Carbon binding of forests: some remarks on classification and valuation 13 th London Group Meeting 29.9.-3.10.2008

1. Carbon binding of forests: some remarks on classification and valuation 13th London Group Meeting 29.9.-3.10.2008 Jukka Muukkonen

2. The main frameworks for classifications • SNA93 and revision • SEEA2003 • UN climate convention and the Kyoto protocol;Annual reporting and calculation of greenhouse gas emissions, sources and sinks based on internationally agreed guidelines and good practise guidance • Global Forest Resources Assessment (FRA) by the UN FAO;periodic assessments of the world forest resources

3. Forest categories in GHG inventory and FRA

4. Forest categories in SEEA2003 and FRA

5. For the revision of SEEA… • In the FRA, availability for wood supply is no longer a classification criteria • But according to forest designation, the FRA includes • production • protection of soil and water • conservation of biodiversity • social services • multiple use of forests • Would this designation –based division of forested land be more usefull for the SEEA2012 ’Forested land’ category than availability/non availability for wood supply? • Anyway, the division ’natural / semi-natural / plantations’ of forests used as an alternative hierarchy of forests in the SEEA2003 seems to be out of date. In the FRA and the GHG inventory, forests are either primary, natural, undisturbed forests or managed forests with sign of human impact.

6. Valuation of forest assets • Monetary valuation of timber assets is an area where SEEA2012 standard can be reached. Valuation methods, such as net present valuation, stumpage value method and methods based on harvesting scenarios are available and/or can be developed. • In practise, any method of monetary valuation of timber is not applicable for all countries. Depending on national circumstances on e.g. regional, ecological, economic and data availability (both physical and monetary) reasons, some or one of ‘standard methods’ methods will be relatively applicable at national level. • Timber values are relevant only for ‘cultivated timber resources’, ‘managed forests’, and ‘forests available for wood supply’. If other monetary values are not known and presented in environmental accounting, integrated balanced environmental-economic information on these forests is not reached.

7. Valuation of forest assets • For primary, natural, undisturbed forests not available for wood supply timber and forest value can only be based on other dimensions than wood as a raw material for industrial purposes. • Valuation of carbon binding expands information on monetary value of forest assets, because valuation reaches also forest assets for which calculation of timber values is not relevant. It also offers information for the decision making on optional uses of forests, such as e.g. intensive timber production or protection of forests to prevent climate change. • Direct economic importance of forests as a sink (or source) of greenhouse gases is increasing due to e.g. emission trade arrangements. Emission trade gives basis for estimation of monetary value of forests as carbon binding natural resource and environmental asset. • Due to international agreements on climate protection and the GHG inventory, data availability and quality on physical carbon balances of both trees and forest soils is improving.

8. SEEA and GHG inventory: changes in stocks