Edited by David Pearce, Corin Pearce and Charles Palmer
W. Neil Adger, Katrina Brown, Raﬀaello Cervigni and Dominic Moran 1 INTRODUCTION Failure to account for the numerous functions and economic services of forests has led to patterns of global forest use with many detrimental environmental consequences. Indeed, the argument is often made that this failure to demonstrate economic values of the environment is at the heart of the systematic loss and degradation of the world’s ecosystems. However, demonstrating value is only one aspect of sustainable resource use. The institutional structures that make use of these values in resource allocation are the key to such sustainability (Vatn and Bromley, 1994). This chapter demonstrates the economic techniques for estimating the total economic value (TEV) of forests. For the Mexican forest estate, the results show an annual lower bound value of the services of the total forest area to be in the order of $4 billion (1994 prices). This aggregate value stems from the non-marketed services provided by non-consumptive use; from future potential uses of the genetic resources and from pure existence values; and the largest proportion of economic value coming from the functional values of hydrological and carbon cycling. However, only a proportion of this value can feasibly be ‘captured’ within Mexico: much of the beneﬁt of Mexico’s forests falls outside the country’s borders, and is therefore not considered by forest users or national policy makers. Consideration of non-market valuation illuminates the scale of economic distortions due to undervaluation and is a necessary condition for eﬃcient policy making....
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