Runyon, K. L. (1995). Development of a Socio-Economic Impact Data Base with Emphasis on Non-Timber Outputs: A Case Study for the Fundy Model Forest. In M. Köhl, P. Bachmann, P. Brassel, & G. Preto (Eds.), The Monte Verità Conference on Forest Survey

4.5 Development of a Socio-Economic Impact Data Base with Emphasis on Non-Timber Outputs: A Case Study for the Fundy Model Forest

Kenneth L. Runyon

Abstract

This paper presents the objectives, approach and findings of a study to develop a socio­

economic impact data base with emphasis on non-timber outputs for the Fundy Model Forest in New Brunswick. The objectives of the study are to identify indicators, collect data, and identify information gaps and research needs. The approach includes develop­

ment of a decision framework, a natural resource account, a matrix of assets, and identification of input/output indicators. Results show that while there is considerable information on timber and related resources and outputs, there are a number of information gaps with respect to biodiversity, aesthetics, water, and their values.

Keywords: socio-economic, impacts, non-timber, values

4.5.1 Introduction

The Fundy Model Forest (FMF) located in southeastern New Brunswick is one of ten model forests in Canada established as part of the federal governments's Green Plan program (1990). The purpose of this program is to establish working models of sustainable forestry in the major forest regions of Canada. Each model forest is managed to provide a full range of user interests including timber, recreation, wildlife, biodiversity, water and so on. The Fundy Model Forest comprises some 420 000 ha with four principal landowner groups. These are: private woodlots (63% ), industry (17% ), provincial government (15% ), and national park (5% ). Management of the model forest is vested in the hands of 20 partners including landowners, naturalists, fish and game associations, professional forestry associations, and so on. The major challenge for this group is to develop an integrated or forest landscape management plan for the forest that will " ... demonstrate the ability to derive full economic potential from the forest resource while ensuring that its use and development is environmentally sound."

Economic benefits result from a variety of forest resources and outputs. Benefits from timber (sawlogs, pulpwood, poles) are perhaps the most obvious. Traditionally, these products have been traded in well-established markets and prices have been used as a proxy for their values. It is apparent, however, that many of the model forest's stakeholder wants are not traded or bought and sold in traditional markets. There are no markets for clean air, clean water, biodiversity, and a host of non-consumptive outputs. These are often referred to as extra-market, non-market, or unpriced goods (ADAMOWICZ 1992; SARKER and MCKENNEY 1992; SINDEN and WORRELL 1979). These non-timber outputs are nevertheless important and if they are to be accurately "weighted" in resource management planning decisions, there must be better information-outputs must be identified and to the extent possible, quantified and valued.

The purpose of this paper is to present the approach and findings of a study¹ to develop a socio- impact impact database with emphasis on non-timber outputs for the Fundy Model Forest.

4.5.2 Study Objectives

The principal objective of this study was to develop a database of the socio-economic impacts of the forest resources with emphasis on non-timber outputs for the Fundy Model Forest. Specific objectives were to:

a) identify relevant socio-economic impact indicators for a variety of outputs including timber and related market products (roundwood, chips, maple syrup, Christmas trees) and extra-market products such as recreation/tourism, wildlife, water, and so on;

b) develop a framework for collection, collation,and dissemination of data; and,

c) identify information gaps and research needs required in integrated resource management planning and decision making.

4.5.3 Approach

Indicators are surrogates or proxies for some goal or action. To be meaningful, they must acccurately reflect or describe the state of resources that are important or the results of an action on the resources or outputs. Indicators are important for planning (to enable an assessment of trade-offs of alternative future management actions) and also for evaluation of past actions (to determine whether we are better off than before). A simple decision­

flow process was established to indicate how and when indicators are important. This framework is shown in Fig. 1.

Identification/interpretation Shareholder goals/values

ft

Evaluation

Identifying indicators

Comparing outcomes & goals Forecasting impacts

Planning

Assessing goals/values Examining options/impacts Developing strategic plan Prescribing treatments

Implementation Conducting operations Monitoring actions

Fig. 1. Simplified decision-flow sequence illustrating the use and importance of indicators.

The approach in this study to identifying socio-economic indicators involved the delineation and interpretation of goals and objectives from the background proposal for

1 This paper is based on a study and report of the same title by D. Kilpatrick and K. Runyon (in press).

the model forest and subsequent discussions of the Partnership Committee² • Three strategic goals were identified in the background proposal (Anonymous 1992). These are:

a) to derive the full economic potential from the forest resources by implementing an environmentally sustainable management plan;

b) to ensure full multiple use of the forest on a sound environmental basis;

c) to enhance and share knowledge of forest ecosystems in order to adapt new management tools and evolve ecosystem management techniques to a higher level.

Twelve major issues were identified as being critical to the achievement of sustainable integrated resource management. These included: timber supply, water resources, wildlife, biodiversity, ecosystem function and ecological integrity, recreation and tourism, naturescape aesthetics, multiple ownership, education, and so on. Objectives were developed for a number of these issues. For example, the objective for wood supply is "to provide a sustainable and diverse supply of wood products" (Anonymous undated). For water resources, the objective is "to minimize the negative impact of forest management practices on water quality". And, the objective for wildlife is "To maintain adequate habitats for identified wildlife species in order to meet population goals."

These were the goals and objectives from which relevant socio-economic impact indicators were to be identified. Consideration of these goals and objectives shows that there is concern for not only current but also future outputs-sustainability. Therefore, an accounting framework was developed to help conceptualize impacts (ANIELSKI 1992). If sustainability is a condition for a management plan, it is imperative that the resource stock (quantity, quality, capacity to meet flow requirements) be monitored. This represents our ability to meet future needs. At the same time, the flow of outputs is important in order to meet current needs. This is the essence of sustainable development-the ability to meet current needs without compromising the ability of future generations to meet their needs.

This resource account has not only a temporal element but also a spatial one. The distribution of flows in a geographical space is also important.

In addition to the need to identify biophysical indicators for stocks and flows, it was necessary to identify socio-economic indicators. There was no attempt to rigorously differentiate social from economic impacts in this study. The reason for including a reference to social aspects with the economic ones is that the interest is on benefits (and costs) of management actions to society (the shareholders) and these include not only those which can be measured and valued in monetary units, but also those that impact on human health and the quality of life. Economic impact indicators used here are employment and income. Estimates for income are based on sales values (for roundwood, Christmas trees) and income or expenditures for a variety of recreational activities. It is important to recognize that income includes salaries and wages, unincorporated business income, profits, taxes, and depreciation. It is important to know how this income is distributed (i.e., salaries and wages, taxes), because distribution of benefits is important in resource allocation decisions. As indicated in the introduction, a commonly used proxy for value is market price (or income). But, for many resources and outputs there are values but no market prices. A useful classification of values is shown in the Appendix 1.

(SARKER and M CKENNEY 1992).

2 There are about 20 associations, companies, affiliations represented on the Partnership Committee.

T= l T= 2 T= 3

Flow Input

_Ji I I

_H I I

_H

Stock Stock Stock

Stock timber, wildlife, soil,

==>

==>

H H Ji

Output Output Output

Flow sawlogs, pulpwood, sawlogs, pulpwood, sawlogs, pulpwood, wildlife, soil, water, wildlife, soil, water, wildlife, soil, water,

biodiversity biodiversity biodiversity

Fig. 2. A natural resource account for the Fundy Model Forest.

Consideration of the goals and objectives, the accounting framework, and the classification of values led to the formulation of a matrix. Nine asset categories were identified. For each asset group, an attempt was made to identify asset descriptors (e.g., for wildlife-population, habitat, diversity). Types of inputs, outputs, biophysical, and socio­

economic indicators were then identified. Indicators for two asset categories-trees and wildlife-are shown in Table 1. The matrix for all assets is shown in Appendix 2.

Table 1. Tree and wildlife assets and indicators for the Fundy Model Forest.

Asset and Inputs/ Biophysical Socio-economic

Descriptors Outputs 1/0 indicators 1/0 indicators

Trees

- forest land base - land accruals/ - area (ha) in/out Market values - inventory volume, removals - m³ growth, quality (employment/income)

species, age - timber growth - m³ loss - salaries & wages

- AAC - depletions - harvest volume - profits, taxes

- Christmas tree (ha) - silvicultural - ha treated - GDP

- maple land (ha) treatments - Christmas trees (#) Non-market values - employment/income - personal enjoyment Wildlife

- population of all fauna - habitat - ha of habitat Market values and non-tree flora - population - population # (employment/income)

- harvest - species # - salaries & wages

- birdwatching - harvest # - tourism income

visits - participants # - fees

Non-market values - personal enjoyment

4.5.4 Results

Due to the large amount of data collected for this study, only a summary is provide here.

In general, there is considerable information on the status of the various resource assets.

Inventory data on timber, recreational facilities, wildlife, soil water, and so on are relatively good. This applies to wildlife and biodiversity as well as other resources. Data are lacking on quality attributes for some resources such as water, but for the most part, this is not a problem. Identifying the types of inputs and outputs is relatively straightforward for some assets such as timber and recreation but is much more difficult for others such as landscape aesthetics and representative, critical, and distinctive areas.

This same situation exists for biophysical indicators for inputs and outputs; while there are good indicators for wildlife, water, timber, it is difficult to identify a measurable attribute for aesthetics or unique and natural areas.

As might be expected, there is a considerable amount of socio-economic impact data for timber, some types of recreation, and consumptive wildlife activities. As explained above, income as determined from market values was estimated for traditional timber and related outputs ( Christmas trees, firewood, maple syrup). Non-market values were identified for a variety of tourism, recreation, and consumptive wildlife activities. These non-market values are expenditures made for the use or participation in these activities. Some of these uses were consumptive (e.g., hunting, fishing) and some were non-consumptive (e.g., bird­

watching, aesthetics). Estimated impacts for these outputs and uses is shown in Figure 3.

Private Tourism/recreation

5%

Fundy National Park

29%

Wildlife recreation 24%

Timber and related 42%

Fig. 3. Summary of income from selected outputs for the Fundy Model Forest.

4.5.5 Information Gaps and Research Needs

As shown earlier in Figure 1., forest resource management decisions (as with other types of decisions) requires that we first identify our goals or objectives. This obviously will depend in part on what options are possible-the alternatives. We also need some means of choosing from a number of these options-some criteria for choice. In the development of the matrix and collection of data for this study, it became apparent that in order to identify socio-economic impacts of forest resource allocation, three types of information were needed. First, there must be an identification of wants-what are the desired outputs? These may be timber, wildlife, biodiversity ,etc. It is critical that these outputs be specifically identified, i.e., types of timber, wildlife, or biodiversity. Second, there must be some

measure of quantification of outputs-how much of a good or service is available or expected. Third, there is need for valuation-there must be some means of weighting outputs. This might be a common denominatior such as dollars, or it might be some other relative index.

Results of this study show that the major identification gaps occur with resource assets and outputs associated with biodiversity, aesthetics, and representative, critical, and unique areas. The outputs or characteristics of these must be more specifically identified if we are to manage for them and if we are to evaluate whether we have made progress over time. The same can be said about these categories with respect to quantification. Valuation is a problem with a number of resources and outputs. While there is considerable data on outputs such as timber, some types of recreation, and consumptive wildlife, there is a real problem with determining values for non-consumptive uses (birdwatching, hiking). In addition, there are a host of non-use values such as the benefits of knowing that some resource or service exists ( existence value) or the benefit of being able to "pass on" some resource to future generations (bequest value).

Another consideration with respect to valuation is the distribution of benefits. It is important to know how benefits are distributed at a given point in time and over time. No attempt was made in this study to estimate indirect benefits or spinoffs.

4.5.6 Summary and Conclusions

The purpose of this study is to present some of the findings of a study to develop a socio­

economic impact database for timber and related resources for the Fundy Model Forest with emphasis on non-timber outputs. The approach of this study included development of a decision framework and natural resource account; interpretation of goals and objectives;

formulation of a matrix of principal assets or outputs: identification of input and output indicators, and; collection and presentation of data.

Results show that while there is considerable data on the impacts of the more traditional outputs such as timber. Christmas trees. and some types of recreation, little data exists on the impacts of water, wildlife. biodiversity, and aesthetics. If the values of these types of resources and outputs are to be included in resource management decisions, better information is needed on their identification. quantification. and valuation.

4.5. 7 References

ANONYMOUS 1992: The Fundy Model Forest. A model forest proposal submitted under the

"Partners in Sustainable Development of Forests", Program of Canada's "Green Plan for a Healthy Environment". sponsored by J.D. Irving. Ltd .. Saint John. New Brunswick.

ANONYMOUS 1993: Fundy Model Forest public input brochure. Fundy Model Forest Network, Sussex, New Brunswick.

ADAMOWICZ , V., 1992: Non-timber values and integrated resource management. Prodeedings of the Seminar on Integrated Reource Management, April 7-8, 1992. Forestry Canada - Maritimes Region, Fredericton, New Brunswick, Can. 11-19.

ANIELISKI, M., 1992: Natural resource accounting: operationalizing sustainable development for Alberta. Paper presented at the Conference: Forestry and the Environment; Economic Perspectives. March 9-12, Jasper, Alberta.

KILPATRICK , D.; R UNYON, K.L. Development of a socio-economic impact database with emphasis on non-timber outputs: a case study for the Fundy Model Forest. Canadian Forestry Service - Maritimes Region. Natural Resources Canada, Fredericton, New Brunswick. (In press.)

SARKER, R.; MCKENNEY, D ., 1992: Measuring unpriced values: an economic perspective and annotated bibliography for Ontario. Forestry Canada, Ontario Region, Great Lakes Forestry Centre, Inf. Rep. O-X-422. 29 pp.

SINDEN, J.A.; WORRELL, A ., 1979: Unpriced values: decisions without market prices. New York, John Wiley & Sons. 511 pp.

Appendix 1 Classification of Values

Value

t

Market value Non-market value

Use-value Non-use value

-f t f f f f •

Consumptive Non-consumptive Existence -Option Quasi-option Bequest Vicarious

value value value value value value value

(source: SARKER and MCKENNEY 1992)

Appendix 2 Fundy Model Forest Assets, Flows, and Indicators Asset Category Inputs/Outputs Biophysical Input/Output Indicators Socio-Economic Input/Output Indicators Trees land accruals/removals area (ha) of forest land in/out Market values Asset indicator inventory growth m3 growth, quality (employment/income & distribution) inventory depletions m3 losses to insects/disease -Inventory management (inventory, -Forest land base natural (insects/disease) m3 harvest-roundwood, chips scarification,planting,silviculture,field -Inventory by volume, harvest Number of Christmas trees harvested w or k,modelling,protection ,regulation) species,age,quality saw logs/pulpwood area treated silviculturally -Sale,harvest,transport,processing of roundwood -Annual allowable cut chips (fiber) roundwood deliveries and specialty products -Christmas tree area/ poles, pit props mill production(by product class) number of trees Christmas trees Christmas tree production (#) Non-market values -Maple land area/ maple products maple syrup production (Jiters, #) (including social, cultural) number of trees silvicultural treatments ( employment/income from protection input consumptive & nonconsumptive use) Recreation/fourism habitat, population, facilities input to facilities construction, maintenance Market values development, management, and Number of hunters, fishermen, tourists, (employment/income & distribution) Asset indicators maintenance hikers' -development -facilities (trails,B&B's, consumptive & non -snowmobilers, canoeists, birdwatchers -management campsites, hunting, consumptive use Number of days used, success, "quality" of -maintenance -fishing opportunities -hunting/fishing experience -licenses, permits, fees -fish and game pop'n, -hiking/camping -retail sales habitat, -x-country skiing -guiding, outfitting -bird populations -camp/cottage use -property/income taxes -bird/wildlife-watching Non-market values -snowmobiling/ATV's -"value" of birdwatching, hiking, aesthetics, etc. -motor touring -berry picking -canoeing -sugar bush touring

Asset Category Inputs/Outputs Biophysical Input/Output Indicators Socio-Economic Input/Output Indicators Wildlife/Biodiversity habitat, population input to habitat development, protection Market values development, maintenance, -area habitat ( employment/income & distribution) Asset indicators protection -population/species number, health -inventory/habitat/population development, -populations of all fauna & -populations, habitat -growth, mortality management, and maintenance non-tree flora -harvest (fur bearers, -harvest number -licenses, permits, fees mushrooms) -number of participants eg., birdwatchers -tourism income -birdwatching visits -"ecosystem" health Non-market values -ecosystem health

-

-

-

Asset Category Soil Asset indicators -inventory by site/productivity class Forest Landscape Aesthetics Asset Indicators -scenic views, vistas other "naturescapes" Unique/Natural Areas Asset indicators -inventory of distinctive, critical, representative areas

Inputs/Outputs soil/site improvement, maintenance, protection increases and decreases in quantity, quality through improvement (fertilization), erosion, nutrient loss, etc. input to development and maintenance of distinct and identifiable areas or area as a whole participation in viewing/appreciation of landscape development, maintenance, and protection ecosystem health appreciation

Biophysical Input/Output Indicators Socio-Economic Input/Output Indicators area by site class Market values (employment/income & distribution) biomass production (tons/ha} -soil/site improvement, maintenance, protection nutrient gain/loss -sale Non-market values -ecosystem health, input to development and maintenance Market valuess number , area, quality of scenic views (employment/income & distribution) -development, maintenance & protection participation (number, frequency of visits) -tourism, recreation "quality" of experience Non-market values -personal enjoyment and health area and quality of distinctive or unique Market Values natural assets (employment/income & distribution) -development, maintenance and protection indicators of ecosystem health Non-market values participation in viewing, studying, -ecosystem health of unique areas -appreciation/satisfaction

Asset Category Education Asset indicators -facilities, resources, intrepretive centres, etc. Roads and other Infrastructure Asset indicators -inventory of roads, bridges, facilities

Inputs/Outputs input to development, management, and maintenance interpretive programming public school programming public(adult focus) education media presentations participation in field days and other educational activities quality and quality of education input to development, management, and maintenance access ( for all uses) participation, utilization

Biophysical InpuUOutput Indicators Socio-Economic InpuUOutput Indicators input to facilities, programs Market values (employment/income & distribution) number, quality of specific facilities, sites, -development, maintenance areas of educational interest Non-market Values Interpretive program participation -education, communication, satisfaction Student demand/participation in optional programming Field day, tour attendance Inventory; all roads by class Market values Road use(vehicle km) by activity (employment/income & distribution) e.g, forest management. construction, maintenance recreation -user fees education Non-market value -education, access -recreational enjoyment