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International Conference
BUILDING
INSIGHTS OF MANAGERIAL ECONOMICS AND ACCOUNTING TOWARDS SUSTAINABLE FOREST
MANAGEMENT May 17 19, 2007
IUFRO Unit 4.05.00 - Managerial Economics and AccountingIUFRO Unit 4.05.01 - Managerial, social and environmental accounting IUFRO Unit 4.05.02 - Managerial economics |
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Ludek Sisak
Faculty of Forestry and Environment, Czech University of Life Sciences, Prague, Czech Republic
E-mail: sisak@fle.czu.cz
In multifunctional forestry the economic efficiency of forestry is gradually more and more affected by growing public requirements for forest environmental non-market services. Therefore, timber as an environment friendly and sustainable material becomes less competitive or even uncompetitive with other less environment friendly and unsustainable materials on the market.
Some of economic losses are already being partially reimbursed in the form of subsidies and tax concessions but the compensations are insufficient and non-transparent in the Czech Republic (CR). It is highly important to separate the loss reimbursements from subsidies and payments for environmental services, and to treat them individually.
As the practice requires a unified system of calculations and simple calculation procedures of economic losses, the proposed framework methodology is based on simplified pragmatic approaches calculating present enhanced or extraordinary costs and present values of future income losses. The time factor must be incorporated into the calculations of the income losses. Some economic losses can be considerably high.
There were identified 10 basic kinds of socio-economic losses in the CR. The methodology of economic losses and damages calculation was applied in the frame of pilot case studies to the CR, and in a more detail to the area of Forest Plant Zidlochovice (22,500 thousand ha of forest land) belonging to the State Enterprise Forests of the Czech Republic.
For example, the average economic loss of forest stands rotation period prolongation for 20 years under average production conditions in the CR and 2% interest rate reaches almost 4 thousand EUR/ha of forest. Even higher economic loss results from the forest stands leaving to spontaneous processes, which amounts to more than 6 thousand EUR/ha under average production conditions in the CR. The highest economic loss, more than 9 thousand EUR/ha, comes from the forests stands preterm felling (reconstruction) with simultaneous tree species change of coniferous tree species for broadleaved tree species. The highest economic loss in the area of Forest Plant Zidlochovice was caused by enhanced overhead (administrative) costs spent for the performing of non-market forest services for the public. The results of application of the economic losses calculation system in individual case studies prove its feasibility.
Keywords: forestry restrictions; economic losses and reimbursements calculations; methodology; Czech Republic
