Value and valuation of forest ecosystem services

Abstract

In this paper, we first present a total forest economic value framework from an anthropocentric instrumental value perspective and differentiate gross value, economic value, market value, and valuation of forest ecosystem services. We then argue that some of the demand-side-based non-market valuation approaches only provide an estimate of gross value, not economic value. Thus, strictly speaking, they are not market valuation per se as the supply side is ignored, and as many non-marketable and non-extractive forest ecosystem services are concerned, it is often the supply side – the opportunity costs of resources used to produce them that determine the economic values of these services. Finally, we identify the role of economic valuation of forest ecosystem services in the political market that often allocates resources directly to produce these services.

Keywords:

• total economic value framework
• forest ecosystems
• valuation
• market value
• use value
• political market

Acknowledgements

This paper was written when the primary author was visiting the Forest Economic Laboratory in Nancy, France, and was supported by a grant overseen by the French National Research Agency (ANR) as part of the “Investissements d'Avenir” program (ANR-11-LABX-0002-01, Lab of Excellence ARBRE) and Auburn University. The authors acknowledge comments received from Hyeongwoo Kim, Henry Thompson, Yaoqi Zhang, and two anonymous referees of this journal. The usual disclaimer applies.

Note

Notes

1. Human happiness is a subjective utility or a subjective measure of well-being, an ‘experienced utility’ (Kahneman, Wakker, and Sarin 1997) or a ‘life satisfaction approach’ (Veenhoven 1997). It is now an increasing concept in environmental economics and an alternative to monetary valuation of environmental issues like stated or revealed preferences (Welsch 2009).