Forests Beyond Wood: Economic Contributions of Recreation, Water, and Biodiversity

The 2024 World Bank report underscores the significant economic value of non-wood forest ecosystem services, such as recreation, water protection, and biodiversity. Using advanced valuation methods, it highlights the need for policies that balance forest conservation with sustainable economic growth.

The 2024 World Bank report, “The Changing Wealth of Nations,” conducted by experts from the International Union for Conservation of Nature, Universidad de la República, and World Bank consultants, offers a global evaluation of non-wood forest ecosystem services, emphasizing the often-overlooked economic contributions of forests beyond timber production. This technical report captures the economic significance of forest resources like recreation, watershed protection, and biodiversity preservation that, while not involving direct resource extraction, contribute substantially to the natural capital wealth of countries. The report updates and expands on the 2021 assessment by implementing a combination of statistical regression and advanced machine-learning models to estimate ecosystem service values. The analysis is based on more than 1,336 studies, incorporating 346 unique value estimates from an extensive dataset that spans 10x10 kilometer grid cells. This high spatial resolution allows for accurate, country-level estimates of the economic benefits derived from forest ecosystem services. The report underlines the importance of this assessment, as it provides insights that can inform policies that balance economic development with sustainable forest management.

Valuing Forests Beyond Wood: Recreation, Food, and Health Services

A key finding of the study is that non-wood forest ecosystem services represent a vital component of global and national wealth, contributing considerably to regions with large forest resources. The analysis finds that high-income countries, particularly in Europe, North America, and parts of Asia, display the highest economic values per hectare, especially in recreation services. Non-wood forest products, such as wild foods, fibers, and medicinal plants, carry significant economic value, particularly in low-income nations. In many regions, these non-wood products are critical to local livelihoods, serving as essential food sources and economic buffers for subsistence economies. This variation is largely due to the increased dependency on forest resources in these areas, where population density and accessibility further influence ecosystem service values. For instance, forest lands closer to urban centers are often more valuable due to higher demand for recreation and other services, especially in densely populated regions where forests are easily accessible.

Innovative Techniques for Accurate Ecosystem Valuation

The report's methodological advancements allow it to capture a range of influential factors, including socioeconomic, biophysical, ecological, and climatic variables. By combining regression analysis with machine learning techniques, the report offers refined, location-specific valuations, providing a more realistic picture of ecosystem service value at both local and global scales. The statistical models revealed that factors like income level, population density, and temperature significantly impact the economic value of recreation services and non-wood products. High-income countries show a higher valuation of recreational services, which reflects their capacity to prioritize leisure and environmental quality. In contrast, forest ecosystems in low-income countries are more valued for their tangible, practical benefits, such as non-wood products that support local diets and traditional medicine. Temperature and biodiversity also play roles, with species richness positively correlating with non-wood product values, hinting that areas rich in biodiversity have greater ecosystem productivity, adding to the forests' economic value. The report reveals that average annual values for recreation and non-wood forest products vary widely across regions, demonstrating forests' localized importance for both economic and ecological reasons.

Protected Forests: Key Contributors to Recreation and Water Quality

In addition to these findings, the report analyzes the economic impact of protected areas, examining their contribution to ecosystem services like water regulation and biodiversity protection. It finds that protected forests globally contribute significant value, especially in terms of recreation and water services, primarily in Europe and North America. However, the assessment highlights a gap in data availability for certain forested regions like Russia and Central Asia, where valuation studies are limited despite these regions housing vast forest resources. To address these disparities, the authors incorporated recent literature from underrepresented areas, such as Southeast Asia and Africa, to bolster the report's findings. Despite these efforts, challenges remain in fully capturing the economic and ecological value of forest ecosystem services in regions with rich biodiversity and data limitations. This underlines the need for continued investment in forest valuation studies, particularly in data-poor regions, to ensure a comprehensive understanding of forests' true economic worth.

A Policy Framework for Balancing Conservation and Economic Growth

The alignment of the report with the System of Environmental-Economic Accounting Ecosystem Accounting (SEEA EA) adds a layer of usability for policymakers and stakeholders, providing a robust framework for environmental-economic assessments that adhere to international standards. The SEEA EA framework helps in disentangling natural capital from human-made capital within valuation estimates, thus offering clearer insights into the specific contributions of ecosystem services. Moreover, by providing detailed estimates of the monetary value of forest ecosystem services per hectare, the report offers a solid foundation for decision-making processes related to sustainable forest use. This systematic approach to valuation further aids countries in evaluating how protected and accessible forests contribute to wealth creation, supporting policies that encourage conservation while balancing economic needs.

Ensuring Forest Wealth for Future Generations

Through these evaluations, the report emphasizes the significance of forests beyond timber and traditional uses, underscoring their contributions to quality of life, climate resilience, and economic stability. This holistic approach to forest valuation is essential for developing informed policies that ensure long-term ecological health and economic sustainability. The World Bank’s findings advocate for enhanced research and data collection, particularly in developing regions where forests are integral to local economies and environmental stability. By providing a clearer picture of the economic value of ecosystem services, the report underscores forests' role in a sustainable future, highlighting the importance of preserving forest wealth for generations to come. The report’s insights aim to drive both policy and investment strategies that foster sustainable use, ensuring that forests can continue to provide their essential services in the face of economic development pressures.