FORESTS ACCOUNTS

WHY AND HOW HP IS IMPLEMENTING

FOREST ACCOUNTS

28th January, 2017Chandigarh

HP FORESTS –CHALLENGES & OPPORTUNITIES......

• Distinguished geography - challenges and opportunities for development-Richly endowed with natural resources-Economically valuable environmental services-Sustains life support systems of majority of rural population of the State

• Catchment area of major rivers:- sustains economic livelihood and industries

in neighbouring plains»Water regulation»Sediment regulation 2

.....HP FORESTS –CHALLENGES & OPPORTUNITIES.....

• Altitudinal variation generates habitats for a number of faunal species-Global Biodiversity hotspots

• Forests an important natural asset for HP providing critical goods and services– Provisioning (timber, firewood, NTFP) – Regulating (water regulation, soil protection,

biodiversity)– Cultural (recreation, tourism)

• Vast potential of its forests to act as carbon sink3

......HP FORESTS –CHALLENGES & OPPORTUNITIES.....

• Potential for attracting higher value added tourists• Hydro power potential –clean and renewal source

of energy (23000 MW)• Dependence of these two critical sectors on

sustainable management of forests:– Hydropower (water flows, sedimentation, lean

season flow)– Tourism (climatic, natural heritage,

environmental advantage)

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.....HP FORESTS –CHALLENGES & OPPORTUNITIES

• 12th and 13th Finance commissions grant

• Special grant for States having more than 50% forest area

• The Forests of the State have Potential to increase contribution to economic growth by providing ES services crucial for other sectors

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WHY FOREST ACCOUNTS....

• Environmental assets• Traditional approach

-Accounted through their individual components (timber)-other benefits to Society & Economy overlooked

• Forests degradable assets, Depreciate if misused-May impact well being of economy

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........WHY FOREST ACCOUNTS• Need for other sectors to be sensitized about

their dependence on healthy forests in economic terms

• Need for quantification and monetization of non marketable environmental services

• Need for robust methodology to capture all goods and services

• Fiscal transfers are generally linked with contribution of a sector to the state revenue/GDP.

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THINK BEYOND GDP.....• GDP is an unsuitable indicator of sustainable development

-Invisible values are not captured• Cannot record trade-offs

-Non marketed products-Upstream Forest cutting vs downstream flood protection

• Intermediate benefits attributed to using sectors • looks at only one part of the economic performance –

Income - but says nothing about assets that underlie this income

– False signals of illusory gains– Income at the cost of depletion?

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.....THINK BEYOND GDP• The declining natural assets are invisible

in GDP and so are not measured -Sustainability?

• For Forestry sector, timber resources are counted in National accounts but services like water regulation, soil protection, carbon sequestration and many supporting services are ignored

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CONCERNS….

• Lack of information on true contribution of forests to the economy-monetization of ES services (IPH Schemes)

• Lack of information on impacts of non-forestry policies on forest resources and services

• Abundant natural resource base crucial for State’s economy, especially priority sectors of Hydro Power and Tourism

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The Present HP Scenario….. • Green growth Agenda of the State

- Balanced and sustainable economic and environmental conditions -HP’s commitment to low carbon growth

• Average growth rate of 8% from 2005-06 to 2012-13- Whether state’s natural resources and other forms of capital increased or growth achieved at the cost of depletion? • Needs yardsticks to measure whether the State is

following the path of sustainable development 11

…..The Present HP Scenario…..

• Climate change may alter distribution and quality of natural resources-By year 2100, under most probable scenario, for the State:

-3 centigrade degrees increase in Temp- 20% decrease in precipitation

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…..The Present HP Scenario….. • 66.5% of total geo area as forest• 26.4% area actually supports forest cover• Forests role in State’s commitment to carbon neutral economy• Complementary role in life support system in agriculture and

horticulture in hills• Economic contribution of forests is captured under forestry

and logging category of industries (SNA)• Contribution of forestry sector in GSDP- 4.8%

- under estimated- wrongly assigned- omitted

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Forest Product or Service

Services provided

State Income Accounts (1999-2000 to 2006-07)

Industrial Wood Provisioning Depletion of forests not included in net value added or net domestic product.

Fuelwood and charcoal Provisioning Underestimated? NSS Consumption Expenditure Surveys (every five years)

Minor Forest Products Provisioning(Resin)

Production estimates from H.P. State Corporation

Others (NTFP) Underestimated? Only royalty value exported quantity available from HPFD

Forest Services

Livestock Grazing Provisioning Attributed to agriculture (recently added to forestry sector)

Pollination services of wild bees

Supporting service Attributed to agriculture

Recreation and Tourism Cultural services Attributed to trade, hotel, and restaurant, or Other services

Carbon storage Regulating services Omitted

Biodiversity Protection Supporting service Omitted

Soil Protection Supporting service Omitted

Water regulation Supporting service Omitted 14

……The Present HP Scenario • But policy makers do not have information they

need to manage this critical economic asset as to:– Extent of forest resource -how and why it is

changing – True economic contribution of forests– Extent of dependence of other sectors of

economy on healthy forests– Impacts of non –forestry policies on forest

resource and ES services (Landscape management)

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How Would Forest Accounts Help?• Demonstrate improved measures of economic benefits

from forest Ecosystems to all sectors of economy• Will help monitor interaction between forest resources

and State of economy- Improved sectoral planning - more equitable social allocations

• Would capture both – resource use as well as damaging effects of degradation

• Would track causes of depletions and additions so that these are targeted at policy level

• Forests accounts at watershed level will help design PES schemes 16

POLICY ISSUES TO BE INFORMED BY FOREST ACCOUNTS…..

• Detailed Forest accounts will help to monitor state of forest resources and state of economy–Asset account to monitor changes in stocks

of natural resources –Flow accounts to monitor use of natural

resources

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…..POLICY ISSUES TO BE INFORMED BY FOREST ACCOUNTS….

• Quantify dependence of other sectors on healthy forests (ES valuation)

• How has forest wealth evolved over the years (physical and monetary terms)?

• Contribution of NTFPs to the state GDP- how are these benefits distributed-how can they be increased?

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……POLICY ISSUES TO BE INFORMED BY FOREST ACCOUNTS

• Value of forest Ecosystem Services to the hydropower sector

-how can this be optimized?• Contribution of forests to tourism sector

-how can this be increased sustainably

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Policy issues to be addressed by Forest Accounts…..

• How to ensure that forests get rightful place in Macro economic policy?

• Economy-wide linkages with forestry needs to be improved by:–Demonstrating economic benefits from

forest ecosystems to all sectors of the economy

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…Policy issues to be addressed by Forest Accounts

• Identification of beneficiaries of ES services

-(User Pays/PES)

• Valuation of Non- Marketable Environmental Services

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WHAT WE ARE DOING• SEEA Central framework allows to capture

relationship between economic activity and environment (resource based perspective)

• SEEA Ecosystem accounts allows systematic integration of true contribution of Ecosystem assets and economic activity (mapping ES & their flow)

• Decided to implement Forest account in one District following SEEA Central framework

–Standardisation & Upscaling22

……WHAT WE ARE DOING……• Preparation of physical area and volume

accounts of Forest resources• Estimate the exact potential and contribution

of NTFP to the state (Survey)• Develop PSUT and MSUT tables for the timber

and NTFP• Understand the exact contribution of the

Forests to Tourism sector of state economy (Tourism Account)

• Towards Ecosystem Experimental accounts......23

…..WHAT WE ARE DOING…..• Steps taken to build Forest accounts:-

-Develop indicators to answer policy question-Corresponding accounting tables that need to be compiled-Define data needs to populate these tables-Evaluate what data is available to prepare the tables-Identify what data is missing

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…..WHAT WE ARE DOING…..• Identify data sources for missing data• Propose ways to solve data gaps

–Primary survey?–Drawing on secondary data?

• Define calculations that should be performed to populate the accounts

• Understand what the SNA of the State is compiling and what is missing

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…..WHAT WE ARE DOING…..• Started with accounts from 2007 onwards• Initially tried to align our tables with FSI data– Forest cover versus forest area-ToF–Variation in Forest area as computed in GIS

environment– Lack of data with HPFD on many parameters

w.r.t. ToF for accounting tables–Density class wise compilation found not

possible

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…..WHAT WE ARE DOING…..

• Decided to follow working Plan data• legal classification wise compilation not

relevant• Data of all working plans brought to

common base year of 2007• NTFP/Fuelwood/Fodder Survey

conducted

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…..WHAT WE ARE DOING…..• Developed ways to derive missing data

(Statistically robust!)– Growing stock data for PAs– No green felling-How to assess notional area

harvested (NPV formula or WP data)– Parameters developed to assess the volume

accretion in plantation <10 cm DBH – Volume accretions due to natural growth (MAI)– Area under grazing-How it will impact volume?– Encroachments– Impacts of forest fires on volume/Area

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…..WHAT WE ARE DOING…..

• Data limitation Encountered:– Data from ToF needs to be captured as there is

significant flows of goods and services from ToF to the economy

– Mismatch between forest area as per forest record and revenue record

– Lack of digitization of forest boundaries a major handicap

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LEARNINGS SO FAR• Different sectors depending on natural resources

cant work in isolation• If data becomes fragmented, it provides false signals

to policy makers rendering it difficult to take informed and positive decisions

• Need to quantify and monetize goods and services to demonstrate benefits from forest ecosystems to other sectors of economy and planners

• Regular availability of data crucial for Forest accounts

• Scope for enhancing the delivery of ES services by Forest Department? 30

Learnings within forestry sector• Urgent need to improve its data base w.r.t.– Forest area– Boundaries– ToF– Non market Environmental services– Seamless integration /digitization– Institutionalization of robust data gathering

systems– Refine methodologies to capture changes in

resource

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WAY FORWARD• Establish close collaboration between data

producers, policy and decision makers• Demonstrate the practical policy implications of

using forest accounts• Development of Institutional arrangement /

Procedures for:-Improvement in data availability (Gaps ?)-Capacity building-Communication and advocacy-Indicators for cultural services

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THANKS

anilvaidya123@gmail.com