1

Title
MONETARY VALUATION OF ECOSYSTEM SERVICES OF

DALMA WILD LIFE SANCTUARY, EAST SINGHBHUM

JHARKHAND

A synopsis presented to Jharkhand Rai University

In the partial fulfillment of the thesis requirement for the degree of

Doctor of Philosophy in Forestry(Agriculture)

Under the Supervision of

Dr. Suresh Mohan Prasad

By

Prakash Chandra Mishra

Jharkhand Rai University, Ranchi

September, 2017.
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Introduction

Forests cover around twenty three percent of land in India. Forests play key role in
providing income and livelihoods while contributing to climate change, mitigation and other
important ecosystem services. Forest ecosystems face natural and manmade artificial
threats. Changing climate has increased the global temperature and affected frequency of
droughts in many parts of the world. Forest disturbance causes increased frequency of forest
fires, invasive pests, invasive shrubs, grasses and competing socio-economic demands for
forest goods and services has resulted in multiple drivers of forest change.

Forests and biodiversity are mutually dependant on each other, Biodiversity depends to a
large extent on the integrity, health and vitality of forested areas. Loss of biodiversity is
consequent upon losses in forest productivity and sustainability. Forest activities on forest
ecosystems services aim at mapping, assessing, and valuing the ecosystem goods and
services. This also intends to investigate the roles that forests play in eco-industry and bio-
economy.

Ecosystem functions are a subset of the interaction between the ecosystem structure and the
processes that underpin the capacity of an ecosystem to provide goods and services. Dalma
sanctuary has been selected as the research subject because this sanctuary is the next door
neighbor of Jamshedpur Industrial Township and it faces maximum biotic pressure and is
also equally important from the point of view of the survival of ecologically sensitive wild
animals. The number of goods and services are quite vast to take up in a single research
project. Under this project ecosystem services to be taken for valuation include,(i)Carbon
sequestration (ii ) Wood and non wood products (iii) pollution control (iv) nutrients cycling
(v) recreation (vi) regulation and supply of water (vii) eatable goods (viii) grazing of fodders
and grasses (ix) soil erosion control

The primary Stakeholders of the project are the policy makers and analysts from government
agencies and ministries responsible for economic and environmental sustainable
management. The local stake holders are human population living in and around this
sanctuary and the population of Jamshedpur town. The research work envisaged shall serve
as a platform to enhance communication between various Govt. agencies, different
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professional groups including economists, statisticians, foresters, ecologists and social

scientists. The investigation will make the nearby population aware of the direct and indirect
benefits from such wildlife areas. The findings would be of immense help in the conservation
of vibrant ecosystems.

Statement of Problem

The wide range in services of forests highlight the diversity of forest uses and
reinforces the idea that, for many people, forests have more than direct economic values.
Thus, we are left with the tension between diverse forest uses, which is entertained with
priorities and the way forests are valued.

Mostly, the immediate value of forests for timber continues to dominate considerations
of forest management by individuals or local people. The reasons are mainly ownership of
land, economic exigencies, greed and corruption.

Viewing forests as a source of timber leads to an excessive weight being given to

economic value of timber and that it has now become crucial to search for economic, social,
cultural and environmental values of the forests.

Main problems envisaged are

i) Inter-generational responsibilities and the rights of forest dwellers, indigenous people

and communities living in and around forests and linked mostly to people who depend
on forests for their day to day economic needs.
ii) The impact of forest destruction on environment and other related innumerable
benefits for which the society at large is dependent.
iii) People in India are yet to know the various latent benefits until and unless it is
clearly perceptible to them about the direct and indirect economic benefits.
iv) Dominant values of forests have come to be equated with economic resources
in an extractive industry that has contributed to forest loss nationally and regionally.
The ecological components of services of forests have largely remained unrecognized
or ignored.
v) Increased level of greenhouse gases have already started showing the depletion of
ozone layer and increase of global temperature.
vi) Soil erosion has caused loss of fertility in lower reaches and increase in the
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level of river bed causing floods each year.

vii) Air quality has been affected grossly caused by depletion of oxygen level and
rise of carbon dioxides.
viii) Quality of water produced by forests also suffers when forest becomes
degraded.
ix) Despite the critical ecological functions the forests provide, forests are often
valued more for their development potential rather than the ecosystem services that
they provide. Their services are not recognized fully by human societies and
therefore, the economic valuation of ecosystem services is an effective way to
understand the multiple benefits they provide.
x) Economic valuation of these services requires proper quantification. To determine
its market value is a challenging task for researchers. This study needs
thorough field work accompanied with laboratory based studies.

Presently, very minimal research regarding valuation of ecosystem services of any

selected forest area has been taken up in India.
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Review of Literature

Gram’s study analyses strengths and weaknesses of different methods for

calculating the economic importance of forest products extracted by rural population
Gram,2000. The study was conducted for one year in two flood plain villages in the
Peruvian Amazon. Different methods were studied in relation to local extraction of
timber and non-timber products, including plants, fish and animals. Both products for
the market and for subsistence use had been included.

Guo et al. 2001. estimated the annual economic value of some ecosystem
services using both simulation models and Geographic Information System (GIS) that
helps to analyze the effect of ecological factors (vegetation, soil and slope) on
ecosystem functions in Xingshan County of China. The ecosystem services assessed
relate to three aspects : water conservation, soil conservation and gas regulation.
Krieger, 2001. admitted that perhaps the most significant factor is that few ecosystem
services have clearly established monetary values. The author published his work on
watershed services (water quantity and quality), soil stabilization and erosion control,
air quality, climate regulation and carbon sequestration, biodiversity, recreation, non
timber products and cultural values. Krieger concluded that these values are not
necessarily comparable across regions because they often correspond to different
aspects of a forest ecosystem service.

Groot et al. 2002. worked on a typology for the classification, description and
valuation of ecosystem functions, goods and services. The authors reported that
ecosystem goods and services often appears at incompatible scales of analysis and is
classified differently by different workers. Hence they presented a conceptual
framework and typology for describing, classifying and valuing ecosystem functions,
goods and services in a clear and consistent manner.

Hein et al. 2006. analyzed the spatial scales of ecosystem services, and it
examined how stakeholders at different spatial scales attach different values to
ecosystem services.
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Gurluk, 2006. reported an application of survey based on contingent valuation

method for valuation of the non-use benefits of improvement in ecosystem services
using discounting rates of ten percent and five percent.

Boyd et al. 2007. argued that unit have to date not been defined by
environmental accounting advocates. The authors proposed that a goal of ecosystem
service units is comparability with the definition of conventional goods and services
found in Gross Domestic Product(GDP) and the other national accounts.

Fisher et al. 2011. focused on three fundamental dichotomies where the

distinctions are critical for delivering meaningful and robust valuation estimates : 1.
Ecosystem services versus benefits 2. Prices versus values and 3. Here and now
versus there and then. The authors indicated the importance of spatial and temporal
considerations for valuation exercises.

Then evaluation of monetary and non-monetary techniques for assessing the

value of biodiversity to people in least developed countries were provided by Christie
et al. 2012..

Verma, 2000. carried economic valuation of Forests of Himachal Pradesh. The

study highlighted the need for sustainable management of forests which is possible
only when the policy makers and planners understand the real worth of the forest
stock. The author used appropriate valuation techniques and from studies conducted in
forest valuation in India and provided an extensive estimate of economic value of
Himachal Forests.

Joshi et al. 2011. quantified and valued the ecosystem services in the western
Himalayan region of India. They carried out the survey study in eleven villages (665
households) using a structured questionnaire. Their study revealed that Oak Forests
provide a greater variety of provisioning services as compared to pine forests.

Bahuguna et al. 2013. made an attempt to estimate the economic value of the
goods and services provided by the forests of India. They estimated the value to ₹
 7

6.96 lakh crore annually, which was approximately 6.86% of the GDP and represents
the bare minimum approximate values of goods and services generated by forests.

Shashi et al. 2015. carried out valuation of ecosystem services of Arunachal Pradesh.
A preliminary and conservative estimate amounting to ₹1518 billion per year about
the ecosystem services emanating from the forests of the State has been made which is
about 1.7 times the value of the growing stock.

Baveye et al. 2013. observed that the concept of Monetary valuation of ecosystem
services emerged in 1997 as a promising way to integrate environmental goods and
services in to the logic of economic markets.

Chiabai et al. 2009. offered a methodological contribution and provided accurate per
hectare estimates of the economic value of some selected ecosystem services. Their
final result showed a loss of €78 billion, the greatest losses coming from North
America and Mexico, followed by Africa, Russia and some Asiatic countries.

Costanza et al. 2014. in their studies on changes in the global value of ecosystem
services estimated the loss of eco-services from 1997 to 2011 due to land use change
at $ 4.3-20.2 trillion/ yr. They suggested that global estimates expressed in monetary
accounting units, are useful to highlight the magnitude of eco-services, but have no
specific decision making context. They emphasized that valuation of eco-services is
not the same as commodification or privatization.

Povazan et al. 2014. studied Velka Fatra National Park, Slovakia and devised a
range of economic methods for valuing non-market benefits.

Laurans et al. 2014. explored the relation between decision making as it is viewed in
the theoretical roots of ecosystem service (economic) valuations (ESV). In general,
the contribution of ESV to decision making relies both on ability to bring rationality to
decision-making, and on its procedural qualities as resource influence that is needed
for advocacy and justification.

Studies conducted by Ninan et al. 2016. in Nagarhole National Park,

Karnataka, India addressed some of the short comings identified in existing literature
 8

by estimating the value of several intangible benefits and disservices of forests

ignored in most valuation studies, as well as the added value from intact forests as
compared to from alternative landscapes.

In a similar study in Myanmar by Emerton et al. 2013. focused on nine categories of

forest ecosystem services found that the annual value of forest ecosystem services is
estimated to be MMK 7 trillion or $7.3 billion.

Chiabai et al. 2011. estimated the valuation framework per hectare by applying meta-
analysis, value-transfer and scaling procedures in order to control for the existing
heterogeneities across world regions and forest biomes.

Wu et al. 2010. worked on Beijing municipality, China. Unlike most other valuation
studies, it also includes an analysis of the distribution of benefits from forest goods
and services among economic sectors and among local, regional and global
beneficiaries. The main methods used to value these amounts were the market value
direct revealed preference (replacement costs, productivity loss, cost of illness, etc.)
and benefit transfer methods.

Baral et al. 2016. assessed the ecosystem goods and services from planted forests.
They proposed an easy to apply frame work to assess ecosystem services from planted
forests that could be used in various planted forest types around the world.

Gomez- Baggethun et al. 2011. suggested that within the institutional set up
and broader socio-political processes that have become prominent since the late 1980s
economic valuation is likely to pave the way for the commodification of ecosystem
services with potentially counter productive effects in the long term for biodiversity
conservation and equity of access to ecosystem services benefits.

Sherrouse et al. 2011. worked on GIS application for assessing, mapping and
quantifying the social values of ecosystem services. Their work described GIS
application, Social Values for Ecosystem Services, developed to assess, map and
quantify the perceived SC values of ES by deriving a non-monetary value index from
 9

responses to public attitude and preference survey. Coefficients derived through these
analyses were applied to their corresponding data layers to generate a predicted social
value map.

Aisbett et al. 2010. reviewed studies and techniques on valuing ecosystem services to
Agricultural production.

Povazan et al. 2014. reviewed and developed guidelines for rapid assessment of
valuation of ecosystem services in Protected Areas because decision makers often lack
data or approximations on the values and benefits created and maintained by
functional ecosystems.

Haener et al. 2000. undertook studies on resource accounting system to provide a

clearer picture of the market and non-market benefits provided by the forest. The case
study provides the basis for future estimates that when tracked overtime can provide
information regarding the sustainability of income flows from the region. In Indian
context

Chopra, 1993. studied the value of non-timber forest products for tropical deciduous
forests in India.

Godoy et al.1993. presented a method for future valuation studies drawing on

anthropology and economics.

Adepoju et al. 2007. worked on valuation of Non Timer Forest Products (NTFPs).
The authors used three methods : direct market price, indirect market price and non-
market estimates. They found that no method is superior to the other but appropriate
method of valuation depends on the objective of the study. They classified NTFPs as
tradable and non-tradable.

Bellu et al.1997. worked on economic valuation of forest recreation facilities.

For this area of public goods market prices do not exist hence Individual Travel Cost
 10

Method and Dichotomous Choice Contingent valuation Methods were used for
economic valuation.

Saklaurs et al. 2015. investigated the methods and indicators for assessing the
value of ecosystem services of riparian forests and to establish the most appropriate
methods of ecosystem service valuation. Their work showed that the majority of
ecosystem service evaluation indicators can be applied if appropriate earlier studies
have been performed and feasible data for similar territories or conditions are
available.

Pandeya et al. 2016. reviewed and compared major past and current valuation
approaches and discuss their key strengths and weaknesses for guiding policy
decisions. Their review used multiple entry points : data vs. simulations, habitat vs
system vs. place-based, specific vs. entire portfolio, local vs. regional scale and
monetary vs. non monetary.

Bluffstone et al. 2017. estimated the values of carbon sequestration resulting from
forest Management Scenarios. They found that a policy targeting both afforestation on
private land and reforestation on public land provides the largest dollar carbon benefit,
with a present value of about $649 billion at a three percent SCC discount rate and an
increase in the present value over the reference scenario of $ 131.6 billion.

Objectives of the study

i) To quantify the timber, the biomass, extraction level of NTFPs ( Non Timber Forest
Products), the gain in agricultural produce in villages of the sanctuary and their valuation.

ii) To conduct hydrological studies to evaluate the total surface & subsurface flow level and
quantity of water supplied outside the forest areas for benefit of the society and its valuation .

iii) To determine the main fertilizers available in humus which are leached and drained out,
the total annual carbon sequestration, the oxygen production level and its valuation.

iv) To assess soil erosion control and its valuation.

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v) To assess the commonly extracted medicinal products , eatables, amount of grazing and
its valuation.

vi) To assess the value of recreation activities provided by the ecosystem.

The monetary valuation of the entire ecosystem services except Genetic resources,
Biological control and Cultural practices shall be included in the present studies.

Significance of the Research

The importance of natural forest ecosystems to human well-being can not be

overstated. Forests provide raw materials for food, shelter & fuel. In forests, ecosystem
components such as microorganisms, soil and vegetative cover interact to purify air & water,
regulate the climate and recycle nutrients and waters. Almost our life is fully dependant on
this.

When people damage the forests, they alter the natural forest ecosystems with the
consequence of losing many ecosystem services both overt and covert. This oversight stems
from our incomplete knowledge about how changes in ecosystems affect the level of services
that the systems provide and our inadequate understanding of the roles played by seemingly
trivial ecosystem components.

The most significant factor is that few ecosystem services have clearly established
monetary values. This can have a strong impact, considering that many decisions about
resource use are made by comparing benefits and costs. The decision to cut trees of a
particular forest tract, should be based on a comparison of the expected monetary value of the
timber and the costs associated with the ecosystem goods and services forgone as a result of
logging.

Any ecosystem goods and services that do not have monetary values are generally not
accounted for in the decision calculus. The benefits of many resource use decisions are
usually enjoyed by small, fairly cohesive groups of people, while the costs of forgone
ecosystem goods & services are borne by larger, more dispersed groups along with future
generations.
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Forest ecosystem values to be estimated in this research study are given in the
objectives. The ability of ecosystems to provide these goods and services depends on the less
obvious ecosystem services or processes through which the goods are created and
maintained. As an example, the process by which ecosystems provide clean water depends on
complex interactions between vegetative cover, soils, wetlands, microorganisms and other
ecosystem components. When the components that contribute to water purification and
damaged or altered, water quality and human welfare may suffer. Cutting down trees for
wood products shall reduce the level of carbon sequestration or erosion control services of
natural forests. Clearing land for food production may eliminate wildlife habitat for some
species and reduce genetic diversity.

Decisions to use one ecosystem good at the expense of other goods and
services are not the symptoms of a healthy society. Many of the ecosystem services till date
have not been quantified or prove to be near impossibility for determining market value.

Hence in this research work, values shall be derived as per existing market
costs. Hidden costs, such as climate depletion, loss of water quality, loss of ethnic & cultural
values etc have not been take in to account.

The Dalma sanctuary has been chosen for this valuation because of the extreme
vulnerability with relation to human pressures. The Tata steel plant and the industrial town
Tata Nagar is very close to Dalma Sanctuary i.e. within four to five km. radius. The
pollution created by this industrial town only adds to the woes of this forest. Dalma
sanctuary, though a rich source of wildlife habitat and importantly supports and elephant
population of more than hundred in addition to lot other animals, pressures are heavy to
exploit the natural resources. Valuation of ecosystem services shall empower the people
living inside and outside within five to ten sq. km. periphery with the consequent knowledge
of costs involved, thereby making the people more sensitive towards the conservation efforts.
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Hypothesis of the study

i) There is a strong relationship between the measured above ground forest biomass and the
satellite derived dependent variables – the vegetation indices and principal components.

ii) There may be significant difference in above ground biomass, canopy structure etc. in a
gap of 3 to 5 years .

iii) As is envisaged, the present level of forest not is sufficient to sustain a population of more
than 100 elephants.

iv) The water quality & quantity supplied to the lower reaches help in augmentation of
agricultural production.

v) The existing forest is not adequate for carbon sequestration in relation to pollution created
by the Tata steel plant.

vi) The economic valuation of each component may result in the findings that it is not
sufficient to provide adequate income to the forest dwellers.
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Research Methodology

Field based research

i)Ecological data shall be collected on the specific functions e.g. Stem counting,
calculation of timber volume, measurement of canopy structure, enumeration of biomass
quantity and regeneration status. By actual measurements in sample plots.

ii)Humus depth shall be measured in sample plots.

iii) Surface flow & subsurface flow of water and day to day rain fall data in the monsoon
shall be measured in sample watershed areas applying Hydrological study principles.

iv)Actual collection of data by door to door survey to evaluate quantity & variety of
forest produces those are extracted from the forest.

v) Study of actual market price / sold price in the local markets by physical survey though
questionnaire.

vi)Data of agriculture production in villages inside the sanctuary and periphery so as to

compare the quantity of produce in distant areas through actual survey in villages inside
the sanctuary and adjoining villages.

vii) Average oxygen production quantity shall be derived basing on set international
standards.

viii) Measurement of carbon sequestration shall be derived from the annual increment
data previously recorded data.

ix) Pollution level of Jamshedpur town shall be obtained from State Pollution Control
Board.

xi) Amount of forest fodder used in sustaining the cattle population & goat population
that thrive in the sanctuary area shall be found out from the questionnaire of survey.
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Laboratory Studies

i) Use of satellite imagery through the Geographical Information System (GIS) for
composite assessment of entire sanctuary area for different types of crop composition.

ii) Humus quality test shall be conducted in certified soil laboratory.

iii) Water quality test in a certified laboratory.

Daily rainfall data shall be collected from the field as well as real time data shall be
collected from the Meteorological laboratory of Govt. of India.

Tentative Chapterization of Research work.

1. Introduction.

2. Study framework, Materials & methodology used.

3. Valuation categories.

3.1. Forest land assets .

3.2. Standing timber assets

3.3. Average annual increment of Standing timber.

3.4. Products of economic forests

3.5. Non wood forest products

3.6. Ecosystem Services and its valuation

3.6.1.Water supply to plain areas

3.6.2. Soil conservation level at different sites.

3.6.3. Agricultural production (comparative analysis)

3.6.4. Air Purification (Oxygen production & carbon sequestration)

3.6.5. Forest recreation valuation.

3.6.6. Amount of employment given by the Govt. and other sectors to the villagers
 16

living in earmarked villages.

4. Results

Stock value of forest natural capital

4.1. Timber value

4.2. Fodder value

4.3. Fuel wood value

4.4. Value of NTFPs

4.5. Value of Agricultural benefits

4.6. Valuation of quality water supply

4.7. Valuation of carbon sequestration

4.8. Valuation of oxygen production

4.9. Valuation of soil erosion control

4.10. Valuation of Recreation & Tourism

5. Contribution to National GDP

6. Conclusion.
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 Verma, M. 2000. “Economic Valuation of Forests of Himachal Pradesh.”

vermahp.PDF-valuation-forests-himachal_r.pdf Report to IIED, Himachal
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(Prakash Chandra Mishra) (Dr. Suresh Mohan Prasad)

Research Scholar Research Supervisor
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Jharkhand Rai University,Ranchi Jharkhand Rai University, Ranchi

DECLARATION

I hereby declare that the synopsis entitled”

“Monetary Valuation of Ecosystem Services of Dalma Wild Life Sanctuary (Distt. East Singhbhum,
Jharkhand)” to be submitted for Registration into the Doctor of Philosophy Program of Jharkhand
Rai University is my original work and the same has not formed the basis for the award of any
degree, diploma, associate ship or fellowship of similar other titles. It has not been submitted to any
other University or Institution for registration and award of any degree or diploma.

Place: Ranchi << Signature of the candidate>>

Date: 12.09.2017 <<Prakash Chandra Mishra>>