Policy instruments to enhance multi-functional forest management

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Abstract

Sustainable forest management has become the salient cross-cutting theme in forestry throughout the world today. This paradigm recognizes that forests are managed for a wide variety of ecological, economic, and social benefits. This explicit recognition of many outputs and services as management objectives has recast our economic analyses on the values of forests. Similarly, our policy tools must adapt to achieve the goals of multi-functional forestry across a broad range of ownerships and values. We review factors that affect forest policy selection, including the nature of goods and services, social values, and economic values. We then discuss traditional and newly developing natural resource policy tools in this context and discuss their applications in meeting the objectives of forest landowners and society in achieving multi-functional sustainable forestry goals in the future.

Introduction

Private and public sector goals for forest resources evolve over time. Individual and societal goals change as values, economic conditions, political situations, and natural resource stocks change. Contemporary public forest resource management goals are expanding to encompass a broader suite of goods and services. Our forest policy tools must change to reach these broader goals.

In this article, we examine various factors that influence forest resource allocation, management, and protection, including the types of goods and services provided by forests, social values and institutions, and economic valuation of those goods and services. The objective of this paper is to synthesize the interaction of factors influencing policy with the development of new policy tools to achieve broad multifunctional forestry goals. As such, we review the factors that affect forest policy development and selection; summarize how these factors are used to justify and to select among various categories of policy instruments; and assess the evolving nature of forest policy instruments based on trends in social values and government capability.

Characterizing changes in social goals for forests is challenging, but new trends in forest resource values and uses can be identified. To cast these in old terms, we might think of Maslow's hierarchy of needs as a means to represent the changing nature of forest uses (Maslow, 1954). Initially, we sought to satisfy basic physiological needs from forests—such as food, shelter, or clothing—or security needs—such as protection from danger or threats. We have slowly expanded from these basic needs to higher needs of social, self-esteem, and self-actualization. Higher level needs encompasses a greater set of amenity, spiritual, or social needs and values. Forests provided multiple goods and services to very low-income, rural, agrarian societies. These ranged from spiritual, cultural, and religious outputs, to agricultural inputs such as watershed protection and fodder, to products including fuelwood, timber, and medicines. As societies develop, they become less connected to forests and rely on them primarily for products. At higher income levels, forests are again valued for multiple goods and services, including amenity values.

A contemporary natural resource explanation of this shift in the demand for environmental services is the environmental Kuznet's curve (Grossman and Kruger, 1995). This inverted U-shaped curve relates deforestation or extractive use of forests to income per capita. As countries develop, both their ability to exploit the forest and their demand for forest goods increase, pushing them up the Kuznet's curve. At some point, countries undergo a transition in production technology (e.g., from fuelwood to kerosene) and in demand (e.g., greater value placed on non-use and passive use of forests). This marks the “forest transition” from shrinking to expanding forest area, as has occurred in both the U.S. and Europe. However, contemporary evidence for this pattern is mixed. The turning point, where deforestation rates start to fall, appears to vary across countries and to depend on other conditions, such as the distribution of wealth and political freedoms (Bhattarai and Hammig, 2001).

Contemporary values of forests have evolved in the industrialized world. First, forests and forest products are still needed to satisfy basic human needs, just as agriculture is needed. However, the suite of goods and services desired from forests has expanded as incomes have risen, just as agriculture is now valued for open space as well as food products. Both public and private forests in most of Europe and in much of the United States are valued at least as much for recreation and tourism, water production (quantity) and quality, amenity values, wildlife, and biodiversity as for wood products (e.g., Bliss and Martin, 1989, Bengston et al., 1999, Butler and Leatherberry, 2004). Second, there is increased recognition that the wide range of forest goods and services that are necessary to even satisfy basic food and shelter has expanded. The recognition of the importance of ecosystem services, such as oxygen production, carbon storage, and hydrological cycles has expanded our concerns for basic needs beyond local stand or watershed issues into national policies and international affairs (e.g., Janson et al., 1994, Daly and Cobb, 1994, Odum, 1993). Third, research has demonstrated the value of forests to native local people and communities, and the need to integrate these local values with national and the global values to allocate and manage forest lands (e.g., Ascher, 1994, Leach et al., 1999, Mauro and Hardison, 2000).

This rapid expansion in the uses of forests as countries develop, combined with the expanded definitions of forest values, forces us to re-think forest policies to achieve these broader social goals. Some traditional forest policies may help us achieve production and protection of a broader set of forest goods and services. However, it seems unlikely that a set of forest policy tools originally designed to achieve production goals will be equally well suited for broader conservation, amenity and social goals. Furthermore, social conditions have changed, as countries have developed, governments have reformed, private sector markets have expanded, and international politics and power relationships evolved.

Section snippets

Policy determinants

The types of forest goods and services, social values, and ability to estimate economic values affect the selection of forest policies. These policy determinants have influenced selection of traditional forest policies and will be equally important as we develop and select new policy instruments to achieve sustainable forest management and multi-functional forestry objectives.

Policy instruments

The preceding public policy determinants influence both the forest policy goals and the selection of forest policy instruments. To recapitulate, forest resource characteristics, social goals, and economic values contribute to forest resource retention, allocation, management, and protection. Government is often required to intervene with policy instruments when the nature of goods and services impedes adequate resource allocation in markets. These includes cases such as of forest fire

Conclusions

Forest policies help determine the retention, use, and protection of forests. In the last decade, sustainable forest management has become a widely accepted paradigm. This paradigm states that we should manage forests for a broad set of economic, ecological, and social values. This infers that our forest policies must provide a broad set of multi-functional goods and services. The evolving nature of sustainable forestry goals requires advances in forest policy instruments for multi-functional

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    This paper was prepared for presentation at the 2005 IUFRO Meeting in Australia Economics of Multifunctionality, Session 037, August 9th.

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