Advanced Search
MyIDEAS: Login

Valuation Methods for Environmental Benefits in Forestry and Watershed Investment Projects

Contents:

Author Info

  • Romina Cavatassi

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

Abstract

The understatement or omission of the environmental costs and benefits associated with forest management options results in project evaluations and policy prescriptions that are less than socially optimal. The aim of this paper is to examine the full range of costs and benefits associated with forests, distinguishing between how these should, and actually are, included in economic analyses. The paper first describes the economic analysis undertaken in the project evaluation procedure of the World Bank. The second section deals with all costs and benefits that typically occur in forestry projects. Costs and benefits are classified as on-site private, onsite public or global according to their nature and area of impact and according to the Total Economic Value approach. The third section illustrates valuation techniques and how these are employed to estimate all forest values. The purpose of the fourth section is to examine how analysis is implemented in project evaluation, focussing on five case studies undertaken by the FAO Investment Centre. The analysis reveals that the main determinants of the economic viability of forestry projects are the on-site private benefits, while a major weakness of project evaluations is the difficulty in including and evaluating on-site public benefits, mainly associated with externalities. Global environmental benefits associated with carbon sequestration proved to be significant for the economic viability of forestry projects.

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: ftp://ftp.fao.org/docrep/fao/007/ae056e/ae056e00.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number 04-01.

as in new window
Length: 55 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:fao:wpaper:0401

Contact details of provider:
Postal: Agricultural Sector in Economic Development Service FAO Viale delle Terme di Caracalla 00153 Rome Italy
Phone: +39(6) 57051
Fax: +39 06 57055522
Email:
Web page: http://www.fao.org/es/esa/
More information through EDIRC

Related research

Keywords: Agroforestry; Cost benefit analysis; Economic analysis; Economic value; Environmental protection; Forest management; Forest resources; Forestry; Forestry development; India; Nepal; Philippines; Water management; Watershed management;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Simpson, R David & Sedjo, Roger A & Reid, John W, 1996. "Valuing Biodiversity for Use in Pharmaceutical Research," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 163-85, February.
  2. Neumayer, Eric, 1999. "Global warming: discounting is not the issue, but substitutability is," Energy Policy, Elsevier, vol. 27(1), pages 33-43, January.
  3. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, October.
  4. Gordon C. Rausser & Arthur A. Small, 2000. "Valuing Research Leads: Bioprospecting and the Conservation of Genetic Resources," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 173-206, February.
  5. Fearnside, Philip M., 1997. "Environmental services as a strategy for sustainable development in rural Amazonia," Ecological Economics, Elsevier, vol. 20(1), pages 53-70, January.
  6. Azar, Christian & Sterner, Thomas, 1996. "Discounting and distributional considerations in the context of global warming," Ecological Economics, Elsevier, vol. 19(2), pages 169-184, November.
  7. William R. Cline, 1992. "Economics of Global Warming, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 39.
  8. Markandya, Anil & Pearce, David W, 1991. "Development, the Environment, and the Social Rate of Discount," World Bank Research Observer, World Bank Group, vol. 6(2), pages 137-52, July.
  9. Leonard Shabman & Kurt Stephenson, 1996. "Searching for the Correct Benefit Estimate: Empirical Evidence for an Alternative Perspective," Land Economics, University of Wisconsin Press, vol. 72(4), pages 433-449.
  10. John Adams, 1993. "The Emperor's Old Clothes:The Curious Comeback of Cost-benefit Analysis," Environmental Values, White Horse Press, vol. 2(3), pages 247-260, August.
  11. Pearce, David, 1998. "Cost-Benefit Analysis and Environmental Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 14(4), pages 84-100, Winter.
  12. Paul Ekins, 2000. "Costs, benefits and sustainability in decision-making, with special reference to global warming," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 3(4), pages 315-333.
  13. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521311120, October.
Full references (including those not matched with items on IDEAS)

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:fao:wpaper:0401. 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: (Gustavo Anríquez) The email address of this maintainer does not seem to be valid anymore. Please ask Gustavo Anríquez 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.