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Need for Natural resource Accounting for Forests in Odisha

Need for Natural resource Accounting for Forests in Odisha. Padmaja Mishra Professor of Economics, Utkal University. Forests in Odisha Economy. Odisha- Poorest state richly endowed with forest wealth 1/3 rd (37.34%) of its geographical area covered with forests

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Need for Natural resource Accounting for Forests in Odisha

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  1. Need for Natural resource Accounting for Forests in Odisha PadmajaMishra Professor of Economics, Utkal University.

  2. Forests in Odisha Economy • Odisha- Poorest state richly endowed with forest wealth • 1/3rd (37.34%) of its geographical area covered with forests • But, contribute less than 2% to the state income, and • Revenue earned has always been less than expenditure incurred by the Forest department • Then, why should we care for forests?

  3. What more in Forests? Forest is not a single resource but a bundle of wealth We have • multistoried,diverse , well stocked and dense forests • Diversified flora and fauna • Two national parks, 18 sanctuaries including Similipal Tiger Reserve • And, many more eco tourism spots

  4. Do we have a good indicator of the value of our forests? Contribution to NSDP and revenues earned do not tell us the complete story. • Conventional accounting has only considered: • Forestry, logging and farm yard wood • Major Products: Industrial wood and fuel wood • Minor products: bamboo, sal seed , kendu leaves etc.

  5. Gives a gross under estimated valuation • What are left out? • All intangible and non marketed products and services • All regrettable marketed products Therefore, a complete valuation is needed based on complete understanding of the FORESTS ECONOMIC, ECOLOGICAL and ENVIRONMENTAL

  6. SEEA and FRA • System of Integrated Economic and Environmental Accounting (SEEA) is required • Besides economic contributions , the forests have other contributions too which include all ecological and protective services such as carbon sequestration and soil and water conservation • Monetary value assignment to all such contributions can be done

  7. Valuation • Total Economic Value = Use value +Non Use value • Use Value= (Direct+Indirect+ Option) values • Non use value= (Bequest+ Existential) values • Many direct and indirect valuation methods are available to assign monetary value to all these, as some products and services are marketed and some are not.

  8. Example studies • Haripriya and others (2001-02) calculated the total eco tourism value for Odisha at Rs.88090.62 million • Also calculated Environmentally Adjusted SDP at Rs. 423931 millions for the same year and non adjusted SDP was Rs. 387373 millions i.e. a difference of Rs. 36888 millions • Katar Singh and others (IIFM) in 2007 studied two sample forest area : Kenjhar and Ghumusar and found net benefits negative by traditional accounting and usually recorded method but positive by taking into non accounted benefits such as NTFP incomes and employments.

  9. If we follow the SEEA based FRA then what kinds of adjustments will be required with the present conventional accounting? 1.Upward adjustments for household consumption of all kinds of non marketed forest goods and amenities 2. Upward adjustment for all ecological benefits 3. Downward adjustment for environmental protection expenditures and, 4. Downward adjustment for all deforestations, depletions, degradations

  10. Thank you

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