0434-B2
Richard B. Standiford 1, Lynn Huntsinger2, Pablo Campos-Palacín3, David Martin-Barroso4, and Pedro Mariscal-Lorente5
The economic values of ecological services provided by oak woodlands in California and Spain are quantified, and implications for conservation policy discussed. Oak woodlands cover millions of hectares, are mainly privately owned, have tremendous biodiversity, and are the forage base for extensive livestock production. However, high opportunity costs stimulate fragmentation of these into smaller residential or cultivated parcels. Despite conversion pressure, landowners make management decisions reflecting their own utility for environmental services. Positive mathematical programming is used to determine landowner utility for woodlands in California. Detailed questionnaires have been used to develop total economic value of Spanish oak woodland dehesa. Various other approaches to assess amenity values are presented. Results contrast traditional financial production models that undervalue Mediterranean oak woodlands and are the basis of historically destructive agricultural and land use policy.
Oak woodlands and savanna are an extensive forest type in Mediterranean climate regions of the world. Known as hardwood rangelands in California, dehesa in Spain, and montados in Portugal, they cover almost 10 million hectares (Figure 1). A relatively open overstory predominantly of oak species (Quercus spp.) allows a well-developed understory of annual grasses and forbs, scattered perennial grasses, and woody brush species (Allen-Diaz et al. 1999, Cardillo 2000).
In both California and the Iberian Peninsula livestock grazing is the main use. Commercial wood value is low, although cork provides valuable forest product in Spain and Portugal. Recently their ecological value has been recognized. California oak woodlands have the richest species abundance of any habitat in the state, with over 300 vertebrate, 5000 invertebrate, and 2000 plant species (Garrison 1996). In Spain, the open oak woodlands known as dehesas support a number of endangered species, Europe's migratory birds (Diaz et al. 1997), and unique cattle breeds. Dehesas have qualified as habitats to be preserved within the European Union Habitats Directive because of their high biodiversity. Public interest in open space, recreation, and the purchase of large "amenity" properties has increased steadily over the last 25 years, adding considerable value to Spanish and Californian oak woodland.
The continued supply of public values from private woodlands depends on their economic value and the opportunity costs of competing land uses. Economic and legal institutions such as conservation easements, property tax incentives, and cost-share incentives compensate owners for amenity values. Broadened product markets, including fee hunting, recreational leasing, and mitigation banking, also increase returns and help maintain ecosystem services. In Spain, direct government compensation to private owners for environmentally sensitive silvicultural and grazing practices is increasing. In this paper, compare bioeconomic research in Spain and California and the implications for the development of conservation policy.
In the mid-twentieth century, in California and Spain traditional financial production models, coupled with the low value of wood, supported policies that discouraged forest conservation, favoring instead more intensive agricultural and urban development. Beginning in the 1950's, prices for dehesa products fell, livestock diseases increased, and much of the rural population emigrated to urban areas. The Spanish government tried to increase animal production value through subsidies and genetic crosses. Higher livestock stocking in oak woodlands led to over-exploitation of forage, and suppression of oak regeneration. Government-sponsored afforestation with exotic eucalyptus and pine species, coupled with subsidies for clearing native oaks, resulted in a decrease of oak dehesa area (Diaz et al. 1997).
In California, agricultural conversion, firewood harvest, and development for housing have reduced oak woodlands by about half since the 1800's. Major losses from 1945 through 1973, were from oak clearing for enhancement of forage and livestock production, often supported by US federal cost-share incentives and state policy. California's oak woodlands have decreased by over four hundred thousand hectares in the last 40 years (Bolsinger 1988). Since 1973 regional oak woodland losses have occurred from urban expansion, firewood harvesting, range clearing, and conversion to intensive agriculture.
Financial models evaluating land conversion, tree harvest, and wildlife habitat retention by landowners have poorly incorporated the economic values of environmental services. Oak woodland owners with positive values for environmental service consumption are both investors in and consumers of goods and services. Research in California and Spain is attempting to incorporate a landowner's utility from environmental services to better represent likely trends.
In California hedonic pricing has been used to capture landowner environmental values (Standiford and Howitt 1992). Traditional optimization concluded that existing markets would lead to oak clearing to increase forage yield. However, these models had a poorly specified objective function, omitting landowner utility from the amenity value of oak stocks. A positive mathematical programming (PMP) approach (Howitt 1995) was used to derive missing elements of the true costs and returns of oak harvest and retention. The dynamic optimization model was constrained by actual landowner behavior. The shadow prices derived from the behavior constraint represents the marginal benefit of retaining trees. Figure 2 compares firewood stumpage price to the "apparent" hedonic price. The difference between the two curves represents the "cost" of overcutting firewood, or the self-consumption value of retaining trees.
Self-consumption of environmental services also plays a crucial role in private dehesa management. In Spain, this has been quantified in Monfragüe Shire (Mariscal and Campos 2001). Landowner surveys reveal that landowners would be willing to lose a significant amount of money before selling their dehesa land. The smaller the property, the greater the proportion of the property value represented by self-consumption value (Figure 3).
In California, oak cover trajectory, firewood harvest, and cattle stocking were modeled for different risk and land productivity conditions (Standiford and Howitt 1992). Figure 4 shows the contribution of the three major commercial enterprises to total net present value (Standiford and Howitt 1993). Fee hunting is important, ranging from 40 percent to 70 percent of woodland value. Firewood, the only major wood product, has low value compared to cattle or hunting enterprises. The marginal value of oak tree cover for hunt club habitat often exceeds the marginal value of the extra forage or firewood harvest value resulting from tree harvest (Standiford and Howitt 1992). Diversification of enterprises provides a conservation incentive for oak woodlands.
Economic surveys of four dehesa estates in Monfragüe Shire (Campos et al. 2001) include marketed commercial products, as well as significant contributions from self-consumption of environmental services (Figure 5). Results show that the omission of environmental service income undervalues the dehesa contribution to private and social income levels. Capital gains, also omitted in national accountings, have been the dehesa's most important source of private income over the past 25 years. The margin for livestock from the case studies was negative, but from grazing services (leased land) was positive. The negative livestock value was compensated for by European Union Common Agricultural Policy (CAP) subsidy for livestock production. Economic contributions from wood harvesting are low on holm oak properties. However, when cork oaks are present, cork harvest represents a significant contribution to value (Pulido et al. 2002).
In much of California, wood harvest, grazing, hunting, and other extensive management practices are a small fraction of actual land value. Some woodlands can be converted to high value, intensively managed agricultural products, such as wine grapes (Merenlender 2000), or subdivided for housing. Grazing land value may be less than 10 percent of the value for intensive agricultural use, or less than 1 percent of the value for housing. These higher value land uses fragment oak woodland habitats, diminishing their environmental values (Merenlender et al. 1998).
In Spain, there have been dramatic increases in rents for organized hunts as a kind of conspicuous consumption in the post-Franco era (from 1975). This has resulted in many dehesa owners converting to hunting reserves. To convert to hunting, game fences are put up and the shrub layer is allowed to return. The regeneration and maintenance of dehesa systems is neglected, jeopardizing agro-sylvo-patoral systems that have maintained ecological values for centuries.
Ecological and aesthetic woodland values are increasingly important in both areas. In California, amenity values are part of high property values. Contingent valuation of different spatial arrangements of oak stands showed that woodlands with at least 100 oaks per hectare (10 meter spacing or less) were worth 27 percent more than open land (Diamond et al. 1987).
A 3400 hectare oak woodland in southern California had positive effect on both individual home and land parcel values (Standiford and Scott 2001). Undeveloped land immediately adjacent to the undeveloped woodland is 17 percent more valuable than land 0.3 kilometers away. Individual homeowners are also willing to pay a premium if native oak stands are near their residence, so woodland open space increases overall value of the entire community. A one percent increase in oak cover and open space size increased total community home and land capital value by $2 million. This increases annual property tax accruing to local government, justifying public financing of oak restoration efforts, and the purchase of open space.
A study of public demand for environmental values in Monfragüe National Park's oak dehesa ecosystems demonstrated their value to the Spanish public (Campos 1996). The demand curve developed showed that the value of recreation and conservation services to dehesa visitors was high, and inversely related to an individual's frequency of visits.
Diverse policy approaches have been adopted to conserve oak woodlands. In California, most oak woodlands are in private ownership, subject to many levels of oversight and regulation. Oak protection, land use, and development ordinances may affect a landowner's management at local and county levels. At the state level, water quality, fire protection, and timber harvest regulations may be a factor. Pro-active, incentive-based programs are rare, but one is the California Land Conservation Act of 1965. This provides reduced property taxes to those who contract with the county not to develop their lands for ten years. Approximately 70% of the oak woodlands of the state are under this type of contract (Huntsinger et al. 1997). A state sponsored voluntary education program appears to have contributed to a reduced rate of oak cutting over the last ten years, but in general, oak woodland landowners are suspicious of and hostile to government intervention (Huntsinger et al. 1997).
In California non-governmental organizations are playing a growing role. One of the largest initiatives for oak woodland conservation is the "the land trust movement." Land trusts vary from local groups, operating with volunteer staffs and little to no direct budget, to regional groups with staff and some funding, to large international groups, such as The Nature Conservancy. In California, there are 132 land trusts, conserving over 400,000 hectares of land (LTA 2000). Land trusts purchase or accept donations of conservation easements. A conservation easement establishes a permanent deed restriction limiting the kinds of development on a property. For example, urban development rights for an oak woodland property may be sold or donated to a land trust, which then holds these rights in perpetuity. The landowner benefits from the capital value of the rights donated or sold, and society benefits from the land's ecological value (Huntsinger and Hopkinson, 1996). Funding comes from private and public sources, and varies among trusts and properties.
There are tax incentives for donation of conservation easements. The market value of the property rights donated reduces the land's basis. Considered a charitable donation, this reduces taxable income, and the owner's income taxes. Lowering land basis also reduces inheritance tax. There is no longer a need to sell parcels to pay inheritance taxes, identified as one of the major constraints to inter-generational transfers of large, extensively managed oak woodlands (Johnson 1997). The proposed reform of U.S. estate taxes may reduce this conversion pressure, but also a donation incentive.
On the Iberian Peninsula, the extensive transhumance, political and demographic upheavals, and property changes that occurred in the Middle Ages favored creation of large extensive farms under the military, clergy, and nobility (Trujillo and Mata 2001). Land title reforms in the nineteenth century shifted these and many common properties into private hands. A proactive program of dehesa conservation has been developed at the provincial, national, and pan-European levels, commonly providing direct subsidies to agricultural producers. Typically, dehesa landowners get a quarter to a third of their operating income as subsidy. In recent years, there has been a shift away from European Union (E.U.) CAP subsidies that emphasize intensification of livestock production. There is a deepening interest in the maintenance and viability of "low intensity agriculture," which includes the dehesa and montados of Spain and Portugal, to reduce environmental degradation, and provide rural employment.
In Spain the dehesa has cultural and environmental importance. With little public land, interest in conserving privately owned open landscapes is great. There is also a long tradition of overlapping and diverse property rights, so there is perhaps not the same inclination to assert such an absolutist form of private landownership in Spain as in the United States. Nature Preserves controlled at national, regional, and local levels often include active agricultural enterprises within their borders, but owners are subject to Preserve goals and regulations.
Some aspects of oak woodland conservation draws on Spanish interest in cultural heritage, and a reassertion of regional pride after suppression during the Franco era (1939-1975). Beef, ham, and cheeses carry regional appellations that are government regulated. The premium prices that can be charged for some products, such as acorn-fed hams, can help increase dehesa profits.
In Spain, livestock subsidies are the main source of public funds for dehesa owners, but this tends to stimulate high animal numbers, threatening oak regeneration. However, there are aggressive and comprehensive strategies to minimize land use conversion in the dehesa. The European Commission, the Spanish government, and even regional authorities, can intervene in dehesa land use. In 1985, the European Economic Community (EEC) put nature conservation measures in CAP reform for the first time. The new CAP supports land uses compatible with nature and cultural heritage conservation. EU subsidies cover planting and maintenance costs for five years, and income loss resulting from reforestation. By December of 1998, 225,988 hectares were reforested with native oaks under EEC Regulation 2080/92, and 82,455 hectares of mature cork oaks were improved (Mariscal and Campos 2001).
Mediterranean oak woodlands have been undervalued by traditional financial production models. New approaches to evaluating self-consumption of environmental services, and the quantification of the utility of amenity values, offer promising approaches to representing value to landowners. California studies show that woodlands increase community values, providing information on the supply side of open space. Spanish work on public demand curves for recreation and conservation shows the demand side for oak open space values. Future work will include demand and supply studies in both countries.
In diverse social, political, and ecological contexts, how can the full range of oak woodland values be analyzed and represented in ways that will stimulate conservation? In Spain, the concept of a "total economic value" that includes numerous difficult to quantify values has increased attention to extensive agriculture in the public policy arena. In California, the political leverage points for this information are not fully identified. Collaboration between Spain and California offers an opportunity to contrast the contribution of various forms of bioeconomic analysis to conservation policy and ultimately to the land use patterns, economic functioning, and ecological structure and function of oak woodlands.
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Figure 1. Californian oak woodlands and Spanish dehesa.
Figure 2. Net firewood return per cubic meter as function of amount of wood harvested (Standiford and Howitt 1992).
Figure 3. Owners' self-consumption of environmental services in Monfragüe shire (year 2000)
Figure 4. Net present value of California oak woodlands from various commercial enterprises (Standiford and Howitt 1993).
Figure 5. Net margin of various production values for four dehesa case studies in the Monfragüe shire.
1 Forest Management Specialist and Associate Dean of Forestry, College of Natural Resources, University of California, Berkley, 145 Mulford Hall, MC 3114, Berkeley, CA, 94720, U.S.A. [email protected]
2 Associate Professor of Range Management and Associate Dean of Student Affairs. College of Natural Resources, University of California, Berkeley, 151 Hilgard Hall, MC 3110, Berkeley, CA 94720, U.S.A. [email protected]
3 Tenure Research, Institute of Economics and Geography (IEG), Spanish Council for Scientific Research (CSIC) Pinar 25, 28006, Madrid, Spain, [email protected]
4 Profesor Ayudante, Departamento de Economía Aplicada II, Facultad de Ciencias Económicas y Empresariales, Universidad Complutense de Madrid, Campus de Somosaguas, 28223 Pozuelo de Alarcón (Madrid), Spain, [email protected]
5 Profesor Asociado, Departamento de Economía Aplicada II, Facultad de Ciencias Económicas y Empresariales, Universidad Complutense de Madrid, Campus de Somosaguas, 28223 Pozuelo de Alarcón (Madrid), Spain, [email protected]