Cost-Benefit Analysis of Forestry Instruments

Abstract : Forests have been managed under the concept of multiple uses since the sixties. However, timber was supposed to pay for providing the non-market, ecological and social benefits. Today, in certain forests, non-timber products such as annual hunting fees dwarf timber income. In the future, non-timber ecological and social services could find markets also. We want to transit toward a more sustainable economic development. Should we speed up the transition process by offering public incentives to reward owners for providing goods and services for which they may not be rewarded financially today but for which a market could appear or be created in the future? A method for tailoring possible forest instruments for this transition period will be presented and the way to operationalize the method discussed. The method relies on the dual financial and economic analyses of forest investments.