Policy means for ensuring the full value of forests to society

Abstract

The total value generated by a forest consists of wood and non-wood goods and services. The profit-oriented forest owner considers in his management plan only those forest products for which he can expect a market price; non-market forest goods and services are provided as positive externalities of the production of market goods. Since many unpriced forest values are of utmost importance to society, their sufficient provision in terms of quantity and quality also has to be ensured. This paper discusses several options aiming at a better utilisation of the forest potential and proposes research needs in this context. One option is to transform non-market goods into market goods. The marketability of goods is a given physical fact having to do with the exclusion of the goods and the rivalry of consumers. If one can easily exclude those from consumption, who do not pay (`free riders'), one can market a good. This is the case for private goods as well as club goods. Many forest services such as biodiversity, and protection against erosion, are public goods. Once public goods are provided, it is difficult to exclude others from enjoying them. By marketing they can be transformed into local public goods and toll goods (`impure public goods') for which a price can be charged. The success mostly depends on the entrepreneurial behaviour of the forest owners. If more `impure public goods’ are needed, or if there are still unpriced forest goods and services which are not marketable, the welfare-optimising state has to intervene by appropriate regulatory, economic and informational means at the national and supra-national levels in order to overcome the prisoner's dilemma situation. A special informational means which has received much attention in the international deliberations on forests are national forest programmes (NFPs). At the international level, a central authority does not exist, which could enforce the sufficient provision of forest public goods in forest management through legally binding instruments. But it could be established, if there is an incentive for a group of participants to overcome a problematic situation through agreement on a legally binding instrument for forests. The international deliberations on forests could benefit from analyses to evaluate the outcomes of existing and new legal instruments and policy tools. Collective action to sustainably manage forests for timber and public goods without an external authority to offer incentives or impose sanctions can also be provided by `common-property regimes'. They seem to be promising for the management of common-pool resources such as forests. Common-property regimes on forests arose during history by trial and error in many mountainous areas of Europe. Both the users of timber and public goods hold private rights to use a given forest and come to some agreement on compatible uses which meet their competing interests. Research on individual case studies of successful and failed common-property regimes would facilitate the implementation of this tool.