Economics of Management for Biodiversity (C1)

Economics of Management for Biodiversity (C1)

C1) Economic valuation of biodiversity-oriented forest management strategies

Marc Hanewinkel, Rasoul Yousefpour & Andrey Lessa

University of Freiburg, Faculty of Environment & Natural Resources, Institute of Forest Sciences, Chair of Forestry Economics and Forest Planning


The Millenium Ecosystem Assessment classifies biodiversity as an existence value under the non-use values. Costanza et al. (1) reveal the important values that the world’s ecosystems deliver to societies. If forest owners or forest managers have to be convinced to modify forest management in order to enhance biodiversity, the economic effects of the modified management strategies have to be disclosed.

Study questions and hypotheses

A general hypothesis of C1 is that orienting forest management towards biodiversity has economic implications that can be quantified on different spatial scales. The value of biodiversity can be expressed as an opportunity cost within a simulation-optimization approach to account for multiple goods and services in the management of pure and mixed stands of Norway spruce(2). Research questions of phase I of project C1 will focus on opportunity costs of retention measures, and in particular habitat trees and dead wood, to enhance biodiversity in forest ecosystems.

Approach and methods

Major forest ecosystems in the study area are assessed and stratified in terms of forest types using information on the 135 ConFoBi study plots and inventory data in the surrounding landscapes. The forest types are then modelled on different spatial scales using a distance-dependent single-tree growth simulator and applying an array of silvicultural strategies, including “business as usual”- approaches as well as different retention levels. Using the results of modules A and B, the effects of the various strategies on biodiversity is quantified to find optimal potential strategies to enhance biodiversity.

Different components of biodiversity, expressed as specific biodiversity indices, are assessed and modelled together with retention strategies. Further, C1 assesses whether forest management measures explicitly oriented towards threatened species, such as retention of nesting trees and dead wood for woodpeckers and other cavity nesters, and of old and open conifer-dominated stands for capercaillie, to enhance biodiversity. Based on this adaptive simulation-optimization approach, the opportunity costs of retention strategies compared to standard production-oriented management schemes are assessed for several standard economic parameters (net present values, annuities, land expectation values(3)). The marginal utility of different retention levels is calculated to support an economically efficient choice of habitat trees and dead wood volumes.


C1 closely collaborates with C2 and D1 to find out which role economic parameters play in decision making related to biodiversity and relies on input from modules A and B for information on the relation of forest structure and biodiversity and for the requirements of different species towards management strategies that will be used as an input for the modelling. For example, with regard to modelling management strategies oriented towards threatened species, C1 closely cooperates with project B6.

Further reading

  • Costanza, R., R. d’Arge, R. de Groot, S. Farber, M. Grasso, B. Hannon, K. Limburg, S. Naeem, R. O’Neill, J. Paruelo, R. Raskin, P. Sutton, and M. van den Belt. 1997. The value of the world’s ecosystem services and natural capital. Nature 357:253 – 260.
  • Yousefpour, R., Hanewinkel, M. (2009). Modelling of forest conversion planning with an adaptive simulation-optimization approach and simultaneous consideration of the values of timber, carbon and biodiversity. Ecological Economics 68:1711-1722.
  • Hanewinkel, M., D. Cullmann, M.-J. Schelhaas, G.-J. Nabuurs, and N. E. Zimmermann. 2013. Climate change may cause severe loss in economic value of European forestland. Nature Climate Change 3:204-207
  • Jactel, H. and E. G. Brockerhoff. 2007. Tree diversity reduces herbivory by forest insects. Ecology Letters 10:835-848.
  • Neuner, S., Albrecht, A., Cullmann, D., Engels, F., Griess, V., Hahn, A.; Hanewinkel, M.; Härtl, F., Kölling, C., Staupendahl, K., Knoke, T. (2014). Survival of Norway spruce remains higher in mixed stands under a dryer and warmer climate. Global Change Biology doi: 10.1111/gcb.12751