Forest Biodiversity and Timber Extraction

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Forest Biodiversity and Timber Extraction

• Kanchan Chopra
• Pushpam Kumar
• Institute of Economic Growth
• Delhi 110007 India
• Fourth Bio-Econ Workshop, Venice
• August 28-29, 2003.

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Forest Biodiversity and Use for human well-being

• Forests can provide a range of products and
  services for human use, primarly due to diversity
  inherent in them, thereby contributing to human
  wellbeing
• The mix that is available depends on the demand
  and the nature of the economic regimes within
  which they are extracted
• Often, market and non-market regimes operate
  together in provision e.g.of timber and
  non-timber forest products.

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Forest Biodiversity and Timber Extraction

• The interaction takes place in two ways
• through the effect of changed biodiversity on the
  extraction effort for the marketed product
  timber
• through policies that increase the supply of
  marketed product
• Combined impact over time is examined in this
  paper

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Organisation of the Paper

• Characterisation and Measurement of Bio-diversity
• Bio-economic indices as measures of biodiversity
  in use
• The theoretical model
• The reduced form equations and the econometric
  estimation
• Results and Discussion

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Characterization and Measurement of Biodiversity

• Biodiversity the variety and variability of
  life forms from the molecular to the biome
  levelThree disciplines characterize and measure
  biodiversity
• Taxonomy provides the reference system and
  depicts patterns of diversity
• Genetics knowledge of gene variations within and
  between species
• Ecology provides knowledge of ecological systems
  in which diversity is based

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Eco-systems and Biodiversity

• Measurement of biodiversity can be made in
  alternative ways
• Number of species
• Size of an area as a measure as in island
  biogeography theory
• Functional diversity Ecologists envisage
  functionality as relevant for the eco-system
  itself ecological functionality
• Social Scientists interest is in use value or
  functionality in relation to humans

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Diversity and Use by Humans

• The study of forest products as timber and
  non-timber forest products provides a measure of
  diversity in use
• Weighted index of Bioeconomic Diversity Sigma
  (piyi/TR)2 where TR Sigma piyi
• In finding values of timber Market prices
• For non-timber non-market values

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The Biodiversity Index

• The pi s stand for value, not market price only
• For some commodities, market prices may measure
  value
• For others, value may be measured by labour for
  extraction, non-market traded value etc.
• The higher the index, the lower the functional
  biodiversity of the forest

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The Model

• The Gordon Schaeffer model is the starting point
  for the present model
• A multi-species natural forest is like a pool
  from which valuable species are being extracted
  products are ranked by value and high value
  products extracted first

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The Model

• Y f(E, X) where Y extraction of timber
• E effort X Stock of timber
• Changes in stock are given by
• X dot rX(1-X/K)-qEX..(1)
• rnet rate of regeneration q coefficient
  depicting availability of timber species and
• qEX Extraction (natural forest here no
  rotation extraction proportional to effort)

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The model ctd.

• Forest departments manage parts of forests for
  sustainable extraction of timber (not for
  sustainable extraction of all goods and services)
  we put X dot 0
• Hence we obtain, extraction YqEX (a function of
  effort and extraction as YqEK(1-qE/r), a
  function of E and K

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The modified model

• Bio economic Diversity Index Sigmai (Pi Yi
  /TR)2
• and TR SigmaiPiYi
• Now, YqBEX.(4)
• B, the biodiversity index is a shift parameter
  implying extraction per unit effort Y/EF(B,X)
  model with biodiversity

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The modified model continued

• Interest in timber extraction results in more
  plantation forests, growth function becomes
• Xdot rX(1eW-X/K)-qEX..(5)
• W Ratio of plantation area to total forest
  area e coefficient for impact of W on timber
  stock

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The modified model ctd

• However, Bf(W) with B increasing as W increases
  (less diversity with plantations)
• New growth and sustainable yield functions for
  timber
• Xdot rX(1 eW-X/ K)-qBEX..(6)
• Y qKBE(1eW-qBE/r).(7)

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Reduced form of Equations

• Define Extraction per unit effort, U
• Without biodiversity index U Y/E
• With bio-diversity effort U Y/BE
• In both cases, XU/q
• Growth function(6) is expressed in terms of U
• Udot rU(1-U/qK eW)-qBEU
• U dot/U r qBE-(r/qK)U reW.(8)

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Methods of Estimation

• The above is a recasting of the Schaefar model as
  a dynamic, discrete time, model
• Leads to a differential equation in Ut(Schnute)
• Adding time subscripts and integrating from t-1
  to t, we get (with U defined with and without B
  as Ut and Ubt)
• ln(Ut/Ut-1) r-qEt-(r/qK)UtreWte.(9)
• ln(Ubt/Ubt-1) r-qEt-(r/qK) UbtreWte..(10)

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Data Aspects Forests in a north Indian State

• The state of Uttar Pradesh in Northern India has
  an area of 29.441 million hectares with 17.29 as
  forest area
• Seven types of forests three tropical subtypes,
  one sub-tropical, sub Alpine and Alpine..Many
  species natural forest with small managed patches
• Another characterisation Dense with more than
  70 canopy cover Open 30-70 canopy cover
  scrub 10-40 canopy cover.

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Forest Characteristics and Data

• No single dominating species hence very diverse
• Land use changes documented plantations
  increasing over time
• Output Extraction of timber 1975 to 2000
• Extraction cost Costs of felling and
  transportation to the forest gate, corrected for
  difference between monetary and real wage rate to
  approximate the effortvariable

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Biodiversity Index

• As stated above, it is a bioeconomic diversity
  index
• Data on quantity of timber and NTFP extraction
  from forest department
• Sales Value of timber and NTFP from UP Forest
  Corporation market prices for timber different
  kinds of values for NTFPs

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Three Selected Equations

• I ln (Ut/Ut-1) f( Et, Ut)
• II ln (Ubt/Ubt-1) f( Et, Ut)
• III ln (Ubt/Ubt-1) f(Et, Ubt, Wt)
• Ut and Ubt being defined as with and without the
  biodiversity index

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Data Sources

• Output of timber in cubic metres per annum for 25
  years from Annual Reports of Forest Corporation
  of UP
• Effort in Extraction treated as costs of felling
  and transportation to the forest gate deflated
  by an index of labour cost to arrive at the
  effort variable
• Bioeconomic index of diversity Timber and
  non-timber products and their value, market or
  otherwise.

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Results and Discussion

• Equation III gives best results in terms of
  explanatory power, nature of fit and DW
  statistic the dependent variable is in
  logarithmic form and a ratio of two years
  observations are taken, robustness of the results
  is ensured
• III Log (Ubt/Ubt-1) r (0.4495)0.0853Et
• (2.9636)00169Ubt (2.8354)8.7454 Wt

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Results and Discussion Ctd.

• In this form of the equation,explanatory power
  increases and
• Extraction Y is positively related to Effort E
  though not a significant determinant of trends in
  extraction over time
• Extraction increases over time (significantly) as
  W increases (planted area increases )
• Extraction increases over time (significantly) as
  Ubt increases

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Results and Discussion

• Consider that Ubt is defined as Y/BE It can
  increase
• With increasing B if Y rises faster than B
  (with constant E). In other words, a decreasing
  biodiversity with extraction rising faster,
  pushes the system towards a state in which
  increases in extraction take place at an
  increasing rate
• With falling B, (increasing biodiversity), Ubt
  could decrease if Y is not rising faster than B
  is decreasing. This could lead to a decreasing
  trend in extraction in following periods of time.
  

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Conclusions and Pointers

• A decrease in biodiversity may imply a rise in
  extraction and at a rising rate
• An increased biodiversity ingeneral means higher
  extraction may imply a decreasing trend in the
  rate of extraction in the future if present
  extraction does not rise faster than the rate of
  increase in biodiversity
• Together, these two results point to a distinct
  trade-off between timber extraction levels in the
  short and long time periods in the scenarios
  studied.

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Conclusions and Pointers

• Implies that a reduced biodiversity may or may
  not be good for timber extraction in the long run
• The model attributes it to two kinds of effects
  through increasing cost of extraction and policy
  encouraging monoculture
• Plantation policies must balance timber
  extraction and biodiversity maintenance
  objectives