project summary

This report describes a project undertaken as part of the comprehensive regional assessments of forests in New South Wales. The comprehensive regional assessments (CRAs) provide the scientific basis on which the State and Commonwealth Governments will sign regional forest agreements (RFAs) for major forest areas of New South Wales. These agreements will determine the future of these forests, providing a balance between conservation and ecologically sustainable use of forest resources.

Project objective/s

This project aims to:

• provide information on the non-use values associated with forest areas
  
• provide estimates of the threshold values associated with forest reservation for the Southern CRA
  
• provide an indicative breakdown of these economic benefits into “use” and “non-use” values components

Methods

The TVA is consistent with the notions of economic efficiency that underpin benefit cost analysis (BCA). In TVA however, the benefits of forest protection are not estimated. The BCA logic is thus converted to a threshold value logic. The decision rational under TVA is:

“dedicate the forest reserves if the decision makers believe that the benefits to society from their protection exceed the estimated benefits derived from extractive uses of those forests that are foregone.”

TVA therefore involves the estimation of the foregone extractive benefits of the forest area proposed for reservation and the setting of that estimate in a format that is useful to decision makers

The analysis contained in this report has two basic components. These include a “static” threshold value analysis and a “dynamic” threshold value analysis. The static TVA is the basic form of TVA under which the foregone extractive benefits of the forest areas being considered for reservation are estimated. Although the dynamic analysis is based on the fundamentals of static TVA, the dynamic TVA takes into account the potential for streams of benefits from forest protection and forest extraction to change asymmetrically overtime.

Results

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.

Previous page | Contents | Next page