the economic costs and benefits of securing community forest tenure

Transcription

WORKING PAPER
THE ECONOMIC COSTS AND BENEFITS OF
SECURING COMMUNITY FOREST TENURE:
EVIDENCE FROM BRAZIL AND GUATEMALA
ERIN GRAY, PETER G. VEIT, JUAN CARLOS ALTAMIRANO, HELEN DING, PIOTR ROZWALKA, IVAN ZUNIGA,
MATTHEW WITKIN, FERNANDA GABRIELA BORGER, PAULA PEREDA, ANDREA LUCCHESI, KEYI USSAMI
EXECUTIVE SUMMARY
For Indigenous Peoples and communities around the
globe, forests provide food, shelter, income, and employment. Forests may also be historically, culturally, and
spiritually significant to the people who have lived in
and around them for generations. But, while Indigenous
Peoples and communities occupy and use a significant
portion of the world’s forests, only a small fraction of community forestland is recognized by national law, and even
less is protected and securely held. In 2013, Indigenous
Peoples and communities held legal rights to only about
15.5 percent of the world’s forests (RRI 2014).
Tenure security—defined as the certainty that a community’s land rights will be recognized and protected if
challenged—is linked to numerous benefits, both for communities and for society more broadly. Evidence is growing that tenure-secure community forests are associated
with avoided deforestation and other ecosystem-service
benefits. There are also economic and social benefits
connected to communal management. Of course, securing community forest tenure also involves costs. A key
question for policymakers and funding agencies is how do
these benefits and costs compare?
The Economic Costs and Benefits of Securing Community
Forest Tenure: Evidence from Brazil and Guatemala
addresses this question through benefit-cost analyses of
community forest tenure in Brazil’s Indigenous Territories
and Guatemala’s Maya Biosphere Reserve. Although data
limitations prevented a full accounting of all benefits and
costs, the results of the analyses suggest that, in the study
areas, the economic benefits of securing community forest
tenure outweigh the costs.
CONTENTS
Executive Summary.......................................................1
Section 1: Introduction..................................................5
Section 2: Background..................................................6
Section 3: Study Area....................................................9
Section 4: T he Costs of Community Forest-Tenure
Security.......................................................11
Section 5: T he Value of Community Forest-Tenure
Security.......................................................14
Section 6: Economic Analysis Method and Results.....18
Section 7: Results and Conclusions.............................23
Annex..........................................................................25
Appendix.....................................................................28
References...................................................................34
Endnotes.....................................................................37
Working Papers contain preliminary research, analysis,
findings, and recommendations. They are circulated to
stimulate timely discussion and critical feedback and
to influence ongoing debate on emerging issues. Most
working papers are eventually published in another form
and their content may be revised.
Suggested Citation: Gray, Erin, Peter G. Veit, Juan Carlos
Altamirano, Helen Ding, Piotr Rozwalka, Ivan Zuniga, Matthew
Witkin, Fernanda Gabriela Borger, Paula Pereda, Andrea Lucchesi,
Keyi Ussami. 2015. “The Economic Costs and Benefits of
Securing Community Forest Tenure: Evidence from Brazil and
Guatemala.” Washington, DC: World Resources Institute. Available
online at http://www.wri.org/forestcostsandbenefits.
WORKING PAPER | November 2015 | 1
Research approach
To weigh the benefits and costs of securing community
forest tenure, we focused our research on two tasks.
First, we identified and described the benefits and costs
associated with establishing and maintaining secure
community tenure. Next, we conducted benefit-cost
analyses that estimated the net economic benefits
realizable from community forests, as well as the
cost per tonne of carbon dioxide ($/tCO2) mitigation
realized through securing forest tenure that, in turn,
avoids deforestation. The benefit-cost analyses focus
on Indigenous Territories in the Brazilian Amazon
and community concessions in the Guatemalan Maya
Biosphere Reserve, although we also describe benefits
and costs for a community forest-enterprise operation
Figure ES-1 |
in Durango, Mexico in the Annex. We conducted our
research over three months, relying primarily on literature
reviews and expert consultations. To our knowledge, this
working paper is the first analysis to develop a benefit-cost
analysis model comparing the economic benefits and costs
of securing community forest tenure.
What are the benefits and costs associated
with establishing and maintaining community
forest tenure?
The benefits and costs associated with establishing and
maintaining secure community forest tenure vary according to country contexts. Nevertheless, we identify three
general categories of benefits and four general categories
of costs, shown in Figure ES-1.
ategories of Benefits and Costs Associated With Establishing and
C
Maintaining Secure Community Forest Tenure
BENEFITS
COSTS
ECOSYSTEM-SERVICE BENEFITS
TENURE-SECURITY ESTABLISHMENT COSTS
Forest ecosystems provide extractive benefits as well
as non-extractive benefits. Extractive benefits include
timber and non-timber forest products and recreation
(e.g., hunting and fishing); non-extractive benefits
include climate change mitigation, water regulation,
habitat and biodiversity, protection of local and
regional climate systems, and tourism.
Costs associated with establishing or changing the institutional and legislative framework to support community forest tenure. They include investment and transaction
costs associated with legislative or regulatory changes.
COLLECTIVE ACTION & CONFLICT RESOLUTION
The clarification of land-use rights and roles can
lead to behavioral changes by community members,
which in turn can result in avoided transaction and
conflict-resolution costs associated with insecure
forest rights.
SOCIAL BENEFITS
These include benefits related to capacity-building
efforts that strengthen local communities (e.g., job
creation and community reinvestment in education
and health programs).
2 |
COMMUNITY FOREST ESTABLISHMENT COSTS
Upfront or initial investment and transaction costs for identifying and securing lands
as community forests, including identification, demarcation, registration, titling, and
establishing forest-management plans.
COMMUNITY FOREST MANAGEMENT, OPERATING, & MONITORING COSTS
Annual or recurring costs associated with protecting community forest tenure; monitoring
and enforcement activities on these lands to ensure rights are protected; transaction costs
associated with handling disputes over community forests; production costs for timber
and non-timber forest products; and recurring investments in programs or activities to
support and strengthen community rights and livelihoods on these lands.
OPPORTUNITY COSTS
These include foregone income from alternative land uses.
The Economic Costs and Benefits of Securing Community Forest Tenure: Evidence from Brazil and Guatemala
How do the economic benefits of securing
community forest tenure compare to the costs?
Our benefit-cost analyses focused on the increased benefits and costs of a tenure-secure scenario compared to a
tenure-insecure scenario in the two study areas.
Recent analyses for both areas (Blackman 2015; Nolte
et al. 2013; Nepstad et al. 2006) show that deforestation
rates are lower in tenure-secure community forests than
in similar areas without tenure security. When trees are
left standing, carbon is stored and communities are able to
extract value from forest resources. For our analyses, we
considered only the benefits associated with this avoided
deforestation, including carbon mitigation (for both Brazil
and Guatemala) and timber and non-timber production
(for Guatemala only). We estimated carbon-mitigation
benefits using a social cost of carbon value of $41/tCO2,
based on guidance from the U.S. Interagency Working
Group on the Social Cost of Carbon (2015). We compared
benefits and costs of tenure security using the “net present
value” for the study period: in other words, we calculated
the present value of benefits minus present value costs
over a 20-year period using a 2 percent and 6 percent
discount rate. We also estimated the mitigation cost per
tonne of CO2.
Our analyses show that the estimated annual per hectare
costs of securing community forest tenure are low compared to the benefits from carbon mitigation and timber
and non-timber production. For Brazil, annual costs
average $1.57 per hectare (ha) while carbon-mitigation
benefits range from $230/ha to $38/ha per year over
the analysis period. For Guatemala, annual costs are
estimated at $16.85/ha while carbon-mitigation benefits
range from $187/ha to $120/ha, and timber and nontimber production benefits are $12.51/ha and $0.91/ha.1
In Brazil, the net present values results (benefits minus
costs) range from $1,454 to $1,743 per hectare and $162
billion to $194 billion for all Indigenous Territories in
the Brazilian Amazon. We estimated the cost of carbon
mitigation (per tonne of CO2 emissions removed from the
atmosphere) through a 20-year investment in forest-tenure security to be between $0.39 and $0.52/tCO2 (Table
ES-1). The cost-of-carbon-mitigation metric is useful for
comparing climate-change mitigation measures in terms
of cost-effectiveness.
Table ES-1 |
razil Benefit-Cost Analysis and
B
Cost/tCO2 Results
DISCOUNT RATE
6%
2%
Total net present value
(US$ 2015)
$161,681,533,000
$193,915,358,000
Net present value per hectare
$1,454
$1,743
Mitigation cost ($/tCO2)
$0.39
$0.52
In Guatemala, the net present value per hectare ranges
from $1,715 to $2,280 and from $605 million to $805
million dollars for all nine active community concessions.
The carbon-mitigation cost per tonne of CO2 emissions
removed from the atmosphere through a 20-year tenuresecurity investment is estimated to range from $7.37 to
$8.50 (Table ES-2).
Table ES-2 |
uatemala Benefit-Cost Analysis
G
and Cost/tCO2 Results
DISCOUNT RATE
6%
2%
Total net present value
(US$ 2015)
$605,368,000
$804,649,000
Net present value per hectare
$1,715
$2,280
$7.37
$8.50
Figure ES-2 compares 20-year present value benefits and
costs (per hectare) for both countries using a 6 percent
discount rate and demonstrates the large gap in values.
The difference between the benefits and costs is $1,454 per
hectare in Brazil and $1,715 per hectare in Guatemala.
Because some degree of uncertainty is inherent in any
benefit-cost analysis, we conducted a sensitivity analysis
to examine how our analyses might be affected by changes
in our assumptions. Specifically, we created lower-bound
and upper-bound net present value estimates by varying the discount rate, the price of carbon, carbon-storage
values, and other cost and benefit assumptions. Even
when we used a much lower carbon value of $6/tCO2
and upper-bound estimates for costs and lower-bound
estimates for benefits, the benefits of securing community
tenure continued to outweigh the costs. Sensitivity analysis results are available in the paper’s Appendix.
Figure ES-2 |
2 0-Year Present Value Comparison of Per Hectare Costs to Benefits for
Brazil Indigenous Territories and Community Concessions in the Guatemalan
Maya Biosphere Reserve (6 Percent Discount Rate)
$2,000
$1,920
$1,500
$1,473
$1,000
$500
$205
$0
$19
BRAZIL
GUATEMALA
Costs
Benefits
Note: Costs are likely underestimated due to data constraints on tenure-security establishment and opportunity costs. Likewise, benefits are also likely underestimated due to data constraints.
Overall Findings
1. Our benefit-cost analyses of Brazil’s Indigenous
Territories and the community concessions in Guatemala’s Maya Biosphere Reserve suggest that securing
community forest tenure is a low-cost, high-benefit
investment that benefits communities, countries, and
global society. Even when we used a much lower value
of carbon ($6/tCO2), the economic benefits of tenure
security outweighed the costs.
2. Community forests can generate a wide variety of
economic benefits through ecosystem services and
behavioral changes that support conflict resolution and
social benefits. Economic valuation can enhance our
understanding of the multiple benefits of community
forests by demonstrating even higher net benefits. Economic valuations can also demonstrate the high value
of tenure security in terms of improving forest-resource
management and conservation, and help policymakers
to better target policies and investments.
4 |
3. The results of the benefit-cost analyses suggest that
investing in strong community forest-tenure security
can be a cost-effective measure for climate-change
mitigation when compared with other mitigation
measures. However, while we consider the cost data
representative of tenure establishment and maintenance costs for the study areas, complete data were not
available. Accordingly, the mitigation-cost estimates
should not be interpreted as the actual price that would
need to be paid to avoid a hectare of deforestation in
the study areas. Rather, they help to demonstrate the
cost-effectiveness of community forests as a carbonmitigation measure.
Addressing data-collection constraints could lay the
groundwork for a deeper understanding of the net
economic gains from community forests. Investing
in improved efforts for monitoring and evaluation of
community forests could be an important first step.
Enhanced monitoring and evaluation could shed light on
the benefits associated with improvements
in forest cover and ecosystem health. It could also enrich
our understanding of social investments and community
conflicts—two categories of benefits and costs that are
currently hard to gauge because of data limitations.
Making stakeholder budgetary data more transparent
would also contribute to more robust evidence regarding
the costs of securing community forest tenure.
Extending the benefit-cost analysis approach to other
community forests around the world could also advance
understanding of the economic case for secure community
forest tenure. WRI is currently collaborating with local
experts to extend this work to other countries in South
America, including Bolivia and Colombia. This will allow
for extrapolating the results to the Amazon basin. Findings, conclusions, and policy recommendations will be
captured in a WRI Research Report to be published in
2016.
SECTION 1: INTRODUCTION
Evidence is mounting that secure community forest
tenure is linked to avoided deforestation and that
community forests can generate economic benefits for
forest communities and society more broadly. Securing
Rights, Combating Climate Change (Stevens et al. 2014)
found that, in many countries, deforestation rates were
significantly lower in legally-recognized and protected
community forests than in forests outside those areas. It
follows that tenure-secure community forests represent a
vital tool for climate-change mitigation.
Community forests can also generate a multitude of
other benefits. Community forests with secure tenure can
support sustainable forest management, which can result
in numerous ecosystem-service benefits. Additionally,
community forests can help society avoid costs associated
with conflict, and provide social benefits in the form of
job creation and community reinvestment in health and
education programs (Larson et al. 2010; Sandler 2000).
Yet, despite these benefits, questions remain about
whether securing community forest tenure provides
positive economic gains. To assess the benefits compared
to the costs of securing community forest tenure—and
to secure investments in protecting community forest
tenure—more evidence is needed.
Research Objective
This Working Paper builds upon the Securing Rights
report by asking, what are the costs compared to the
benefits of securing and maintaining community
forest tenure for community forest areas in Brazil and
Guatemala? We answer this question by:
▪▪
▪▪
identifying and describing the applicable benefits and
costs associated with securing and maintaining secure
tenure; and
conducting benefit-cost analyses that estimate the net
economic benefits possible from community forests,
as well as the mitigation cost per tonne of carbon
dioxide ($/tCO2) saved from avoided deforestation
under securing forest tenure.
We focus on the societal benefits achievable from
community forests in Brazil and Guatemala; we do not
engage in a cost-effectiveness analysis that compares
land-management regimes. We conducted our research
over three months, with literature reviews and expert
consultations as the primary research methods. The
benefit-cost analyses quantify those benefits and costs
for which data were readily available, such as for carbon
mitigation, and timber and non-timber production.
Why Now?
Community forests can promote and deliver social justice,
local development, economic prosperity, and environmental sustainability at the local, national, regional, and global
scales. Strong land and forest rights and secure tenure
provide communities with the confidence, incentives, and
authority they need to effectively manage their forests
(RRI 2014; Byamugisha 2013; Place 2009; FAO 2002).
2015 may be a pivotal year in global efforts to address
development and environmental challenges. In September, the international community launched the Sustainable Development Goals as the blueprint for development
for the next 15 years. In December, the Conference of the
Parties of the United Nations Framework Convention on
Climate Change will convene in Paris to finalize a new
agreement to tackle the changing climate. These milestones provide unique opportunities to press for global
action to secure land and forest rights for Indigenous
Peoples and communities.
Research on the impacts of securing forest tenure, particularly the economic consequences, can help governments
improve existing forest policies and maximize broad social
welfare. This Working Paper aims to reach and inform
technical leads in the land, forest, and financial sectors of
governments and funding agencies on the economic gains
achievable from community forests. It is intended as a
work in progress. Data collection and analysis constraints
are discussed in the paper (Box 2) as a means to support
ideas for future research.
Following this introduction (Section 1), Section 2 provides
a brief background on community land and forest rights,
including the geographic extent of community forests, an
overview of the importance of secure tenure for generating economic benefits, and some common risks and
enabling conditions for promoting secure tenure. Section
3 provides an overview of the study area. Sections 4 and
5 provide an overview of the economic benefits and costs
associated with securing and maintaining secure community forest tenure. Section 6 presents the economic valuation methodology and results of the benefit-cost analyses
for Brazil and Guatemala. Finally, Section 7 discusses the
results and key conclusions.
SECTION 2: BACKGROUND
Forests are a primary source of livelihood, nutrition,
income, wealth, and employment for Indigenous Peoples
and local communities in much of rural Africa, Asia, and
Latin America. Forest resources provide security, status,
social identity, and a basis for political relations. For
many rural people, forests are historically, culturally, and
spiritually significant (FAO 2014; RRI 2014, 2012). Many
Indigenous Peoples and communities have lived on and
around forestlands for generations.
Forests cover 31 percent of the world’s land surface, or just
over 4 billion hectares (FAO 2014). Indigenous Peoples
and communities occupy and use a considerable portion
of the world’s forests. However, only a small fraction
of this community forestland is officially recognized by
national law, and even less is protected and securely held
by them. As a consequence, most Indigenous Peoples and
communities have weak rights and insecure tenure over
their forests. Many community forests have been lost to
outsiders and much of the remainder is under threat.
6 |
Box 1 |
Definition of Common Terms
Community Forests are forests on indigenous or community
land. In some countries, the law recognizes that community or
indigenous property includes the rights to all trees on the lands. In
other places, the law provides that certain trees (naturally occurring
trees) or forests belong to the state.
Community Lands cover all lands governed by communities,
whether or not this is recognized in national law. This means that
the community decides the type of rights allocated within its area
and upholds these rights through community-based mechanisms
(customary or modern).
Indigenous Lands or territories refer to the collectively-held
and governed lands (and natural resources, including trees and
forests) of Indigenous Peoples. Some indigenous lands may be
allocated, with group consent, for use by individuals and families.
Other indigenous land is managed as common property. Traditional
indigenous territories alone encompass up to 22 percent of the
world’s land surface (Nakashima 2012; Sobrevila 2008).
Land Rights are the rights of individuals or groups, including
Indigenous Peoples and communities, over land. The bundle can
include the rights of access, withdrawal, management, exclusion,
and alienation. The source of these rights can be statutory law or
customary law.
Land Tenure is the statutory or customarily-defined relationship
among people—as individuals or groups—with respect to land. It
includes the full range of social relationships between people and
communities with regard to accessing, possessing, and controlling
land and natural resources (FAO 2002).
Customary Tenure Systems refer to land governance and
administrative systems that operate in accordance with local
custom, including traditional institutions and rules (or customary
law) for accessing, possessing, and controlling land and natural
resources. Community- and Indigenous Peoples-based systems
of landholdings are usually traditional or customary. Alden Wily
(2011) estimates that customary tenure extends over at least 8.54
billion hectares (an estimated 65 percent of the global land area)
involving 1.5 billion people. However, only about 18 percent of the
world’s land is formally recognized as owned by or designated for
Indigenous Peoples and communities (RRI 2015).
Land Tenure Security is the certainty that an individual’s or
community’s rights to land will be recognized by others and
protected in cases of challenges (FAO 2002).
The Rights and Resources Initiative (RRI) estimates that
Indigenous Peoples and communities held at least some
legal or official rights (i.e., rights recognized under statutory law) to at least 511 million hectares of forest in 2013—
about 15.5 percent of the world’s forests (RRI 2014). This
figure, which recognizes 52 countries containing nearly
90 percent of the global forest cover, includes forestland
legally recognized as community land, as well as state land
to which Indigenous Peoples or communities have some
formal, conditional rights (see Figure 1). The 15.5 percent
represents an important increase over the last decade: in
2002, Indigenous Peoples and communities had formal
rights to 11.3 percent of the world’s forest (RRI 2014).
While governments are increasingly recognizing community rights to forests, in 2013, an estimated 73 percent
of the world’s forests was state controlled—down from
77.9 percent in 2002 (RRI 2014). Much of the community
forests held under customary tenure systems are legally
government forests.
Figure 1 |
The Importance of Secure
Land Rights and Forest Tenure
The rights that Indigenous Peoples and communities hold
over their land vary by customary and statutory law. The
bundle may include rights of access, withdrawal, management, exclusion, and alienation. Each right provides the
holders with certain authorities and legal security over
their land. For example, the right of exclusion allows
communities to refuse access to and use of the land. Large
bundles of rights, therefore, commonly provide Indigenous Peoples and communities with considerable control
over their lands. Land rights may also include rights to
some or all of the natural resources on or below the land
surface (Veit and Larsen 2013). When Indigenous Peoples
and communities have rights over these resources,
there is a reduced risk that government will allocate
resource rights to outsiders (e.g., mining licenses, timber
concessions).
Forest Ownership, 2002–2013 (millions of hectares)
100%
90%
2002
2013
80%
70%
77.9%
73%
60%
50%
40%
30%
20%
10%
0%
1.5%
Administered by
Government
2.9%
Designated for
IPs & Communities
9.8% 12.6%
10.9% 11.5%
Owned by
IPs & Communities
Owned by
Firms & Individuals
Source: RRI 2014
Strong land rights and secure tenure are central to communities maintaining their land and natural resources.
Secure tenure underpins a broad range of human rights
and is at the foundation of economic development, social
equity, poverty reduction, women’s empowerment, environmental sustainability, peace, and stability (RRI 2014).
Land tenure substantially affects people’s ability and
incentive to use and manage their land. Incentives depend
upon expectations of rights over the returns on investments and, therefore, on the nature of land and resource
tenure. Clear and secure land tenure can encourage or
induce a range of investments of labor, resources, and
other assets (Goldstein and Udry 2008; Cotula et al. 2006;
Deininger 2003). These investments can help ensure that
forests are well managed and continue to provide vital
ecosystem services and economic benefits. For example,
the forests to which Indigenous Peoples and communities have legal rights—about one eighth of the world’s
total—contain approximately 37.7 billion tonnes of carbon
(Stevens et al. 2014).
Factors that Can Create Secure Tenure
Indigenous Peoples and communities realize their
land rights. Indigenous Peoples and communities that
know their rights and have capable village institutions
can monitor and protect their lands. Civil society organizations and development assistance agencies can
support the development of indigenous and community land maps, the acquisition of formal land documents, and other measures to help secure tenure.
Factors that Can Create Insecure Tenure
Weak tenure leaves Indigenous Peoples and communities vulnerable to losing their land and natural resources.
Insecure tenure discourages people from investing in
their lands and commonly results in the exploitation of
the land to maximize short-term benefits. Three common
sources of insecure tenure are weak laws and regulations,
inadequate implementation of supportive law, and the
overuse of government authority to restrict or extinguish
land rights.
▪▪
Factors that contribute to tenure security vary by context
and circumstances. Whether land rights are legally recognized, and whether they are protected when threatened,
are two determinants of tenure security.
▪▪
▪▪
8 |
Legal Recognition of Land Rights. Supportive statutory laws can help secure tenure. Laws are supportive
when they recognize all rights customarily held by Indigenous Peoples and communities as lawful forms of
land ownership, and protect customary tenure to the
same degree as other forms of tenure (e.g., freehold).
Supportive laws also require the state to, for example,
provide Indigenous Peoples and communities with a
formal title to their lands; recognize the indigenous
group or community as having legal authority over
their land; recognize that customary rights are held
in perpetuity; and require consent before an outside
actor may acquire indigenous or community land.
Protection of Rights. While supportive laws provide
Indigenous Peoples and communities with a layer of
tenure security, the laws must be effectively implemented if they actually are to protect land rights when
those rights are threatened. Implementation and
enforcement can be achieved in various ways. Wellresourced government agencies with explicit responsibilities to protect land rights can help to ensure that
▪▪
Weak Laws and Regulations. While many governments
now recognize customary tenure systems, few have
established the strong legal protections needed to
secure indigenous and community land. In Cameroon
and other countries, the law formally recognizes
only the portion of community land that is “used
and occupied”—such as homesteads and farmland—
but not the community land managed as common
property. In Zambia and other countries, the law
provides just a small bundle of land rights. In most
of Africa, legal rights to land do not include the rights
to many of the natural resources on and below the
land, such as water, wildlife, natural trees and forests,
minerals, and hydrocarbons (WRI 2013).
Poor Implementation of Supportive Legislation. Even
when customary land rights are recognized by statutory law, governments often fail to protect indigenous
and community land from encroachment or expropriation. Many governments lack the human and
financial resources needed to map or document indigenous and community lands, or to protect them from
outsiders. Some governments threaten tenure security
by allocating long-term concessions for agricultural
plantations, large-scale mining operations, and oil
and natural gas extraction. Governments justify these
industrial concessions as a means to decrease dependence on development assistance, generate formal
employment, increase national incomes, and generate
scarce foreign exchange (RRI 2014).
▪▪
Broad Authorities to Extinguish Land Rights. All
governments have the power to restrict or extinguish
land rights, primarily to meet public purposes, such
as road or dam construction, or to establish a protected area for biodiversity conservation. In recent
years, however, many governments have exercised
these powers more broadly through compulsory land
acquisition, zoning regulations, and other land-use
restrictions. Few governments in Africa and elsewhere
have enacted clear enabling regulations or prepared
implementation guidelines for these powers, leaving officials with broad discretion over how they are
exercised. When these authorities are exercised, even
for genuine public purposes, they can create insecure
tenure for Indigenous Peoples and communities.
Figure 2 |
SECTION 3: STUDY AREA
We selected Brazil and Guatemala as our focus areas for
three reasons:
▪▪
▪▪
▪▪
Community forests are relatively secure in both countries (Stevens et al. 2014).
Spatial data were available on community forestlands
and carbon-storage values.
The countries represent diverse tenure arrangements
in terms of tenure-security establishment processes,
land uses, forest types, and benefits and costs.
Based largely on data availability, we narrowed down the
study areas for each country as described below.
Indigenous Territories in Brazil, 2015
Brasilia
State Capital
Amazonia Legal
State Limit
IT’s Administrative Process Phase
In Study
Conducted as Indigenous Reserves
Delimination
Declaration
Homologation
Registration
0
1,000km
Source: Based on data from Project BCIM 3rd version 20102/IBGE and FUNAI.3
Brazil: For this paper, community forests in Brazil
include Indigenous Territories in the Amazon region
(111,177,224 hectares) (see Figure 2). Indigenous Territories are inhabited exclusively by Indigenous Peoples
and are recognized legally as conservation or sustainableuse protected areas. While Indigenous Territories are
public property, the Brazilian government recognizes the
indigenous communities’ soil and water rights, their right
to exclude others, and their right to manage and use the
forest sustainably. Communities do not have subsurface
rights, but the government generally does not allocate
mineral rights in these areas (Davis 2013).
with a total area of 113,518,234 hectares (FUNAI 2015a).
This represents roughly 13 percent of the total land area
in Brazil (Survival International 2015; ISA 2011) and
approximately 25 percent of the Amazon biome (Garzon
2009). Around 98 percent of Indigenous Territories are in
the Amazon region.
Guatemala: The study area for Guatemala includes
community concessions within the Maya Biosphere
Reserve (MBR), a tropical forest reserve established in
the Petén district in 1990 (see Figure 3). The MBR covers
2.08 million hectares and consists of three management
zones: a core zone (39 percent), a multiple-use zone (38
percent), and a buffer zone (23 percent). Each zone has
its own purpose and management strategy. The core
zone encompasses 12 protected areas, including national
There are currently 588 Indigenous Territories in Brazil
(545 are traditionally occupied lands, 31 are indigenous
reserves, and 12 are proprietary or interdicted lands),
Figure 3 |
Map of Land-Use Zones in the Maya Biosphere Reserve of Guatemala
MEX ICO
Land-Use Zones
Core Protected Area
G UAT E M A L A
MEXICO
Buffer Zone
BELIZE
Multiple-Use Zones
Biological Corridor and Land
with No Concessions
Community Concession
Suspended/Cancelled
Community Concession
Industrial Concession
Source: CEMEC-CONAP, 2007.
10 |
GUATEMALA
0
100
200km
HONDURAS
EL SALVADOR
parks, biotopes, and archeological sites; it allows only for
scientific research and tourism (Hodgdon et al. 2015). The
multiple-use zone permits extractive activities (e.g., timber and non-timber harvesting) and is currently home to
biological corridors (without concessions), two industrial
concessions, and nine community concessions (Rodas et
al. 2014). The buffer zone is a 15-kilometer strip along the
southern border of the MBR; agricultural activities and
human settlements are allowed in the buffer zone.
There are currently nine active community concessions in
the MBR, covering 332,000 hectares. All are located in the
multiple-use zone. The concessions were established to
allow local communities to benefit economically from sustainable forest management, and to prevent agricultural
encroachment into the protected core zone. Communities
have management, use, withdrawal, and exclusion rights
over their concessions (Larson et al. 2008), allowing for
sustainable timber and non-timber extraction, tourism
development, and limited agriculture (Gomez and Mendez
2005; Gretzinger 1998).
SECTION 4: THE COSTS OF COMMUNITY
FOREST-TENURE SECURITY
Processes for establishing and maintaining tenure vary
within and across countries, depending, among other
matters, on governmental infrastructure, institutional
capacity, land management, and ownership regimes.
Furthermore, land tenure may be composed of different
bundles of rights and therefore the processes for
establishing and maintaining those rights may vary
(Robinson et al. 2014). Yet, despite these variances, we
identified four general categories of costs to consider in
an economic benefit-cost analysis:
1. Tenure-security establishment costs: Costs associated with establishing or changing the institutional
and legislative framework to support community forest
tenure. Costs include investment and transaction costs
associated with legislative or regulatory changes.
2. Community forest establishment costs: Upfront
or initial investment and transaction costs for identifying and securing lands as community forests, including
identification, demarcation, registration, titling, and
management-plan establishment costs.
3. Community forest management, operating,
and monitoring costs: Annual or recurring costs
associated with protecting community forest tenure;
monitoring and enforcement activities on these lands
to ensure that rights are protected; transaction costs
associated with handling disputes over community forests; production costs for timber and non-timber forest
products; and recurring investments in programs or
activities to support and strengthen community rights
and livelihoods on these lands.
4. Opportunity costs: Foregone income from alternative land uses that benefit landowners. Opportunity
costs are strongly associated with deforestation pressures (e.g., urban development, agriculture, cattle
pastures) because these pressures often represent the
highest-value alternative land uses.
These costs may accrue to a variety of actors. Accordingly, in this paper, we consider the primary, secondary,
and external stakeholders involved with securing and
maintaining community forest tenure. Primary stakeholders are people who directly experience the impacts of
forest-tenure policy changes: the Indigenous Peoples and
communities, or other local groups that may be resettled
or affected by changes in forest rights. Secondary stakeholders are generally the people within a country who can
make and shape decisions; they include local and federal
government agencies, and natural-resource managers.
External stakeholders include people with the power to
influence decision-making; they include the bilateral and
multilateral development organizations that support government agencies, and non-governmental organizations
(NGOs) (Waite et al. 2014).
Evidence from Brazil
The Brazilian Constitution recognizes the inalienable
rights of Indigenous Peoples to lands they traditionally
occupy, and gives them permanent possession of these
lands. Although the Constitution guarantees Indigenous
Peoples exclusive use of their lands, including soil
and water rights, the national government maintains
ownership of the land and all subsurface natural resources
(e.g., mineral rights). The Brazilian Constitution defines
lands traditionally occupied by Indigenous Peoples as
lands “inhabited by them permanently, those used for
their productive activities, those indispensable to the
preservation of the environmental resources necessary
for their well-being, and those necessary for their physical
and cultural reproduction, in accordance to their habits,
customs and traditions.” (ISA 2015a). The Constitution
required the Fundação Nacional do Índio (FUNAI)—the
government body responsible for policies related to
Indigenous Territories—to demarcate all Indigenous
Territories by 1993. However, even today, this task
has not been completed. The government has revised
its demarcation procedures for Indigenous Territories
multiple times, with the latest guidance announced in
Decree 1775 in 1996 (ISA 2015b).
In 2012, the Brazilian government published “The
National Policy of Territorial and Environmental Management of Brazilian Indigenous Lands.” The policy
establishes Indigenous Territories as protected areas that
allow sustainable use of natural resources by Indigenous
Peoples. Additionally, it required that Indigenous Peoples
should participate in building territorial and environmental strategies to manage their lands by developing
management plans that detail the communities’ land-use
aspirations (Comandulli 2012). NGOs like the Nature
Conservancy are assisting communities with developing
their management plans (Amazon Fund 2015).
FUNAI is also responsible for monitoring Indigenous Territories. Its monitoring and management expenses include
supervision; surveillance; combat and prevention of illicit
activities; monitoring and expulsion of non-Indians on
indigenous lands; and locating and protecting isolated
Indigenous Peoples (Verdum 2015). Numerous organizations partner with FUNAI to monitor and manage these
Table 1 |
lands, including the Ministry of Justice, the Federal Police,
the Federal Highway Police, the National Public Security
Force, the Ministry of Defense, the Armed Forces, the
Operations and Management Center of the Amazonian
Protection System, the Ministry of Environment, the
Brazilian Institute of Environment and Renewable Natural
Resources, the Chico Mendes Institute for Biodiversity
Conservation, and the Environmental Military Police of
the state and federal prosecutors (FUNAI 2015b).
Local governments provide financial and technical support to Indigenous Peoples to help secure and guarantee
their rights (Borger et al. 2015). The Brazilian Ministries
of Health, Education, Agrarian Development, and Environment also conduct activities in Indigenous Territories,
including health, education, rural development, and
environmental programs (Verdum 2015).
Finally, community members incur investment and transaction costs associated with working with local and federal
government agencies to establish and maintain tenure.
Communities may also incur costs from monitoring and
managing their land, and defending it from loggers,
ranchers, and other intruders (Nepstad et al. 2006).
Table 1 summarizes the costs of establishing and maintaining tenure in Brazil’s Indigenous Territories and notes
the key stakeholders to whom many of the costs accrue.
Tenure-Security Establishment and Maintenance Costs for Brazilian Indigenous Territories
COST CATEGORY
COST COMPONENTS
KEY STAKEHOLDERS
Tenure-security
establishment costs
1. Constitutional reforms
2. Governmental decrees
National government
Community forest
establishment costs
1.
2.
3.
4.
5.
Delimitation
Declaration of Indigenous Territories limits
Demarcation
Presidential approval
Registration
National and local government agencies;
Indigenous Peoples
Community forest management,
operating, and monitoring costs
1.
2.
3.
4.
Development of management plans
Ongoing management and monitoring
Subsidies and technical support for capacity building
Compensation for relocation
National and local government agencies;
NGOs; Indigenous Peoples
Opportunity costs
Foregone income from soybean production, cattle
pastures, roads, and/or urban development
12 |
Landholder (national government)
Evidence from Guatemala
The Maya Biosphere Reserve (MBR) was established
in 1990 by Congressional Decree (Decree 5-90, later
updated by Decree 04-2006). The government’s aim in
creating the reserve was to protect the biodiversity and
cultural heritage of the Petén region, and to promote
sustainable natural-resource use (Carey 2008). External
stakeholders, particularly the United States Agency for
International Development (USAID), played a significant
role in financing the MBR (Hodgdon et al. 2015; Carrera
et al. 2006). The National Council of Protected Areas
(CONAP) administers and manages the concessions and
was initially responsible for approving each concession’s
establishment. Conflicts surfaced in the MBR’s early days,
but they have largely been settled (Carrera et al. 2006).
With the creation of the MBR, many communities found
themselves within the boundaries of the reserve with no
legal land rights. With the support of international NGOs,
the local communities eventually persuaded the government to provide them with formal concessions (Larson et
al. 2008). In 1994, the Guatemalan government, backed
by USAID, legalized the community concession system
in the multiple-use zone (Monterroso and Barry 2012).
Between 1994 and 2002, 12 community concessions were
established, although only nine are still active.4 A community forestry concession “is an administrative mechanism
whereby the government, through CONAP, grants state
lands to legally established organizations for a 25-year
renewable period, giving them the right to integrated
resource use, involving such activities as forestry and
ecotourism.” (Rosales 2010).
In 1995, community leaders formed the Association of
Forest Communities of Petén (ACOFOP) to resolve conflicts by negotiating greater community rights (Hodgdon
et al. 2015). ACOFOP comprises 23 local organizations
that represent 30 rural communities and over 2,000
families (Rosales 2010). ACOFOP created Empresa Comunitaria de Servicios del Bosque (Community Forestry
Services Enterprise or FORESCOM) to provide commercial support to its member communities, especially with
marketing, pricing, payments, and forest-product development (Rosales 2010). FORESCOM has also invested
substantial amounts in wood-processing infrastructure
and equipment.
To be granted a concession, communities must establish
a legal entity to assume responsibility for the concession
(Rosales 2010). Communities must also demonstrate
historical use and the capacity to sustainably manage
forest resources (Radachowsky et al. 2012). Additionally,
they must:
▪▪
▪▪
▪▪
▪▪
▪▪
▪▪
▪▪
▪▪
▪▪
present a CONAP-approved general forestmanagement plan;
develop an environmental impact evaluation;
present annual operations plans;
achieve third-party certification by the Forest Stewardship Council (FSC) within three years of concession establishment and undergo periodic audits;
pass annual certification audits;
fulfill an annual CONAP evaluation;
undergo environmental-regulation evaluations (by the
Guatemalan government and sometimes USAID);
implement mitigation measures required by the environmental impact evaluation; and
monitor impacts on ecological integrity and archaeological sites (Rosales 2010).
Community concession members and CONAP both undertake fire prevention and monitoring activities (Rosales
2010).
External funding from bilateral agencies, domestic and
international NGOs, and other donor groups have played
a significant role in the establishment and maintenance
of community concessions. For example, USAID and the
Ford Foundation provided technical and financial support
for establishing the community concessions (Hodgdon et
al. 2015). USAID, the Tropical Agricultural Research and
Higher Education Center (CATIE), the Rainforest Alliance,
and others have funded and supported the FSC forest
certification costs (Carrera et al. 2006). NGOs, including
Centro Maya, Conservation International, Naturaleza
para la Vida, and the Rainforest Alliance, have provided
technical and financial assistance to concessions, including enterprise and market development (Hodgdon et al.
2015), and international organizations fund ACOFOP.
Table 2 summarizes the costs of establishing and maintaining community concessions in the MBR and notes the
key stakeholders to whom many of the costs accrue.
Table 2 |
Tenure-Security Establishment and Maintenance Costs for the Guatemalan Maya Biosphere Reserve
COST CATEGORY
COST COMPONENTS
KEY STAKEHOLDERS
Tenure-security
establishment costs
1. Congressional decrees
National government; domestic and foreign donors
Community forest
establishment costs
1. Establishment and legalization of the community concession
system
2. Establishment of supporting agencies (CONAP and ACOFOP)
National and local government agencies; supporting
agencies (CONAP and ACOFOP); domestic and
foreign donors; community members
Community forest
management, operating,
and monitoring costs
1. Development of forest-management plans, environmental
impact evaluations, and annual operations plans
2. FSC certification
3. Annual certification audits and CONAP evaluations
4. Periodic environmental-regulation evaluations
5. Monitoring and enforcement of concession boundaries and
concessionaires’ activities
6. Timber and non-timber production costs for commercial sales
7. Tourism-production costs
National and local government agencies; domestic
and foreign donors; NGOs and supporting agencies;
community members
Opportunity costs
Foregone income from commercial timber, and/or cattle pastures
Landholder (national government)
SECTION 5: THE VALUE OF COMMUNITY
FOREST-TENURE SECURITY
Just as the costs of secure community forest tenure vary,
so too do the economic benefits associated with establishing and maintaining secure tenure. Here, we consider
three categories of benefits that we identified in Brazil
and Guatemala based on a literature review and expert
consultation.
1. Ecosystem-service benefits: Forest ecosystems
provide extractive benefits and non-extractive benefits. Extractive benefits include production of timber
and non-timber forest products and recreation (e.g.,
hunting and fishing). Non-extractive benefits include
climate-change mitigation, water regulation, habitat
and biodiversity, protection of local and regional
climate systems, and tourism.
2. Collective-action and conflict-resolution benefits: Clearly defined land rights and roles can result
in behavioral changes among primary and secondary
stakeholders. Behavioral changes can avoid the transaction and conflict-resolution costs associated with
insecure forest rights.
14 |
3. Social benefits: Secure tenure can encourage job
creation and actions that strengthen capacity within
local communities (e.g., community reinvestment in
education and health programs).
Many studies have explored the impact of tenure security
on forest-ecosystem conditions. Robinson et al. (2014)
conducted a meta-analysis of 36 publications that linked
land-cover change to tenure conditions. They found that
communal land-tenure impacts on forest-ecosystem
conditions varied regionally, possibly due to the effects
of regional conflict and/or weak governance (important
enabling conditions identified in Section 2 of this paper
and by Stevens et al. 2014). Communal and customary
tenure impacts on forest-ecosystem conditions were low in
Africa, moderate in Central America, and mixed in South
America. Overall, however, the study found that communal land tenure was associated with less deforestation.
Recent studies in Brazil and Guatemala, which we explore
in depth below, also show avoided deforestation benefits
associated with secure community forest tenure (Blackman 2015; Nolte et al. 2013; Nepstad et al. 2006).
The Millennium Ecosystem Assessment (2005)
categorizes ecosystem services into four categories:
Table 3 |
Forest Ecosystem Services
ECOSYSTEM SERVICE TYPE
EXAMPLES OF GOODS AND SERVICES
Regulating
Air quality regulation; climate regulation; water-flow regulation; water filtration; erosion prevention
Provisioning
Food; water supply; raw materials (e.g., timber products); medicinal products; genetic resources
Supporting
Habitat for species; genetic diversity
Cultural
Recreation and tourism; sacred ritual and burial sites; habitat for important totem animals; educational uses
Source: Based on TEEB (2009).
supporting, regulating, provisioning, and cultural.
Examples of forest-ecosystem goods and services for each
category are described in Table 3.
Some studies have attempted to estimate the value of
forest-ecosystem services to society. A report by The Economics of Ecosystems and Biodiversity (TEEB 2009) estimates that the average value of ecosystem services from
tropical forests (including climate regulation) is $6,120
(US$ 2007) per hectare per year, but the maximum value
ranges to $16,362 per hectare per year.5 Costanza et al.
(2014) estimated an average net value of forest-ecosystem
services at $3,800 per hectare in 2011.6 Many of these
benefits are lost because of deforestation. Additionally,
fragmentation of forests may reduce the scale of benefits
achievable.
Secure tenure for forest communities can also produce
economic benefits by reducing conflict and enhancing
mechanisms for collective action.7 When communities
have clear rights, they may be better able to work with
each other as well as with secondary and external stakeholders to manage their forests. This can reduce some of
the transaction costs of forest management (e.g., reduced
need for meetings and staff), both for communities and for
secondary and external stakeholders.
Clear land rights and land governance roles can also
reduce conflict costs for communities and secondary
and external stakeholders. Most forest-related conflicts
result from differing interpretations of rights and tenure;
these conflicts can sometimes turn violent. Examples
include disputes between forest communities over village
boundaries and disputes between forest concessionholders and local communities over access to forest
products, decision-making, and benefit sharing (De
Koning et al. 2008). Conflicts from weak land rights can
disrupt economic growth in many ways. Community
members may spend resources guarding and protecting
their land rather than using them for productive activities.
Furthermore, communities may have less incentive to
produce goods and services if their lands and resources
are at risk (Sandler 2000). Communities with clear
tenure that act together to manage forests can also help
reduce transaction costs of coordinating actions and
communications with secondary and external stakeholders
(Larson et al. 2010). Community forest networks are
known to increase their access to forest resources and
markets, build capacity of community groups, and expand
their interface with decision-makers (Larson et al. 2010).
Finally, a multitude of other social benefits is possible
when forest productivity is increased and ecosystem
services are maintained through avoided deforestation.
For example, when communities are better able to manage
their forests and increase the provision of ecosystem-service benefits, they can create more jobs and generate more
revenues to support education, health, or other social
programs. In Mexico, community forestlands often serve
as regional employment centers, supporting livelihoods
not only for local communities, but also for migrants who
come seeking work. Often, community forestry enterprises will reinvest a portion of their profits from timber
sales into education, health, or other social programs (see
Annex for more detailed information on Mexico).
As with costs, benefits can accrue to a variety of
stakeholders. Moreover, benefits may range from the
community to the global level. For example, forest
ecosystems may benefit local communities that generate
income from selling forest products. These same
ecosystems can also generate regional and global benefits
because some services, such as carbon mitigation,
contribute to global climate-change mitigation. Collectiveaction and conflict-resolution benefits, in contrast, accrue
mostly to local communities and the local and national
stakeholders that interact with them directly. Social
benefits as we define them also apply mostly to local
communities, which benefit from improved education
and health care. However, social benefits may also be felt
regionally and nationally, because governments may need
to invest less in health care and education subsidies.
The following sections provide results from a literature
review of benefits found for Indigenous Territories in Brazil and community concessions in the Guatemalan MBR.
Evidence from Brazil
Recent matching analyses for the Brazilian Amazon found
that Indigenous Territories demonstrate lower deforestation rates than similar matched areas (Nolte et al. 2013;
Nepstad et al. 2006). They also show lower incidences of
fire. Nepstad et al. (2006) identified four major types of
fire in the Amazon: fire that burns felled forest, fire that
burns standing forests, fire used to improve forage quality
in cattle pastures, and accidental cattle-pasture fires. The
study found that the average density of fires (fires/km2)
was roughly twice as high along the outside perimeter of
indigenous areas as it was inside protected indigenous
areas. Indigenous lands were also found to strongly reduce
fire incidence near agricultural areas. The Amazon contains more carbon in tropical forest trees than any country—47±9 billion tonnes in 3.3 million square kilometers
of forest (Nepstad et al. 2007). This makes Indigenous
Territories an effective carbon-mitigation tool.
In terms of direct-use ecosystem-service benefits, the
largest extractive uses of forest products from Brazil’s
Indigenous Territories are food, medicine, handicrafts,
and personal use, as well as fishing and hunting (Global
Forest Atlas 2015).
16 |
Amazonian forests also generate a multitude of nonextractive ecosystem services, including climate
regulation, biodiversity and traditional knowledge,
protection of local and regional climate systems, and
water supply and filtration benefits. A significant benefit
of Indigenous Territories is their stock of biodiversity
and traditional knowledge about the Amazon’s plants
and animals. Biodiversity and local knowledge of this
biodiversity are thought to have economic value: they
provide access to genetic resources, including some with
pharmaceutical value. For example, a study by Simpson
et al. (1996) estimated the value of biodiversity for
pharmaceutical research by estimating the willingness to
pay (WTP) of pharmaceutical companies for biodiversity.
The study estimated the WTP to protect a hectare of land
in a biodiversity hot spot along the Atlantic Coast of Brazil
to be $6.71/ha (US$ 2015).
Another benefit of Indigenous Territories stems from
changes in local and regional climatic conditions in
relation to forest cover. A recent report by Nobre (2015)
found that the impacts of deforestation and fires in
the Amazon include widespread decreases in forest
transpiration, changes in the dynamics of clouds and
rain, and an extended dry season. These impacts affect
the regional climate and could be contributing to drought
conditions in São Paulo (Watts 2014). Thus, local and
regional climate regulation, including protection of the
local and regional climate system, is an important benefit
of Amazonian forests.
The collective-action benefits and social benefits from
Indigenous Territories are not as well documented.
The potential avoided transaction costs associated with
establishing Indigenous Territories, and the amount
communities are reinvesting in health and education
programs through income generated by extractive or other
activities (e.g., payments for ecosystem services), are not
well known. More evidence is needed to better understand
whether Brazil’s Indigenous Territories are generating
these types of benefits.
A summary of major economic benefits derived from
Brazil’s Indigenous Territories, and their respective
beneficiaries, is presented in Table 4.
Table 4 |
Summary of Economic Benefits from Indigenous Territories in Brazil
BENEFIT
EXAMPLE BENEFIT COMPONENTS
BENEFICIARIES
Ecosystem-service benefits
1. Direct use (extractive) benefits
a. Subsistence forest products
b. Hunting/fishing
c. Recreation
d. Handicrafts
2. Indirect use (non-extractive) benefits
a. Biodiversity/pharmaceuticals
b. Climate-change mitigation
c. Fire suppression
d. Local/regional climate regulation
Community members; tourists/recreationists; regional stakeholders (e.g., agricultural producers); global society
Social benefits
Job creation (handicrafts)
Community members; local and national governments; other
stakeholders that interact with forest communities
Source: Literature review
Evidence from Guatemala
As with the case of Brazil, recent analyses from Guatemala show that tenure security established by community
concessions is linked to avoided deforestation. A recent
matching analysis by Blackman (2015) compared community concessions in the MBR with matched areas outside
of the MBR, and found that these areas were effective in
curbing deforestation.
Extractive ecosystem-service benefits that relate to avoided
deforestation benefits (as shown by Blackman 2015) include
timber and non-timber forest production, as well as ecotourism benefits. Community concessions have been able to
increase the production of timber products and non-timber
forest products, including xate (a frond used in floral
arrangements), allspice, and chicle (a natural gum) (ACOFOP 2015; Hodgdon 2015). Currently, the nine community
concessions generate over $4.4 million in timber revenues
and over $300,000 in non-timber revenues per year. The
communities also extract non-timber forest products for
subsistence or to replace commercial items, and practice
subsistence hunting (Radachowsky et al. 2012).
Community concessions are popular for tourism, especially focused on Mayan archeological sites such as the
Uaxactún and El Mirador (Radachowsky et al. 2012).
Some communities have been able to organize and manage tourism activities. Two tourism organizations within
the concessions, Chachaklum and Asodesty, have been
able to generate at least $37,500 per year in tourism
revenues (ACOFOP 2015).8
In terms of non-extractive ecosystem-service benefits
associated with avoided deforestation benefits, forests
protected by community concessions provide climate
regulation, fire suppression, and biodiversity benefits.
In the Petén Department, where the MBR is situated,
locals set fires during the dry season to transform the land
either to agriculture or pasture. CONAP (2015b) found
that as many as 1,350 hotspots or fires were recorded in
MBR, but only 12 fires were located within the community
concessions.
In terms of biodiversity benefits, the MBR is an invaluable part of Selva Maya, the largest broadleaf tropical
forest in Mesoamerica. Selva Maya encompasses forests in
Guatemala, Belize, and Mexico, and is home to over 3,400
vascular plants, 571 bird species, 163 mammal species,
121 reptile species, 60 freshwater fish species, and 42
amphibian species. It also serves as a temporary home to
one billion migratory birds from North America each year
(Nations 2010).
Social benefits have also been documented for community
concessions. Local communities have benefited from job
creation related to timber and non-timber production.
Between 2007 and 2015, timber production in the community concessions generated around 2,500 permanent
and 6,400 temporary jobs (ACOFOP 2015). Sawmilling
activities provided the most employment, followed by timber harvesting, and pre-harvest activities (Radachowsky
et al. 2012). At the same time, non-timber production
provided around 850 permanent and 2,600 temporary
jobs (ACOFOP 2015).
Table 5 |
ummary of Economic Benefits from Community Concessions in the
S
Guatemalan Maya Biosphere Reserve
BENEFIT
EXAMPLE BENEFIT COMPONENTS
STAKEHOLDERS
Ecosystem-service benefits
1. Direct use (extractive) benefits
a. Timber and non-timber production
b. Recreation
2. Indirect use (non-extractive) benefits
a. Climate-change mitigation
b. Fire suppression
c. Biodiversity
d. Tourism
Community members; tourists/recreationists;
regional stakeholders (e.g., agricultural
producers); global society
Collective-action and
conflict-resolution benefits
1. Avoided transaction costs
2. Improved land productivity/
forest management
Community members; local and national
governments; other stakeholders that interact
with forest communities
Social benefits
1. Job creation
2. Community reinvestment in
capacity building
Community members; local and national
governments; other stakeholders that interact
with forest communities
Source: Literature review.
Communities also benefit from investing the profits generated by concessions back into the community—in infrastructure, health care, and education. These investments
not only improve local standards of living, they can have a
high positive spillover effect. Based on 2014 data, annual
social investments in the community concessions are estimated to have been as high as $425,000 (ACOFOP 2015).
Benefits related to collective action and the clarification
of rights have not been as well documented; however,
conflicts that were initially associated with MBR’s establishment appear to have been largely settled (Carrera et al.
2006).
A summary of major economic benefits derived from
Guatemalan community concessions and the respective
beneficiaries is presented in Table 5.
SECTION 6: ECONOMIC ANALYSIS
METHOD AND RESULTS
This section describes the method we used to assign
monetary values to the benefits and costs associated with
establishing and maintaining secure community forest
tenure for Brazilian Indigenous Territories and community concessions in the Guatemalan MBR. Understanding the economic benefits and costs of establishing and
18 |
maintaining community forest-tenure security requires
that we first understand the processes and costs of tenuresecurity change. It also requires that we understand the
forest-cover change that will result from establishing and
maintaining tenure security, how forest-cover changes
affect the provision of ecosystem-service benefits, and how
tenure security results in changes in community and other
stakeholder behavior. We compare benefits and costs
using benefit-cost analyses.
The benefit-cost analyses focus on the incremental
benefits and costs of a “policy” or tenure-secure scenario
over a “no-policy” or tenure-insecure scenario. The policy
scenario assumes that a policy change does occur, so it
considers all costs associated with securing and maintaining tenure. In contrast, the no-policy scenario assumes
that no policy changes occur and that no incremental costs
of policy changes are incurred. Because of data limitations
(see Box 2), only a subset of benefits presented in Section
5 is included in the benefit-cost analyses. Specifically, we
consider carbon-mitigation benefits (for both countries)
and timber and non-timber production benefits (for
Guatemala only). In addition, the analyses estimate only
benefits associated with avoided deforestation impacts
predicted to result from establishing and maintaining
tenure security; this impact is best documented in the
literature.
Box 2 |
Data Collection Constraints
The research question, what are the costs compared to the benefits of securing and maintaining community forest tenure? presents multiple
economic valuation challenges, due largely
to data availability. While Sections 4 and 5
describe the benefits and costs that would ideally be considered in an economic analysis, the
analyses here do not capture all benefits and
costs because of the following data limitations
and knowledge gaps:
• Opportunity costs of alternative land
uses: The benefit-cost analyses assume
that deforested lands in the no-policy
scenario are degraded and thus not in use.
However, in reality, these lands may be
converted to another income-producing
land type, such as agriculture or pasture.
The foregone income from the alternative
land use would ideally be considered in the
benefit-cost analyses because this represents an opportunity cost to the landholder.
The calculations for estimating opportunity
cost are complex, however, and require an
understanding of what the deforested area
could be converted to, and the expected
financial returns from that land. Furthermore, while opportunity costs may exist for
individual landowners, it is not clear that
broader aggregate-scale opportunity costs
exist. Due to the complexity of this question,
opportunity costs were excluded from the
benefit-cost analyses.
• Tenure-security establishment costs:
Valuing the costs associated with establishing tenure security (via policy and institutional changes) necessitates an understanding of the transaction costs associated with
these changes, including, for example,
staff time spent drafting tenure reforms and
working with communities. For Guatemala,
tenure-security establishment costs could be
approximated based on estimates of foreign
and domestic expenditures to establish the
community concessions within the MBR.
For Brazil, however, the available data are
unclear on the financing that supported
the constitutional reform of 1988 and other
governmental decrees and policy changes.
• Ecosystem-service benefits: The
benefit-cost analyses include only ecosystem-service benefits for which data were
readily available, either in the literature or
market values. Carbon-mitigation and timber
and non-timber production benefits were
included because these data were available.
Many relevant indirect use or non-extractive
ecosystem-service benefits (e.g., biodiversity and water filtration) are often valued
based on preferential or willingness-to-pay
data. To appropriately transfer these benefit
values from the policy sites to the study
sites, site-specific data to help identify local
preferences (e.g., gross domestic product,
population) would be required. However,
this was beyond the scope of our study. In
general, extractive-use benefits are easier to
value than non-extractive benefits: production and market-value data for forest products are more easily tracked and published.
In the case of Brazil, however, we could
find no quantitative evidence, of sales of
forest materials or subsistence uses of forest
products from Indigenous Territories.
• Collective-action and conflict-resolution benefits: Collective-action and conflict-resolution benefits are often difficult to
quantify because they necessitate an understanding of the number of conflicts occurring, and the transaction and other costs
associated with these conflicts (e.g., number
of deaths/injuries, cost of establishing
conflict-resolution programs or initiatives,
and wages for staff who work to address
conflicts). Additionally, while communities
may be better able to organize and work with
secondary and external stakeholders, it is
also difficult to capture transaction costs that
may include, for example, a reduction in the
number of meetings or hours spent working
with communities. Finally, it is also difficult
to capture forest production-improvement
data that may result from behavioral changes
via collective action and conflict resolution. These data are often not collected by
relevant stakeholders or disaggregated from
government budgetary data in a way that
enables a proper interpretation of scale of
benefits. As a result, collective-action and
conflict-resolution benefits are excluded
from the benefit-cost analyses.
• Uncertainty regarding benefit and
cost data: Benefit and cost data are often
not disaggregated by stakeholders in ways
that permit easy estimation of individual
benefit and cost components associated with
securing and maintaining tenure security (as
listed in Section 3). In Brazil, for example,
government cost data were not available
by cost component (e.g., demarcation vs.
registration vs. titling) or by individual
indigenous territory. Rather, annual federal
and local government budgetary data for
Indigenous Territories were available for
broad categories. In Guatemala, it is clear
that a good deal of foreign aid, combined
with domestic financial support and NGO
technical and financial assistance, went into
establishing the MBR and the community
concessions. However, a detailed registry
of these costs is not available, making it
difficult to discern the exact investment total
and the percentage of costs for the MBR
that went into the concessions alone. On
the benefits side, timber and non-timber
revenue data were available for Guatemala
from 2007 through 2015, but productioncost data were available for only three
concessions. While data employed for the
benefit-cost analyses are thought to be
representative of the scale of costs, more
transparent and accurate data from relevant
stakeholders would be helpful for conducting a more robust economic analysis. Given
these difficulties, benefit and cost data and
analysis assumptions were verified with
secondary and external stakeholders in both
Brazil and Guatemala to ensure that they
were representative. Additionally, a sensitivity analysis was undertaken to provide a low,
average, and high range of potential benefits
and costs (see Appendix).
A brief overview of the methods we used to value and compare benefits and costs follows. The Appendix provides a
more detailed overview of the benefit-cost analysis model,
key data assumptions, and results from a sensitivity
analysis.
Table 6 |
ummary of Economic Costs for Brazilian
S
Indigenous Territories ($/ha/yr)
COST COMPONENT
VALUE
Valuing Costs of Securing and Maintaining
Community Forest Tenure
FUNAI expenditures
$1.31
Local government: total expenditures
$0.03
The valuation method for costs follows a two-step process. First, we identify the costs associated with the policy
change, based on the cost categories defined in Section 4.
Second, we monetize (assign a dollar value to) these costs
(where data are available). Cost data were collected primarily from government and other stakeholder websites,
peer-reviewed and grey literature, and solicitation of data
from relevant stakeholders and country experts (where
data were not available online). Additionally, cost data
were verified with in-country experts and stakeholders to
ensure that they were representative.
Development of management plans
$0.23
Total Annual Cost
$1.57
The benefit-cost analyses assume that deforested land
is converted to degraded land, so opportunity costs are
zero (see Box 2 for more information on opportunity-cost
considerations for alternative land uses).
Monetizing Costs for Brazil and Guatemala
For Brazil, tenure-security establishment cost data associated with the constitutional change in 1998 and governmental decrees were not available. Community forest
establishment costs and community forest management,
operating, and monitoring costs are based on FUNAI and
local government budgetary data for Indigenous Territories; they are estimated at $1.31/ha/yr and $0.03/ha/
yr, respectively (see Appendix for more detailed FUNAI
budget data). Management-plan costs were assumed not
to be included in government expenditures because these
plans are often developed in coordination with NGOs
or other external stakeholders. An average annualized
cost per hectare of $0.23 was estimated based on a $5.2
million grant given to The Nature Conservancy (TNC) to
develop plans for six Indigenous Territories in the states
of Amapá and Pará (Amazon Fund 2015). Total estimated
annual costs for Brazilian Indigenous Territories are $1.57
per hectare (see Table 6).
20 |
For Guatemala, the costs of tenure-security establishment;
community-forest establishment; and community-forest
management, operating, and monitoring are based on
evidence in the literature regarding domestic and foreign
contributions to the MBR and the percentage of funding
attributable to the community concessions. Total domestic
and foreign support for the MBR between 1990 and 2005
is estimated at roughly $131 million (Gomez and Mendez
2005). The analysis assumes (based on Bray et al. 2008)
that 30 percent of this amount went toward community
concessions, for an average of $4 per hectare per year. The
analysis further assumes that domestic and international
support will continue into the future following historical data trends from 1990–2005. Additional costs that
are assumed not to be included in domestic and foreign
investments include community expenditures on FSC
certification ($0.29/ha/yr), community monitoring and
enforcement ($0.55/ha/yr), and CONAP expenditures
on monitoring and enforcement ($0.30/ha/yr). Finally,
because the community concessions are known to sell timber and non-timber forest products, production expenses
associated with these products are also included based on
data from Stoian (2015). These production expenses are
estimated at $10.89/ha/yr for timber products and $0.79/
ha/yr for non-timber products (equivalent to 87 percent
of total revenue from timber and non-timber products),
or $11.68/ha/yr total. Total estimated annual costs are
$16.85 per hectare (see Table 7).
Table 7 |
ummary of Economic Costs for
S
Community Concessions in Guatemala’s
Maya Biosphere Reserve ($/ha/yr)
COST COMPONENT
VALUE
Domestic and international support
$4.04
FSC Certification
$0.29
Community monitoring and enforcement costs
$0.55
CONAP monitoring and enforcement costs
$0.30
Timber and non-timber production expenses
$11.68
Total Annual Cost
$16.85
Valuing Benefits of Securing and Maintaining
Community Forest Tenure
the annual avoided deforestation impact is estimated to
remain stable at 1.54 percent, based on Blackman (2015)
(see the Appendix for additional information on these
studies and analysis assumptions).
The annual avoided deforestation impact is then applied
to the total area of community forest for each study area
to estimate the annual area of avoided deforestation.
The area to which the deforestation-rate impacts can be
applied shrinks every year for both the policy and nopolicy scenarios9 and, as a result, carbon-storage values
decrease slightly over time, but remain positive.
Identifying and Monetizing Benefits
The benefits that could be monetized for the economic analyses include carbon mitigation and timber and non-timber
production. The analyses assume that these benefits apply
only to the area of avoided deforestation for each year.
The valuation method for benefits follows a three-step
process. First, we identify the forest-cover change impact
that relates to community forest-tenure establishment
and maintenance. Second, we identify site-specific benefits that relate to forest-cover change impacts, based on
the benefits categories defined in Section 5. Third, we
monetize, or value, ecosystem-service benefits that relate
to this forest-cover change. As stated previously, we do
not include collective-action, conflict-resolution, and
social benefits in the benefit-cost analyses because of data
constraints (see Box 2).
The estimate of the total carbon stored through avoided
deforestation is based on the difference in carbon-stock
values (the above- and below-ground biomass content in
a given biome) between intact forest and partially deforested or deforested areas (i.e., a carbon-storage gap). To
calculate total carbon storage based on avoided deforestation, for example, the annual area of avoided deforestation
is multiplied by the per hectare carbon-storage value. For
Brazil, the carbon-storage gap is equal to 120.4 tonnes of
carbon per hectare (tC/ha); for Guatemala, the carbonstorage gap is equal to 75 tC/ha.10
Estimating the Forest-Cover Change Impact
Because we are interested in understanding the broader
societal economic gains related to tenure-security of
community forests, the economic value of carbon storage resulting from avoided deforestation was estimated
by multiplying the annual carbon-stock values by the
social cost of carbon (SCC). The SCC reflects the fact that
carbon-sequestration benefits stemming from avoided
deforestation contribute to global climate mitigation and
to reduced global damages from climate change.11 The SCC
is an estimate of the monetized damages associated with
an incremental increase in carbon emissions in a given
year. It includes (but is not limited to) changes in net
agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem
services that result from climate change. In our analyses,
we used the United States government’s latest estimate of
the global social cost of carbon (SCC) of $41/tCO2 (US$
2015) (Interagency Working Group on Social Cost of
Carbon 2015).
To determine the change in forest cover associated with
establishing and maintaining tenure security, we relied
on matching analyses for Brazil and Guatemala that
estimated the impact of protected or community areas
on deforestation. Matching analyses are able to isolate a
policy-change impact (e.g., establishment of tenure security or protected area status) by comparing forest areas
that are very similar in a variety of factors, but have different tenure or protection status. These studies estimated
the difference in deforestation rates between tenuresecure areas (defined as protected areas or sustainable-use
areas) and matched plots (i.e., the no-policy scenario).
The annual avoided deforestation impact is the difference between these rates. For Brazil, the analysis assumes
that avoided deforestation impact begins at 1.28 percent
(based on Nepstad et al. 2006) and drops to 0.24 percent
after 10 years (based on Nolte et al. 2013). In Guatemala,
For Brazil, the annual value of carbon storage (or carbon
mitigation) begins at $230/ha/yr and falls to $38/ha/yr
over the analysis period, depending on the deforestation
impact. For Guatemala, the value of carbon mitigation
begins at $173/ha/yr and falls to $107/ha/yr over the
analysis period.12
Because of data limitations, extractive-use benefits are
estimated for Guatemala only and include timber and
non-timber wood products based on data provided by
ACOFOP (2015). ACOFOP estimates that, on average,
a hectare of forest within the community concessions
annually generates $12.51 in timber revenue and $0.91
in non-timber revenue.
Comparing Benefits and Costs
We calculated benefits and costs over a 20-year period and
discounted them to their present value using a 2 percent
and 6 percent real discount rate.13 We then compared the
discounted benefits and costs using benefit-cost analysis
and the metric of net present value (NPV). We selected
benefit-cost analysis as the decision-support tool and NPV
as the metric because community forest-tenure security is
considered a long-term investment (greater than 10 years)
by national governments to meet one or more goals. Goals
might include poverty reduction, conflict resolution, preservation of forest ecosystems, support for communities
and indigenous groups, and carbon mitigation. Benefitcost analysis enables policymakers to compare the benefits
and costs of an investment decision to see whether it generates economic gains. NPV is a common metric for comparing benefits and costs because it converts benefits and
costs into a single value by discounting so that they can be
compared in present value terms. NPV allows policymakers to determine whether an investment generates losses
or gains, and to compare investment options (Cubbage et
al. 2013). In our analyses, we present NPV results at both
per-hectare and aggregated-community-forest scales.
We selected a 20-year analysis period for two reasons.
First, a 20-year analysis period reflects the uncertainty
and risks associated with maintaining tenure security
over the long term. For example, community concessions
in Guatemala are granted only for a 25-year period and
may be canceled at any time. In Brazil, despite constitutional reforms, there are also tenure security risks. A large
political faction in Brazil opposes the expansion of Indigenous Territories (Vianna 2015), and Brazil’s Indigenous
Peoples’ policy still has extensive legal, institutional, and
methodological deficits in how it handles the protec-
22 |
tion and management of Indigenous Territories (GIZ
2015). Second, the matching analyses we relied on in our
research generally report deforestation benefits on a short
time period of 4 to 10 years, which makes it difficult to
project benefits in a robust way for more than 20 years.
The selection of a discount rate (or rates) is important in a
benefit-cost analysis because it may greatly alter the NPV
and ultimately, influence decision-making. We selected 2
percent and 6 percent discount rates, based on guidance
from Cubbage et al. (2013), who explain:
The appropriate discount rate is a controversial
subject, but in principle it should represent an individual’s, organization’s, or government’s opportunity cost
of capital for an investment . . . Discount rates commonly vary from as little as 2 percent to 10 percent in
forestry literature, but are often as much as 6 percent
to 15 percent or more in practice. The low discount
rates will favor investments such as forestry that occur
over a long time, since they will not decrease future
values as much as high discount rates. Low discount
rates may be considered appropriate for public goods
and investments because they place relatively more
value on returns for future generations. However,
obtaining market loans at such low discount rates
is often not possible, and many poor persons and
communities may have very high discount rates—they
need funds and income much more in the present
than in the future. Thus the higher discount rates
common in the market reflect the cost of capital for
private goods and services.
Because tenure-security investments can be viewed
as national public investments, we estimated benefits
using both 2 percent and 6 percent discount rates. (We
also present results for a 10 percent discount rate in the
Appendix, as part of a sensitivity analysis.)
Beyond NPV, we also consider forests’ effectiveness in
mitigating carbon emissions. We measure the cost of carbon mitigation as the investment cost of storing a tonne of
carbon dioxide ($/tCO2) in the avoided deforestation area
(calculated as the 20-year present value cost divided by
the total tonnes of CO2 stored via avoided deforestation).
We calculated this metric ($/tCO2) to allow readers to
compare community forest-tenure security as a climatemitigation strategy with other climate-mitigation strategies. We do not, however, discuss other climate-mitigation
strategies in this paper.
SECTION 7: RESULTS
AND CONCLUSIONS
Both Brazil and Guatemala demonstrate that estimated
annual per-hectare costs of securing community forest tenure are low compared to benefits from carbon
mitigation and timber and non-timber production. In
Brazil, annual costs are estimated at $1.53/ha compared
to potential annual carbon-mitigation benefits ranging
from $230/ha to $38/ha over the analysis period. In
Guatemala, annual costs are estimated at $16.85/ha, while
annual benefits from carbon mitigation and timber and
non-timber production are estimated at $187/ha to $120/
ha over the analysis period. Figure 4 compares the present value per hectare benefits to costs for both countries
over the 20-year period using a 6 percent discount rate.
Figure 4 |
(In the Annex, we provide evidence from a community
forest concession in Durango, Mexico that also points to
the low costs and high benefits of secure community forest
tenure.)
The 20-year NPV results (benefits minus costs) for Brazil
range from $1,454 to $1,743 per hectare for a 6 percent
and 2 percent discount rate, respectively. Applying these
values to the total area of Indigenous Territories in the
Brazilian Amazon (111,177,224 hectares), the national level
NPV is between $162 billion and $194 billion. Additionally, we estimate the cost of carbon mitigation (per tonne
of CO2 emission removed from the atmosphere) through a
20-year investment in forest-tenure security to be between
$0.39 (at a 6 percent discount rate) and $0.52/tCO2 (at a 2
percent discount rate). Results are summarized in Table 8.
2 0-Year Present Value Comparison of Per Hectare Benefits to Costs for
Brazil Indigenous Territories and Community Concessions in the Guatemalan
Maya Biosphere Reserve (6 Percent Discount Rate)
$2,000
$1,920
$1,500
$1,473
$1,000
$500
$205
$0
$19
BRAZIL
GUATEMALA
Costs
Benefits
Note: Costs are likely underestimated due to data constraints on tenure-security establishment and opportunity costs. Likewise, benefits are also likely underestimated due to data constraints.
Table 8 |
razil Benefit-Cost Analysis and
B
Cost/tCO2 Results (US$ 2015)
DISCOUNT RATE
6%
2%
161,681,533,000
193,915,358,000
Net present value per
hectare ($)
1,454
1,743
0.39
0.52
Total net present value ($)
Community concessions in Guatemala also demonstrate
positive economic gains to society. The 20-year NPV
estimate per hectare ranges from $1,715 to $2,280 for
a 6 percent and 2 percent discount rate, respectively.
Applying this to the total area of community concessions
(352,908 ha), total NPV ranges from $605 million to $805
million. In terms of the carbon-mitigation cost per tonne
of CO2 emissions removed from the atmosphere through
a 20-year tenure secure security plan, it is estimated to
range from $7.37 to $8.50 at 6 percent and 2 percent
discount rates, respectively. Results are summarized in
Table 9.
Table 9 |
uatemala Benefit-Cost Analysis and
G
Cost/tCO2 Results (US$ 2015)
DISCOUNT RATE
6%
2%
605,368,000
804,649,000
Net present value per hectare ($)
1,715
2,280
7.37
8.50
Total net present value ($)
Both countries demonstrate that community forests are
generating positive societal economic gains through only
a subset of the benefits explored in Section 5. The benefitcost analyses do not consider the variety of ecosystemservice, collective-action, conflict-resolution, and other
social benefits, so they likely underestimate the true
economic gains to society from secure community forest
tenure in the study areas. Additionally, the analyses do
not consider all applicable costs because of data collection
constraints. While costs are meant to be comprehensive
in the Brazilian example, they do not include tenureestablishment costs (e.g., constitutional reforms, governmental decrees). For Guatemala, no detailed inventories
24 |
of funding for the MBR (and specifically, the community
concessions) have been conducted, especially for years
after 2005. Additionally, production expenses for timber
and non-timber extraction were available for only three
concessions and may overestimate these costs. As a result,
there is uncertainty associated with cost estimates. The
sensitivity analysis was conducted to address these data
uncertainties (see Appendix). Data collection constraints
that should be considered are also described more in
depth in Box 2.
The mitigation cost ($/tCO2) results for both countries
demonstrate that securing and maintaining community
forest tenure may be a cost-effective way to mitigate
climate change. The difference in values between Brazil
and Guatemala is best explained by the difference
in annual costs: Guatemala’s costs are considerably
higher than Brazil’s and include timber and non-timber
production costs. Although the values estimated may
be used to compare carbon-mitigation strategies, we
recommend that they be treated with caution, taking into
account the data-collection constraints described in Box
2. Additionally, results should not be interpreted as the
price that would need to be paid to avoid a hectare of
deforestation in these regions.
Given the uncertainty and data-collection constraints,
we conducted a sensitivity analysis to test the robustness
of our results. For the sensitivity analysis, we used a 10
percent discount rate in addition to the 2 percent and 6
percent discount rates and, where possible, we collected
a range of benefit and cost data to create lower-bound
and upper-bound estimates. The lower-bound estimate
assumes high cost values and low benefit values, and the
upper-bound estimate assumes low cost values and high
benefit values. Additionally, the lower-bound estimate
applies the average historical carbon price from the voluntary carbon market ($6/tCO2) instead of the SCC to value
carbon-mitigation benefits. The higher-bound estimate
assumes a SCC value of $119/tCO2 to reflect the 95th percentile upper-bound SCC estimate. Results for Brazil show
that the NPV can range between $102/ha and $5,522/ha
or $11 billion and $614 billion for all Indigenous Territories in the Brazilian Amazon. Results for Guatemala show
that the NPV can range between $114/ha and $8,118/ha or
$40 million and $2.8 billion for all nine active community
concessions in the MBR. The Appendix provides additional details on the sensitivity analysis.
Even with data limitations and the uncertainty inherent in
benefit-costs analysis, our research supports three important findings:
1. Analysis results for Brazil’s Indigenous Territories and
community concessions in the Guatemalan MBR suggest that efforts to secure community forest tenure are
low-cost, high-benefit investments from an economic
perspective. The community concessions in Guatemala demonstrate slightly higher gains despite higher
per-hectare costs, largely because the concessions are
allowed to manage for sustainable timber and nontimber production, and data on extractive benefits for
Brazil are patchy. Our sensitivity analysis also demonstrates positive economic gains in both countries even
when we used a much lower value of carbon of $6/tCO2.
2. Community forests can generate a wide variety of economic benefits by providing ecosystem services (e.g.,
biodiversity and climate regulation) and encouraging
behavioral changes (e.g., collective action) that support conflict resolution and social benefits. Our results
suggest that a better understanding of the multiple
economic benefits of community forests could help
demonstrate even higher net benefits and the high
value of tenure security in improving forest-resources
management and conservation. Economic valuation of
community forest benefits could help policymakers to
better target policies and investments.
3. From a financial perspective, investing in forest-tenure
security can be a relatively cost-effective measure for
climate-change mitigation when compared with other
mitigation measures. However, while we believe our
cost data are representative of tenure establishment
and maintenance costs for both study areas, we faced
data availability limitations in our analyses. Consequently, while our mitigation cost estimates can be
useful for demonstrating the cost-effectiveness of community forests as a carbon-mitigation measure, they
should not be interpreted as the price that would need
to be paid to avoid a hectare of deforestation in these
regions.
Addressing some of the data constraints we describe in
this paper could improve collective understanding of the
potential net economic gains from community forests.
Investing in improved monitoring and evaluation of community forests would be an important first step. Improved
monitoring and evaluation could support a more thorough
understanding of the benefits associated with improve-
ments in forest cover and ecosystem health. It could also
contribute to a more robust understanding of the benefits
and costs associated with conflicts and social investments.
More transparent stakeholder budgetary data would also
help to fill some of the data gaps that researchers and
policymakers face when trying to compare the full range
of benefits and costs associated with secure community
forest tenure.
Beyond improving data availability and transparency,
conducting similar analyses of other community forests,
and comparing results for forests with secure and insecure tenure rights, would also build understanding of the
economic case for secure community forest tenure. WRI
is working with local experts to extend this work to other
countries in South America, including Bolivia and Colombia.. This will allow us to extrapolate the results to the
Amazon basin. Findings, conclusions, and policy recommendations will be captured in a WRI Research Report
that will be published in 2016.
ANNEX 1: CASE STUDY—
COMMUNITY FOREST ENTERPRISE
IN SAN BERNARDINO DE MILPILLAS
CHICO, MEXICO
Mexico has a long history of community lands, known as
ejidos and comunidades. Ejidos are communally owned
and governed on the basis of rural and indigenous traditions, while comunidades are owned by Indigenous
Peoples who hold land titles dating back to the colonial
period (Zuniga et al. 2012; Bray et al. 2005). Together, ejidos and comunidades hold roughly 60 percent of Mexico’s
forests (see Figure 5). As of 2007, there were 31,514 ejidos
and comunidades in Mexico (over 92 percent of them were
ejidos), covering 106 million hectares. Roughly 65 percent
of that land is designated as a common-pool resource of
the community.
The ejido and comunidad governance systems provide the
structure and support for Community Forestry Enterprise
(CFE) management institutions. CFEs are forest industries
owned and operated by local and indigenous communities.
Today, there are approximately 2,300 CFEs in Mexico (19
percent located within comunidades and 81 percent within
ejidos) (Bray et al. 2010). Of these 2,300 CFEs, more than
200 have the capacity for industrial processing, sawnwood
production, and the commercialization of products with
added value, such as furniture, moldings, and flooring
(Bray et al. 2007). Well-run CFEs that practice sustainable
Figure 5 |
Map of Ejidos and Comunidades (Núcleos Agrarios) in Mexico
Location of San Bernardino
Milpillas Chico. Source: CCMSS 2015
0
Ejido
Comunidad
Source: National Agrarian Registry (RAN), Agency of the Ministry of Agrarian, Land and Urban Development. “Núcleos Agrarios.” Downloaded from
http://busca.datos.gob.mx/#/conjuntos/nucleos-agrarios, 29 January, 2015.
forest operations are generating jobs, decreasing deforestation rates, and increasing the provision of valuable
ecosystem services, such as biodiversity and water.
Overall, the experience of CFEs in Mexico is showing that
communities can successfully compete in international
markets and generate positive economic gains both for the
communities and for society.
San Bernardino Milpillas Chico (Milpillas) is a communalproperty located in Pueblo Nuevo, Durango. It presents
a case study of a successful CFE operation. Milpillas has
just over 5,000 inhabitants; 20 percent belong to the
ethnic group, Tepehuanos of the South (Tepehuanos del
Sur), and 80 percent to the Mestizo population. The total
area of Milpillas is 159,925 hectares, and it has 1,148
co-owners.14 Approximately 18,000 hectares of mixed
26 |
pine-oak forest are managed for commercial production
under a common property regime; this area could expand
to ~47,000 hectares in the future.
In 1961, a presidential decree recognized Milpillas as
being under a communal-property regime. Over the past
20 years, the community has expanded operations and
restructured its financing by moving away from financial
support from private forest companies toward self-finance
and government subsidies on the order of $65,000 to
$80,000 a year. The community has installed four sawmills, drying ovens, a pallet factory, and a furniture factory
(CCMSS 2015). In 2004, the community received forest
management certification from the Forest Stewardship
Council (FSC) with support from the Rainforest Alliance
(Hernandez et al. 2010).
Costs of CFE operations
Benefits from CFE operations
Several expenses associated with CFE operations are not
covered by the subsidies that the community receives.
These include:
Over the past 40 years, the CFE has grown from simple
forest operations to value-added operations such as
furniture production. One of the earliest benefits of the
switch to community ownership in 1961 was a decrease
in conflicts associated with earlier government efforts
to promote private timber management in the 1940s.
Today, the CFE produces 40,000 cubic meters of certified pinewood under the FSC, an increase of 54 percent
since 2005. Annual average company sales of lumber and
timber products are roughly $2.2 million per year.
▪▪
▪▪
▪▪
FSC initial certification cost of $13,365
Establishing a community management plan at a cost
of $346,500
Annual (recurring expenses) between $1.78 million
and $1.81 million for:
□□
Audit costs for FSC membership of $4,455/year
□□
Timber production expenses of $1.14 million/year
□□
Permits for transporting timber (required by law)
at a cost of $5,940/year
□□
CFE technical forest-management team expenses
(e.g., salaries and administrative expenses) of
$214,830/year
□□
Sales and financial costs (timber sale expenses,
including commissions and salaries, as well as
bank account expenses) of $258,390/year
□□
Activities to protect, conserve, and restore
forest and soil resources of between $81,000
and $104,000/year. Activities include creating
and maintaining firebreaks, controlling diseases
and pests, conserving and restoring soils, and
reforesting through natural regeneration and
tree planting.
Community investments made in activities to protect,
conserve, and restore forest and soil resources have both
increased forest cover on degraded lands and reduced fire
incidence. In the 1990s, an average of 1,600 hectares was
burned each year due to natural causes and unsustainable
land management practices. By 2014, an average of only
20 hectares was burned per year. The Consejo Civil Mexicano para la Silvicultura Sostenible (CCMSS) estimates
that reforestation occurs on roughly 31.5 hectares per year.
Together, forest restoration and protection activities help
to avoid the release of CO2 emissions.
The CFE also serves as a regional employment center.
Today, the CFE is the largest source of income for the
community: it produces 430 direct full-time jobs throughout the supply chain and 120 to 130 temporary jobs. The
temporary jobs last between one and six months and provide labor for reforestation, soil conservation and restoration, fire-break installation and maintenance, pest control,
and the production of plants in the community’s nursery.
A significant portion of profits from CFE operations is
reinvested in the community. Each year the CFE pays
co-owners for the rights to harvest timber—this represents a total direct economic benefit to the community of
between $400,000 and $745,000 annually. Additionally,
another $230,000 per year is invested by the CFE via the
traditional government in cultural activities, health and
education programs, and community infrastructure.
APPENDIX: BENEFIT-COST MODEL, ASSUMPTIONS, AND SENSITIVITY ANALYSIS RESULTS
BENEFIT-COST ANALYSIS MODEL
The Benefit-Cost Analyses for Brazil and Guatemala compare a policy scenario to a no-policy scenario. As a result, the paper calculates the net present
value (NPV), that is, the difference between the benefit and cost streams for
the analysis period of 20 years by:
20
NPV =
∑
Bi – Ci
∑
Bi – C i
i=1
20
NPV =
(1 + r)i
(1 + r)i
Where:
i=1
Bi = Benefits in year i
20
Ci= Costs in year i
Bi – C i
r= discount rateNPV =
+ r)i + M
Ci = TEi +(1CFE
i
i
i=1
Annual costs (Ci) were calculated in US$/ha/yr using the equation:
∑
Ci = TEi + CFEi + Mi
Where:
B = CMi + TFPi + NTFPi
costs in year i
TEi = Tenure-securityi establishment
+ CFEi +costs
Mi in year i
Ci = TEestablishment
i
CFEi= Community-forest
Mi = Management, operating, and monitoring costs in year i
Bi= CMi + TFPi + NTFPi
Benefits (Bi) were calculated in US$/ha/yr using the equation:
Bi= CMi + TFPi + NTFPi
Where:
CMi = Carbon-mitigation benefits in year i (US$/ha)
TFPi = Revenue from timber forest-products sales for year i (US$/ha)
NTFPi = Revenue from non-timber forest-products sales in year i (US$/ha)
DATA ASSUMPTIONS
Brazil
To estimate community forest establishment and community forest management, operating, and monitoring costs, federal and local government budgetary data were collected by researchers from the University of São Paulo,
who verified that this estimate provides a general approximation of costs.
As FUNAI is the official indigenous agency of Brazil, costs are based on the
average annual FUNAI budget for working with/managing indigenous lands
from 2005 to 2014. These costs are broken out into three cost categories:
ethnic identity/cultural heritage expenses, administrative expenses, and protection/land-management expenses. FUNAI’s annual budget for working with/
managing indigenous lands is available at the government online platform
Transparência Pública (CGU/ Transparência Pública 2015).
Additionally, local government expenditures for Indigenous Territories
were also included in community forest establishment and community-
28 |
forest management, operating, and monitoring costs based on the average
expenditure from 2005 to 2014 (Finbra 2015). Table A1 provides an overview
of national and local government expenses from 2005 to 2014. Local
government expenses include support to Indigenous Peoples in order to
guarantee their rights. This expense is included in a subgroup called “right
of citizenship.” Expenses in this subgroup aim to guarantee the rights of
minorities and to assist them inside the municipalities. These expenses are
assumed to be indicative of local support for all the initiatives regarding
Indigenous Peoples’ rights.
Finally, the cost estimation also includes the cost of establishing a management plan. The calculation is based on a grant received by The Nature
Conservancy (TNC) of $5.2 million for six Indigenous Territories. The total
grant amount was divided by the area of six territories (1,248,948 hectares)
in order to estimate a per hectare value. The analysis assumes that only
about 60 percent of the grant is applicable because the grant may also cover
overhead and other general expenses for TNC. It is further assumed that
management plans are established in year one, and are a one-time, upfront,
expense. The management-plan cost is estimated at $2.61/ha/yr.
Average annual cost estimates are assumed to remain constant for the 20-year
analysis period. However, it is possible that this approach may over- or underestimate costs because it appears likely that the budget for national programs
will be reduced in coming years (Borger et al. 2015). Lower- and upper-bound
values shown in Table A1 are used for the sensitivity analysis (lower bound
assumes maximum costs; upper bound assumes minimum costs).
The only benefit that could be calculated for Brazil was carbon mitigation
based on matching analyses by Nepstad et al. (2006) and Nolte et al. (2013)
for 1997 through 2000, and 2000 through 2010 respectively. Nepstad et al.
(2006) found that indigenous lands in the Brazilian Amazon strongly inhibited deforestation, especially near agricultural areas. The study estimated the
deforestation of indigenous lands using satellite data and land-cover maps.
As a metric of indigenous land performance, the study estimates the ratio
of deforestation outside the indigenous land boundary versus inside the
indigenous land boundary (using 10 km wide strips), from 1997–2000. Deforestation was detected based on forest replacement by cattle pastures and
agricultural land, and by detecting fires that are used in the forest-clearing
process and in maintaining cattle pastures. The annual deforestation rate for
areas outside the buffer zone from 1997–2000 was roughly 1.45 percent,
whereas the annual deforestation rate inside the buffer zone for the same time
period was roughly 0.17 percent.
Nolte et al. (2013) also estimated the inhibitory effect of indigenous lands
on deforestation in the Brazilian Amazon. Control groups were identified
by repeatedly sampling forested parcels from within the boundaries of the
indigenous lands and matching them to forested parcels that had never been
protected up to 2010 but were similar in terms of key covariates associated with the likelihood of protection and deforestation. The study used two
satellite datasets (PRODES and GFCL) and estimated a range of deforestation
impacts between 2000 and 2010. The study found that indigenous lands
were effective in avoiding deforestation, but that this impact decreased over
time between the first and second half of the decade due to a decrease in
deforestation rates on unprotected forest parcels in the Amazon.
Table A1 |
National and Local Government Expenditure Data for Indigenous Territories in Brazil (US$/ha 2015)
ETHNIC IDENTITY/
CULTURAL
HERITAGE
ADMINISTRATIVE
EXPENSES
PROTECTION/
MANAGEMENT
LANDS
TOTAL
LOCAL
GOVERNMENT
EXPENDITURES
($)
2005
0.11
0.20
0.26
0.57
0.03
0.60
2006
0.10
0.17
0.21
0.48
0.03
0.50
2007
0.22
0.38
0.49
1.09
0.03
1.12
2008
0.24
0.42
0.54
1.19
0.02
1.21
2009
0.28
0.49
0.63
1.41
0.03
1.44
2010
0.33
0.57
0.73
1.63
0.12
1.74
2011
0.34
0.59
0.76
1.69
0.02
1.71
2012
0.33
0.58
0.75
1.66
0.01
1.67
2013
0.35
0.62
0.80
1.77
—
1.77
2014
0.32
0.56
0.72
1.59
—
1.59
AVG
0.26
0.46
0.59
1.31
0.03
1.34
Lower Bound
0.35
0.62
0.80
1.77
0.12
1.88
Upper bound
0.10
0.17
0.21
0.48
0.01
0.48
YEAR
FUNAI EXPENDITURES ($)
TOTAL
($)
Source: CGU/Transparencia Publica 2015; FINBRA 2015.
Based on these two studies, the Benefit-Cost Analyses for Brazil assumes the
following deforestation rates (Table A2):
Deforestation Rates for the Benefit-Cost
Analyses for Brazil
Table A2 |
YEARS
1–4A
(%)
YEARS
5–9B
(%)
YEARS
10–20C
(%)
Average annual deforestation rate—
no-policy scenario
1.45
0.80
0.26
Average annual deforestation rate—
policy scenario
0.17
0.03
0.02
Deforestation impact
1.28
0.77
0.24
by the carbon-storage value, to estimate the difference between carbon storage (above- and below-ground) that is possible in a hectare of intact forest
versus a hectare of deforested land. The difference is estimated at 120 tC/ha
(see Table A3). The deforested area is assumed to be degraded and no longer
in use, so the starting area for subsequent years is equal to 1 hectare minus
the area deforested for the policy scenario. The total annual value of carbon
stored is then multiplied by the social cost of carbon value of $41/tCO2 (or
$149/tC).
The total benefits and costs are then multiplied by the total area of
Indigenous Territories in Brazil, to estimate Amazon-wide benefits.
Guatemala
Sources:
a. Nepstad et al. (2006) estimate from 1997–2000
b. Average estimate from Nolte et al. (2013) using value from 2001–2005 using PRODES
dataset and value from 2000–2005 from GFCL dataset
c. A verage estimate from Nolte et al. (2013) using value from 2006–2010 using PRODES
dataset and value from 2005–2010 using GFCL dataset
The deforestation rate for each scenario is multiplied by a starting area
of 1 hectare to estimate the area deforested in year one. The difference in
deforested area between the policy and no-policy scenario is the area of
avoided deforestation. The area of avoided deforestation is then multiplied
The costs of tenure security and establishment; community forest establishment; and community forest management, operating, and monitoring are
based on domestic and foreign investments in the MBR and community
concessions between 1989 and 2005, as shown in Table A4. USAID appears
to have contributed the most during this period, but other funders include the
Guatemalan government, KfW Bankengruppe (German Development Bank),
Inter-American Development Bank, the ICCO Cooperation, Ford Foundation,
and Scandinavian countries. Bray et al. (2008) estimate that between 20 percent and 40 percent of USAID funding was used to establish the community
concessions. Based on this finding, the analysis assumes that 30 percent of
total funding ($131 million) was used for community concession establishment and ongoing maintenance expenses. Using this number, an average annual value per hectare of $4 was calculated, assuming the investments apply
to the original 12 concessions, or 400,829 hectares. The analysis assumes
that investments continue to be made at this rate into the future.
Table A3 |
Carbon Storage Values by Forest Type and Biome (Above- and Below-Ground Biomass)
FOREST CLASSIFICATION
AVERAGE CARBON STORAGE (TC/HA)
BRAZIL—AMAZON BASIN, TROPICAL/SUBTROPICAL
MOIST BROADLEAF FOREST BIOME
GUATEMALA—PETÉN, TROPICAL/SUBTROPICAL
MOIST BROADLEAF FOREST BIOME
Intact
154.10
148.04
Fragmented / Managed
129.54
130.91
Partially deforested
68.22
87.44
Deforested
33.72
57.99
Note: Carbon storage estimates per forest condition category for each area were calculated at WRI using the following GIS datasets: WWF 2001; Potapov et al. 2011; and Saatchi et al. 2001.
Table A4 |
Domestic and Foreign Investments in the MBR and Forestry Concessions in Guatemala, 1990–2005
PROJECT
ORGANIZATION(S)
YEARS
COST (US$ 2015)
USAID/CONTRAPARTES
1990–2002
54,000,000
Sustainable Development Project
IDB
1998–2002
26,400,000
PROSELVA
KFW
1998–2000
36,960,000
CENTRO MAYA
USAID
1998
162,000
CATIE/CONAP
USAID
1998
1,200,000
Scandinavian countries
1999
98,400
USAID
2002–2004
10,680,000
—
Ford Foundation
1999–2004
564,000
—
ICCO
2000–2005
720,000
130,784,400
Maya Biosphere Project
OLAFO (Final phase)
BIOFOR
TOTAL
Source: Gomez and Mendez (2005).
The analysis assumes that costs covered by these domestic and foreign
investments include:
▪▪ MBR and Community Concession establishment costs
▪▪ FSC assessment costs (Carrera et al. 2006)
▪▪ ACOFOP’s budget (Rosales 2010)
The analysis further assumes that costs not covered by these investments
include:
annual audit, membership, and compliance costs (assumed to be
▪▪ FSC
paid for by communities)
▪▪ Community and CONAP monitoring and enforcement costs
▪▪ Timber and non-timber production costs
30 |
FSC annual audit, membership, and compliance costs are based on data
provided by Carrera et al. (2006) and equal $0.29/ha/yr. Community and
CONAP monitoring and enforcement costs are based on data provided by
ACOFOP (2015) and equal $0.5/ha/yr and $0.3/ha/yr, respectively.
Timber and non-timber production costs are based on data from Stoian
(2015) for three concessions (Chosquitan, Carmelita, and Cruce a la Colora).
Stoian estimated that production expenses are equal to roughly 87 percent of
total revenues from timber and non-timber sales.
Carbon-mitigation benefits are calculated using the same process as for
Brazil. The deforestation impact is based on matching analysis results from
Blackman (2015). Blackman’s matching study of deforestation in the MBR
used 2001-2006 forest loss data and controlled for land characteristics in
order to isolate the actual effect of different management regimes. The study
found that the average predicted probability of deforestation in matched
unprotected lands outside of the reserve was 2 percent per year. This
value is assumed to be equal to the counterfactual annual deforestation
Table A5 |
Timber and Non-Timber Product Sales from Community Concessions in the MBR in Guatemala
COMMUNITY CONCESSION
TIMBER PRODUCT SALES ($)
NON-TIMBER PRODUCT SALES ($)
ASOCIACION AFICC
964,762
11,300
ASOCIACION AFISAP
4,474,703
219,496
SOCIEDAD CIVIL OMYC
3,097,472
1,018,725
SOCIEDAD CIVIL EL ESFUERZO
3,003,672
145,459
SOCIEDAD CIVIL LABORANTES DEL BOSQUE
4,645,580
16,751
SOCIEDAD CIVIL CUSTODIOS DE LA SELVA
3,883,139
432
SOCIEDAD CIVIL IMPULSORES SUCHITECOS
3,834,626
$0
SOCIEDAD CIVIL ARBOL VERDE
4,745,362
3,660
COOPERATIVA CARMELITA
2,940,062
1,163,564
FORESCOM
3,738,779
0
Total
35,328,158
2,597,386
Annual total
$4,416,020
322,423
rate. Blackman’s model predicts that the average deforestation rate per year
inside community concessions is approximately 0.44 percent per year, so
the deforestation impact (the difference between the counterfactual and
community concession deforestation rates) is 1.56 percent per year.15
The carbon-storage value is based on the difference in above- and
below-ground biomass found in intact forest versus that found in
partially deforested and deforested areas (average value). The value is
estimated at 75 tC/ha (see Table A3).
Timber and non-timber revenues are based on data provided by ACOFOP
(2015) for 2007–2015, as shown in Table A5.
While ACOFOP (2015) reports that tourism generates revenues of $37,500
per year for two communities within the community concession area, the
production expenses associated with tourism, and who incurs these costs,
are not clear. As a result, tourism benefits are not included in the BenefitCost Analyses calculation.
SENSITIVITY ANALYSIS RESULTS
Due to the complexity of the research question and data-collection constraints, a range of benefit and cost data was collected, where possible, to
create lower-bound, average, and upper-bound estimates to cover the range
of uncertainties associated with the data and valuation methods. (Only average estimates are provided in the main body of the working paper.)
Carbon-storage value:
the lower-bound estimate, the carbon-market value is based on the
▪▪ For
value communities might expect to receive in a voluntary market of $6/
tCO2—based on the average historical carbon-market price from the 2014
State of the Voluntary Carbon Markets Report from Forest Trends (PetersStanley and Gonzalez 2014).
For the average estimate, a SCC value of $41/tCO is used that better
▪▪ reflects
the global benefits of carbon mitigation. This value is based on the
2
most recent United States Interagency study (Interagency Working Group
on Social Cost of Carbon 2015), which recommends that U.S. government
agencies use this value in their calculations for the year 2015. While the
interagency report shows that SCC values increase from 2015 through
2050, the SCC value is held constant over time to be more conservative.
the upper-bound estimate, a higher SCC value of $119/tCO is used,
▪▪ For
based on the 95th percentile upper-bound SCC value recommended by
2
the U.S. Interagency study. While the interagency study shows that SCC
values increase from 2015 through 2050, the SCC value is held constant
over time to be more conservative.
Additionally, the discount rate was varied between 2 percent, 6 percent,
and 10 percent, based on Cubbage et al. (2013). These rates were used for
conducting a sensitivity analysis to test the robustness of the results. Tables
A6–A11 summarize data assumptions and results for the sensitivity analysis
(by country).
1. A lower-bound estimate that assumes low benefits and high costs;
2. An average estimate that assumes average benefit and cost values;
3. An upper-bound estimate that assumes high benefits and low costs.
Brazil Sensitivity Analysis: Assumptions and Results:
Table A6 |
Brazil Deforestation Rate Assumptions
LOWER BOUND
YEARS 1–4A (%)
YEARS 5–9B (%)
YEARS 10–20B (%)
Average annual deforestation rate—no-policy scenario
1.45
0.72
0.21
Average annual deforestation rate—policy scenario
0.17
0.02
0.02
YEARS 1–4A (%)
YEARS 5–9B (%)
YEARS 10–20B (%)
1.45
0.80
0.26
0.17
0.03
0.02
YEARS 1–4 (%)
YEARS 5–9 (%)
YEARS 10–20 (%)
1.45
0.89
0.32
0.17
0.04
0.02
AVERAGE
UPPER BOUND
Source:
a. Based on Nepstad et al. (2006)
b. Based on Nolte et al. (2013)
Table A7 |
Data Assumptions for Carbon-Storage Benefits and Costs to Brazil
CARBON
VALUE
($/TCO2)
CARBON
STORAGE
GAP (TC)
Lower
6
Average
Upper
Table A8 |
FEDERAL AND LOCAL GOVERNMENT EXPENDITURES
ETHNIC IDENTITY/
CULTURAL HERITAGE
($/HA/YR)
ADMINISTRATIVE
EXPENSES
($/HA/YR)
PROTECTION/
MANAGEMENT
LANDS
($/HA/YR)
LOCAL
GOVERNMENT
COSTS
($/HA/YR)
MANAGEMENTPLAN COST
($/HA)
85.89
0.35
0.62
0.80
0.12
4.18
41
103.13
0.26
0.46
0.59
0.03
2.09
119
120.38
0.10
0.17
0.21
0.01
1.05
Sensitivity Analysis: Results for Brazil
DISCOUNT RATE
NPV PER HECTARE ($/HA)
TOTAL NPV (MILLION $)
CARBON MITIGATION COST ($/TCO2)
2%
6%
10%
2%
6%
10%
2%
6%
10%
132
115
102
14,686
12,750
11,303
1.12
0.85
0.69
Average
1,743
1,454
1,254
193,815
161,682
139,385
0.52
0.39
0.31
Upper
5,522
4,544
3,875
613,886
505,165
430,861
0.29
0.22
0.17
Lower
32 |
Guatemala Sensitivity Analysis: Assumptions and Results
Table A9 |
Benefit Assumptions for Community Concessions in Guatemala
DEFORESTATION
IMPACT (%)
CARBON VALUE
($/TCO2)
CARBON STORAGE
GAP (TC)
TIMBER REVENUE
($/HA/YR)
NON-TIMBER
REVENUE ($/HA/YR)
Lower
1.54
6
61.0
12.51
0.91
Average
1.54
41
75.5
12.51
0.91
Upper
1.54
119
90.0
12.51
0.91
SCENARIO
Table A10 |
Cost Assumptions for Community Concessions in Guatemala (US$/ha)
INTERNATIONAL AND
DOMESTIC TECHNICAL
AND FINANCIAL
ASSISTANCE FOR
ESTABLISHMENT AND
MANAGEMENT ($/HA)
FSC
CERTIFICATION
($/HA)
COMMUNITY
MONITORING AND
ENFORCEMENT
COSTS
($/HA)
CONAP
MONITORING AND
ENFORCEMENT
COSTS
($/HA)
TIMBER
PRODUCTION
COSTS
($/HA)
NON-TIMBER
PRODUCTION
COSTS
($/HA)
Lower bound
6
0.29
0.55
0.30
10.89
0.79
Average
4
0.29
0.55
0.30
10.89
0.79
Upper bound
2
0.29
0.55
0.30
10.89
0.79
Table A11 |
Benefit-Cost Analyses Results for Guatemala Including Sensitivity Results
NPV ($/HA)
TOTAL NPV (MILLION $)
CARBON MITIGATION COST ($/TCO2)
Discount rate
2%
6%
10%
2%
6%
10%
2%
6%
10%
Lower bound
187
142
114
66
50
40
6
4
3
Average
2,280
1,715
1,358
805
605
479
8
7
7
Upper bound
8,118
6,104
4,830
2,865
2,154
1,704
3
2
2
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ENDNOTES
1. While we consider the cost data presented to be representative of tenure
establishment and maintenance costs, the data are limited. For example,
the Brazil analysis does not include tenure-establishment costs, so
the costs presented will be an underestimate. For Guatemala, there
are no detailed inventories of funding for the MB (and specifically, the
community concessions), especially for years after 2005. Additionally,
production expenses for timber and non-timber extraction were available
only for three concessions and may overestimate these costs. As a result,
the cost estimates are uncertain. The sensitivity analysis described in the
paper’s Appendix was designed to address these uncertainties.
10.Carbon-storage estimates per forest condition category for each area
were calculated at WRI using the following GIS datasets: WWF 2001.
“Ecoregions.” Available at: http://worldwildlife.org/biomes; Potapov, P.,
L. Laestadius, and S. Minnemeyer. 2011. “Global map of forest condition.” Washington, D.C.: World Resources Institute. Available at www.
wri.org/forest-restoration-atlas; and Saatchi, S.S., N.L. Harris, S. Brown,
M. Lefsky, E. Mitchard, W. Salas, B. Zutta, W. Buermann, S. Lewis, S.
Hagen, S. Petrova, L. White, M. Silman, and A. Morel. 2011. “Benchmark
map of forest carbon stocks in tropical regions across three continents.”
Proceedings of the National Academy of Sciences (108)24: 9899–9904.
2. Available from <http://downloads.ibge.gov.br/downloads_geociencias.
htm>; Download date: 2013
11.In a benefit-cost analysis, SCC can be interpreted as the value of avoided
climate damages at the margin or Marginal Damage Cost (MDC)—in
other words, a marginal benefit to the society—in association with one
tonne CO2 emissions reduction, to be compared with Marginal Abatement Cost (MAC), which is derived from the global MAC curve that
aggregates the costs of different technologies to reduce one tonne of
emissions (Ding 2011; Pearce 2003). If MDC and MAC curves are precisely defined, then the estimated carbon price (i.e. the interplay between
the MDC and MAC curves) shall indicate the social optimum level of
emissions reduction control (Perman et al. 2003).
3. Available from <http://www.funai.gov.br/index.php/shape>; Download
date: July 2015
4. As of 2015, two concessions have been cancelled, one suspended, and
one suspended but later reinstated (Hodgdon et al. 2015, Rodas et al.
2014). Concessions can be revoked if the community does not follow its
management plan or lacks operational or financial sustainability (Hodgdon et al. 2013; Gretzinger 1998). All cancelled or suspended community
concessions experienced a similar rapid increase in population and
turnover, as well as rampant illegal land appropriations affecting between
30 percent and 50 percent of the concession area. Additionally, these
concessions lacked a historical tie to the land (Radachowsky et al. 2012).
5. Ecosystem services valued included food, water, raw materials, genetic
resources, medicinal resources, improvement of air quality, climate
regulation, regulation of water flows, waste treatment/water purification,
erosion prevention, and recreation and tourism.
6. Ecosystem services include carbon benefits and 15 other services
including water regulation, pollination, and food production.
12.For Brazil, the deforestation impact is assumed to decrease over time
based on evidence from Nepstad et al. (2006) and Nolte et al. (2013).
For both Brazil and Guatemala, the area to which carbon-storage benefits
can be applied shrinks over time as deforested area is assumed to be
converted to degraded area.
13.A 6 percent discount rate is the average discount rate based on Cubbage
et al.’s (2013) finding that forestry studies tend to use a discount rate
between 2 percent and 10 percent.
7. OECD (2013) defines collective action as “action taken by a group to
achieve common interests.”
14.A co-owner or comunero is a person with land rights and who is a
landowner in common with other comuneros. Comunero status is legally
recognized by presidential decision or judgment of the corresponding
Agrarian Court (Tribunal Unitario).
8. This value does not represent a net revenue number because the staffing,
administrative, and other costs associated with ecotourism are not clear.
15.This assumption was verified by Dr. Allen Blackman in a personal communication on August 4.
9. For both countries, the matching analyses (Blackman 2015, Nolte et al.
2013, and Nepstad et al. 2006) found that, whereas deforestation rates in
Brazilian and Guatemalan community forests are lower than in matched
areas without tenure security, they still exhibit some deforestation.
ACKNOWLEDGMENTS
ABOUT THE AUTHORS
The authors would like to acknowledge the following individuals for their
valuable guidance, critical reviews, and research support: David Kaimowitz
(Ford Foundation); Penny Davies (Ford Foundation); Benjamin Hodgdon
(Rainforest Alliance); Kevin Currey (Ford Foundation); David Bray (Florida
International University); Kenneth Chomitz (Forest Trends); Paul Isbell (Johns
Hopkins University); Allen Blackman (Resources for the Future); Caleb Stevens (United States Agency for International Development); Helen Mountford
(WRI); Mark Robinson (WRI); Free de Koning (WRI); Katie Reytar (WRI);
Laura Malaguzzi Valeri (WRI); Gaia Larson (WRI); Chris Delgado (WRI);
and Julia Hussey (WRI). We would also like to thank the community of San
Bernardino Milpillas Chico (Milpillas) in Pueblo Nuevo, Durango, Mexico,
for allowing us to develop a case study of their Community Forest Enterprise.
Erin Gray is an environmental economist with the World Resources
Institute’s Economics Center, USA.
We would like to acknowledge those involved with graphic design, editing
and layout as well as communications and outreach: Hyacinth Billings (WRI),
Michelle DeCesare (WRI), Carni Klirs (WRI), Emily Matthews (WRI), Michael
Oko (WRI), Emily Schabacker (WRI), Madaleine Weber (WRI), and Lauren
Zelin (WRI). We also receive communications support from Burness, a global
communications firm that supports nonprofit organizations.
Helen Ding is an environmental economist with the World Resources
For this working paper, WRI is indebted to the Climate and Land Use
Alliance, Good Energies Foundation, Ministry of Foreign Affairs of the
Netherlands and Irish Aid for their generous financial support.
Contact: [email protected]
This working paper represents the views of the authors alone. It does not
necessarily represent the views of the World Resources Institute or its
funders.
Peter G. Veit is Director of the Land and Resource Rights Initiative in the
World Resources Institute’s Governance Center, USA.
Juan Carlos Altamirano is an economist with the World Resources
Piotr Rozwalka is a graduate student in economics at the Stockholm School of
Economics, Sweden, and a Wallenberg Fellow at Georgetown University, USA.
Iván Zúñiga is the Forest Policy Coordinator at the Mexican Civil
Council for Community Forestry (Consejo Civil Mexicano para la
Silvicultura Sostenible), Mexico.
Matthew Witkin is a student in Environmental Studies at Middlebury
College, USA.
Fernanda Gabriela Borger is a Senior Researcher in Fundação
Instituto de Pesquisas Econômicas of the Department of Economics
at the University of São Paulo, Brazil.
Andrea Lucchesi is an Assistant Professor at the University of
São Paulo, Brazil.
Paula Carvalho Pereda is an Assistant Professor in the
Department of Economics at the University of São Paulo, Brazil.
Keyi Ando Ussami is a Research Assistant in the Department of
Economics at the University of São Paulo, Brazil.
38 |
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the economic costs and benefits of securing community forest tenure

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