Tree Plantations in the Philippines and Thailand: Economic, Social, and Environmental Evaluation

Background

Tropical land area under plantations have dramatically increased in recent decades, largely as a result of natural forest depletion. Forest plantations cannot qualitatively substitute the timber or the habitat of natural forests, yet are growing in global importance both commercially and ecologically. However, the negative and positive social and environmental impacts must also be included in analysis of tropical forest plantations.

goals & methods

In two case study countries, Thailand and the Philippines, the profitability of industrial, community based and private reforestation was assessed for two most commonly used tree species in reforestation. The profitability assessments were aimed to be carried out at four different levels: based on comparisons between costs and benefits in market prices, economic efficiency prices, and monetary valuation of environmental impacts into the economic analysis. The study also evaluated the economic costs of transpiration and nutrient loss in harvesting, and benefits in erosion control and carbon sequestration.

Conclusions & takeaways

The results of the case studies indicated that the economic-environmental profitability of reforestation is considerably higher than the financial profitability alone in both cases. It also became evident that the environmental-economic profitability was highly dependent on the environmental impact and valuation assessments; in this study, the environmental-economic valuation improved the economic profitability of reforestation. While the empirical and methodological bases for including environmental and social impacts into traditional profitability analysis of tree plantations requires improvement, valuing the social and environmental costs and benefits in economic analysis may encourage environmentally and socially sensitive management practices in plantation forest development.