Why the world needs to put a better price on the rainforest

Convincing people not to chop down trees is hard, especially in poor countries, where the quick fix of clearing land for development and selling timber seems like a winning strategy. When money is on the table, it’s hard for do-gooders warning about threats such as global warming to get much traction with talk of carbon reserves, or locals to win debates with arguments about tradition.

But what if you could prove that the forest itself was a potential cash cow, and that leaving it alone might make more money than cutting it down?

That’s the premise of a new report from the Center on Global Development by the economist Katrina Mullan, who quantifies the value of forest ecosystems in an effort to complicate the traditional binary between conservation and development. Her hope is that more people will see the immediate benefits of conservation.

In China, for example, she found that a reforestation effort in the upper watershed of the Three Gorges Hydroelectric Power Dam helped control erosion, saving $15.1 million in sediment-clearing costs and generating an additional $21.9 million worth of electricity thanks to increased water flow each year.

When mangrove forests on coasts are destroyed, they expose nearby settlements to natural disasters (particularly noticeable during the 2004 Indian Ocean tsunami) and reduce the productivity of fisheries—in Mexico, a 3% reduction of mangrove area in one village reduced revenue from shrimp harvests by $279,000 a year. Forests provide bee populations for pollination of Costa Rican coffee plantations, increasing profits by $62,000 a year.

And when fires are started to clear forests or as a side-effect of logging, the smoke has serious health implications: Forest fires in Indonesia are estimated to have generated $300 million in national health costs from respiratory illness.

Mullan hopes that governments in developing economies can use these ideas to increase the compensation developers must pay residents to offset the economic losses of deforestation, or even to have those companies pay for conservation. In Nepal, for example, a fishery cooperative pays upstream residents to use forestry practices that minimize the erosion that could fill their waters with sediment.

It’s not easy to value forest land—the calculations depend on location, how people use it, and the level of development in the area. But the odds that protecting forests will be more lucrative than harvesting them increase where rural population density is high, incomes are low and natural disasters are prevalent—exactly the circumstances that increase the temptations of deforestation.

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