Study on the Development and Marketing of
Non-Market Forest Products and Services

DG AGRI, Study Contract No: 30-CE-0162979/00-21
Study Report - Annexes
-November 2008-
of the authors, and it should not be interpreted as a position of the European Commission. Neither
the European Commission, nor any person acting on its behalf can be held responsible for the use of
this document or of the information contained within.

Prepared by:

European Forest Institute (EFIMED)
Robert Mavsar, Sabaheta Ramčilović, Marc Palahí

University of Natural Resources and Applied Life Sciences (BOKU)
Gerhard Weiss, Ewald Rametsteiner, Saana Tykkä

Alterra
Rob van Apeldoorn, Jan Vreke, Martijn van Wijk

Confederation of European Forest Owners (CEPF)
Gerben Janse
External experts

33
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NNEX 12. THE CONCEPT OF ECONOMIC VALUE 43
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NNEX 13. VALUATION APPROACHES 44
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NNEX 14. GENERAL VALUE TYPOLOGY 45
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NNEX 15. ECONOMIC VALUATION TECHNIQUES 46
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NNEX 16. VALUATION TECHNIQUES AND FOREST GOODS AND SERVICES 47
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NNEX 17. KEY STEPS IN THE VALUATION OF ECOSYSTEM GOODS AND SERVICES 48
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NNEX 18. SPATIAL RELEVANCE OF DIFFERENT FOREST GOODS AND SERVICES 50
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NNEX 19. SUMMARY OF ECONOMIC VALUES 51
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NNEX 20. OVERVIEW OF CLASSIFICATION SCHEMES FOR FINANCING INSTRUMENTS 52
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NNEX 21. TYPOLOGY OF FINANCING INSTRUMENTS USED IN THE STUDY 54
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NNEX 22. USE OF FINANCING INSTRUMENTS – RESULTS 55
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NNEX 23. INNOFORCE DATABASE OF INNOVATION CASES IN FORESTRY 58
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NNEX 24: QUESTIONNAIRE FOR ADDITIONAL MCA INFORMATION 59
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NNEX 25: SHORT DESCRIPTION OF COLLECTED EXAMPLES OF FINANCING MECHANISMS 64
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Annexes
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Annex 2. Common interview guide for the case study data collection

Case interview guide:
• name of case and carrier
• background information on institutional situation (e.g. legal framework and administrative
structure)
• characterisation of the activity (what is the business or project and why is it innovative?)
(including what type(s) of financing is/are employed)
• characterisation of the financing mechanisms involved
o Description of the financing mechanism
o Beneficiary of the payment (e.g. land owner, association, community, etc.)
o Who pays? (e.g. local, provincial, national government, user, etc.)
o Are there intermediary organisations involved?
o Use of legal, economic, communication, or voluntary instruments, or combinations
o Which investments or measures are necessary before the mechanism works?
o On which basis is payment fixed, e.g. market price, free negotiation, assessment of costs,
etc.?
• chronology of the case:
o problem situation before the innovation or start-up was started and motivation why it
was started;
o development and implementation incl. e.g. source of ideas and initiatives; critical stages
or milestones of the development possibly including challenges and strategies to
overcome problems;
o finally: state-of-progress and outcome incl. basic data on the business such as number of
staff, annual turnover, etc. as far as available. (including: amount of compensation from
specific financing instruments)

Biochemicals, natural
medicines, pharmaceuticals
Freshwater
Air quality regulation
Climate regulation
Water regulation
Erosion regulation
Water purification and waste
treatment
Disease regulation
Pest regulation
Pollination
Natural hazard regulation
Cultural diversity
Spiritual and religious values
Knowledge systems
Educational values
Inspiration
Aesthetic values
Social relations
Sense of place
Cultural heritage values
Recreation and ecotourism
Supporting
Soil formation, Photosynthesis, Primary production, Nutrient cycling and Water cycling
Adopted from MEA (2005)
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Annex 4. Characterisation of forest goods and services (according to MEA 2005)
Resources: This category refers to the forest ability to provide “tangible” wood and non-wood forest

taffy, butter
mushrooms
nuts
seeds
teas
vegetables
adhesives
alcohol
candles
cloth
dyes
essential oils
fragrances
incense
lignosulfonates
resin
specialty wood pr.
stuffing material
thread & rope
turpentine
aromatherapy oils
cosmetics
drugs
essential oils
herbal health pr.
nutraceutials
perfumes and
fragances
pet care pr.
shampoos

• Water regulation is related to the forest’s capacity to regulate the hydrological flows on the
surface. (e.g. maintenance of natural irrigation, buffering extremes in discharge of rivers and
regulation of run-off).
• Water supply refers primarily to the forest’s storage capacity. It is related to the consumptive
use of water (e.g. households, agriculture, and industry).
Soil protection is mainly based on the structural aspects of forests. The vegetation root system and
cover play an important role in soil retention and formation.
• Soil retention is assured by the root system, which stabilises the soil, and foliage, which
intercepts rainfall, preventing soil compaction and erosion.
• Soil formation is also supported by the root system that disintegrates the rocky material,
while the vegetation cover plays an important role in the fertilisation processes.
Health protection is tightly related to many other forest goods and services important for human
survival and well-being. Services contributing to health protection are:
• Disturbance prevention refers to the ability of vegetative structures to alter potentially
catastrophic effects, such as floods, storms and droughts.
• Waste treatment is related to forest’s potential to neutralise, to a certain level, the pollution
(e.g. dust filtering, assimilation of substances (pollutants) and their chemical re-composition).
• Medical resources relate to direct disease treatment (e.g. respiratory diseases) or provision of
medical plants, which can be used in traditional medicine or as pharmaceuticals or drugs.
Biospheric Services
: The main services in this group, according to the MEA classification, are
biodiversity protection and climate regulation.
Biodiversity is an essential factor in sustaining the functioning of the ecosystem and hence
underpinning for many other forest goods and services. It generally it refers to three levels:
• Genetic diversity or differences of genes among populations/individuals of the same species
(e.g. varieties of crops).
• Species diversity refers to the variety of plants, animals and micro-organisms in an ecosystem.
• Ecosystem diversity refers to the variety of different ecosystems.
According to Mayer (1995) forests are the most important terrestrial ecosystems for conservation
and protection of biodiversity.

landscapes (e.g. urban parks, sacred landscapes, and recreational sites). Therefore they directly link
to the social, spiritual, cultural and historic services
Spiritual services refer to the spiritual values placed on certain ecosystems (e.g. holy forests),
species (e.g. sacred plants and animals), and landscapes (e.g. mountains, waterfalls). It is about the
peoples’ connections to their environment, through personal reflection, or more organised events
(e.g. religious gathering, rituals).
Cultural services refer to the cultural linkages between humans and their environment. It includes
cultural heritage and cultural identity (e.g. “memories” in the landscape from past cultural ties, forest
elements in the national symbols, folklore, etc.)
Historical services mainly refer to the valuable history-related and educational information
embedded in the forest. A large part of peoples’ history is associated with ecosystems and landscapes
(special landscapes, old trees, remains of traditional cultivation systems, historic artefacts).

Study on the Development and Marketing of Non-Market Forest Products and Services
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Annex 5. Comparison of different forest goods and services classifications
Classification Scheme Forest good / service
MEA (2005) Total Economic
Value
Market/
non-market
Public/private
Industrial wood Resources Direct use Market Private
Fuel wood Resources Direct use Market Private
Cork Resources Direct use Market Private
Food Resources Direct use Market Private
Fodder and forage Resources Direct use Market Private/pool
Decorative material Resources Direct use Market Private
Hunting and game
products

use, Non-use
Non-market Public

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Annex 6. Lists of market and non-market forest goods and services
Table 6.1: List of market forest goods and services
Group Good/Service Sub-group End product
Boards
Cants
Flitches
Lumber/industrial
Timber
Primary products
Veneer
Chopsticks
Pillings
Poles
Posts
Log homes
Shakes
Shingles
Treated pilings
Treated poles
Treated posts
Log products
Wood novelties
Building components
Cut stock
Door stock

Components
Oriented stand lumber
Dimension boards
Machine stress/rated
Softwood Lumber
Timber
Sawn wood
Plywood
Hardwoods
Veneers
RESOURCES
Industrial wood
Processed Wooden furniture
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Group Good/Service Sub-group End product
Builders joinery and carpentry and profiled
wood products
Continuously shaped wood
Glued products
Treated products
Pulp and Paper
products
Other wood including products
Charcoal
Fuelwood
Firewood
Fruits
Honey
Mushrooms

Animal products
Pelts
Nettle
Common elder-blossom
Lime-blossom
Dog-rose hip
Different medicines
Herbs
Aromatherapy oils
Cosmetics
Drugs
Essential oils
Herbal health products
Nutraceutials perfumes
Fragrances
Medical plants
and
heath/personal
care products
Shampoos and Soaps
Bark
Fodder
Forage
Non-wood forest
products
Plant products
Cork
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Group Good/Service Sub-group End product

Remark: The list of non-market forest goods and services reflects the general situation. However,
there are cases (see part 1 of Deliverable 2) where some of the goods and services from this list are
market or at least some financial mechanisms have been developed and applied to compensate for
their provision.
Good/service End service
Water quality improvement
Drainage and natural irrigation
Medium for transport
Provision of water (drinking, irrigation and industrial use)
Protection of avalanches
Reduction of surface erosion and sedimentation
Filtering water pollutants
Water yield and flow regulation
Flood moderation
Enhancing precipitation (e.g. "cloud forests")
Salinity mitigation
Mass wasting
Watershed protection
Water retention
Regulation of hydrological cycle
Regulation and redistribution of surface and below-ground run off
Water
Protection
Increasing of the total annual river run off.
Flood protection
Maintenance of arable land
Wind and shoreline erosion
Siltation prevention
Maintenance of productivity on arable land
Maintenance of natural productive soils

Maintenance of good air quality
Influence on climate
Maintenance of favourable climate
Human habitation protection
Health protection
BIOSPHERIC SERVICES
Climate
Regulation
Cultivation
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Good/service End service
Travel to nature ecosystem
Enjoyment of scenery
Nature tourism
Cultural tourism
Rural tourism
Tourism
Sustainable tourism
Walking
Hiking
Camping
Bird-watching
Hunting
Orienteering in nature
Horseback riding
Mountain biking
Enjoyment of scenery
War games
School excursions

Services
Historic artefacts

Study on the Development and Marketing of Non-Market Forest Products and Services
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Annex 7. Importance of different forest services in the EU-27 countries
Table 7.1: The share of forest for soil and water protection, in 2005 (source: MCPFE 2007)
Country Protective forest
(in %)
Austria
1
17.7
Belgium 25.7
Bulgaria 11.6
Czech Republic 5.8
Denmark 6.8
Estonia 10.6
Finland 3.1
France 2.8
Germany 34.1
Hungary 7.7
Italy 5.0
Ireland 0.0
Latvia 4.3
Lithuania 15.0
Luxembourg 1.4
Cyprus 0.0
Netherlands 0.0
Portugal 5.7
Poland 21.1

Finland 738500 797600 855857 38,7
France 983158 1066667 1165511 74,9
Germany 981000 1193000 1283000 115,8
Greece 51600 56300 58700 15,6
Hungary 146271 161807 169026 86,8
Ireland 16100 18300 20000 29,9
Italy 476291 636587 715585 71,7
Latvia 191260 228561 243280 80,2
Lithuania 113000 130700 139400 65,7
Luxembourg 7030 9235 9235 106,5
Malta 60 60 60 172,9
Netherlands 20970 25330 27780 76,1
Poland 578885 673462 736199 80,0
Portugal 77400 101700 113800 30,1
Romania n.a. n.a. n.a. -
Slovakia 175200 204300 218600 113,2
Slovenia 130740 160360 171210 135,5
Spain 276000 353000 392000 21,9
Sweden 1112417 1205548 1233691 44,3
United Kingdom 98600 106600 115100 40,5
EU-27 7039181 8308096 8897830 57,2

2
Calculated for 2005.
3
Data for Austria includes also the area of other wooded land.
Study on the Development and Marketing of Non-Market Forest Products and Services

Slovakia 5.0 12.3 25.9
Slovenia 0.8 0.5 4.1
Spain 0 0 0
Sweden 4.1 0.2 0.2
United Kingdom 0.4 4.8 22.7
EU 27 3.3 3.8 10.2

Annexes
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Figure 7.1: Share of forest for biodiversity protection in EU-27 countries in 2005 (source: MCPFE 2007)

Study on the Development and Marketing of Non-Market Forest Products and Services
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Annex 8. Summary of the FORVALUE Questionnaire Results
1. Introduction
The purpose of the FORVALUE study (“Study on the Development and Marketing of Non-Market
Forest Products and Services” [Contract number: 30-CE-0162979/00-21]) is to acquire summary
information on the state-of the-art for the importance, valuation and compensation for non-market
forest goods and services. This study is financed by the European Commission and is part of the
implementation of the EU Forest Action Plan and is being undertaken by a consortium led by the
European Forest Institute.
The study seeks to find out whether developments in the theoretical aspects of forest valuation over
the last few decades have been, or could be, translated into operational mechanisms for financial
transactions for non-market forest goods and services. The ultimate goal of this exercise is to create a
foundation for discussion of the feasibility of economic instruments for encouraging and supporting
the supply of non-market forest goods and services from which policy conclusions will be drawn.
Thus, a questionnaire was developed to obtain relevant data on the current situation concerning
mechanisms in use to compensate for the provision of non-market goods and services at the national
level. The questionnaire covered three thematic areas (see also the questionnaire in Annex 9):
• importance of forest goods and services

8. Finland - Finnish Forest Research Institute
9. France - Ministry of agriculture / forest and wood department
10. Germany - Institute for World Forestry
11. Greece - Ministry Of Rural Development And Food / Directorate Of Forest Resources
Development
12. Hungary - Ministry of Agriculture and Rural Development
13. Ireland - Irish Forest Service
14. Latvia - Ministry of Agriculture Republic of Latvia
15. Lithuania - Ministry of Environment Department of Forests
16. Luxemburg - Administration des Eaux et Forêts
17. Malta: Nature Trust
18. Poland - Warsaw University of Life Sciences - SGGW; Faculty of Forestry
19. Portugal - DG Forest Resources, Ministry of Agriculture, Rural Development and Fisheries
20. Romania - Ministry of Agriculture and Rural Development
21. Slovakia - Natioanl Forest Centre - Forest Research Institute in Zvolen
22. Slovenia - Ministry of Agriculture, Forestry and Food
23. Sweden - The Swedish Forest Agency
24. Spain - Regional Govern of Spain: Castilla-La Mancha
25. Spain- Catalonia: Department of Environtment and Housing (Government of Catalonia)
26.
Spain - Conselleria de Medio Ambiente, Agua, Vivienda y Urbanismo. Directora General de
Gestión del Medio Natural
27. Sweden - The Swedish Forest Agency
28. The Netherlands - LEI
29. UK - Forestry Commission
EUSTAFOR - “State forest companies”
4

, and asked to specify:
• Importance – the importance of the good or service in the respective country in comparison
to other forest goods and services (1- not important…5-very important)
• Trend of importance – how the importance of a product/service is evolving (1 – constant; 2 –
increasing; 3 – decreasing)
• Area - area important for the production/provision of a certain forest good/service in % of
total forest
• Access – Is the access to the forest good/service public or limited (1 – public; 2 – limited to
forest owner; 3 – limited to permit holders)
• Following the Millennium Ecosystem Assessment (MEA) Classification scheme, forest goods
and services are grouped into five main categories: Resources: industrial wood, fuel wood,
cork, food, fodder and forage, decorative material, hunting and game products and
pharmaceuticals.
• Ecological: biodiversity protection, climate regulation, air quality regulation, carbon
sequestration
• Biospheric: health protection, water regulation, water purification, soil protection
• Social: recreation, sports, tourism 5
For a complete list and description of forest goods and services considered in the questionnaire, see Annex 2.