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Cost-Benefit Analysis of Enhancing Biodiversity Through Forest Conversion in Lower Saxony, Germany

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Cost-Benefit Analysis of Enhancing Biodiversity Through Forest Conversion in Lower Saxony, Germany Cost-benefit analysis of enhancing biodiversity through forest conversion in Lower Saxony, Germany Jürgen Meyerhoff*, Ulf Liebe**, Volkmar Hartje* * Institute for Landscape Architecture and Environmental Planning, Technische Universität Berlin ** Institute for Sociology, Universität Leipzig Background: forest conversion in Lower Saxony – the LÖWE strategy • Lower Saxony initiated a forest conversion strategy (LÖWE – long lasting ecological development) in 1991 for its commercially used forests. • Afforestation a) after World War II and b) after storms and forest fires in the 1970s was mainly done with faster growing coniferous trees. • Conversion strategy aims at, among others, -> increase broad-leaved and mixed stands, -> use of appropriate tree species, -> conservation of rare and endangered species. LÖWE – long lasting ecological development Main objective of forest conversion Forest developement Area coniferous trees in % Area broad-leafed trees in % Conversion, i.e. changes in the mix of broadleaved and coniferous trees, will affect forest biodiversity. Luenburger Heide Regions suitable (mainly pine ) for forest conversion in Lower Saxony Harz (mainly spruce) Solling (mainly spruce ) Cost-benefit analysis • Object: Changing forest management from profit oriented management to LÖWE programme 1. Geographic Information System (GIS) based forest growth simulator was used for simulating forest development under various management regimes 2. Calculation of financial losses for forest owners based on forest development simulation 3. Benefit estimation concerning changes in forest biodiversity – estimates from stated preference methods: contingent valuation (CV) and choice experiment (CE) 4. Cost-benefit analysis and sensitivity analysis GIS-Simulation: initial state GIS-Simulation: LÖWE – 40 years Example of CV-Question (LH) Without forest Programme Amount Willing to pay defintively yes 9 conversion A per year not sure/ definitively no 8 Share of broad- 30 60 0,50 € _____________ 1,00 € _____________ leaved forest per cent per cent 2,00 € _____________ 3,00 € _____________ Habitate for en- 5,00 € _____________ dangered and medium high 7,00 € _____________ 10,00 € _____________ protected species 15,00 € _____________ 20,00 € _____________ medium medium 25,00 € _____________ Species diversity 30,00 € _____________ 35,00 € _____________ 50,00 € _____________ Forest stand low high 60,00 € _____________ structure 75,00 € _____________ 90,00 € _____________ Landscape 100,00 € _____________ low medium 130,00 € _____________ diversity other amount _________ Programme A equals the LÖWE forest development programme. Example of a Choice Card (LH) without forest Programme A Programme B conversion 30 % broad-leaved 60 % broad-leaved 60 % broad-leaved Habitat for endangered and medium high medium protected species Species medium medium medium diversity Forest stand low medium high structure Landscape low high high diversity Contribution to fund 0 35 20 “forest conversion” I choose ; Experimental design resulted in 36 choice cards; they were blocked in six blocks each time six choice cards General willingness to pay Lüneburger Solling/ Heide Harz 28.0% 30.0% WTP>0 Contingent (N = 85) (N = 96) Valuation Useable (CV) 305 324 interviews 40.7% 51.3% WTP>0* Choice (N = 122) (N = 162) Experiment Useable (CE) 298 316 interviews * In CE respondents who chose at least one time not status quo. Benefits from LÖWE management — average willingness to pay per year Lüneburger Solling/ Heide Harz Contingent WTP per year 6.60 € 6.70 € Valuation (95%-intervall) (4.66 – 8.54) (4.60 – 8.81) (CV) Choice WTP per year 13.28 € 6.23 € Experiment (95%-intervall) (7.73 – 19.02) (3.61 – 8.98) (CE) Similarity between both methods in Solling/Harz region is partly due to the effect that the attribute „Forest stand structure“ is not significant and therefore not recognised in WTP calculation. Cost-benefit analysis – input data I Forest area LH 357,000 ha only Solling 45,700 ha Opportunity costs LH € 43.1/ha/year Financial losses of forest owners – only Solling € 57.8/ha/year profit versus LÖWE Time period costs 40 years are taken into account Cost-benefit analysis – input data II Benefits per year LH – CV € 7,052,000 LH: 1.02 million HHs LH – CE € 14,957,109 SH: 1.22 million HHs S – CV € 2,593,400 (HH = respondent) S – CE € 2,265,122 Time period a) 10 years (median from survey) benefits are taken b) 40 years (equal to costs) into account Discount rate 2 % Cost-benefit analysis Lüneburger Heide 2,0 CV – 10 years 1,8 CV – 40 years CE – 40 years 1,6 CE – 10 years 1,4 1,2 1,0 0,8 Benefit-cost ratio 0,6 0,4 0,2 0,0 0 5 1 1 2 2 3 3 0 00 50 00 50 00 50 ha Waldumbaufläche in 1.000 ha Forest area suitable for conversion KB_10 CE_10 KB_40 CE_40 Cost-benefit analysis Solling 2,0 1,8 CV – 40 years 1,6 1,4 CV – 10 years 1,2 1,0 NKV 0,8 Benefit-cost ratio 0,6 0,4 0,2 0,0 0 2,5 5,0 7,5 10,0 12,5 15,0 17,5 20,0 22,5 25,0 27,5 30,0 32,5 35,0 37,5 40,0 42,5 Waldumbaufläche in 1.000 ha Forest area suitable for conversion KB_10 KB_40 Sensitivity analysis Monte-Carlo simulation; costs and benefits can increase or decrease up to 20 % randomly and independently; benefit-cost ratio subsequently recalculated, 5000 repetitions 200 180 160 140 120 100 80 60 Number of BCRs 40 20 0 0,24 0,29 0,34 0,39 0,44 0,49 0,54 Benefit-cost ratio Lüneburger Heide, 150,000 ha; 2% discount rate; mean BCR = 0.36 Sensitivity analysis – selected results Benefits Area CBA Sensitivity analysis (ha) Discount rate 2% 0 % 2 % 4 % Lüneburger Benefit-cost ratio Heide CV_10 357.000 0,15 0,12 0,15 0,19 150.000 0,36 0,28 0,36 0,45 50.000 1,01 0,83 1,09 1,36 CE_10 357.000 0,32 0,25 0,32 0,40 150.000 0,76 0,59 0,77 0,96 50.000 2,27 1,76 2,32 2,87 Solling CV_10 45.700 0,32 0,25 0,33 0,41 30.000 0,49 0,38 0,50 0,62 15.000 0,98 0,76 0,99 1,24 Conclusions • People are WTP for enhancing biodiversity through forest conversion in both study regions • However, benefits do not cover all financial losses of forest owners on the whole suitable forest area • Conversion can only take place on smaller area • But management strategy LÖWE may lead to additional benefits (e.g., recreation) • Estimation of additional benefits is required to get a comprehensive CBA.
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