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Methodology for Calculating Budget Losses and Local Revenue Impacts of Illegal Logging
Illegal logging is acute in the Russian Federation, particularly in the Far East which houses many valuable hardwood species. The problem has a strong negative influence on economic development in the regions, which can be measured by two indicators: the existing size of budget losses and the local, unreported income from illegal logging and associated timber trade. These two indicators hamper economic development not just in particular regions but in the country as a whole.
To further enhance forest governance and to target activities at the regional or district level, it is crucial for the government forestry agencies and legislative bodies to know both of the above-mentioned parameters. Not less important is to assess the effectiveness of prior governance measures on the basis of constant annual monitoring. Both of these needs can be met by developing and implementing a unified method for calculating (or estimating) the economic impacts of illegal activities, particularly the budget losses and unreported local revenues. Complementing efforts from different government agencies and environmental NGOs, which focus on the existing size of budget losses, this project aims to develop a unified method to quantify unreported income from illegal logging.
The project will be divided into two steps, the first step contains development of the methodology and the second one is the field testing of the methodology itself.
In order to develop a unified method to calculate economic losses, the project reviews different methods currently being employed both internationally and in Russia. Capitalizing on the strengths and addressing the weaknesses of existing approaches, PROFOR will develop a step-by-step valuation methodology.
The methodology will then be field tested in the Russian provinces of Khabarovskii and Primorskii Krais.
The output from this task will be set of estimated values for benefits and losses accruing to different stakeholders associated with the illegal timber trade, including government and local communities.
This activity is ongoing. Findings will be shared on this page when they become available. For stories and updates on related activities, follow us on Twitter and Facebook, or subscribe to our mailing list for regular updates.
Last Updated : 02-24-2017