This paper looks at the optimal location of new forests in a suburban region under area constraints. The GIS-based methodology takes into account use benefits such as timber, hunting, carbon sequestration and recreation, non-use benefits (both bequest and existence values), opportunity costs of converting agricultural land, as well as planting and management costs of the new forest. The recreation benefits of new forest sites are estimated using function transfer techniques. We show that the net social benefit of the total afforestation project may vary up to a factor 6, depending on the forest sites that are selected. We show that the recreation value of a forest site varies considerably with the available substitutes.

This article studies the possibility of using auctions as a policy instrument in conservation programs. In particular, it provides insight into the main concerns that need to be dealt with when implementing conservation auctions. To show the cost saving potential of this policy instrument, we also calculate the social welfare improvement that can be obtained for an afforestation project in Flanders. When developing conservation policies, it is thus worthwhile to consider auctions as an alternative policy instrument.

This paper analyses current and alternative afforestation policy instruments in Flanders. First we select forest sites that maximize net social benefits given a constraint on the total area of new forests and then we select policy instruments that yield this optimal combination of sites. For each policy option, we calculate the associated costs for landowners and government as well as net social benefits for society. Our empirical illustration shows that the welfare gain is considerable if the afforestation subsidy is conditioned on an objective criterion rather than a case-by-case approach. Our results also show that it is worthwhile to consider alternative policy instruments, such as auctions, not previously used in Belgian legislation.

Land use, land use change and forestry (LULUCF) offer domestic and international opportunities to accomplish the targets set by the Kyoto Protocol. Design and selection of successful forestry projects are complex decision processes based on information of the carbon dioxide mitigation potential, the environmental impacts and the cost efficiency of selected scenarios. In this paper, a decision support framework to evaluate forestry scenarios for greenhouse gas emission reduction is presented and tested on five scenarios (existing and new multifunctional forest in Flanders, Belgium, bioenergy crop with short rotation poplar and with elephant grass in Flanders, Belgium, plantation forestry in the subtropics, and, conservation of tropical rainforest). The framework is organized as a serial connection of a carbon accounting module, an environmental impact module and an economic module. Modules include a combination of models and quantitative assessment procedures. In order to make scenarios comparable, the environmental and economic modules calculate their outputs on a functional unit basis of 1t CO2 emission reduction. The framework is universally applicable and straightforward, transparent and quantitative. The level of data requirement is medium, but the application is fairly complex due to the interdisciplinary character of the tool. Further developments would require automated data flows between models and a user interface. Results of the test application showed that the only attractive domestic option is the establishment of new multifunctional forests. This scenario even yields a net benefit because it replaces the generally loss-making agriculture and, in addition, it provides other environmental and recreational benefits. The establishment of bioenergy plantations is a very efficient way of reducing CO2 emissions as far as land occupation and environmental impacts per functional unit are concerned. However, it also turns out to be a very expensive option. Plantation forestry in the tropics is advantageous when evaluated over longer periods of time. Conservation of tropical forest is not eligible as a clean development mechanism (CDM) project, although it would be economically attractive for Flanders since the cost per tonne CO2 emission reduction is close to the expected world market price. This option is thus promising for the voluntary market and for future commitment periods of the Kyoto Protocol.

This paper is concerned with the issue of how to introduce monetary valuation into public decision-making. This issue is closely related to introducing rational procedures into public decision-making (Pearce, 2001). All public decision-making involves choice. To economists, rational choice means making the 'best' use of available resources, i.e. choose that option that has the lowest opportunity cost or the lowest value to be sacrificed. Costs and benefits of any project should therefore be weighed as well as compared to cost and benefits of alternative projects. This implies that all impacts of these projects need to be expressed in the same unit to make comparison possible. Money seems to be the most obvious numeraire. We discuss some of the most popular economic valuation techniques and their potential role in public decision-making. Due to the high cost and time that is needed to perform original valuation studies and the limited knowledge of decision-makers with these techniques, we recommend that the Flemish Administration primarily invests in performing high-quality transfer studies.

For the implementation of the Kyoto Protocol, governments of annex I countries need to develop strategies and policies for greenhouse gas reduction. Land use, land use change and forestry (LULUCF) offer CO2 emission reduction opportunities both home and abroad. Selection of effective forestry opportunities is a complex decision process based on multiple information concerning the greenhouse gas emission reduction potential, the environmental impacts and the cost efficiency of potential scenarios. In this paper, a decision support framework to evaluate forestry scenarios for greenhouse gas emission reduction was presented and tested on five different scenarios (existing and new multifunctional forest in Flanders, Belgium, energy crop with short rotation poplar, energy crop with annually harvested Miscanthus, forest plantation in the subtropics, and conservation of tropical rainforest). The framework is organized as a serial connection of a carbon accounting module, an environmental module and an economic module. Modules include a combination of models and quantitative assessments procedures. In order to make scenarios comparable, the environmental and economic modules calculate their outputs on a functional unit basis of 1 ton CO2 emission reduction. The framework is universally applicable, straightforward, transparent and quantitative. Data requirements are medium, but applicability is fairly complex due to the interdisciplinary character of the tool. Further developments would require automated data flows between models and a user interface. As to the results of the scenario analysis, the only attractive possibility for sinks in Flanders is the establishment of new multifunctional forests. This even yields a net benefit because it replaces the generally loss-making agriculture and, in addition, yields other environmental and recreational benefits. The establishment of bioenergy plantations is a very efficient way of reducing CO2 as far as land occupation and environmental impacts are concerned. However, it also turns out to be a very expensive option. Plantation forestry in the tropics is advantageous when evaluated over longer periods of time. Conservation of tropical forest does not come into consideration as a CDM project, but is nevertheless economically attractive for Flanders since the cost per ton CO2 emission reduction is in the neighborhood of the world market price.

The use of bio-energy crops for electricity production is considered an effective means to mitigate the greenhouse effect, mainly due to its ability to substitute fossil fuels. A whole range of crops qualify for bio-energy production and a rational choice is not readily made. This paper evaluates the energy and greenhouse gas balance of a mixed indigenous hardwood coppice as an extensive, low-input bio-energy crop. The impact on fossil energy use and greenhouse gas emission is calculated and discussed by comparing its life cycle (cultivation, processing and conversion into energy) with two conventional bio-energy crops (short rotation systems of willow and Miscanthus). For each life cycle process, the flows of fossil energy and greenhouse gas that are created for the production of one functional unit are calculated. The results show that low-input bio-energy crops use comparatively less fossil fuel and avoid more greenhouse gas emission per unit of produced energy than conventional bio-energy crops during the first 100yr. Where the mixed coppice system avoids up till 0.13tCO2 eq./GJ, Miscanthus does not exceed 0.07tCO2 eq./GJ. After 100yr their performances become comparable, amounting to 0.05tCO2 eq./ha/GJ. However, if the land surface itself is chosen as a functional unit, conventional crops perform better with respect to mitigating the greenhouse effect. Miscanthus avoids a maximum of 12.9tCO2 eq./ha/yr, while mixed coppice attains 9.5tCO2 eq./ha/yr at the most.

In this paper we show how cost-benefit analysis can be used as a decision support mechanism for the location of new (urban) forest land, starting from the multifunctional role of these new forests. We start with a simple presentation of the cost-benefit analysis (CBA) technique. Key features of this evaluation technique are that (i) all - both positive and negative - impacts for all relevant parties (i.e. not only the project promoter) are taken into account and (ii) evaluation occurs on the basis of monetary values. Next, we give an overview of all relevant costs and benefits of afforestation projects for the whole society. On the cost side, we distinguish costs directly related to the afforestation project itself, such as tree planting and forest management on the one hand and opportunity costs on the other hand. On the benefit side we make a distinction between use and non-use values. Use values include timber production, hunting, recreation and ecosystem values. Non-use and option values capture forest benefits that are independent from the actual use made of the forest area. As valuation of recreation and non-use/option values is not straightforward, we discuss their valuation methods in more detail. For valuing recreation the travel cost method (TCM) is the most widely used technique. TCM seeks how the visit frequency responds to changes in the price of a visit. Non-use values can only be valued using the contingent valuation method (CVM). CVM uses survey questions to elicit people's preferences for public goods by finding out what they would be willing to pay for specified changes in them. Finally, we apply the CBA to a real life policy problem. The Flemish government has agreed on a 10.000 ha forest expansion in Flanders, focusing on the multifunction role of forests. In our case study we give an example for the Ghent region (East Flanders). We investigate the net benefits per hectare of combinations of potential forests that meet the surface restriction of 540 ha. We show the importance of including recreation benefits in the evaluation of afforestation projects and more specifically the role of alternative forests (substitutes) in the valuation of one specific forest. We find that this substitution effect is significant in the decision on the location of new forests and leads to a wide variation in the net benefits per hectare of different combinations.

In this paper we use the results of a recent on-site recreation survey to know whether it matters to use perceived rather than calculated travel costs. The calculated travel costs (time and money) are derived from detailed GIS computations. The perceived travel times and costs are taken directly from the survey responses. We first find that there is a high non-response rate for the perceived cost question. For those who respond we find that the perceived costs are close to the sum of the calculated time and fuel costs. The relative difference between perceived and calculated costs is negatively related to distance and visit frequency. We explain perceived costs by simple factors such as distance, time, group size, social class, education level, length of stay and general satisfaction with their visit. To examine the effect of the specification of the travel cost and time variables, we estimate several individual trip demand equations for three functional forms of the dependent variable: semi-log, negative binomial and truncated negative binomial. Based on the log-likelihood values of the estimation of the different trip demand equations we show that there are no significant differences in model performance as far as cost specifications are concerned. Comparing cost coefficients and consequently consumer surplus estimates shows that only for the negative binomial functional form there is a statistically significant difference between the specification with perceived costs and the model with total calculated cost measures. 1 The research reported in this paper was financed by the ‘Vlaams Impulsprogramma Natuurontwikkeling’ (contract C96/06). The authors would like to thank P. Nunes and E. Van Ierland for many valuable comments and suggestions during internal workshops. All errors remain the authors’.

This paper analyses the current Flemish afforestation policy and shows that it is not optimal. An important step in improving the afforestation policy in Flanders is the selection of the optimal location of a cluster of new forests as a whole. For this reason, the regulator will select the location that maximises the net social benefits of the afforestation projects. The analysis of the optimal location can provide the regulator with objective criteria, which can be used to develop optimal regulations. It is also worthwhile to consider alternative policies, such as auctions for afforestations projects. To this effect, we investigate several policy options and test these in a real-life example for the creation of new forests in East Flanders.

2

This paper studies the possibility of using auctions as a policy instrument in conservation programs. In particular, it provides insight into the main concerns that need to be dealt with when implementing conservation auctions. To show the cost saving potential of this policy instrument, we also calculate the social welfare improvement that can be obtained for an afforestation project in Flanders.