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1 August 2008 Valuing Mediterranean Forests: Towards Total Economic Value
Nick Hanley
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Valuing Mediterranean Forests: Towards Total Economic Value, edited by Maurizio Merlo and Lelia Croitoru. Wallingford, United Kingdom: CABI Publishing, 2005. xxii + 406 pp. US$ 140.00. ISBN 0-85199-997-2.

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This book, edited by the late lamented Maurizio Merlo and his colleague from the University of Padova, is a heroic attempt at quantifying the ‘Total Economic Value’ (TEV) of Mediterranean forests across 18 countries. TEV is a concept first popularized by David Pearce and Kerry Turner, and represents the many ways in which a natural resource, such as a forest, is valuable to people. The editors make the point that Mediterranean forests have always been managed for multiple uses, not just timber harvesting. The many benefits from forests include timber, non-timber forest products such as cork and pine kernels, watershed and soil protection, biodiversity values, and recreation. Pastoral grazing regimes have also interacted with forest management for centuries.

The book is composed of 3 sections. Part 1 starts off by setting a historical context for forests in the Mediterranean, and describing their current nature and extent. The authors recognize that many of the benefits of forests are ‘non-market’ in that, due to the absence or imperfect enforceability of property rights and the nature of the goods provided, no market price exists to ‘signal’ the value of, for example, watershed protection and biodiversity conservation. Methods for placing monetary values on these non-market goods, such as contingent valuation and the travel cost approach, are then reviewed. A template for calculating TEV is presented—the idea being that all ‘country studies’ which follow in Part 2 will apply this template. The benefit categories set down in the template are shown in Table 1.


Benefit categories applied in country studies for calculating total economic value.


Whilst this particular treatment of TEV is a little ‘old-fashioned,’ it gets across the point that there are a wide range of forest-related benefits, only some of which are valued by markets, and some of which will accrue to people in the future. Moreover, the template makes the important point that environmental costs can also arise from the planting of new forests. The book sets out a method for calculating most of these values. Part 1 closes by summarizing the results from individual country applications of this template, noting that due to data problems, the template could not be evenly or equally applied in all cases. Part 2 of the book presents these individual country studies, from Algeria to Turkey to Slovenia, covering 18 countries in all. Part 3 discusses the institutional constraints on forest management, opportunities and initiatives for participatory management and ownership, and finally the need for an international agreement on Mediterranean forests.

But why would we want to calculate the TEV of forests? The authors give 2 reasons. First, so that policy-makers, forest managers and the general public will recognize the scale and variety of forest benefits—the argument here is that a benefit registered in monetary terms somehow carries more weight in a political sense than the same benefit expressed in some other manner. Second, so that such benefits can be incorporated into management decisions and forest planning. Herein lies the major problem with the approach taken. What the many authors end up measuring is the average per-hectare value of the current stock of forests, broken down by forest type and by component of total economic value. Yet what is of much more relevance from a management point of view is to know how these values would change if management actions were altered: for example, how the TEV per hectare of a particular type of forest would fall or rise if species diversity was increased, or recreation facilities improved, or a different felling regime adopted.

At the moment, the values in the book are more useful in terms of registering the wider value of the current stock of forests in, for example, Italy, in a national accounting framework. Yet this only makes sense if we believe in the counter-factual question: “How much poorer would Italy be with no forests.” However, the per-hectare values are of interest in comparing across countries: for example, the analysis reveals that recreation benefits are more important in the countries to the North of the Mediterranean than those to its South and East. Timber values are highest in Portugal and lowest in Lebanon. Grazing values are highest in Greece. As a whole, total economic forest values are also higher in the North (around 176 €/ha/year, with a highest recorded value of 344 €/ha/year for Portugal) than in the South and East (around 67 and 48 €/ha/year, respectively, with a lowest value of 6 €/ha/year for Egypt). The numbers are also of interest in comparing the different components of TEV—for example, watershed protection can account for about half of the total. Overall, direct use values (see Table 1) constitute around 70% of total measured benefits, with indirect use benefits accounting for another 15%.

Many criticisms can be made of this study. The numbers produced are often very approximate, resulting from the application of rather simple versions of valuation techniques, or very crude benefits transfer. ‘Benefits’ are sometimes valued using cost figures (especially in the case of biodiversity protection). However, the authors would argue—and I agree with them—that it still allows an important insight of the value of protecting forests, and into the multiplicity of ways in which forests matter to people.

Nick Hanley "Valuing Mediterranean Forests: Towards Total Economic Value," Mountain Research and Development 28(3), 339-340, (1 August 2008).
Published: 1 August 2008

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