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Environmental Valuation in Developed Countries

Case Studies

Edited by David Pearce

This is the second of two volumes of case studies that illustrate how environmental economists place values on environmental assets and on the flows of goods and services generated by those assets. This important book assembles studies that discuss broad areas of application of economic valuation – from amenity and pollution through to water and health risks, from forestry to green urban space. In this, his last book, the late David Pearce brought together leading European experts, contributors to some two dozen case studies exploring the frontiers of economic valuation of natural resources and environmental amenity in the developed world.
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Chapter 3: Costs and Benefits of UK Forestry Policy

Bob Crabtree


Bob Crabtree INTRODUCTION Forestry has been the subject of periodic cost–benefit analysis (CBA) in the UK. The first study was in 1972 (HM Treasury, 1972), a second in 1986 (National Audit Office, 1986), and a third in 1991 (Pearce, 1991). These appraisals and others have all demonstrated that timber produced in isolation from other public benefits gives a very low social return (Price, 1997). Even when market failure adjustments (land values, strategic issues, recreation and environment) have been included, it has proved very difficult to demonstrate a return approaching the test discount rate in any context. Despite the apparently weak economic case for intervention in forestry the Forestry Commission (2004a, 2004b) has continued to manage a public estate of 1.05 million hectares (which accounts for 29 per cent of all GB woodland) and a net expenditure of around £150 million per year on grant aid, regulation and research. The area of woodlands and forests is still expanding, with 12 456 hectares of new planting in GB in 2003–04. This chapter assesses more recent evidence on the benefits from forestry. It concentrates on Scotland and England, which together accounted for 96 per cent of new grant-aided planting in GB in 2004. POLICY Forestry policy was progressively devolved in the late 1990s, culminating in the Forestry Devolution Review (Forestry Commission, 2002). The Forestry Commission is the forestry department of three administrations – the UK government, the Scottish Executive and the National Assembly for Wales. Its aim...

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