ABSTRACT

The Nova Scotia GPI Forest Accounts Volume 1:
Indicators of Ecological, Economic & Social Values of Forests in Nova Scotia

Nova Scotia today only contains remnants of the mature and old-growth forests that historically were present in the province. A long history of high-grading (removing the best trees), land clearing, and clearcutting over more than two centuries has severely degraded the province’s forested natural wealth. The ecological integrity, health, and economic value of Nova Scotia forests have continued to decline sharply since the 1950s, when the Department of Lands and Forests inventory noted that the quality of the province's forests had already decreased substantially.

Major losses in age-class diversity have occurred since the 1950s, with an increasing percentage of forests in younger age classes, and the loss of almost all the province's older forests. In 1958, forests more than 80 years old covered 25% of the province's forest area. Today they cover only 1% of forest area. Forests more than 100 years old covered 8% of the province's forest area in 1958; today they cover only 0.15% of forested land.

True old-growth forest in Nova Scotia is endangered and exists only in very small, scattered, isolated pockets in the province. We are currently witnessing the disappearance of the natural site-evolved species, structure, and age characteristics of the once dominant Acadian forests.

Natural species diversity has also declined with a particularly sharp decline among some tolerant hardwood species. According to forest inventories, merchantable oak, beech, and yellow birch, for example, have all declined significantly. Black ash, of great cultural importance to the Mi’kmaq, is now rare in Nova Scotia. Among softwoods, eastern hemlock has seen a particularly sharp recent decline, down by more than half since 1958 alone. In the early 1900s, 300-year-old stands of eastern hemlock were common in Nova Scotia, with many trees up to 800 years old. White and red pine occupy less than 50% of their former range in this region.

The rate of cutting in Nova Scotia has doubled over the past two decades by volume, and in the last decade alone the actual area clearcut annually has doubled, placing additional stress on the province's forests. The wood volume harvested annually grew from an average of 3.3 million cubic metres between l981 and l985 (NSDNR l997) to 6.5 million m³ in 2000. Ninety-nine percent of this wood is harvested by clearcutting. Based on the annual growth rate of the province's forests,on the rate of seeding and planting in the past decade, and on changes in age structure and species composition, the current annual rate of cutting is unsustainable.

These findings are in accord with public perceptions. A recent public opinion poll found that 91% of Nova Scotians believe the present rate of timber harvest is too high to sustain the forest for other values or uses. A majority also believes that clearcutting should not be used as a harvest method in Central Nova Scotia because it harms wildlife, ruins forests, causes erosion, looks bad, and wastes wood

However, the majority of the province's forests are privately owned, making regulation and forest protection initiatives more challenging than in jurisdictions with higher rates of public owernship of forestland. Of public land in Nova Scotia, only about 20% of provincial Crown land is classified as not available for resource extraction. Once deductions are made, about 60% of the Crown forests or 732,000 hectares are actually available for timber harvesting.

Land clearing and recent increases in clearcutting and the loss of both mature forests and natural species diversity in Nova Scotia forests represent a substantial depreciation of the province's valuable natural capital assets, and a decline in forest economic value due to:

• the loss of valuable species;
• the loss of large diameter logs and clear lumber that fetch premium market prices;
• the loss of resilience and resistance to insect infestation that is enhanced by species diversity;
• the loss of wildlife habitat, including decreasing populations of birds;
• the loss of forest recreation values that can impact tourism;
• A decline in forested watershed protection, which has likely contributed to a 50% decline in shade-dependent brook trout;
• soil degradation and the leaching of nutrients that can affect future timber productivity;
• a substantial decline in carbon storage capacity and an increase in biomass carbon loss; and
• a decline in other essential forest ecosystem services.

This decline has been invisible in standard measures of progress based on the gross domestic product (GDP) and economic growth statistics, which give value to forests only when they are cut for timber. Because they count the extraction of natural resources as economic growth, without considering the direct and indirect costs, GDP statistics send misleading messages to policy makers and the general public and blunt potential remedial action. The GDP gives no value to standing forests, and thus counts their depletion and liquidation as economic gain. This is bad accounting, like a factory owner selling off his machinery and counting it as profit. Similarly, current timber accounting methods ignore the loss of timber and non-timber values such as natural age-class and species diversity.

By contrast, the Genuine Progress Index (GPI) assigns explicit value to natural capital assets, including the full range of forest functions and vital ecosystem services that provide multiple benefits to human society. In the GPI, natural capital is subject to depreciation when not used sustainably. Conversely, restoration forestry is seen not just as a cost, but as a re-investment in natural capital that will produce a valuable flow of goods and services in the future. Just as a factory owner’s economic viability depends on the quality and quantity of his equipment, the GPI recognizes that the capacity of forests to provide vital services to human society depends on the health of the standing natural capital stocks.

Extrapolating from one global study, Nova Scotia forests are estimated to provide a minimum of $1.68 billion (1997$) worth of services annually in climate regulation, soil formation, waste treatment, biological control, food production, recreation, and cultural benefits (Costanza et. al. 1997). This estimate does not include other vital forest ecosystem services such as soil erosion control, water supply and watershed protection, nutrient cycling, gas regulation, pollination, habitat, disturbance regulation, and genetic resources. Increased clearcutting and the loss of natural forest diversity are rapidly diminishing the value of these forest ecosystem services in the province.

Nova Scotia's forests store about 107 million tonnes of carbon, thereby avoiding an estimated $2.2 billion in climate change damage costs. However, the accelerated rate of cutting, and the loss of old growth and mature forests in Nova Scotia since 1958, have drastically reduced the province's carbon storage capacity by 38%, costing an estimated $1.3 billion in lost value. In other words, based on the 1958 forest inventory, the carbon stored would be worth $3.5 billion. Carbon loss in Nova Scotia's forests is now contributing to global climate change.

Direct non-timber contributions to the Nova Scotia economy include a four-fold increase in maple sugar production over the past three decades. However, valuable forest-dependent medicinal plants that are dependent on mature forests, are becoming increasingly rare in the province as forest ecosystems with old-growth characteristics disappear.

Nova Scotians spend $250 million a year on nature and wildlife-related pursuits, a lot of it in forests, of which 70% is non-consumptive (e.g. hiking, bird-watching, canoeing) and 27% is consumptive (mostly hunting and fishing). In addition, total tourism revenues rose to a record $1.26 billion in 1999, contributed $430 million to the provincial GDP, and generated $200 million in tax revenues (current dollars), with nature tourism the fastest growing sector of the industry. The tourism industry directly employs more than 12,000 Nova Scotians, with direct and indirect tourism jobs increasing by 13.3% between 1997 and 1999. A Nova Scotia government report on the nature tourism market noted that natural settings, protected areas, parks, and opportunities for hiking and wildlife viewing were critical to the development of ecotourism market potential.

Total forestry industry shipments in 1999 were $1.4 billion, and contributed $431 million to GDP, remarkably similar in size to the tourism industry contribution.

From the perspective of sustainability, however, this forestry industry contribution must be assessed in relation to the health of the natural capital stocks on which it depends. Otherwise, the degradation and depletion of these stocks may appear as economic gain. For example, the fisheries industry appeared to be booming, with record catches recorded, on the eve of the Atlantic groundfish stock collapse.

When the forestry industry contribution to GDP is assessed in relation to volume of biomass harvested, the trends are much more troubling. In 1984, the forestry industry contributed $90,804 per 1,000 cubic metres of timber harvested. In 1999, the industry contributed only $68,023 per 1,000 cubic metres, a 25% decrease (constant 1997$). In other words, the GDP and shipment figures in isolation conceal the reality that far greater quantities of timber are being harvested to maintain a relatively fixed contribution to GDP.

Depending on which job categories are included, estimates of forestry industry employment vary widely. Statistics Canada’s Survey of Employment, Payroll and Hours puts forestry industry employment at 9,000, while a recent study by APEC (2000), prepared for the Nova Scotia Forest Products Association, put the figure much higher – at 13,000.

However, once again, it is not the absolute employment numbers that are most significant from the perspective of sustainability, but the employment per unit of biomass harvested. Higher ratios are a sign of genuine progress in the GPI. However, employment per unit of timber harvested has declined by 26% since the l980s, from an average of 1.9 jobs/1,000 cubic metres in the l980s to an average of 1.4 jobs/1,000 cubic metres in the l990s. In other words, greater quantities of timber are being harvested to maintain each job in the industry.

Clearcutting is currently the dominant harvest method in the province, accounting for 99% of the total annual harvest. New government regulations provide financial incentives for silviculture (e.g. planting and thinning) with the goal of doubling the volume of softwood harvested from 5.5 million cubic metres (the mean harvest from 1995 to 1998) to over 11 million cubic metres by 2070.

However, the continued focus of both policy and current accounting methods on quantity rather than quality not only encourages clearcutting, but also conceals a significant loss of value per unit of biomass harvested, due to the changing age and species structure of the province’s forests. The potential lost market value of premium-priced large diameter and clear lumber through the destruction of old trees in the last 40 years alone is roughly estimated at $260 million annually, or 19% of total annual revenues.

To protect and restore the value of Nova Scotia's forest wealth and the full range of forest services, this GPI study recommends:

• incentives for investment in forest restoration and uneven-aged management, including selection harvesting, in order to protect and restore the natural age distribution and species diversity of the province’s forests, and to provide more jobs;
• a sharp reduction in the rate of clearcutting and the volume of timber harvested annually;
• a gradual industrial shift from volume-based to value-added forest products, to produce high-value wood products, and to increase the number of jobs per unit of resource harvested;
• protection of all remaining old-growth forest;
• that the full range of forest values and services, and the full cost and benefits of associated harvest methods, be counted and tracked in annual forest accounts and in ongoing forest management planning; and
• Sustainable forest management is not the whole answer. Even with the most careful harvesting techniques, there will be some level of impact on forest ecosystems. While there is a great difference between clearcutting and selection harvesting systems, they both involve the construction of roads and the removal of biomass. And even the highest standards applied on a particular woodlot cannot guarantee needed protection of critical forest values at the landscape level. Therefore, no matter how excellent forest operations may be, they are not a substitute for an adequate network of representative protected areas in Nova Scotia.