Lessons and Experiences of Other Country’s Forest Accounting Systems for Ethiopia’s Forest Accounting System

Abstract

For many countries, forests play a key role by providing income and livelihoods while contributing to climate change mitigation and other vital ecosystem services. The Ethiopian system of national accounts does not properly account for the full economic, social, and environmental values of forest resources. The main objective of this study is to assess the experience of other countries accounting systems to draw important lessons for designing our robust forest accounting system. For this study, 7 countries across the world were selected for a case study based on the availability of comprehensive data and based on the contribution of forests to the economy. The result of the study shows that Sweden and the United Kingdom made efforts to improve the forest accounting system and use an alternative accounting system. For example, Sweden used forestry statistics; valuation of forest land and timber, and forest area is included in the SNA stock accounts to measure the true value of forest. The United Kingdom developed forest statistics and measure the indirect and induced employment multipliers effect of forests. Also, used annual surveys of forestry sector businesses and organizations to obtain more specific economic data relating to the sector including private woodland owners. The new lesson to be adopted for Ethiopian forest sector accounting is annual forestry statistics, supply and use information, accounting of depreciation, alternative evaluations for non-market goods and services, development survey on indirect and induced employment multipliers affecting the forest sector, quality data on private sector forest and standards data on all goods and services and application alternative forest accounting system. Further, the study recommends the Ethiopian forest sector should be contextualized and adopt the European experiences on forest accounting, in particular estimates of forest and timber values, non-wood goods, production capacity, services (recreation, protection of soils and noise, carbon sequestration), biodiversity and chemical imbalance costs.