Study on the Development and Marketing of Non-Market …...Study on the Development and Marketing of...

Study on the Development and Marketing of Non-Market Forest Products and Services DG AGRI, Study Contract No: 30-CE-0162979/00-21 Study Report - Annexes

-November 2008-

Disclaimer This report was produced under contract from the European Commission. It solely reflects the views of the authors, and it should not be interpreted as a position of the European Commission. Neither the European Commission, nor any person acting on its behalf can be held responsible for the use of this document or of the information contained within.

Prepared by:

European Forest Institute (EFIMED)

Robert Mavsar, Sabaheta Ramčilović, Marc Palahí

University of Natural Resources and Applied Life Sciences (BOKU)

Gerhard Weiss, Ewald Rametsteiner, Saana Tykkä

Alterra

Rob van Apeldoorn, Jan Vreke, Martijn van Wijk

Confederation of European Forest Owners (CEPF)

Gerben Janse

External experts

Irina Prokofieva (Forest Technology Center of Catalonia)

Mika Rekola & Jari Kuuluvainen (University of Helsinki)

Study on the Development and Marketing of Non-Market Forest Products and Services

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Contents ANNEX 1. INITIAL EXPERT INTERVIEWS ......................................................................................................................................1 ANNEX 2. COMMON INTERVIEW GUIDE FOR THE CASE STUDY DATA COLLECTION ...............................................................2 ANNEX 3. CLASSIFICATION OF ECOSYSTEM SERVICES...............................................................................................................3 ANNEX 4. CHARACTERISATION OF FOREST GOODS AND SERVICES (ACCORDING TO MEA 2005).....................................4 ANNEX 5. COMPARISON OF DIFFERENT FOREST GOODS AND SERVICES CLASSIFICATIONS..................................................7 ANNEX 6. LISTS OF MARKET AND NON-MARKET FOREST GOODS AND SERVICES ..................................................................8 ANNEX 7. IMPORTANCE OF DIFFERENT FOREST SERVICES IN THE EU-27 COUNTRIES .................................................... 13 ANNEX 8. SUMMARY OF THE FORVALUE QUESTIONNAIRE RESULTS ............................................................................... 17 ANNEX 9. FOREST MULTIPLE USES - COMPATIBILITY MATRIX.............................................................................................. 29 ANNEX 10. PUBLIC ACCESS TO FORESTS AND PUBLIC USE OF NON-WOOD PRODUCTS NWFP.................................... 31 ANNEX 11. QUESTIONNAIRE CONCERNING THE IMPORTANCE OF FOREST GOODS AND SERVICES AND EXISTING FINANCING MECHANISM............................................................................................................................................................... 33 ANNEX 12. THE CONCEPT OF ECONOMIC VALUE ..................................................................................................................... 43 ANNEX 13. VALUATION APPROACHES....................................................................................................................................... 44 ANNEX 14. GENERAL VALUE TYPOLOGY ................................................................................................................................... 45 ANNEX 15. ECONOMIC VALUATION TECHNIQUES .................................................................................................................. 46 ANNEX 16. VALUATION TECHNIQUES AND FOREST GOODS AND SERVICES ......................................................................... 47 ANNEX 17. KEY STEPS IN THE VALUATION OF ECOSYSTEM GOODS AND SERVICES............................................................ 48 ANNEX 18. SPATIAL RELEVANCE OF DIFFERENT FOREST GOODS AND SERVICES............................................................... 50 ANNEX 19. SUMMARY OF ECONOMIC VALUES.......................................................................................................................... 51 ANNEX 20. OVERVIEW OF CLASSIFICATION SCHEMES FOR FINANCING INSTRUMENTS..................................................... 52 ANNEX 21. TYPOLOGY OF FINANCING INSTRUMENTS USED IN THE STUDY......................................................................... 54 ANNEX 22. USE OF FINANCING INSTRUMENTS – RESULTS..................................................................................................... 55 ANNEX 23. INNOFORCE DATABASE OF INNOVATION CASES IN FORESTRY ........................................................................ 58 ANNEX 24: QUESTIONNAIRE FOR ADDITIONAL MCA INFORMATION.................................................................................. 59 ANNEX 25: SHORT DESCRIPTION OF COLLECTED EXAMPLES OF FINANCING MECHANISMS ............................................. 64 ANNEX 26: OVERVIEW MCA OF THE SELECTED CASES OF FINANCING MECHANISMS. ..................................................... 77


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Annex 1. Initial expert interviews List of experts for initial interviews, March 2008 (name of expert, organisation, date and place): • Erik Kosenkranius, Eustafor, Brussels, 13 March, 2008 (Brussels) • Pieter De Corte, ELO, Brussels, 13 March, 2008 (Brussels) • Marilise Wolf-Crowther, Eurostat, 15 March, 2008 (Brussels) • Hakan Nystrand, METO (Forestry Experts’ Association), Helsinki, 15 March, 2008 (Brussels) • Jenny Wong, Wild Resources Limited, Bangor, 15 March, 2008 (Brussels) • Joan Botey I Serra, CEPF/Agrofitor S.A., Barcelona, 14 March, 2008 (Brussels) • Stefan Schenker, CEPF, Brussels/Mariensee, 20 February (telephone) • Thomas Stemberger, COPA-COGECA, Brussels/Vienna, 15 March, 2008 (Brussels) • Alexandra Vakrou, DG Environemtn, Brussels, 15 March, 2008 (Brussels) Conferences used for further interviews: • PARLAVIS WS 22. 2. 2008, Nasswald, AT; • EFORWOOD WP2.3 meeting, 27. 2. 2008, Lisbon, PT; • International Excursion on Forest Policy and Innovations in Forestry, 21.-23. 4. 2008, AT; • BEECH Project Meeting 6. 5. 2008, Freiburg, DE; • EFI PC INNOFORCE meeting 11. 6. 2008, Edinburgh, UK; • Seminar on Innovations for Rural Development, 11. 6. 2008, Dunkeld, UK; • COST Action E51 meeting, 12.-13. 6. 2008, Dunkeld, UK; • FOPER International Master Programm Seminar, 30. 6. – 4. 7. 2008, Belgrade/Durmithor, SB/MNE; • FORTIS Seminar “Forests – Not Only Wood”, 3. 9. 2008, Trento/S. Michele, IT; • FORVALUE Workshop and project meeting, 8.-10. 9. 2008, Barcelona, ES; • EESD Conference 23. 9. 2008, Graz, AT.

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Annex 2. Common interview guide for the case study data collection Case interview guide: • name of case and carrier • background information on institutional situation (e.g. legal framework and administrative structure) • characterisation of the activity (what is the business or project and why is it innovative?) (including what type(s) of financing is/are employed) • characterisation of the financing mechanisms involved

o Description of the financing mechanism o Beneficiary of the payment (e.g. land owner, association, community, etc.) o Who pays? (e.g. local, provincial, national government, user, etc.) o Are there intermediary organisations involved? o Use of legal, economic, communication, or voluntary instruments, or combinations o Which investments or measures are necessary before the mechanism works? o On which basis is payment fixed, e.g. market price, free negotiation, assessment of costs, etc.?

• chronology of the case: o problem situation before the innovation or start-up was started and motivation why it was started; o development and implementation incl. e.g. source of ideas and initiatives; critical stages or milestones of the development possibly including challenges and strategies to overcome problems; o finally: state-of-progress and outcome incl. basic data on the business such as number of staff, annual turnover, etc. as far as available. (including: amount of compensation from specific financing instruments)

• actors involved (e.g. authorities; extension services; NGO’s; research institutions; firm networks and cooperation)and their role, particularly: o knowledge (which kind of knowledge came from whom?), o financing (who contributed which financial sources incl. public grants and private money) o relation of actors and coordination (which cooperations where important and who was particularly important for coordinating actors?)

• relevance of public policies and programmes (e.g. through subsidies but also through advice, knowledge, coordination, legal regulations, etc.) • analysis/evaluation:

o Outcomes in relation to the objectives of the innovation o Role of the innovation in the overall economic strategy of the organisation (e.g. specialisation, diversification, rationalisation, outsourcing, marketing, cooperation, expansion) o relevance of the institutional setting for the innovation o Positive and negative results and outcomes of the innovation (economic performance and other changes) o Challenges and problems, strategies to overcome these o Fostering and impeding factors o Future plans o feasibility of and requirements for an application of the financing mechanism in other countries


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Annex 3. Classification of Ecosystem Services

Provisioning Regulating Cultural

Food Fiber Genetic resources Biochemicals, natural medicines, pharmaceuticals Freshwater

Air quality regulation Climate regulation Water regulation Erosion regulation Water purification and waste treatment Disease regulation Pest regulation Pollination Natural hazard regulation

Cultural diversity Spiritual and religious values Knowledge systems Educational values Inspiration Aesthetic values Social relations Sense of place Cultural heritage values Recreation and ecotourism

Supporting Soil formation, Photosynthesis, Primary production, Nutrient cycling and Water cycling Adopted from MEA (2005)

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Annex 4. Characterisation of forest goods and services (according to MEA 2005)

Resources: This category refers to the forest ability to provide “tangible” wood and non-wood forest products. Industrial wood serves as the basis for the production of a vast number of products, like industrial round wood, sawn wood, wood-based panels, pulp and paper, particleboard, fibreboard, and plywood, engineered lumber components, softwood lumber, flooring, pallets, veneer, etc. Fuel wood includes the provision of wood for energy generation from direct use of woody material (e.g. twigs, branches and stems used as fuel or charcoal); indirect use (e.g. wood processing residues); recovered wood-fuels (used wood) and wood-derived fuels (e.g. methanol) (Mead, D. 2001). Non-wood forest products (NWFP) serve various purposes, ranging from food, medicines, spiritual, aesthetic, construction and clothing materials. Forest provides a great diversity of NWFP. According to the Millennium Environmental Assessment (MEA, 2005) “At least 150 NWFPs are of major significance in international trade”. For a comprehensive overview of NWFP see Figure 4.1. Figure 4.1. Example of Non-Wood Forest Products Classification

Food Products

Decorative &Aesthetic Pr.

Health & Care Pr.

Landscape & Garden Pr.

Materials & Manufacturing Pr.

Environmental Pr.

berriesbeverages-essential oilsflavouring agentsherbs and spiceshoneymaple syrup,sugartaffy, buttermushroomsnutsseedsteasvegetables

adhesivesalcoholcandlesclothdyesessential oilsfragrancesincenselignosulfonatesresinspecialty wood pr.stuffing materialthread & ropeturpentine

aromatherapy oilscosmeticsdrugsessential oilsherbal health pr.nutraceutialsperfumes and fragancespet care pr.shampoossoaps

Christmas treecone craftsbark craftscarvingsfloralarangementswreathsgarlands,swagsnatural dyes

biofuelsbiopesticidesrecycled pr.

landscape treesshrubswildflowersgrassesmulchessoil amendments

Adopted from: CMRN (1999) Ecological Services: The main ecological services are related protection and regulation of water, soil and health.


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Water protection is based on the forest’s ability to capture and store rainfall and moisture, maintain natural irrigation, drainage, regulate river flow, reduce sedimentation, prevent land slides, regulate water quality, etc. (FAO, 2003). In particular it refers to: • Water regulation is related to the forest’s capacity to regulate the hydrological flows on the surface. (e.g. maintenance of natural irrigation, buffering extremes in discharge of rivers and regulation of run-off). • Water supply refers primarily to the forest’s storage capacity. It is related to the consumptive use of water (e.g. households, agriculture, and industry).

Soil protection is mainly based on the structural aspects of forests. The vegetation root system and cover play an important role in soil retention and formation. • Soil retention is assured by the root system, which stabilises the soil, and foliage, which intercepts rainfall, preventing soil compaction and erosion. • Soil formation is also supported by the root system that disintegrates the rocky material, while the vegetation cover plays an important role in the fertilisation processes.

Health protection is tightly related to many other forest goods and services important for human survival and well-being. Services contributing to health protection are: • Disturbance prevention refers to the ability of vegetative structures to alter potentially catastrophic effects, such as floods, storms and droughts. • Waste treatment is related to forest’s potential to neutralise, to a certain level, the pollution (e.g. dust filtering, assimilation of substances (pollutants) and their chemical re-composition). • Medical resources relate to direct disease treatment (e.g. respiratory diseases) or provision of medical plants, which can be used in traditional medicine or as pharmaceuticals or drugs.

Biospheric Services: The main services in this group, according to the MEA classification, are biodiversity protection and climate regulation. Biodiversity is an essential factor in sustaining the functioning of the ecosystem and hence underpinning for many other forest goods and services. It generally it refers to three levels:

• Genetic diversity or differences of genes among populations/individuals of the same species (e.g. varieties of crops). • Species diversity refers to the variety of plants, animals and micro-organisms in an ecosystem. • Ecosystem diversity refers to the variety of different ecosystems. According to Mayer (1995) forests are the most important terrestrial ecosystems for conservation and protection of biodiversity.

Climate regulation refers to maintenance of favourable climate and weather conditions. It is based on complex interactions of regional and global circulation patterns with local topography, vegetation, and hydrological configuration. The service directly links to forests are : • Gas regulation referring to the bio-geochemical reactions influencing the composition and the chemical balance of the atmosphere and oceans (e.g. CO2/O2 balance, maintenance of O3 level and SOX level). This service includes clean air provision and prevention of diseases. • One of the specific services, related to gas regulation, is carbon sequestration. It is considered, that by capturing and storing the excessive carbon dioxide from the atmosphere, forest contribute to the mitigation of global warming. In the last decade, this service attracted significant attention of policy makers.

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Social Services: There is vast array of opportunities that forest provides for recreation and leisure. However, the three main groups of services are: Ecotourism refers to the form of tourism where flora, fauna, and cultural heritage are the primary or important attractions. Recreation refers to organised or free activities that contribute to human health and well-being. These services are including numerous activities, like, walking, hunting, mountain biking, etc. Sport activities imply organised, usually group, activities, mainly related to competition. It should be noted, that the boundaries between these groups are not always clear. Amenity Services: Amenity services are largely associated to the aesthetic aspects of forests and landscapes (e.g. urban parks, sacred landscapes, and recreational sites). Therefore they directly link to the social, spiritual, cultural and historic services Spiritual services refer to the spiritual values placed on certain ecosystems (e.g. holy forests), species (e.g. sacred plants and animals), and landscapes (e.g. mountains, waterfalls). It is about the peoples’ connections to their environment, through personal reflection, or more organised events (e.g. religious gathering, rituals). Cultural services refer to the cultural linkages between humans and their environment. It includes cultural heritage and cultural identity (e.g. “memories” in the landscape from past cultural ties, forest elements in the national symbols, folklore, etc.) Historical services mainly refer to the valuable history-related and educational information embedded in the forest. A large part of peoples’ history is associated with ecosystems and landscapes (special landscapes, old trees, remains of traditional cultivation systems, historic artefacts).


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Annex 5. Comparison of different forest goods and services classifications

Classification Scheme Forest good / service

MEA (2005) Total Economic Value

Market/ non-market

Public/private

Industrial wood Resources Direct use Market Private Fuel wood Resources Direct use Market Private

Cork Resources Direct use Market Private Food Resources Direct use Market Private

Fodder and forage Resources Direct use Market Private/pool Decorative material Resources Direct use Market Private Hunting and game

products Resources Direct use Market Private/pool

Pharmaceuticals Resources Direct use Market Private Biodiversity protection

Biospheric Indirect use, Non-use Non-market Public Climate regulation Biospheric Indirect use Non-market Public

Air quality regulation Biospheric Indirect use Non-market Public Carbon sequestration Biospheric Indirect use Non-market Public

Health protection Ecological Indirect use Non-market Public Water regulation Ecological Indirect use Non-market Public

Water purification Ecological Direct/Indirect use Non-market Public Soil protection Ecological Indirect use Non-market Public

Recreation Social Direct use Market/Non-market Club/Public Sports Social Direct use Market/Non-market Club/Public

Tourism Social Direct use Market/Non-market Club/Public Spiritual and cultural

services Amenities Direct/Indirect use, Non-use Market/Non-market Club/Public

Historical and educational services

Amenities Direct/Indirect use, Non-use Market/Non-market Club/Public Aesthetic services Amenities Direct/Indirect use, Non-use Non-market Public

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Annex 6. Lists of market and non-market forest goods and services

Table 6.1: List of market forest goods and services

Group Good/Service Sub-group End product Boards Cants Flitches Lumber/industrial Timber Primary products

Veneer Chopsticks Pillings Poles Posts Log homes Shakes Shingles Treated pilings Treated poles Treated posts Log products

Wood novelties Building components Cut stock Door stock Edge glued components Finger-jointed stock Furniture components Joinery stock, Ladder stock Laminated components Laminated stock Metric stock Moulding panels Panel blanks Pallets Crating stock Medium density fiberboard Particleboard Pattern stock Sawmill speciality products Staircase components Turning squares

Intermediate products

Window stock. Wafer board Stand board Fibber board Particle board Softwood plywood Panels

Wood cement Laminated veneer lumber Engineered Lumber

Components Oriented stand lumber Dimension boards Machine stress/rated Softwood Lumber Timber Sawn wood Plywood Hardwoods Veneers RESOURCES

Industrial wood

Processed Wooden furniture


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Group Good/Service Sub-group End product Builders joinery and carpentry and profiled wood products Continuously shaped wood Glued products Treated products Pulp and Paper products

Other wood including products Charcoal Fuelwood Firewood Fruits Honey Mushrooms Nuts Berries Herbs Saps Roots Carob Beverages-alcoholic essential oils Ferns Ramps (wild onion) Flavouring agents Spices Maple syrup Sugar Taffy Butter Seeds Teas Vegetables Oils

Edible plant products

Wild rice Game meat and products Hides Wool Skins and trophies Beeswax Honey Snails Furs Animal products

Pelts Nettle Common elder-blossom Lime-blossom Dog-rose hip Different medicines Herbs Aromatherapy oils Cosmetics Drugs Essential oils Herbal health products Nutraceutials perfumes Fragrances

Medical plants and

heath/personal care products

Shampoos and Soaps Bark Fodder Forage

Non-wood forest products

Plant products

Cork

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Group Good/Service Sub-group End product Carvings Wreaths Garlands Swags Natural dyes Pine boughs Moss Ferns Flowers and floral arrangements Mistletoe and holly Cone crafts Grazing Gums Resin Compost Adhesives Dyes Incense Lignosulfonates Stuffing material Ropes Materials and

Manufacturing products Turpentine


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Table 6.2: List of non-market forest goods and services Remark: The list of non-market forest goods and services reflects the general situation. However, there are cases (see part 1 of Deliverable 2) where some of the goods and services from this list are market or at least some financial mechanisms have been developed and applied to compensate for their provision. Good/service End service Water quality improvement Drainage and natural irrigation Medium for transport Provision of water (drinking, irrigation and industrial use) Protection of avalanches Reduction of surface erosion and sedimentation Filtering water pollutants Water yield and flow regulation Flood moderation Enhancing precipitation (e.g. "cloud forests") Salinity mitigation Mass wasting Watershed protection Water retention Regulation of hydrological cycle Regulation and redistribution of surface and below-ground run off

Water Protection

Increasing of the total annual river run off. Flood protection Maintenance of arable land Wind and shoreline erosion Siltation prevention Maintenance of productivity on arable land Maintenance of natural productive soils Maintenance of soil vitality and ecosystem productivity Soil Protection

Land and landscape conservation Flood protection Storm protection Protection of human habitation and infrastructure Waste treatment Pollution control Filtering of dust particles Abatement of noise pollution Pollination of wild plant species and crops

ECO

LOG

ICA

L SE

RV

ICES

Health Protection

Food production Biodiversity conservation Habitat conservation Pest and disease control Reduction of herbivores (crop damage control) Maintenance of biological and genetic diversity Biodiversity Protection Maintenance of commercially harvested species Carbon balance Carbon storage and sequestration Stabilization of macro climate Mitigation of global climate change UV protection by O3 layer Maintenance of good air quality Influence on climate Maintenance of favourable climate Human habitation protection Health protection

BIO

SPH

ERIC

SER

VIC

ES

Climate Regulation

Cultivation

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Good/service End service Travel to nature ecosystem Enjoyment of scenery Nature tourism Cultural tourism Rural tourism Tourism

Sustainable tourism Walking Hiking Camping Bird-watching Hunting Orienteering in nature Horseback riding Mountain biking Enjoyment of scenery War games School excursions Organized NWFP collection Recreation

Huts and cottage renting Outdoor sports Organized sport competitions Hunting

SOCI

AL

SER

VIC

ES

Sport activities Fishing Sacred, religious, or other forms of spiritual inspiration Site of worship for ancestral spirits Spiritual fulfilment Notion of heritage of natural ecosystems Holy forests Sacred plants and animals Landscape features (mountains and waterfalls) Spiritual Services

Intellectual development Nature as a motive in film, books, painting, folklore, national symbols, architecture Cultural identity and values related to forest, “Memories’’ in the landscape from past cultural ties Cultural Services Aesthetic enjoyment and inspiration Special landscapes Old trees Remains of traditional cultivation systems

AM

ENIT

Y S

ERV

ICES

Historical Services Historic artefacts


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Annex 7. Importance of different forest services in the EU-27 countries

Table 7.1: The share of forest for soil and water protection, in 2005 (source: MCPFE 2007)

Country Protective forest (in %)

Austria1 17.7Belgium 25.7Bulgaria 11.6Czech Republic 5.8Denmark 6.8Estonia 10.6Finland 3.1France 2.8Germany 34.1Hungary 7.7Italy 5.0Ireland 0.0Latvia 4.3Lithuania 15.0Luxembourg 1.4Cyprus 0.0Netherlands 0.0Portugal 5.7Poland 21.1Romania 25.1Slovakia 17.3Slovenia 7.5Spain 13.1Sweden 11.5United Kingdom 0.2EU-27 11.2

1 Data for Austria and Luxembourg includes also the area of other wooded land.

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Table 7.2: Carbon stock in woody biomass, period 1990-2005 (source: MCPFE 2007)

Total Carbon stock (in 1000 tC) Country 1990 2000 2005 Average2 tC/ha

Austria3 323000 358000 375500 97,2 Belgium 51732 62094 66691 99,2 Bulgaria 188000 244000 263000 72,0 Cyprus 2550 2730 2760 15,8 Czech Republic 277352 308142 316692 119,6 Denmark 22065 25418 25971 51,9 Estonia n.a. 178594 179182 79,1 Finland 738500 797600 855857 38,7 France 983158 1066667 1165511 74,9 Germany 981000 1193000 1283000 115,8 Greece 51600 56300 58700 15,6 Hungary 146271 161807 169026 86,8 Ireland 16100 18300 20000 29,9 Italy 476291 636587 715585 71,7 Latvia 191260 228561 243280 80,2 Lithuania 113000 130700 139400 65,7 Luxembourg 7030 9235 9235 106,5 Malta 60 60 60 172,9 Netherlands 20970 25330 27780 76,1 Poland 578885 673462 736199 80,0 Portugal 77400 101700 113800 30,1 Romania n.a. n.a. n.a. - Slovakia 175200 204300 218600 113,2 Slovenia 130740 160360 171210 135,5 Spain 276000 353000 392000 21,9 Sweden 1112417 1205548 1233691 44,3 United Kingdom 98600 106600 115100 40,5 EU-27 7039181 8308096 8897830 57,2

2 Calculated for 2005. 3 Data for Austria includes also the area of other wooded land.


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Table 7.3: Share of forest area devoted to biodiversity protection, in 2005 (source: MCPFE 2007)

Country No or minimal management

Active management

Landscape protection

Austria 0.7 2.3 23.4 Belgium 0.8 1.0 4.1 Bulgaria 4.1 0.1 3.5 Cyprus 0 0 0 Czech Republic 0.6 2.5 22.1 Denmark 2.2 16.2 0 Estonia 7.7 5.1 7.3 Finland 6.4 1.1 2.2 France 0.7 0.5 20.4 Germany 1.4 23.8 45.2 Greece 0 0 0 Hungary 0.6 3.1 18.0 Ireland 0 0 0 Italy 15.4 14.0 10.2 Latvia 5.4 4.4 4.6 Lithuania 1.2 7.9 4.4 Luxembourg 2.3 32.1 0 Malta 0 0 0 Netherlands 8.5 6.3 9.0 Poland 0.8 2.5 15.3 Portugal 0.3 0 24.8 Romania 0 2.8 2.2 Slovakia 5.0 12.3 25.9 Slovenia 0.8 0.5 4.1 Spain 0 0 0 Sweden 4.1 0.2 0.2 United Kingdom 0.4 4.8 22.7 EU 27 3.3 3.8 10.2

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Figure 7.1: Share of forest for biodiversity protection in EU-27 countries in 2005 (source: MCPFE 2007)


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Annex 8. Summary of the FORVALUE Questionnaire Results

1. Introduction The purpose of the FORVALUE study (“Study on the Development and Marketing of Non-Market Forest Products and Services” [Contract number: 30-CE-0162979/00-21]) is to acquire summary information on the state-of the-art for the importance, valuation and compensation for non-market forest goods and services. This study is financed by the European Commission and is part of the implementation of the EU Forest Action Plan and is being undertaken by a consortium led by the European Forest Institute. The study seeks to find out whether developments in the theoretical aspects of forest valuation over the last few decades have been, or could be, translated into operational mechanisms for financial transactions for non-market forest goods and services. The ultimate goal of this exercise is to create a foundation for discussion of the feasibility of economic instruments for encouraging and supporting the supply of non-market forest goods and services from which policy conclusions will be drawn. Thus, a questionnaire was developed to obtain relevant data on the current situation concerning mechanisms in use to compensate for the provision of non-market goods and services at the national level. The questionnaire covered three thematic areas (see also the questionnaire in Annex 9): • importance of forest goods and services • financing mechanisms used for forest goods and services • questions regarding most innovative financing mechanisms The questionnaire was distributed to all the EU Member States (MS). To compare the opinion of different stakeholder groups, it was also sent to the members of Confederation of European Forest Owners (CEPF), European State Forest Association (EUSTAFOR) and some national environmental non-governmental organizations (ENGOs).

Figure 8.1: Questionnaire responses (responded are marked in blue)

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Completed questionnaires were received, from all EU Member States4 but one, which indicated difficulties in responding to the questionnaire (see also Figure 8.1). For some Member States, responses from different sources were received (e.g. ministry, forest owner association, state forest companies, ENGO). However, in the evaluation of the “Importance of forest goods and services” (the first thematic area), only the data coming from the official source was used. The data from other sources was used for comparison only. The full list of all questionnaires received is provided hereafter: Official Responses: 1. Austria - Federal Ministry of Agriculture, Forestry, Environment and Water Management, Division IV/1 - Forest Policy and Forest Information 2. Belgium (Wallon) - Nature and Forest Division of the Ministery of the Walloon Region 3. Bulgaria - State Foiestry Agency 4. Cyprus - Department of Forest 5. Czech Republic - Faculty of Forestry and Wood Sciences. Czech University of Life Sciences Prague 6. Denmark - University of Copenhagen 7. Estonia - Ministry of Environment, Forest Department 8. Finland - Finnish Forest Research Institute 9. France - Ministry of agriculture / forest and wood department 10. Germany - Institute for World Forestry 11. Greece - Ministry Of Rural Development And Food / Directorate Of Forest Resources Development 12. Hungary - Ministry of Agriculture and Rural Development 13. Ireland - Irish Forest Service 14. Latvia - Ministry of Agriculture Republic of Latvia 15. Lithuania - Ministry of Environment Department of Forests 16. Luxemburg - Administration des Eaux et Forêts 17. Malta: Nature Trust 18. Poland - Warsaw University of Life Sciences - SGGW; Faculty of Forestry 19. Portugal - DG Forest Resources, Ministry of Agriculture, Rural Development and Fisheries 20. Romania - Ministry of Agriculture and Rural Development 21. Slovakia - Natioanl Forest Centre - Forest Research Institute in Zvolen 22. Slovenia - Ministry of Agriculture, Forestry and Food 23. Sweden - The Swedish Forest Agency 24. Spain - Regional Govern of Spain: Castilla-La Mancha 25. Spain- Catalonia: Department of Environtment and Housing (Government of Catalonia) 26. Spain - Conselleria de Medio Ambiente, Agua, Vivienda y Urbanismo. Directora General de

Gestión del Medio Natural 27. Sweden - The Swedish Forest Agency 28. The Netherlands - LEI 29. UK - Forestry Commission EUSTAFOR - “State forest companies”

4 In the case of Belgium the response came only from Wallonia, while in the case of Spain only autonomous communities of Castilla- La Mancha, Catalonia and Valencia responded.


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1. Czech R.: Forests of the Czech Republic, state enterprise 2. Estonia: State Forest Management Centre (RMK) 3. Latvia: SC Latvijas valsts mezi 4. Poland: PGL Lasy Państwowe 5. Romania: National Forest Administrtion - Romsilva 6. UK: Forestry Commission England CEPF - “Private forest owners associations”

1. Austria: Landwirtschaftskammer Österreich 2. Estonia: Estonian Private Forest Center 3. Finland: Central Union of Agricultural Producers and Forest Owners MTK

ENGOs (Environmental Non-Governmental Organisations” 1. Greece: WWF Greece, 2. Sweden: Swedish Society for Nature Conservation 3. UK: Confor, Glos Wood Fuels, Woodland Improvement 4. UK: Coetir Mynydd Please consider that the results, presented in this report, are based upon the opinion of the respondents and might differ from results cited in other sources. 2. Results The results presented in this report are summarizing the findings of the first part of the questionnaire, which inquired about the current importance level and trend, as well as about the area important for the provision and accessibility of different forest goods and services. The respondents were presented a list with 18 forest goods and services5, and asked to specify:

• Importance – the importance of the good or service in the respective country in comparison to other forest goods and services (1- not important…5-very important) • Trend of importance – how the importance of a product/service is evolving (1 – constant; 2 – increasing; 3 – decreasing) • Area - area important for the production/provision of a certain forest good/service in % of total forest • Access – Is the access to the forest good/service public or limited (1 – public; 2 – limited to forest owner; 3 – limited to permit holders) • Following the Millennium Ecosystem Assessment (MEA) Classification scheme, forest goods and services are grouped into five main categories: Resources: industrial wood, fuel wood, cork, food, fodder and forage, decorative material, hunting and game products and pharmaceuticals. • Ecological: biodiversity protection, climate regulation, air quality regulation, carbon sequestration • Biospheric: health protection, water regulation, water purification, soil protection • Social: recreation, sports, tourism

5 For a complete list and description of forest goods and services considered in the questionnaire, see Annex 2.

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• Amenities: spiritual and cultural services, historical and educational services, aesthetic services. However in the following presentation of the results, the resources, as being mainly “market forest goods and services”, are exempted. Further, to provide a better overview, the countries were grouped into regions. The grouping follows the classification used by the MCPFE6, and divides the countries into following groups: • Central Europe (CE): Austria, Czech Republic, Hungary, Poland, Slovak Republic, Slovenia • Nordic/Baltic (NB): Denmark, Estonia, Finland, Latvia, Lithuania, Sweden • North West Europe (NW) : Belgium, France, Germany, Ireland, Luxemburg, Netherlands, UK • South East Europe (SE): Bulgaria, Cyprus, Greece, Romania • South West Europe (SW): Malta, Portugal, Spain

2.1 Ecological services As ecological services are considered those, which are related to protection of water, soil and health. In all the parts of Europe these services were considered as being important. The highest importance was to this services was ascribed in South-Eastern EU Member States. Table 8.4: Importance of ecological services

CE NB NW SE SW EU Health protection 3,2 3,0 2,4 4,3 2,8 3,1 Water regulation 3,8 2,7 3,0 4,5 3,4 3,5 Water purification 4,0 3,0 3,4 4,3 2,4 3,4 Soil protection 3,8 2,2 3,4 4,8 3,3 3,5 The respondents also considered that the importance of these services is mainly increasing (Table 8.5), especially health protection and water regulation in the Nordic/Baltic region, water regulation in the South-Western Member States and soil protection in North-Western and South-Eastern countries. Table 8.5: Trends of importance of ecological services

CE NB NW SE SW EU Health protection 0,5 0,8 0,4 0,5 0,3 0,5 Water regulation 0,5 1,0 0,4 0,5 0,7 0,6 Water purification 0,5 0,5 0,6 0,5 0,0 0,4 Soil protection 0,5 0,0 0,7 0,8 0,2 0,4 Legend: the scale for the trend of importance goes from -1 (decreasing) to 1 (increasing), and 0 indicting a constant importance Data on area of forests important for provision of ecological services implies that in general high shares of forests are considered as being important for the provision of these services (Table 8.6); on the European level, in average, almost 70% of the forests.

6 MCPFE (2007), State of Europe’s Forests 2007-http://mcpfe.org/files/u1/publications/pdf/state_ of_europes_forests_2007.pdf

http://mcpfe.org/files/u1/publications/pdf/state_of_europes_forests_2007.pdf

http://mcpfe.org/files/u1/publications/pdf/state_of_europes_forests_2007.pdf


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Table 8.6: Area of forests important for the provision of ecological services

CE NB NW SE SW EU Health protection 80 35 67 100 98 76 Water regulation 79 30 53 72 65 60 Water purification 77 38 45 100 65 65 Soil protection 82 35 68 74 84 69 These services are in almost all countries considered as public and therefore freely accessible. Nevertheless some countries limit the access to water purification sites (Slovakia, Netherlands, Cyprus and Germany). 2.3 Biospheric services Climate, air quality regulation, carbon sequestration and biodiversity protection are services listed under the category of biospheric services. Without exception, biodiversity protection was considered as the most important service in this group. In all the regions it was considered as being very important, when compared to other forest goods and services (Table 8.7). Nonetheless also all the other services, in this group, obtained high scores for importance. Table 8.7: Importance of biospheric services

CE NB NW SE SW EU Biodiversity protection 4,3 4,5 4,4 4,8 4,1 4,4 Climate regulation 3,0 3,0 3,7 3,8 3,7 3,4 Air quality regulation 3,0 2,7 3,1 4,5 3,4 3,4 Carbon sequestration 3,0 3,0 4,1 3,8 3,7 3,5 Even if the services are already now considered as being important or very important, the responses about trends (Table 8.8) indicate, that their importance is even further increasing. Table 8.8: Trends of importance of biospheric services

CE NB NW SE SW EU Biodiversity protection 1,0 1,0 0,7 0,8 0,9 0,9 Climate regulation 0,8 0,8 0,9 0,8 0,7 0,8 Air quality regulation 0,7 0,3 0,7 0,8 0,3 0,6 Carbon sequestration 0,8 0,8 0,6 1,0 0,7 0,8 Legend: the scale for the trend of importance goes from -1 (decreasing) to 1 (increasing), and 0 indicting a constant importance Again the reported data on the area important for the provision of biospheric services is of very diverse quality and therefore difficult to compare and interpret. The highest share of forests is important for carbon sequestration, air quality and climate regulation. In some cases (e.g. Central Europe, Nordic/Baltic region, South-Eastern Europe) all the forests are considered as being important for the provision of these services. For biodiversity protection this share is lower. This is understandable, since for this service very often special management regimes have to be applied, which doesn’t always holds for the rest of the services in this group.

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Table 8.9: Area of forests important for the provision of biospheric services

CE NB NW SE SW EU Biodiversity protection 50 51 68 15 30 43 Climate regulation 100 82 76 68 48 75 Air quality regulation 100 68 35 100 48 70 Carbon sequestration 100 100 84 67 91 88 Like in the case of ecological services, also biospheric services are treated as public, being freely available. An exception is the access to biodiversity protection sites which is limited in some countries (Poland Belgium-Wallonia, Netherlands, Germany and Cyprus). 2.4 Social services Under the label of social services were joined tourism, recreation and sport activities. Recreation was ranked as the most important of these services (Table 8.10). It considered as very important in the Nordic/Baltic region and South-Eastern Europe, in the later also tourism is very important. Somehow lower importance was ascribed, throughout Europe, to sport activities in the forests. The higher importance of recreation, when compared to the other two services, was expected, since it comprises activities which attract high shares of the societies in all the countries (e.g. jogging, walking, hiking, mountain biking). Table 8.10: Importance of social services

CE NB NW SE SW EU Recreation 3,2 4,2 3,7 4,3 3,2 3,7 Sport 2,8 2,2 2,4 3,0 1,8 2,4 Tourism 3,3 2,7 3,0 4,5 2,3 3,2 The relative importance of social services is further underlined with its increasing trend in all parts of Europe (Table 8.11). Also the importance of forest for organised sport events is considered to be gaining importance. Table 8.11: Trends of importance of social services

CE NB NW SE SW EU Recreation 1,0 0,7 0,9 0,8 0,9 0,8 Sport 0,8 0,3 0,7 0,5 0,6 0,6 Tourism 0,8 0,7 0,6 0,5 1,0 0,7 Legend: the scale for the trend of importance goes from -1 (decreasing) to 1 (increasing), and 0 indicting a constant importance Regardless the high importance of social services, a lot of countries lacks data about the forest area important for their provision. Only the Central European and Nordic/Baltic countries provided more or less complete data sets. According to the data presented in Table 8.12, in the group of social services the highest share of forest areas is important for the provision of recreation services, followed by tourism, while areas important for sport events have the lowest share. The high differences between different regions are mostly resulting from the incomplete data set.


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Table 8.12: Area of forests important for the provision of social services

CE NB NW SE SW EU Recreation 81 74 73 8 30 53 Sport 79 73 17 NR 21 38 Tourism 66 97 38 NR 14 43 NA-no data reported With regard to the accessibility to social services, there is a big variety concerning both, the countries and different services. While access to recreation is mostly unlimited, except in Poland, Belgium, France and Spain, access to tourism and sport sites is more limited. In particular the access to sport sites is restricted to permit holders in most of the Central, North-Western and Nordic European countries. 2.5 Amenities The last group includes aesthetic, historical and educational, and spiritual and cultural services. Aesthetics are considered to have the highest importance among these services, followed by historical and educational, while spiritual and cultural are considered as less important (Table 8.13). South-Eastern countries assign the highest importance to this group of services, on the contrary in South-Western and North-Western Europe their importance is the lowest. Table 8.13: Importance of amenities

CE NB NW SE SW EU Spiritual and cultural services 2,3 2,4 2,0 3,0 2,1 2,4 Historical and educational services

2,8 3,0 2,0 3,5 2,1 2,7 Aesthetic services 2,7 3,5 2,9 3,8 2,2 3,0 Following the responses to the questionnaire, it can be expected that in the future the importance of amenities, in particular aesthetic services, will increase, in most parts of Europe (Table 8.14). Table 8.14: Trend of importance of amenities

CE NB NW SE SW EU Spiritual and cultural services 0,5 0,8 0,6 0,3 -0,2 0,4 Historical and educational services 0,7 0,7 0,6 0,5 0,1 0,5 Aesthetic services 0,7 0,8 0,6 0,5 0,7 0,6 Legend: the scale for the trend of importance goes from -1 (decreasing) to 1 (increasing), and 0 indicting a constant importance As in the case of social services, the data on forest area important for the provision of amenities is incomplete. From the obtained information, we can conclude that, in all regions the highest share of forests is important for provision of aesthetic services, while spiritual and cultural services have the lowest share. Table 8.15: Area of forests important for the provision of amenities

CE NB NW SE SW EU Spiritual and cultural services 63 10 11 NR 16 20 Historical and educational services 55 47 14 10 9 27 Aesthetic services 67 52 53 NR 51 44 NA-no data reported

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The access to these services is free in all European regions. Only in single countries, the access to some of the services it is regulated by permits (e.g. Austria, Estonia, Cyprus and Germany). 2.6 Other goods and services In the questionnaire the respondents were also asked to add goods and services which are not on the given list, but are important in their countries. If counting the official responses, only four countries used this option. Greece added as important resin production and grazing, Slovakia - forests designated for therapeutical purposes in the surroudings of spas and medical facilities and the autonomus community of Valencia (Spain) – added inland fishing as an important forest service. Finally, the Forest Commission of England reported the “economic regeneration”, mineral extraction, and the use of the forest for wind energy to be also important forest goods and services. In addition, the Landwirtschaftskammer Österreich mentioned protection against avalanches and torrents to be a very important forest service in Austria, while the Central Union of Agricultural Producers and Forest Owners MTK from Finland, added peat. 2.7 Comparing all goods and services Comparing the importance of the different groups of forest goods and services, on the EU level, it can be concluded that biospheric and ecological services are the most important one, followed by social and amenities, as the least important (Figure 8.2).

Figure 8.2: Importance of different groups of forest goods and services (2-less important, 3-important, 4-quite important, 5-very important)


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Figure 8.3: Importance of different forest goods and services in the EU-27 (1-not important, 2-less important, 3-important, 4-quite important, 5-very important) If comparising the importance of single forest goods and services (Figure 8.3), biodiversity protection and recreation are ranked as the most important. They are further closely followed by carbon sequestration and watershed services (soil protection, water regulation and purification). The lowest importance is ascribed to sport and spiritual and cultural services. If we analyze the trends of importance of the forest goods and services (Table 8.17), we can observe that all the groups of services are showing an increasing trend of importance (with some regional exceptions). Table 8.17: Trend of importance of different groups of forest goods and services

CE NB NW SE SW EU Biospheric + + + + + + Ecological + + + + 0 + Social + + + + + + Amenities + + + 0 0 + Legend: 0=constant, + = incresing, - = decreasing Looking at the development of the importance of single goods and services, the above conclusions are in general confirmed (Table 8.18).

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Table 8.18: Trend of importance of different groups of forest goods and services, at the EU level

Constant Increasing

Spiritual and cultural services Water purification Soil protection

Health protection Historical and educational services Air quality regulation Sport Water regulation Aesthetic services Tourism Fuel Wood Carbon sequestration Climate regulation Recreation Biodiversity protection The next two figures (8.4 and 8.5), summarize the share of forest area that is important for the production/provision of different forest goods and services. The situation is very simillar to the one presented in the case of importance. The highest share of forests is important for the provision of biospheric, ecological and recreational services. The situation changes slightly when analysing single goods an services (Figure 8.5).

Figure 8.4: Area of forests important for the provision of different groups of forest goods and services


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Figure 8.5: Area of forests important for the provision of different forest goods and services at EU level Finally, there are significant differences in the accessibility to different groups of forest goods and services (Figure 8.6). Biospheric and ecological services are slightly restricted, but the restriction is mainly for protecting certain areas important for the provision of these services (e.g. protected habitats, forests around drinkable water sources). The social services and amenities are further less restricted, and the imposed restrictions are mainly entrance fees, in general related to touristic attractions or places of cultural importance (e.g. monuments).

Figure 8.6: Accessibility of forest goods and services at EU level

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2.8 Comparison with data from other sources As mentioned in the introduction to this questionnaire analysis, also other forestry related organizations were included into the survey. In total thirteen organizations from nine7 countries have responded, of which six are members of EUSTAFOR, three are ENGOs and four members of the CEPF. Due to the lower number of countries represented in this sub-sample, a direct comparison with the “official responses” on the regional or EU level would not be reliable. Still to provide some data we performed a comparative analysis on the country level. The conclusion is that the data received from these organizations is largely in accordance with data obtained from the official sources. This is especially the case for the group of ecological and biospheric forest goods and services. The main differences are observed concerning the relative importance of social and amenity services, where these services are given slightly higher rank of importance, compared to the reported by the „official sources“. Also the trends of importance for biospheric and social goods and services, indicated by “other organizations”, are similar to those described by the official respondents. On the contrary, for ecological and amenity services, the trends of importance are slightly higher (more often increasing trends were selected for these two groups). 2.9 Concluding remarks To conclude, according to the importance groups of forest goods and services can be placed in the following order: biospheric, as the most important, followed by ecological, social and amenity services.. The trends of importance in general follow the ranks of relative importance, and force increasing trends of importance for all non-market forest goods and services (biospheric, ecological, social and amenities).. The forest area important for the provision of different forest goods and services coincides with the importance of these forest goods and services. Finally, concerning the access to forest goods and services, the obtained results confirm our expectation. The access to biospheric and ecological forest goods and services, is generally free, with exceptions for certain protected areas. Social and amenity services are available with even less restriction, with exception for historical and touristic sights, for which symbolic fees are sometimes introduced.

7 Austria, Czech Republic, Estonia, Greece, Latvia, Poland, Romania, Sweden and UK,


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Annex 9. Forest multiple uses - Compatibility matrix

MUTUAL IMPACT Timber and commercial

logging

Fuelwood production


Recreation Soil and watershed protection

Biodiversity protection

Carbon sequestration

Timber and commercial logging

- there are trade-offs and complementarity between high-quality and general purpose timber

- encroachment - short-term income - trade-offs, but generally compatible - encroachment - additional income - biological interdependence - canopy opening may suppress production of some NWFPs - local vs. national and export market - trade-offs, but generally Compatible

- suppression of recreation activities during logging operations - aesthetic damage especially if clear felling - some complementarity is possible depending on location of both activities

- if properly managed impacts can be minimal - potential impacts on water flows, quality and quantity as well as on soils

- similar to recreation, with a possibility of greater negative impacts - generally incompatible except for: generalized species; corridors; very select harvest of high-value species

-intensive timber production with short rotation periods diminishes the total carbon stock; - younger trees higher relative annual sequestration (faster growth) Fuelwood production

- additional income - possible damage to standing timber - utilization of non-commercial species - likely compatibility

- generally compatible in natural forests and multispecies plantations - additional income - can lead to some constraint on fuel wood species

- complementarity possible depending on how both activities take place - compatible if properly managed - additional value - trade-offs

- interactions are similar to soil and watershed protection - generally incompatible - conflicting, because early removing part of the biomass


- generally compatible in natural forests - there is possibility of damage to standing timber - additional income - trade-offs, but generally compatible

- additional income - generally compatible in natural forests and multi-species plantations - trade-offs, but generally compatible

- some complementarity is possible depending on how both activities take place - compatible if properly managed - additional value - trade-offs

- generally incompatible - generally compatible, if properly managed

Recreation - restricts location of timber activities - conflicts in terms of road usage - direct conflicts if - restricts location of timber activities - direct conflicts if land is set aside for wilderness to the

- generally compatible depending how and where both activities take place - can have impactdepending on magnitude of recreation activities, so they may or may

- can have impact depending on magnitude of recreation activities, so they -mainly no impacts if not to high rate of recreation activities (vandalism, soil erosion)

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MUTUAL IMPACT Timber and commercial

logging

Fuelwood production


Recreation Soil and watershed protection

Biodiversity protection

Carbon sequestration land is set aside for wilderness to the exclusion of other users

exclusion of other uses not be compatible may or may not be compatible Soil and watershed protection

- can impose restrictions on logging activities - can impose higher logging and management costs - can deny free access to the forest - can be compatible if properly managed

- can deny free access to the forest - can be compatible if properly managed - can impose restrictions on use of the area - compatible depending on how and where recreat. takes place

- none (positive complementarities) - additional value - none (positive complementarities) Biodiversity protection

- generally incompatible as land is set aside for preservation to the exclusion of all other uses - none (positive complementarities

- generally incompatible since land is set aside for preservation to the exclusion of all other uses

- generally incompatible as land is set aside for reservation to the exclusion of all other uses - constraints on the collection of plants and animals except for collection of species samples for research

- can be compatible depending on how and where recreation take place -positive complementarities - none (positive complementarities)

Carbon sequestration

- generally conflicting, - decreased timber production, because of longer rotation periods - generally conflicting, - decreased production, because of longer rotation periods

- in general complementary, since old-growth forests enable higher diversity of species - in general complementary, since older forests are preferred for recreation activities (easier moving and impressive aesthetics)

-positive complementarities, old-growth forests more soli stability and less water use -generaly complementary, old-growth forests, higher biological diversity

Parts adopted from Panayotou and Ashton (1992) and Gregersen (1996)


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Annex 10. Public Access to Forests and Public Use of Non-Wood Products NWFP

Figure 10.1: Share of forest and other wooded land ownership in the EU-27”(Based on the MCPFE (2007) and COST E-30 (2007)

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Table 10.1: Public Access to Forests and Public Use of Non-Wood Products NWFP (Adopted from UNECE/FAO 2004)

Country Public access to Forest

Public use of NWFP

Austria 2 2 Bulgaria 0 2 Cyprus 3 1 Czech Republic 2 2 Estonia 2 2 Finland 3 3 France 1 1 Germany 2 2 Hungary 2 2 Lithuania 3 2 Poland 1 2 Romania 2 0 Slovakia 2 2 Slovenia 2 2 Sweden 3 3 UK 1 0-1 Legend: 0 – the right does not exist or is not mentioned in the analyzed laws 1 – public access strongly limited (e.g. in private forests); only limited use of NWFP 2 – right of public access or right to use NWFP generally admitted but restrictions and prohibition possible 3 – public access to forests and use NWFP generally admitted provided that no damage is caused.


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Annex 11. Questionnaire concerning the importance of forest goods and services and existing financing mechanism


Dear Madam/Sir, I am contacting you on behalf of the FORVALUE study, asking you to complete a short questionnaire on the valuation of non-market forest products and services. The purpose of the FORVALUE study (“Study on the Development and Marketing of Non-Market Forest Products and Services” [Contract number: 30-CE-0162979/00-21]) is to acquire summary information on the state-of the-art for the valuation and compensation for non-market forest goods and services. This study is financed by the European Commission and is part of the implementation of the EU Forest Action Plan and is being undertaken by a consortium led by the European Forest Institute. The study seeks to find out whether developments in the theoretical aspects of forest valuation over the last few decades have been, or could be, translated into operational mechanisms for financial transactions for non-market forest goods and services. The ultimate goal of this exercise is to create a foundation for discussion of the feasibility of economic instruments for encouraging and supporting the supply of non-market forest goods and services from which policy conclusions will be drawn. This questionnaire was developed to obtain relevant data on the current situation concerning mechanisms in use to compensate for the provision of non-market goods and services at the national level. The questionnaire covers three thematic areas: • Importance of forest goods and services • Financing mechanisms used for forest goods and services • Questions regarding most innovative financing mechanisms If you are not able to answer to some questions we would kindly ask you to consult your colleagues who may have the expertise on the issue. Please note that you are asked for an “expert opinion” and not for an official governmental statement. The results of the questionnaire will be kept confidential and no person or organisation will be identified in the published results. The results obtained from the questionnaire will be presented to the European Commission for discussion by the Standing Forestry Committee and published in a final project report. The data collected with the questionnaire will help to draw a complete picture of the importance of forest goods and services and instruments applied to promote different types of forest benefit in the EU Member States. We kindly ask you to complete the questionnaire and return it in electronic form, to the following address, by the 12th of May 2008. Mr. Robert Mavsar (European Forest Institute (EFIMED)) [email protected] Thank you very much for your cooperation and important contribution. Dr. Marc Palahi Project Coordinator, EFIMED

mailto:[email protected]

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Study on the Development and Marketing of Non-Market Forest Products and Services DG AGRI, Study Contract No: 30-CE-0162979/00-21

Questionnaire concerning “the importance of forest goods and services and existing

financing mechanism”

Prepared by: European Forest Institute (EFIMED)

University of Natural Resources and Applied Life Sciences (BOKU)

Alterra

Confederation of European Forest Owners (CEPF)


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COUNTRY: Date of submission: Correspondent§§: Name: Organisation: Address: Phone/Fax: E-mail: Web address:

Other people contributing to the questionnaire: Name: Organisation: E-mail: Name: Organisation: E-mail: Name: Organisation: E-mail:

§§ Disclaimer: Information provided by you on this page is only for the internal use of the study and possible follow-up need and will not be disclosed.

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A. Importance of forest goods and services (G&S) in your country In this part of the questionnaire you are asked to provide data on the current importance of the forest goods and services in your country. Forest goods are materials removed from or consumed in the forest e.g. berries, mushrooms, wood. Forest services are indirect benefits human population derives from forests such as recreation, amenity, water quality etc. Indicators • Importance – the importance of the good or service in your country in comparison to other forest goods and services (1- not important…5-very important) • Trend of importance – how the importance of a product/service is evolving (1 – constant; 2 – increasing; 3 – decreasing) • Area - area important for the production/provision of a certain forest good/service in % of total forest • Access – Is the access to the forest good/service public or limited (1 – public; 2 – limited to forest owner; 3 – limited to permit holders) • Remarks – add all information you consider as needed to clarify the data reported Detailed explanations of classes of forest goods and service are provided in Annex 1 of this questionnaire. Importance Forest good / service Level Trend Area (% of total forest area) Access Remarks Industrial wood -Select- -Select- -Select- Fuel wood -Select- -Select- -Select- Cork -Select- -Select- -Select- Food -Select- -Select- -Select- Fodder and forage -Select- -Select- -Select- Decorative material -Select- -Select- -Select- Hunting and game products -Select- -Select- -Select- Pharmaceuticals -Select- -Select- -Select- Biodiversity protection -Select- -Select- -Select- Climate regulation -Select- -Select- -Select- Air quality regulation -Select- -Select- -Select- Carbon sequestration -Select- -Select- -Select- Health protection -Select- -Select- -Select- Water regulation -Select- -Select- -Select- Water purification -Select- -Select- -Select- Soil protection -Select- -Select- -Select- Recreation -Select- -Select- -Select- Sports -Select- -Select- -Select-


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Importance Forest good / service Level Trend Area (% of total forest area) Access Remarks Tourism -Select- -Select- -Select- Spiritual and cultural services -Select- -Select- -Select- Historical and educational services -Select- -Select- -Select- Aesthetic services -Select- -Select- -Select- Other important goods and services (optional) Please fill into the following table all those goods and services, which are important in your country, but were not mentioned in the above list.

-Select- -Select- -Select- -Select- -Select- -Select- -Select- -Select- -Select-

Additional remarks

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B. Financing mechanisms used for forest G&S A growing number of mechanisms – public, mixed or private – exist for the financing of forest G&S. In how far are financing mechanisms currently used in your country? • A list of financing mechanisms with examples is provided in Annex 2. • Please name the G&S (see Annex 1) for which the financing instruments are typically used. • Please indicate the importance of the mechanism in financing the G/S in comparison with other

mechanisms. • Please give illustrating examples or comments if you think necessary for a proper understanding of the

mechanism. Type Financing mechanism Which Forest Goods / Services Importance of use Examples or comments -Select- -Select- -Select- Taxes, fees and charges -Select- -Select- -Select- -Select- PUBLIC

MECHANISM

S

Subsidies (excluding contracts) -Select- -Select- -Select- -Select-

Public-private partnerships (PPP) / public-private contracts -Select- -Select- -Select- -Select- MIXED

PUBLIC/PRIV

ATE MECHA

NISMS

Tradable permits/ cap-and-trade schemes -Select- -Select- -Select- -Select- Purchase of G or S (incl. licences, entry fees) -Select- -Select- -Select- -Select- Land purchase -Select- -Select- -Select- -Select-

PRIVATE MECH

ANISMS

Eco-sponsoring -Select-


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Type Financing mechanism Which Forest Goods / Services Importance of use Examples or comments -Select- -Select- -Select- Donations and gifts -Select- -Select- -Select- -Select- Trade with certified goods -Select-

Other important financing mechanisms Please fill into the following table financing mechanisms that were not mentioned in the above list but seem important in your country. Additional remarks

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C. Examples for most innovative financing mechanisms

Please name the 3 most innovative examples for financing mechanisms for forest goods and services from your country:

With innovative we mean new financing mechanisms, not yet extensively used for a specific good or service in your country. Please name any example that you know of, regardless if your organisation is involved or not, and regardless if it is in the planning stage or already implemented. Innovative examples for financing mechanisms (ranked by importance)

Specify the good(s) or service(s) addressed (see Annex 1) Class of financing mechanism applied (see Annex 2) Additional remarks

1 2 3 Short descriptions of the 3 innovative examples for financing mechanisms:

Please provide some basic information as far as available:

Example 1: Description of the financing mechanism Beneficiary of the payment (e.g. land owner, association, community, etc.) Who pays? (e.g. local, provincial, national government, user, etc.) Use of legal, economic, communication, or voluntary instruments, or combinations Which investments or measures are necessary before the mechanism works? On which basis is payment fixed, e.g. market price, free negotiation, assessment of costs, etc.? Please provide contact data of person(s) that might be able to provide further information on the design and application of the financing mechanism: Person 1 Person 2 Name Function Affiliation Telephone e-mail Weblink Other related weblinks or literature sources related to Example 1:


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Thank you very much for cooperation and important contribution to this survey! Please send the completed questionnaire by 12 May 2008 to: Robert Mavsar European Forest Institute (EFIMED) [email protected]


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Annex 12. The concept of economic value Economic valuation of ecosystem goods and services is based on the concept of willingness to pay, which is a fundamental concept of welfare economics and is built on the measurement of individuals’ preferences. Individuals express their preferences through choices they make when faced with certain constraints, such as those on income or on available time. The economic value of a particular good is reflected in the individual’s willingness to pay for that good. Willingness to pay for a particular good is defined as the maximum amount of other goods (e.g. money) that a person would be willing to give up in order to have that good. For example, when an individual can choose from two goods, bread and water, the value of a bottle of water is measured by the maximum amount of bread that this individual would be willing to give up to have one additional bottle of water. In an economy, in which money is an accepted medium of exchange, economic value is measured in monetary terms. Willingness to pay for a particular good or service (together with the ability to pay) determines the demand for that good or service. The quantity demanded is the amount of a good or a service people are willing to by at a certain price. The relationship between price and quantity demanded is known as the demand relationship, and its graphical representation is called demand curve (Figure 12.1). The demand curve is downward sloping, reflecting the fact that (other things being equal) the quantity demanded of a good falls when its price rises. This is known as the law of demand.

Figure 12.1: The demand curve and the consumer surplus It is often incorrectly assumed that a good’s market price measures its economic value. In reality, the market price only tells us the minimum amount that people are willing to pay for it. When people make their purchase decision, they compare the amount of money they would be willing to pay for that good with its market price. They purchase the good only if the market price does not exceed their willingness to pay for that good. Therefore, it is perfectly comprehensible that the value of the good to the buyers may be well above its market price. The net economic benefit from a good or a service to an individual is, therefore, measured by the amount that the individual is willing to pay beyond what he actually pays. This exactly corresponds to the notion of consumer surplus, that is, the difference between the price actually paid for a good, and the maximum amount that an individual is willing to pay for it. On a graph, consumer surplus is represented by the area under the demand curve and above the price (in Figure 1 marked in green).

Market Price

Consumer Surplus

Quantity

Price

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Annex 13. Valuation approaches

Approach Why do we do it? How do we do it?

Determining the total value of the current flow of benefits from an ecosystem

To understand the contribution that ecosystems make to society Identify all mutually-compatible services provided; measure the quantity of each service provided; multiply by the value of each service Determining the net benefits of an intervention that alters ecosystem conditions

To assess whether the intervention is economically worthwhile Measure how the quantity of each service would change as a result of the intervention, as compared to their quantity without the intervention; multiply by the marginal value of each service Examining how the costs and benefits of an ecosystem (or an intervention) are distributed

To identify winners and losers, for equity and practical reasons Identify relevant stakeholder groups; determine which specific services they use and the value of those services to that group (or changes in values resulting from an intervention) Identifying potential financing sources for conservation

To help make conservation financially sustainable Identify groups that receive large benefit flows, from which funds could be extracted using various mechanisms Source Pagiola et al. 2004 Possible objectives of economic valuation of forests: 1. To raise awareness by demonstrating the importance of forest conservation and sustainable use. 2. To determine damages of forests loss 3. Land use decisions: i. To compare benefits of land use for forestry relative to other land uses (e.g. agriculture, urbanization, infrastructure) ii. To set priorities for conservation or restoration projects. 4. To maximize the environmental benefits per dollar spent (e.g. cost-effective forest management) 5. To encourage innovative forest goods and services (e.g. certification) 6. To justify and decide how to allocate public spending on conservation, preservation, or restoration initiatives. 7. To consider public’s values, and encourage public participation and support for environmental initiatives. 8. To compare the benefits and costs of different projects or programs.


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Annex 14. General value typology A broader typology of values is given in Turner et al. (2003): Anthropocentric Non-anthropocentric Instrumental Total Economic Value The values of other species, ecosystems, etc Intrinsic Stewardship value Value an entity possesses independently of any valuer Anthropocentric value 1. Anthropocentric instrumental value -This is equivalent to: Total economic value=Use + Non-use value. The non-use category is bounded by the existence value concept, which has itself been the subject of much debate. Existence value may, therefore, encompass some or all of the following motivations a. Intragenerational altruism: resource conservation to ensure availability for others; vicarious use value linked to self-interested altruism and the ‘‘warm glow’’ effect of purchased moral satisfaction b. Intergenerational altruism (bequest motivation and value): resource conservation to ensure availability for future generations c. Stewardship motivation: human responsibilities for resource conservation on behalf of all nature; this motivation may be based on the belief that non-human resources have rights and/or interests and as far as possible should be left undisturbed If existence value is defined to include stewardship then it will overlap into the next value category outlined below 2. Anthropocentric intrinsic value - This value category is linked to stewardship in a subjectivist sense of the term value. It is culturally dependent. The value attribution is to entities which have a ‘sake’ or ‘good of their own’, and instrumentally use other parts of nature for their own intrinsic ends. It remains an anthropocentrically related concept because it is still a human valuer that is ascribing intrinsic value to non-human nature Non-anthropocentric value 1. Non-anthropocentric instrumental value - In this value category entities are assumed to have sakes or goods of their own independent of human interests. It also encompasses the good of collective entities, e.g. ecosystems, in a way that is not irreducible to that of its members. But this category may not demand moral considerability as far as humans are concerned 2. Non-anthropocentric intrinsic values - This value category is viewed in an objective value sense, i.e. ‘inherent worth’ in nature, the value that an object possesses independently of the valuation of valuers. It is a meta-ethical claim, and usually involves the search for constitute rules or trumpcards with which to constrain anthropocentric instrumental values and policy

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Annex 15. Economic Valuation Techniques

*Dose response/Production function approach is not a valuation technique per see, but it is an important element of several of the valuation approaches (e.g. dose response function may be used to establish the link between air pollution and health effects).

Revealed Preferences

Total Economic Value

Use Values Non-Use Values

Stated Preferences

Dose response/Production function*

Benefit Transfer

Market Prices

Avoided Costs

Hedonic Pricing

Travel Cost Method

Choice Modelling

Contingent Valuation


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Annex 16. Valuation techniques and forest goods and services

Valuation method

Forest good or service valued

Value captured

Affected population

captured

Benefits of method

Limitations of method

Market prices Those that are traded in markets, e.g. timber, fuel-wood, cork, non-wood forest products Direct and indirect use Users Market data available and robust Limited to market goods and services

Avoided Costs Mainly to protection services: soil protection, water protection, climate regulation Direct and indirect use Users Market data available and robust Can potentially overestimate actual value

Hedonic Pricing

Services that contribute to the quality of attributes of a certain market good, e.g. air quality, landscape aesthetics, noise reduction

Direct and indirect use Users Based on market data Very data intensive and limited mainly to data related to property Travel Cost Method

All ecosystem services that contribute to recreational activities Direct and indirect use Users Based on observed behaviour Limited to recreation and problematic for multiple destination trips

Contingent Valuation

All goods and services Use and non-use Users and non-users Able to capture all use and non-use values Bias in response, hypothetical market (not observed behaviour), resource-intensive Choice Modelling

All goods and services Use and non-use Users and non-users Able to capture all use and non-use values Bias in response, hypothetical market (not observed behaviour), resource-intensive

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Annex 17. Key steps in the valuation of ecosystem goods and services

Step 1: Establish the environmental baseline (status quo situation) The main objective of this step is to identify the ecosystem services it provides. This will later in the process help to identify the location and the type of ecosystem services by a certain action (e.g. policy or management). Step 2: Identify and provide qualitative assessment of potential impacts on ecosystem services A preliminary qualitative assessment should identify the ecosystem services that might be affected by a certain action and in what “direction” (positive, negative) and how significant this impact might be (e.g. very positive, very negative, and negligible). It is important that at this stage all the services are considered, even if for many of them they might be no impact. However it is important to get a complete picture of the situation, since this might contribute to the identification of uncertainties and gaps of evidence. Step 3: Quantify the impacts on specific ecosystem services After in the qualitative assessment the impacted services were identified, in this step the magnitude of this impacts (changes) should be estimated. It might be very difficult to quantify the absolute level of a certain ecosystem service, therefore most often only the changes, between two options, are estimated. Step 4: Assess the effects on human welfare When assessing the impact of an ecosystem service on the human welfare, it is crucial to focus also on the benefits that derive from these services. Since the benefits are those which affect the human welfare and thus the benefits are those we want to value (for example see Figure 17.1).

Figure 17.1: Complex interactions between forest services and their economic endpoints (benefits to the society) (adopted from DEFRA 2007)

Carbon fixation

Erosion control

Flood control

Regulation of wáter supplies

Preserve hábitats and species

Regulate global temperature

Avoid flooding

Improve water quality

Impact/Effect

Non-use value

Avoided damage cost to property

Recreation

Clean drinking water

Benefits to society Services & Goods

Filtration of water

Nutrient cycling

Habitats important for conservation


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It is important to acknowledge that there is overlapping between services that impact on similar benefits, as this could lead to double-counting. Further it is important to identify those groups of the society that will be affected by changes in ecosystem services, as this is influencing how these will be valued and over what population the values have to be aggregated. Step 5: Value the changes in ecosystem services In this step, finally, the economic valuation technique is applied, to estimate the values attributed to ecosystem services. The aim is to estimate the monetary value of as many of the changes of ecosystem services as possible. It should be also noted, that for providing an unbiased picture, not only the benefits, but also the cost of a certain impact should be estimated. It must be also avoided, to combine values of services that are incompatible (e.g. biodiversity protection and intensive timber production), since this would overestimate the value of the benefits.

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Annex 18. Spatial relevance of different forest goods and services

TEV Value Goods and Services Local Regional Global Forest products - timber - fuelwood/charcoal - non-wood forest products

X X X X X

Genetic information - traditional medicine - pharmaceuticals - research

X X X X X

X X

Direct Values

Recreation and tourism X X X Regulation of regional rainfall X Flood and water yield regulation X X Control of soil erosion X X Carbon storage and sequestration X Indirect use

Health X Option Future direct and indirect uses of above goods and services X X X Non-use Traditional/cultural knowledge & traditions X X X


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Annex 19. Summary of economic values

Figure 19.1.: Value (per ha) of different forest goods and services (source: Merlo&Croitoru 2005)

Figure 19.2.: The components of the total aggregated value of social and environmental benefits from british forests (source: Garrod 2003)

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Annex 20. Overview of classification schemes for financing instruments

Table 20.1: Classification used by Forest Trends (e.g. Johnson et al. 2001, Powell et al. 2002) Forest Trends (Johnson et al. 2001, Powell et al. 2002) Self-organized private deals Open trading schemes Public payment schemes Table 20.2: Classification example for economic instruments (Mendes 2002) Economic instruments of environmental policy (Carvalho Mendes et al. 2002)

Private instruments Mixed public-private instruments Public instruments Table 20.3: Classification of financing instruments for watershed services used by Smith et al. (2006) PAY (Smith et al. 2006) Private payment schemes Cap-and-trade schemes Certification schemes for environmental goods

Public payment schemes Table 20.4: Three-fold typology of policy means (several authors) Three-fold typology of policy means or instruments (Jann 1981, Mayntz 1987, Bemelmans-Videc et al. 1998, Weiss 2000)

Regulatory instruments (“sticks”): - Mandatory rules - Prohibitory rules - Permissions

Economic (financial, fiscal) instruments (“carrots”): - negative incentives (taxes) - positive incentives (subsidies) - contractual action - supply of infrastructure - purchase/supply of goods and services by the state - market creation

Informational instruments (“sermons”): - provision of information - planning - persuasion - symbolic rewards - example

Table 20.5: Traditional and contemporary policy instruments (Cubbage et al. 2007) Traditional and contemporary policy instruments (Cubbage et al. 2007) Traditional policy instruments: - Regulation - Education and research - Protection - Subsidies

Contemporary innovations: - Market mechanisms - New market approaches - Government ownership, market sales, and production - International sustainable forest management processes

Study on the D

evelopment and M

arketing of Non

-Market Forest P

roducts an

d Services

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Tab

le 20

.6:M

atrix of finan

cial and

other econ

omic in

strum

ents to in

ternalise extern

alities (M

end

es 20

02

)

Private

In-kind and other contributions of local populations; Domestic private philanthropy; Domestic private investment funds

International private philanthropic assistance (international foundations, other NGOs and other private donors); International private investment funds Mixed domestic/international philanthropic assistance and investment funds

Mixed public/private

Securing or reforming property rights and negotiating private arrangements; Market creation; Mixed public/private domestic financial instruments; Charge systems; Liability systems; Bonds and deposit refund systems Market creation (Clean Development Mechanism); Mixed public/private international financial instruments (Global Environment Facility) Mixed public/private international investment funds

Public

Fiscal instruments Public financial instruments

Official Development Assistance; Critical Ecosystem Protection Fund (World Bank); Debt swaps; Tobin tax Mixed domestic/international public funds

Domestic

International

Mixed domestic/international

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Annex 21. Typology of financing instruments used in the study

Financing mechanism Examples PUBLIC MECHANISMS Taxes, fees and charges Taxes, tax exemptions, earmarked taxes, user fees or user charges e.g. for drinking water, tourism use, gravel extraction, etc. Subsidies (excluding contracts) Pure subsidies, e.g. for close-to-nature or mixed forest regeneration, educational activities, etc. MIXED PUBLIC/PRIVATE M. Public-private contracts Nature conservation on the basis of voluntary contracts, Tradable permits / cap-and-trade schemes

Emission trading schemes PRIVATE MECHANISMS Purchase of goods and services Purchase of fruits or greenery, entry fees, mushroom or berry picking licences, hunting licences, etc. Land purchase Purchase of land for specific purposes such as drinking water protection, nature conservation, purchase of development rights etc. Land lease Lease of land for specific purposes Eco-sponsoring Eco-sponsoring by enterprises for business purposes e.g. sponsoring of afforestations, maintenance of natural monuments, nature conservation or restoration projects, events, etc. Donations and gifts Donations and gifts by private persons e.g. for nature conservation projects, sponsorship of trees or conservation areas, voluntary labour, etc. Certification Certification of sustainable forest management, organic production, regional source of products, etc.


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Annex 22. Use of financing instruments – results Comparison of the answers from government officials and other respondents

Figure 22.1: Use of financing instruments – government answers

Figure 22.2: Use of financing instruments – answers by other stakeholder groups

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Figure 22.3: Use of financing instruments – answers by forestry stakeholder groups

Figure 22.4: Use of financing instruments – answers by environmental stakeholder groups


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Figure22.5: Use of financing instruments - comparison of country groups

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Annex 23. Innoforce Database of Innovation Cases in Forestry Web address of the Innoforce Database of Innovation Cases in Forestry: http://cases.boku.ac.at/ The collected cases can be viewed without password. For viewing the cases, please click on “cases” in the above right corner. Cases may be selected by using the following criteria:

• Country • Innovation type • Financing mechanism • Start-up or not They can further be sorted by the following criteria: • Date of entry • Country name • Title The cases are presented in a short overview table. By clicking on the looking glass on the left side, the full information is given. A screenshot can be seen in Figure 23.1.

Figure 23.1: The case database – case selection tool


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Annex 24: Questionnaire for additional MCA information

Characteristics of the mechanism All selected cases will be described in the same way, which requires the following information: General information about the mechanism region/country where the mechanism is applied area in which the mechanism is applied other area’s in which the mechanism could be applied type of mechanism (see annex 1) type of product wherefore the mechanism is applied (see annex 2) primary goal of the application additional goals of the application beneficiaries of the mechanism (e.g. land owner, association, community etc.) who contributes/pays (e.g. user, local government, national government, etc.) executor of the mechanism operation of the mechanism, i.e. who has to do what and which actions and regulations are required has a feasibility study been executed in advance and what are the results

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Feasibility of the mechanism The legal context refers to the effective legal context (law, regulations et cetera) before the mechanism was applied and to the modifications carried out to make the application feasible. The required information comprises answers to the following questions: Legal context Was application of the mechanism allowed in the effective legal context? If not, which modifications of the legal context were made to make the application feasible? And, how long did it take to realize these modifications? The institutional context refers to the existence of institutional structures to facilitate the introduction and/or the operation of the mechanism. Examples of institutional structures are a market, a consultation/communication network and or an organization to certify specific goods. The required information comprises answers to the following questions: Institutional context Was there already an institutional structure to facilitate the mechanism? If not, which efforts were made to set up the required institutional structure? And, how long did it take to setup the institutional structure? The societal context refers to support before the mechanism was applied, for the application of the mechanism. The required information comprises answers to the following questions: societal context Was application of the mechanism accepted by the beneficiaries and the payers? Was application of the mechanism accepted by the executor and/or intermediary organizations? Was application of the mechanism accepted by society? Which efforts (information, communication, ----) were made to make the instrument accepted?


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Applicability The information on the applicability is required to get more insight in the suitability of the mechanism in practice. The technical applicability concerns the constraints concerning technical facilities in the forest such as fences, paths et cetera, that had to be realized before the mechanism could be applied. The required information comprises answers to the following questions: Technical applicability Which technical constraints were connected with the application of the mechanism? How long did it take to solve these technical constraints? What were the costs for solving the technical constraints? And how is the size of these costs in comparison to the benefits of the mechanism?

The preparation concerns organizational preparations that had to be made before the mechanism was in working order, including for instance training personal and setting up a the local system for selling permits? The required information comprises answers to the following questions: Preparation Which preparations/investments were made? How long did it take to finish the preparations? What were the costs of these preparations/ investments? And how is the size of these costs in comparison to the benefits of the mechanism? The transaction cost concerns both the operation cost of running the mechanism and the comparison of the total of the operation costs, preparation costs and the costs of solving technical constraints with the benefits of the mechanism. The operation costs are the recurring expenses which are related to the operation of the mechanism. The required information comprises answers to the following questions: Transaction costs What are the operation costs of running the mechanism? Which activities do have operation cost? How do the operation costs compare with the benefits of the mechanism? How is the size of the transaction costs (total of operation costs, preparation costs and costs of solving technical constraints) in comparison to the benefits of the mechanism?

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Effects The required information on the effects concerns the actual situation in which the instrument is applied and covers both the intended effects and the side effects of the application of the mechanism. The effectiveness describes if the mechanism generates the intended effects. The required information comprises answers to the following questions: Effectiveness To what extend are the primary goals realized at the moment (effectiveness)? How long did it took to get accomplish the current effectiveness? Is it expected that the effectiveness will improve in future? The side effects describes the side effects that are caused by the mechanism. The required information comprises answers to the following questions: Side effects Which are the intended side effects and are they realized? Which are unintended side effects and are they judged positive or negative? In what period are side effects noticeable? Which measures can/will be applied to reduce undesired side effects?


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Dear Madam/Sir/ Mr/Mrs You have been involved in the project FORVALUE by giving information on forest goods and services. This information is crucial for the last step in the project. Based on this information 18 cases, that have been indicated as ‘innovative’, have been selected for carrying out a Multi Criteria Analysis (MCA). For this analysis we need further detailed information of each case. The necessary information is illustrated in the questionnaire attached as Annex to this email. You will also find a matrix in the Annex illustrating how the information will be used in a MCA. We would hereby invite you to provide us with the necessary information for your case(s) ……..,……….,……….., using the matrix. Do not hesitate to contact me or when I am absent my colleague C. Niemeijer for any questions. We have to deliver our MCAs at the end of July so, please, return your information as soon as possible and not later than July 5th. I thank you very much in advance for your kind cooperation Jan Vreke [email protected] +31 317 481710 [email protected] + 31 317 484986



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Annex 25: Short description of collected examples of financing mechanisms

Case # / title *=selected case for MCA

1. Forest Env &Nature 2000 Payments measures of the rural development programmes *

2. Financial Compensations for Forest Management Restrictions*

3. Non-Productive investments in Forest *

Country Cyprus Czech republic Czech republic FGS Biodiversity, Soil protect, Water regul Biodiversity (nature conservation) Recreation Class of FM Mixed Public/Private subsidies Subsidies Description Payments for not undertaking fellings in certain specified high nature value habitats Based on applications, approved by offices of the Ministry of Environment, joint Regulation by the Ministry of Environment and Ministry of Agriculture

Based on individual projects by owners, approved by the Ministry of Agriculture (State Agricultural Intervention Fund) Beneficiary Private forest owners/associations Land owner Land owner, forest visitors Who pays National government Government, state budget EAFRD + government (state budget); payment administered by regional offices of the State Agricultural Intervention Fund Instrument used Rural development programme Economic instrument Economic + communication instruments Necessary measures and investments

Utilization of the Rural Development structure and mechanism NA Costs of preparing application Basis for fixing the payment

Payment is granted on the basis of income forgone Market price, costs assessment Costs assessment


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Case # / title 4. Transformation of National Financial Support to Regions

5. Lease of Recreational Services * 6. Natural Values Trading*

Country Czech republic Finland Finland FGS Environmental Services/Multifunctional Forest Man Recreation, Aesthetic services Biodiversity protection Class of FM Subsidies Not classified Mixed public/private Description Regional support measures based on individual projects approved by the Regions' offices E.g. summer house owner may pay for the land owner for keeping the scenery open from summer house to the lake, or for not harvesting the forest nearby the summer house. The contract is usually fixed-term (10 yrs)

State pays for the forest owner for maintaining or increasing nature values (biodiversity) in his forest. A fixed-term contract for 10-20 yrs. Beneficiary Land owner, users Land owner Forest owner Who pays Regions, Private user, community, local recreation organisation, enterprise etc. National government Instrument used Economic instrument Voluntary and economic instrument Voluntary and economic instrument Necessary measures and investments

NA Compensation is based mainly on the lost timber values and amenity benefits are not directly valued. Tailor-made solutions: no common practice, which may slow down implementation of the method in practise. More information (measures) about how people value different characteristics of the forest environment and recreational services helps in designing the products and services.

Forestry centre assess the object and negotiates a contract and price.

Basis for fixing the payment

Costs assessment Free negotiation (market prices has not yet been formed) Market price based on the value of the wood and nature values

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Case # / title 7. Competitive Tendering* 8. Immediate response to devastated fires in Greece

9. Neighbour Wood Scheme *

Country Finland Greece Ireland FGS Biodiversity protection Biodiversity protection, Soil Protection Recreation Class of FM Land purchase Subsidies Description Private forest owners offer valuable (nature values) objects for state which either buys them or exchanges them to land somewhere else.

Internet (application) ?? Public funding of peri-urban forests for public access, recreation and enjoyment Beneficiary Land owner WWF Greece, Forest Service Local Authorities and Community Groups Who pays Metsähallitus (The Finnish forest and park service) Individual donations National Government Instrument used Voluntary and economic instrument NA Economic Instrument Necessary measures and investments

Assessing the object offered. International network coordination from both organisations, legal written agreement, comunication plan, coordination of accountant offices for both organisations Provision of facilities and infrastructure


Market price and negotiation Individual donations (not fixed) Assessment of costs


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Case # / title 10. Carbon Offset 11. One percent tax income donation * 12. Forest husbandry

Country UK Hungary Czech Republic FGS Woodland Creation Public Services of Forest Silvicultural and logging operations Class of FM Private Sector Mixed Description Carbon Offset Taxpayer can donate 1% of their income tax liability for pre-defined purposes. These purposes are set by the government. The system goes on, but the forest services are not among the purposes anymore.

Beneficiary Landowner Not defined Who pays Carbon emitter Tax payers Instrument used Voluntary instrument The donation is voluntary, if a taxpayer does not donate his/her 1% for any of the defined purposes, it goes to the state budget. Necessary measures and investments

Afforestation New tax regulations Basis for fixing the payment

Assessment of costs Not defined

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Case # / title 13. State subsidies 14. Compensation for detriment 15. BIOSA *

Country Czech Republic Czech Republic Austria FGS silvicultural operations logging operations Biodiversity protect Class of FM Ecosponsoring, PPP Description Organisation founded by forest owners organizes private and/or public funds to finance projects carried out voluntarily by forest owners Beneficiary Land owner community Forest owners Who pays provincial Companies, public authorities Instrument used Legal economic Help by the forest owners organization Land&Forstbetriebe Necessary measures and investments

Legal measures Basis for fixing the payment

Assessment of costs


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Case # / title 16. Voluntary Action 17. Group Purchase 18. Heritage Funding

Country UK FGS Biodiversity Amenity and "Livelihood" Amenity Class of FM Donations and gifts Land purchase PPP Description Working Holidays Group purchase of land Local Heritage funding Beneficiary Land owner directly, but often to generate public services Co-operative members Community Who pays User Members backed by government and EU grants Local government Instrument used Communication is very important. Lifestyle motivations so need good communications Economic Necessary measures and investments

Accommodation, food, supervisors, insurance, tools, suitable tasks Group of like-minded people willing to form association and contribute volunteer time or cash investment Partnership, action plan with broad public support Basis for fixing the payment

Volunteer time costed at EU rates for match funding or legal minimum wage. Match funding used to draw down other grants e.g. EU Objective 1 projects. Market price for holiday accommodation which is also a contribution to NGO income. Market price Assessment of costs

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Case # / title 19. Compensation principle* 20. Using extra value of housing prices caused by the presence of nature, to finance nature development*

21. Include drink water supply companies in the financing *

Country Netherlands Netherlands Netherlands FGS Biodiversity / aesthetics / recreation Aesthetics / recreation Water purification Class of FM Institutions PPP TFC and PPP Description When forest areas are being destroyed because of building of infrastructure, then the initiator is required to plant the same surface of forest elsewhere

When constructing a forest area, the recreational and aesthetic value of surrounding living areas might increase. As a result, housing prices might increase. In fact, people living in de surrounding become free-riders of (government) spending on forest development. When new houses are being built in response to the nature development, then housing development companies would financially benefit from nature development because they can get a higher price when selling the houses. It such cases it might be reasonable to let these free-riders participate in the financing of the nature development.

water board companies may benefit financially from the presence of forests as the water purification function of forests reduces their water purification costs. in addition, substracting water from nature areas might cause a drying out of nature areas. In other words, there is reason to let these companies pay for substracting water.

Beneficiary The society benefits because the destroyed nature areas are being replanted. Also the initiator of the project benefits, because he has more freedom to use land he needs, as long as he compensates. the initiator of the nature development project land owner, society


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Case # / title 19. Compensation principle* 20. Using extra value of housing prices caused by the presence of nature, to finance nature development*

21. Include drink water supply companies in the financing *

Who pays the initiator the user (people buying houses nearby the site where nature is being developed) or the company building the houses. water board Instrument used legal instruments are the main force here; an initiator is / should be obliged to compensate for destroying a nature area. Often legal support will be needed. however, when the company building the houses is assured that (i) if he does not participate in the finance of the nature development the nature will not be developed, and (ii) if nature will not be developed he misses positive net benefits (extra income from selling houses with a higher price minus his payment contribution for developing the nature)

institutions

Necessary measures and investments

implementing it in the law (institutions) legal adjustment (institutions) implementing institutions Basis for fixing the payment

Market price: the initiator has to buy a peace of land and bear the cost of planting. partly law adjustments, partly market mechanism assessment of the social cost of subtracting water (cost of measures to reduce the drying out effect caused by water subtraction)

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Case # / title 22. Rural Development contracts, rural

priorities* 23. Scottish Forest Alliance * 24. Insurance for personal liability *

Country UK UK Belgium FGS Aesthetic enhancement, biodiversity protection, carbon sequestration Aesthetic enhancement, biodiversity protection, carbon sequestration Recreation, tourism, sport Class of FM Public private contracts Eco-sponsoring PPP Description Eco-sponsoring of native woodland creation projects. Payment by the public authority of an insurance for personal liability of the forest owners. Beneficiary Public private contract - competitive application process for grant aid covering forest G&S as well as those from agri-environment, natura sites,

Land owner / manager - three recipients (State Forest Service - Forest Enterprise) + two charitable organisations (Woodland Trust, Royal Society for the Protection of Birds) Forest owners

Who pays Land owner / occupier British Petroleum (BP) - this money is then supplemented by match funding Regional government of Wallonia Instrument used National Govt, with EC cofinance Contract between BP and the beneficiary Necessary measures and investments

Based on RDR with domestic legal instruments giving legal basis for payments. Legally enforcable contract between beneficiary and national govt. Payments in return for delivery of outcomes / outputs Concordat negotiated between all partners then leading on to individual contracts on a site by site basis


EC approval of Member State RDP, domestic legislation, delivery mechanism for applications processing and payments verification Free negotiation Risk assessment by insurance company, on the basis of a public tender.

Mixed according to options chosen - intervention rates determined by RDR


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Case # / title 25. Exemption of inheritance rights 26. Private Contracts for water * 27. Compensation Bank

Country Belgium France France FGS all FGS water purification Biodiversity Class of FM Fiscal incentive PPP Land purchase or land leas Description exemption of inheritance rights on the value of standing trees (general system) and on the land value (in Natura 2000 network). Private contracts. One contract (Saint-Etienne municipality /ONF) for public access surveillance in water sources areas. One contract (Saint-Etienne drinking water company/ONF) for surveillance of operations in water sources areas and for knowledge maintain of drainage pipes network location.

CDC Biodiversity is a private filial of the Caisse des dépots bank. It buys or contracts with private owners and pay them for a management of their land, that is in favour of biodiversity. Therefore, when a project has to compensate its environmental losses, CDC biodiversité organisation can provide/sell or contract with the project to provide the required compensation. Beneficiary Private owners National Forest Office (ONF) Land owner or land managers Who pays Regional government support the lack of inheritance rights Saint-Etienne municipality, Saint-Etienne drinking water company (Stéphanoise des eaux) CDC biodiversité bank. It finally sells its service to project managers that need to compensate the environmental losses of their project due to environmental legislation Instrument used Legal Economic instrument Contracts, land lease Necessary measures and investments

Contact between forest managers and water providers. Knowledge of water origins and water vulnerability to pollution have enough land in the compensation bank so that compensation market can work and a damage site can be compensate by a geographically close site or equivalent site in its biodiversity Basis for fixing the Market price Assessment of costs and negotiation Cost of management and negociation

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payment

Case # / title 28. Water agencies* 29. Public funds for forest environmental protection

30. Patronage*

Country France Poland Spain FGS Water purification Biodiversity, carbon seq., water & soil pror., Biodiversity protection, Climate regulation, Air quality regulation and Carbon sequestration, Air quality regulation, Water regulation and purification, and Soil protection Class of FM Taxes Public funds - grants and loans Public Mech and Mixed PP Mechanisms Description Some water agencies pay local management if favourable to local water status. Water agency’s resources are collected through water taxes on water catchment users.

special public funds Pay for support forest land Beneficiary Local municipalities, owners associations or other form of collective action National Parks, local gov., state forest Land owner, community Associatión . Who pays Water agency pays and is financed by taxes on water users national and regional public funds Private Foundation or Government, Ecologist Instrument used Combination of all Necessary measures and investments

legal framework for taxes To regulate for laws Basis for fixing the payment

assessment of cost of action Assessment of cost stay services


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Case # / title 31. Co-property* 32. Association* 33. ISDW - "Initiative Protection by Forests" *

Country Spain Spain Austria FGS Biodiversity protection, Climate regulation, Air quality regulation and Carbon sequestration, Air quality regulation, Water regulation and purification, and Soil protection, Spiritual and cultural services, Historical and educational services, Aesthetic services.

Industrial wood, Cook, Hunting and game products, Fuel, Food products, Fodder and forage, Decorative material, Pharmaceuticals and Cosmetics Protection: Protective Forests

Class of FM Public Mech and Mixed PP Mechanisms Private mechanisms Subsidies (within the framework of the national rural development programme) Description Share of land with others persons Association for guarantee forest products subsidies Beneficiary Original owner Owner forest product land owner and in consequence the community/public Who pays Citizen, private organization, Government The company associated to the owner forest product according EU rural development programme Instrument used Combinations of all Regulate for laws Combinations of all combination of legal, economical and communicational instruments Necessary measures and investments

Regulate for laws Guaranteed forest product marked conception of ISDW, framework planning on district level as a requisite for easy operational implementation Basis for fixing the payment

The market price have that to be guaranteed assessment of costs

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Case # / title 34. Mountain Biking * 35. Xarxa de Custòdia del Territori (Ter-ritory custody network)

Country Austria Spain FGS Recreation & Sports Biodiversity protection Class of FM PP Contract Purchase of C or S, land purchase and land lease Description public-private contracts (negotiated on regional level) Agreements and contracts Beneficiary land owner, touristic regions, mountain biker Land owners Who pays provinces, communities, tourism industry The members of this network: public administrations, universities, associations, foundations, companies and individual people. Instrument used economic, contracts, information and communication etc. Necessary measures and investments

planning of route network, contracting insurances, markers information To be member of the Territory custody network Basis for fixing the payment

negotiated price based on assessment of costs It depends of each case


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Annex 26: Overview MCA of the selected cases of financing mechanisms.

1. Evaluation of the financing mechanisms This annex presents an overview of the evaluated cases of financing mechanisms. The characteristics such as they are provided by the respondents, and an overview of the criteria and their scores are presented for each of the evaluated financing mechanism. It was planned to evaluate 22 cases of financing mechanisms, due to late arrival of data and incompleteness of the information provided for some cases, therefore the MCA could only been performed for 11 cases (see table 27.1). Table 26.1: Evaluated cases of financing mechanisms9

Case Type of mechanism Country NeighbourWood Scheme Public Ireland Non-productive investments in forest Public Czech Republic Cop property Public Spain (Castillia-La Mancha region) Forest Env.& Nature 2000 Payments Mixed Cyprus Private contracts for water Mixed France Mountain biking Mixed Austria One percent tax donation Mixed Hungary Insurance personal liability Mixed Belgium BIOSA Private Austria Scottish Forest Alliance Private UK (Scotland) Lease of recreational services Private Finland The evaluation was conducted by the members of Standing Forestry Committee Working Group on Valuation and Compensation Methods of Non-Wood Forest Goods and Services and by members of the project consortia, including representatives of the following organisations: 1. Wild Resources Limited, United Kingdom 2. Ministry of Rural Development and Food, Greece 3. University of West Hungary, Institute of Forest Economics, Hungary 4. Agricultural Economic Institute (LEI), Netherlands 5. Ministère de l'agriculture et de la pêche, France 6. Confederation of European Forest Owners 7. Swedish Forestry Agency, Sweden 8. COPA-COGECA, Austria 9. Department of Environment, Government of Catalonia, Spain 10. EFIMED, Spain 11. BOKU, Austria 12. Alterra, Netherlands 9 More detailed information is provided in section 2 of this annex.

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While the overall results are presented in the Final study report section 6.4.6, in this annex the results are presented separated for both groups. Table 26.2 Relative weights of the importance of aspect and criteria

Relative weights Aspect Criterion

Aspect Criterion 0.322 Legal context 0.281 Institutional context 0.322 Feasibility Social context 0.397 0.364 Technical applicability 0.389 Preparation 0.264 Applicability Transaction cost 0.347 0.314 Effectiveness 0.556 Effect Side effects 0.444 The criterion scores (Table 26.3) represent the judgment of the situation concerning the specific criterion. A three point scale has been used: -1 indicates a negative judgment; 0 indicates indifference and 1 indicates a positive judgment. The scores of the criteria are used to calculate the aspect scores (weighted average of the concerning criteria) and the total judgement of a case is the weighted average of the aspect scores. The used weights (see also table 26.2) are also based on the questionnaire returned by members of the working group. Because not all members of the working group specified the relative weight of criteria and aspects, the average of the relative weights had to be used in aggregating scores. Because some mechanisms have not been applied long enough it was difficult to evaluate their effectiveness, the aspect “effects” is represented by two variables, one (prognosis effects) indicating the prognosis for those mechanisms that are not running long enough.


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Table 26.3: Score table for the financing mechanisms as evaluated by members of the SFC ad hoc working group (N=9)

Public mechanisms Mixed mechanisms Private

mechanisms

Nei

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Feasibility 0.74 0.40 0.49 0.73 0.49 0.63 0.13 0.52 0.66 0.69 0.51 Legal context 0.4 0.1 0.1 0.8 0.3 0.3 -0.4 0.3 0.8 0.6 0.3

Institutional context 0.7 0.4 0.3 0.8 0.6 0.6 0.1 0.2 0.4 0.6 0.8 Social context 1.0 0.6 0.9 0.7 0.6 0.9 0.6 0.9 0.8 0.9 0.5

Applicability 0.43 0.41 0.31 0.30 0.29 0.70 0.23 0.52 0.48 0.31 0.52 Technical applicability 0.7 0.3 0.6 0.1 0.3 0.8 0.2 0.4 0.7 0.6 0.1

preparation 0.8 0.3 -0.2 0.1 -0.1 0.8 0.1 0.5 0.1 0.3 0.6 Transaction cost -0.1 0.6 0.4 0.7 0.6 0.6 0.3 0.6 0.6 0.0 0.9

Effects 0.04 0.84 0.88 0.72 0.57 0.44 Prognosis effects* 0.06 0.03 0.00 0.00 0.00

Effectiveness -0.1 0.1 0.1 0.0 0.9 0.8 0.0 0.0 0.7 0.6 0.9 Side effects** 0.2 - 0.0 - 0.8 1.0 0.0 - 0.8 0.5 - * because it concerns a prognosis, the aspect score is divided by 2; ** “ – “ indicates no information

Table 26.4 Score table for the financing mechanisms as evaluated by members of the project group (N=3) Public mechanisms Mixed mechanisms Private mechanisms

Nei

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ices

Feasibility 1.00 0.72 0.35 1.00 0.63 1.00 0.85 1.00 0.89 0.57 0.87 Legal context 1.0 0.0 -0.2 1.0 -0.3 1.0 0.8 1.0 1.0 1.0 1.0

Institutional context 1.0 1.0 0.0 1.0 1.0 1.0 0.7 1.0 0.7 -0.3 1.0 Social context 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 0.7

Applicability 0.68 0.74 0.47 0.63 0.33 0.77 0.97 0.84 0.49 0.34 0.78 Technical applicability 1.0 1.0 0.5 1.0 1.0 1.0 1.0 0.7 1.0 1.0 1.0

preparation 0.0 0.0 0.2 0.9 -0.7 1.0 0.9 1.0 -0.5 -0.2 0.2 Transaction cost 0.8 1.0 0.7 0.0 0.3 0.3 1.0 0.9 0.7 0.0 1.0

Effects 0.52 1.00 1.00 0.67 1.00 0.50 Prognosis effects* 0.25 0.48 0.50 0.58 0.50

Effectiveness 0.7 0.5 0.7 1.0 1.0 1.0 0.5 1.0 0.7 1.0 1.0 Side effects** 0.3 0.7 1.0 1.0 1.0 0.7 1.0 * because it concerns a prognosis, the aspect score is divided by 2; ** “ – “ indicates no information

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Figure 26.1 Comparison of cases based on scoring by the working group (N = 9) and the project group (N= 3)

comparison of cases, average scores steering group

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00

Neighbourwood Scheme

Non-productive investments

Co-property

Forest envi& Nat 2000 payments

public mechanism

Private contracts for water

Mountain biking

One percent tax donation

Insurance for personal liability

mixed mechanism

BIOSA

Scottish forest alliance

Lease of recreational services

private mechanism

feasibility applicability effects prognosis

comparison of cases, average scores project team

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00

Neighbourwood Scheme

Non-productive investments

Co-property

Forest envi& Nat 2000 payments

public mechanism

Private contracts for water

Mountain biking

One percent tax donation

Insurance for personal liability

mixed mechanism

BIOSA

Scottish forest alliance

Lease of recreational services

private mechanism

feasibility applicability effects prognosis

The bars represent the contribution of the separate aspects to the total score for the mechanism. It should be noted that the total score is the average of the three aspect scores (feasibility, applicability and effects/prognosis of effects) so the length of the coloured bar is 1/3 of the aspect score In comparing the results for both groups, the project group seems assign higher scores than the members of the SFC ad hoc working group. The remaining part of this annex describes, for each case, the characteristics and the criteria scores.


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2. Detailed description of evaluated financing mechanisms and scoring tables

NeighbourWood Scheme, Ireland Description of the mechanism according to the returned questionnaire general information about the mechanism: NeighbourWood Scheme region/country where the mechanism is applied Ireland area in which the mechanism is applied Urban and rural, with a focus on sites in and around centres of populations (cities, towns, villages) where the demand for ‘close-to-home’ woodland amenity is apparent. other area’s in which the mechanism could be applied Occasionally in more rural-based areas. type of mechanism Subsidies type of product wherefore the mechanism is applied Recreation, sports, tourism, spiritual and cultural services, historical and educational services, aesthetic services. Also biodiversity protection, carbon sequestration, water purification, soil protection. primary goal of the application Recreation, i.e. to develop existing and new amenity woodlands close to where people live, for daily use for general recreational activities (e.g. strolls, dog-walking, family visits, picnics, fitness training, school visits). Three separate elements in the scheme target the enhancement of existing woodland, the establishment of new woodland, and the installation of appropriate recreational facilities. additional goals of the application The promotion of public health and well-being, the encouragement of local community engagement and participation in local projects and the promotion of the use of woodlands as outdoor classrooms by local schools. beneficiaries of the mechanism Members of the local community benefit by being able to use and enjoy the neighbourwood. Under the scheme, the funds involved are paid to the landowner. This is normally a Local Authority (local government), who develops the project in partnership with the local community, community groups, eNGOs, etc. Private landowners can also apply, subject to conditions regarding access. who contributes/pays National Government executor of the mechanism Forest Service, Department (Ministry) of Agriculture, Fisheries and Food, is responsible for the governance of the scheme. operation of the mechanism, i.e. who has to do what and which actions and regulations are required Forest Service (the Forest Authority) has published grant conditions and a grant manual setting out the scheme’s criteria, terms & conditions, procedures, standards, etc.. Best practice is also set out in the Forest Service publication Forest Recreation in Ireland – A Guide for Forest

Owners and Managers. The applicant/beneficiary prepares a plan in partnership with the local community, following a set template included in the scheme’s manual. This application is assessed by the Forest Service (in consultation with other relevant statutory bodies, as necessary) and approval is issued. The approved work is then carried out, and payment of an initial instalment of the grant follows after vetting by the Forest Service. The remaining second instalment is paid 4 years later, subject to verification of proper maintenance. has a feasibility study been executed in advance and what are the results Not specifically. However, the NeighbourWood Scheme (launched in 2001) evolved from earlier schemes available in the 1990s (Planned Recreational Forestry Scheme, Amenity Woodland Scheme, Urban Woodland Scheme) and from Forest Service funded post-graduate research. Experiences gained from this shaped the scheme. The current version of the scheme, launched in April 2008, incorporates changes and revisions arising from experiences to date with the scheme, a review of projects funded, and detailed consultation with relevant stakeholders in 2007.

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Summary of the answers for the score table in the returned questionnaire plus judgement of the situation. aspect criterion summary of answer criterion score working

group project group

feasibility legal context Standard legal requirements regarding felling control, forest reproduction material, plant passports, species and habitat protection, proof of ownership, tax clearance certificates, etc. apply to the scheme. 0.4 1.0

institutional context Yes, in the form of the Forest Service. 0.7 1.0 social context generally yes 1.0 1.0 applicability technical applicability no technical constraints 0.7 1.0 preparation The development of the initial version of the scheme launched in 2001 took approximately 1.5 years to complete. The recent revision of the scheme took place over a 1-year period. The cost were are not significant

0.8 0.0

transaction cost The cost per unit area tends to be more expensive on both the applicant and Forest Service side, due to the complexity of the projects, the level of consultation required, and the nature of the practical work involved. However, arguably, higher non-timber benefits flow from these projects. The operational costs can therefore be deemed to be minimal compared to the benefits of the mechanism.

-0.1 0.8

effects effectiveness yes, but some local authorities are not very enthusiastic so the use of the scheme legs behind expectations -0.1 0.7 side effects positive effect is publicity which leads to support and the negative effect is abuse, e.g. illegal dumping 0.2 0.3 Motivation of the criterion scores feasibility: scores are obvious applicability: the mechanism required one and a half year for preparations (-1) and the transaction cost are high but minimal compared to the benefits (1) effects: score effectiveness is the combination of good results when applied (1) and legging behind of expectations (0). The score of the side effects is the combination of the positive effect (1) and the negative effect (-1).


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Non-productive investments in forest, Czech Republic Description of the mechanism according to the returned questionnaire general information about the mechanism: Non-Productive investments in Forest region/country where the mechanism is applied Czech Republic area in which the mechanism is applied All regions except for the Capital of Prague type of mechanism subsidies type of product wherefore the mechanism is applied Recreation, tourism, aesthetic services, biodiversity protection primary goal of the application To increase social value of forests additional goals of the application To regulate movement of forest visitors in order to diminish negative impacts on forest ecosystems through building suitable infrastructure, to ensure safety of visitors (paths for tourists and cyclists, parking lots, shelters and rest places for visitors, fences, information boards etc.) beneficiaries of the mechanism Land owners, forest visitors who contributes/pays EAFRD + government (state budget) based on the Rural Development Programme 2007-2013 executor of the mechanism regional offices of the State Agricultural Intervention Fund operation of the mechanism, i.e. who has to do what and which actions and regulations are required Single payment to a forest owner or their association based on a project, application is presented to the State Agricultural Intervention Fund, the recipient of the payment has to fulfil the objectives of the project for at least 5 years has a feasibility study been executed in advance and what are the results Potential absorption capacity has been examined in the course of preparation of Rural Development Programme Summary of the answers for the score table in the returned questionnaire plus judgement of the situation.

criterion score aspect criterion summary of answer working

group project group legal context No, some regulations had to be adopted 0.1 0.0 institutional context Yes, State Agricultural Intervention Fund. 0.4 1.0 feasibility

social context Yes 0.6 1.0 technical applicability No information but no problems expected 0.3 1.0 preparation Training of the staff of the State Agricultural Intervention Fund 0.3 0.0 applicability

transaction cost no additional costs required 0.6 1.0 effectiveness the regulations were adopted in December 2007. Since then applications have been received and one project is started. 0.1 0.5 effects

(prognosis)*

side effects no information - - * because it concerns a prognosis, the aspect score is divided by 2 (the score between brackets) Motivation of the criterion scores Feasibility: the average of the criteria scores Applicability: technical applicability is left out of consideration Prognosis effects: effectiveness, score 0.5 because only one project has started yet (0) and the prospects are good (1).

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Co-property, Spain Description of the mechanism according to the returned questionnaire general information about the mechanism: co-property region/country where the mechanism is applied Spain area in which the mechanism is applied In Castilla-La Mancha Region, It has property with these characteristics, but the mechanism is not implanting other area's in which the mechanism could be applied In all land forest. It is prefer in forest land owner association of local sphere type of mechanism public mechanism and mixed public private mechanism type of product wherefore the mechanism is applied biodiversity protection, climate regulation, air quality regulation and carbon sequestration, water regulation and purification, soil protection, spiritual and cultural services, historical and educational services, aesthetic services. primary goal of the application The primary goal will be keep, support and improve the forest. additional goals of the application It will be help the Rural Development and pay it to the owner. Today these lands cost money to their owners. beneficiaries of the mechanism original owner who contributes/pays citizen, private organization, Government executor of the mechanism The Regional Government operation of the mechanism, i.e. who has to do what and which actions and regulations are required Original owner have to keep, support and improve their forest. They will work in their forest to obtain benefits thought economic helps. has a feasibility study been executed in advance and what are the results unknown. Summary of the answers for the score table in the returned questionnaire plus judgement of the situation.


group project group legal context No, but modification is not difficult: It’s only take decision and money 0.1 -0.2 institutional context Establishment of certification of sustainable management forest is required, which is rather easy to accomplish by expansion of the existing regional government

0.3 0.0 feasibility

social context yes 0.9 1.0 technical applicability yes 0.6 0.5 preparation Collecting information and providing (including preparation) of documentation. -0.2 0.2 applicability

transaction cost Cost are always lower than the benefits 0.4 0.7 effectiveness It is expected that the goals will be reached after a long term 0.1 0.7 effects (prognosis)* side effects positive side effects are expected in 5 to 10 years 0.0 0.7 * because it concerns a prognosis, the aspect score is divided by 2 (the score between brackets) Motivation of the criterion scores Feasibility: the average of the criteria scores. The score for legal context is the average of not allowed (-1) but the required modification that is not difficult (1). The score of institutional context is the average of the stated requirement which is rather easy to accomplish (1) by a small expansion of existing capacity of the regional government (0) Applicability: the average of the criteria scores. Prognosis effects : effectiveness and side effects, score 0.5 because the goals will be reached after a long term


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Forest Environment & Nature 2000 Payments, Cyprus Description of the mechanism according to the returned questionnaire general information about the mechanism: Forest Env&Nature 2000 Payments measures of the rural development programs region/country where the mechanism is applied Cyprus other area’s in which the mechanism could be applied In private forest areas either Natura 2000 or not type of mechanism Mixed Public/Private mechanism type of product wherefore the mechanism is applied Biodiversity, Soil protection, Water regulation primary goal of the application The conservation of high value habitats such as the habitats of Quercus infectoria and Pistasia atlantica additional goals of the application • The protection of soil against erosion

• The protection of water resources beneficiaries of the mechanism (e.g. land owner, association, community etc.) Private forest owners/associations who contributes/pays (e.g. user, local government, national government, etc.) National government executor of the mechanism Department of Forests operation of the mechanism, i.e. who has to do what and which actions and regulations are required The mechanism is implemented under the Rural Development Programme has a feasibility study been executed in advance and what are the results No Summary of the answers for the score table in the returned questionnaire plus judgement of the situation. criterion score aspect criterion summary of answer

working group

project group legal context Yes 0.8 1.0 institutional context Yes 0.8 1.0 feasibility social context Yes 0.7 1.0 technical applicability There were no technical constraints 0.1 1.0 preparation Only internal training 0.1 0.9 applicability

transaction cost Benefits are expected to be higher then the transaction costs 0.7 0.0 effectiveness Implementation has not been started, but the expectations are good 0.0 1.0 effects (prognosis)* side effects no information - - * because it concerns a prognosis, the aspect score is divided by 2 (the score between brackets) Motivation of the criterion scores feasibility: obvious applicability: because of a lack of quantitative information the score 0 (indifference) has been assigned to transaction cost: benefits are higher but how much? effects: because the implementation did not start yet only expectations can be used.

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Private contracts for water, France Description of the mechanism according to the returned questionnaire general information about the mechanism: private contract for water region/country where the mechanism is applied France area in which the mechanism is applied Furan watershed (1 of the 2 watersheds of Saint Etienne) type of mechanism Public-private partnerships type of product wherefore the mechanism is applied water purification primary goal of the application Protect drinking water resources additional goals of the application Recreation beneficiaries of the mechanism National Forest Office (ONF) who contributes/pays Saint-Etienne municipality, Saint-Etienne drinking water company (Stéphanoise des eaux) executor of the mechanism National Forest Office (ONF) operation of the mechanism, i.e. who has to do what and which actions and regulations are required ONF has to do a regular surveillance of harvesting activities nearby water pipes and of recreation, program the maintenance work of the pipes (master builder), deforest just above the water pipes. has a feasibility study been executed in advance and what are the results No Summary of the answers for the score table in the returned questionnaire plus judgement of the situation.


group project group legal context No, normally a protected area above catchment points should be fenced. The required modification took 2 years

0.3 -0.3 institutional context Yes 0.6 1.0

feasibility

social context Yes 0.6 1.0 technical applicability Yes 0.3 1.0 preparation It took several years (progressively) for gathering and exchanging knowledge -0.1 -0.7 applicability

transaction cost Transaction costs of € 22 000 /year seem to be justified by the benefits 0.6 0.3 effectiveness The primary goals are reached: good drinking water quality, no accident since the beginning of the contract

0.9 1.0 effects

side effects The good forest practices are also applied by private forest owners nearby. 0.8 1.0 Motivation of the criterion scores feasibility: The score -1 for the legal context is based on the two year period for the required modifications. applicability: The score for preparations is negative because of the length of the period. effects: the score 1 is obvious.


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Mountain biking, Austria Description of the mechanism according to the returned questionnaire general information about the mechanism: mountain biking region/country where the mechanism is applied Austria area in which the mechanism is applied Tyrol other area’s in which the mechanism could be applied other provinces, where tourism is relevant type of mechanism public-private contracts type of product wherefore the mechanism is applied Recreation & Sports primary goal of the application Reaching a consensus on mountain biking between land owners and tourist boards additional goals of the application Reduce risks of liability for land owners, positive effects on tourism, channel mountain bikers on suitable roads, promote “legal mountain biking”, beneficiaries of the mechanism land owner who contributes/pays Province of Tyrol, local touristic boards executor of the mechanism Province of Tyrol, local touristic boards operation of the mechanism, i.e. who has to do what and which actions and regulations are required Land owner and local touristic board or local community are signing a contract, which allows mountain biking on a specified forest road, province and touristic board subsidise these roads with 100-150 €/km*a, an overall-insurance for all MTB-routes is contracted, mountain bike roads are signed in the terrain and published via www.tirol.gv.at/mountainbike has a feasibility study been executed in advance and what are the results In 1995 a survey showed, that there is an urgent need for mountain bike roads in Tyrol and 3.000 – 5.000 km are suitable for mountain biking. Summary of the answers for the score table in the returned questionnaire plus judgement of the situation.


group project group legal context Yes (Austrian Forest Law, 1975) 0.3 1.0 institutional context Yes, one of the main tasks of the Tyrolean Forest Service is to find solutions for such conflict of interests

0.6 1.0 feasibility

social context Yes 0.9 1.0 technical applicability Yes 0.8 1.0 preparation Almost no modifications on existing roads where necessary, a design for the MTB-Signs was developed et cetera, which took less than one year 0.8 1.0 applicability

transaction cost low and much less then the benefits 0.6 0.3 effectiveness it is effective 0.8 1.0 effects side effects yes, 80-90% of the bikers now use legal MTB routes and no other paths 1.0 1.0 Motivation of the criterion scores feasibility: the score 1 is obvious applicability: in the answers to the questionnaire the criteria are a bit mixed up. The general tendency for the combination of preparation and transaction cost it is between 0 and 1 (it takes some time and some cost, but not to much).Therefore the scores 1 (preparation) and 0 (transaction cost) have been arbitrarily assigned. effects: the score 0 for side effects is because a small part still does not use legal MTB roads

http://www.tirol.gv.at/mountainbike

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One percent tax donation, Hungary Description of the mechanism according to the returned questionnaire general information about the mechanism: mountain biking region/country where the mechanism is applied Hungary area in which the mechanism is applied Hungary, the whole country other area’s in which the mechanism could be applied type of mechanism public-private contracts type of product wherefore the mechanism is applied Public Services of Forest primary goal of the application to increase the quality of forest public services additional goals of the application improve public awareness on forestry and on forest public services beneficiaries of the mechanism not defined who contributes/pays tax payers executor of the mechanism national government (administration) operation of the mechanism, i.e. who has to do what and which actions and regulations are required "Dissemination of the fund was incorporated into the national subsidy system as a ministerial decree. Administration is done by the forest authority. has a feasibility study been executed in advance and what are the results Real actions are implemented by awarded applicants."


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Summary of the answers for the score table in the returned questionnaire plus judgement of the situation. criterion score aspect criterion summary of answer

working group

project group legal context In general yes, but public services of the forest had to be added to the annual national budget act, which took about half a year

-0.4 0.8 institutional context The mechanism could fit into the national forestry subsidy system, only additional procedures were required to disseminate and control the use of funds. It took 1 year to accomplish this

0.1 0.7 feasibility

social context yes 0.6 1.0 technical applicability yes 0.2 1.0 preparation The subsidy system is run by the state administration, no special preparation was necessary. Guidelines were prepared (and here accounted for in the modification of the institutional context). 0.1 0.9 applicability

transaction cost It is run by the state administration parallel with other subsidies, the attributed costs are much lower than the benefits 0.3 1.0

effectiveness Effectiveness cannot be assessed yet, but prospects are good 0.0 0.5 effects* side effects increased public awareness on forestry and forest public services has not been realized yet, but is expected 0.0 1.0

* because it concerns a prognosis, the aspect score is divided by 2 Motivation of the criterion scores feasibility: both the legal and institutional context required some slight modifications, therefore the score 0.5 has been assigned. applicability: as the state administration runs the mechanism parallel with other subsidies, no special efforts are require, moreover the operation cost are low compared to the revenues effects: both the effects and the side effects cannot be assessed yet, because forest management was added to the list of tax destinations in 2006 and 2007, and logically the revenues were available much later. Therefore the expectations are judged

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Insurance for personal liability, Belgium Description of the mechanism according to the returned questionnaire general information about the mechanism: Insurance for personal liability region/country where the mechanism is applied Belgium area in which the mechanism could be applied 550 00 ha type of mechanism public private partnership type of product wherefore the mechanism is applied recreation, tourism, sport primary goal of the application encourage owners in giving access to their forests beneficiaries of the mechanism forest owners who contributes/pays regional government of Wallonia executor of the mechanism the insurance company operation of the mechanism, i.e. who has to do what and which actions and regulations are required when it arrives a material damage or physical injury the owner contacts the forest office who contacts the insurance company has a feasibility study been executed in advance and what are the results a statistical of damage was produced Summary of the answers for the score table in the returned questionnaire plus judgement of the situation.


group project group legal context The forest code 0.3 1.0 institutional context Yes 0.2 1.0 feasibility social context Yes 0.9 1.0 technical applicability No technical constraints 0.4 0.7 preparation No preparations were mentioned 0.5 1.0 applicability transaction cost No considerable costs mentioned 0.6 0.9 effectiveness The expectations are good, but the implementation has not been started. 0.0 1.0 effects

(prognosis)* side effects no information - - * because it concerns a prognosis, the aspect score is divided by 2 Motivation of the criterion scores feasibility: obvious applicability: because of a lack of information (on this criterion and on preparation) the scores are arbitrarily determined at 1. The mechanism concerns the payment by the public authority of an insurance for personal liability of the forest owners, which will be low compared to the benefits. prognosis effects: because the implementation did not start yet only expectations can be used.


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BIOSA, Austria Description of the mechanism according to the returned questionnaire general information about the mechanism: BIOSA – Biosphere Austria region/country where the mechanism is applied Austria area in which the mechanism is applied mainly in Styria, Lower Austria, and Carinthia other area’s in which the mechanism could be applied other federal provinces of Austria type of mechanism PPP, public-private contracts, and eco sponsoring type of product wherefore the mechanism is applied biodiversity protection (habitat and species protection) primary goal of the application promote the idea of voluntary contract ecology and dynamic nature conservation, demonstrate nature conservation services brought by private forest owners for the society, achieve fair financial compensations for nature conservation services brought by private forest owners (higher costs by close to nature management, abandonment of active forest management) additional goals of the application awareness-rising, forest education, support of scientific projects related to biodiversity and close to nature management beneficiaries of the mechanism forest owners, authorities, companies (PR), society, science who contributes/pays forest owners pay membership fee to association BIOSA; companies and public (federal and provincial) authorities pay project costs executor of the mechanism mechanism is executed by the registered association BIOSA in cooperation with forest owners and project partners (federal authority, provincial authorities, companies, schools, kindergarten, hospitals, etc.); on part of BIOSA operational work is done by the executive secretary operation of the mechanism, i.e. who has to do what and which actions and regulations are required kind of actions done depends on the particular type of project; on part of BIOSA actions can be: making contacts, project acquisition, elaborate project concepts, project planning, administration, coordination, PR, etc.) has a feasibility study been executed in advance and what are the results no

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working group

project group legal context Yes it was allowed, nature conservation based on private-law contracts 0.8 1.0

institutional context Yes 0.4 0.7 feasibility

social context Yes. Since the mechanism follows a bottom-up approach (BIOSA was founded on the initiative of private land and forest owners) and is strictly based on voluntariness and contractual agreements based on private law, it is very well accepted by both beneficiaries and payers

0.8 1.0

technical applicability Yes 0.7 1.0 preparation Foundation and set up of a registered association with its formal and operational infrastructure, which took 1 to 1.5 years 0.1 -0.5 applicability

transaction cost Relatively low 0.6 0.7 effectiveness yes 0.7 0.7 effects side effects awareness is rising, such as forest education, no negative side effects identified yet 0.8 0.7 Motivation of the criterion scores feasibility: obvious applicability: the mechanism required over a year for preparations (score -1) and transaction costs are relatively low (score 1) effects: the score 1 is obvious


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Scottish forest alliance, UK Description of the mechanism according to the returned questionnaire general information about the mechanism: Scottish Forest Alliance (SFA) region/country where the mechanism is applied United Kingdom area in which the mechanism is applied Scotland other area’s in which the mechanism could be applied Only available to SFA partners but similar transactions being undertaken by a wide range of other parties. type of mechanism Purchase of goods and services. (BP entered into the contractual agreement with the three land management organisations on the basis that they (BP) wished to secure carbon credits from afforestation schemes i.e. it was a business arrangement rather than a charitable act. Demonstration of an exemplar project was always important. Eco-sponsoring emerged as a co product later in the partnership’s life.) type of product wherefore the mechanism is applied Economic:- Carbon sequestration; Rural development

Environmental:- Management and conservation of biodiversity (some sites required creative conservation and restoration as biodiversity has been severely reduced – so there was nothing to protect!); Aesthetic enhancement ( also included restoration of a former industrial site.) restoration of native woodland cover was the main activity. Social :- Community engagement (not on your list but an important element of the project);Recreation primary goal of the application Sustainable forest management was the overarching aim. (see above). additional goals of the application See above. beneficiaries of the mechanism Land owner / manager - three recipients/ partners (State Forest Service – Forestry Commission Scotland) + two charitable organizations (Woodland Trust, Royal Society for the Protection of Birds). Community benefit through rural development activities. who contributes/pays British Petroleum (BP) All The partners (not just BP) contributed significantly eg purchase of land. Also other funding mechanisms were secured executor of the mechanism The Partners collectively although operational activity was undertaken on the ground by the land managers. operation of the mechanism, i.e. who has to do what and which actions and regulations are required All schemes were passed through a site selection process and agreed by a working group with BP the final arbiter of how their funds were used. The land managers sought consents for afforestation including EIA and Forestry Grant Scheme, from the appropriate public authorities via Forestry Commission Scotland. Additional funding was secured by the land managers who were also responsible for the implementation and management of the schemes. Land managers were also responsible for community and other stakeholder consultations. The partners collectively undertook research, monitoring on carbon sequestration and biodiversity. They also worked on communication methods and practice. has a feasibility study been executed in advance and what are the results No although each project went through an evaluation by the steering group and rigorous checking by Forestry Commission Scotland and its consultees as part of the approval process. Base line studies have been undertaken at each site for carbon and biodiversity enabling changes to be monitored accurately in future.

Annexes

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working group

project group legal context Yes 0.6 1.0 institutional context Some new structures were required and the setup took over one year 0.6 -0.3 feasibility

social context Yes, locally and nationally generally well received although some ngos challenge the value of afforestation as a valid means of mitigating climate change. 0.9 1.0

technical applicability Yes, normal forest management techniques applied. 0.6 1.0 preparation Some additional staff was required. 0.3 -0.2 applicability

transaction cost It is expensive, but the cost are in balance with the benefits (i.e. they are accepted by the sponsor, BP) 0.0 0.0 effectiveness yes 0.6 1.0 effects side effects Only positive, no negative side effects identified yet 0.5 1.0 Motivation of the criterion scores feasibility: Setting up the required institutional context took over a year, which leads to a score -1 for the criterion institutional context applicability: The score for the criterion preparations is set to 0 because some additional staff was required and no further comments were made on the required time period, so it is assumed that it was realized in a rather short time period. effects: the score 1 is obvious.


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Lease of recreational services, Finland Description of the mechanism according to the returned questionnaire general information about the mechanism: Lease of recreational services region/country where the mechanism is applied Finland area in which the mechanism is applied whole country, privately owned land other area’s in which the mechanism could be applied same kind of mechanism could be applied also ti publicly owned land type of mechanism purchase of services type of product wherefore the mechanism is applied Recreation, Aesthetic services primary goal of the application reconcile the needs and interests of the landowner and others enjoying the recreational value of the area additional goals of the application - offer nature tourism entrepreneurs a possibility to secure operating-environment - offer land-owners more wide management opportunities for their forests/other land areas - offer land-owners a new possibility to income beneficiaries of the mechanism (e.g. land owner, association, community etc.) - land owner (- also the potential buyers are beneficiaries as they are given a possibility to maintain the recreational or landscape values thy appreciate or wider user rights to an area they don’t own) who contributes/pays (e.g. user, local government, national government, etc.) Private user, community, local recreation organisation, enterprise etc. executor of the mechanism there is no single executor operation of the mechanism, i.e. who has to do what and which actions and regulations are required - the model is based in endowments of civil law: contracts between private parties; so the responsibility is on the potential buyer and the land-owner - local forest owners’ association (Forest Management Associations) offer advice for the potential buyers and sellers has a feasibility study been executed in advance and what are the results No formal feasibility study was made. A study about the possible models and their attractiveness to different parties was made in a project implemented by the Forest Development Center Tapio with participation of MTK (Central Union of Agricultural Producers and Forest Owners), Association of Tourism Organisations in Finland, the Village Action Association of Finland and the Association of House Dwellers. The study concluded that ther is a need for a new model and that the model should be based on private/private-contracts.

Annexes

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working group

project group legal context yes 0.3 1.0 institutional context Yes. The local farmers’ and forest owners’ associations can serve a natural source of information. There also exist national organizations and local associations for the potential buyers. Information about the model can be distributed through those existing organizations.

0.8 1.0 feasibility

social context yes, it is developed by payers and beneficiaries and approved by the government 0.5 0.7 technical applicability Yes 0.1 1.0 preparation The personnel of the regional and local forest owners’ associations were trained, which took more than one year. The cost are minimal.

0.6 0.2 applicability

transaction cost They are expected to be low and in balance with the benefits. 0.9 1.0 effectiveness The primary goal has been achieved 0.9 1.0 effects side effects no information - - Motivation of the criterion scores feasibility: obvious. applicability: the score for preparation is the average of the required period (score -1) and the minimal cost (score 1) effects: side effects are not considered.

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