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By Peter Bacon and Associates Sharon Finegan MSc Economic Policy Studies 2 nd December 2011.

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Presentation on theme: "By Peter Bacon and Associates Sharon Finegan MSc Economic Policy Studies 2 nd December 2011."— Presentation transcript:

1 by Peter Bacon and Associates Sharon Finegan MSc Economic Policy Studies 2 nd December 2011

2 Review and Analysis Structure 2 parts: Ex-post evaluation of the 1996 Strategic Plan for development of the Forestry Sector “Growing for the Future”. Forward looking piece which identifies the reforms required to achieve further progress.

3 Report covers 4 broad themes: Review of the existing strategy including a VFM review Examines some of the developments in the sector including non-timber benefits Identifies the impact of reform of the CAP Examines funding methods and structures

4 Ex-ante evaluation: what did the original strategy aim to achieve? Sets targets for increased planting Increased yields Greater mix of species New focus on environmental considerations Improving the attractiveness of forestry to farmers Improving some of the non-timer benefits to forestry Range of other issues including improved research, planning, education and training etc

5 Analysis of outcomes from 1996 Strategy Rate of afforestation has fallen short of the target  14,000 ha/yr compared with a target of 20,000 ha/yr Other shortcomings:  Species mix not achieved (impacting on commercial market viability)  Poor forest management Concludes that Govt investment in forestry should continue and is essential for the viability of the sector

6 1996 Strategy- further comments The report considers some of the reasons why the target was not reached and concludes that: “failure to adequately recognise and quantify the returns from non-timber benefits means that policy has not adequately supported the protection of the potential environmental and recreational benefits of forestry” (Page 120)

7 Non-timber benefits of forestry Chapter 4 1. Recreation and Leisure 2. Carbon Sequestration and Storage 3. Biodiversity 4. Landscape 5. Water supply and quality 6. Health * Will focus on the work done on the first three.

8 Non-timber benefits of forestry 1. Recreation and Leisure Deficiencies in the Irish data available Baseline data from UK model used- Willingness to Pay (WTP)- (use of UK data in Irish context must be done with caution) Estimate a WTP of €3.34 pp/ year for forests for recreation With approx 11 million visitors, this equates to €37.6 million per annum Entrance fee causes considerable behaviour changes, therefore forests must be available at low private cost

9 Non-timber benefits of forestry 2. Carbon Sequestration and Storage Approach outlined assumes that each tonne sequestered by forests will be a saving to the state. Sequestration, in theory, negates the need to purchase credits, by ‘sinking the carbon in the atmosphere’. Report estimates that sequestration will be worth between €38.8 and €51.7 million per annum However, no formal method of monetisation has emerged. As such, the savings being derived are theoretical, are based on a functioning accountancy system. The price of carbon is also crucial here.

10 Non-timber benefits of forestry 3. Biodiversity Methodology constructed using UK base-line data with WTP figures and applying them in Ireland. WTP question concerned with increasing the area of forest managed under four different standards Highest WTP was when forests were at their desired level of biodiversity- between 51.7 and 56.4 pence per year Analysis is dependent on what the alternative use of the land is- Interaction with REPS

11 Non-timber benefits of forestry Summary Report estimates a total value for non-timber goods in the forestry sector of €88.4 million per annum. Given the nature of these NTBs, it is argued that they present a compelling case for Govt intervention: non- excludable, non- rivalrous, and have a range of positive externalities. Authors recommend that the NTBs of forestry are highlighted and that additional data should be made available to support this.

12 Some Issues with the methodology In quantifying the non-timber benefits of forests, the analysis is carried out based on existing forests only Cost associated with new forests- not quantified- yet this is where it is likely to be applied for decision making Seems unlikely that all new forests would have all of these positive attributes- study could have usefully suggested how to include/ exclude based on individual circumstances Insufficient detail on potential costs for Non-timber activities


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