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POLICYMIX Case Study Description: NORWAY

The following is a short description of policy and research questions in the Norwegian case study of

POLICYMIX. This page will be continually updated as the case study focus is developed. Assessments

of economic instruments in their policymix in case studies will take place in 2011-2013.

1. Introduction

In June 2009, Norway established a Nature Diversity Act,

which includes all previous laws related to land use and

biodiversity in one act. This act is the most important

legal framework for all future regulatory and economic

instruments in the area of forest and biodiversity

conservation – both inside and outside protected areas.

Forests cover around 20% of the Norwegian land area of

which only around 10% are owned by the state or

municipalities

i. The rest is owned privately or by localii, while a much citediii. The

2. National level case study

2.1 Main economic instruments in use in forest/biodiversity conservation and related

regulatory instruments

Traditionally, the main regulatory instrument has been state appropriation of private forest land for

forest reserves against compensation based on the value of the standing timber. This is sometimes

termed “forced conservation”, and was the source of serious conflicts between forest owners, the

state and environmental NGOs in the 1990s. This can be viewed a “command-and-control”

instrument, despite the monetary transfers involved.

In 2000, the national forest owner association proposed a new voluntary conservation approach,

where forest owners report to the association areas available for protection, which is then

negotiated with the state (or county). The rules of compensation are quite similar, though the

compensation payments seem to somewhat higher under the voluntary approach

main difference compared to “forced conservation” seems to lie in the process. Since 2003, nearly all

new conservation processes have been in the voluntary form (with one important exception – see

case site 1 below). The voluntary conservation approach may be viewed as more similar to a

standard economic instrument.

There are currently few, if any, “pure” economic instruments in use in forestry conservation, or

biodiversity conservation more generally, in Norway. Compensation (at the county level) can be

obtained for setting aside areas of ‘Complementary Hotspot Inventory’ (“MiS” in Norwegian). Forest

Forest and conservation areas in

Southern and Central Norway, including

proposed local case study sites #1-#3.

owners with biodiversity hotspots covering at least 1% of the productive forest area in their property

can receive compensation (generally small amounts). Recently, forest owners with large areas of MiS

can propose the establishment of a nature reserve on their property as part of the voluntary

conservation approach and receive full compensation if the forest area fulfills the criteria for

protection as a nature reserve. A large part of forests that are actively managed are under

certification (Norwegian “Living Forests”, under the European Program for the Endorsement of

Forest Certification Schemes) Certification is primarily a market-driven process, though government

has to some extent been involved in setting the criteria.

Other direct regulations or wider economic instruments may also be important. There are a range of

economic support schemes for forestry (and agriculture in forest areas) that potentially run counter

to conservation objectives (e.g. planting exotic tree species, forest road construction, harvesting in

difficult terrain). There is also a lack of integration of forest in environmental impact assessment in

other sectors (e.g. of small scale hydropower development). Other direct regulation that affect

biodiversity, include the forestry law and planning, building and other acts concerning land use and

the right to environmental information act (which opens up for previously confidential biological and

management information from private forest owners).

iv. However, the

2.2 New instruments under consideration or to be assessed

The new Nature Diversity Act provides the general framework for economic instruments affecting

biodiversity and forests for the near to medium term. Other economic instruments may be

conceivable for the longer term.

The relatively recent voluntary conservation approach is and will continue to be the backbone of

government policy to increase forest conservation. More generally under the act, if the protection

makes ongoing use more difficult, or if the protection prohibits ongoing use and the owner or the

rights holders can document financial losses, this loss will be compensated by the Government.. All

forestry is classified as ongoing use and will be compensated if the protection makes the use more

difficult or if the use is prohibited. The compensation rules have been simplified and better

standardized (e.g. for different protection categories). Previously around 30% of the costs were due

to lawyers and external experts (e.g. land valuations). There has been a small increase in the budget

for protected areas, especially for operational management measures, which has received little

emphasis until now. However, the main current impediment to voluntary conservation is generally

low budgets for compensation payments

in our national and local case study assessments.

In addition, grant schemes are proposed under the act outside protected areas to stimulate the

conservation of what the act terms “priority species” and sustainable use of “selected habitat types”.

This is not compensation, but “positive incentives” that are meant to stimulate landowners, rights

holders, organizations and municipalities to take care of these species and habitat types. The funds

will go to measures to maintain priority species and selected habitat types, through active

operational management or other measures that will help to maintain or restore the ecology of the

area. These support schemes will be new economic instruments which we will consider in our case

study.

Finally, there is no allowance under the act for general compensation – fiscal ecological transfers – to

municipalities affected by protected areas. This was decided by the Government when they passed

the Nature Diversity Act , without objection from the Norwegian Parliament

instruments that the government wants to use are grant schemes and compensation to landowners

and right holders. However, a local development fund was set up previously when the last, large

forced protected area (Trillemarka – see below) was established, so as an ad hoc tool it may be

conceivable in future. Some funds have been set aside for 2010 to support local pilot projects to

stimulate income generating activities based on protected area/national park activities, e.g. smallscale

ecotourism operations. For the longer term, at least four other economic instruments may be

worth sounding out and assessing in the project:

iv. The voluntary forest protection approach will be centralv. The main economic

more cost effective conservation

Public auctioning of conservation contracts (as has been tested e.g. in Finland) to achieve

recreational home development and other economic activities in proximity of PAs, to

overcome local resistance.

Combination of compensation for protected area establishment and allowing (limited)

plots to be protected together.

Agglomeration bonus under the voluntary conservation scheme to encourage adjacent forest

values – important for stimulating better long-term “management investment” decisions.

Grant/compensation schemes that not only reward high timber values, but high biological

3. State and local case studies

Based on the types of instruments and ecosystem services of interest, three geographical areas have

been identified as relevant for local level policy impact assessments in the second local level phase of

the case studies. One case will be chosen for in-depth assessment, 2-3 considered for inclusion as

brief case illustrations in the national level assessment.

3.1 Site option #1: Trillemarka-Rollag Østfjell

protected area in Buskerud county

Introduction

The area lies within three municipalities in

Buskerud County in south-Eastern Norway. Part of

the area, consisting of two nature reserves

totalling 47 km

Protection Act. The area protected by law was in

2008 extended with approximately 100 km

some termed the last “forced” protected forest

area in Norway. The area houses a high diversity of

red-listed species and is characterized by various

hot spot areas with high conservation values.

Buskerud County is typical of forestry areas in

Southern Norway, with extensive mainly nutrient poor to intermediate boreal coniferous forest, and

limited agricultural activity. Impacts on forest biodiversity are mainly from regular commercial

forestry activities in well-established and long regulated areas.

Site option #1: Trillemarka-Rollag Østfjell

protected area in Buskerud county

2, is protected under the Nature2. It is by

Main ecosystem services under evaluation:

Biodiversity (primary, independent of role for ecosystem services)

Recreation and ecotourism (secondary)

Various cultural heritage, educational and aesthetic values (secondary)

Main actors/stakeholders:

Private forest owners

Representatives of 3 municipalities

Local development interests/associations

General public, researchers, environmental NGOs

Main economic instruments in use in forest/biodiversity and related regulatory instruments:

“Forced conservation” and compensation scheme combined with local development fund

Other (support for MiS registration, certification schemes)

Land-use laws and practices, coordination between municipalities and county/national levels

New instruments under consideration or to be assessed:

Voluntary conservation schemes nearby

to protected area (recreational home construction, ecotourism and cultural heritage

activities)

Combination of more protection combined with local development opportunities in relation

3.2 Site option #2: Oslomarka forest complex,

in municipalities surrounding Oslo

Introduction

The area consists of the forests to the north, southwest

and south-east of the capital Oslo, shared

between 19 municipalities and five counties. Less

than 30% is owned by the state/government;70% is

owned by around 2000 private forest owners, of

which one owns 25% of the total area of 1720 km

is mostly coniferous, though have many areas of

mixed and deciduous trees. Oslomarka is by far the

most important recreation area in the country. It is

protected by a special law for Oslomarka

(“Markaloven”) and special regulations related to forestry activities. There are a few forest reserve

areas, of relatively small sizes. There is also some limited voluntary conservation. The area houses

important biodiversity. Due to the importance of primary-like forests (“fairy-tale forests”) for

recreation, there are ongoing conflicts between interests of conservation, traditional and more

activity-based recreation, and forestry and other direct economic uses.

Site option #2: Oslomarka forest complex,

in municipalities surrounding Oslo

2. It

Main ecosystem services under evaluation:

Recreation and ecotourism (primary)

Biodiversity (primary, independent of role for ecosystem services)

Various cultural heritage, educational and aesthetic values (secondary)

Water quality regulation for Oslo (secondary)

Main actors/stakeholders:

Recreationists (a heterogeneous group)

Private forest owners (especially one)

Municipality and county representatives

Population of Oslo, and adjacent areas

Researchers, environmental NGOs

Main economic instruments in use in forest/biodiversity and related regulatory instruments:

Support for MiS registration, certification schemes

Land-use laws and practices, coordination between municipalities and county levels

Most recent “forced conservation” and related compensation processes

New instruments under consideration or to be assessed:

Voluntary conservation schemes

Grant schemes for “priority species” and “selected habitat types”

plots to be protected together.

Agglomeration bonus under the voluntary conservation scheme to encourage adjacent forest

ecosystem service justifying protected area status in the Nature Diversity Act.

Newly introduced, special law for Oslomarka, which recognizes “fairytale forests” as an

Information instruments

3.3 Site option #3: Aamli and Drangedal

protected areas in counties of Aust-Agder

and Telemark

Introduction

The area consists of two municipalities in the

southern part of Norway, in the transition zone

between boreal and temperate forest. Drangedal is

situated in Telemark county, while Åmli is in the

neighboring Aust-Agder county. One or both

municipalities can be used for a case study area,

and if a continuous area is needed, the municipality

of Nissedal located between Åmli and Drangedal,

can be included. Forestry is an important part of the

economy in these municipalities. The area is also

within the part of Norway with a high occurrence of

red-listed species in special hotspot-habitats.

Site option #3: Aamli and Drangedal

protected areas in counties of Aust-Agder and

Telemark

Several large and small protected forest areas with high biodiversity is present, including a number of

voluntarily protected areas

Main ecosystem services under evaluation:

Biodiversity (primary, independent of role for ecosystem services)

Recreation and ecotourism (secondary)

Main actors/stakeholders:

Private forest owners

Municipality representatives

Local development interests/associations

General public, researchers, environmental NGOs

Main economic instruments in use in forest/biodiversity and related regulatory instruments:

Support for MiS registration, certification schemes

Land-use laws and practices, coordination between municipalities and county levels

Most recent “forced conservation” and related compensation processes

New instruments under consideration or to be assessed:

Voluntary conservation schemes

Public auctioning of conservation contracts to achieve more cost effective conservation

Grant schemes for “priority species” and “selected habitat types”

plots to be protected together.

Agglomeration bonus under the voluntary conservation scheme to encourage adjacent forest

i

Store Norske Leksikon:-http://www.snl.no/Norge/skogbruk

ii

The Norwegian Directorate for Nature Management: http://www.dirnat.no/content.ap?thisId=500040201

iii

Framstad, E. et al. (2002) ”Evaluering av skogvernet i Norge”. – NINA Fagrapport 54: 146s.

iv

NIBR/NINA 2010.

Skjeggedal, T. et al. (2010) ”Frivillig vern av skog – evaluering av arbeidsformen”. Samarbeidsrapport

v

Presentation to POLICYMIX kick-off seminar, Oslo, May 2010.

Lange, T. (2010) ”An introduction to Norway’s Nature Diversity Act and some policy instruments”.

common property institutions. Currently 1.8% of

productive forests are protected

biological evaluation recommended 4.6% as a minimum

to achieve biodiversity/landscape protection goals

main challenge in Norway is thus to create incentives for

private forest owners to take biodiversity and ecosystem

services into account, beyond what they would

otherwise do, in their forestry and other land-use

activities.