Summary of the final report
Ville Ovaskainen, Terhi Koskela, Mikko Kurttila and Riitta Hänninen
The final report of Safeguarding Forest Biodiversity – Policy Instruments and Socio-Economic Impacts (TUK) research programme is published as part of Metla's working paper series, no 158 ( in Finnish). The report includes brief summaries of the key results of the research projects. A large proportion of the project results have already been presented in various publications, the most important of which are the two earlier reports: the METSO 2003–2007 monitoring and evaluation report (Syrjänen et al. 2007) and the research report (Horne et al. 2006). These were publi shed by Metla, the Ministry of Agriculture and Forestry, the Ministry of the Environment and the Finnish Environment Institute (SYKE).
In the following, we briefly discuss the key results of the programme and evaluate their importance with respect to other studies in the same area of research. In addition, some key future research and development needs are specified. In some subject areas, the research work is being continued by Metla's METSO projects.
3.1 Results of the programme and implications for the safeguarding of forest biodiversity
Benefits of safeguarding forest biodiversity − citizens’ attitudes and willingness to pay for increased conservation
Nationwide surveys targeted at the general public and non-industrial private forest (NIPF) owners before and during the METSO 2003–2007 pilot phase revealed clear support for the METSO programme and its voluntary conservation instruments (Ovaskainen et al. 2010, final report 2.1.3). Most Finnish citizens supported an increase in forest conservation in Southern Finland (e.g. Horne et al. 2004, Horne & Karppinen 2009). However, notable differences were found between the preferences expressed by various respondent groups. While some citizens emphasised the utilisation of forests as a source of wood, others focused on their intangible, nature values. In general, the retention of property rights and the accommodation of conservation with forestry and other forest use were considered important by respondents. Most Finnish citizens agreed that additional conservation would enhance their welfare and were willing to pay for it (Lehtonen et al. 2003).
The acceptability of policy instruments used in the implementation of conservation policy, as assessed by citizens and forest owners
According to the nationwide survey results, with respect to conservation measures citizens were most in favour of voluntary contracts and information on biodiversity (Horne et al. 2004a, Horne & Karppinen 2009). With respect to voluntary instruments, citizens’ willingness to pay for increased conservation was greater than in the case of traditional land acquisition. Most citizens believed that payments to landowners should cover at least the full amount of forgone timber revenues.
For forest owners, the retention of property rights and sovereignty was of particular importance (Horne et al. 2004b, 2009, Koskela 2010, final report 2.1.4). Conservation contracts of a voluntary nature and offering more flexible terms were considered much more acceptable than land acquisition. Thus, the results provided clear support for the development of new, flexible conservation measures. The most acceptable measure resembled the nature values trading conducted during the METSO 2003–2007 pilot phase. The acceptability of contracts was highly dependent not only on the amount of compensation, but also on other contract terms such as the contract initiator, contract duration, amount of compensation, restrictions on forest use and the cancellation policy.
Nature values can be created and protected using an array of methods, from binding contracts to non-contractual practices. Additionally, conservation status can be fixed-term or permanent and can comprise various restrictions on use and management. The landowner may receive compensation for conservation, either as a direct payment or land exchange. Alternatively, areas of high conservation value may be sold to the government. According to Horne et al. (2009), most forest owners were of the view that compensation for permanent conservation should cover the market value of the land and forest stock. If property rights are maintained, compensation should cover the market value of the forest stock (Koskela 2010, final report 2.1.4). Many forest owners believed that biodiversity values should be taken into account when determining compensation.
The results of the study also indicate that it should be possible, at least in theory, to increase the cost-efficiency of conservation by developing the policy implementation instruments (Horne et al. 2009). For private forest owners, conservation measures were more acceptable when carried out on a voluntary basis and flexible contract terms. Thus, the potential negative welfare impact of conservation measures was significantly smaller when the terms were more flexible and acceptable. In such cases, the financial compensation required to maintain the forest owner’s welfare was correspondingly smaller. This indicates that, in principle, the required number of conservationally valuable sites could be brought under biodiversity conservation programmes with less governmental expenditure, while maintaining the overall welfare of forest owners (Horne et al. 2004b).
Factors affecting the supply of sites for conservation
The number of sites provided for conservation with respect to most of the actions trialled during the METSO 2003–2007 pilot phase was reasonably high. Pricing mechanisms varied between actions. It was considered important that forest owners have the opportunity to present their views on the price of the conservation site. However, the forest owners also considered this a difficult issue: in practice the price was estimated by the authority in question, based on a commonly used pricing method. After this, the price was negotiated with the forest owner. To some extent, the original concept, envisaging competition between forest owners in the supply of conservation sites, remained unrealised. Conservation prices could not be settled through a competitive market mechanism (Syrjänen et al. 2007).
The METSO 2008–2016 programme enables forest owners to protect their forests permanently, temporarily or by managing them in environmentally sensitive ways. Permanent protection includes privately owned protection areas, forests sold to the state or land exchanges. In the case of temporary protection, ten-year environmental forestry subsidy agreements can be signed by the authorities and forest owners, as defined by the Act on the Financing of Sustainable Forestry. Under the Nature Conservation Act, temporary conservation, in most cases for a maximum of 20 years, is also possible.
According to the research results, in most cases forest owners consider nature management work a suitable instrument for increasing valuable natural features in forest habitats. They also prefer temporary conservation agreements and effective nature management in commercial forests to permanent conservation (Koskela 2010, final report 2.1.4). However, the results of the monitoring performed under the METSO 2003–2007 programme showed that forest owners are also interested in permanent conservation. In practice, high availability of both permanent and temporary instruments improves the possibilities of finding a suitable conservation alternative taking account of nature values and the forest owner’s goals. A key benefit of the new voluntary and flexible instruments lies in their potential for increasing the acceptability of conservation. This in turn would reduce the probability of conflicts and improve the long-term prospects of success in forest and environmental policy.
Costs and cost-efficiency of safeguarding forest biodiversity
Compensation paid to forest owners (due to the purchase or rental of a forest site for conservation) represents the direct costs to society of safeguarding forest biodiversity. In the case of temporary conservation action, these costs include compensation for the net financial losses incurred by forest owners in terms of unrealised timber sales and any other, related expenses. In the case of permanent conservation, the value of the land as well as the forest stock is included.
Approximate calculations (Hannelius 2010, final report 2.1.6) indicate that the compensation fees (10-year conservation contracts in exchange for the environmental forestry subsidy) applied to METSO conservation sites have been financially attractive to forest owners. Such financial compensation accounted for roughly half of the market value of the respective forest sites under commercial forestry. Recent note has taken of the fact that the supply of forest sites has outstripped demand, even with respect to permanent conservation, thereby being greater than the funding available under the METSO programme. Hannelius (2006) has analysed the acquisition costs of real forest sites in voluntary and compulsory trading, alongside nature values trading and the environmental forestry subsidy.
The METSO 2003–2007 monitoring results indicated that forest owners’ willingness to participate in nature values trading was clearly dependent on the amount of financial compensation (Juutinen et al. 2005, Kumela & Koskela 2006). The direct costs to society of nature values trading were approximately the same as they would have been had the stand been acquired by the state. However, the result is dependent on the discount rate used in the calculations (Juutinen et al. 2006). One option for analysing the determination of financial compensation in the case of temporary conservation would be to apply the conservation version of the MOTTI model developed and modified by Metla (Hynynen 2010, final report 2.1.7).
The effects of increased forest conservation on roundwood markets and the forest industry
A large increase in forest conservation would decrease the potential supply of wood to the roundwood markets. As a result, roundwood prices and production costs would rise, leading to production cuts in the forest industry. The sawmill industry in particular would be affected. Conservation actions and roundwood price increases in certain areas usually affect fellings in others (e.g. Sedjo 1995, Kallio et al. 2006). For example, forest conservation in Southern Finland increases fellings in Northern Finland (Pohjola et al. 2007) and the use of imported wood increases, if imports are possible. From the forest sector, the indirect effects of conservation spread to other sectors of the national economy.
An incremental increase in forest conservation in southern Finland, corresponding in magnitude to the goals of the METSO 2008–2016 programme, would have a relatively minor, but visible, impact on the roundwood markets, the forest industry and the national economy (Kallio & Hänninen 2010, final report 2.2.1). The forest sector model used in the analysis takes account of price adjustments and the compensatory wood supply from different sources (imports of roundwood and increased procurement of domestic wood from other parts of the country). Naturally, the effects of increased conservation also depend on the characteristics of the forests to be conserved. In addition, some of the sites offered for conservation may have already been outside commercial forestry, based on a prior decision taken by the forest owner. The inclusion of biodiversity information in the model provided the opportunity to analyse the cost-efficiency of forest conservation. Optimising the regional allocation of conservation sites would decrease the adverse economic impacts on the forest sector. However, the results suggest that at local level the economic impacts of increased conservation could be large. Kniivilä et al. (2002) similarly found that the benefits generated by conservation areas in Ilomantsi were greater than the costs at the level of the whole of North Karelia, while at local level in Ilomantsi the benefits were lower than the costs. This means that even if the benefits at national level would justify a certain level of conservation, the implementation of conservation actions may cause significant local impacts and compensation issues.
Social and economic effects of conservation areas at local level
Conservation areas are socially, culturally and economically significant to their local areas. According to surveys carried out among the inhabitants of national park municipalities (Petäjistö & Selby 2010, final report 2.3.4), such parks enhance the visibility and image of a region, despite what may be a negligible financial gain. In many cases, insufficient steps have been taken to promote tourism, while utilising small and scattered conservation areas can be even more challenging. Indeed, this may be an additional justification for the development of cooperation networks across estate boundaries.
The local economic benefits of tourism and recreation are linked to the economic and employment effects of spending by visitors. These can be viewed from the perspective of whether new, emerging businesses in nature tourism, for example, might compensate for the potential financial losses due to additional conservation. In general, the local economic benefits of national parks are relatively small (Selby et al. 2010, final report 2.3.6). Their role as a source of income compensation depends on the service structure of the local area, since services are needed to generate significant cash flows. On the other hand, identifying and realising business potential takes time and requires a change in the attitudes of both entrepreneurs and other decision makers.
3.1.3 The role of forest planning in safeguarding forest biodiversity
Methods and opportunities for multi-objective and interactive forest planning
Studies in support of decision making in forest planning can vary in scale. In private forest planning, studies are often performed at estate and stand level, although examples of regional-level planning also exist (Kärkkäinen et al. 2010, final report 2.4.4). However, a stand-level scale is almost always applied to biodiversity studies of private forests. At stand-level, while it is possible to estimate issues such as the alternative cost of stand conservation, no assessment can be made of whether the stand should be felled at all when considered in accordance with the owner’s overall objectives and production opportunities. In terms of safeguarding forest biodiversity, at the very least the development of planning methods and calculations should be applied with respect to estate-level studies. On the other hand, studies above estate-level can take account of socio-cultural values and the effects of conservation on, for example, the landscape and agricultural industries.
Research into forest planning has seen the development of methods suitable for estate-level studies. In practice, implementing a merely "normal" multi-objective estate-level planning calculation (e.g. Pukkala 2007) should result in the treatment of the stands according to the owner’s objectives. If the owner's objectives are biodiversity-related, it is likely that, during the optimisation process, (some) stands which include biodiversity features will be selected for treatment leading to the preservation or promotion of biodiversity (rest or a special cutting).
If the object of the study fulfils social criteria, potential compensation for conservation in the area in question can be included in the calculations (e.g. Kurttila et al. 2008). This is done in a way which provides the owner with financial income with respect to the rest-treatment alternative, in the same way as for timber sales. Once the owner sets his or her estate-level objective, the optimal treatment of the stand becomes clear. If the owner is unable to describe his or her objectives precisely enough, an interactive approach can be taken to describing the limits of the estate’s production potential in terms of income from cutting and the value of the remaining growing stock, for example. The treatment of a potential conservation stand (cutting or rest) by applying a certain level of conservation compensation, cutting income and remaining growing stock value, can all form part of the same picture (Pykäläinen & Kurttila 2009).
Habitat models in forest planning
In forest planning, habitat models prepared for different species or groups of species can also be utilised, either directly in planning calculations or indirectly (e.g. Nikula et al. 2010, final report 2.4.3). The models show the habitats of the species as functions of forest stock indicators. They also display the probability that the habitat is suitable, which can then be shown on maps. This provides an indication of, say, the number of habitats suitable for flying squirrels, and the distribution of such habitats within the area.
Habitat models can and should be directly integrated into multi-objective planning calculations. Planning calculations provide an indication of the development of the habitats and the effects of forest treatments and changes in land use on their numbers. Using an indicator from a habitat model as a numerical target in planning calculations also enables us to strive, at various times, for the fulfilment of quantitative species targets and suitable inter-habitat positioning.
Unfortunately, calculatory estate-level planning methods have so far rarely been used in practical forest planning. The use of habitat models in support of decision making has perhaps become a little more common, but these are not usually linked to planning calculations. This presents a prime opportunity to make so-called spatial optimisation methods part of practical forest planning. Based on this method, habitat development forecasts under various planning options could be graphically presented to decision makers, in the form of maps.
3.2 Future Development and Research Needs
3.2.1 Monitoring and evaluation of the effects of the METSO Programme
Monitoring the action taken forms an essential part of the METSO 2008 – 2016 programme’s implementation, enabling the identification of successes, problems and development needs. The main responsibility for practical monitoring work lies with Metla and the Finnish Environment Institute (SYKE) under the Ministry of Agriculture and Forestry, and the Ministry of the Environment. In 2008, the Ministry of the Environment set up a broad-based working-group to act as a collaborative body between various agencies and to monitor the programme’s implementation. The METSO 2008 – 2016 programme also falls within the Biodiversity and Environmental Benefits of Forests Task Force within the National Forest Programme 2015. The first intermediate evaluation of the METSO 2008 – 2016 programme is performed in 2010, together with the evaluation of the National Forest Programme.
In 2009, Metla launched three METSO research projects funded by the Ministry of Agriculture and Forestry, for the purpose of monitoring and supporting research conducted under the programme. These projects will gather information on the implementation and results of the METSO procedures, review the cost-efficiency of measures taken to safeguard biodiversity, chart easily measured structural features of the METSO sites and the threatened and near threatened species dependent on them, produce information on the number and geographical distribution of forests similar to the habitats of special importance defined in the METSO programme, develop support for decision-making by forest owners regarding the safeguarding of biodiversity, and carry out research on the potential for using forest treatment models that imitate natural disruption dynamics in the safeguarding of biodiversity in commercial forests. Awareness of the METSO procedures and forest owners’ level of interest in the voluntary safeguarding of biodiversity, as well as their opinions on the methods used, were surveyed in 2009 as part of the Metla national survey (Koskela 2010, final report 2.1.4).
3.2.2 Developing the regulation base of conservation policy instruments and the cost-efficiency of safeguarding forest biodiversity
Implementation methods and policy instruments
Although recent discussions, and even this report, have paid specific attention to fixed-term contractual arrangements for private land, it is worth remembering that a host of methods exist for safeguarding biodiversity, such as the nature management in commercial forests, small scale fixed-term protected sites, private protected sites and the network of national parks and other unbroken protected areas. It is clear that different methods are required in different sites. There is room for both temporary and permanent protected sites.
Short-term temporary contracts are best suited to protecting sites that require treatment and whose nature values are changing. On the other hand, long-term or permanent protection contracts are suitable for safeguarding slowly evolving and permanent biodiversity values. Nature management is a way of accelerating and maintaining nature-identical developments on sites of valuable biodiversity and of promoting the interlinking of areas (Syrjänen et al. 2007). It is obvious that small-scale fixed-term sites on private land do not make up for the network of unbroken, permanent protected areas, but are a complementary element whose ecological significance is increased through appropriate location in terms of the network of protected areas and spread of species. It is also important that resources used for short-term temporary contracts correspond to the benefits gained from them, taking account of the situation after the end of the contract.
Similarly, economic, informational and regulatory policy instruments are required in the selection of policy methods for safeguarding forest biodiversity. As stated in Naskali’s thoroughgoing review (2010, final report 2.1.2), market based instruments, for example, are not necessarily the best or even adequate means as such, but justified regulatory policy instruments of proven legitimacy also have a role to play.
The effects and cost-efficiency of policy instruments in the protection of private land
In terms of cost-efficiency in safeguarding forest biodiversity, the question is one of how a protection budget of a certain size might best be used in maximising the biodiversity benefits gained (protecting the best sites in terms of nature values or the maximum area of sites that fulfil the quality criteria). Vice versa, we could ask how certain biodiversity benefits (e.g. a given area containing sites that fulfil the quality criteria) could be achieved at a minimum opportunity cost.
In principle, instruments and methods such as nature values trading and competitive tendering also allow for greater cost-efficiency in conservation (see Juutinen 2005). Forest owners with the most positive attitudes towards safeguarding biodiversity could make voluntary contracts accepting smaller rewards, while a reward system based on nature values might help in bringing the best sites, in terms of nature values, within the scope of contracts. Although positive attitudes towards conservation did not yet materialise in the form of lower purchase costs during the pilot phase of nature values trading (Juutinen et al. 2006), this situation may change as the procedure becomes established and the tendering of sites evolves. From this point of view and judging from the obviously ample supply of sites, compensation practices linked directly to the stand cutting value are not necessarily the best, although they may be the most simple to implement in practice.
However, the pilot phase of nature values trading will not be continued in the METSO programme 2008–2016, because the EU’s interpretation of the regulations in force does not allow for the payment of rewards for the creation of nature values. Fixed-term contracts are executed with the help of the Environmental Forestry Subsidy defined in the Act on the Financing of Sustainable Forestry, intended primarily for sites described in section 10 of the Forest Act. The Environmental Forestry Subsidy provides the forest owner with compensation for the additional costs of forest biodiversity safeguarding and for the amount of foregone timber revenues (Act on the Financing of Sustainable Forestry 1996). In other words, there has been a shift from negotiable fees for producing nature values to a fairly mechanical public subsidy based on timber revenue – not based on nature values (for more detailed presentation, see Naskali 2010, final report 2.1.2).
The chief merit of the voluntary contracts introduced within the METSO programme has been the creation of a more positive general attitude towards conservation. In this respect, the significance of contracted sites within private forests is greater than their significance measured in terms of area. Since, during the pilot phase, ideas related to genuine nature values trading and competitive tendering have mainly been bypassed in site selection, there is a danger of losing the development potential of social approval (legitimacy) and the cost-efficiency in conservation gained from nature values trading. The Forbid project by Hildén et al. (2009) emphasised the need to develop tools such as a new market-based regulatory base for policy instruments. Further research on the effect and cost-efficiency of policy instruments is about to start at Metla, as part of the METSO research projects.
3.2.3 Developing decision-making support promoting forest biodiversity
The practical application of methods developed in research remains an important development theme, requiring close cooperation between researchers and those in the field, as well as a new, more development-oriented approach to research (e.g. Hokajärvi & Hujala 2009, Kurttila et al. 2010). At the various stages of private forest planning in particular, the need to go beyond the scale of stand-level studies is highlighted, involving a planning approach that respects the owners’ point of view (e.g. Hujala et al. 2010, final report 2.4.1) while avoiding mechanical solutions (e.g. Lihtonen 1928).
In the development of private forest planning, an operating model should be sought in which multi-objective issues form a natural part of a comprehensive service (Laitila et al. 2009). This entails that, in addition to proposals for forestry action, planning information for forest owners should include information on, and treatment proposals for, valuable objects of nature on the estate. Such a comprehensive service would also include information on options for promoting forest biodiversity. In addition, should the owner be interested, the selection and features of the instruments available can be evaluated.
A related research need involves identifying the needs of forest owners in support of decision-making. Research is currently being undertaken which applies the so-called social network analysis to examining the significance of the various decision-making parties from the owner’s perspective, interaction between these parties and the owner, the information available during the decision making process and what information should have been available. The results will provide information on issues such as the type of counselling and information the owners require regarding the safeguarding of forest biodiversity. From a societal aspect, it would be important to identify the level of compensation at which the owners would be prepared to protect objects located on their estates. In addition to economic and biodiversity indicators, the owner’s decision is affected by a range of other socio-cultural factors, whose relative significance is likely to change alongside changes in the structure and values of the base of forest owners (e.g. Rämö et al. 2010). While there is good reason to expect that the direction of these changes will be in favour of safeguarding forest biodiversity, the rate of change can also be accelerated by actively developing methods and practices in support of decision-making (von Boehm 2008, Laitila et al. 2009). In particular, development is required in the identification of socio-cultural values and the development of criteria and instruments for measuring the socio-cultural effects of forest use and protection, so that they become part of planning calculations and of influence studies.
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