Economic Valuation of Protection Forest

Background

The protection function of forests is of great importance in mountainous regions. In Switzerland, this function is officially recognized by the forest police law since 1876, including financial support for maintaining protection forest. From 1995 to 1999, the federal contribution to protection activities in forest areas added up to 120 million USD (incl. natural protection by forests, technical solutions and planning activities). After the severe winter storm ‘Lothar’ in 1999 payments increased to 150 million USD in the following four years. About 62% of this amount have been spent on forest maintenance, 35% on technical protection measures against avalanches, rockfalls and landslides, and the rest on planning activities (Schärer 2004).

Problem to be addressed

According to the Swiss guidelines „Forest Policy 2020“ one of the five major future challenges is to ensure the protection services of forests. Thus, maintaining forests to protect the population from natural hazards is a core forest policy task, and public financing will continue. In the NFA programme 2008-2012, about 58 million USD per year are budgeted for protection forest maintenance (BAFU 2008a).

According to the National Forest Inventory (NFI) about 111.000 ha are recognized as protection forest (9% of the overall Swiss forest area), while at the Canton level about 280.000 ha (23%) are declared as forests with specific protection function. Although a major part of this divergence is due to the fact that NFI mainly focusses on avalanche and rock fall processes (Duc et al. 2004), it is necessary to harmonize the criteria for determining protection forests. The FOEN project SilvaProtect-CH has the aim to develop the required basic principles for such a harmonization. A standard definition of ‚protection forest‘ has already been agreed upon: „Protection forest is a forest, which can protect a recognized damage potential against existing natural hazards or reduce the related risk.“ (BAFU 2008b).

In this regard the new strategy related to ‚payments for public (protection) services‘ reflects a paradigm shift: from cost-related, lumped estimations based on danger perimeters towards a utility-oriented, case-specific assessment based on integrated risk management. This approach comprises a systematic procedure within a cycle of preparedness, response and recovery (PLANAT) including risk analysis and assessment as well as planning activities. As a result, different types of assets to be protected can be captured and recorded in a standardized way (compare Wilhelm 1997). However, the described approaches mainly focus on the assessment of damage costs, while a plausible quantitative estimation of the resulting benefits generated by protection forests is often missing.

From the viewpoint of regulatory policy and economic allocation, important prerequisites for payments related to the provision of the public service ‚hazard protection‘ have to be fulfilled: (i) the service has to be defined clearly (What is a protection forest and what is its protective impact?), and (ii) the service has to be quantified (What is the benefit of the protective impact?). Based on this knowledge, costs and benefits of a protection forests can be compared (Olschewski et al. 2008)

Aim and Approach

The aim of the project ‚Economic Valuation of Protection Forest‘ is to quantify the costs and benefits of the avalanche protection function of forests, thereby contributing to a (risk-based) cost-benefit analysis.

Therefore, a three-step approach has been applied:

1. The study region and relevant protection forest areas have been determined. The decision depends on whether the local population is already aware of the danger and damage potential, and in how far this potential can be communicated to the population.
2. An economic analysis of alternative protection measures has been conducted. For this purpose relevant forest, technical and planning measures have been identified and their costs have been estimated. Further, risk scenarios and run-out zones of a possible avalanche event has been determined.
3. The benefits of protecting the population from avalanches have been determined. A choice experiment has been conducted to estimate the willingness to pay based on stated preferences of the local population.

Results

As case study region the village Andermatt has been selected. The specific protection function of the forest had already been recognized in 1397 and guaranteed by strict entry bans and restricted harvesting. Since 1874 reforestation activities led to an increase of the protection forest from originally 4 ha to 24 ha nowadays (Olschewski et al. 2011).

Based on a choice experiment, the willingness to pay for avalanche protection has been estimated. It is about 450 USD per household on average. This one-time (lump-sum) payment corresponds to the estimated average financial risk per household in case an extreme avalanche event takes place. This indicates that the local population is willing to bear a substantial part of the financial burden in order to be protected from avalanches. At the same time, it becomes clear that people are not willing to pay the entire amount for relative expensive alternative measures, such as steel bridges and nets. They rather prefer wooden constructions in combination with reforestation activities as adequate protection measures (Olschewski et al. 2012).

The preferable solution from an economic point of view is maintaining the existing forest, because by this means protection is provided at lowest costs. While this is desirable from the ecological point of view, too, the result crucially depends on whether avalanche protection can actually be ensured in the long run. Therefore, maintenance and silvicultural management should focus on both increasing effectiveness against avalanches as well as reducing vulnerability to heavy storm events. Furthermore, the early and steady regeneration of the forest is crucial for a fast re-establishment of the protection function in case a wind throw has taken place.

Application

The results have been presented and discussed on the occasion of the WSL-Jubilee-Event in Andermatt in January 2011. Further presentations have been given at ETH-Montagskolloquiums. A synthesis of the overall project has been published in the Swiss Forestry Journal (SZF-Schwerpunktnummer 11/2011).

The project was part of the overall project „Externalities of Forests in Switzerland“ and has been conducted within the framework of the European COST Action E45.

References

BAFU (Hrsg.) (2008a): Handbuch NFA im Umweltbereich. Mitteilung des BAFU als Vollzugsbehörde an Gesuchsteller. Umwelt-Vollzug Nr. 0808. Bundesamt für Umwelt, Bern. 283 S.

BAFU (2008b): Harmonisierung der Kriterien zur Schutzwaldausscheidung – Aktualisierter Synthesebericht zum Projekt SilvaProtect-CH Phase II. Bundesamt für Umwelt. 17 S.

Duc, P., Brändli, U.-B. & Brassel, P. (2004): Der Schutzwald im zweiten Schweizerischen Landesforstinventar (LFI2). In: Eidg. Forschungsanstalt WSL (Hrsg.) 2004: Schutzwald und Naturgefahren. Forum für Wissen 2004: 7-13.

Olschewski, R., Bebi, P., Grêt-Regamey, A. & Kräuchi, N. (2008): Wald und Klimawandel – Ansätze für eine ökonomische Bewertung. Schweizerische Zeitschrift für Forstwesen. 159(10): 374-380.

Olschewski, R., Bebi, P., Teich, M., Wissen Hayek, U. & Grêt-Regamey, A. (2011): Lawinenschutz durch Wälder - Methodik und Resultate einer Zahlungsbereitschaftsanalyse. Schweizerische Zeitschrift für Forstwesen. 162(11), 389-395.

Olschewski, R., Bebi, P., Teich, M., Wissen Hayek, U. & Grêt-Regamey, A. (2012): Avalanche protection by forests - A choice experiment in the Swiss Alps. Journal of Forest Policy and Economics. 15, 108-113.

PLANAT (Hrsg.) (2004): Vision und Strategie - Sicherheit vor Naturgefahren. Reihe 1/2004. 40S.

Schärer, W. (2004): Der Schutzwald und seine Bedeutung in der Waldpolitik des Bundes. In: Eidg. Forschungsanstalt WSL (Hrsg.) 2004: Schutzwald und Naturgefahren. Forum für Wissen 2004: 87-90.

Wilhelm, C. (1997): Wirtschaftlichkeit im Lawinenschutz. Mitt. Eidg. Institut Schnee- und Lawinenforschung, Nr. 54.