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C1) Economics of Management for Biodiversity

Economic analysis of biodiversity- oriented forest management strategies

Marc Hanewinkel & Rasoul Yousefpour
Doctoral researcher: Nicole Still (since 2019)

University of Freiburg, Faculty of Environment & Natural Resources, Institute of Forest Sciences,
Chair of Forestry Economics and Forest Planning

Background

Degradation of biosphere integrity and biodiversity decline may trigger substantial losses in ecosystem functioning, compromising the flow of ecosystem goods and services that constitute human wellbeing. It is thus crucial to find forest management solutions that enable to harmonize production and conservation objectives in forest landscapes under environmental pressures.

During Phase I, project C1 has addressed the costs of biodiversity-oriented forest management strategies and proposed models to define efficient levels of biodiversity provision in temperate forest landscapes. Moreover, project C1 integrated preferences of local communities in addressing a few biodiversity features and explored the role of biodiversity-oriented management in determining the aesthetic value of the landscape. Still, a comprehensive analysis of multi-taxon responses to biodiversity-oriented management and retention forestry at the landscape scale continues to be developed.

During phase II, project C1 will address these issues by coupling climate-sensitive ecological and economic models and evaluate economic risks related to climate change. The project will assess the insurance value of biodiversity to ecosystem functioning and investigate potential synergies and trade-offs between the provision of biodiversity and other ecosystem services in temperate forest landscapes.

 

Research questions and hypotheses

Hypothesis: Biodiversity-oriented management leads to structural diversification across forest landscapes, reducing the risk of catastrophic losses in ecosystem functioning and improving the total economic value of forest ecosystems.

Study questions:

  1. What is the optimal management portfolio to internalize the value of biodiversity into forest management under climate change and disturbance risk?
  2. What is the insurance value of biodiversity to forest owners facing risk and uncertainty under climate change?
  3. What are potential synergies and trade-offs between the provision of biodiversity, economic efficiency and other ecosystem services?
  4. What are the implications of the optimized retention strategies for the conservation of multiple taxa at the landscape scale?

 

 

 

Approach, methods and linkages

Approaches and methods. To answer the research questions, project C1 will employ coupled ecological-economic models in a simulation-optimization framework. C1 will simulate the effect of multiple disturbances under climate change at the landscape scale and compare the economic outcomes of different management strategies, including biodiversity-oriented management. Thereby, C1 will assess the insurance value of biodiversity to forest owners and society. The project will employ robust optimization techniques to find management portfolios and landscape structures that guarantee the flow of ecosystem services in the face of environmental pressures and uncertainty, employing spatially-explicit optimization techniques. Furthermore, C1 will disentangle synergies and trade-offs between the provision of habitat for multiple taxa and other ecosystem goods and services.

Output and linkages. Project C1 will provide detailed management prescriptions and the allocation of conservation actions required to maximize the provision of ecosystem services across forest landscapes. The project will quantify the total economic value of forest stands in the Southern Black forest region, untwining its components, as well as for the insurance value of biodiversity. This will provide a basis for the implementation of policies to increase biodiversity supply in the region. This will be an interdisciplinary work that will involve all B projects, allowing for a comprehensive multi-taxon analysis of the responses of forest taxa to different landscape structures, as well as the C2 and D projects, allowing for social and cultural considerations in the analysis. Among the management options, C1 will also consider the economic implications of habitat tree selection, to be conducted in cooperation with project A2.

 

Findings

Main results in phase I show that creating habitat networks and increasing the share of forest reserves can be realized with moderate costs (Augustynczik, Yousefpour, Rodriguez et al. 2018) and that an optimal allocation of forest reserves in combination with connecting deadwood islands to secure habitat for endangered saproxylic organisms is subject to multiple uncertainties (Augustynczik,Yousefpour, Hanewinkel et al. 2018).

Uncertainty in the economic parameters, namely interest rate and wood prices are determinant to forest profitability (Augustynczik et al. 2017) and consequently to the opportunity costs of conservation practices. In collaboration with A2 and B6, the project showed that at the landscape scale, the promotion of forest biodiversity for multiple taxa required a substantial diversification of management regimes across the landscape (Augustynczik, Asbeck, Basile et al. 2019). C1 revealed that biodiversity has a high social value in the study region, but current practices are not well suited to internalize this adequate value into forest management, asking for an increase in the biodiversity supply, especially when climate change is taken into account (Augustynczik, Yousefpour and Hanewinkel 2019a,b).

Furthermore, C1 showed that a socially optimal forest management would demand a substantial increase in the current biodiversity supply (Augustynczik et al. 2020). Finally, C1 proposed a mechanism design model to take into account the strategic behaviour of the stakeholders and the asymmetric information related to biodiversity valuations in the decision-making process (Augustynczik, Yousefpour & Hanewinkel 2019a). C1 thus investigates questions that are central to ConFoBi: what costs and benefits biodiversity creates, and how conservation can be effectively and efficiently integrated into multi-functional forest management.

Additionally, in collaboration with the C2 and D projects, C1 dealt with the aesthetic value of forest structural and biological diversity through an interdisciplinary analysis of social media data across the study area to answer how aesthetic value is spatially distributed across the landscape and assess the contributory roles of forest elements to the aesthetic value of the Black Forest. Findings from the spatial analysis highlight the necessity of nuance in photographic content and spatial scale when assessing landscape predictors of aesthetic value (Still et al., in prep) and results from the forest elements assessment will provide insights on how biodiversity-oriented management strategies might impact aesthetic value. Aesthetic value, along with the other cultural ecosystem services it underpins, are important components of the total economic value of forest stands in the study area and valuable for management decision-making.

 

 

Future projects

Next PhD project (starting 1 July 2022)

Initially, C1 focused on the costs of biodiversity-oriented forest management strategies in the study are. In the next phase, it will:

  • Apply a fully coupled ecological-economic model in a simulation-optimization framework taking into account the effect of multiple disturbances under climate change at the landscape scale and compare the economic outcomes of different management strategies, including biodiversity-oriented (multi-taxa) management.
  • In collaboration with other researchers from the Faculty, C1 will assess the insurance value of biodiversity to forest owners and society and will employ robust optimization techniques to find management portfolios and landscape structures that guarantee the flow of ecosystem services in the face of environmental pressures and uncertainty.
  • Furthermore, C1 will disentangle synergies and trade-offs between the provision of habitat for multiple taxa and other ecosystem goods and services.

Skills required for PhD3 applicants in C1:

In addition to the general requirements described in the job advertisement, applicants who wish to apply for C1 should bring economic skills including classical forestry economic evaluation techniques like net present value, Land Expectation Value, annuities and risk analysis. The potential applicants should in addition to that have an understanding and skills in applying climate-sensitive growth models that can project the development of forests from stand to landscape scale and that can be linked to economic models. An initial (process-based) modelling framework is available, which needs further development.

 

 

ConFoBi-publications by C1

Asbeck, Thomas; Sabatini, Francesco; Augustynczik, Andrey L. D.; Basile, Marco; Helbach, Jan & Jonker, Marlotte et al. (2021). Biodiversity response to forest management intensity, carbon stocks and net primary production in temperate montane forests. Scientific reports, 11, 1625. www.doi.org/10.1038/s41598-020-80499-4.

Augustynczik, Andrey L. D.; Asbeck, Thomas; Basile, Marco; Jonker, Marlotte; Knuff, Anna & Yousefpour, Rasoul et al. (2020). Reconciling forest profitability and biodiversity conservation under disturbance risk: the role of forest management and salvage logging. Environ. Res. Lett., 15, 0940a3. www.doi.org/10.1088/1748-9326/abad5a.

Augustynczik, Andrey L. D.; Yousefpour, Rasoul & Hanewinkel, Marc (2018). Multiple uncertainties require a change of conservation practices for saproxylic beetles in managed temperate forests. Scientific reports, 8, 14964. www.doi.org/10.1038/s41598-018-33389-9.

Augustynczik, Andrey L. D.; Yousefpour, Rasoul & Hanewinkel, Marc (2019). Impacts of climate change on the supply of biodiversity in temperate forest landscapes. Allgemeine Deutsche Forst und Jagd Zeitung, 189, 209–220. www.doi.org/10.23765/afjz0002031.

Augustynczik, Andrey L.D.; Hartig, Florian; Minunno, Francesco; Kahle, Hans-Peter; Diaconu, Daniela & Hanewinkel, Marc et al. (2017). Productivity of Fagus sylvatica under climate change – A Bayesian analysis of risk and uncertainty using the model 3-PG. Forest Ecology and Management, 401, 192–206. www.doi.org/10.1016/j.foreco.2017.06.061.

Augustynczik, Andrey Lessa Derci; Asbeck, Thomas; Basile, Marco; Bauhus, Jürgen; Storch, Ilse & Mikusiński, Grzegorz et al. (2019). Diversification of forest management regimes secures tree microhabitats and bird abundance under climate change. The Science of the total environment, 650, 2717–2730. www.doi.org/10.1016/j.scitotenv.2018.09.366.

Augustynczik, Andrey Lessa Derci; Gutsch, Martin; Basile, Marco; Suckow, Felicitas; Lasch, Petra & Yousefpour, Rasoul et al. (2020). Socially optimal forest management and biodiversity conservation in temperate forests under climate change. Ecological Economics, 169, 106504. www.doi.org/10.1016/j.ecolecon.2019.106504.

Augustynczik, Andrey Lessa Derci; Yousefpour, Rasoul & Hanewinkel, Marc (2019). Climate change and the provision of biodiversity in public temperate forests - A mechanism design approach for the implementation of biodiversity conservation policies. Journal of environmental management, 246, 706–716. www.doi.org/10.1016/j.jenvman.2019.05.089.

Augustynczik, Andrey Lessa Derci; Yousefpour, Rasoul; Rodriguez, Luiz Carlos Estraviz & Hanewinkel, Marc (2018). Conservation Costs of Retention Forestry and Optimal Habitat Network Selection in Southwestern Germany. Ecological Economics, 148, 92–102. www.doi.org/10.1016/j.ecolecon.2018.02.013.

Gustafsson, Lena; Bauhus, Jürgen; Asbeck, Thomas; Augustynczik, Andrey Lessa Derci; Basile, Marco & Frey, Julian et al. (2020). Retention as an integrated biodiversity conservation approach for continuous-cover forestry in Europe. Ambio, 49, 85–97. www.doi.org/10.1007/s13280-019-01190-1.

Storch, Ilse; Penner, Johannes; Asbeck, Thomas; Basile, Marco; Bauhus, Jürgen & Braunisch, Veronika et al. (2020). Evaluating the effectiveness of retention forestry to enhance biodiversity in production forests of Central Europe using an interdisciplinary, multi-scale approach. Ecology and evolution, 10, 1489–1509. www.doi.org/10.1002/ece3.6003.