Money Can’t Buy Me Love, But You Can Put A Price On A Tree
Heather Keith, David Lindenmayer, Michael Vardon, 12 Oct 17
       

Mountain ash in the Victorian Central Highlands. Takver/FlickrCC BY-SA

What is something worth? How do you put a dollar value on something like a river, a forest or a reef? When one report announces that the Great Barrier Reef is worth A$56 billion, and another that it’s effectively priceless, what does it mean and can they be reconciled?

This contrast points to fundamentally different notions of value. Environmental accounting is a way of recognising and comparing multiple sources of value, in order to better weigh competing priorities in resource management.

In practice it is sometimes crude, but it’s been standardised internationally and its scope is expanding to include social, cultural, and intrinsic benefits.

Using environmental accounting we’ve investigated the tall, wet forests of Victoria’s Central Highlands to weigh the competing economic cases for continuing native timber harvesting and creating a Great Forest National Park. But first we’ll explain a little more about environmental accounting, and how we put a price on trees.

What we count

Essentially, environmental accounting involves identifying the contributions of the environment to the economy, summarised as gross domestic product (GDP). In Australia, the Australian Bureau of Statistics standardises the data and reporting of these contributions in the System of National Accounts. The Bureau also produces environmental accountsthat extend the range of information presented - e.g. water and energy use and greenhouse gas emissions.

But there are other things of value, like positive environmental and social outcomes, worth incorporating into calculations. Ecosystem accountinggives researchers a framework for doing this, extending the accounting to look at the value of different “ecosystem services” – the contributions of ecosystems to our wellbeing - and not just goods and services captured in our national accounts or environmental accounts.

For example, businesses and homes pay a price for water delivery, but the supplier doesn’t pay for the water that entered the dam. That water is an ecosystem service created by forests and the atmosphere. By assessing costs in the water supply industry, we can estimate the value of the ecosystem service of water provisioning.

The value of Victoria’s Central Highlands

Victoria’s Central Highlands are contested ground. Claims and counter-claims abound between the proponents of native timber production and those who are concerned about the impacts of logging on water supply, climate abatement and threatened species.

Our research has, for the first time, directly compared the economic and environmental values of this ecosystem. It shows that creating a Great Forest National Park is clearly better value.

With any change in land management, there will be gains and losses for different people and groups. Assessing these trade-offs is complex, made even more so by patchy and inconsistent data.

Through careful accounting, we synthesised the available data and calculated the annual contributions of industries to GDP. In 2013-14, the latest year for which all financial data were available, these came to A$310 million for water supply, A$312 million for agriculture, A$260 million for tourism and potentially A$49 million for carbon storage. (There is no current market for carbon stored in native forests in Australia – more on that in a minute.)

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