Advanced Search
MyIDEAS: Login

Cost- benefit analysis of the location of new forest land

Contents:

Author Info

  • Ellen Moons

    ()
    (K.U.Leuven, C.E.S., Energy, Transport and Environment)

Abstract

In this paper we show how cost-benefit analysis can be used as a decision support mechanism for the location of new (urban) forest land, starting from the multifunctional role of these new forests. We start with a simple presentation of the cost-benefit analysis (CBA) technique. Key features of this evaluation technique are that (i) all - both positive and negative - impacts for all relevant parties (i.e. not only the project promoter) are taken into account and (ii) evaluation occurs on the basis of monetary values. Next, we give an overview of all relevant costs and benefits of afforestation projects for the whole society. On the cost side, we distinguish costs directly related to the afforestation project itself, such as tree planting and forest management on the one hand and opportunity costs on the other hand. On the benefit side we make a distinction between use and non-use values. Use values include timber production, hunting, recreation and ecosystem values. Non-use and option values capture forest benefits that are independent from the actual use made of the forest area. As valuation of recreation and non-use/option values is not straightforward, we discuss their valuation methods in more detail. For valuing recreation the travel cost method (TCM) is the most widely used technique. TCM seeks how the visit frequency responds to changes in the price of a visit. Non-use values can only be valued using the contingent valuation method (CVM). CVM uses survey questions to elicit people's preferences for public goods by finding out what they would be willing to pay for specified changes in them. Finally, we apply the CBA to a real life policy problem. The Flemish government has agreed on a 10.000 ha forest expansion in Flanders, focusing on the multifunction role of forests. In our case study we give an example for the Ghent region (East Flanders). We investigate the net benefits per hectare of combinations of potential forests that meet the surface restriction of 540 ha. We show the importance of including recreation benefits in the evaluation of afforestation projects and more specifically the role of alternative forests (substitutes) in the valuation of one specific forest. We find that this substitution effect is significant in the decision on the location of new forests and leads to a wide variation in the net benefits per hectare of different combinations.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.econ.kuleuven.ac.be/ew/academic/energmil/downloads/ete-wp02-05.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment in its series Energy, Transport and Environment Working Papers Series with number ete0205.

as in new window
Length: 21 pages
Date of creation: Jul 2002
Date of revision:
Handle: RePEc:ete:etewps:ete0205

Contact details of provider:
Postal: Naamsestraat 69, 3000 Leuven
Phone: +32-(0)16-32 67 25
Fax: +32-(0)16-32 67 96
Email:
Web page: http://www.econ.kuleuven.be/ew/academic/energmil
More information through EDIRC

Related research

Keywords: Environmental economics; Cost-benefit analysis; Valuation; Land use change; Forestry;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ete:etewps:ete0205. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Isabelle) The email address of this maintainer does not seem to be valid anymore. Please ask Isabelle to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.