Economic valuation of ecosystem-based rockfall risk reduction considering disturbances and comparison to structural measures

Forests provide a series of ecosystem services, including the protection from natural hazards. Thanks to these forests, structural protection measures can be avoided in many places. A realistic long-term valuation of this ecosystem-based risk reduction provided by the forest is essential. The aim of this study is to assess the Net Present Value (NPV) of a protection forest using a risk-based approach and compare it to the NPV of rockfall nets. Costs to be included in the NPV calculation are forest management interventions, net construction, and benefits are the risk reduction and wood sales. The risk reduction is monetised as avoided costs, i.e. the difference between the yearly rockfall risk with and without measure. Uncertainties in the protection effect due to possible forest fires were simulated over a period of 100 years using a Monte-Carlo approach. Both the protection forest and the nets effectively reduce rockfall risk at the study site. The NPV of the nets is highly negative (−124,100 CHF/ha), indicating that they are economically not worthwhile at the study site. The NPV of the protection forest is highly positive (162,400 CHF/ha). The variation of the NPV due to fires is very low and the influence of this disturbance on the long-term efficiency of the protection forest is small. Building temporary nets in case of a large fire can restore the protective effect. Their NPV is, however, lower compared to the situation without net. By calculating the NPV of a forest considering its risk reducing effect, we provide a methodology for a realistic valuation of its protective effect. It is based on a case study, which, however, can be applied in a broader context. The presented approach can serve as basis to find optimal combinations of investment in natural hazard prevention, be this ecosystem-based or structural measures.