Linking standard Economic Account for Forestry and ecosystem accounting: Total forest incomes and environmental assets in publicly-owned conifer farms in Andalusia-Spain

Abstract

A major problem faced by government as trustee of society charged with conserving the nation's forest environmental asset is that the standard Economic Account for Forestry (EAF) fails to measure the contribution of nature to total forest incomes and environmental assets. In the context of this government mission, the debate arises with regard to how to uncover the contribution of nature to the total forest incomes enjoyed by people through a refined accounting framework which extends the EAF. The latter is applied by the statistics office to estimate the values added of timber, firewood, cork, resin, industrial nut and other non-woody final products of the forest at national/sub-national scale. Bearing in mind this narrow scope of the EAF, this research proposes the application of the experimental Agroforestry Accounting System (AAS), which extends the forest incomes and environmental asset estimates by applying simulated exchange values stated/revealed by consumers for non-market public goods and services. We apply the EAF and AAS frameworks to 12 large publicly-owned protected conifer forest farms which are not available for sale on the competitive land market and which cover an area of 47,262 ha in Andalusia-Spain. In this conifer farm case study, the EAF considers the economic activities of timber, firewood, aromatic plants and residential service. The AAS adds to the EAF activities those of grazing, conservation forestry, hunting, livestock, agricultural crops, livestock-keeper private amenity, fire services, free access recreation, mushrooms, carbon, landscape conservation, threatened wild biodiversity and water supply runoff stored lower down the watershed in public reservoirs. The objectives of this conifer farm case study are, first, to compare the final products and incomes estimated by applying the EAF and AAS frameworks and, second, to measure the sensitivity of conifer farm environmental assets to changes in land ownership rights and discounting rates in accordance with the AAS results. The conifer farm results show total income measured by the AAS is 38 times higher than the EAF net value added (NVA) for the 2010 period. The AAS economic activities of forestry conservation, fire services and landscape conservation activities generate 71% of the conifer farm labour compensation. The AAS opening environmental asset measured at the assumed competitive real baseline discounting rate of 3% is 6371.6 €/ha, which is 3.7 times lower than it would be if the conifer farm was available for sale on the competitive land market. The change in the baseline discounting rate chosen, from 3% to 1.5%, would lead to an increase of 116% in the value of the opening environmental asset. The above results reveal the inconsistent EAF measurement of total conifer farm incomes. The sensitivity analysis underlines the important effects on the environmental asset arising from changes in land ownership rights and discounting rates.