Comparing opportunity cost measures of forest conservation in Uganda; implications for assessing the distributional impacts of forest management approaches

Citation

Bush G, Hanley N & Rondeau D (2011) Comparing opportunity cost measures of forest conservation in Uganda; implications for assessing the distributional impacts of forest management approaches. Stirling Economics Discussion Paper, 2011-12.

Abstract
Reducing deforestation and forest degradation will mean imposing restrictions on the use of forest resources by households that currently use natural forests to maintain their livelihoods. An emerging issue in forest monitoring is the need to assess social and economic impacts in forest user communities of alternative policy and management approaches. Implicit but often unrecognized in forest management strategies focused on integrating people into forest management is that communities are not homogeneous , implying an important degree of variation in the costs of forest use restrictions across households. Quantitative economic methods are essential to a robust measurement of the real socio-economic impacts of forest management and conservation programs, and to adequately design compensation packages to offset local costs. A key entry point to understanding the scope of impact in design of a forest management program, under conditions of local subsistence use, is assessing the minimum compensation necessary to incentivize forest conservation. Two principal valuation approaches exist, financial and economic. The latter measures both financial and social values; but which approach should we use? The selection of valuation approach can dramatically impact estimates of the compensation required to affect real change in forest conservation. Empirical evidence on the divergence of different value measures are presented for four case study forests under different governance arrangements in Uganda. A contingent valuation (CV) survey was administered alongside a market price (MP) method household survey for park-adjacent households. In the CV survey respondents were asked to state their minimum level of compensation required to forgo access to timber and non-timber forest products from their local protected area for a period of one year, whilst the MP survey estimated total annual household income from all sources e.g. agriculture, livestock and forest access. Data were collected from households in areas adjacent to the forests according to a stratified random sample (n=690). Distributional differences in forest income and welfare values are examined, to illustrate the strengths and weaknesses of different valuation approaches for estimating the benefits of forest use. We find that a range of complimentary conclusions can be drawn from the two techniques. Together, they provide contrasting information on the importance of forest income to heterogeneous rural households and they can help assess the potential effectiveness of alternative forest management strategies and governance arrangements.

Keywords
costs of conservation; protected areas; forest income; contingent valuation; Agricultural industries Environmental aspects Developing countries; Sustainable agriculture Developing countries; Forests and forestry Uganda

JEL codes

• O13: Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
• Q57: Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics; Industrial Ecology

• SEDP-2011-12-Bush-Hanley-Rondeau.pdf