicy networks addressing sustainable and multifunctional forest man-agement. doi:10.1300/J091v23n03_02 [Article copies available for a fee fromThe Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address:<[email protected]> Website: <http://www.HaworthPress.com>© 2006 by The Haworth Press, Inc. All rights reserved.]
Yves C. Dubé is Forestry Officer (Planning), FAO Forestry Department, 00100Rome, Italy (E-mail: [email protected]).
Glenn-Marie Lange is Senior Research Scholar, Center for Economy, Environmentand Society, The Earth Institute at Columbia University, 2910 Broadway, Room 110,New York, NY 10025 (E-mail: [email protected]).
Franz Schmithüsen is Professor of Forest Policy and Forest Economics, Institute ofHuman Environment Systems, Department of Environmental Sciences, Swiss FederalInstitute of Technology, CH-8092, Zurich, Switzerland (E-mail: [email protected]).
Journal of Sustainable Forestry, Vol. 23(3) 2006Available online at http://jsf.haworthpress.com
© 2006 by The Haworth Press, Inc. All rights reserved.doi:10.1300/J091v23n03_02 47
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KEYWORDS. Cross-sectoral policy linkages, public policy networks,system of integrated environmental and economic accounting, forestryaccounts, sustainable forest management
INTRODUCTION
The World Summit on Sustainable Development in Johannesburg inSeptember 2002 reconfirmed the outcomes of the major United Nationsconferences and international agreements. The implementation planhighlights the role of forests in several public policies such as natural re-source management, agriculture, desertification, mountains, and sus-tainable development. It shows that forests and forestry developmentare closely linked to decisions that address measures on climate change,biodiversity, and the policy environment for sustainable development.These decisions place forests in a coherent and comprehensive contextof sustainable development and as a natural resource base for economicand social advancement (WSSD, 2002). The growing complexity ofpublic policies addressing land uses and management of the natural re-source base is reflected in corresponding legislative developments.While each country has its own constitutional context and traditions inorganizing its legal and administrative system, one can identify drivingfactors in all regions that have led to important changes since the UnitedNations Conference on Environment and Development (UNCED) in1992. These are concerned, for example, with the transition to marketeconomies, regionalization, good governance, and devolution and de-centralization of governmental powers.
Important trends such as globalization of the economy and trade, in-ternationalization of environmental and nature protection, privatization,and a changing understanding of the role of the state require a new ap-proach in sustainable forest management. Increased participation ofstakeholders, the growing influence of non-governmental organizations(NGOs) in decision making, as well as the diversification of society’sdemand for forest goods and services form the context in which link-ages between forest policies and other public policies that have an im-pact on the forest sector have to be judged (FAO, 2003; Schmithüsen,2003). Cross-sectoral policy linkages in the forest sector were high-lighted by UNCED in 1992. They were subsequently discussed in thecontext of the Intergovernmental Panel on Forests, the Intergovernmen-tal Forum on Forests, and the United Nations Forum on Forests.
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CROSS-SECTORAL POLICY LINKAGES
Analyzing Policy Linkages
Linkages between different public policies have an immediate or in-direct influence on the behaviour of landowners, forest users, publicagencies, and NGOs. Of importance are the combined outcomes and re-sults of policies and legal instruments that address economic, social,and environmental issues and their positive and negative effects onsustainable land management practices.
In forestry, the nature and importance of policy linkages that are rele-vant and the policy networks which they produce depend first and fore-most on the level of policy decision making. There are significantelements that make it possible to analyze the most important linkagesbetween different public policies and to carry out a comparative analy-sis of specific policy networks operating in certain social, economic,and ecological conditions (Schmithüsen et al., 2001; Box 1). In Europe,
Dubé, Lange, and Schmithüsen 49
Box 1. Elements for analyzing policy linkages.
Relevant Public Policies Policy Instruments
Institutional policies Regulatory instruments
Sector policies Incentive instruments
Development policies Information instruments
Economic and Ecological Context Process-steering instruments
Population growth and density Organizational instruments
Social product and per capita income Direction of Impacts
International trade relations Impacts from other policies on forestry policy
Importance of forest goods and services Impacts from forestry policy on other policies
Environmental conditions Reciprocal impacts between forestry andother policies
Forest ecosystems Valence of Impacts
Extent of forest area Positive impacts
Level of Policy Decision Making Negative impacts
International Neutral impacts
Supranational
National
Regional/local
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integrating forestry management and planning within the broader con-text of rural development, agriculture, landscape and nature protectionhas become a major issue. For countries in transition to a market econ-omy in Central and Eastern Europe, the main policy linkages in forestryhave resulted from privatization and land tenure policies, adjustments tothe rules of a market economy and standards set by the European Union.In North America, major impacts on forest resource development resultfrom environmental and nature-protection policies. In developing coun-tries, public policies have focused largely on protecting land fromuncontrolled deforestation, providing new resources through afforesta-tion and promoting economic and social development.
At national and local levels, the kind of linkages that are most impor-tant and the scale of the positive and negative effects that result fromthem need to be examined. The focus is on the actors involved, instru-ments and procedures that influence their behavior, and on the causalrelationship between forest policies and other public policies. The fun-damental issue to be addressed is the need to provide for an appropriatecombination of policy linkages that can effectively regulate the multipleuses of the natural resource base in a sustainable manner (FAO, 2002).Key questions to be asked in assessing the strengths and weaknesses ofexisting policy networks are as follows:
• Do they provide an appropriate positive regulatory environmentfor activities in support of sustainable development?
• Are they free of unnecessary regulatory constraints that could in-hibit activities that are essential for achieving the goals of sustain-able development?
• Are the mandates for different institutional actors clear, coordi-nated, and desirable?
• Do they provide mechanisms by which people may obtain mean-ingful and secure rights to the assets essential for their pursuit of asustainable livelihood?
• Do they allow the formation and empowerment of appropriatestakeholder organizations?
Managing Policy Networks
There is a need to strengthen public agencies’ capacity–more specifi-cally, the capacity of public agencies responsible for sustainable forestmanagement–to manage complex policy networks regulating a wide
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range of stakeholder interests in alternative land use systems and man-agement practices (Schmithüsen, 2004). It is important to find out towhat extent these interests are compatible or conflicting and the reasonswhy. In the case of compatibility of interests, one has to know in whatways public policies can foster synergy and optimize the use of avail-able natural resources. In the case of conflicting interests, one has tofind out to what extent modified political solutions and regulations canbe developed or to what extent complementary measures and/or com-pensations might reduce or neutralize negative policy effects. Develop-ing the potential of the rural space means, in fact, facilitating economicand social interactions between landowners, immediate beneficiaries,and public entities. Policy and law networks thus have to be concernedwith the financing of multiple outputs and services and to determine, inaccordance with the principle of subsidiary responsibilities, viableconditions for financial transactions among landowners, immediatebeneficiaries, and public entities.
The increasing interdependence between forest policies and otherpublic policies, with the growing complexity of policy networks formanaging the natural resource base, require a considerable amount ofprocess-steering involving governmental agencies, land users, and en-vironmental groups. This implies a shift from direct state control to for-estry practices that favor new forms of joint management involvingforest owners, NGOs, and public authorities. Public policies are in-creasingly tending to define specific targets and performance standardsfor the stakeholders concerned. They support cooperative forms of de-cision making and contractual arrangements with third parties. Guide-lines for best management practices, procedures for mediation, and theexchange of information constitute a substantial part of efforts to op-timize cross-sectoral policy linkages. Policy instruments related toprocess steering, public organization, and the allocation of financialresources are gaining in importance.
FORESTRY ACCOUNTS AND THEIRPOLICY APPLICATIONS
SEEA Forestry Accounts
The United Nations published an interim handbook on environmen-tal accounting in 1993 and has recently completed a substantial revi-
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sion, the system of integrated economic and environmental accounting(SEEA) 2003 (United Nations et al., 2003). The purpose of the SEEA isto provide an information system to operationalize sustainable develop-ment by linking environmental data directly to the system of nationalaccounts (SNA), which is the primary source of information about theeconomy and is widely used in all countries for assessment of economicperformance, policy analysis and decision making.
The SEEA forestry accounts provide a framework for (1) linking for-est asset (balance) accounts with flow accounts for timber, non-timberforest products (NTFPs), and forest ecosystem services in physical andmonetary terms; and (2) linking forest asset and flow accounts with theSNA (FAO, 2004). The advantage of this approach is that it provides atool to overcome the tendency to divide issues along disciplinary lines inwhich analyses of economic and environmental issues are carried out in-dependently of one another. For issues such as forest management, it sup-ports an economy-wide approach to sustainable forest management thatcan identify benefits that forests provide to other sectors as well as threatsto or opportunities for forests from non-forestry policies.
Forestry accounts are based on recording of forest goods and servicesunder headings of the following four basic components:
• Asset accounts. Forest asset accounts include balance accounts forforestland and stocks of standing timber. Accounts for recordingforest health are also included.
• Flow or production accounts. Forest flow accounts include supplyand use tables for detailed forest products (wood and non-wood,marketed and non-marketed) that are linked to the input-outputtables and social-accounting matrices used in economic models.They also include measures of forest ecosystem services such ascarbon storage or watershed protection and environmental de-gradation associated with forest use (e.g., soil erosion from log-ging).
• Environmental protection and resource management expendituresaccounts. Forestry accounts include forest management expendi-tures by government, environmental protection expenditures bypublic and private sectors and user fees and taxes paid by forestusers to the government.
• Environmentally adjusted macroeconomic aggregates. Forestryaccounts provide the addition to the gross domestic product (GDP)of unvalued forest goods and services, the subtraction from the net
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domestic product (NDP) of the economic cost of deforestation orloss of forest services caused by a change in management, and thecontribution of forests to national wealth (see Appendix).
Formal Accounting Programmes
The Statistical Office of the European Communities (Eurostat) initi-ated a pilot programme on forestry accounting in the late 1990s. Whilethe SEEA Handbook and Eurostat provide detailed descriptions of thecompilation of forestry accounts, there has been little discussion of thepolicy uses of forestry accounts. A recent paper commissioned by theFAO (FAO, 2004) addresses the policy applications of forestry ac-counts, and puts the emphasis on developing forestry accounts for pol-icy analysis and the particular needs of developing countries in terms ofdata availability and strengthening regional or local institutional capacityin cross-sectoral policy analysis.
Table 1 lists countries that have formal accounting programmessponsored by government agencies or by non-governmental agencies incooperation with governments that have established forestry accountsand the type of forest goods and services included in the accounts. For-estry accounts for all countries include timber asset accounts in physicaland monetary terms. Forests are disaggregated in different ways, de-pending on the policy issues and characteristics of forests in each coun-try. Virtually all forestry accounts distinguish cultivated and naturalforests, and disaggregate forests by major tree species. Many develop-ing countries limit timber accounts to commercial timber production,but are beginning to add non-commercial timber production and use ofnon-wood products as data become available. Among the developingcountries, only Swaziland has constructed supply and use tables. Mostdeveloped countries include carbon accounts. This practice is lesswidespread in developing countries, but is likely to increase with thegrowing potential for markets in forest carbon mitigation.
Forestry accounts provide a comprehensive framework for repre-senting all goods and services provided by forests to all other sectors.Important policy uses are, for example, the institution of fees for envi-ronmental services, which can be used to fund forest management andto compensate other users–often local communities–who may have tosacrifice some forest uses in order to maintain the flow of forest protec-tion services. Forestry accounts may also help identify potential con-flicts at the level of sectoral development objectives, as well as between
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local users of forest resources. By quantifying the relative values, trade-offs among users can be assessed and an optimal forest strategy de-signed that takes all stakeholders into account. Forestry accounts alsoassist in the establishment of multidisciplinary alliances across minis-tries and among different stakeholders as they realize the extent of theirdependence on forests.
54 JOURNAL OF SUSTAINABLE FORESTRY
TABLE 1. Forestry accounts constructed by selected countries.
Forestry accounts Forestry-related accounts
Timber Non-timber goodsand services
Land Energy Water Pollutionand envi-
ron. degra-dation
Asset ac-counts
Supplyand usetable
Carbonstorage
Othergoods andservices
Developing countries
Brazil X
Chile X
Costa Rica X
Indonesia X X
Mexico X X X X
Philippines X X X X X X
Thailand X
South Africa X X X X
Swaziland X X X X
Developed countries(Under Eurostat pilot programme)
Austria X X X X X X X
Finland X X X X X X X
Denmark X X X X X X X X
France X X X X X X X X
Norway X X X X X X X
Sweden X X X X X X X X
Spain X X X X X X X
Germany X X X X X X X X
Italy X X X X X X X
Other developed countries
Canada X X X X X X X X
Australia X X X X X X X X
New Zealand X X X X X X X
Source: FAO, March 2004.
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Forestry accounts help address questions such as:
• What is the total economic contribution of forests and what are thebenefits from sustainable forest management?
• What is the distribution of forest benefits among different groupsin society?
• Is economic growth sustainable or is it based on the depletion offorests?
• What are the trade-offs among competing users and how can forestutilization be optimized?
• What are the impacts of non-forestry policies on forest use?
Total Forest Values
For cross-sectoral policy, forest managers need to establish the socio-economic contributions of forests in relation to the rest of the economyand to evaluate the impact of non-forestry policies on forests andviceversa. Data from Romania, South Africa, and Sweden show the im-portance of accounting for total forest values, and the share of forestvalues that are either wrongly attributed to other sectors or not countedat all in national economic accounts. The estimated forest values forthese countries indicate that non-timber values can be greater than thevalue of the commercial timber harvest (Table 2). In all three countries,the values directly attributed to forests in national accounts greatly un-derestimate the true value of forests (Table 3). The share attributed toforestry ranges from a high of 45 per cent in Sweden to a low of 4 percent in Romania. A substantial proportion of forest services benefitsother sectors and is attributed to these sectors, mainly recreation and ag-riculture, which account for 41 per cent of forest output in Sweden and24 per cent in South Africa.
Who Benefits from Forest Goods and Services?
It is important to identify the dependence of rural communities on for-ests for their livelihoods and the dependence of other sectors of the econ-omy on forest services. Forestry accounts have not been used to addressthe issues of equity and poverty systematically, but this use of the ac-counts is likely to become important in future work (Lange, 2002). Inboth Swedish and South African forestry accounts, it is possible to distin-guish commercial operators from household forest users. In South Africa,poor rural households depend on forests for subsistence livelihoods and
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56 JOURNAL OF SUSTAINABLE FORESTRY
TABLE 3. Forest values included in national accounts of Romania, South Af-rica, and Sweden.
Romania(1997 )
South Africa(1998 )
Sweden(1999)
(Million US$) % oftotal
(Million US$) % oftotal
(Million US$) % of total
Included innationalaccounts asforest values
136 4 338(Commercial
timber)
28 2768(Timber,
non-timbergoods)
45
Included butattributed toother sectors
Part of 3096(Forest
environmentservices)
Partof 96
293(Grazing,
recreation,pollination,
reduced rainfallrunoff)
24 2528(Recreational
services)
41
Not includedin nationalaccounts
Part of 3096(Forest
environmentservices)
Partof 96
577(Non-market
timber,non-timber
forest goods,carbon storage)
48 885(Noise protec-tion + carbon
storage)
14
Total 3232 100 1208 100 6181 100
Source: FAO, March 2004.
TABLE 2. Value of forest goods and services in Romania, South Africa, andSweden.
Romania South Africa Sweden
1997(million US$)
1998(million US$)
1999(million US$)
Timber harvest 104 338 2528Non-timber goods 32 490(b) 240Forest services 3096(a)
Recreation 5 2528Protection from noise 21Carbon storage 87 864Livestock grazing 186Pollination services 143Reduction of rainfall run-off �41(c)
Total 3232 1208 6181
(a) Average annual value. (b) Includes non-market timber. (c) reduced rainfall runoff due to highevapotranspiration of exotic species in plantation forests.Source: Adapted from FAO, March 2004.
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accounts for the single largest forest value. In Sweden, households arealso the major beneficiaries, but mainly in the form of recreational ser-vices (Table 4).
Beneficiaries can be categorized as local forest owners/users, re-gional beneficiaries, and global beneficiaries. Two other examples areshown from the forestry accounts for Swaziland and Spain to illustratethe forms these divisions may take (Table 5). Local users/owners inboth countries receive the largest share of forest benefits: 55 per centand 47 per cent in Swaziland and Spain, respectively. These includebenefits from commercial logging and household harvesting of non-market timber and non-timber forest products. In Spain, commerciallogging is carried out by local companies, but in Swaziland, most of thelogging operations are foreign owned. In developing countries, it maybe useful to distinguish the foreign operators, as their interests may dif-fer from those of local operators. In Spain, the proximity of the forest toMadrid makes it an attractive recreational site for city dwellers. Recre-ational services accruing to regional beneficiaries account for 42 percent of the forest’s total economic value, but visitors typically do notpay for the use of forests. Finally, the global community benefits from
Dubé, Lange, and Schmithüsen 57
TABLE 4. Distribution of forest benefits by purpose or scale of forest use.
South Africa (million US$) Sweden (million US$)
Private commercial operators 495 (41%) 2528 (41%)
Commercial logging and forestproducts
352 2528
Commercial agriculture(pollination in South Africa)
143 NA
Households 667 (55%) 2768 (45%)
Non-market timber and otherNTFP (Subsistence productionin South Africa)
662 240
Recreation (value to visitors) 5 2528
Multiple beneficiaries 46 (4%) 885 (14%)
Carbon storage 87 864
Other environmental servicesincluding negative impacts
� 41 21
Total 1208 6181
Source: Adapted from FAO, March 2004. NA: not available.
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forest services such as international tourism, carbon storage, and bio-diversity protection, which account for 32 per cent and 11 per cent offorest values in Swaziland and Spain, respectively.
Depletion of Forests
In the past, loss of cultivated forest was recorded in national accountsbut loss of natural forest was not. Forestry accounts were constructed toadjust the commonly used measures of macroeconomic performance,GDP and NDP, for depletion of natural forests. It was hoped that theseenvironmentally adjusted measures of GDP and NDP would providemore accurate indicators of sustainable development. This type of appli-cation was typical of early work in developing countries, and some of theresults are shown in Table 6 (additional references are provided in FAO,2004). In some instances–Indonesia and Costa Rica–the cost of defores-tation was quite high. The World Bank includes a rough estimate of forestdepletion (timber value only) in its indicator of sustainable development,Genuine Savings; it attempts to adjust conventional net domestic savingsfor environmental depletion and for investment in human capital. Itsubtracts from net domestic savings an estimate of depletion of forest andminerals, adds expenditures on education and subtracts a notional dam-age charge for carbon emissions (Kunte et al., 1998). In the World Bankestimates, forest depletion reduced net domestic savings by 20 per cent inlow-income countries, mostly in Asia. Some countries, such as Australiaand Canada, are beginning to publish figures for total national wealth thatinclude non-produced assets such as natural forests.
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TABLE 5. Distribution of forest benefits between land owners/users and othersin Swaziland and Spain (percentage of total forest value).
Swaziland(National Forestry Accounts)
Spain(Accounts for Guadarrama Forest)
Local beneficiaries 68% Local beneficiaries (commerciallogging and NTFP)
47%
Subsistence household(non-market timber and NTFP)
55%
Foreign-owned local beneficiaries(commercial logging)
13% Non-local regional beneficiaries(recreation)
42%
Global beneficiaries (carbon storage,international tourism)
32% Global beneficiaries (carbonstorage, biodiversity protection)
12%
Source: FAO, March 2004.
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Trade-Off and Impact Analysis
Forestry accounts provide information that can be used for a range ofpolicy analyses, from relatively simple assessment of trade-offs amongcompeting users to more complex economic modelling. Cost-benefitanalysis is the main economic tool used for assessing trade-offs; it is of-ten used for project or policy evaluation at the local or regional level.When all the non-market goods and services provided by forests are in-cluded in the analysis, there is often a strong economic argument forforest conservation, or at least lessening the incentive for deforestation.The starting point for cost-benefit analysis–an assessment of the valueof present uses of a forest–can be provided by forestry accounts.
An example for the catchment forest reserves of Tanzania is shown inTable 7. They were established exclusively for their environmental pro-tection services (water and soil), but they are currently subject to illegaluse, which is gradually degrading the forest and reducing its ability tocontinue providing services. The main problem is the grazing of livestockin the forest. A study undertaken by the Ministry of Natural Resourcesand Tourism (MNRT, 2003) assessed the value of the forest under thepresent management (catchment protection only, but with illegal use),against an alternative form of management–catchment protection com-bined with limited use that is regulated to prevent forest degradation. Un-der limited legal use, cattle grazing would be reduced, but sustainableharvest of timber and timber-related products would be allowed.
The total value of catchment forest reserves under mixed-use man-agement is greater than under present management, but there is a clearloss to local communities from cessation of grazing. The distribution ofbenefits is a key element in designing policies to ensure sustainable
Dubé, Lange, and Schmithüsen 59
TABLE 6. Costs of forest depletion and degradation in selected countries.
Country Change in GDP/NDP by including the cost of defor-estation and degradation
Indonesia, 1971-1984 �5.4% of GDPCosta Rica, 1970-1989 �5.2% of GDPPhilippines, 1988-1992 �3.0% of GDPMalaysia, 1970-1990 �0.3% of GDPSweden, 1998 �0.03% of NDPSwaziland �0.83 % of GDP
Source: FAO, March 2004.
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management of forests. Local communities will not benefit from the al-ternative management unless their share of benefits from the harvestingof timber is sufficient to compensate for their loss of grazing. Forexample, the report noted the following:
• Local communities depend on catchment forest reserves and areusing them in an open-access manner, mainly because forest use isillegal so that there is no local management of consumptive use offorests. By allowing selective consumptive use of them, localmanagement committees can be established to oversee forest useand ensure that local use does not compromise catchment protec-tion services.
• Downstream users receive a substantial proportion of the benefitswhile often they are unaware of this and contribute nothing to forestmanagement. The report recommends education of all stakeholdersas well as the introduction of conservation fees for water and elec-tricity that would be used to finance forest management, or possiblyto compensate local communities for loss of livestock grazing.
The Tanzanian case study is a highly simplified assessment of trade-offs between two alternative forest management options, but it demon-strates that forestry accounts can provide a useful first step in these
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TABLE 7. Total net economic values generated by catchment forest reservesunder present management and alternative management in Tanzania (presentdiscounted net value in million US$, 2001).
Management Objective
Present Management(catchment protection only, with
illegal consumptive use)
Alternative(catchment protection +
limited legal consumptive use)
Forest goodsTimber and timber-related products
67.6 445.0
NTFPs 287.1 33.9
Forest servicesWater protection 54.1 54.1Soil protection 18.7 18.7Tourism 11.9 11.9Carbon storage 50.9 50.9
Total 490.3 614.6
Source: FAO, March 2004.
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assessments. A more extensive analysis of the socio-economic benefitsof forests would include measurement of the upstream and downstreamlinkages from each user, in terms of changes in employment and na-tional income under each option. This is a standard analytical techniquedeveloped for input-output and social-accounting matrix multiplieranalysis, which is widely used throughout the world. This kind of analy-sis shows more fully the dependence of the regional and nationaleconomy on forestry, and the impact of land use change.
Assessment of trade-offs in a partial-equilibrium, cost-benefit frame-work is a first step toward understanding the cross-sectoral policyimpacts on forestry. However, understanding the impact of broaderchanges such as trade liberalization, population growth, agriculturalpolicy, tourism development, energy policy, and so on requires an econ-omy-wide environmental-economic model. These models are generallybased on input-output and social-accounting matrices. In developedcountries, modelling with environmental accounts has focused mainlyon issues related to pollution and environmental taxes. Two countrieshave explicitly combined environmental accounts with economic mod-els to address cross-sectoral policy linkages to forestry–the Philippines(Cruz and Repetto, 1992) and Indonesia (Lange, 1997). A new interestin forest and land accounts has emerged from international efforts tocompensate for greenhouse gas emissions by creating carbon sinks intropical forests. A growing number of studies have analyzed the poten-tial value of forestland as a carbon sink in comparison with its value un-der alternative uses. A good example is a study by Castro and Cordero(2001) that estimated the reservation prices in eight regions of CostaRica (which have different opportunity costs and carbon productivity)for 27 different agricultural activities.
Challenges for Regional and Local Forestry Accounting
Like national forestry accounts, the non-market forest benefits thatare easiest and most often incorporated in regional or forest-levelaccounts are:
• Non-market wood and non-timber forest products that primarilybenefit local communities.
• Recreation and tourism services which, in developing countrieslike Swaziland, benefit mainly foreigners or, in developed coun-tries like Spain, may benefit regional communities.
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• Carbon storage, which mainly benefits the global community.
The accounts for the Guadarrama forest in Spain and the catchmentforest reserves of Tanzania indicate the importance of recreational andprotection services to downstream beneficiaries. At present, beneficia-ries do not pay for these services. If there is sufficient pressure on for-ests in the future, it may be appropriate to devise a system for users topay for such services. In Swaziland, stakeholders can use regional for-estry accounts to demonstrate the rural livelihoods that would be lostand would need to be replaced if more forestland were converted to for-est plantations or to large-scale commercial agriculture. These exam-ples show how regional or forest-level accounts may be helpful tostakeholders where non-market forest products to local communitieshave not been systematically taken into account in forestland use deci-sions. Regional forestry accounts linked to additional demographic andsocio-economic data would provide forest managers and local stake-holders with a tool to determine, for example, which local areas are un-der greatest stress relative to population needs and the importance offorest products in livelihoods, and they would make it possible to designmanagement strategies appropriate to each region.
Regional economic accounts are regularly compiled only in devel-oped countries and some large developing countries such as China, In-dia, Indonesia, and the Philippines. Few developing countries compileregional economic accounts on a regular basis. Even where such accountsare available, they may not correspond well with regional forestry ac-counts. For example, Swaziland has regionalized forestry accounts onthe basis of ecological criteria, while the Spanish accounts were com-piled for a particular forest and the Tanzanian accounts were compiledfor a category of forests spread throughout the country. None of thesegeographic areas corresponds to administrative regions used for collect-ing economic statistics. Regional forestry accounts will be of limiteduse for regional forest management unless they can be integrated withthe corresponding regional economic accounts.
CONCLUSIONS
Taking cross-sectoral policy linkages into account in forestry and ap-proaching problems in a more integrated manner are key concepts forimproving the effectiveness and efficiency of public policies aimed at
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achieving sustainable forest management and development. In thiscontext, forestry accounts can provide a powerful information tool topromote cross-sectoral policy analysis; however, there is not a singlecountry in the world that is currently taking full advantage of the poten-tial of this tool. Constructing forest accounts need not be a particularlyexpensive undertaking, as the accounts can often be constructed fromexisting information rather than requiring extensive new surveys. Someof the information exists at the national level, but much of it is collectedin scattered, micro-level cost-benefit studies usually designed to ad-dress local resource management issues. Adjusted for consistency withnational income accounts and integrated into forest accounts, theselocal case studies can contribute to national policy.
In order to help countries take the full advantage of forestry accountsin the future, the following actions are recommended:
• Join other information systems. National forest resource assessmentsincluding criteria and indicators for sustainable forest managementrepresent important ongoing data collection and efforts at analysisthat forestry accounts could complement and reinforce.
• Use existing information to begin constructing accounts for non-market goods and services. There is an extensive body of literatureon the valuation of non-market forest goods and services that canprovide a starting point for many countries.
• Increase forest accounting at the regional or forest level. Becauseforest utilization tends to be a local or regional issue, there is aneed for more disaggregated forestry accounts, strengthening thecapacity of local institutions to conduct cross-sectoral policy anal-ysis.
• Build forestry accounts around policy priorities. Issues such ascarbon storage, rural livelihoods, tourism, biodiversity, and water-shed protection can provide topics for communicating the resultsof the accounts. The broader the group of stakeholders involved,the more effective the forestry accounts will be.
• Share information and knowledge. This could be achieved byorganizing training workshops, developing more practical policyapplications at the subnational level, and supporting the establish-ment of “communities of practice.”
• Promote work on legal, policy, organizational, and financial is-sues. This will provide concrete empirical information on suc-cesses, as well as on gaps and drawbacks in a given social,economic and political context.
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REFERENCES
Castro, R. & S. Cordero. 2001. Tropical forests and the emerging CO2 market.Investigación Agraria, No. 1, pp. 185-204.
Cruz, W. and R. Repetto. 1992. The environmental effects of stabilization and struc-tural adjustment program: The Philippine case. World Resources Institute, Wash-ington, DC.
FAO. 2002. Law and sustainable development since Rio: Legal trends in agricultureand natural resource management. Legislative Study No. 73. FAO, Rome, Italy.
FAO. 2003. Cross-sectoral policy impacts between forestry and other sectors. For-estry Paper 142. Edited by Yves C. Dubé and Franz Schmithüsen. FAO, Rome,Italy.
FAO. 2004. Manual for environmental and economic accounts for forestry–a tool forcross-sectoral policy analysis. By Glenn-Marie Lange, FAO Forestry Department,Policy and Institutions Service Working Paper. FAO, Rome, Italy.
Kunte, A., K. Hamilton, J. Dixon, & M. Clemens. 1998. Estimating national wealth:Methodology and results. Environment Department Papers, Environmental Eco-nomics Series No. 57. World Bank, Washington, DC.
Lange, Glenn-Marie. 1997. Strategic planning for sustainable development in Indone-sia using natural resource accounts. In J. van den Bergh & J. van der Straaten (eds).Economy and ecosystems in change: Analytical and historical approaches. ElgarPublishing, Aldershot, United Kingdom.
Lange, Glenn-Marie. 2002. Using environmental accounts to link poverty, environ-ment and development. Paper presented at the workshop on poverty reduction, en-vironmental management and sustainable development: theory and practice, 24-26May 2002. Durban, South Africa.
Ministry of Natural Resources and Tourism (MNRT). 2003. Resource EconomicAnalysis of Catchment Forest Reserves in Tanzania. MNRT, Dar Es Salaam, Tan-zania.
Pagiola, S., J. Bishop, and N. Landell-Mills (eds). (2002). Selling Forest Environmen-tal Services: Market-Based Mechanisms for Conservation and Development. Earth-scan, London.
Schmithüsen, F. 2003. Understanding cross-sectoral policy impacts–policy and legalaspects. Forestry Paper 142: 5-44. FAO, Rome, Italy.
Schmithüsen, F. 2004. European forest policy developments in changing societies: Po-litical trends and challenges to research. In: Towards the Sustainable Use of Eu-rope’s Forests–Forest Ecosystem and Landscape Research. EFI Proceedings No.49: 87-99. European Forest Institute, Joensuu, Finland.
Schmithüsen, F., K. Bisang and W. Zimmermann. March 2001. Cross-sectoral link-ages in forestry–review of available information and considerations on further re-search. Swiss Federal Institute of Technology, Department of Forest Sciences,Forest Policy and Economics Chair, Zurich.
United Nations, European Commission, International Monetary Fund, Organizationfor Economic Cooperation and Development and World Bank. 2003. Integrated en-vironmental and economic accounting 2003. United Nations, New York.
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World Bank. 2005. Where is the Wealth of Nations? World Bank, Washington, DC.World Summit on Sustainable Development (WSSD). 2002. Plan of Implementation.
Johannesburg, South Africa.
RECEIVED: 07/12/05REVISED: 03/15/06
ACCEPTED: 04/04/06
doi:10.1300/J091v23n03_02
APPENDIX
COMPILATION OF FORESTRY ACCOUNTS
A brief overview on the compilation of forestry accounts is provided here inorder to clarify the figures in the tables. It is not possible to describe each studyin detail, and the reader is referred to a more detailed explanation of the way inwhich forestry accounts are constructed (FAO, 2004).
Forestry accounts consist of stocks and flows. The stocks are compiled in(1) physical units (e.g., the area of forest cover, volume of standing timber,volume of carbon stored) and (2) monetary units. In principle, the value of for-est assets is the net present value of all the benefits a forest is expected to gen-erate over its lifetime–timber (at stumpage value), non-timber forest products(NTFPs), forest environmental services (carbon storage, services to agricul-ture, tourism, etc.). Timber valuation has a long history and is often the firstcomponent of a forest asset to be valued. The valuation of services is morecomplicated, requiring several steps:
1. Estimating the gross value of annual production of goods and services2. Calculating the net value (gross minus costs of harvesting/production)3. Making some assumption about the future production of these benefits4. Discounting future benefits to the present
Most of the tables in this paper report examples of the first step–measure-ment of the gross production of gross benefits (goods and services) in a givenyear. Estimation of net values is not yet complete.
Timber is valued gross at market price and net at stumpage value.The same principle is applied to valuation of NTFPs. For non-market
goods, timber and non-timber, there is usually at least a small amount trade in
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local, informal markets, which provides a reasonable estimate of market price.Consequently, these values can be measured with a reasonably high degree ofaccuracy.
Valuation of environmental services: A wide range of services may be in-cluded in the forest accounts. The most common is carbon storage. Carbonvaluation is based on several alternative methods:
• Where a market for trading carbon permits exists, the trading price isused.
• In the absence of markets for tradable permits, a carbon tax (if levied)might be used.
• Finally, for countries not participating in carbon markets and withoutcarbon taxes, an estimate from 1992 of global damages from climatechange is often used as a proxy (World Bank, 2005).
Forest services to agriculture–such as pollination services of wild bees orgrazing for livestock–is usually based on a “near-market” substitute, for ex-ample, the cost of hiring pollination services or grazing land (or providing fod-der for animals). For these services with “near-market” equivalents, the valuesare also reasonably accurate.
Services for tourism and recreation are more difficult to measure, althoughenvironmental economists have developed several techniques that have beenwidely applied for several decades. The number of tourist visits and theamount of money that visitors spend is observable and can be used for estimat-ing a value. Additional techniques (contingent valuation, conjoint analysis)survey visitors directly about the value of a site to them.
Forest services such as watershed protection and soil stabilization–servicesincluded in the Tanzanian forest accounts–are still quite controversial, be-cause measurement of the physical services provided is so uncertain. One indi-cation of value comes from “Payments for Environmental Services,” a recentinitiative mainly in Central America to establish a market in which down-stream beneficiaries pay the forest land owners/users for services such as wa-tershed protection and soil stabilization (Pagiola et al., 2002). While criticallyimportant, these forest services are likely to remain the least certain of the for-est values for some time to come.
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