Economic Valuation of Old-Growth Forests on Vancouver Island

The Problem We Aimed to Solve

In collaboration with Simon Fraser University associate professor Duncan Knowler, the project analyzed the ecological benefits of old-growth forests in Vancouver Island and demonstrates its value beyond its use for timber. Societal benefits are exemplified in the use of the cost benefit analysis in the Port Renfrew case study which compared timber harvest, carbon storage/sequestration, tourism, recreation, non-timber forest products, Coho salmon habitat, real estate values, and education/research opportunities.

How We Helped

Using Arrowsmith-South Island Timber Supply Area (TSA), a 35km buffer around Port Renfrew, we assessed the net economic benefits of old-growth forests and found it is higher where the trees are left standing than if they are logged. The study compared 19 old growth protection scenarios ranging from 30% to 100% old growth protection over a 100-year period. Societies would benefit by $97 million (2018 CAD, net present value), if trees 140 years were protected, and $90 million, if trees older than 250 years were protected, in the full protection scenario. The scenarios considered the economic benefits from multiple ecosystems services provide by the old-growth forests of which carbon sequestration, timber harvest, and recreation/tourism were the main drivers.
An increase in old-growth protection would mean a decrease in timber harvest. In scenarios where 100% of old growth is achieved, 69% of harvest is possible, there is a $16 million loss in net benefit to society and 7 fewer full-time equivalent (FTE) jobs generated, and a decrease by $247 thousand annually from the forests sectors contribution to provincial GDP. This loss is outweighed by benefits experienced in the protection of the old-growth forests. The TSA is currently a net carbon source, by increasing the protection to 100% would reduce the source status by 569,250 tonnes, $46 million of net economic benefit of society, of carbon over 100-year period. Increase in tourism and recreation by additional $11 million over the same 100-year period, 7 additional FTE jobs, and a $162 thousand increase in annual contribution to provincial GDP.

Our Project’s Impacts

The economic benefits evaluated do not fully capture the total economic value (TEV) of the old-growth forests in the study areas and should be interpreted as an underestimate of TEV. Cultural value, health and well-being, and fish production services were not included due to the lack of data available or require more extensive modelling outside the scope of the project.
Our analysis presents the value of retaining the old-growth forests and provides an opportunity for the British Columbia (BC) government to acknowledge the old-growth forests economic value beyond timber and the necessity for a paradigm shift in the BC forest sector.