Policy brief: The economic value of the world’s forests

Our planet’s forests provide many benefits to society’s continued well-being yet are subjected to ongoing loss and degradation. These activities provide financial benefits but unless we understand the value of what is lost when the forests are cleared and degraded, we will not be able to make informed decisions about their use and management.

These benefits derive from what are called ‘ecosystem services’, which include three broad categories: provisioning services – such as wood, food, and fibre; regulating services – such as carbon storage, water filtration, and coastal protection; and cultural services – such as recreation, aesthetics, and spiritual wellbeing. 

We reviewed historic economic valuation studies to ascertain how and where different forest ecosystem services have been valued and to identify the drivers of value estimates and knowledge gaps. Our review  findings demonstrate the relevance of economic valuation of ecosystem services for socially optimal policy making.

We found that the literature on economic valuation of forest ecosystem services has been limited in terms of its coverage of some of the world’s most important forest regions and ecological zones.

Our study also revealed that the literature is dominated by market-pricing techniques, rather than non-market techniques, reflecting the historically greater focus on estimating a narrow set of extractive uses, particularly managed forestry for timber. This has left important weaknesses in our understanding of bundles (or aggregations) of ecosystems services provided by the world’s forests, where in many instances the extractive uses involved trading-off the benefits from other provisioning, regulatory, and cultural ecosystem services.

Information of the value of all forest ecosystem services is needed when assessing the costs and benefits of a proposed change in forest use. Our meta-analysis underlines the importance of considering the economic value of multiples of ecosystem services when formulating public policy that supports forest conservation over the management of forest for single-use, extractive industrial production, or clearing for mineral extraction and agriculture.

Understanding the drivers of the value estimates of forest ecosystem services helps identify better policy interventions for global forest conservation efforts. In this regard, our findings support local, regional, and global efforts to address the problem of deforestation and degradation in ways that support Indigenous access and use rights of forests, reduce biodiversity loss, and minimize atmospheric greenhouse gas concentrations.

Inclusive conservation management of forests informed by valuation of the benefits from all their ecosystem services is vital to the achievement of the development targets in the United Nations Sustainable Development Goals, meeting the emissions reduction challenges set out in the Paris Agreement on climate change, advancing the conservation objectives of the Convention on Biological Diversity, and supporting the survival, dignity and well-being of the world’s Indigenous Peoples, as articulated in the UN Declaration on the Rights of Indigenous Peoples.

Article authors

Fitalew Taye

Fitalew Taye

Fitalew is an environmental and resource economist whose research focuses on non-market valuation of environmental goods and services.
Chris Fleming

Chris Fleming

Chris is a Professor of Economics and Dean (Research) at the Griffith Business School. He teaches, researches, consults and provides public policy advice on the economic determinants of well-being and the sustainable management of the world around us.
Andrew Buckwell

Andrew Buckwell

Andrew is a Research Fellow at Griffith Business School with experience as an applied environmental economist focussed on micro-economic valuation and community preferences for natural resource use.
Dr Brendan Mackey

Brendan Mackey

Project Director and Director of the Griffith Climate Action Beacon at Griffith University, contributing to community planning and engagement in forest projects.

Additional authors

Maja Vinde Folkersen, K.C. Diwakar, Dung Le, Syezlin Hasan, and Chantal Saint Ange 


Fitalew Agimass Taye, Maja Vinde Folkersen, Christopher M. Fleming, Andrew Buckwell, Brendan Mackey, K.C. Diwakar, Dung Le, Syezlin Hasan, Chantal Saint Ange (2022). The economic value of the Planet’s forest ecosystems. Griffith Climate Action Beacon Science Informing Policy Briefing Note 1/22, pp. 1-6. Brisbane, Australia: Griffith University. https://doi.org/10.25904/1912/4554