Valuation of ecosystem services of Tamil Nadu forests

Abstract

Though forests are very important providers of crucial life supporting ecosystem services, their conservation has always been a difficult task. Market failure in the forestry sector has been attributed as the main reason for its degradation and disappearance. Hence it is very important that the issue of conservation is viewed from an economic angle rather than just ethical or functional. One of the first but extremely important steps in this direction is to understand the economic value of forests. However, this task is extremely challenging as most of the ecosystem services are not marketed and hence fixing a value to the services is difficult. In this study, the value of the ecosystem services from the forests of Tamil Nadu has been estimated using the benefits transfer method. The two important models used are the values obtained first from the monumental paper by Costanza et al, 1997 in Nature and the other being from the Orders of the Ministry of Environment of Forests (MoEF), which was based on the orders of the Supreme Court. The value of the ecosystem services from the forests of Tamil Nadu annually has been estimated to be Rs. 38,878 Crores (August, 2011 prices) using the Costanza model and Rs. 14,452 Crores using the Orders of the Ministry of Environment and Forests. It has been found that the actual revenue from the forests of Tamil Nadu is about 0.006 % of the estimate (using MoEForders) of ecosystem services obtained in this study and the expenditure incurred by the Government towards forest conservation is also extremely low (0.02 % of the estimate). The contribution of forestry in the State Net Domestic Product (SNDP) was found to be extremely low (0.7 %). It has been found that the estimate arrived in this study (using MOEF orders) of the value of ecosystem services from forests was 5.2 %of SNDP. It is hoped that the rough estimate obtained in this study would reemphasize the importance of forests towards sustainable development in the state and would lead to more effective forest conservation