Economic Valuation of Forests Around Summerhill, Shimla (H.P.)

Abstract

The forests are the most important natural resources and have been of great importance to human beings and act as sources of raw materials, food and other services for the human population and hence, we are largely dependent on them. Besides this, forests are the key players in environment purification as they contribute largely to carbon sequestration. They are also the new vistas for carbon trading at the global level.   In addition, forests are a source of timber with market values, influence local and regional climate, preserve soil cover in- situ, are a major component of watersheds and protect soil downstream from floods. Contrary to this, the increasing burden of population on forests caused large-scale destructions in past many years leading to a decrease in its area considerably. The study highlights that their values though provided to various users but go completely unrecorded in the state’s accounting system. The study incorporated the forest resources into the national accounts and adjusts the Gross Domestic Product (GDP) for the depletion of forest capital, using the Contingent Valuation Method. The value of net accumulation (positive or negative) of forests is calculated and the net Domestic Product is adjusted for the depletion of the forest resources to get Environment adjusted Domestic Product (EDP). The results show that the EDP equals 98.4% of the adjusted net domestic product in 1993–1994. A proper accounting framework would better reflect not only the long-term value of the state's natural wealth but also its immediate contribution to the state economy in the current accounts. This study is part of a broader research aimed at providing decision-makers with data and information which would allow them to design more appropriate land use policies. The study was conducted in the Summerhill of Shimla (Himachal Pradesh) with the objective of covering the inventory of forest resources and the economic assessment of the multiple services of forests.