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While the NIPA as currently structured are not intended to include the full range of forest values, regular reports of economic activity as measured by the NIPA are widely noted and interpreted as measuring important aspects of economic well-being. It is logical to try to capture in these accounts more of the important relationship between forests and humans. Forests support human material and spiritual welfare in countless ways. They harbor many important species of plants and animals. They form an aesthetically pleasing backdrop for recreation and for everyday life. They filter and regulate the flow of much of the U.S. water supply. They have been a reservoir for land available for conversion to agriculture and other developed activities. Wood is one of the world's most important industrial raw materials and a ubiquitous source of energy. And worldwide, literally millions of indigenous people call forests home.
This section examines, in five parts, methodological and practical issues that arise with regard to including forests in national economic accounts. It begins with a discussion of the nature of the economics of forest values, providing a general framework for assessing those values. The second subsection translates this general discussion into a more precise statement of how forest values might be incorporated in the U.S. economic accounts. Given this context, the third subsection comments on BEA's work to date and provides a brief discussion of the extensive international literature on forest accounting. This is followed by discussion of a recommended approach for measuring the net accumulation of timber. The section ends with the panel's conclusions on forest resources.
The Nature of Forest Values
Forests produce economic value through three principal classes of economic goods: private goods traded in markets, private goods not traded in markets, and public goods. These goods can affect both the national asset accounts and the NIPA.6 These three classes of forest goods and services are discussed in decreasing order of availability of data and of accepted analysis required to include them in the national economic accounts.
The following discussion focuses primarily on issues pertinent to the United States. A significant issue in natural-resource accounting for many developing countries is deforestation. For example, a major concern in the national accounts of developing countries such as Indonesia is that harvesting of forests is contributing to rapid growth in current consumption at the expense of the stock of forest assets. In the late 1800s, the deforestation rate in the United States equaled or exceeded that found in many tropical countries today, but deforestation is no longer significant on a national scale, and the general trend since the 1950s has been a net growth in the forest stock of the United States.