Economic Valuation Harju

Description of valuation study conducted – SUPPLY

Research Question:
Estimated need for compensation (per hectare and total) in case of replacing clear cutting with shelterwood cutting in forest stand compartments in densely populated areas and in 100 m wide zone surrounding them for a period of five years in state and private forests in Harju County.

Method applied:
Cost accounting based on map data – first the area of forest compartments in densely populated areas and in 100 m wide zone in Harju County was selected; then the ownership was ascertained; then the calculations of costs was made for private and public forests. It was assumed, that the same averaged level of compensation is used for all areas of all types of mature forests – 625 EUR/ha.
Also a private forest owner’s web-survey was carried out for clearing out on what conditions they would make the agreements with local governments about replacing the clear cutting. 67 owners completed the questionnaire.

 

PG valuation results – SUPPLY

Area of mature forest in densely populated areas and their buffer zones in Harju County (incl. towns) is: 3 091.4 ha state forest and 5 988.7 ha private forest. Financial relief for the state-owned forest management (replacement of clear-cutting with shelterwood cutting) would cost approx. 1.7 MEUR for 5 years in Harju County and for the private forest owners about 0.9 MEUR for 5 years in Harju County. This means about 125 €/ha/year.

According to the web-based survey the different scenarios were offered to the respondents for the compensation contracts about clearcutting prohibition. The compensation amount is quite similar in all cases – around 210 €/ha/year. More precise financial evaluation of the mechanisms‘ cost we got after modeling the mechanisms using differentiated compensation rates for forest location type, a set of forest allocations for a 20 year term and a seven-year payment period. Then the compensation rates will be between 700 to 2200 €/ha/7 years.