Evaluation of Forest Ecosystem Services (FES) in the Republic of Moldova

July 2015

This publication has been produced with the assistance of the European Union. The content, findings, interpretations, and con clusions of this publication are the sole responsibility of the FLEG II (ENPI East) Programme Team (www.enpi-fleg.org) and can in no way be taken to reflect the views of the European Union. The views expressed do not necessarily reflect those of the Implementin g Organizations.

Technical Report:

Evaluation of Forest Ecosystem Services (FES) in the Republic of Moldova

Prepared by:

Transilvania University of Bra ș ov (TUB) Faculty of Silviculture and Forest Engineering

The material in this publication is copyrighted. Any copying or transmitting portions of information without permission may be a violation of applicable law. The author encourages dissemination of this work and will normally grant permission to reproduce portions of this report.

The interest and willingness of Moldovan forestry and environment protection sectors as well as other key stakeholders to actively engage in collaboration with the Transilvania University of Brașov team on a diverse range of topics is gratefully acknowledged. We render thanks to all stakeholders from forestry, water management, agriculture, and tourism sectors as well as to local public administrations and academia who actively participated in consultations undertaken by the TUB Team in predicting the evolution of variables for the two alternative scenarios, collecting data and applying the valuation techniques.

Photos: Transilvania University of Brașov, ENPI FLEG

Design: Transilvania University of Brașov & Amedia

July 2015

TRANSILVANIA UNIVERSITY FROM BRASOV

FACULTY OF SILVICULTURE AND FOREST ENGINEERING
1 Sirul Beethoven - BRAŞOV 500123 www.unitbv.ro/silvic

Content

Introduction........................................................................................................................... 7 1. Snapshot on the forestry sector of Moldova ................................................................... 7
1.1. Forestry sector........................................................................................................ 7 1.2. Economic Impact of Forest Ecosystem Services (FES) ........................................ 12
2. Qualitative assessment of FES ....................................................................................... 13
2.1. Conceptual framework.............................................................................................. 13 2.2. Ecosystem services (ES) identification ..................................................................... 15 2.3. Brief description of ES that Moldovan forests provide............................................... 16
3. Benefits of FES to local communities .............................................................................. 22
3.1. Wood and NTFPs for rural communities ................................................................... 22 3.2. Carbon sequestration benefit as a FES ................................................................... 29 3.3. Landslides and floods prevention.............................................................................. 30 3.4. Cultural and recreational benefits for local communities from forest ......................... 31
4. Methodological aspects................................................................................................... 33
4.1. Sector Scenario Assessment (SSA) ......................................................................... 33 4.2. Targeted sectors and evidence of economic FES benefits ....................................... 37 4.3. Management scenarios design................................................................................. 39
5. BAU and SEM scenarios description............................................................................... 41
51. Business as Usual (BAU) .......................................................................................... 42 5.2. Sustainable Ecosystem Management (SEM)............................................................ 42 5.3. Sectoral description of BAU and SEM scenario ........................................................ 43
5.3.1. Tourism.............................................................................................................. 43 5.3.2. Forestry.............................................................................................................. 45 5.3.3. Agriculture.......................................................................................................... 47 5.3.4. Water management sector................................................................................. 49 5.3.5. Disaster risk reduction........................................................................................ 50
6. Monetary valuation of FES.............................................................................................. 51
6.1. Tourism .................................................................................................................... 51
6.1.1. Baseline value.................................................................................................... 51 6.1.2. FES value for tourism sector in BAU and SEM scenarios................................... 53
6.2. Agriculture ................................................................................................................ 56
6.2.1. Baseline value.................................................................................................... 56 6.2.2. FES value for agriculture sector in BAU and SEM scenarios.............................. 59
6.3. Forestry.................................................................................................................... 62
6.3.1. Baseline value.................................................................................................... 62 6.3.2. FES value for forestry sector in BAU and SEM scenarios .................................. 63
6.4. Domestic water supply sector................................................................................... 66
6.4.1. Baseline value.................................................................................................... 66 6.4.2. FES value for domestic water supply sector in BAU and SEM scenarios ........... 68
6.5. Natural disaster risk and climate change mitigation .................................................. 70
6.5.1. Baseline value.................................................................................................... 70 6.5.2. FES value for domestic water supply sector in BAU and SEM scenarios ........... 71
7. Payments for Ecosystem Services (PES) mechanisms................................................... 74 8. Conclusions .................................................................................................................... 77 9. Recommendations.......................................................................................................... 78 References ......................................................................................................................... 81

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TRANSILVANIA UNIVERSITY FROM BRASOV

FACULTY OF SILVICULTURE AND FOREST ENGINEERING
1 Sirul Beethoven - BRAŞOV 500123 www.unitbv.ro/silvic

List of figures

Figure 1: National Forest (NF) of the Republic of Moldova.................................................... 8 Figure 2: Species distribution in the Moldovan NF ................................................................ 9 Figure 3: People usually collect walnuts from trees and use them mainly for food or cashing on local markets.................................................................................................................. 17 Figure 4: Logs and branches gathered at felling site are meant primarily as fuelwood (Forest Enterprise Straseni, Moldsilva)............................................................................................ 18

Figure 5: Lake Beleu, the core area of the Nature Reserve “Prutul de Jos” (Moldsilva), is

home to a great biodiversity and provider of fish and water to local communities................ 18 Figure 6: Moldova is not a mushroom country, but many people collect them for personal use...................................................................................................................................... 19 Figure 7: Income shares by source for the three sample villages ........................................ 24 Figure 8: Frequency of forest product collection in the three sample villages...................... 25 Figure 9: Value share of forest products collection in the three sample villages .................. 25 Figure 10: Value for cash/subsistence for main forest products .......................................... 26 Figure 11: RFI over income quintiles – centralized results for the three sample villages ..... 27 Figure 12: Chopped wood of black locust (Robinia pseudoacacia) sold as energy wood, placed on a road market along with other stuff for construction (Chisinau city, 2014) ......... 28 Figure 13: Oak plantation created within carbon sequestration projects by Moldsilva.......... 30 Figure 14: The National Park Orhei – Curchi church and forest landscapes are important objectives of the touristic trail (http://www.cuvintul.md/article/2093/) .................................. 33 Figure 15: Overview on the SSA approach (Flores, 2012) .................................................. 34 Figure 16: Forest cover (%) in the Republic of Moldova...................................................... 50 Figure 17: Relationship between forest cover (%) and water treatment cost (Ernst, 2004).. 50 Figure 18: Tourism sector FES values in BAU scenario ($/years)....................................... 54 Figure 19: Tourism sector FES values in SEM scenario ($/years)....................................... 54 Figure 20: Eco-tourism FES value under BAU and SEM over 25 years ($) ......................... 55 Figure 21: Cumulative FES value of SEM over BAU in tourism sector ($ million)................ 56 Figure 22: C factor (Corine land cover) – vegetation coverage............................................ 57 Figure 23: Soil erosion estimation at country level using Terente (2008) formula................ 58 Figure 24: Agriculture sector FES values in BAU scenario ($/years)................................... 60 Figure 25: Agriculture sector FES values in SEM scenario ($/years)................................... 60 Figure 26: Agriculture FES value under BAU and SEM over 25 years ($) ........................... 61 Figure 27: Cumulative FES value of SEM over BAU in agriculture sector ($ millions) ......... 61 Figure 28: Forestry sector FES values in BAU scenario ($/years)....................................... 64 Figure 29: Forestry sector FES values in SEM scenario ($/years)....................................... 64 Figure 30: Forestry FES value under BAU and SEM over 25 years ($)............................... 65 Figure 31: Forestry FES value under BAU and SEM over 30 years ($)............................... 65 Figure 32: Relationship between forest coverage (%) and water treatment and distribution cost ($/1000 cubic meters) at rayon level (based on Ernst, 2004) ....................................... 66 Figure 33: Domestic water supply FES value under BAU and SEM over 25 years ($)......... 68 Figure 34: Water supply sector FES values in BAU scenario ($/years) ............................... 69 Figure 35: Water supply sector FES values in SEM scenario ($/years)............................... 69 Figure 36: Cumulative FES value of SEM over BAU in water supply sector ($ million)........ 70 Figure 37: Disaster risk FES value under BAU and SEM over 25 years ($)......................... 72 Figure 38: Carbon sequestration FES value under BAU and SEM over 25 years ($) .......... 73 Figure 39: FES beneficiaries in Tourism sector (cumulated values for 2014-2038, mill $)... 75 Figure 40: FES beneficiaries in domestic water supply sector (cumulated values for 2014- 2038, mill $) ........................................................................................................................ 75

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TRANSILVANIA UNIVERSITY FROM BRASOV

FACULTY OF SILVICULTURE AND FOREST ENGINEERING
1 Sirul Beethoven - BRAŞOV 500123 www.unitbv.ro/silvic

List of tables

Table 1: Potential Forest Ecosystems Services(FES) and links to productive sectors......... 14 Table 2: Results of the qualitative assessment of ES provided by forests ........................... 15 Table 3: Overview of how sectors benefit from FES and management challenges.............. 35 Table 4: Overview on how sectors benefit from ES............................................................. 38 Table 5: Indicators and valuation techniques ...................................................................... 40 Table 6: Comparing BAU and SEM – potential indicators ................................................... 40 Table 7: Key features for BAU and SEM scenarios for tourism sector................................. 44 Table 8: Key features for BAU and SEM scenarios for forestry ........................................... 46 Table 9: Key features for BAU and SEM scenarios for agriculture....................................... 48 Table 10: Baseline for FES – Tourism ($, 2014).................................................................. 53 Table 11: Baseline for FES – Agriculture ($, 2014) ............................................................. 59 Table 12: Baseline for FES – Forestry ($, 2014) ................................................................. 63 Table 13: Baseline for FES – Domestic water supply ($, 2014)........................................... 67 Table 14: Baseline for FES – Natural disasters ($, 2014).................................................... 71 Table 15: Baseline for FES – CO2 sequestration ($, 2014)................................................. 71 Table 16: Summary of FES valuation in SEM and BAU scenarios ...................................... 74 Table 17: Summary description of possible PES mechanisms for tourism and water supply sectors................................................................................................................................ 76

Abbreviations and acronyms

• AAC
• Annual Allowable Cut

• BAU
• Business as Usual

CIFOR CBD
Centre for International Forest Research Biodiversity Conservation Convention
ENPI FLEG European Neighbourhood and Partnership Instrument Forest Law
Enforcement and Governance

• ES
• Ecosystem Services

ESA EU
Ecosystem Services Approach European Union

• FE
• Forest Ecosystems

FES FMP GDP GHG IPCC IUCN LPA LULUCF MDL MP
Forest Ecosystem Services Forest Management Plan Gross Domestic Product Green House Gases Intergovernmental Panel on Climate Change International Union for Conservation of Nature Local Public Administration Land Use, Land Use Change and Forestry Moldavian currency Protected Area Management Plan National Biodiversity Strategy and Action Plan National Ecological Fund
NBSAP NEF

• NF
• National Forest

NGO NPV NTB
Non-Governmental Organization Net Present Value Nature Based Tourism

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TRANSILVANIA UNIVERSITY FROM BRASOV

FACULTY OF SILVICULTURE AND FOREST ENGINEERING
1 Sirul Beethoven - BRAŞOV 500123 www.unitbv.ro/silvic

NTFP PA
Non timber forest products Protected Area
PEN PES PV
Poverty Environment Network Payment for Ecosystem Services Present Value

• RFI
• Relative forest income

SEM SRF SSA TUB UNDP VAT WTP $
Sustainable Ecosystem Management Short Rotation Forestry Sector Scenario Analysis

Transilvania University of Brașov

United Nations Development Programme Value Added Tax Willingness to Pay United States Dollar

6

TRANSILVANIA UNIVERSITY FROM BRASOV

FACULTY OF SILVICULTURE AND FOREST ENGINEERING
1 Sirul Beethoven - BRAŞOV 500123 www.unitbv.ro/silvic

Introduction

This report, prepared by the Transilvania University of Brasov, offers an analysis of the Forest Ecosystem Services (FES) in the Republic of Moldova. The study is based on existing information and data of Moldovan economy sectors relevant to forests, findings from meetings and discussion with Moldovan institutions responsible for forestry, results of background studies undertaken during the implementation of both phases of the ENPI FLEG Program, and materials from other projects and initiatives in the Republic of Moldova. This work includes also FES approach and experience of other countries.