A benefit–cost analysis of establishing protected natural areas in New Brunswick, Canada

Abstract

The government of New Brunswick established a network of protected natural areas (PNAs) in 2003 without conducting a rigorous benefit–cost analysis of this policy's effect on social values. We assessed non-market benefits and opportunity costs associated with discontinuing timber harvesting in the PNAs using contingent valuation and wood supply modeling methods, respectively. The addition of 143,000 ha of PNAs was estimated to provide non-market benefits of $58.63 per household per year, or $44 to $730 million in total present value terms over an 80-year horizon, depending on the assumed discount rates and restrictions imposed on benefits. Total present value costs over the same period were estimated to range from $37 to $289 million, depending on the assumed silvicultural budget and discount rate. Overall, we found that the net present value of the existing PNAs was positive for the majority of silvicultural budgets, discount rates, and benefit restrictions considered. These results provide decision makers with data on stated benefits and opportunity costs of PNA establishment, as well as insight into the importance of modeling assumptions when using this framework of analysis.