Ecosystem services may provide large economic values in forests in Kenya and Vietnam

By Upeksha Hettiarachchi, Wei Zhang, and Kristin Davis, International Food Policy Research Institute (IFPRI)

A conservative estimate suggests forests provide services worth $25.78 billion for Kenya and $35.60 billion in Vietnam annually in 2022 US dollars. The findings provide a crucial defense against deforestation and degradation because of the costs associated with these threats. While more information is needed to understand the full value of forests’ ecosystem services, these estimates can be of great utility to policymakers and nature-positive decision-making.

The earth’s ecosystems are critical for our survival and quality of life. Ecosystem services are the direct and indirect contributions of ecosystems to human wellbeing. Our recent study estimates per hectare values of ecosystem services provided by forests in Kenya and Vietnam based on a systematic literature review. These countries have received much attention from the research and development communities for their biodiversity significance, opportunities for scaling nature-positive solutions, climate and poverty challenges, and political will.

This analysis adopts the conceptual and analytical frameworks provided by the Millenium Ecosystem Assessment and The Economics of Ecosystems and Biodiversity (TEEB). Both frameworks provide a structure to collect standardized data on ecosystem service valuation. The categorizations recognize that ecosystem services are wide and varied, and cover a large spectrum of ecosystem services, including provisioning, regulating, cultural, supporting services and additional general services.

To estimate the values of ecosystem services in areas lacking data, we used “value transfer”. This method involves using economic values from one site to estimate the value of a different site with similar characteristics. In this study, we aggregated the values for ecosystem services across prior studies reviewed and applied the values to the entire forest area in Kenya and Vietnam.

Tree cover extent data sourced from the Global Forest Watch (GFW) provided a reliable proxy for forest cover, which was used to calculate the total value of ecosystem services provided by forests in Kenya and Vietnam.

Value of forests

Forests provide services worth $25.78 billion for Kenya and $35.60 billion in Vietnam annually in 2022 US dollars. In comparison, the agricultural sector contributed $48.50 billion to Vietnam’s GDP and $24.10 billon to Kenya’s GDP in 2021, based on data published by the World Bank.

The number of ecosystem services provided by forests identified and quantified for Kenya and Vietnam are 28 and 17. We estimated that forest land in Kenya provides ecosystem services worth $5,718.50 ha⁻¹ yr⁻¹, with a range of $1,609.44 – $15,606.62 ha⁻¹ yr⁻¹ (Fig. 3). Forests in Vietnam provides ecosystem services worth $3,650.20 ha⁻¹ yr⁻¹ with a range of $84.93 – $8,978.16 ha⁻¹ yr⁻¹ (Fig. 4).

In Kenya, regulating services provided by forests are worth the most, at $3,591.42 ha⁻¹ yr⁻¹, followed by provisioning services at $1,595.48 ha⁻¹ yr⁻¹. The large value for regulating services is from the value of pollination, which is worth $1,651.78 ha⁻¹ yr⁻¹. Provisioning services include the value of crops grown in forests, non-timber forest products (NTFPs), and genetic resources. The values for NTFPs were mostly from honey.

We see a big difference when comparing the values of forest-provided provisioning services between Kenya and Vietnam. Most studies assessing ecosystem services in Vietnam focus on valuing plantations established for timber production, and timber production has a large value of $1,500.75 ha⁻¹ yr⁻¹.

Fig. 1: Values of ecosystem services provided by forests in Kenya. (Source Authors). Shapefiles retrieved from: Kenya – Subnational Administrative Boundaries – Humanitarian Data Exchange (humdata.org)

Fig. 2: Values of ecosystem services provided by forests in Vietnam. (Source Authors). Shapefiles retrieved from: Viet Nam – Subnational Administrative Boundaries – Humanitarian Data Exchange (humdata.org)

Understanding the results: Quality vs. quantity

The ecosystem services studied ranged from food provision to the moderation of extreme events and the opportunities for recreation, and many of the other ecosystem services from the TEEB and MEA frameworks (Fig. 3 and 4). For both countries, provisioning services, particularly food, water, and raw materials, have been the topic of research over most of the search period for our literature review (from July 15, 2005 to September 15, 2022). Regulating services such as climate control and erosion prevention have also been the focus of many studies.

Both Vietnam and Kenya have embarked on substantial national reforestation programs, aiming for significant forest cover percentages by 2030; Kenya targeting 20% and Vietnam aiming for 45%. However, planted monoculture forests constitute a considerable portion of the programs. The quality of such planted forests in terms of providing ecosystem services is not as high, because monoculture forests are less biodiverse and thus offer lower ecosystem services than natural forests. GFW data reports that primary forest cover in both countries is decreasing at an alarming rate, which will ultimately decrease the value of ecosystem services provided by forests considerably. The loss of biodiversity associated with the decline of primary forests might be partially mitigated through the establishment of secondary and plantation forests. Nevertheless, the value of primary forests is incomparable. The effectiveness of secondary and planted forests in providing vital habitats for biodiversity hinges upon whether these forests are composed of mixed or native species rather than monocultures and exotic varieties. While reforestation efforts will increase in both countries, the ability of such efforts to restore the value of ecosystem services lost to the deforestation of primary forests will depend on the type of trees in the forests.

The findings from the value transfer method provide a crucial defense against deforestation and forest degradation by offering insights into the potential costs associated with these threats. As many ecosystem service valuation studies are conducted at a local scale within specific ecosystems, aggregating these values to produce an estimate for these services at a larger scale as shown here can offer greater utility to policymakers who make decisions at a broader level.

Our results offer a conservative estimate of forests’ true value due to the lack of data on ecosystem services, like air quality regulation and sustainable energy provision. The values we present here should be considered as a guiding reference for incorporating these estimations into broader policy decision-making rather than as exact representations of localized values. Much more information is needed to really understand the economic values of ecosystem services in these countries. This knowledge will allow for more informed natural resource management decisions.

Fig. 3: Number of studies that had a value for ecosystem services in Kenya

Fig. 4: Number of studies that had a value for ecosystem services in Vietnam