Edited by David Pearce
Chapter 3: Costs and Benefits of UK Forestry Policy
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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