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The Economic Value Of A Tree


“To exist as a nation, to prosper as a state, to live as people, we must have trees.” (Theodore Roosevelt) Trees provide a tremendous value to us in a variety of ways and we are dependent on them for our sustenance but do we know their real economic value? A tree’s value should not be based on its market price, its lifetime contribution must be taken into consideration. This includes providing a variety of benefits – preventing soil erosion and contamination, droughts and floods, improving air quality, providing various things of commercial value (timber, fruits, herbs etc) to name a few. Ancient trees provide us with great heritage value as they have seen the different events that have shaped humanity, such as the Great Depression, Holocaust, and World Wars. Unfortunately, the government is forced to cut down these precious resources in the name of growth and development. Many-a-times, it is understandable but it is just atrocious.

The simple solution that the government has come up with is when uprooting a tree, just plant some saplings in its place. This is not an effective strategy at all and may cause more harm than good. A tree requires a proper ecological system, this means that you just can’t plant a peepal tree in place of a Sal tree. More often than not, when the saplings are planted by the government, no one takes care of them afterwards, they just forget about it and move on. These tiny saplings are sentenced to their doom as soon as they are planted. There needs to be a more efficacious strategy.


For years, it has been believed that the economic value of a tree must be equivalent to its market price, that is, basically its ‘exchange value’ in the market. Adam Smith, the founding father of modern economics further identified two other bases of economic value: ‘labour value’ and the ‘use value’. Deriving from a real-world example, the labour value of a tree would entail the human labour required to convert the tree into economic products that can be sold in the markets.-. The value implies the different benefits it provides to the local community and social a whole.

However, Smith along with other political economists failed to identify the fourth base of economic value, namely, ‘function value’ which is its contribution to the sustenance of the ecosystem and its habitat of which it’s a vital part. A mother tree provides significant value to its ecosystem as it aids in the growth and subsistence of other trees.


When the West Bengal government decided to cut down 356 trees for a developmental project which involved constructing five railway overbridges, this matter was brought to the attention of the Supreme Court. A committee was set up comprising five experts to evaluate the true economic value of a tree when about 50 trees had already been cut as part of the project. The committee came up with appalling results. According to them, the value of a tree should be equal to its age multiplied by Rs. 74,500. This means that the 50 trees that had been cut would be valued at Rs. 220 crores. If the government were forced to pay this sum, they would certainly go bankrupt. The Bench said that these costs need to be rationalised and implemented effectively for a positive impact.


While a country like India is still far behind to solve the problem of sustainable development, countries like New Zealand have come up with ingenious solutions. In 2017, the New Zealand government launched its One Billion Trees Programme which aims to plant a billion trees in the span of the next ten years. This is not executed haphazardly; proper planning has gone into this to plant the right trees at the right place. They believe that those trees would grow into lush forests and improve the productivity of land, fertility of the soil, diversity of income and employment opportunities for a lot of people. It will be executed by providing incentives for planting the tree and partnering up with innovators to explore newer areas for forestry, new techniques and markets and technological inventions.


Trees help cities save billions as they provide much-needed carbon sequestering, air purification amidst traffic pollution and luscious canopies lowering temperatures. The rainwater captured by trees also takes the pressure off drains and sewers. Furthermore, trees do wonders for our mental and physical health too. In Canada, researchers have found that living on tree-lined streets could take seven years off how old you feel, or economically, the equivalent of getting a Rs. 7 lakh annual salary rise.


With the change in interests and expectations as a society, problematic policy and management challenges are created, requiring innovative national and local strategies that integrate urban trees into community development efforts and balance socio-economic and environmental needs in the local, national, and even international arena. The roles of urban forestry, in general, are changing as well. The changes are unfolding as awareness increases of how local communities control and depend on trees and urban forests, prompting efforts to strengthen local stakes in tree management and urban forestry, programs and activities.

Replacing one tree with another isn’t always enough since one mature plane tree would need to be replaced by 60 new trees to replicate the leaf area. For this, we need not only accurate data but also urban forestry experts who can evaluate which trees go where and why. Asking all the important questions and including biodiversity to best meet the demands of a city is the smart way to get the most value from trees.

To overcome this incessant battle, the only option left to us is the total halting of deforestation followed by many increasing activities of afforestation programme including the extension of green coverage all across rural and urban areas.


The forests all across the globe have been shrinking at a continuously increasing rate. A detailed critical survey indicates that the world’s original tropical rainforest has already been reduced by more than 40 per cent in 1970 to a total area of 935 million hectares and that they are shrinking by about 11 million hectares each year. In India, such shrinkage had been more than 60 per cent during the last 100 years.


If this situation is allowed to continue, it will embark us on a journey of unavoidable calamity that will have unprecedented damage on our environment and global economy. As we are already seeing, continuous increase in world population and rising demand in the market for timber and its products are adding pressure on the forests internationally. Furthermore, we are not giving enough time to the ecosystem to recover and rejuvenate which causes irreparable devastation. This unsustainable relation between increasing demand and decreasing supply is leading to disastrous events including increasing carbon dioxide emissions and a rising number of natural calamities.


Trees are often referred to as the green gold of the earth bestowed upon us as a gift from nature. Cutting down trees is a cut to the economy. Life is inconceivable on the earth without the existence of trees. We can’t put a value on something which provides us life, it is simply a priceless treasure that we must continue to cherish.

 

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