Report of the Tiger Task Force - PRS

■ JOINING THE DOTS TIGER TASK FORCE REPORTEcological services valuationsHimachal PradeshA valuation of Himachal Pradesh’s forests used acombination of methods: market prices orestimates for timber, fodder, fuelwood and nontimberforest produce which have markets; and thetravel cost method to gauge the value ofecotourism. They revealed that the state’s forestsprovide annual benefits exceeding Rs 1,00,000crore. 2Bhopal (Madhya Pradesh)The Kolar dam provides nearly 60 per cent ofBhopal’s water. The dam receives water from theKolar river, which originates from a thicklyforested area 70 km upstream 3 . The 60-70 villagesin this catchment area put significant bioticpressure on these forests: they are largely poortribal communities dependent on the forests fortheir fuelwood, fodder and non-timber forestproduce. To maintain watershed services in thelong run, an incentive-based system was proposedto motivate communities in the catchment areas toprotect the forests, which would be cheaper thanother alternatives.A study by Madhu Verma on the Bhoj wetlandsused a combination of methods like directvaluation, contingent valuation, preventative orreplacement cost and hedonic pricing to put avalue on various benefits. Livelihood benefits werecalculated using incomes or the market price ofproducts. Bhopal currently makes no payments atall for watershed protection services it receivesfrom these forests. Yet it pays Rs 9.5 crore to supplyhighly subsidised drinking water, which could besaved if a fraction of the cost was spent onconservation activities in the catchment area 4 .Costa RicaIn 1996, Costa Rica implemented a system of‘payments for environmental services’ (PES).Through financial and legal mechanisms, local,national and global beneficiaries of forest servicescompensate those who protect them. Funds areallocated through the National Forestry FinancialFund, which works directly with people, andthrough NGOs; these funds compensate those whoprovide these services. Costa Rica’s 1996 forestrylaw explicitly recognises four ecosystem servicesprovided by forests: carbon fixation andsequestration, hydrological services, biodiversityprotection and scenic beauty 5 .Community management of Mayan BiosphereAlmost 3,88,000 hectare (ha) of the MayanBiosphere, a 2-million ha reserve in Guatemala, hascome under community managed concessions. Thefirst community concession was awarded in thearea in 1996. The concessions were created as aresponse to increased illegal logging and thedevelopment of new agricultural areas. Thecommunity forest management is verified forsustainability by independent parties, and reportsindicate that the pressure on the reserve hasdecreased, biodiversity values have beenmaintained and extra income has been generatedfrom the communities. 6Cost of conservationIn fact, the ‘burden’ of conservation has grown overthe last few years. An analysis of the revenue andexpenditure of the state forest sector shows thatconservation is costing forest-dependent statesenormously.While the revenue generated by the states fromforests have dwindled, expenditures have mounted.In the mid-1990s, for instance, Madhya Pradeshmade money from its forest resources. Its revenuewas higher than its expenditure in this sector. But by2005, the situation completely reversed. Now thestate spends more than it can earn. Today, ArunachalPradesh’s spending on forestry is as high as itsrevenue used to be in the mid-1990s; 80 per cent ofthe state is forested, but today it makes practicallynothing from its vast forest wealth (See graph:Changing state expenditure on forestry and revenueearned from the sector)The situation is such that India, today, hasbecome a major importer of wood — that is to say,from forests cut elsewhere. By 2001, India’s export offorest-based products stood at Rs 4,459 crore; themajor items were rubber and paper products. Butimports were over a whopping Rs 12,000 crore —three times higher. That year, the country spent overRs 2,000 crore simply on importing wood 7 .The repercussions are at three levels. One, thecountry loses precious foreign exchange. Two, thecountry keeps its own millions of people deprived ofeconomic development. And three, the costs ofmaintaining these forested areas are borne by stategovernments whose budgets are reduced and whohave less and less money for developmentprogrammes.Economic valuation of forests offers amethodology to quantitatively calculate the benefitsthat forests provide, and also helps elucidate who are142 The way ahead