Economic Effects of Forest Decline Due to Air Pollution. Study of the Literature Concerning Methods and Results

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W O R K I N G P A P E R

ECONOMIC EFFECTS OF FOREST DECLINE DUE TO AIR POLLUTION. STUDY OF THE LITERATURE CONCERNING METHODS AND RESULTS

Aino-Ma rjatta Metz

October 1988 WP-88-100

I n t e r n a t i o n a l I n s t i t u t e for Applied Systems Analysis

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ECONOMIC EFFECTS OF FOREST DECLINE DUE TO AIR POLLUTION. STUDY OF THE LITERATURE CONCERNING METHODS AND RESULTS

Aino-Marjatta Metz

October 1988 WP-88-100

Working Papere are interim reports on work of the International Institute for

Applied Systems Analysis and have received only limited review. Views or opinions expressed herein do not necessarily represent those of the Institute or of its National Member Organizations.

INTERNATIONAL INSTITUTE FOR APPLIED SYSTEMS ANALYSIS

A-2361 Laxenburg, Austria

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About the Author

Dr. Aino-Marjatta Metz i s

a

consultant in f o r e s t r y , living in Munich, FRG. Her in- terests include economic a s p e c t s of environmental and f o r e s t damage. f o r e s t policy and management as w e l l as timber economics. Her address i s Lindauer S t r a s s e 7 , D-8000 Munich 83, FRG.

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Preface

One of t h e greatest potential economic e f f e c t s of air pollution and regional acidification i s t h a t on f o r e s t s . The Regional Acidification INformation and Simulation (RAINS) model developed by t h i s P r o j e c t h a s submodels dealing with t h e acidification of f o r e s t soil and of d i r e c t e f f e c t s of S O Z on f o r e s t vegetation. This l i t e r a t u r e survey, financed primarily by HAPRO, t h e Finnish Research P r o j e c t on Acidifica- tion, t a k e s a n important f i r s t s t e p in examining t h e methodologies f o r evaluating t h e economic e f f e c t s of a i r pollution on f o r e s t s , and gives some preliminary estimate f o r t h r e e European countries. I t i s possible t h a t , in t h e f u t u r e , predictions of biochemical e f f e t s by environmental models such as RAINS will b e linked with economic d a t a t o give predictions of t h e economic e f f e c t s of regional a i r pollution.

Roderick W. Shaw Leader

Acid Rain P r o j e c t

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The f i r s t discussions about man's disturbance of t h e environment were made in t h e lQ5O's. Some national economists point out t h a t t h e c r i s e s in f o r e s t r y also demon-

strates

a crises of t h e economy in t h a t t h e high value of

our

ecological r e s o u r c e s h a v e not b e e n taken into account by mankind. The reawakened i n t e r e s t of t h e national economists with r e g a r d

to

f o r e s t r y and timber economics as a p a r t of t h e en- vfronrnental economy i s a welcome and important development. However. i t i s sometimes difficult f o r t h e national economists and t h e f o r e s t e r s

to

understand each o t h e r . The national economists are used

to

thinking in t h e l a r g e r context of t h e total economy. In c o n t r a s t , t h e f o r e s t e r s often c o n c e n t r a t e on problems of t h e i r individual e n t e r p r i s e s . However, t h e c r i s i s of f o r e s t r y damage demands t h a t t h e disciplines of f o r e s t r y and national economy both become more involved with e a c h o t h e r , especially in dealing with t h e problems due

to

novel f o r e s t decline from a i r pollution. Political decisions should b e based not only on f o r e s t economic f a c t o r s but a l s o on national economic f a c t o r s .

In t h e 1980's, many studies in t h e European countries have been published about t h e economic e f f e c t s in f o r e s t r y due

to

a i r pollution. They c a n b e divided from t h e economic point of view into t h r e e categories:

1. National economic studies in different countries;

2. Forest economic studies f o r individual e n t e r p r i s e s ; and 3. Timber economic studies.

The national economic studies v a r y due t o t h e different national s t r u c t u r e of f o r e s t r y in each country. For example, in t h e Federal Republic of Germany, t h e r e c r e a t i o n function h a s a high value. In Switzerland, t h e protection function against mountain t o r r e n t s and avalanches gives r i s e t o l a r g e estimates of t h e c o s t s of f o r e s t decline, and in Austria tourism and timber production are especially im- p o r t a n t .

Tcrble I summarizes t h e estimated total

costs

(in round numbers) of f o r e s t decline d u e

to

a i r pollution, divided in use-sectors in FRG and Switzerland. In t h e Federal Republic of Germany (Ewers

st

d . , 1986). t h e total monetary damage w a s evaluated f o r a time period of 77 y e a r s (1983-2060), and t h e additional residual damage taking into account r e c o v e r y was calculated f o r

an

equal time period resulting a f t e r 2060. The damage in t h e FRG

was

divided into t h r e e subsections.

The f o r e s t r y subsection includes, f o r example,

an

estimate of t h e loss of growing s t o c k , difference in stand value,

costs

^due

to

c u l t u r e and conversion, management a n d fertilizing costs. The r e c r e a t i o n subsection includes, f o r example, loss of use by local and distant visitors,

loss

of optimal utilization and income loss in t h e tourism economy. In t h e

water

and soil subsection, changes due

to

f o r e s t damage in t h e e x t e n t , in temporal distribution and quality of t h e run-off from f o r e s t e d catchment a r e a s ; in addition, possible damage in t h e a r e a of soil erosion and increased avalanche d a n g e r h a s

to

b e considered.

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^vii

-

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Table

L

Estimated total monetary damage in t h e Federal Republic of Germany (2%

discount

rate,

from Trend-Scenario

to

Status-quMcenario; and in Switzerland in

DM

p e r total f o r e s t a r e a and

DM

p e r inhabitant. (All d a t a rounded.)

lXi/ha LMI/ihhabitant

Federal Republic

~ s n d i

s t a t u s - q u o 2

wend2

~ t c r t u s - q z ~ o ~ Q t G f - - n ~ Scencrtio S c e n a r i o S c e n a r i o S c e n a r i o

Forestry 11000

-

¹⁶⁰⁰⁰ ¹⁴⁰⁰

-

¹⁹⁰⁰

Recreation & leisure 15000

-

³⁰⁰⁰⁰ ¹⁸⁰⁰

-

³⁵⁰⁰

Water

& soil 1500

-

²⁵⁰⁰ ¹⁸⁰

-

³⁰⁰

Total 28000

-

⁵⁰⁰⁰⁰ ³⁰⁰⁰

-

⁶⁰⁰⁰

Forestry

Protection (against mountain t o r r e n t s and avalanches) Additional damages

Total

1. Trend scenario. Reduction of SO, with 40% and NO, with 30% until 1991. From 1991 to 2060 emissions will reach 25% SO, or 35% NO, to t h e level a t t h e beginning of 1sSO's.

2. S t a t u s q u o scenario. A level of emissions was assumed which oorresponds to the level a t t h e beginning of 1980's.

In Switzerland (Basler

et

a l . , 1986), on one hand, t h e total d i r e c t costs due t o f o r e s t decline a r e calculated f o r a time period from 20 t o 40 years. On t h e o t h e r hand, costs f o r measures and adaption concerning different economic s e c t o r s and inhabitants will result f r o m increased natural dangers. These costs a r e described in a form of employment and f a c t o r income losses, which will mainly b e taken c a r e of by e n t e r p r i s e s and private persons. The income losses in different economic sectors cannot b e directly compared with t h e damage costs mentioned above because of a limited time period of interpretation. The income losses can only partly b e understood as a negative e f f e c t s affecting t h e different branches o r regions.

In Switzerland, t h e d i r e c t costs of f o r e s t damage are described in t h e subsections f o r f o r e s t r y , protection against natural danger and additional

costs

like damages

to

people and buildings due

to

increased natural danger.

In Austria, only annual total monetary damages could b e calculated. In t h e f i r s t published study in Austria (Schiinstein and Schiirner, 1985) t h e monetary damage due

to

air pollution includes t h a t on f o r e s t r y involving, f o r example, loss of growing stock

,

additional costs in conversion and cultural measures, management and fertilizing costs,

etc.

The possible costs of protection against mountain t o r r e n t s and avalanches are also included. Loss of tax income i s also estimated, but t h e importance of t h e recreation function has not been evaluated. In

a

m o r e r e c e n t national economic study in Austria (Puwein, 1987) t h e value of tourism and r e c r e a t i o n i s included resulting in higher costs due

to

f o r e s t decline than was calculated in t h e e a r l y study of Schiinstein and Schiirner (1985).

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-

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In Austria, t h e total evaluated annual monetary damage would b e around 0.64 milliard

DM

according

to

t h e 1985 study and about 3 milliard

DM

in t h e 1987 study.

In Switzerland, t h e annual damage v a r i e s from 2.2

to

1.5 milliard

DM.

In t h e Federal Republic of Germany, t h e annual monetary damage v a r i e s from 5.5 t o 8.8 milliard DM under t h e assumption of a discount rate of 2%. Expressed in percen- t a g e of t o t a l g r o s s national product t h e estimated monetary damages v a r y in t h e s e t h r e e w u n t r i e s from 0.3

to

1.5%; a n a v e r a g e of 0.6

to

0.7%.

The total monetary damage depends on t h e assumed discount

rate.

In Switzer- land, t h e a u t h o r s used 0%. In t h i s case t h e residual damage was not added. In t h e Federal Republic of Germany, discount

rates

in t h e r a n g e of 0, 1, 2 and 3% were used. In t h i s case t h e choice of t h e discount

rate

and the assumption of t h e monetary damage w a s l e f t open also

to

t h e decision-makers. Using a discount

rate

t h e time component of f o r e s t decline will b e considered. The c o s t s of f o r e s t damage in different y e a r s will b e determined with a

rate

of i n t e r e s t

set

down. Ewers

et

al.

(1986) mentioned as r e a l i s t i c t h e so-called real discount

rate

in a n amount of 2%;

r e a l discount

rate

means t h e difference between t h e nominal i n t e r e s t and t h e infla- tion rate. However, in t h e case of s e v e r e environmental damage a discount

rate

of 0% should b e applied, since t h e value of t h e environment in t h e f u t u r e i s

to

b e valued t o b e as high as t h e p r e s e n t .

Although t h e national economic e f f e c t of f o r e s t decline would not b e catas- t r o p h i c , t h e e f f e c t s of f o r e s t decline on small e n t e r p r i s e s c a n b e devastating. The growing stock and t h e annual growth increment of trees will b e reduced. The in- c r e a s e of c o s t s in f o r e s t r y and f o r e s t management will b e considerable. The public will b e m o r e obligated

to

s u p p o r t t h e f o r e s t r y .

The development of t h e timber market cannot b e predicted f o r a long period.

All studies p r e d i c t a n increased timber supply and a fall fn timber p r i c e in t h e n e a r f u t u r e as a r e s u l t of t h e damaged timber. However, a slight r e s t r u c t u r i n g in t h e field of export-import would result.

Although t h e monetary evaluation of environmental and especially f o r e s t dam- a g e s h a s began, t h e r e are a number of theoretical, methodological and p r a c t i c a l problems t o solve. In t h e n e a r f u t u r e i t will b e essential

to

emphasize t h e impor- t a n c e of t h e benefit of protecting o u r environment.

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Acknowledgments

In a number of European countries since 1980 t h e monetary evaluation of environmental damages have enjoyed a n increasing i n t e r e s t by national and f o r e s t economists. In order

to

summarize and compare t h e methods and r e s u l t s of t h e s e publications t h i s study, owing

to

P. Kauppi's initiative and with financial s u p p o r t of HAPRO ( t h e Acidification P r o j e c t of t h e Ministry of Environment in Finland) w a s undertak- en. For t h i s r e a s o n t h e a u t h o r would like

to

thank P. Kauppi f o r his initiative and helpful attitude. The a u t h o r i s obligated

to

HAPRO f o r financing t h i s project. The a u t h o r i s also grateful

to

K. Kuusela, and S. Nilsson f o r t h e i r e x p e r t comments and especially t o P. Duinker and R. Shaw who carefully reviewed t h e p a p e r . The au- t h o r also e x p r e s s e s h e r thanks t o L. Cornelio and V. Hsiung who provided g r e a t help in typing t h e p a p e r .

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T a b l e o f C o n t e n t s

1. Introduction

1.1. Development of t h e f o r e s t decline situation 1.2. Possible causes of novel f o r e s t decline 1.3. P r e s e n t s t a t e of f o r e s t decline

2. Evaluation of t h e decline of t h e environment

2.1. The need f o r a more broadly-based anthropogenic environmental e t h i c

2.2. Ecology and economy

2.3. F o r e s t economy a n d national economy 3. Evaluation of f o r e s t decline

3.1. Monetary evaluations of f o r e s t decline in t h e Federal Republic of Germany

3.2. Monetary evaluations of f o r e s t decline in Austria 3.3. Monetary evaluations of f o r e s t decline in Switzerland 4. Conclusions

References Figures

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Economic Effects of Forest Decline Due to

Air

Pollution.

Study of the IAterature Concerning Yethods and Results.

A i n o - M a r j a t t a Metz

1. Introduction

Man h a s been f o r c e d

to

a c c e p t t h a t h e h a s endangered his own existence through his excessive demands on n a t u r e . The s h o r t a g e of n a t u r a l r e s o u r c e s f o r c e s him t o make difficult choices. Clean water h a s become scarcer. Air pollution causes human illnesses which, in t u r n , causes increased c o s t s f o r national economies. The situation with trees and t h e f o r e s t s is similar.

The monetarisation of benefits of n a t u r e , which up

to

now have been assumed

to

b e f r e e , h a s now begun. N e w methods of evaluation have been developed. Stu- dies have been c a r r i e d out on how t h e damage due t o pollution c a n b e evaluated in t e r m s of f o r e s t r y and f o r e s t economics and t h e i r different functions.

In t h e opinion of Schulz (1987) t h e r e h a s been t o o much discussion in t h e p a s t only about t h e c o s t s of environmental maintenance. This i s t h e wrong way of look- ing at t h e problem. The real point is t h e advantages t h a t can b e gained from protection of t h e environment. In t h e light of t h e damage

to

n a t u r e and p r o p e r t y which c a n b e avoided, environmental protection c a n yield benefits f o r o u r national economy. Environmental economists d o not demand t h a t all emissions should b e avoided but t h a t a measure of avoidance b e exercised in which t h e cost of t h e avoidance of t h e last unit of harmful substance i s just compensated f o r by t h e benefit of t h e avoidance. The advantage of a reduction in emissions is t h a t t h e damage resulting from emissions

can

b e avoided (Ewers

et

d . , 1986). This a t t i t u d e of a basic denominator of use instead of t h e e a r l i e r one of cost i s a new one and puts t h e evaluation of t h e measures enacted f o r t h e protection of t h e environment into a completely different light.

National economists have, f o r a long time, worked on t h e assumption t h a t na- t u r a l ecosystems are stable (Thoroe, 1984). Furthermore, f o r e s t economists were f a r from

a

comprehensive economic attitude and were intensively engaged with t h e i r management problems. They t h u s failed

to

consider t h e numerous e x t e r n a l e f f e c t s outside t h e i r business. A s t r o n g e r cooperation i s r e q u i r e d between national and f o r e s t economists since f o r e s t decline i s a n consequence of t h e modern economic p r o c e s s e s and i s contingent on economic considerations. Accordingly, political decisions must have a basis in f o r e s t r y and economics (Bonus, 1984). This r e q u i r e s , however, new ways of thinking

to

evaluate all t h e consequential costs t o t h e f o r e s t economy. Only in t h i s way can a basis b e found f o r justification of t h e benefits of conservational

measures.

This study c o n c e n t r a t e s on t h e published l i t e r a t u r e of t h r e e c e n t r a l European countries. In t h e Federal Republic of Germany, Austria and Switzerland, s e p a r a t e national economic evaluations of t h e e x t e n t of f o r e s t damage have been made. I t i s intended

to

look

at

t h e problem of economic environmental evaluation on t h e basis of published materials. Ethical principles and t h e development of man's attitude t o

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ecology will b e discussed. The relationship between ecology and economy will also b e looked

at

on t h e basis of published l i t e m t u r e . Finally r e f e r e n c e will b e made t o f o r e s t decline a n d i t s significance f o r t h e national economies of s o m e c e n t r a l Eu- r o p e a n countries. Mention w i l l also b e made of t h e significance of f o r e s t decline

to

individual e n t e r p r i s e s and

to

t h e timber economy, based on published materials.

The studies of t h e monetary evaluation of f o r e s t decline as a r e s u l t of a i r pollution will b e summarised in o r d e r

to

b e a b l e

to

p r e s e n t a concise picture.

1.1. Development of the forest decline situation

Different t y p e s of f o r e s t disease have been known since antiquity. Damage

to

t h e

trees

and f o r e s t s w a s f i r s t described in specialist f o r e s t l i t e r a t u r e in 1845 (Rettstadt cit. by Wentzel, 1985; 1987). About 140 y e a r s a g o Rettstadt described t h e 'sulfurous' acid and metal dust as t h e cause of t h e poisoning of f o r e s t s , people and animals. Smoke damage w a s f i r s t dealt with in t h e textbook 'Der Forstschutz' 1878 by P r o f e s s o r Richard He@. In addition, t h e book 'Damage

to

vegetation by smoke and t h e Upper Harz hut smoke damage' by P r o f e s s o r Julius von Schriider and chief f o r e s t o f f i c e r Carl Reup w a s published in Berlin 1883. The a u t h o r s in- vestigated 4500 h e c t a r e s of damaged f o r e s t , of which many hundreds of h e c t a r e s w e r e totally b a r e on t h e basis of visual evidence of t h e stock and on chemical nee- dle analysis divided into t h r e e c a t e g o r i e s of damage. A s a r e s u l t of t h i s investigation detailed maps of damage w e r e produced. The a u t h o r s s t r e s s e d t h e major im- p o r t a n c e of avoiding pollution of t h e a i r . They categorically r e j e c t e d t h e immedi-

ate

construction of h i g h e r chimney s t a c k s with t h e observation t h a t , 'in mountainous areas t h e smoke masses not only r e a c h e d t o t h e f o r e s t stands on t h e moun- t a i n slopes, b u t a l s o into t h e valleys where they mix with t h e l o w cloud and t h u s damage both

areas'

(Wentzel, 1985).

Ten y e a r s later t h e r e

were

f u r t h e r publications in which, among o t h e r things, Reup (cit. by Wentzel, 1985) showed t h a t a chronic emissions e f f e c t produced a s t r o n g e r susceptibility of t h e f o r e s t t o n a t u r a l dangers. Thus, approximately 100 y e a r s a g o t h e i n t e m c t i o n of weather conditions and p a r a s i t i c disease w a s established. His observations concerning mining and industry were however legally challenged, and Reup lost his case in t h e c o u r t s . In t h e 90 y e a r s following 1880, approximately 20 f u r t h e r monographs and textbooks d e a l t with t h e problem of emission damage. A s e a r l y as 1872, a textbook entitled 'Acid Rain' by P r o f e s s o r Robert August Smith a p p e a r e d in London (Wentzel, 1987), giving b i r t h

to

t h e w e l l known environmental term.

In more mountainous c o u n t r i e s such as Austria and Switzerland, c a t a s t r o p h i e s and f o r e s t destruction have been experienced f o r many y e a r s . R e p o r t s from Tirol claim that between 1750 and 1830 the f o r e s t destruction due

to

anthropogenic c a u s e s was v e r y high. On top of t h e damage cawed by

water

run-off. which w a s out of control, there w a s damage caused by avalanches. If 70Z of t h e avalanches r e c o r d e d in t h e land r e g i s t e r b r e a k away below t h e n a t u r a l t r e e l i n e , t h e i r triggering moment will

m e a n

a n anthropogenically caused destruction of t h e f o r e s t in t h e p r o t e c t i o n f o r e s t area (Jobst a n d Karl, 1984).

According

to

^Stolz⁽¹⁹⁸⁸⁾t h e p r e s e n t

state

of f o r e s t s cannot b e explained without r e f e r e n c e

to

historical f a c t s . In his opinion

it

is quite possible that t h e laymen c a n easily learn from positive o r negative p r i o r experience. In Switzer- land t h e floods of t h e 1830's made no significant improvement in t h e learning pro- cess concerning t h e protection of f o r e s t ; however, t h e flood c a t a s t r o p h e of 1868 gave r i s e

to

a public c o n c e r n which finally gave b i r t h

to

f e d e m l legislation on f o r e s t r y . Stolzms calculations show that t h e damage of 1868 amounted

to

^2.2Zof t h e

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net national product. The causes w e r e no s u r p r i s e t o t h e e x p e r t s who had much e a r l i e r drawn attention

to

t h e connection between the overexploitation of f o r e s t s and t h e dangers of runoff.

The over-exploitation in Swiss f o r e s t s w a s followed by afforestation and con- servation, and a trend

to

manage f o r e s t s on

too

small a scale. Just as this trend began

to

change as a r e s u l t of a change in f o r e s t policy, and t h e f o r e s t r y problems s e e m e d

to

b e solved, t h e f o r e s t economy began

to

b e threatened by f o r e s t damage due

to

pollutant emissions. This 'sudden' appearance i s seen by Stolz r a t h e r more

as

insidious; t h e analysis of t h e annual rings led

to

t h e assumption t h a t t h e level of harmful substances had. in t h e 1950's. already exceeded those limits beyond which t h e

trees

began

to

suffer damage.

The expression 'novel f o r e s t damage' has been introduced in t h e Federal Republic of Germany. According

to

t h e Forest Decline/Air Pollution Research Ad- visory Board

to

t h e Federal Ministry f o r Research and Technology, 'novel' describes t h e geographically widespread nature of t h e symptoms of damage

to

individual types of trees which almost simultaneously (i.e., wlthin only a few years) ap- p e a r on many types of

trees,

as w e l l as t h e rapid s p r e a d and chronic n a t u r e of t h e disease. In contrast, Wentzel (1987) maintains t h a t t h e widespread n a t u r e of t h e damage is, however, only new in t h e western p a r t of t h e l a r g e c e n t r a l European area. Research has revealed this simultaneous appearance on many species of trees f o r o v e r 100 y e a r s , and t h e chronic nature of such decline has been known even longer as c h a r a c t e r i s t i c of f o r e s t decline due

to

emissions. The following section briefly discusses f u r t h e r possible causes of novel f o r e s t decline.

1.2. Possible causes of novel forest decline

I t is widely recognized t h a t harmful substances in t h e a i r are t h e main cause of novel f o r e s t decline. The externally identifiable damage is so manifold and confus- ing t h a t i t i s difficult

to

form a complete picture of t h e phenomena. They vary according

to

t h e type of emission, weather, humidity, exposure, solar intensity, type of soil, altitude, tree species,

etc.

Articles about t h e possible causes of forest decline have, f o r example, been published by Prinz (1987) and Krause et al. (1986).

According

to

Gesellschaft fiir Strahlen- und Umweltforschung (GSF) (Anon., 1987) one can distinguish, f o r example, between t h e following hypotheses, which have been only partly confirmed:

acidification of t h e soil p hoto-ox idants

leaching nitrogen

stress hypothesis radioactivity triethyllead

halogenised hydrocarbons o t h e r organic compounds.

1 ) The acidification hypothesis i s maintained

m o s t

strongly a t t h e University of GZittingen in

the

FRG (Ulrich, 1981. 1983;

Matmer s t

d . , 1985). The extent of soil acidification depends upon t h e one hand on soil buffering capacity and on t h e other hand on t h e deposition of acid from the atmosphere. This leads

to

t h e mobili-

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sgtion of n u t r i e n t s which, due

to

reduced r o o t mass, are unavailable

to

plants and are washed out. Toxic aluminum ions are mobflised. This hypothesis a p p e a r s

to

b e valid f o r weakly buffered soils.

2) Photo-oxidant damage means d i r e c t damage

to

t h e p a r t of t h e plant above t h e ground s u r f a c e by gaseous or dissolved peroxide, whereby ozone a c t s as t h e indicator substance. Other peroxides

are

peroxyacetylnitrate (PAN) or H202.

Membrane damage and even n e c r o t i c s p o t s lead

to

s t r o n g e r washing o u t of t h e nu- t r i e n t elements from t h e needles and leaves. The photo-oxidant hypothesis h a s gained in importance and i s maintained f o r example by Krapfenbauer (1988a, b ) and Prinz (1985). In o r d e r

to

come

to

g r i p s with t h i s particularly difficult a s p e c t of a i r chemistry,

a

p r o j e c t g r o u p

set

up by t h e Bavaria S t a t e Ministry

to

r e s e a r c h t h e e f f e c t s of substances harmful-

to

t h e environment (PBWU) h a s developed t h e concept f o r t h e Alpine Research Center on Mountain Wank (Bayer. Staatsforst- verwaltung, 1987). The photo-oxidants hypothesis w a s intensively examined in la- b o r a t o r y and open-top chamber experiments. A clear conclusion i s still pending.

This hypothesis

seems to

b e p e r t i n e n t

to

t h e h i g h e r elevations of t h e c e n t r a l moun- tains and t h e Alps (Anon., 1987).

3 ) N o t only acidic precipitation, but also SO2, ozone and o t h e r peroxides, damages t h e o u t e r wax l a y e r of t h e needles and leads

to

membrane damage as w e l l as damage in t h e stoma. This gives r i s e

to

disturbance of transpiration, foodstuff losses and increased photosensitivity. This hypothesis i s supported, f o r example, by a t t l (1987) and Hiittl (1987). On acidic soil poor in nutrients, t h i s especially leads

to

calcium and magnesium deficiency, t h e o l d e r needles turning yellow and finally dropping off. This hypothesis c a n b e combined with t h e previous one.

4) The nitrogen hypothesis i s based on t h e fertilization e f f e c t of constantly increasing NO, emissions. A s a consequence t h e r e i s a noticeable increased- growth e f f e c t in t h e t r e e s ; however, on t h e o t h e r hand, deficiencies develop in o t h e r n u t r i e n t s such as calcium, magnesium and phosphorous. Susceptibility

to

in- s e c t s i n c r e a s e s and t h e trees become more p r o n e

to

f r o s t damage (e.g., Rehfuss, 1983). Changes in t h e nitrogen conversion in t h e ground c a n lead

to

acidification and more s e r i o u s washing o u t of elements. In p a r t i c u l a r NO, c a n b e damaging

to

plants in t w o d i f f e r e n t ways in connection with o t h e r substances: (1) when t o g e t h e r with SO2 t h e synergistic damaging e f f e c t i s increased; (2) NO, are necessary initial products in t h e formation of ozones (Nieplein and Voss, 1985). Conclusive experi- mental evidence h a s not y e t been produced f o r t h i s thesis.

5 ) The stress hypothesis attempts

to

show t h a t t h e different levels of harmful substances in t h e a i r provide t h e basis f o r t h e reduction in photosynthesis p e r f o r - mance a n d assimilate t r a n s p o r t a t i o n in t h e

roots.

Thus, t h e whole e n e r g y balance i s changed and t h e r e i s also a reduced production of p r o t e c t i v e substances by t h e plants. The susceptibility

to

f u r t h e r

stress

f a c t o r s i s raised.

6) According

to

some r e p o r t s , f o r e s t areas n e a r nuclear power stations display a h i g h e r g r a d e of damage t h a n s t o c k s located

at

a g r e a t e r distance. How- e v e r , t h e role of radioactivity h a s not been proven in any

case

(Bundesamt fiir E d m n g and Forstwirtschaft, 1987). This hypothesis h a s alsa been r e f u t e d in t h e studies of Hiittermann (1987) and S c h e p f e r (1987).

7 ) Tetraethyllead i s mixed into leaded p e t r o l

as

a n anti-knock agent. I t i s c o n v e r t e d through t h e burning p r o c e s s or via

U.V.

light into triethyllead which i s toxic

to

plants. Since t h e concentration of triethyllead remains below t h e limits of toxicity, t h e r e i s n o proof of accumulation in plants.

8 ) The hypothesis concerning t h e e f f e c t s through halogenised hydrocarbons h a s also not y e t been confirmed.

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9 ) Organic chemicals are emitted in l a r g e quantities. I t i s suspected t h a t among t h e s e substances t h e r e are some compounds which are damaging

to

plants.

This hypothesis i s undergoing intensive investigation, f o r example, in Bavaria.

The causal a g e n t s of f o r e s t decline can b e f u r t h e r divided into d i r e c t and in- d i r e c t . To t h e f o r m e r belongs a i r pollution in t h e form of SO2, NO,, photo- oxidants, acidic precipitation, heavy metals, and organic oomponnds. lllso

to

b e included in the d i r e c t a g e n t s

are

t h e increasingly influential flnorohydrogens, and t h e cumulative e f f e c t s of different a i r pollutants (Bundesamt fiir Erniihrung und F o r s b i x t s u h a f t , 1987). Under t h e indirect influences w e can find e f f e c t s above t h e ground, changed element content in t h e o r g a n s of t h e plant, and fine s t r u c t u r a l changes in t h e needles and leaves. To t h e s e w e must also add the changed f a c t o r s f o r natural r e g e n e r a t i o n such

as

susceptibility

to stress.

Other influences damag- ing

to

t h e f o r e s t

are to

b e s e e n in t h e biotic, climatic, and silvicultural influences.

To t h e last-mentioned belong t h e overstocking a n d over-aging of f o r e s t growing stocks, which are p a r t l y

to

b e s e e n as a problem of t h e c e n t r a l European f o r e s t s (on t h i s s u b j e c t see Kuusela, 1987a, b).

In Austria, discussions have been held on t h e s u b j e c t of t h e possible c a u s e s of f o r e s t decline within t h e framework of F'IW (Research initiative against f o r e s t decline). I t h a s been established t h a t t h e symptoms of f o r e s t decline are c o r r e l a t e d with a multiplicity of anthropogenic influences, ecosystemic reorganisation p r o c e s s e s and n a t u r a l environmental stresses. Investigations have revealed t h a t t h e o b s e r v e d o c c u r r e n c e s are not t h e same in e v e r y location, but r a t h e r t h a t t h e form of t h e o c c u r r e n c e of f o r e s t decline as well as i t s intensity are strongly dependent on local circumstances. A number of p r e - s t r e s s e s are a l s o mentioned, including removal of f o r e s t l i t t e r , f o r e s t pasturing, and stress d u e

to

hooved game.

The influence of f o r e s t use, building of f o r e s t r o a d s , and t h e v a s t building during t h e post-war y e a r s i s a l s o cited (Glatzel, 1987a. b). Weather stress i s cited as a c a u s e of f o r e s t decline in Austria whereby i t i s h a s been shown t h a t , in t h e last 30 y e a r s on t h e whole, d r y y e a r s have been more predominant t h a n in t h e previous 30 y e a r s (Richter, 1987). In summarising one can s a y t h a t main cause f o r t h e oc- c u r r e n c e of t h e novel f o r e s t decline h a s not y e t been identified. I t i s t o b e hoped t h a t t h i s f a c t will b e considered with t h e a p p r o p r i a t e

care

as long as measures

to restore

damaged f o r e s t stock and

to

p r e v e n t new f o r e s t damage are being sought.

1.3. Present state of forest decline

TPrble 2 p r e s e n t s basic d a t a such as

total

a r e a , f o r e s t a r e a , s t r u c t u r e of ownership and p e r c e n t division of coniferous and deciduous

trees

in

s o m e

c e n t r a l European countries. The g r o s s national product p e r inhabitant i s

also

featured. Table 2 p r e s e n t s t h e e x t e n t of damage p e r h e c t a r e shown in classes of damage (slight, moderate, a n d dying

or

dead) in

some

c e n t r a l European countries according

to

Kuusela (1987a). I t can b e s e e n from t h i s Information t h a t in 1986 54% of t h e f o r e s t area in Federal Republic of Germany, 1 0 2 in Austria, and 48% in Switzerland

w a s

damaged. Altogether in t h e s e countries 4,412 million h e c t a r e s w e r e damaged of which

s o m e

134,000 h e c t a r e s w e r e dying or dead.

Nilsson and Duinker (1987) have calculated t h e volume of damaged stands in cubic

m e t e r s

according

to

d e g r e e of damage of coniferous or deciduous growing s t o c k f o r c e n t r a l European countries. The a u t h o r s have a l s o calculated t h e r e l a - tionship between t h e decline and t h e growing stock and decline and the

annual

^fel- ling ratio. They have also shown t h a t particularly in Switzerland, Austria, and t h e F e d e r a l Republic of Germany t h e relationship of t h e decline

to

t h e growing stock

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T a b l e 1. Basic data of t h e Federal Republic of Germany, Austria and Switzerland.

F.R. G. A u s t r i a 53uttzerland Total area (million ha)

Forest

area

(million ha) Inhabitants (million)

Forest

area

(ha/inhabitant) S t a t e owned f o r e s t (X)

Corporation owned f o r e s t (X)

Private

f o r e s t (X)

Coniferous (X) Deciduous (X)

G.N.P. 1986 (DM/inhabitant)

T a b l e 2. Extent of f o r e s t damage due

to

a i r pollution in t h e Federal Republic of Germany, Austria and Switzerland (Source: Kuusela, 1987a).

Damage c l a s s ( i n llXW h a ) D y i n g o r

C o u n t r y Light Moderate dead Total

F.R.G. 2424 1163 111 3698

Austria 240 80 10 330

Switzerland 295 76 13 384

Total 2959 1319 134 4412

Proportion of' tot&

ezploitable closed forest

X

i s h i g h e r t h a n t h e a v e r a g e in Europe. This a l s o applies

to

t h e relationship of decline

to

t h e annual fellings in t h e countries mentioned. The d i v e r s e methods of keeping r e c o r d s in t h e different countries made a comparison between t h e coun- t r i e s r a t h e r tennous and led in some cases

to

a n under-estimation and in o t h e r cases to a n overestimation of t h e damage situation.

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2. Evaluation of the Decline of the Environment

2.1. The need for a more broadly-based anthropogenic environmental ethic Many scientists have concerned themselves with o u r anthropocentric conception of t h e world. The opinion has recently been voiced

m o r e

and more t h a t w e must begin

to

think in more complex interoonnections and t h a t o u r p a t t e r n of thinking must change, i.e., w e

m u s t

effect a paradigm change (Capra, 1983 cit. by Bucher, 1984;

Capra, 1986). Albert Schweizer formulated, quite radically, t h e independent right of Nature. 'Ethic i s t h e responsibility of unlimited extent f o r e v e m i n g t h a t lives'. This radical e t h i c supercedes any rational thinking of t h e industrial society; t h e r e is no economic imperative which has priority o v e r nature's right

to

Ufe. Nature's r i g h t

to

life i s only then a b l e

to

evolve when mankind develops a new intellectual relationship

to

t h e universe

to

conclude a n inner peace with nature (Reiche ei QL., 1987). Kafka (1988) w a s also concerned with t h e symptoms of decline of o u r world in his essay 'The l a w of ascent' wherein, however, h e sees no reason

to

give up t h e struggle against decline completely. According

to

him i t will b e possible with insight and judgment t o influence this decline. Bucher (1984) was of t h e same opinion. He stated t h a t f o r e s t decline could b e one of t h e signs of t h e high level of instability of o u r complex social system. This instability does not necessarily have to develop into chaos, but i t could and must lead

to

a change in o u r approach. In t h e opinion of Reiche

et

^aL.(1987) an economically based environmental protection plan would be morally strong, but would remain politically weak since i t could not prevail in a conflict with anthropocentrically based in-

terests.

A more widely-defined self-critical anthropocentrism would provide more effectiveness t o a n environmental policy. In t h e eyes of Fiihser (1987) f u r t h e r 'progress' i s only justified when, in t h e sense of 'doctrine of budgeting', i t s e r v e s in t h e broadest sense mankind, t h e environment, t h e present generation, and t h e following generation b e t t e r than previously. O u r technical potential s e e m s clearly

to

b e rushing way ahead of o u r cultural, social and moral abilities.

2.2. Ecology and economy

One of t h e f i r s t o r a c l e s of t h e threatening r i s e in social costs and t h e disturbance of t h e environment w a s Kapp (1979) in t h e y e a r 1950. Present experiences point

to

t h e f a c t t h a t w e need new concepts and solutions in o r d e r

to

stave ecological destruction, economic regression and social decline. Even in a liberal society where, according to Samuelson's maxim 'individuals preferences a r e

to

count', t h e r e is a duty

to

provide f o r f u t u r e generations (cit. by Hampicke, 1987). The ob- ligations

to

n a t u r e and t h e environment only find t h e i r limit where t h e

costs

are s o high that, in t h e light of t h e norms of inter-generational justioe, they become an unreasonable expectation of t h e present generation (Hampicke, 1987). The con-

certed

action of economy and ecology and vice-versa in t h e field of primary production

in

economic and ecological systems have

an

especially great significance f o r t h e practical economy. Although as f o r e s t e r s w e are used

to

treating n a t u r e and t h e f o r e s t as one ecological totality, because of t h e unsatisfactory knowledge of t h e infinitely complex network of connections and because of unrealistic, d e t e r - ministic linear empirical methods. w e are surprised again and again by t h e exceed- ing of limits, and sudden collapse of equilibrium. In contrast t h e economic viewpoint concentrates on t h e rationale of economic principle. The compatibility with n a t u r e depends strongly on whether t h e models f o r explanation and decision- making t h a t are used c o r r e c t l y p o r t r a y t h e connections with and within nature, and whether t h e economic aims r e s p e c t ecological limits (F'iihser, 1987).

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In t h e opinion of Bonus (1984) t h e f o r e s t c r i s i s demonstrates a c r i s i s of t h e economy. He concludes t h a t mankind h a s managed i t s ecological capital very inef- ficiently, and h a s squandered i t because i t failed

to

t a k e into account t h e high value of ecological

resources.

I t i s not t h a t

too

much economy h a s ruined o u r f o r e s t s , but r a t h e r

too

little; t h e same applies

to

o u r ecosystems: 'our industrial system is embedded in a

natural

ecosystem, i t s own existence depends on i t and this f a c t should have had i t s influence on every single everyday economic decision'.

In o r d e r

to

understand t h e connection between economy and ecology and vice-versa, one must briefly consider t h e t w o definitions. Economy r e f e r s

to a

sys-

t e m

of rules (nomus) which have been developed f o r expedient housekeeping (oikos

=

house). Ecology is t h e scienae (logos) of t h e relationships in Nature's house- hold. To achieve t h e necessary integration of t h e

t w o

terms one must try

to

find a general housekeeping/ budgetary doctrine ( F a s e r , 1987). The forgetfulness about Nature in t h e field of ecology, and on t h e o t h e r hand t h e economic naivety in natural science,

m u s t

b e eliminated. Thus, in t h e i n t e r e s t of f o r e s t economy, a n ecological market economy could arise from t h e f o r e s t crisis, a n economy in which t h e tension from economy and ecology are no longer suppressed, but is liberated and made economically productive (Bonus, 1984).

If one combines t h e two definitions of economy and ecology

to

form a charac- terization of budgeting, then

it

t r a n s p i r e s t h a t t h e budgetary doctrine h a s t h e aim of making use of materials, energy, information, and life so t h a t man's requirements can be satisfied, whilst maintaining t h e conditions of natural existence of t h e environment, t h e p r e s e n t generation, and f u t u r e generations. In mathematical terms this would b e a task of optimisation (Fiihser, 1987). which would b e compati- ble with o u r anthropocentric conception of t h e world. However, as has already been said, t h e new e t h i c would r e q u i r e t h a t t h e independent r i g h t s of n a t u r e b e set as a prediction. This would lead

to

a simpler new definition of budgeting; 'The budgeting doctrine has t h e aim of arranging material, energy, information and life in such a way t h a t t h e natural existence of t h e whole living community is per- manently ensured'. This, in t u r n , means t h a t t h e

test

c r i t e r i a of economic efficien- cy, environmental and social compatibility, and international acceptability will have a s t r o n g e r role

to

play in environmental and f o r e s t policy (Fiihser, 1987).

Hjerppe (1980) also draw attention

to

t h e international n a t u r e of environmental problems and t h e i r solution within t h e environmental economy.

2.3. Forest economy and national economy

Nobel prize-winner Samuelson (1976) observed o v e r t e n y e a r s ago t h a t 'ecologists know t h a t soil erosion and atmospheric quality

at

one spot on t h e globe may be sig- nificantly affected by whether o r not

trees are

being grown

at

s o m e distance away.

To t h e d e g r e e t h i s i s so, t h e simple Faustmann calculus and t h e bouncing's of t h e f u t u r e s c o n t r a c t s f o r plywood on t h e organised exchanges need

to

b e a l t e r e d in t h e i n t e r e s t s of t h e public'. The i n t e r e s t s of national economists in questions of f o r e s t r y and timber economics as part of t h e environmental economy is a welcome development. However, sometimes t h e r e

are

difficulties f o r t h e two p a r t i e s

to

understand e a c h o t h e r . The national economists, who

are

used

to

thinking in l a r g e r eontexts of t h e total economy, have ignored environmental problems f o r a long time. They assumed t h a t natural ecosystems

were

stable (Thoroe, 1984). On t h e o t h e r hand, f o r e s t economists have also laboured under false assumptions t h a t they could quietly continue

to

solve t h e i r individual e n t e r p r i s e problems with t h e i r

customary

long-standing methods,

also

with t h e observation t h a t t h e national economists would hardly a p p r e c i a t e t h e many-sided n a t u r e of t h e individual managerial and specialised problems. Thoroe (1985) found t h e reasons f o r t h e

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division between t h e national and f o r e s t economists in t h e i r economic analysis and evaluation

to

b e t h a t ; 'in t h e e y e s of t h e national economist i t i s t h e a t t i t u d e of concentration on t h e f o r e s t which led

to

a l a r g e e x t e n t

to an

ignorance of alterna- tives outside t h e f o r e s t sector and

also to

economically i n c o r r e c t conclusions in f o r e s t economy analysis. In t h e e y e s of t h e f o r e s t economist i t i s especially t h e narrow economic a t t i t u d e which w a s responsible f o r t h e reduction of t h e problem situation

to

a purely economic level and principles which made i t a p p e a r i r - r e l e v a n t

or

insignificant

to

national economic analysis based on competitive models of market economy'.

What changes would i t make if national economists t u r n e d t h e i r attention

to

t h e s u b j e c t of f o r e s t decline? Bonus (1984) s a y s t h a t t h e f o r e s t c r i s i s demands

that

both the disciplines of f o r e s t r y and national economy become more involved with e a c h o t h e r t h a n t h e y h a v e been up

to

now, especially. s i n c e f o r e s t decline i s a n (unintended and unforeseen) incidental consequence of m o d e r n economic p r o c e s s e s and i s also conditional on economic f a c t o r s ; and f o r t h i s r e a s o n political conclusions should not only b e based on f o r e s t economic f a c t o r s but also on national economic f a c t o r s . In t h e opinion of Wiebecke (1983), t h e national economies of all t h e countries affected in dl t h e i r p a r t s are concerned with t h e influence of f o r e s t damage. According

to

him f o r e s t policy i s r e q u i r e d as a p a r t of t h e national economy. On t h i s s u b j e c t Thoroe (1985) made t h e suggestion in t h e form of a licence solution. He s a y s t h e

state

h a s

to

decide politically, f i r s t of all, how l a r g e t h e minimum size of t h e f o r e s t area should be, and which protectional and r e c r e a - tional functions i t should perform. The state should not, however, f o r c e t h e f o r e s t owner

to

provide t h e s e services. Instead of this, a p p r o p r i a t e promissory docu- ments would b e issued which would impose on t h e owner t h e operation of p a r t i c u l a r f o r e s t a r e a s , o r , requiring t h e i r availability f o r protection or r e c r e a t i o n a l pur- poses. The f o r e s t owners could buy or sell t h e s e licences according

to

t h e e x t e n t of t h e i r intended activities. However, in t h e opinion of some f o r e s t economists t h i s i s not a v e r y r e a l i s t i c suggestion to solve t h e difficult problems in f o r e s t r y .

The s t r o n g e r consideration which i s given

to

t h e f o r e s t economy by t h e national economy i s c h a r a c t e r i s e d by t w o f a c t o r s : on t h e one hand t h e p r o f i t of t h e f o r e s t i s moved more and more from t h e p r i v a t e

to

t h e public s e c t o r , and t h u s becomes e x t e r n a l . An ever-increasing p a r t of t h e national economic revenue from t h e f o r e s t i s f o r t h e benefit of t h e community as

a

whole. On t h e o t h e r hand, following t h e t r e n d of rising s a l a r i e s , t h e growing costs have

to

b e c a r r i e d solely by t h e f o r e s t economy (Bonus, 1984). These e x t e r n a l e f f e c t s of timber production, from t h e point of view of t h e whole economy, must b e included in t h e calculations f o r any decision. From t h e point of view of t h e national economy t h e s e e x t e r n a l ef- f e c t s should b e c l e a r l y shown in models f o r f o r e s t economy decision-making

(Thoroe, 1985).

In t h e light of questionnaire r e s e a r c h in which i t was shown t h a t t h e population of t h e Federal Republic of Germany considered t h e e x t r a economic perfor- mance of the f o r e s t

to

b e f o u r and

a

half times more important t h a n timber production (Nieflein, 1983 cit. by Thoroe, 1985), t h e national economists question wheth-

er

t h e analyses and t h e models f o r decision-making f o r timber production can still form

a

basis f o r f o r e s t policy. In t h e context of f o r e s t damage t h e f o r e s t economy is f a c e d with

a

problem of t h e lasting changes

In

growth of the f o r e s t which t h e y

must

a l l o w f o r in t h e i r analyses a n d m o d e l s . This also applies

to

the changes in t h e behaviour of f o r e s t owners (Thoroe, 1985).

In the opinion of Fiihser (1987) a judgement about t h e rationality of economic management cannot b e made because,

to

d a t e , t h e r e i s hardly any d a t a about ecological, social, and

to a

c e r t a i n e x t e n t also economic costs which ensue, b u t which are not c o v e r e d by t h e classical perception of

costs

of independent e n t e r p r i s e s .

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In his opinion these missing costs are costs as a consequence of management.

These consequential costs can b e sub-divided into four categories (Leipert, 1984, cit. by Fiihser, 1987):

1 ) defensive expenditure f o r removal, reduction or prevention of t h e damage, 2) consequential c h a r g e s due

to

additional payments

to

insurers,

3) direct loss of production, income and assets,

4) real damage

to

human health,

to

t h e animal and plant world and

to

eaosystems,

etc.

According

to

Miiller-Wenk (1978), in o r d e r

to

internalise the consequential costs, a n 'ecological accounting' ie required. This should b e accompanied by a comprehensive, interconnecting, dynamic, and multidimensional concept. Such concepts were presented, f o r example, by Vester (1985, 1987). In his calculations h e showed, on t h e basis of the value of a

tree

and of a bird, how subjective econom- i c evaluation can be. The a v e r a g e timber value of a

tree

in t h e FRG, f o r example, is put a t 270 DM. In his comprehensive evaluation, a 50-year-old tree achieves an output value of 264,000 DM, without taking interest into account. The value of a bird was equally vividly presented.

In F5hserSs (1987) opinion i t is possible today

to

slowly extend t h e classical

tools

of business management with ecological and social information when t h e environmental compatibility (e.g., of pesticides) and t h e special compatibility of operational measures is closely examined. To this end t h e Council of t h e European Community has provided guidelines f o r t h e examination of environmental compatibility. Forest economy activity also has a r e g u l a r influence on t h e environment.

For t h e analysis of t h e ecological effect of projects t h e Council f o r Nature Conser- vation and Care of t h e Countryside a t t h e Ministry f o r Agriculture and Forestry suggests various methods such a s Delphi method, scenarios, graphic processes, tables of o r d e r of priority, utility-value analyses, and mathematical processes (Fiiihser, 1987). These processes have been increasingly used recently in o r d e r t o be able t o estimate t h e economic consequences of f o r e s t decline in terms of national, industrial and timber economies. In t h e next c h a p t e r s w e will look a t methods and presentation of results achieved in estimation of t h e economic consequences of f o r e s t decline in t h e above-mentioned areas.

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9. Evaluation of Pored Decline

American economists laid t h e foundation f o r economic evaluation in t h e 1970s. A t t h a t time extensive estimations were made concerning c o s t s of damage due t o a i r pollution. The monetary emphasis of t h e examination, however, t h e n lay on t h e damage

to

human health. Damage

to

vegetation w a s considered monetarily only in

Last

place a f t e r damage

to

buildings and materials. The same thing happened in t h e FRG. One of t h e f i r s t studies estimated in t h e y e a r 1977 t h e damage

to

materials, works of a r t , and buildings

at

a n amount of 3.2

to

4.2 milliard DM (Heinz, 1979 c i t . by Thoroe, 1984). The damage

to

vegetation w a s estimated

at

0.4 milliard DM. In a study in 1980 t h e damage due

to

a i r pollution

to

buildings and materials w a s estimated

at

3.35 milliard DM, t h e damage

to

health w a s

set at

4.5 milliard DM, and

to

vegetation

at

0.2 milliard DM (Gliick et d., 1982, cit. by Thoroe, 1984).

In r e c e n t y e a r s in t h e FRG, pioneer studies of t h e evaluation of environmental damage have been c a r r i e d out. In Austria and Switzerland, extensive economic investigations have a l s o b e e n c a r r i e d out. The s t r u c t u r e of t h e f o r e s t economy in t h e s e t h r e e c o u n t r i e s i s somewhat different. This leads

to

some differences in t h e national economic evaluation in e a c h country. For t h i s r e a s o n t h e s p h e r e s of in-

terest

which have committed themselves t o a n evaluation of t h e f o r e s t damage a r e v e r y diverse, and t h e translation of t h e studies into f o r e s t policy will b e motivated v e r y differently. The p u r p o s e of r e c r e a t i o n and tourism a r e , in conjunction with t h e utility function, extremely important in t h e s e t h r e e countries. The protective function of t h e f o r e s t i s equally significant in t h e s e t h r e e mountainous countries (in t h e FRG in t h e s o u t h e r n p a r t ) . I t i s a question of diversified and complicated problems of f o r e s t r y a n d society of which t h e evaluation and solution of new ways must b e sought. In o t h e r European countries, as in Poland (Owczarzak et al., 1987) and in Czechoslovakia (Stoklasa and Duinker, 1988), a beginning i s a l s o being made on t h e evaluation of f o r e s t damage. In t h e USA a l s o (Callaway et al., 1986a, b) and in Canada (Crocker and F o r s t e r , 1986) f o r e s t damage h a s been monetarily evaluated. In t h e last mentioned study account w a s t a k e n not only of t h e increment loss b u t a l s o of t h e importance of t h e wildlife and r e c r e a t i o n a l functions.

9.1. Monetary evaluations of forest decline in the Federal Republic of Germany

A s in t h e American a n d OECD studies in t h e 19701s, vegetation damage including f o r e s t damage i s rated much lower than damage in o t h e r areas (Thoroe, 1984; En- vironment and Economics, Vol. 11, OECD 1984 cit. by Juhasz, 1986). In addition, t h e s t a t i s t i c s concerning the f o r e s t have little scientific foundation. A s a r e s u l t , t h e f o r e s t economy h a s a s t r o n g need f o r in a c o r r e c t economic evaluation, especially as one can only make claims of damage with soundly based knowledge. Also, with substantiated knowledge t h e urgency of t h e environmental and f o r e s t policy meas-

ures

can t h e n be emphasised more strongly. However, t h e r e are d i v e r s e and diffi- c u l t problems in conducting t h e evaluation. The multiplicity of f o r e s t diseases, t h e long t u r n o v e r times, the complexity of ecosystems and t h e lack of knowledge about t h e development of d i s e a s e s are problematic enough. On t h e o t h e r hand, econom- i s t s demand

an

answer

to at

least two questions: how high

are

t h e increment losses due

to

a i r pollution, and how s e v e r e i s t h e damage

to

t h e f o r e s t stock in terms of f u t u r e utility? (Thoroe, 1984). Since one c a n r e f e r

to

t h e timber p r i c e as a basis f o r t h e evaluation of damage, i t will b e possible in t h i s

case to

make

at

least initial approximations of t h e losses

to

b e e x p r e s s e d in monetary terms.

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It is a different case when w e consider t h e protection, social welfare (in Aus- t r i a ) and recreational functions, especially when one wishes

to

evaluate t h e soil, fauna and flora affected by ecosystem damage. The climatic and water budgets

are

also influenced by advancing forest decline. Finally, t h e f o r e s t has a cultural and ethical value, too. A system of evaluation of forest damage due

to

a i r pollution had been worked

out

by

a

working group in t h e PRG (Brandl and Matthies, 1984). A model was designed in tabular form with a diagram of damage and damage components. The former includes total

or

p d a l loss of stands

as

w e l l as increment loss. The

Latter

i s divided into four main components. These

are

(a) individual forest stands, (b) soil, (c) total forest utilities, and (d) national economy.

Another working group studied t h e social function of t h e f o r e s t (Matthies, 1985). The following theoretically possible evaluations were considered: (1) from t h e point of view of t h e supply: expense and return, and (2) from t h e point of view of demand:

cost

and benefit. This

latter

r e f e r s

to

utility f o r t h e general public.

The possibilities mentioned

were

(a) reproduction and social costs, (b) replacement costs, (c) loss of use costs, and (d) utility value analysis based on data using a non-monetary scale.

In t h e FRG extensive studies have been carried out in t h e last few years

to

evaluate t h e utility of measures

to

improve t h e environment, some of which w e r e commissioned by t h e Ministry f o r t h e Environment (Heinz, 1980; Ewers and Schulz, 1982; Schulz (ed.), 1986; Schulz, 1987; Ewers

st

d . , 1986). The study of Ewers and Schulz (1982) is a work with a pioneering method about t h e monetary utility of measures t o improve water quality. The method already developed f o r evaluation of t h e use of measures

to

improve t h e environment was systematised and, more important, its practical application w a s tested on a concrete example, the Tegeler Lake in Berlin. Two new methods

to

evaluate leisure and recreational use were developed. The authors see t h e general results of t h e study

to

be that:

-

measures t o improve water quality can b e justified in t h e s a m e way as other infrastructural activities of t h e state,

-

this monetary justification of the use for leisure and recreational activities as w e l l as drinking water utilization will be of a higher and growing significance in t h e future,

-

_contrary

_{to a}

widely held attitude, t h e main problem of a monetary evaluation of measures

to

improve t h e environment lies less in t h e economic base data f o r evaluations of determinable effects than in t h e quantitative forecast of t h e effects themselves (development of

water

quality with or without measures, development of water utilization in dependence on t h e

water

quality).

Wicke (1986) provides five arguments f o r a monetarisation of forest damage:

a ) Rational environmental policy requires, in his opinion, t h e balancing of t h e a c m u n t s of all advantages and disadvantages of environmental protection.

The supporters of less environmental protection, with t h e i r knowledge of t h e

oosts

of environmental protection, can convince t h e opposite side.

b)

In

l i c k e ' s (1986) opinion i t is understandable t h a t economic cost estimations showing t h e socio-political dimensions of forest decline

are

presented

to the

public.

c ) Wicke sees i t as part of man's

nature

that h e only becomes careful with his be- longings when h e has

to

pay a n appropriate p r i c e f o r t h e i r use.

d) The money available f o r environmental protection must b e used effecWvely so that t h e highest benefit can be achieved.

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e ) In t h e context of disturbance of t h e environment, t h e gross national product gives a misleading picture of a very high standard of living. I t i s hoped

to

re- place this through a n extended national economic calculation which takes into account environmental damage and damage

to

health. This can only be t h e case when environmental damage can be measured in terms of money.

Wicke (1986) was t h e f i r s t

to

make a systematic estimation of all environment damage in t h e FRG. He presented a detailed 'Report on Ecological Damage in t h e

PRGa

based on new sound r e s e a r c h from home and

to

an extent from abroad which i s really a conservative interim balance sheet. The amount of t h e damage oalculat- ed (including f o r e s t damage) constitutes

m o r e

than 62 of t h e

GNP

of 1985. The sum in monetary terms i s

at

least 103.5 milliard DM/year (Wicke, 1986). This means a n o f t q u o t e d OECD estimation from t h e 1970's of 3-52 does not even r e f l e c t t h e lowest level of t h e environmental damage in t h e

FRG

(Schulz and Wicke, 1987). O r ,

to

put i t in o t h e r words, in t h e

PRG

in 1984 t h e economy and t h e

state

make ex- penses of, on average, approximately 20 milliard DM p e r y e a r available f o r t h e prevention of damage

to

t h e environment

to meet

requirements of o v e r 100 milliard DM p e r y e a r (Schulz and Wicke, 1988).

3.1.1. National economic evaluation of forest decline in the

PRG

A study on this subject has been published by Ewers et a l . (1986). This work has been r e f e r r e d

to

in many publications (Ewers, 1986; BrabSnder, 1987; Wicke, 1986; Schulz and Wicke, 1987, 1988; Anon., 1986).

Premises of v a l u e a n d e v a l u a t i o n methods

According t o Ewers et a l . (1986) t h e basic individual prejudice of t h e social wel- f a r e economy p u r p o r t s t h a t i t i s t h e individual citizens who decide t h e relevant values of t h e i r own t r a d e and o r d e r in society. This assumption means t h a t , f o r e v e r y monetary evaluation of environmental damage, t h e social evaluation i s t h e sum of individual evaluations. Many different arguments have been presented against this, including information problems, representation problems, neglect of f u t u r e generations, and distribution problems (distribution of available income).

This also gives r i s e

to

t h e problem of whether t h e individual evaluation is inter- p r e t e d as a 'willingness

to

pay' or 'willingness

to

sell'. Politically one should decide between willingness

to

pay and willingness

to

sell as a basis f o r monetary evaluation. Willingness

to

pay would mean t h a t you implicitly accord all environmental rights

to

t h e instigator of damage. Willingness

to

sell would mean t h a t you a c c o r d all environmental r i g h t s

to

t h e damaged p a r t y which would correspond with t h e causation principle. Accepting t h e s t a t u s quo of o u r environment as a basic point, t h e concept of willingness

to

pay can only b e seen in t h e sense of t h e causation principle, should i t b e a question of m e a s u r e s which imply a improvement of the statw-quo of

our

environment. In this

case

t h e people concerned should, in f a c t , b e questioned about t h e willingness

to

^pay,

or

t h e willingness

to

pay should be estimated indirectly. Should it, however, b e

a

question of

measures

which imply a deterioration of t h e

status

quo, then, in t h e sense of t h e causation principle, t h e willingness

to

sell must b e t h e basis of t h e evaluation (Ewers et d . , 1986).

The choice of t h e a p p r o p r i a t e method of evaluation depends not only on t h e level of information held by t h e population concerning t h e relevant damage, but also on t h e

t i m e

and t h e

oosts

which are available for t h e evaluation. I t must be mentioned in this context t h a t a n excellent compilation of t h e systematology of t h e