TY - JOUR

T1 - Are Ecosystem Services Complementary or Competitive? An Econometric Analysis of Cost Functions of Private Forests in Vietnam

AU - Lambini, Cosmas Kombat

AU - Nguyen, Trung Thanh

AU - Abildtrup, Jens

AU - Pham, Van Dien

AU - Tenhunen, John

AU - Garcia, Serge

N1 - Funding Information: Many thanks to the private forest owners and farmers in Hoa Binh Province who devoted their valuable time to the lengthy field interviews. We are grateful for the generous support from the Ministry of Agriculture and Rural Development (MARD), the Forestry University, Vietnam (FUV), and the TERRECO ( DFGGRK 1565 ) Project at Bayreuth University , Germany. This work was also supported by a grant overseen by the French National Research Agency (ANR) as part of the “Investissements d'Avenir” programme ( ANR-11-LABX-0002-01 , Lab of Excellence ARBRE). The authors are grateful to the participants of the 2016 FAERE and 2015 EAERE conferences, especially to Anne-Charlotte Vaissière and Julien Wolfersberger, for their helpful comments.

PY - 2018/5

Y1 - 2018/5

N2 - Forest ecosystem service (FES) provisioning and management in Vietnam is a priority in the Vietnamese environmental agenda. The main rationale of private forest management is to maximise profits from timber and non-timber forest product (NTFP) production. From a social point of view an under-supply of positive forest externalities (or non-marketed ecosystem services) exists. This paper therefore contributes to the ecosystem service (ES) literature by assessing the production cost structure, in other words, the cost of marketed production and provision of carbon and biodiversity, based on a survey of private forest owners in Hoa Binh Province in Vietnam. The econometric analysis was carried out using a dual cost function approach to analyse the trade-off between forestry costs and ecological performance. This is, to our knowledge, the first time such an approach has been used to estimate the production relationship between marketed outputs and non-marketed ES in the forest sector. This approach appears to be appropriate for handling the multiple joint outputs of forest production and allows us to estimate marginal costs and other cost measures such as cost complementarities in the production of multiple ES. Our results indicate that there is complementarity in the provision of timber and carbon sequestration and, consequently, policies that enhance carbon sequestration in private forests in Vietnam can be implemented without additional costs for the forest owner. We also found that keeping deadwood (to favour biodiversity) had no significant cost and was complementary with NTFP (also an indicator of biodiversity in our study), but could increase the marginal cost of producing timber. This means that biodiversity can be enhanced at no additional cost, provided that the quantity of deadwood does not significantly increase.

AB - Forest ecosystem service (FES) provisioning and management in Vietnam is a priority in the Vietnamese environmental agenda. The main rationale of private forest management is to maximise profits from timber and non-timber forest product (NTFP) production. From a social point of view an under-supply of positive forest externalities (or non-marketed ecosystem services) exists. This paper therefore contributes to the ecosystem service (ES) literature by assessing the production cost structure, in other words, the cost of marketed production and provision of carbon and biodiversity, based on a survey of private forest owners in Hoa Binh Province in Vietnam. The econometric analysis was carried out using a dual cost function approach to analyse the trade-off between forestry costs and ecological performance. This is, to our knowledge, the first time such an approach has been used to estimate the production relationship between marketed outputs and non-marketed ES in the forest sector. This approach appears to be appropriate for handling the multiple joint outputs of forest production and allows us to estimate marginal costs and other cost measures such as cost complementarities in the production of multiple ES. Our results indicate that there is complementarity in the provision of timber and carbon sequestration and, consequently, policies that enhance carbon sequestration in private forests in Vietnam can be implemented without additional costs for the forest owner. We also found that keeping deadwood (to favour biodiversity) had no significant cost and was complementary with NTFP (also an indicator of biodiversity in our study), but could increase the marginal cost of producing timber. This means that biodiversity can be enhanced at no additional cost, provided that the quantity of deadwood does not significantly increase.

KW - Cost complementarity

KW - Forest ecosystem service

KW - Marginal cost

KW - Trade-off

KW - Translog cost function

KW - Vietnam

UR - http://www.scopus.com/inward/record.url?scp=85042794556&partnerID=8YFLogxK

U2 - 10.1016/j.ecolecon.2018.01.029

DO - 10.1016/j.ecolecon.2018.01.029

M3 - Article

AN - SCOPUS:85042794556

VL - 147

SP - 343

EP - 352

JO - Ecological economics

JF - Ecological economics

SN - 0921-8009

ER -