Making Forest Conservation Pay Off

For developing countries, conservation doesn't pay. A study published in the 9 June issue of Science concludes that forest conservation provides net economic benefits for local communities and for the world, but not for individual nations. The report argues, however, that bleak assessment could be changed by a controversial addendum to the already controversial Kyoto Protocol, which would enable developing countries to trade on the carbon value of their forests.

According to recent estimates, 32 million acres of forest worldwide are cut down for timber or go up in smoke every year. "As the logging companies go in, they create roads, and often these roads will be infiltrated by local people who will do slash-and-burn farming," explains Stanford University conservation biologist Claire Kremen. "It's a double whammy."

The new report, by Kremen and seven ecologists and economists, makes it clear just how hard it is for a poor country to say no to deforestation. While she was helping design the Masoala National Park, a 500,000-acre preserve created by the Madagascar government in 1997, Kremen collected a wealth of data on the economic value of the forest. Nearby villagers, for example, use forest products to thatch their roofs, to flavor an alcoholic beverage, and to build canoes. Kremen also learned the forest's potential value on the timber market. "We thought we'd come out with a really positive accounting for forest conservation," Kremen says.

Yes and no. Sustainable forestry did pay off for the villagers, Kremen found. Over 10 years, each village could make or earn over $200,000 worth of goods from the forest, compared to only $12,000 that it could earn from slash-and-burn agriculture. But these benefits were dwarfed by the estimated $90 million in foreign trade that Madagascar could earn by selling the timber from the forest.

The picture reversed again when Kremen took into account the impact on the global economy of not harvesting and burning those 500,000 acres. The burning of forests is a major source of carbon dioxide in the atmosphere, and thus a contributor to global warming. Using a rough estimate of $20 per ton of carbon conserved, the researchers concluded that the world economy would benefit by $180 million over the same 10 years by not burning the wood in the Masoala National Park.

Under a proposed system of greenhouse-gas emission credits, oil companies or governments in developed countries can help reach their greenhouse-gas reduction target by supporting conservation efforts in developing countries. By offering credits as little as $4 per ton of carbon saved, developed nations could enable a country like Madagascar to break even on its conservation efforts, Kremen says.

The report is "very timely," says Peter Frumhoff, director of global resources at the Union of Concerned Scientists, because the signatories of the Kyoto Protocol are currently debating the carbon credit plan in Bonn. Opponents of the Kyoto accord, however, are skeptical of the findings. The underlying assumption is that economists can determine the value of resources even when they're not bought and sold on the market, says Jerry Taylor, the director of natural resource studies at the Cato Institute in Washington, D.C. "I'm not in a position to sort that out, nor is any human being alive."

Posted in Environment, Economics