Measuring the opportunity costs of forest conservation in Uganda;

implications for forest conservation policy and management in a REDD+

framework

Taking stock of small holder community forestry

Montpelier 24-26 March 2010

Glenn Bush, Woods Hole Research Center, USA

Nick Hanley, University of Stirling, UK

Daniel Rondeau, University of Victoria, Canada

Summary

•The policy framework – REDD+ and sustainability•The theoretical framework – Forest values•Study objectives and methodology•Results and conclusions

Climate Change;REDD +

Sustainability and

Safeguards

Several key issues were agreed upon with regard to the role of tropical forest in mitigating the effects of climate change through the REDD+ mechanism:

•Principle to contribute to sustainable development and poverty reduction

•Safeguards (including rights, good governance and protection of natural forests)

•Consideration of drivers of deforestation and forest degradation e.g. land tenure, forest governance, gender and safeguards when developing national strategies

Forests in Sustainability

Forest biomes support economic growth and human welfare

Forest Environment and Biodiversity

ProvisioningFood and fuel

CulturalReligious beliefs

RegulatoryClimate control

Economy and human wellbeing

Drivers of forest loss

Two key factors may be seen as the major threats to forests worldwide:

1. Conversion into agricultural and grazing land, due to population expansion and extensive pastoral systems (Deforestation)

2. Over harvesting (mining of the resource) for fuel wood, timber, NTFP and charcoal due to high dependence by predominantly rural populations to maintain their livelihoods (Degradation)

Deforestation & degradation

Agriculture Livestock Timber Fuelwood NTFP Human Needs

Income Consumption Livelihoods

security

Conservation threats

vs. Human needs

Forest Total Economic

Value

 

Direct economic benefits:

Indirect economic benefits:

Timber-Fuel wood, Construction, Charcoal

Non Timber- Honey, wild food, medicinal plants, bushmeat

Recreational use- Tourism

Grazing

Cultivation

Soil - fertility and erosion control

Water - conservation and regulation

Carbon sequestration

Accounting for

smallholder decisions; to deforest or conserve?

Benefits to one group are costs to another!

Forests give benefits to the national and international economy/society through tourism revenue, climate regulation

Local loss of access to land and forest resources creates costs in their lives

Local opportunity costs

REDD+ Monitoring

Issues

REDD+ aims to offset local opportunity costs of forest conservation

Need to quantitatively estimate the costs to objectively design REDD+ offset programs

Continued monitoring of the economic and social impacts of programs on household incomes

Must incorporate social and economic indicators in to the monitoring framework

Study objectives

To assess the local opportunity costs of avoided deforestation and forest degradation around selected protected forests in Western Uganda

To evaluate the differences in measures of two quantitative valuation procedures

To assess the implications of the different valuation estimates on planning REDD+ project interventions

Methods

Market price and contingent valuation survey of 23 villages

Stratified/random sample selection, proportionate to income levels in villages

In-house interviews by trained interviewers from the region

Extensive pre-testing

Measuring economic impacts of

REDD+ interventions

on local livelihoods

Financial vs Economic values

Financial values – prices of goods and services as they accrue to private individual

or

Economic values – value of goods and services to individuals or groups as a whole adjusted to account for social and environmental concerns (welfare value)

Which values to consider?

Measuring financial

value

Market price method: Assess the volumes of goods

harvested using household surveys

Assign a market price value to estimate total financial values of goods

Usually estimates the value of goods sold and consumed in the home

Measuring welfare values

Sated and reveled preference methods

Contingent valuation Assess willingness to pay or

willingness to accept compensation for a given gain/loss in environmental goods and services

Choice of approach depends on property rights context e.g. de facto or de jure access

The CVM- WTA setting

The payment scenario Regulations to be enforced Current uses to cease Compensation fund to provide annual

payments to affected households there is a maximum amount (provision

point) available in the fund Each affected household gets to make

a claim on the fund.

Ugandan forest

management context

Ugandan forests are managed under a deregulated para-statal system

National and district forest authorities with varying responsibilities over different governance classifications of forests e.g. Central forest reserves, district forest reserves, nature reserves, forests on private land

National wildlife authority manage forests in national parks – strict exclusionary policies and community co-management arrangements

Survey Sample

Protected Area Bio Type Governance Type No of Households in survey

Queen Elizabeth National Park

Savannah Woodland & Grassland

Strict National Park (no community co-management)

330 (10 communities)

Bwindi Impenetrable Forest National Park

Afromontane Forest

National Park with some community co-management

240 (8 communities

Community Forest Reserve (Masindi District)

Tropical High (Closed Canopy) Forest

Forest on private ( community) land, community owned and managed

60 (2 communities)

Budongo Forest Reserve Collaborative Forest Management

Tropical High (Closed Canopy) Forest

Forest Reserve (public land), with community co- management

60 (2 communities)

Total HH 660

Study Sites Uganda

Queen Elizabeth NP

Bwindi Forest NP

N

Key Protected Areas in Uganda

Tengele CFM

Budongo FR

Kampala

National Park

Forest Reserve

Hunting Reserve

Market price survey results

Site n

Mean net total hh income

Mean net total protected area income

Mean net total protected area income consumed

Mean net total protected area income sold

% protected area income consumed

protected area income as a % of total hh income

Budongo 60 373.30 4.40 1.05 3.35 23.93 1.18 Tengele 59 894.00 44.16 29.79 14.37 67.47 4.94 QEPA 319 1393.05 36.24 25.06 11.18 69.15 2.60 Bwindi 232 681.37 0.05 0.05 0.00 100.00 0.01 All 670 1011.35 21.56 13.42 10.54 65.88 2.13

hh= householdPrices in $US per annum

•Mean annual household income for all sites was just over $1000•Mean annual income form the protected area $21.56 (2.13%)

Site N Mean Std. Deviation

Std. Error Minimum Maximum

Budongo 60 485.88 482.42 62.28 42.11 2631.58 Tengele 59 448.35 506.98 66.00 52.63 3157.89 Bwindi 229 410.41 409.95 27.09 0.00 2631.58 QEPA 327 404.72 457.06 25.28 0.00 2631.58 ALL 675 417.68 448.31 17.26 0.00 3157.89

CVM Results - Mean Bid

values between

sites •Mean willingness to accept compensation for all sites was $417•No significant difference between sites

CVM Results Mean bid values by income group

Income quartile N Mean

Std. Deviation

Std. Error Minimum Maximum

Lowest 25% 169 419.1841 453.2255 34.8635 0 2631.58 Lower middle 25% 170 491.4752 528.0482 40.49945 0 2631.58 Upper middle 25% 168 407.3152 414.8213 32.00415 26.32 3157.89 Upper 25% 168 351.8484 374.4895 28.89249 0 2631.58

ALL 675 417.6776 448.3106 17.25548 0 3157.89

F=2.796, d.f.=3, p<0.05

•Welfare values appear to increase and then decrease with income group ( environmental Kuznets relationship)•Highest income group had lowest welfare value

Variable ( X) Coefficient (β)

β/S.E. Standard Error

Mean of X

TOTAL OCCUPANTS

9.00 1.23 7.31 6.22

AREA OF AG. LAND

-0.89* -2.11 0.42 2.48

TOTAL HH INCOME

2.90e-7 0.681 4.29e-6 642.1

TOTAL PA INCOME

1.197e-4** 2.786 4.33e-5 24.9

DISTANCE TO MARKET

3.52 0.53 6.61 3.24

DIST TO PA 10.02 0.87 11.59 1.43

BWINDI DUMMY

-11.01 -0.18 60.03 -

BUDONGO DUMMY

-25.24 -0.39 64.97 -

TENGELE DUMMY

-199.75** -2.82 70.86 -

CONSTANT 343.44*** 54.30 55.2 -

Disturbance standard deviation (σ)

429.18*** 30.657 14.00 -

Tobit; n=675, R2 (Decomposition) = 0.061; OLS - R2 = 0.064, F= 3.94, d.f. = 9, 463 p<0.001p<0.05, **p<0.01, ***p<0.001; Dependant variable WTA Bid

CVM-WTA bid determinants

Significant factors:•Area of agricultural land (negative)•Total income form the protected area (positive)•Tengele CFM – (negative)

MPM estimates sow that the % contribution of mean annual total household income was 2.13%

The amount of compensation required estimated by the CVM is equivalent to almost as much as 50% of annual income

Methods essentially measure different things reflects substantial non-market use of forest resources and the potential local economic losses imposed by conservation policies

Social (non-market) values associated with forest income can be higher for low income households than for high income households (high dependence).

• Forest conservation strategies using direct or indirect compensation methods must do more than compensate the finical values lost to ensure local equity

• Simply improving incomes ( poverty alleviation) may not help to conserve forests

Conclusions values and approaches

ConclusionsGovernance 1

•Surprising result of the governance dummies –expected higher WTA values with increasing community involvement in management.

•Amount of agricultural land was an important factor in lowering respondents WTA value; respondents in Tengele had higher mean holding than respondents around other sites

•Difference between de facto and de jure access might be another key e.g. strict national park no access in reality poor local enforcement means open access

ConclusionsGovernance 2

•With increasing levels of community involvement in the management of the protected area more effective enforcement of lower but more sustainable levels of use may be apparent.

•This means overall less goods are available to the community form the protected area and therefore less on an individual basis to households in the community.

•Highlights the need to quantitatively account fro the changes in social values as a result of community forest management initiatives

Recommendations

•Need to adequately understand the economic incentives and rational for forest conservation measures involving small holders

•Need to quantitatively account for the social impacts as a result of community forest management initiatives

. Economic research is essential to help us realistically budget for programmes that expect to achieve a given set of social outcomes

•UK Government, Economic and Social Research Council

•CARE Uganda Rights Equity and protected areas Program

•CARE Denmark – Poverty Environment and Climate Change Network

•Howard Buffet Foundation

Thanks