Payment for so-called ecosystem services means that a forest owner not only can get paid for the timber that’s harvested but also for other values. Carbon storage is one example of such a service we already wrote about here at NordicWoodJournal.com. We also wrote about other alternatives to selling the timber through “normal” channels so, the theme is not new. Nevertheless, the EU Commission presented proposals for new guidelines within the Green Deal. It’s about supporting sustainable forestry and creating payment systems for ecosystem services.
My colleague Fredrik Reuter at iSkogen.se took on to dig into this to find out what’s in it for the forest owners. Here are his conclusions.
Getting paid for ecosystem services – Find the hidden values
According to the EU Commission, the new guidelines are under the framework of the Green Deal. To stop climate change is the purpose of the initiative. The Commission thinks that the forest owner already tributes to the fight against climate change and should get paid for that. With that said, the Commission wishes to create initiatives that will lead to even better future forests in Europe.
The EU Commission identifies that a prosperous forest, among other things, contributes to:
- Storing carbon dioxide from the atmosphere
- Creating better water- and air quality
- Increasing the well-being of humans
- Increasing biodiversity
- Gives climate-smart products through e.g., wood construction
The Commission also states that the forest owners only get paid for one of those benefits today. It’s important to keep in mind that this partly is why the new guidelines about payment for the forest’s ecosystem services have been created.
It’s voluntary for forest owners
The Commission is very clear that systems like these must be voluntary. It’s up to each forest owner to decide whether to use the future payment system for ecosystem services or not. The choice is yours the day the system is launched – keep on doing what you are doing or join the system.
The reason for this flexibility is not clear but most likely it’s about not using force as that can create resistance against the system.
Financial values on different ecosystem services in the forest
Below there is a list of values in SEK (Swedish Krona. 1 USD = approx. 11 SEK) per hectare and year according to the EU Commission. Please note that the value could serve other receivers today (the values are in the forest even though the forest owner doesn’t get paid for it today).
Value SEK/ha annually Timber sales 1166 Other (berries, mushrooms, hunting, etc.) 306 Air quality 1646 Carbon storage 10561 Biodiversity 3490 Water flow/quality 12620 Preventing erosion 4709 Recreation 4884
As you can see in the list, the most valuable service is water. Almost 12 times more valuable than timber sales. But maybe cheap if you consider the volume? The annual precipitation in Sweden is approx. 7 million liters of water per hectare …
Nothing is however said about whether the Swedes automatically will get this amount of money in a future system, but it’s an interesting list that we (in Sweden) have never seen before.
Where does the money come from?
In this new potential system, the forest owner will not only get paid for the timber. An important issue is how the forest owner shall get paid and by whom. As for where the money will come from, the Commission seems flexible. Several systems could be created from money from CAP (agricultural support) to systems where companies and/or private persons will pay for the forest’s ecosystem services.
This is, of course, an important issue that will be discussed further on, it seems that the Commission wants to focus on creating rigid systems that will make payment easy no matter where the money comes from.
Monitoring, reporting, and verification
A system for monitoring, reporting, and verification is suggested in the text. It’s simply a framework that will guarantee that the actions within the system are complied with and verified. But also here some flexibility seems to be possible. It’s mentioned that the FSC (Forestry Stewardship Council) has started a system for ecosystem services (however not in Sweden) and authorities in the respective member states could also take on the responsibility of verifying the standard. Satellite monitoring is mentioned in the text as a part of the system as well.
It’s obvious that the Commission has not yet finished the framework and that changes might occur. One example is the parallel process of creating a certification system for carbon storage is mentioned. This has been underway for some years now and is delayed. The carbon certification system will most likely be a part of the coming system.
Clear-cut free forestry in Close to Nature
Apart from the guidelines for payment systems for ecosystem services, a guideline for sustainable forest management is now available. As we see it, those guidelines could cooperate but don’t necessarily have to. We might have misunderstood, but it seems that a forest owner will have a free choice.
If you in the future wish to optimize your cash flow from the forest ecosystem services, you should probably certify your total forest land area. Then you can choose to do different actions within the estate due to the state of each stand. E.g., if one stand has high environmental values you can plan the management of that stand without clear cuts, or even no actions at all, and verify that the high environmental values are maintained or increasing – and get paid for that.
Or you can certify your forest land for ecosystem services only, “sustainable forestry”. If so, in Sweden, that means you can’t make any clear cuts over 0,5 hectares. But (maybe) you can make lots of money on carbon storage, water quality, recreation, biodiversity, and the well-being of humans. I must confess, it sounds a bit too good to be true. But still …
As mentioned above: the choice is yours. You can also go on with business as usual and manage your forest (almost) as you want to. But then you won’t get any extras for the ecosystem services.
As you may understand, dear reader, there are lots of uncertainties in this. It’s a future system that is under construction and we don’t know exactly what it will be. The exciting part is the importance of finding out the real values of the forest.
Whether we like it or not, systems to stop climate change are underway and the forest is an important part of that. Maybe we should have understood that the forest ecosystem has many more advantages than we thought. Maybe we missed that the forest is important for e.g., the future water supply.
Maybe it’s time to reevaluate the forest from this point of view. Maybe some people already did, e.g., those who keep buying forest land even though the prices keep going up independent of wars and low economy.