Impossible to see the wood for the fumes

Applied Environmental Economics
January 23, 2004

This book consists mainly of the PhD work of one of its authors, Ian Bateman. It is a rigorous treatment of the issues surrounding hypothetical land-use change possibility in Wales. It sets out to answer the question "What are the costs and benefits associated with converting agricultural land use in Wales to forestry?" The answer involves long and sometimes technical expositions of appraisal methods for the monetary evaluation of woodland recreation, a review of previous valuation studies, a geographical information system (GIS) based analysis leading to predictions of the latent demand for visits, a discussion of timber-yield models, the benefits of carbon sequestration in forests, the opportunity costs of converting agricultural land to woodland, a cost-benefit analysis of this conversion and a summary of policy recommendations.

Applied Environmental Economics is a scholarly treatise on a narrow topic of dubious relevance to public policy. It is hard to imagine a situation anywhere in the world where wholesale land conversion on a regional or sub-national scale is a realistic proposition. This lack of relevance and the artificiality of the questions posed detracts from what could have been a splendid contribution to improving decision-making processes and harvesting the insights of GIS and cost-benefit analysis (CBA).

Ironically, there is no shortage of land-conversion debates. Swaths of UK countryside are being converted from agricultural use to suburban housing and road space. It would be of enormous value to decision-making to have the results of a GIS-CBA of this conversion process.

Even in its own terms of reference, the book is partial and misleading. A great deal of the benefit side of the equation in its land-conversion example is derived from recreational visits to woodland sites. A map shows some areas of Wales receiving "predicted annual party visits per site" of more than 150,000. This is interpreted as an unqualified benefit.

Disadvantages are ignored. Rural tourism and recreation in the UK create significant problems through high rates of car dependency. Ninety-two per cent of trips to the Lake District are by car. If agricultural land is to be converted to woodland specifically to encourage recreational visits, we need a detailed analysis of the pollution, road-traffic accidents, congestion and greenhouse-gas (GHG) emission costs of these millions of car trips. This is missing and it is a methodological, conceptual and practical weakness in the book.

Even more inexplicably, the chapter on carbon sequestration makes no reference to the fact that the basic concept advanced in this book (conversion to woodland) will generate additional GHG. If carbon sequestration is seen as a benefit (which it is), then the reality of additional GHG emissions from cars has to be built in as a significant disadvantage. This is ignored. It is also possible that GHG emissions from car-based trips will exceed the carbon that can be sequestered in the new woodland.

On a more philosophical level, there is a problem with taking CBA as it stands and merging it with GIS to produce a hybrid methodology that can bring about "a timely infusion of realism into economic analyses". There is very little realism in CBA, and 40 years or more of CBA in transport has contributed to the parlous condition of transport policy and provision in the UK. CBA is a contested area. The way that valuation of time is carried out for road schemes leads to a situation where we invest to reduce time spent travelling and then adapt by travelling longer distances so that we maintain a constant time budget. This is why we have congested roads. The valuation of time methodology is artificial and deeply flawed.

The book claims to make a contribution to real-world decision-making. It does not. It adds to the confusion surrounding decision-making through a technocratic approach based on assumptions. Decision-making requires a more modest, citizen-led and participative approach. The analyses in this book can only foster an elitist, top-down, non-participative approach.

John Whitelegg is leader of the implementing sustainability group, Stockholm Environment Institute, University of York.

Applied Environmental Economics: A GIS Approach to Cost-benefit Analysis

Author - Ian J. Bateman, Andrew A. Lovett and Julii S. Brainard
Publisher - Cambridge University Press
Pages - 358
Price - £45.00
ISBN - 0 521 80956 8

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