Economic

Introduction

The economic value of woodland to the East of England economy is estimated to be in the region of £1 billion per year. This total comprises the direct value to the timber industry and the more indirect values such as, increases in house prices, inward business investment, recreation and tourism activity which generate real spend in the region but for which there is no market transaction with the woodland owner.

A healthy, viable and competitive woodland business sector underpins the provision of the wide range of benefits of trees and woodlands to the people of the East of England.

i. Contributing to local economies

a. Recreation and Tourism
Recreation and tourism are major industries for the East of England, according to the 2005 England Leisure visits survey report there were some 17.5 million leisure visits to woods and forests in the East of England (5.4 million of these are categorised as tourism visits). The average spend on these visits to woods and forests generated an average spend per trip of £35.69. This provides an estimated overall spend of some £193 million. However this forms just a small part of the overall recreation spend generated by woods and forest which is estimated to be around £550 million annually.

- woodland part of 100 tourist attractions -

Woodlands form an integral part in over 100 tourist attractions in the East of England, either as attractive settings (such as Dedham Vale and the Chilterns) or in their own right. Numerous tourist venues within the East of England are largely or partially associated with woodlands. It has been estimated that woodland contributes significantly to about 20% of the region’s ‘out of town’ attractions, as well as contributing more generally to the visitors’ experiences of a day out or holiday in the region. Some wooded areas are already major tourism magnets: Thetford Forest (part of the Public Forest estate managed by the Forestry Commission) is the third most visited attraction in the region with over 1.5 visitors annually.

As well as being attractive places to visit, woodlands can provide a range of tourism facilities including:

• Heritage trails,
• Camping and caravan sites,
• Cabins and cottages,
• Organised, specialist sports,
• Cycling,
• Concert venues
• Visitor centres,
• Safaris’ and bird/mammal watching

Holiday destinations such as Center Parcs at Elveden use forests as a backdrop and generate considerable indirect value to the economy of the East of England - adding some £15 million from wages and £2.5million from contracts locally and within the East of England. Given the considerable value of tourism, it would seem that interventions to enable more areas to benefit or derive greater value from this sector would provide a good return on investment.(ROI) and increase employment especially in rural areas. Whilst tourism is a significant sector for rural economic growth it also has the potential to benefit biodiversity and enable management of currently unmanaged woodland.

b. Field sports and game
Pheasants and venison production are likely to be the most significant of these products. Deer are currently culled to reduce damage to tree crops and biodiversity interest and a Wild Venison Project has been set up to support the processing supply chain.

A number of other animals can be reared within woodland to mutual benefit if properly managed. These include pigs, wild boar, cattle and hens, and sheep and horses within wood pasture. Silvopastoral systems involving all these species have been traditional management practices in many parts of the East of England.

The provision of pheasant shooting and deer stalking are principal woodland management considerations for many woodland owners. These activities generate significant income, and thus strongly influence management decisions and provide considerable contributions to local rural economies and employment. Contribution to the economy is estimated at £81 million (WWA 2010).

c. Housing and industry.
The contribution of green infrastructure, which includes trees and woodland to the urban environment, is substantial. The protection from the elements that trees afford also has economic benefits for residents.

Trees...cut energy expenditure
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Trees provide shelter and reduce wind speed, thereby cutting heat loss from buildings during winter and reducing expenditure on energy.

• Careful tree planting, by increasing shade, reduces the amount of energy required to cool buildings.

Land and property values are greater:
Trees...improve house prices
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In 8 UK parks studied, it was shown that proximity to parks added a premium to house prices of between 5 to 7%.
Source CABE

Urban infrastructure can benefit from trees too:
Trees...protect urban infrastructure
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The shade cast by trees can significantly increase the life of road surfaces by reducing the temperature that the surface reaches during hot weather.

The impact on local economic regeneration can be great:
Trees...help areas economically
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Consumers reported consistently higher ratings for a number of categories related to their perception of business districts with trees. The issues reported included a willingness to pay more for parking in landscaped car parks and on average a preparedness to pay about 11% more for goods in a landscaped business district than a non-landscaped district.
Source: Wolf, 1998(a), Wolf, 1999 and Wolf, 2003

• Local economies in rural areas with accessible woodlands tend to attract a higher proportion of tourism spending.
• The quality of landscaping [including trees] along approach routes to business districts positively influenced consumer perceptions.
  Source: 'Community Image - Roadside Settings and Public Perceptions, Wolf K,
• Both consumers and businesses have been found to favour districts with high tree cover as they can command increased retail prices.

Making an area more attractive to inward investment has been demonstrated by a number of studies, for example, the creation of the National Forest, which increased the number of local jobs by 4.1%. It has also been estimated that local regeneration using green infrastructure attracted £96million of investment (Centre for Economic and Social Regeneration, 2004). For every 1% added to the tax base by well-designed and located tree cover, an additional £15.9m of annual revenue could be created.

Costs associated with maintaining green infrastructure with trees are lower too:
Trees...less costly than grass
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Annual management costs of tree/woodland is half that of grassland.
Source: Forest Research

Further, the investment in trees as an asset is often overlooked:
Trees...valuable assets
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Two different tree value assessment systems have been used to value English parks. At Highbury Fields in Islington, using the CAVAT system, its 578 trees were valued in 2008 at £44,960,886. While in the same year 6,756 mature trees at Sefton Park in Liverpool were valued, using the Helliwell system, at £86,645,700.
Source: CABE Space 'Making the invisible visible: the real value of park assets'

Trees contribution to business and industry is also substantial. Leaving aside direct employment in the timber trade (see below), this contribution is more often of an indirect nature:
Trees...increase productivity
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Desk workers who can see nature also report greater job satisfaction.
Source: Wolf, 1998

• Industrial areas with ready access to greenspace tend to have a more productive workforce.
• Office workers were less frustrated, more patient and displayed higher overall job satisfaction wherever they could see trees.
  Source: 'The role of Nature in the workplace', Dr. Rachel Kaplan
• Desk workers who can see nature from their desks experience 23% less time off sick than those who cannot see any nature.
  Source: Dr Rachel Kaplan

ii. Providing marketable products

a. Timber and wood products
The production of wood as the raw material for the timber industry has been the main reason for the continued existence of woodland over the centuries, and for most of the last century was the prime rationale for afforestation. Wood is a very versatile, renewable raw material that is being used in ever increasing quantities at global and national levels; Britain imports 85% of its requirements. In fact the UK is the second largest net importer of timber in the world, by value, at US$ 11 billion per annum.

Trees...provide employment

Overall timber related industry supports 2,789 full time equivalent jobs, arising from direct or indirect effects of timber production. £115m is added to the economy from timber processing, £49 million from arboriculture, and £33.5million from wood products including wood fuel (believed to be an under estimate). Taken together a total economic input to the East of England of £345.5 million.

b. Low carbon economy potential
Trees...a massive low carbon asset

A report published by InCrops in 2010 looks at the potential for low carbon supply chains for timber in construction, identifying the resource, the market potential and the constraints.

Woodland and its forest products have a significant role in a low carbon economy. The use of timber in buildings or other long service life products locks up carbon. In addition, the benefit of the substitution effect of not using carbon intensive materials outweighs the carbon stored in the products[ii].

Apart from construction other wood-using industries include manufacturers of:

• Furniture
• Fencing
• Garden furniture and buildings
• Craft products and
• Cricket bat blanks (the East of England provides the raw material for many of the world’s cricket bats).

c. Opportunities
Estimates from the Forestry Commission and the Private Sector suggest that from 2022 to 2026 there is approximately 365,000m3 roundwood softwood available per annum. In 2009 the softwood consumption by the existing sawmills was 146,000 green tonnes (for pine it is reasonable to say that 1 green tonne is equivalent to 1 m3). Some of this capacity will be imported from other parts of the UK and abroad; some regional timber will be exported. Thus there is at least 200,000m3 of additional softwood theoretically available by 2022-26 than currently milled. If 120,000 green tonnes were used for biomass energy the remaining sawn softwood would provide timber for almost 19,000 new houses per annum if those homes were traditional brick and blockhouses[iii].

Conservative estimates of hardwood (broadleaved) timber indicate that there is at least 100,000m3 of unutilised hardwood timber in the East of England plus a similar volume of wood that could be used sustainably for woodfuel.

Estimates of timber availability exclude all street and garden trees and small copses. There is no reason why wood and timber should not be produced from these trees; doing so would raise the awareness of a much larger population to the realities of the sustainability of wood production.

Trees...a valuable construction material

The value of the market for sawn softwood in construction in the East of England is estimated to exceed £100 million per annum. UK softwood usage in housing construction in 2007, totalled 6.4 million m3 of which only 15%, or just below 1 million m3, was produced in the UK

Given that the UK is the second largest importer of timber next to China there is huge potential to use local wood for a range of construction related products.

d. Limitations
A number of factors prevent the realisation of the full economic potential of the woodlands of the region:

1. A perceived poor quality of much of the wood resource,
2. Damage by pests,
3. Fragmented, small ownership,
4. Accessibility to woodland for management and harvesting,
5. Lack of market information,
6. Diminishing skills base in woodland management, harvesting and haulage.

1. In terms of ownership, the 144,000 hectares of woodland in the East of England represent 7.6% of the land area. Of this area approximately 26,000 hectares (18%) is managed by the Forestry Commission, while the majority (82%) is owned by other public bodies, charities or private companies and individuals. It is also estimated that about 61,000 hectares of the woodlands of the East of England are currently under managed.

2. For pest details see Trees in the East of England' section viii c. above.

3. The region's fragmented woodland estate of often small-sized woodlands is a hindrance to management. In some cases it may be necessary to encourage the better management of these areas if important benefits they provide are under threat.

4. Whilst the climate and soils of the East of England should facilitate the growth of high quality broadleaved and coniferous timber, past management practices and exploitation have frequently militated against this. There is common agreement that effort should be expended to improve the quality of timber grown in the region. Such material will always have greater saleability, but will require a very long-term commitment to sustained management that will need to address some key issues:

• The issue of pests and diseases. For example the very high populations of deer and grey squirrels have in the past resulted in further reduction in value due to browsing and bark stripping damage.
• The nature of woodland ownership is such that the economies of scale required for cost-effective wood production are only occasionally achievable.
• Other than in Forestry Commission woodlands, rarely is there adequate access for lorries of the size now commonly used for timber transportation.
• The implications of climate change and species choice.

5. Even where markets are present, there is often a lack of information exchange between those markets and timber growers. Many wood using businesses do not even consider using local timber and many growers are very conservative in their marketing, relying on traditional buyers and not seeking alternatives.

6. Any increase in the rate of woodland establishment, woodland management and timber harvesting would all have positive impacts on woodland economics and therefore employment; the greatest resulting from harvesting operations.

What is of particular concern in the region, however, is the decline in the number of experienced woodland workers and contractors. It is predicted that the situation will worsen as the industry is failing to attract sufficient young people with a resultant increase in average age of the workforce. It is feared that many of the skills required to manage small, lowland broadleaved woodland will decline, just at the point when the importance of these woods for the multitude of benefits they provide is being fully recognised.

e. Reasons for optimism
On a more positive note, timber prices appear to have stabilised at a higher level than in recent years and improving market conditions have encouraged contractors to return to the industry.

The woodfuel market is particularly buoyant. After only two years the Woodfuel East initiative has encouraged an additional 51,000 green tonnes of woodfuel to come to market by the end of 2013, reflecting a carbon saving in Carbon Dioxide (C02eq) of 43,000 tonnes. This will bring an estimated 14700[iv] hectares of woodland into management over a projected 10 year period, much of which will have been previously unmanaged.

There are a number of primary wood processors, almost entirely sawmills, in the East of England ranging in size from medium sized industries to micro businesses. Of particular importance are those that process softwood grown in the region. Some of these have invested to improve productivity and so are providing important opportunities for growers to supply them with timber. The larger businesses and those processing high-grade timber mainly obtain their raw material from outside the region; many associated with ports.

There is a wide range of products, apart from wood and timber that can be harvested from the woodlands of the East of England including:

• Charcoal
• Venison,
• Other animals, (including pheasants)
• Fungi,
• Fruit and berries, and
• Foliage for floristry.

There are thriving ‘cottage industries’ based on some of these products, although they rarely generate any income for the woodland owner.

iii. Reducing costs

a. Maintenance
Maintenance of treed areas is significantly lower:
Trees...less costly than grass
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Annual management costs of tree/woodland is half that of grassland.
Source: Forest Research

b. Flooding
In the East of England as many as 125,000 properties are at risk from flooding. It is increasingly recognised that woodland has the potential to ameliorate flooding by slowing down run off. If the woodland in the East of England were to reduce this risk by 1%, this alone would have an annual worth of £880,000.

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[i] www.naturalengland.org.uk/ourwork/enjoying/research/monitor/leisurevisits/default.aspx
[ii] Combating climate Change – a Role for UK Forests: www.forestry.gov.uk/readreport
[iii] This estimate is conservative as the 120,000 green tonnes for biomass energy may be met in part or majority by the processing co-product from sawmilling and from forest management.
[iv] To assess volume figures from both owner-occupied estates and contractors felling over multiple ownerships, we assumed 1ha of hardwood YC4 thinned at 70% marginal intensity will yield 28 m3 on a 10-year rotation from thinning. Where actual figures from estates are available and lower (or volumes are known to come from high volume interventions such as poplar CF or overstood coppice), the lower hectare figures are used. Also assumes 1 green tonne = 1m3.