Measuring Asset Values and Flow Benefits of Non-Traded Products and Ecosystems Services of Forest and Woodland Resources in South Africa

Abstract

Conventional measures of economic output, national income and wealth highly underestimate the value and contribution of natural resources to economic welfare. This paper makes estimates of the asset values and flow benefits of non-traded goods and services from forests and woodland resources in South Africa. Four benefit categories were included, namely direct consumptive use values (timber and non-timber products), non-consumptive use values (recreation for example), indirect use values (environmental services such as carbon sequestration, watershed protection, etc.), and non-use values (based on contingent valuation by tourists). Asset values were calculated knowing the change in physical stocks and the relevant prices. In South Africa, the increase in assets was equivalent to 1.1% of gross domestic product (GDP) (forests were improving, but fynbos deteriorating), and the flow benefits were equivalent to 0.8% of GDP. These are large magnitudes.