Forests provide a wide array of services, such as timber production, climate stabilization, provision of water quantity and quality, and cultural benefits, such as recreation. Some management options increase the supply of several services, but often one service is enhanced to the detriment of others.
Forests are often managed for provisioning services, particularly for timber. But even within the category of provisioning services, management options differ. If a forest is considered exclusively a supplier of timber, managers will encourage the growth of only certain kinds of trees, possibly nonnative fast-growing trees, and will cultivate them so that they grow in a uniform way, typically straight and tall. When the trees are deemed mature, they will be cut down, often all at once. By contrast, if a forest is regarded as a supplier of diverse benefits, it may be managed to nurture a wide array of valued species that would not be available in the mono-crop forest described above.
Forests also have both short-term and medium-term impacts on climate. Temperature regulation happens in forests when the canopy shades the ground and when dark-colored foliage absorbs heat. Forests can in certain circumstances also influence precipitation - in cloud forests, for example, trees and epiphytes intercept and condense water directly from the air, and that water runs down trunks to plants and soil below. On a longer timescale, forests play a role in carbon cycling and sequestration; when forest plants, bacteria, and algae respire, they take CO2 out of the atmosphere. Plants, soils, and the animals that eat them in forests, grasslands, and other terrestrial ecosystems store ^2000 billion tons of carbon worldwide, about half the amount of carbon stored in the ocean and nearly three times that stored in the atmosphere. However, if these ecosystems are burned or destroyed, as happens when timber is harvested, the carbon they are sequestering is released to the atmosphere. Although most organic compounds do return to the atmosphere as CO2 when living organisms die and decompose, in a functioning forest ecosystem some is buried and sequestered. About 25% of the human-caused increase in CO2 concentration in the atmosphere during the past 20 years resulted from land-use change, primarily deforestation.
Forests in a watershed, on the hillslopes that drain into a river, influence the water quality in that river. In part this is because higher-intensity uses, such as agriculture input pollutants like nutrients and pesticides into a system while forests do not. Forests themselves also reduce sediment and nutrient runoff.Clearing trees can have an impact as soon as the next rainy season on sediment and nutrient loads in streams, as demonstrated in the classic Hubbard Brook experiment. In some cases, water users have invested in forests to keep their water supplies clean. New York City recently invested US$ 250 million to acquire and protect land in the Catskills watershed that supplies water to the city. By working with landowners to reduce pesticide and fertilizer application and to plant buffer strips along waterways, New York City reduced potential contamination of its drinking water. In conjunction with related conservation investments amounting to ^US$ 1.5 billion, the city thereby obviated the need to build a filtration plant projected to cost between US$ 6 and US$ 8 billion.
Forests can also play an important role regulating the timing and quantity of runoff. The economic value of forests in the watershed of the Yangtze River above Three Gorges Dam, in western Hubei Province, Central China, was quantified in a study published in 2000. Here, the Gexhouba Hydroelectric Power Plant, the largest hydro-facility in China, producing 15.7 billion kW annually, requires a narrow range of flows on the Yangtze in order to run at full power. If the water level is too high, then water must be released through the sluice gates, causing the water level below the dam to rise, reducing the amount of power that can be produced; at very high flows, turbines are drowned and cannot work at all. If the water is too low, then generators cannot run at full power.
The goal of the hydroelectric facility's managers is for the river to have flow depths that vary as little as possible, as this has been shown to be much more important for power generation than the total flow. Upstream forests damp fluctuations in stream flow by reducing runoff in wet periods through canopy interception, leaf litter absorption, and soil and groundwater storage; increased infiltration provides base flow in dry periods through groundwater discharge. Though water flow regulation is a function of vegetation, soil type, and slope, which occur in a heterogeneous mix through the watershed, forests and even shrubs with all types of soils and slopes consistently provided better water regulation than grasses, orchards, and crop agricultural fields. This study estimated the value of electricity produced by the hydro-facility due to water regulation by the forest at over US$ 600 000 per year (in the early 2000s), or about 2.2 times the income derived from forest product services in this area. Because trees lose water to the atmosphere through transpiration, however, the total water available downstream was decreased by the forest.
Different management regimes will yield different suites of services. Some services can never be co-produced; other services will almost always be produced in tandem, though often to differing degrees. For the hypothetical forest illustrated in Figure 2, cattle and timber cannot be produced on the same parcel of land - conversion to pasture optimizes livestock but reduces timber output dramatically. Under timber maximization, once trees are harvested they are not available for climate or hydrologic regulation, though before harvest those services will be produced, as well as some habitat and hiking trails. Carbon sequestration, hydropower, recreation, and preservation of biodiversity tend to be co-produced, but there are tradeoffs in their optimal supply. Maximizing biodiversity, for example, produces all four to their fullest extent but allows for no timber supply. Bringing selective logging back into the management regime reduces supply of the other services somewhat; maximizing timber yield reduces them much more dramatically.
Tradeoffs between services are also tradeoffs between consumers, such as local recreationalists, regional users of hydropower, and global beneficiaries of carbon sequestration and biodiversity conservation. These tradeoffs underscore the importance of valuation, making explicit who benefits from ecosystem services and who pays for them. Conceiving of ecosystem functions as services and assigning a monetary value to them provides a tool for decision-makers to weigh different management options.
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