5. conclusions

The threshold values estimated in this paper demonstrate that the protection of the South Coast sub-region forests under the Current Commitments outcome investigated cause costs to the Australian community. These costs are the opportunity costs associated with the surpluses that could otherwise have been generated from forest extraction.

For the Current Commitments outcome, using the dynamic value model, the protection value thresholds (in the current year) of the forests which are proposed under that scenario for reservation range from $1485 to $3923 (mid point $2704). Decision makers must consider the likely magnitude of the forest protection values generated in the current year relative to their threshold values estimated here. The likely extent of these forest protection values have been put into some context through the use of the benefit transfer technique.

A parallel analysis of threshold values was not caried out for the Tumut sub-region. The forest management outcome in the sub-region provided gains in both forest proptection values and timber extraction values. In such a situation, the threshold value concept is inappropriate as there are no trade-offs for the community to choose between alternate value streams.

A number of caveats must be recognised in considering these results.

• The threshold values estimated have been subjected to some sensitivity analyses. It has been demonstrated that the estimates are sensitive to a number of parameters. The values of the parameters used for this analysis may vary outside the range of values specified. Hence, the actual values may differ from those reported here.
  
• The process of transferring benefit estimates from one study to another context can be problematic.
  
• The opportunity costs associated with the protection scenario is limited to those associated with the timber outputs of the forests under consideration.

Despite these caveats, the TVA process detailed in this report provides policy relevant information. The results produced embody information on the opportunity costs of forest protection and potential changes in value streams through time.

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