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The social benefits and costs of preserving forest biodiversity and ecosystem services

Henrik Lindhjem (), Kristine Grimsrud, Stale Navrud () and Stein Olav Kolle

Journal of Environmental Economics and Policy, 2015, vol. 4, issue 2, 202-222

Abstract: Ecologists recommend preserving more of the old-growth forests in Norway, as half of the species have forests as their main habitat and many are in decline. We investigate benefits and costs over a 50-year period of increasing forest conservation from 1.4% of the productive forest area (the situation in 2007) to 2.8% (doubling), 4.5% ('ecologists' minimum') and 10% (one goal suggested in public debate). The benefits are estimated based on a national contingent valuation (CV) survey of Norwegian households. Two independent measures of total costs are used: (1) the actual compensation amounts paid to forest owners and (2) results from a survey of forest owners' minimum willingness to accept compensation to preserve. Results show that social benefits outweigh costs of the three conservation plans by a large margin. The middle option of 4.5% has the highest net present value. This result is robust to a range of assumptions, including considerations of potential hypothetical bias in willingness to pay estimates. The results of this cost-benefit analysis reflect the preferences of the general population, the authorities and the forest owners with respect to biodiversity and ecosystem services conservation, and supplement the expert opinion of ecologists.

Date: 2015
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DOI: 10.1080/21606544.2014.982201

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