Precision Forestry Cooperative

ECOSEL - A Forest Ecosystem Services Marketing Tool

Sándor F. Tóth


ECOSEL is an analytical modeling tool that aids forest landowners and managers in selling ecosystem services from their working forestland. ECOSEL optimally allocates management actions to forest stands in order to produce various bundles of timber and non-timber benefits. The tradeoffs and opportunity costs of providing an efficient range of bundles are identified and linked to spatially explicit management plans. The figure below illustrates this linkage. Here, for simplicity, only two services are bundled: discounted net revenues from timber production (vertical axis) and old-growth forest habitat (horizontal axis). The basic idea is that the harvesting activities (grey polygons) can be reshuffled across the land-base and over time so that various amounts of mature forest habitat (green patches) could arise and evolve. Obviously, as more mature forest habitat is desired, more timber revenues must be forgone.

The profit maximizing alternative is represented by Point A accompanied by a map of the corresponding 3-period management plan that shows the harvesting activities that would need to take place in order to achieve this maximum profit. At the other end of the production frontier lies Alternative B leading to the greatest possible amount of mature forest habitat that can be achieved within the 60-year planning horizon (three 20-year long planning periods) used in this example. Several compromise alternatives exist between these two extremes, including Alternative C and E. The common feature of these alternatives is that they are efficient (Pareto-optimal) in a sense that no other alternatives exist that would lead to more profit or to more mature forest habitat without compromising the other service.

Figure 1.

This presentation has several advantageous features. First, it indicates how much it would cost the landowner to provide various amounts of mature forest services. Second, it identifies cost-efficient production opportunities such as Alternative C. Notice that this alternative achieves a significant increase in the mature forest habitat service by forgoing only very little profit. Low-cost alternatives can be important for the landowner because potential buyers are more likely to come forward and cover the opportunity costs if substantial amount of services can be purchased for a low price. ECOSEL identifies these opportunities if they exist.

Note: If the highest best use of the land is not timber production then the opportunity cost structure must be adjusted accordingly.