Critical Review On The Valuation of ES From The Forests of India

© 2019 IJRAR March 2019, Volume 6, Issue 1 www.ijrar.
org (E-ISSN 2348-1269, P- ISSN 2349-5138)
A CRITICAL REVIEW ON THE VALUATION

OF ECOSYSTEM SERVICES FROM THE
FORESTS OF INDIA
Divya Soman 1, Anitha V 2
1-Research Scholar, 2-Principal Scientist,
Forest Economics Department,
Kerala Forest Research Institute, Peechi 680 653, Kerala, India
Abstract
Forest are vital ecosystem needed for the survival of human beings that plays a significant role in the
management of environment by providing innumerable services that meets the needs of different subgroups of
people. These services make a significant contribution to the shelter of the world’s population and one fourth
of the global population depend on them for their sustenance needs. Despite the essential functions of the forest
in meeting the livelihood and subsistence needs, they are undervalued, due to the non-marketable nature
coupled with the lack of awareness on the existing link between natural ecosystems and functioning of human
support systems. Economic valuation plays a key role in overcoming this problem and is an imperative tool in
prioritizing resource allocation, distribution, and management of resources for the policy makers and
stakeholders. A critical review on the valuation studies conducted in the forest ecosystem have been analyzed
and the need for implementing innovative market techniques in India are addressed.
Keywords: forest, ecosystem, economic valuation, ecosystem service
I. INTRODUCTION
Forest ecosystems are the vital component that plays a significant role in the management of environment by
delivering ecosystem services both tangible (measurable and has a monetary value) and intangible (non-
marketable-e.g. regulating services and supporting services). The Ecosystem Services (ES) are the benefits that
humans derive from the ecosystem (Costanza et al., 1997, Pearce & Pearce 2001, Pearce & Moran, 2001, Nasi
et al., 2002) that meets manifold needs for different sub groups of people and about 25 per cent of the global
population depend on them for meeting their subsistence needs (UNO, 2017). Despite the fact that the forest
products make a significant contribution to the shelter of 18 per cent of the world’s population (SOFO, 2014),
the contribution of the forestry sector to India’s Gross Domestic Product (GDP) is around 2 per cent. The key
reasons being the fact that the intangible benefits are not being accounted into when calculating the contribution
of the forestry sector to GDP. Proper validation of the resources helps in developing a conservation value,
justifying the need to sustainably use these resources. Major threats to the forests today is land use change
caused by rise in the population, exploitation activities which include expansion of agriculture land, ranching,
wood extraction and development of infrastructure. Western Ghats, one of the biodiversity hotspot is designated
as vulnerable ecosystem due to the alternative land use leading to the loss of 35.3 per cent of forest area (Reddy
et al., 2016). Massive land use change in Kerala has diverted more than 50 per cent of the forest land since 1973
resulting in the loss of 9, 06,440 ha of forest (Ramabhadran and Ramachandra, 2017). This has been designated
as one of the most important cause of drought in Kerala. The loss of biodiversity is the second most important
problem in nearly every terrestrial ecosystem on Earth. This loss is accelerating driven by the over-exploitation
of natural resources, habitat destruction, fragmentation and climate change (Millennium Ecosystem
Assessment, 2005). Although Convention on Biological Diversity (CBD) has adopted a target of reducing the
rate of biodiversity loss at global, regional and national levels by 2010, still the loss of biodiversity is at a high
pace. Nearly 75 per cent of the genetic diversity of domesticated crop plants has been lost in the past century
(WEHAB, 2002) and about 24 per cent of mammals and 12 per cent of bird species are currently considered to
be globally threatened. Despite the essential functions of ecosystems and the consequences of their degradation,
IJRAR19J3586 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 1588
© 2019 IJRAR March 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
ES are undervalued, due to the non-marketable nature coupled with the lack of awareness on the existing link
between natural ecosystems and functioning of human support systems. Considered as a successful tool to both
stakeholders and policy makers, economic valuation studies can overcome the problem of undervaluation and
play an important role in prioritization of resource allocation, distribution, and management of them. Moreover
this pervasive appreciation of the ecosystem service helps in reframing the interrelation between people and
nature (Costanza et al, 2014).
II. THE HISTORY OF ECONOMIC VALUATION

The concept of the ecosystem services (ES) dates back to 400 BC, when Plato realized the importance of
maintaining the forest soil which once eroded can lead to drying up of water bodies. Later in 1864, Marsh
pointed out that the resources are limited and linked it to the loss in soil fertility in the Mediterranean region.
But it was not until 1940 that the concept had caught the attention of the society. Ecosystem Services (ES),
initially termed as ‘environmental services’ (Anonymous, 1970) included providing services like pollination,
fisheries, climate regulation and flood control. These services were termed as ‘public services of global
ecosystem’. Eventually in 1980 the term ‘Ecosystem Service’ (ES) was proposed (Ehrlich and Ehrlich, 1981)
following which the term has been widely used. ES is defined as the benefits that humans obtain from nature
(CBD, 1992). The modern concept has gained its importance in 1997, when the most comprehensive study for
economic valuation of ecosystem goods and services was carried out by Costanza et al., where they estimated
the economic value of 17 different ES from 16 different biomes based on earlier published studies and some
original calculations. The study projected the annual value of the ES of terrestrial and aquatic biomes of the
world to be in the range of US$16–54 trillion with an estimated average of US$33 trillion. This value was found
to be 1.8 times higher than the Gross National Product (GNP) value for the world. Though the work was severely
criticized for the high monetary value, still it remains as one of the most important work that has valued the
intangible services of the ecosystem and set a monetary value. In the same year (1997), Daily published a book
on Nature’s services which covered the concept of ES and a brief on the services provided by various
ecosystems. Accordingly, the services were grouped as watershed service, control of soil erosion, public health
and climate regulation. In 2001, Pearce pointed out that the main constrain in conserving ecosystem lies in the
fact that many ecosystem functions have no market value which in turn justifies the use of forest land for non-
forest purpose. It emphasized on market creation for the benefit of forest dependents by ascertaining an
economic value of conservation that exceeds the value of forest conversion for alternative use. For a
comprehensive assessment of ecosystem function, goods and services, De Groot et al. (2002) listed out 23 ES
(Table 1) and provided a checklist and matrix linking these functions to ecological, socio-cultural and economic
valuation methods. Ecosystem functions were grouped under four categories- Regulation function, Habitat
function, Production function and Information function. The valuation methods were ranked and monetary
values were ascertained. The approaches to be taken for the conservation of ecosystem were categorized into
four- to assess the total value of an ecosystem, contribution to the society, change in the value when conservation
is undertaken and how the different changes affect the stakeholders. Describing the methods for conservation
of forest, the study had put forward setting up of Protected Areas and Payment for Ecosystem Service (PES)
(Pagiola et al., 2004). A major milestone in the history of valuation studies was the Millennium Ecosystem
Assessment (MA), 2005 which was a collaborative work from 1360 experts all around the world. The MA report
had achieved the grade of the first scientific evaluation on the status of ecosystem and is considered a basis for
conservation actions and sustainable utilization of ecosystem resources. The assessment was initiated in 2001
for evaluating the consequences caused by changes in the ecosystem and human well-being and to conserve and
sustainably use those systems. It has classified the services provided by the ecosystem into four types-
provisioning, regulating, and cultural services that directly affect people and supporting services needed to
maintain the other services (Figure 1).
Table1: Goods and services from forest ecosystems as

suggested by Groot et al, 2002
Production function Regulation Function
 Food  Gas regulation

 Climate regulation
 Raw materials  Disturbance
prevention
 Genetic  Water regulation
resources  Water supply
 Soil retention
 Medicinal  Soil formation
resources  Nutrient regulation
 Waste treatment
 Ornamental
 Pollination
resources
 Biological control
Information Function Habitat Function
 Aesthetic  Refugium function

information  Nursery function
 Recreation
 Cultural and artistic
information
 Spiritual and
historic
information
 Science and
education
Figure 1: Ecosystem services as per Millennium

Ecosystem Assessment framework
Provisioning services includes products i.e., food (including roots, seeds, nuts, fruits, spices, fodder), fiber
(including wood, textiles) and medicinal and cosmetic products. Regulating services are the benefits obtained
from the regulation of ecosystem processes (carbon sequestration, climate and water regulation, protection
from natural hazards such as floods, avalanches or rock-fall, water and air purification and disease and pest
regulation). Cultural services are the non-material benefits people obtain from ecosystems through spiritual
enrichment, cognitive development, reflection, recreation, and aesthetic experiences. Supporting services are
necessary for the production of all other ES. They differ from provisioning, regulating, and cultural services
in that their impacts on people are either indirect or occur over a very long time. However, MA failed to
provide adequate scientific information which could answer the important policy related questions on
ecosystem service and human wellbeing
The value of nature is many a time considered invisible. Hence, to make the nature’s value visible and to analyze
the global economic benefit of biological diversity, the costs of biodiversity loss and the failure to take
protective measures versus the costs of effective conservation, The Economics of Ecosystem and Biodiversity
(TEEB) was initiated in 2007. The study was undertaken in three phases. The first phase of the study emphasized
on the biodiversity loss which affects the human health and welfare and on developing support tool for decision
makers. The second phase of TEEB initiated in 2010 aimed at bringing phase I into action through a series of
five stages- integrating the ecological and economic knowledge, identifying suitable valuation mechanism,
working out biodiversity loss and loss of ES, developing toolkit and engaging the end users and linking up with
the stakeholders. It brought out four key publications TEEB Ecological and Economic Foundations, TEEB in
National and International Policy Making, TEEB in Local and Regional Policy and TEEB in Business and
Enterprise based on the end users. As a continuation of the work done in 1997, Costanza updated the value of
global ecosystem in 2014 as US$125 trillion/year based on the land use change from the period 1997 to 2011.
In 2016, TEEB is in its third phase where findings of the previous study are to be applied at different levels of
policymaking and included into different biomes and sectors (Figure 2).
Figure 2: Major developments in the economic valuation study from 1997 to 2016
III. STATUS OF ECOSYSTEM SERVICES

1. PROVISIONING SERVICES
Provisioning services are the energy output from the ecosystem; tangible, tradable and priced in the market
(MA, 2005; TEEB, 2009). Provisioning services commonly considered are timber and NTFPs, as major share
of the economic worth of forests are imparted to them. The world's annual industrial round wood production
for timber is estimated at 1.87 billion m3 where India has a 3 per cent share of global production (FAO, 2016).
Global trade in industrial round wood accounted to 125 million m³ in 2013 (FAO, 2016). Apart from serving
as a storehouse of wood, there are also equally important NTFPs obtained from the nature. These are the
resources or products extracted from forest and utilized within the household or marketed or have social,
cultural or religious significance. The estimated total value of world trade in NTFPs is approximately US
$1.1Billion (Laird et al., 2010). The contribution of NTFPs to the income generation and sustainable livelihood
maintenance has been widely studied (Kramer et al, 1992; Tewari & Campbell, 1995; Kant et al, 1996; Rao
and Singh, 1996; Cavendish, 1997; Shakleton and Shakleton, 2000; Pearce, 2001; Murthy et al, 2005; Shylajan
and Mythili, 2007; Ramana and Patil, 2008). NTFP sector is one of India’s largest unorganized sectors having
a dependent population of about 275 million and business turnover of more than Rs.6000 crores per annum
(Kanwal, K, S, 2014). They contribute to about 50 per cent of Indian government forest revenue and 70 per
cent of forest-based product exports (Shivaprasad and Chandrashekhar, 2014), leading to unsustainable
extraction and depletion of many NTFP species. The key role is played by the private traders who route the
trade through unofficial channel resulting in the biased share of money to the gatherers who are the tribes
(Muraleedharan et al., 1997). The importance of NTFPs over timber was clearly depicted by a study in 1989
where, the financial benefits of non-timber forest products (wild fruits and latex) were compared to the
potential returns from forest conversion for timber harvesting in the Amazonian rain forest in Peru (Peters et
al., 1989). The sustainable fruit and latex yields was estimated at US$422/hectare/year compared to the
merchantable timber of US$11.49/ha. The study shows the importance of NTFPs over timber which often
remains unnoticed. Education, awareness and income play a major role in the decision of the household
regarding the resource extraction from the forest. Over exploitation of resources of direct use leads to resource
use conflicts. In 2004, a study analyzed the resource use conflicts among the stakeholders in Peechi-Vazhani
Wildlife Sanctuary showing high community factor dependence of 66 per cent on fuelwood, grazing and
wildlife (Sreelakshmi, 2004). Sustainable management of resources can be achieved when providing alternate
livelihood option which can reduce the dependence on forest resource.
1.1. Status of NTFP in India

NTFPs contribute to poverty alleviation through income generation. About 70 per cent of NTFP collection in
India takes place in the central Indian States (Bag et al., 2010). It is estimated that 30 million forest dwellers,
mostly of tribal ancestry, depend on NTFPs for their livelihood in Central India (Quang, 2006) and growing
local, national, and international markets involve them. Small Scale Forest based Enterprise (SSFE) in India
includes value addition process to NTFPs. This will lead to an increase in the earning from the products. The
total value of non-timber goods and services available from tropical deciduous forests in India was estimated
from a minimum of $219 to a maximum of $357 per hectare annually (Shivaprasad and Chandrasekhar, 2014).
In Kerala, 120 items of the NTFPs, mainly medicinal plants are collected from the forests by the tribals and
96 species by tribal cooperatives (Krishnakumar, 2015). The tax revenue obtained from the export of herbs
and herbal byproducts has made a great contribution to the foreign exchange earnings. The average values of
NTFP per year of sales and collection charges are Rs 31,524,480 and Rs 25,219,520 respectively (Jayaraman
and Anitha, 2010). In spite of all these facts, NTFPs are not given importance due to the inadequate statistical
information on the availability, extraction and trade of these products (Ahenkan and Boon, 2011). The lack of
standardized system for compiling data on NTFPs, market failure, high exploitation and poor regeneration,
lack of proper mapping of NTFP resources and policy inconsistencies are other factors which affect the sector.
2. REGULATING SERVICES
Regulating services are the intangible benefits from forest that are nonmarketable in nature and hence difficult
to value. These include air quality regulation, climate regulation, disturbance prevention, carbon sequestration,
soil erosion prevention, water quality regulation, pollination, waste treatment. Anthropogenic activities like
deforestation and burning of fossil fuel have increased the amount of carbon dioxide in the atmosphere and 12
to 20 per cent of greenhouse gas (GHG) emission has resulted from deforestation activity (Ninan and Inoue,
2013). Among the GHG, CO2 accounts for a major share of 60 per cent (Melkania, 2009). The beginning of
the 20th century marked the setting up of scientific bodies like Inter Governmental Panel on Climate Change
(IPCC) and treaties like Kyoto Protocol for mitigating climate change which had gained importance since the
19th century. The possible implications of climate change as projected by IPCC indicates a loss of flora and
fauna and Himalayan glaciers by 2035, increase in the vector borne diseases, drought and flood, frequent dry
days, 38 percent drop in per capita water availability by 2050 and a rise in the sea level by 40cm by 2100.
Under these circumstances, it is mandatory to reduce the emission level of GHG. The carbon sequestration
potential which is the ability to sequester the atmospheric carbon in the various parts of the plants of the forest
can be made use of for sequestering the carbon which otherwise would cause an increase in the global
temperature. The world’s forest absorbs and sequesters 296 GT of carbon in its above and below ground
biomass (FAO, 2015). One-gram dry organic matter fixes 1.63g of CO2 (Ninan and Inoue, 2013) which if left
unmonitored leads to global temperature rise. Studies have revealed that the forest in India has a potential to
sequester 92 t/ hectare of CO2 (Haripriya, 2002) with a carbon uptake of 11.8 metric ton and a projected carbon
uptake of 55.48 Mt and 73.48 Mt and a sequestration potential of 4.1 and 9.8 Gt for the year 2020 and 2045
(Lal and Singh, 2000, Atkinson & Gundimeda, 2006). According to the Forest Survey of India, 2017, India
has a total carbon stock of 7082 million tons sequestered in the trees and soil. The forest trees when felled will
result in the emission of one sixth of the global carbon (FAO, 2017). The level of exploitation on the forest
ecosystem have exceeded the resilience capacity that they are not able to meet the demand of humans both in
the present and future. The concept of sustainable utilization of resources was advocated from the past but it
has nothing much to do in action.
2.1. Role of forest in maintaining forest soil

Forest has the ability to maintain soil fertility by preventing soil erosion, sediment deposition and pollution.
Forest soil has the capacity to buffer, filter and transform various xenic compounds and helps to regulate ES
like nutrient cycling, biomass production, water quality, climate regulation and pollination which is why it is
an important component of forest. Both forest soil and global forest biomass stores an equaling percentage of
carbon which is about 45 per cent (FAO, 2015). The valuation of soil erosion prevention function of pasture
land and agriculture land in Turkey was analyzed based on the nutrient loss and market price of fertilizer which
has to be applied to replenish the lost nutrients. The study revealed the economic loss due to soil erosion to be
$59.54/ha/year in the pasture land and $102.36/ha/year in agriculture land (Hacisalihoglu et al., 2010). Similar
study was conducted in the forest soil in Gujarat using replacement cost method. The nutrient value was
analyzed based on the market price method and the value was Rs. 13, 233/ha. Revised Universal Soil loss
equation is also now being widely used in determining the soil erosion loss rate in the watersheds which is
associated with land use change and anthropogenic activities (Kiran and Kaur, 2011). Studies have also
successfully incorporated GIS along with the RUSLE model for bringing out more reliable results (Shi et al.,
2004; Breiby, 2006; Prasannakumar et al., 2012; Farhan et al., 2013; Ganasri and Ramesh, 2016; Gelagay and
Minale, 2016). The economic cost of replacing the forest soil with alternate substitute is expensive. Hence the
conservation of forest soil is considered cost effective.
2.2. Forest and water

Forest play a key role in maintaining the hydrological balance in both local and global levels. Provisioning of
water by the forest ranges from drinking to bathing, cleaning and for agricultural purposes. The water body
which provides the water purification and water provisioning service from the forest are a part of a larger
watershed. A watershed is an area of land that feeds water draining through the landscape into a river and its
tributaries, through the process of precipitation. It is associated with the various components or groups of
ecosystems that make up the landscape within a watershed. It plays an important role in providing water
security to the users downstream of a water body. Watershed protection and restoration of the degraded
watershed can reduce or prevent downstream water management costs by providing protective cover for soil
and for cushioning impact of adverse climatic changes. Watershed delineation is often needed for finding the
value of the services provided by the water body. Various studies have been carried out based on the value
provided by the watershed based on the replacement cost method which is the cost of replacing the water
provisioning service with alternate methods which incur more cost (Francisco and Espiritu, 1999;; Tao et al.,
2012; Kreye et al., 2014). According to MA, 2005; 60per cent of ES have already been degraded and the
provision of freshwater is far beyond the level for sustaining current demand for it. The provision of financial
mechanisms to compensate the providers who manage the forest can be considered as a positive step towards
sustainable management of the watershed. A study conducted in Sardu watershed Nepal (Paudel et al., 2010)
has recommended Payment for Ecosystem Service (PES) through Conservation Finance Fund whose
contributors are the beneficiaries or water users at different levels collaborative and participatory approach to
integrate the ecosystem services at a watershed level. In 2012, a review on the status of PES in Sardu watershed
brought into light that 47 per cent of the total population are willing to contribute physical labor while 42
percent have agreed to allocate monetary contribution for conservation fund. The watershed considers only
drinking water service but provides only a very low return, so bundling of other services like carbon,
recreational service and biodiversity can bring out a more efficient strategy in PES. The same mode can be
adapted in India where there is growing dispute and disturbances between various states on the water sharing
(Kerala and Tamil Nadu, Karnataka and Tamil Nadu, Karnataka and Maharashtra, Punjab and Haryana and
the dispute is about to spread to other states also).
2.3. Forest and air quality

Forest ecosystem can have positive effects on air quality, primarily through interception, deposition and
removal of pollutants. This is a method of bioremediation. Emissions to the atmosphere from ecosystems can
directly and indirectly degrade the air quality. The vegetation belt of trees in the forest can play a major role
in minimizing the effect of pollutants mainly the particulate matter, No 2 and So2. Noise can also be considered
as a source of pollution in the ecosystem. Damage costs are one way of approximating the impacts of changes
in air pollution. A study in Beijing included the value of noise reduction by “four sides” tree belt and estimated
based on the length of the tree belt, its capacity to reduce noise, and the market price of using soundproof
materials and it was found that 4 to 5 m wide tree belt can reduce noise by 5 decibels (Wu et al., 2010).
3. CULTURAL SERVICES
The nonmaterial benefits people obtain from ecosystems through spiritual enrichment, cognitive development,
recreation, and aesthetic experiences are termed as cultural services (MA, 2005). They help to place a link
between the social and ecological issues (Milcu et al., 2013). While assigning a value to the cultural services,
their contribution to the human wellbeing from the aspect of cultural assessment have to be considered
(Charles and Dukes 2007, Eicken et al. 2009, Scullion et al. 2011, Milcu et al, 2013). Cultural services include
recreational and aesthetic value, cultural heritage, educational value, spiritual and religious value, knowledge
system, inspirational, social relations, cultural diversity and sense of place. Services which are documented
often are the recreational and ecotourism value, aesthetic and educational value. The valuation method used
for cultural services are the stated preference method (contingent valuation method and choice experiments)
and the travel cost method. The economic worth of different recreational areas were analyzed in India with the
aim of highlighting the conservation importance of the regions (Djafar, 2006; Panchamuki et al, 2008;
Dehghani et al, 2009; Mohandas et al., 2011; Pant et al., 2012; Ravindranath and Gundimeda, 2014). In the
Athirapally-Vazhachal region of Kerala an innovative site specific program for the development of
environment consciousness and awareness among the locals and visitors - ‘One Tourist One Rupee Ten Trees
Program’ was recommended by a study conducted by Kerala Forest Research Institute, in which one rupee is
collected from each tourist and a common conservation fund is set up. When the fund reaches Rs.500, a person
is employed for planting ten trees in the recreation area and conserves it for a period of six months. After the
conservation period, if the tree is sustaining the employed person should be paid Rs.500 from the fund as an
incentive (Anitha and Muraleedharan, 2007). This has not yet been implemented in the region and the number
of visitors reaching the destination is increasing day by day posing threat to the serene location. Local
economic development of tribal communities as a result of ecotourism development in the region due to
employment generation is an added advantage. In Parambikulam Tiger Reserve, Kerala, community
participation in ecotourism activities has helped to reduce their dependence on forest resources and improved
the livelihood of people by providing a steady source of income in addition to the incentives like educational
incentive, loan and financial assistance, insurance coverage, health programs and training in basic hospitality
skills thereby reducing the dependence on the forest (Vinodan and Manalel, 2011). Development of visitor
management strategy is an important tool in maintaining sustainable tourism in Protected Areas as increased
recreational use of an area will have a negative impact on the natural resources and cultural integrity of the
region in addition to depletion in quality of experience to the visitors (Candrea and Ispas, 2009). Chundamannil
and Ramachandran, 2002 developed a visitor management strategy for three Protected Areas in Kerala-
Parambikulam, Eravikulam and Neyyar Wildlife sanctuaries. The existing situation in each protected area was
looked up and ideal situation for development in Protected Areas was conceived followed by developing the
strategy of reaching the ideal situation. Entry fees and user fee are used as supplement budgetary support and
contribute to park maintenance and improvement of visitor facilities. The study suggests short term strategies
for sustainable tourism such as prevention of developmental activities in the ecologically fragile zone and
preservation of grassland-shola ecosystem, creation of infrastructure for visitor information and regular
training in wildlife management, visitor management, interpretation and documentation.
The tourism traffic of Kerala depicts an increasing trend over the years. The marginal change in the number
of visitors from one year to another indicates an increasing trend of the domestic tourists. The visitors’ flow
to the Wildlife Sanctuaries and National Parks of the state showed an increasing trend during the period.
Ecotourism growth in protected area can create income generation at the same time pose threat to fragile
ecosystem and also highlights the need for site specific management strategies (Jayaraman and Anitha, 2010).
The number of visitors are increasing in ecotourism sites causing an increased revenue and income generation.
On the other hand, the loss of the cultural integrity among the tribals and the resource exploitation by the
visitors are adversely affecting the region. The cultural tourism in Agasthyamala Biosphere Reserve has shown
an increasing trend in the visitor flow and revenue generation but augmented rate of visitation by the non-
tribals in the region has led to acculturation among indigenous communities (Anitha, 2010). A carrying
capacity analysis can resolve the problem by putting an upper limit to the number of visitors and restrict the
entry of visitors for a natural regeneration of the region. The lack of appraisal of the cultural service is mainly
due to the intangible nature of the services (Sarukhán and Whyte 2005, Adekola and Mitchell 2011, Daw et
al. 2011, Milcu et al., 2013) as they are commonly associated with emotional and mental profits which are
instinctual in nature (Kenter et al. 2011, Milcu et al., 2013) due to which their accountability will never be
complete. Cultural services are represented based on the individual and cultural assessment and their
contribution to human wellbeing (Charles and Dukes 2007, Eicken et al. 2009, Scullion et al. 2011) and their
incorporation to management plan has also been attempted (Dominati et al. 2010, Kimmel and Mander 2010).
IV. INNOVATIVE MARKET MECHANISMS

The use of market based instruments (MBI) for environmental protection has gained importance in developed
nations with developing nations in its initial stage of growth. The concept of free good service and over
exploitation of resources can be prevented with the enforcement of taxes and charges. Based on the polluter
pay principle for reducing the pollution emission, the issues of climate change, loss of biodiversity, human
health and sustainable use of resources are addressed by the implementation of MBI. MBI can be classified
under five different schemes-tradable permits, environmental taxes, environmental charges, subsidies and
incentives and liability and compensation. Pollution charges, water charges, charges for waste disposal are
imposed as part of environmental charges and environmental taxes are imposed for the emission of Co 2, Nox
and Sox. Environmental subsidies and incentives are provided for green purchasing which help to reduce
pollution (e.g. for waste water treatment, catalytic converter for reducing Co2 emission from vehicles). The
provision of incentives through Payment for Ecosystem Services (PES) is another innovative through which
the beneficiaries of environmental services, reward those whose lands provide these services with subsidies or
market payments. PES schemes helps to maintain or enhance those forest ecosystem services for which
markets or incentive mechanisms do not exist (Wunder, 2005). It is an approach to complement regulation and
other measures such as labelling and certification, to encourage consumers of ecosystem services to recognize
and pay for the value of those services. Costa Rica pioneered the use of PES by establishing a country wide
program of payment for ecosystem services. It is marked as one among the most successful programme
implemented in the country as part of forest policy in 1996 which has resulted in the regeneration of forest
area from 20 percent to more than 50 per cent. It is a program where landowners receive direct payment for
ecological services which their land produces, when they adopt land use and forest management technique
with minimum negative effect. Implementation of the PES is yet to be achieved in India as part of the forest
policies. A step forward in implementing PES can bring about a change in the way ecosystem services are
looked at and thought of ecosystem service as a free good will be wiped out. With a clear idea on the design
and setting of the price in case of emission trading systems these innovative market mechanisms are successful
in many European Union countries. Attempts to include such schemes through policies in India should also
be positively undertaken. To enhance the contribution of ecosystem to human wellbeing it is required to
enhance the management of relationship and the services provided by the ecosystem. The problem of not
integrating ES into national policies has resulted in the conflict between maintenance of integrity of ecosystem
and sector based resource management (Chen et al., 2014). The requirement of policy instrument is essential
as part of enhanced conservational measure to improve the provision of ES from forest which is important to
balance the supply of services to meet the need of the public.
V. CONCLUSION
Forest are a pre-requisite for economic development and considered as critical factor in securing continued
life support system. The over extractive and exploitative nature of resource use has led to a hindrance in the
dynamic interaction that existed between people and ecosystems (Sreelakshmi, 2004). Identifying the marginal
cost of non-marketed ecosystem service is important for social decision making and can help in accounting
for the increased GDP of forestry sector in the country. Economic valuation studies, considered as a
justification for conservation of forest is of great importance in a developing country like India where strong
forest policy are yet to be developed and inclusion of the results of the valuation studies in decision making
will strengthen the conservation aspect of forest and reduce the diversion of forest for non-forest purposes
VI. ACKNOWLEDGEMENT
The author would like to acknowledge Kerala State Council for Science, Technology and Environment
(KSCSTE) for the funding support in carrying out the study.
VII. REFERENCES
1. Adekola, O., and Mitchell, G., The Niger Delta wetlands: threats to ecosystem services, their importance to
dependent communities and possible management measures. International Journal of Biodiversity Science,
Ecosystem Services & Management., 2011. 7, 50-68.
2. Ahenkan, A., Boon, E., Improving the Supply Chain of Non-Timber Forest Products in Ghana. Supply
Chain Management - New Perspectives, Prof. Sanda Renko (Ed.). 2011, 443-458.
3. Anitha, V., Linking Conservation and Forest management with Sustainable livelihood and Resource use
conflict in the Kerala part of Agasthyamala Biosphere Reserve. KFRI research Report No.397. 2010
4. Anitha, V., Muraleedharan, P. K. Economic valuation of Ecotourism development of a Recreational site in
the Natural Forest of Southern Western Ghats. 2007. KFRI research Report No. 288.
5. Atkinson, G., Gundimeda, H., Accounting for India's forest wealth, Ecological Economics 59 2006., 462-
476
6. Bag, H., Ojha, N., Rath, B., NTFP Policy Regime after FRA: A study in select states of India. RCDC,
Bhubaneswar, 2011
7. Breiby, T., Assessment of Soil Erosion Risk within a Subwatershed using GIS and RUSLE with a
Comparative Analysis of the use of STATSGO and SSURGO Soil Databases. Volume 8, Papers in
Resource Analysis. 22pp. Saint Mary’s University of Minnesota Central Services Press. Winona, MN. 2006
8. Candrea, A. N., Ispas, A., Visitor Management, a Tool for Sustainable Tourism Development in Protected
Areas. Bulletin of the Transilvania University of Brasov Economic Sciences Series V, 2009, 2, 131-136.
9. Cavendish, M.W.P., The economics of natural resource utilization by communal area farmers of Zimbabwe.
1997, Ph.D. Thesis. Oxford, UK: University of Oxford.
10. CBD. THE CONVENTION ON BIOLOGICAL DIVERSITY. 1992
11. Charles, H. and J. Dukes. Impacts of invasive species on ecosystem services. 2007, Pages 217–237 in W.
Nentwig, ed. Biological Invasions. Berlin: Springer-Verlag
12. Chen, Y., Jessel, B., Fu, B., Yu, X., Pittock, J., Ecosystem Services and Management Strategy in China.
Springer Earth System Sciences. 2014
13. Chundamannil, M., Ramachandran, K, K., Development of visitor management strategy for Parambikulam
National Park, Neyyar Wildlife Sanctuary. KFRI Research Report No. 239, 2002
14. Costanza, R , de Groot, Sutton, P., Sandervan der Ploeg, Anderson, S, J., Kubiszewski, I., Farber, S.,
Turner, R, K., Global Environmental Change. Vol 26., 2014, 152-158
15. Costanza, R; Arge,R,G; Groot, D; Farberk, S; Grasso, M; Hannon, B; Limburg, K; Naeem,S; Limburg; P,
J; Raskin, R; Paul, P; Suttonk, K ; Marjan ,B., The value of the world’s ecosystem services and natural
capital. NATURE, 387, 1997, 253-260
16. Daily, G, C., Nature’s Services: Societal Dependence on Natural ecosystems. Island Press. Washington D
C, 1997
17. Daw, T., K. Brown, S. Rosendo, and R. Pomeroy., Applying the ecosystem services concept to poverty
alleviation: the need to disaggregate human well-being. Environmental Conservation 38, 2011, 370-379.
18. De Groot, R. S., Wilson, M. A., Boumans, R. J., A typology for the classification, description and valuation
of ecosystem functions, goods and services. Ecological Economics. Vol. 41. 2002, 393–408.
19. Dehghani, M., Iliev, R., Atran, S., Ginges, J., Medin, D. Emerging sacred values: The Iranian nuclear
program. Judgment and Decision Making. 4 (7), 2009, 990–993.
20. Djafar F. Cultural Services of Forests: A Case Study in Garhwal Hills, Uttaranchal, India. NETFOP Report
07. Alterra, Wageningen UR. 2006
21. Dominati, E., M. Patterson, and A. Mackay.,A framework for classifying and quantifying the natural capital
and ecosystem services of soils. Ecological Economics. 69, 2010, 1858-1868.
22. Ehrlich, P. R., Ehrlich, A. H., Extinction: the causes and consequences of the disappearance of species.
Random House, New York. 1981
23. Eicken, H., Lovecraft A. L., and Druckenmiller M. L., Sea-ice system services: a framework to help identify
and meet information needs relevant for Arctic observing networks. Arctic 62, 2009, 119-136.
24. FAO: Forest and Climate Change. FAO’s work on climate change forest. 2017
25. FAO: Forest Products Statistics. 2016.
26. FAO: Healthy soil for healthy life. International Year of Soils. 2015http://www.fao.org/soils-
2015/news/news-detail/en/c/285569/
27. Farhan, Y., Zregat, D., Farhan, I., Spatial Estimation of Soil Erosion Risk Using RUSLE Approach, RS,
and GIS Techniques: A Case Study of Kufranja Watershed, Northern Jordan. Journal of Water Resource
and Protection, 5, 2013, 1247-1261
28. Francisco, H, A., Espiritu, N, O., Valuation of Forest Resources in Watershed Areas: Selected Applications
in Makiling Forest Reserve. Journal of Philippine development. Vol.26(1) ,1999, 3-26
29. Ganasri, B, P., Ramesh, H., Assessment of soil erosion by RUSLE model using remote sensing and GIS -
A case study of Nethravathi Basin. Geoscience Frontiers. Vol 7(6), 2016, 953-961
30. Gelagay, H, S., Minale, A, S., Soil loss estimation using GIS and Remote sensing techniques: A case of
Koga watershed, Northwestern Ethiopia. International Soil and Water Conservation Research. Vol 4(2),
2016, 126-136
31. Global Forest Products Facts and Figures., Food and Agricultural Organization of United Nations. 2016
32. Hacisalihoglua, S; Toksoy, D; Kalca, A., Economic valuation of soil erosion in a semi-arid area in Turkey.
African Journal of Agricultural Research. Vol. 5(1), 2010, 1-6
33. Haripriya, G., "A framework for assessing carbon flow in Indian wood products " Environment,
Development and Sustainability’, vol. 3 (3), 2002, 229-251.
http://www.cbd.int/convention/)
http://www.fao.org/forestry/statistics/80938@180723/en/
34. Intergovernmental Panel on Climate Change (IPCC)., Fourth Assessment Report. Inter-Governmental
Panel on Climate Change, Cambridge University Press. Cambridge, UK. 2007
35. Jayaraman, K., Anitha, V., Forestry sector analysis for the state of Kerala. Kerala Forest Research Institute.
Peechi. KFRI Research Report No: 345, 2010
36. Kant, S., Nautiyal, J, C., Berry, R, A., Forests and economic welfare. Journal of Economic Studies. Vol.
23(2), 1996, 31-43
37. Kanwal, K, S., Non timber forest products (NTFP) as a tool for sustainable socio-economic development
of community. The Arunachal Times. 2014
38. Kenter, J. O., T. Hyde, M. Christie, and I. Fazey., The importance of deliberation in valuing ecosystem
services in developing countries — evidence from the Solomon Islands. Global Environmental Change 21.
2011, 505-521.
39. Kramer, R., Healy, R., Mendelsohn, R., Forest Valuation. In: Sharma, N, P (ed.) Managing the world’s
forests, 1992, 237-67. Kendall Hunt Publishing Company, Dubuque Iowa.
40. Kreye, M, M; Escobedo, F, J; Adams, D, C., The Value of Forest Conservation for Water Quality
Protection. Forests. Vol 5, 2014, 862-884.
41. Krishnakumar, J., Yanagida, J, F., Anitha, V., Balakrishnan, R., Radovich, T. J., Non-timber forest
products certification and management: A socioeconomic study among the Kadars in Kerala,
India. Environment, Development and Sustainability, 17(4), 2015, 837–858.
42. Laird, S.A., Ingram, V., Awono, A., Ndoye, O., Sunderland, T., Lisinge, E. and Nkuinkeu R., Integrating
customary and statutory systems: the struggle to develop a legal and policy framework for NTFPs in
Cameroon. In: Laird, S.A., McLain, R.J. and Wynberg, R.P. (eds) Wild Product Governance: Finding
Policies that Work for Non-Timber Forest Products. Earthscan, London, 2010, 53–70.
43. Lal, M; Singh, R., Carbon sequestration potential of Indian forests. Environmental monitoring and
assessment. Vol. 60, 2000, 315-327.
44. Marsh, G P., Man and Nature. Charles Scribner, New York. 1864
45. Melkania, N, P., Carbon Sequestration in Indian Natural and Planted Forests. Indian Forester. Vol. 135 (3),
2009, 380-387.
46. Milcu, A, I., HAnspach, J., Abson, D., Fischer, J., Cultural ecosystem services: a literature review and
prospects for future research. Ecology and Society. 18(3), 2013, 44
47. Millennium Ecosystem Assessment., Ecosystems and Human Well-being: Synthesis. Island Press,
Washington, DC. 2005
48. Mohandas, T, V., Remadevi, O, K., A study on tourist visitations in protected areas of central Western
Ghats in Karnataka. Indian For, 137(4), 2011, 403-410
49. Muraleedharan, P, K., Sasidharan, N., Seethalakshmi, K, K., Biodiversity in Tropical Moist Forests: a Study
of Sustainable Use of Non-Wood Forest Products in the Western Ghats, Kerala. KFRI Research Report No.
133. Kerala Forest Research Institute, Peechi, 1997
50. Murthy, I, K., Bhat, P, R., Ravindranath, N, H., Sukumar, R., ‘Financial valuation of nontimber forest
products flows in Uttara Kannada district, Western Ghats, Karnataka’. Current Science 88 (10), 2005,
1573–1579.
51. Nasi, R., Wunder, S. and Campos J.J., Forest Ecosystem Services: Can they pay our way out of
deforestation? A discussion paper prepared for the GEF for the Forestry Roundtable held in conjunction
with the UNFF II, 2002. New York.
52. Ninan, K, N; Inoue, M., Valuing forest ecosystem services: Case study of a forest reserve in Japan.
Ecosystem Services. Vol 5. 2013, 78-87
53. Pagiola, S; Ritter, K; Bishop, J., Assessing the Economic Value of Ecosystem Conservation. Environment
Department Paper No.101. In collaboration with The Nature Conservancy and IUCN—The World
Conservation Union. 2004
54. Panchamukhi, P, R., Trivedi, P., Debi, S., Kulkarni, A, K., Sharma, P., Natural Resource Accounting In
Karnataka: A Study on Land and Forestry Sector (Excluding Mining). Centre for Multi-Disciplinary
Development Research, Dharwad, 2008, 242.
55. Pant, K, P; Rasul, G; Chettri, N; Rai, K, R; Sharma, E., Value of Forest Ecosystem Services: A quantitative
estimation from the Kangchenjunga landscape in eastern Nepal. ICIMOD Working Paper 2012/5
56. Paudel, D; Karn, P; Singh, D. Study report of Economic valuation of Watershed Services and Payment for
Environmental Services (PES) Scheme for Sardu Watershed Conservation. IUCN. Funded by UKaid from
the Department of International Development, 2010.
57. Pearce, D, W., Moran, D., “Handbook on the applied valuation of biological diversity”, Report prepared
for Environment Directorate, OECD, Paris. 2001
58. Pearce, D, W., Pearce, C., The Value of Ecosystems. Convention of Biological Diversity, Montreal, 2001
59. Pearce, D, W., The Economic Value of Forest Ecosystem. Blackwell Science Inc. Ecosystem Health. Vol.
7(4), 2001, 284-296
60. Peters, M, C; Gentry, A, H; Mendelsohn, R, O., Valuation of an Amazonian Rainforest. Nature. Vol. 339,
1989, 655-661
61. Prasannakumar, V., Vijith, H., Abinod, S., Geetha, N., Estimation of soil erosion risk within a small
mountainous sub-watershed in Kerala, India, using Revised Universal Soil Loss Equation (RUSLE) and
geo-information technology. Geo Science Frontiers. Vol 3(2) ,2012, 209-215
62. Quang., Commercial collection of NTFPs and household living in or near the forests. Science Direct. 2006
63. Ramabhadran, R., Ramachandra, T, V., Water Woes Kerala Is Fast Losing Its Forest Cover: What Are We
Doing About It? Times of India 26-05-2017
64. Ramana, P, Patil, S, K., Marketing of value added products from Artocarpus species in Uttara Kannada
district of Karnataka. My Forest 44(1), 2008, 49-53.
65. Rao, A. R; Singh, B. P., Non-wood Forest products contribution in tribal economy. Indian Forester: 122
(4), 1996, 337-342.
66. Ravindranath, N, H; Gundimeda, H., Valuation of forest ecosystem services and biodiversity in the Western
Ghats. The Economics of Ecosystems and Biodiversity TEEB India Initiative: Interim Report - Working
Document. 2014, 92p
67. Reddy, C, S., Jha, C, S., Dadhwal, V, K., Assessment and monitoring of long-term forest cover changes
(1920–2013) in Western Ghats biodiversity hotspot. Journal of Earth System Science. 2016, DOI:
10.1007/s12040-015-0645-y
68. Sarukhán, J., and A. Whyte, editors., Ecosystems and human well-being: Synthesis (Millennium Ecosystem
Assessment). Island Press, World Resources Institute, Washington, D.C., USA. 2005
69. Scullion, J., C. W. Thomas, K. A. Vogt, O. Pérez-Maqueo, and M. G. Logsdon., Evaluating the
environmental impact of payments for ecosystem services in Coatepec (Mexico) using remote sensing and
on-site interviews. Environmental Conservation 38, 2011, 426-434.
70. Shackleton, C, M., Shackleton, S, E., Direct use values of savanna resource harvested from communal
savannas in the Bushbuckridge lowveld, South Africa. Journal of Tropical Forest Products Vol. 6, 2000,
21-40.
71. Shi, Z.H., Cai, C, F., Ding, S, W., Wang, T, W., Chow, T.L., Soil conservation planning at the small
watershed level using RUSLE with GIS: a case study in the Three Gorge area of China. Catena (Science
Direct), 55 (1), 2004, 33-48
72. Shivaprasad T, M; Chandrashekar, H, M., Impact of New Forest policies on Collection and Marketing of
Minor Forest Produce in Karnataka, with Special reference to LAMPS. IOSR Journal of Humanities and
Social Science, Volume 19 (11), 2014, 9-14.
73. Shylajan, C, S; Mythili, G., Community Dependence on Non-timber Forest Products: A Household
Analysis and its Implication for Forest Conservation. Working Paper, No-2007-005. Indira Gandhi Institute
of Developmental Research, Mumbai. 2007
74. SOFO. Enhancing the socioeconomic benefits from forests. State of the World’s Forests. 2014, Food and
Agriculture Organization of the United Nation
75. Sreelakshmi, K., Resource use conflict and stakeholder diversity in valuing the forest benefits: An
assessment of diverse benefits of the forest ecosystem in Kerala. Unpublished Ph.D. thesis. Forest Research
Institute, Dehradun. 2004
76. State of Forest Report India., Forest Survey of India (Ministry of Environment & Forests), 2017
77. Tao, Z., Yan, H., Zhan, J., Economic Valuation of Forest Ecosystem Services in Heshui Watershed using
Contingent Valuation Method. Procedia Environmental Sciences. Vol 13, 2012, 2445-2450
78. TEEB. The Economics of Ecosystem and Biodiversity for National and International Policy makers. 2009
79. Tewari, D, D, Campbell J, Y., Developing and sustaining non-timber forest products: some policy issues
and concerns with special reference to India. Journal of Sustainable Forestry, 3(1), 1995, 53-79.
80. UNO. United Nations Department of Economics and Social Affairs. 2017,
https://www.un.org/development/desa/publications/video/forest-based-solutions-to-improve-peoples-lives
81. Vinodan, A., Manalel, J., Local Economic benefit of ecotourism: A Case Study of Parambikulam Tiger
Reserve in Kerala. South Asian Journal of Tourism and Heritage. Vol 4(2) 2011, 93-109
82. WEHAB., “A Framework for Action on Biodiversity and Ecosystem Management”, Water, Energy, Health,
Agriculture and Biodiversity Working Group Report, contribution to the World Summit on Sustainable
Development, Johannesburg, South Africa, United Nations, New York. 2002
83. Wu, S; Hou, Y; Yuan, G., Valuation of forest ecosystem goods and services and forest natural capital of
the Beijing municipality, China. Unasylva 234/235, Vol. 61, 2010,28-36.
84. Wunder, S., Payments for environmental services: Some nuts and bolts. CIFOR Occasional Paper No. 42.
Center for International Forestry Research, Indonesia, 2005.

Critical Review On The Valuation of ES From The Forests of India

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Critical Review On The Valuation of ES From The Forests of India

Caricato da

Copyright:

Formati disponibili

© 2019 IJRAR March 2019, Volume 6, Issue 1 www.ijrar.

org (E-ISSN 2348-1269, P- ISSN 2349-5138)

A CRITICAL REVIEW ON THE VALUATION

Keywords: forest, ecosystem, economic valuation, ecosystem service

II. THE HISTORY OF ECONOMIC VALUATION

Table1: Goods and services from forest ecosystems as

 Food  Gas regulation

Information Function Habitat Function

 Aesthetic  Refugium function

Figure 1: Ecosystem services as per Millennium

III. STATUS OF ECOSYSTEM SERVICES

1.1. Status of NTFP in India

2.1. Role of forest in maintaining forest soil

2.2. Forest and water

2.3. Forest and air quality

IV. INNOVATIVE MARKET MECHANISMS

Potrebbero piacerti anche