)_ . - ~~E N V. I R-O N M E N T tia ;9 - ~D E P A R T M E N T ,_ _. - PAPER NO. 009 TOWARD ENVIRONMENTALLY AND SOCIALLY SU5TAINAPILE DEVELOPMENT ENVIRONMENTAL ECONOMICS Economic and Ecological Benefits of Reducing Emissions of Sulfur Oxides in'the Sostanj Region of Slovenia Wendy S. Ayres John. A Dixon April 1995 Environmentally Sustainable Development The World Bank E-SD Pollution and Environmental Economics Division Economic and Ecological Benefits of Reducing Emissions of Sulfur Oxides in the Sostanj Region of Slovenia Wendy S. Ayres John A. Dixon April 1995 Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and discussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank. Contents Acknowledgments iii Acronyms and Abbreviations iv Executive Summary 1 Introduction 3 Policies for Reducing Emissions of Sulfur Oxides 3 Forests as Stock and Flow Resources 5 Estimating the Benefits of Reducing Sulfur Oxide Emissions at Sostanj 5 Estimating Timber Values 8 Estimating Non-timber Values 12 Comparing the Costs and Benefits of Reducing Emissions of Sulfur Dioxide from the Sostanj Thermal Power Plant 13 Final Caveat 14 References 15 Technical Annex 17 Text Tables 1. Forest Structure and Value of Output in Sostanj Emission Influence 9 2. Total Economic Value of Reducing Emissions from Unit 5 at Sostanj 13 Text Figures 1. Benefits and Costs of an FGD on Block 5 at Sostanj 2 2. Benefits Valuation of Forests in Area of Sostanj Emission Influence 7 3. Volume of Timber Harvests with and without FGD (cubic meters) 10 4. Nominal (undiscounted) Value of Timber Harvests with and without FGD 10 5. Volume of Trees Standing Stock with and without FGD 11 i~ Environmental Economics Series Annex Tables Al. With-project Timber Yields, Volume of Standing Stock, and Net Present Values (moder ately damaged forest) 20 A2. With-project Timber Yields, Volume of Standing Stock, and Net Present Values (severly damaged forest) 22 A3. Without Project Timber Yields, Volume of Standing Stock, and Net Present Values (moder ately damaged forest) 24 A4. Without Project Timber Yields, Volume of Standing Stock, and Net Present Values (se verely damaged forest) 26 A5. Growth Functions 28 A6. Volume of Timber Harvests with and without FGD 30 A7. Nominal (undiscounted) Value of Harvests with and without FGD 31 A8. Cumulative Discounted Present Value of Timbner Harvests with and without FGD 32 A9. Incremental Discounted Present Value of Timber Harvests with and without FGD 32 A10. Volume of Tree Standing Stock with and without FGD 33 All. Nominal (undiscounted) Value and Cumulative NPV of Recreational Benefits 34 A12. Nominal (undiscounted) Value and Cumulative Net Present Value of Non-timber Forest Benefits 35 Annex Figures Al. Volume of Timber Harvests with and without FGD 30 A2. Nominal (undiscounted) Value of Harvests with and without FGD 31 A3. Cumulative Discounted Present Value of Timber Harvests with and without FGD 32 A4. Volume (undiscounted) Value of Recreational Benefits with and without FGD 33 A5. Nominal (undiscounted) Value of Recreational benefits with and without FGD 34 A6. Nominal (undiscounted) Value of Non-timber Forest Benefits with and without FGD 35 Annex Map 1. Inventory of Forest Decline in Area of Emission Influence from Sostanj 36 . . Acknowledgments The authors are especially grateful to Gordon Franc Ferlin, Ivan Kolar, and the team of the Hughes for helpful suggestions and guidance. Slovenian Institute for Forest and Wood The authors also wish to thank Helmut Economy in Slovenia, and Sten Nilsson of Schreiber, Richard Ackermann, and Bill IIASA and many others for supplying informa- Magrath at the World Bank, Jernje Stritih, tion and commenting on earlier drafts. iii Acronyms and Abbreviations CVM Contingent valuation method DM German Deutsch Mark FGD Flue Gas Desulfurization IIASA International Institute for Applied Systems Analysis (Laxenburg, Austria) MW Megawatts NPV Net present value PV Present value so2 Sulfur Dioxide TEV Total economic value US$ United States Dollar(s) iv Executive Summary In preparing the Slovenia Environment Project, emissions of sulfur dioxide further. The the World Bank carried out a study in 1993-94 economic question, simply put, is whether or to evaluate the benefits of reducing sulfur not the benefits of installing an FGD unit, or dioxide emissions from Block 5 of the Sostanj using one of the other alternatives, are suffi- Power Plant. Through discussions with forestry ciently large to justify the expenses entailed. and environmental experts in Slovenia, it was determined that the primary damage caused by The approach taken was to consider all the sulfur dioxide emissions from Sostanj is to the possible benefits from reducing sulfur emis- forests which are exposed to high ambient sions from Block 5 of Sostanj - timber as well concentrations of sulfur dioxide and to deposi- as non-timber benefits such as recreational tions of sulfur in the form of "acid rain." benefits and watershed protection. Specifically According to the Slovenia Institute of Forest the analysis considered the impacts of sulfur and Wood Economy and others, more than dioxide emissions on (i) timber yields; (ii) 120,000 hectares of forest have been damaged forest recreation and tourism; (iii) non-timber by emissions of sulfur from the power plant. forest products such as mushrooms, berries, (Health effects were not identified as an and meat from game, biodiversity and soil important issue and are not included in this conservation; and (iv) existence and option analysis). values which reflect what society is willing to pay to maintain the forest in a natural state for Because of concern about forest damage, current and future generations. Slovenia has taken steps that will reduce emissions of sulfur dioxide from Sostanj by The analysis looked at how these values would about 45 percent from 1991 levels even without change over a period of 70 years - timber installing a flue gas desulfurization unit (FGD) output, recreation and tourism, non-timber on Unit 5. An FGD installed on Unit 4 and forest products, and existence and option became operation in early 1995. Limestone values - with and without a project which injection processes are used to limit emissions would reduce sulfur emissions from Sostanj. of sulfur dioxide from Units 1, 2 and 3. The Under the without project case, emissions question is therefore: What additional benefit would continue unabated from the power plant would be possible by reducing emissions until its scheduled closing in 2020. Under the further from Block 5 at Sostanj? How much with project case, emissions from Block 5 would uncertainty is there over these estimates? and, drop to 10 percent of 1991 levels starting in the What is the most cost-effective way of reducing year 1996 when a flue gas desulfurization unit sulfur emissions? To answer this question, the (FGD) - the proposed investment for control- analysis considered the impacts on the forest - ling emissions of sulfur dioxide - could and the benefits generated by the forest - uith become operational. and without reducing emissions further from The analysis found that the benefits from Block 5. The "without project" scenario asks reducing emissions to be substantial - with a what would be the damages from not reducing discounted present value of about 24 million Environmental Economics Series Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia German marks. However, the FGD costs operating and maintenance costs (including the between 140 and 160 million German marks - costs of electricity, limestone, waste disposal, more than 115 million Germnan marks higher and maintenance for the equipment). The than the identifiable benefits. Investing in this annualized value of all non-timber benefits is technology places the country in danger of about 4 million German marks. Therefore, the wasting 115 million German marks, money project produces annual benefits of about 4 which could be used for alternative environ- million German marks for a cost of about 24 mental and forestry investments providing mnillion German marks per year. higher benefits. This does not mean that reducing sulfur The differences between costs and benefits is emissions is not a good idea. Lower-cost clearly seen if we compare the annual costs of measures may well be worthwhile. However the FGD with the annual benefits it is expected the FGD is an extremely expensive solution, to generate. The annualized costs of the FGD whose costs greatly exceed the benefits gained are about 17.5 million German marks, com- from reducing sulfur emissions. prised of 7 million German marks of capital recovery per year (150 million depreciated over a period of 20 years), and 10 million per year in Figure 1 Benefits and Costs of an FGD on Block 5 at Sostanj (present value, discount rate = 7%/) 150,000,000MCSAdA Cost of FGD ~~~Benefits of edcing emissionls 2 Environment Department Papers Economic and Ecological Benefits of Reducing Emissions of Sulfur Oxides in the Sostanj Region of Sostanj Introduction employer (employing about 5,000 workers) and has reserves adequate for 40 to 60 years at the Slovenia is committed to lowering its emissions present rate of production. The power plant of sulfur oxides to reduce forest damage, to employs about 1000 people and a major appli- improve local health conditions and to comply ance factory employs from 6-7,000 people. The with the proposals to reduce emissions of power plant, the mine and the appliance sulfur oxides in Europe of the United Nations - factory define the urban area. Economic Commission for Europe. About 76 percent of sulfur oxide emissions in Slovenia in Although the lignite from the Velenje mine has 1991 came from thermal power plants burning a relatively low sulfur content (between 1.2 -1.3 coal. percent), it also has a low energy value. The heating value of lignite per ton of lignite is At present, out of a total installed capacity of approximately one-half that of good-quality about 2,000 MW, thermal sources account for imported hard coal with a sulfur content of 0.5 almost half of the total power output (hydro percent or less. This means that larger quanti- provides about 700 MW and the nuclear facility ties of lignite have to be burned to produce an shared with Croatia provides 337 MW of equivalent quantity of electricity, thereby power to Slovenia). The largest thermal facility releasing more sulfur dioxide. In fact, of by far is the Sostanj Thermal Power Plant near Slovenia's total annual sulfur oxide emissions Velenje, with an installed capacity rated as of about 180,000 tons, almost half (about 80,000 between 700-745 MW. (The other thermal tons) comes from the Sostanj Thermal Power plants are smaller: Trbovlje has 164 MW from Plant. coal and fuel oil; Moste, located in Ljubljana, uses coal to produce 45 MW, and Bretanica use fuel oil to produce 84 MW of power.) Sostanj has 5 units, three small ones installed in 1956 Policies for Reducing Emissions of (30 MW), 1957 (30 MW) and 1960 (75 MW), and Sulfur Oxides two large units: Unit 4 installed in 1972 (275 MW), and Unit 5, installed six years later in A major impetus within Slovenia to address 1978, rated at 335 MW. As the single largest emissions at Sostanj comes from the local power source in the country, and the most effects of sulfur dioxide exposures, particularly reliable, Sostanj plays a key role in the national on the forests in the Saleska valley, where the energy grid. power plant is located. Given the particular topography and meteorology of the Saleska Sostanj and the nearby town of Velenje have a valley, the emissions of sulfur dioxide from the combined population of almost 40,000. The power plant have led to localized forest dam- underground lignite mine in Velenje sends age, especially at higher elevations. This almost all of its 4 million tons annual produc- damage was first noted in specific cases of tion to the power plant. The mine is a major "scorching" of spruce forests in the winters of Environmental Economics Series 3 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia 1984/85 and 1986/87. 4. Shut down Unit 5 or replace it with a gas- fired plant. An additional, but largely unstudied and 5. I lagtu unknown factor, is the impact of longer term durIngtperiods tiof eprtfre ser and long range acid deposition from power plant emissions. The tall stacks and prevailing 6. And finally, an option that addresses the winds mean that sulfur oxide emnissions tend to forestry issues but not the sulfur oxide be dispersed (when there is not a thermal emissions is to increase the proportions of inversion) to the north and northeast. A 1990 beech or other pollution-tolerant species in survey of standing volume and forest condition the forest area. Beech traditionally com- of forests in Slovenia noted damage to silver prised more than 50 percent of the trees in fir, a species especially vulnerable to sulfur the forests of this area and is potentially as dioxide exposure, in areas to the northwest, commercially valuable as spruce. north and northeast of Sostanj, possibly due to Each of these six options has various costs sulfur oxide emissions from Sostanj. The full associated with it. The major economic costs impact on these depositions on the forests and are the following: the acidic soils found in this area is still un- known, but adds an important element of 1. An FGD unit will cost from 140-160 million uncertainty to the entire equation. German marks (about, US$90-100 million'). 2. Importing coal will require investments in To protect its forests and prevent other types of infrastructure to transport the coal to damage attributed to exposure to sulfur oxides, Sostanjr Slovenia is eager to reduce sulfur oxide emis- sions from Sostanj. A flue-gas desulfurization 3. Reducing electricity output may be unac- unit (FGD) installed on Unit 4 at the power ceptable during periods of peak demand. plant became operational in early 1995. Emis- 4. Replacing the electricity from Unit 5 will sions from all other Units, including Unit 5, are require investments in new generating being reduced with limestone injection pro- capacity. cesses. Together these steps have reduced 5. The economics of adding a gas turbine to sulfur oxide emissions from the power plant by Unit 5 have to be examined in more detail. about 45 percent from 1991 levels, by 1995. To further reduce emissions from the power plant, 6. Converting the surrounding forest to beech it will be necessary to address emissions from will take many decades under Slovenia's Unit 5. For this, Slovenia has a number of current forest management regime. options: Some of these options (particularly 2 and 4) will result in job losses at the coal mine in 1. Install an FGD unit on Unit 5. Velenje. 2. Change the source of coal to imported, low sulfur coal. Unit 4 has already been fitted with an FGD unit which reduced sulfur oxide emissions from 3. Change the operating rules at Unit 5 to Sostanj considerably starting in 1995. The minimnize sulfur oxide emissions during question is: How large are the potential benefits periods of atmospheric inversion, thereby from additional reductions in sulfur oxide limiting forest damage from direct expo- emissions from Unit 5? How much uncertainty sure (taking into account the effects of is there over these estimates? and, What is the reducing sulfur oxide emissions from the most cost-effective way of reducing sulfur FGD unit which became operation in early oxide emissions? This analysis is framed in a 1995 on Unit 4. "with and without" framework where the "with project case' is the installation of an FGD All values in this paper are computed using mid-1994 exchange unit. (Other means can also be considered for rates. For example, IUS$ = 1.6 German marks 4 Environment Department Papers Forests as Stock and Flow Resources reducing sulfur oxide emissions as described of satisfaction from the forest. This has impor- above. However, the focus in this analysis is tant implications when valuing forests and on estimating the benefits of reducing sulfur other natural resources, since many people oxide emissions, not on how to reduce them.) who will never enjoy the benefits of forests The "without project" scenario asks what directly may none-the-less be willing to con- would be the damages from not reducing tribute to maintain them. Recreation is an emissions of sulfur oxides. Throughout the example of a quasi-public good, since, in analysis we take as a given the current forest uncongested forest areas, more than one management regime practiced in Slovenia. individual can enjoy a recreational outing without detracting from another's experience. Maintaining the stock values has been an important dimension in the historical manage- Forests as Stock and Flow Resources ment of Slovenia's forests. The major analytical problem is that forests Forests can also be considered flow resources, must be considered as both stock and flow since forests yield a flow of timber and, in resources: that is, there are values associated some cases, non-timber forest products. This with the existence of the forests, and there are flow depends on biological processes (e.g. how other values associated with the periodic quickly the trees grow) and on management removal of part of that stock (e.g. harvesting) decisions (e.g. how intensively the forests are and converting that part of the stock into a flow managed). The values of the flow and stock of timber or other forest products. Estimates of aspects are quite different and require different both components are needed to assess the total valuation approaches. economic benefits provided by the forest. As stock resources represented by the standing volume, forests yield important non-timber Estimating the Benefits of Reducing benefits, including ecosystem and biodiversity Sulfur Oxide Emissions at Sostanj benefits and recreational, landscape and other values that depend on the existence of the The main benefits of reducing sulfur oxide forest. Many of these values have the charac- emissions from Sostanj would be direct and teristics of public or quasi-public goods, which indirect economic benefits, including forestry means that a given quantity of the good can be impacts, recreational and tourism benefits, and enjoyed by more than one consumer without other ecosystem values.2 The rest of this paper decreasing the amounts enjoyed by other assess the potential benefits of reducing sulfur consumers. An example of a pure public good oxide emissions from Sostanj in order to produced by a forest is its existence value: the compare them to the costs of reducing emis- utility consumers derive just knowing the sions. The economic question, simply put, is forest exists. Potentially, there is no limit to the whether or not the benefits of installing an FGD number of consumers who can derive this form unit, or using one of the other alternatives, are sufficiently large to justify the expenses en- tailed. 2. Human health damage from exposure to emissions from Total Economic Value Approach Sostanj is not a major concern. Air quality in the Saleska Valley where Sostanj is located is better than the national average, with Natural resources are economic assets that relatively low annual concentrations of sulfur dioxide and particulate matter. This is because the tall stacks emit the sulfur provide a flow of goods and services of eco- far above the valley floor where most people live, and because nomic value. These goods and services can be homes are heated with energy from the power plant rather than divided into direct-use values such as timber with coal. and other non-timber forest products, indirect- Environmental Economics Series 5 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia use values such as watershed protection, and average of about 44 cubic meters wood, and prevention of soil erosion, and non-use values provides a net income of about 1,300 German such as option and existence values. In order marks per hectare (about 30 German marks per to compute the benefits of reducing sulfur cubic meter) to the owner per 10-year cutting oxide emissions, we will adopt a Total Eco- cycle. Our analysis is for a large forest area, 10 nomic Value (TEV) Approach (see Pearce and percent of which is cut each year. Warford 1993) in which all three types of goods and services are considered. Non-timber Benefits The most easily identified direct-use value is Unfortunately we have no information about that of forestry products - primarily the extrac- the value of non-timber benefits in Slovenia. tion of timber. As described later, this is the We have based our estimates on a survey of a most straightforward value to obtain and our number of papers in the literature that esti- estimates are based on the amnual yield and the mated the magnitudes of various non-timber change in stock with and without the FGD. benefits associated with native forests. Unfortunately, while the value of timber harvests and changes in timber yields is easy to Studies done in the United Kingdom estimating measure, other direct and indirect use values the recreational value of Forest Commission are harder to quantify. Other direct use goods lands have found that recreational values are include non-timberforest products such as meat very site-specific, ranging from 3 German from game, meat, berries and mushrooms and marks per hectare per year for forests with such quasi-public good components as recre- little recreational development to 1,400 German ation and tourism. Important indirect use and marks per hectare per year for forests where non-use values include watershed protection public use is exceptionally high. The two most (including soil protection) and biodiversity important characteristics distinguishing forests benefits and existence and option values. To our with high recreational benefits from those with knowledge, no attempts have been made to lesser recreational value were (a) the location of estimate these values for the forests of in the the forest relative to a population center and Sostanj region or elsewhere in Slovenia. (b) the extent of development of its recreational infrastructure. Also important was the age and Timber Benefits species composition of the trees: forests yield- ing the highest recreational benefits had above Timber on the stump in the forests near Sostanj average proportions of trees in the more ranges in value3 from 5 to 65 German marks mature age classes, with an above-average per cubic meter (called stumpage value), proportion of broad-leaved trees, while those depending on the size of the trees harvested yielding the fewest recreational benefits are (see Table 1).4 We assume that each hectare in dominated by young spruce or conifers (Willis, a mature mixed-aged forest is selectively cut 1991). We have adopted a generous value of once every 10 years. The harvest - which is 100 German marks per hectare per year, focused on the largest trees but also involves slightly less than the annualized value of the the removal of some smaller trees - yields an timber harvest. The forest lands near Sostanj are currently largely undeveloped for recre- ation and tourism, so this value is more an indication of future benefits that might be lost 3. The market value for timber ranges between 70 and 100 if forest loss and dieback become more severe. German marks per cubic meter. The stumpage value equals the Without damage, the value of these forests market value less amounts reflecting costs for harvesting, transport, processing, and other expenses. wilderness areas is almost certain to grow with 4. Synthetic but realistic values, based on discussions with population and income growth and the devel- Slovenian foresters and with persons involved with forestry opment of tourist infrastructure. (It should be operations in other countries of Eastern and Central Europe. noted that air pollution from Sostanj has 6 Environment Department Papers Estimating Benefits of Reducing Sulfur Oxide Emissions Figure 2 Benefits Valuation of the Forests in the Area of Sostanj Emission Influence Total economic value Use values Non-use values direct use indirect use existence option and values values values bequest values outputs benefits commodities (timber, such as watershed, game, berries) or services and soil protection (recreation) reportedly hurt tourism at the existing hot- year (Hultkrantz, 1992). According to this springs resort of Topolsica near Sostanj.) analysis, non-timber benefits in Sweden thus totaled about 58 German marks per hectare per A study measuring the contribution of forestry year. These values were adjusted to account to the Net National Product in Sweden esti- for differences in incomes between the two mated the values of non-marketed forest countries' to obtain 18 German marks per products, including firewood, berries, mush- hectare per year for mushrooms, berries, meat rooms, and meat from game to be about 40 from game, biodiversity and soil conservation. German marks net per hectare per year and the benefits of biodiversity and soil conservation to Finally, we arbitrarily choose a value of 40 be about 18 German marks net per hectare per German marks per hectare per year for the non-use benefits, such as existence values. We have no actual information as to how large these values mnight be in SlovenLia, but discus- 5. Slovenia's per capita gross national product is about 25 sions with government officials and others percent that of Sweden's. 6. Sten Nilsson of IIASA uses an alternative approach to suggest these are likely to be important.b estimate the value of non-timber benefits in a study examining the sustainability of Europe's forests (1992). Using estimates of To calculate the benefits of reducing emissions various direct and indirect use values, he derives a set of of sulfur oxides, the analysis considers what multipliers to represent the relative value of non-timber versus happens to both stock anid flow variables, (e.g. timber benefits. The multipiers are then applied to the Net timber volume and yields, and other forest Product Value of wood products to obtain the value of the non- use benefits. For example, if the Net Product Value of wood is benefits, such as recreation and protection of 100 units and the multiplier for tourism benefits is 1.32, then watersheds, soils, and biodiversity, and exist- tourism benefits are 132 units. Rather than use multipliers, we ence values) with and without emissions have chosen plausible per hectare values of non-timber benefits from many of the same studies cited by Nilsson. reductions, The analysis covers a 70-year Environmental Economics Series 7 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia period, starting with 1996 (when an FGD could growth increment for these forests is also above be operational if construction started soon), average: 6 cubic meters per hectare in contrast extending to 2020 when the power plant is to 5 cubic meters per hectare elsewhere in scheduled to be shut down, and ending in the Slovenia. To allow the forests to recover from year 2066, thereby including the recuperation what is viewed as excessive cutting that took period for damaged forest stocks.7 In this way place up until World War II, timber extraction the analysis captures the important impacts currently removes only about 72 percent of the from sulfur oxide emissions that continue past annual growth increment. the closing date of the plant; these impacts are reflected in the differences in forest yields and However some of the forests in this area have volume of standing stock under the two also been heavily affected by emnissions of scenarios. sulfur oxides from Sostanj. The Forestry Institute of Slovenia estimates that approxi- The big unknown is the extent of present and mately 100,700 hectares of forests have been future forest damage. The literature on this is moderately damaged and 20,700 hectares mixed: Kolar (1989) cites widespread and severely damaged in the area influenced by extensive damage in his reports while Ferlin emissions from Sostanj (see Map 1). The (1991, 1992) is more guarded in his analysis. categories are based on the amount of visible Since sulfur oxide emissions from Sostanj only damage to foliage, such as yellowing or defolia- increased dramatically in the past 20 years, tion or abnormal branching. Forest damage is after the installation of Units 4 and 5, there is not directly proportional to exposure to air the possibility of lagged impacts that are not pollution, but depends on many factors. The fully evident. In fact, a major concern of some most severe damage occurs in older forests and foresters is the potential for a generalized forests with interrupted structure, and in collapse of the system due to both direct forests growing on sites with shallow soils, exposure to sulfur oxides in the ambient air wind, little precipitation, or steep slopes. More and in acidic depositions and due to longer damage also occurs in forests with a higher term changes in soil chemistry which might proportion of conifers. interfere with nutrient take up (the area differs from much of the rest of Slovenia in that it Because damaged trees are prematurely contains largely acidic soils that are not as harvested, growing stock is lower on damaged tolerant to acid depositions as are the basic hectares, averaging about 200 cubic meters on soils found elsewhere in the country). moderately damaged plots and about 170 on severely damaged hectares. More controver- sial is whether the annual tree growth incre- ment is also lower in damaged forests and if so, Estimating Timber Values by how much. The annual growth increment in the emission influence area of Sostanj has been The forests affected by emissions from Sostanj increasing since World War II, but it is possible are among the tpoce inaSlo that growth could have been even greater The growing stock in these predominantly without exposure to sulfur dioxide. spruce forests averages 246 cubic meters per hectare in contrast to the Slovenia average of Slovenia's policy is to manage its forests as about 193 cubic meters per hectare. The annual naturally as possible in order to maintain their recreational and protective functions and their character and appearance. Forests consist of stands of mixed ages and species. Trees are 7. It does not really matter how sulfur emissions are reduced, harvsted seecing is aro only that there either be a general reduction in emissions over the harvested selectively; dear-cutting is prohib- course of the year or that the peak emergency periods be ited by law. In Slovenia, rotation periods eliminated or greatly reduced. average 120-140 years for Norway spruce, the 8 Environment Department Papers Estimating Timber Values dominant species. Although outside the scope before the quality of their marketable wood of this analysis, alternative forest management deteriorates. Therefore foresters must visit regimes offer interesting possibilities for individual plots much more frequently than increasing direct economic benefits from the would otherwise be the case, with consequent forests. In fact, our preliminary analysis increases in silviculture costs. Trees must be indicates that optimal economic rotations may harvested regardless of size, so harvesting be 60-70 years and that rotations to produce costs are likely to be higher as a proportion of maximum sustainable-yields may be around output than under the ideal management 100 years.' regime. Because new stock is regenerated naturally, Table 1 below shows the structure of the forest there are few costs for planting and tending and the values of a unit of wood in the area young trees with uneven-aged management, affected by emissions from the Sostanj Power the most costly operation in forestry. But Plant. The table describes a theoretical mixed because harvesting costs are higher per unit age forest on a per hectare basis: what we volume of merchantable timber, this manage- would obtain if each hectare in the forest ment regime works best for producing large resembled the structure of a large forest area trees of expensive high-quality timbers for made up of stands of even aged trees. which the cost of harvesting represents a small part of the final output. Available data from This analysis considers what happens to the Slovenia and elsewhere in Central and Eastern quantity, quality and value of timber harvests Europe indicate that wood cut from the largest, with and without emissions controls. We most mature trees is 13 times more valuable assume that with operation of an FGD on Unit than wood cut from the youngest age classes. 5 in addition to the operation of an FGD on Unit 4, sulfur oxide emissions from Sostanj will Damage to trees from emissions (and other fall by 90 percent from 1991 levels, and forest causes) interferes with the management regime damage caused by emissions of sulfur oxide practiced in Slovenia and raises its costs. will be substantially if not completely ellmi- Sickly trees must be identified and removed nated. The forests will be managed and Table 1 Forest Structure and Value of Output in the Area of Sostanj Emission Influence Age Age Avg. Avg. # of Class Basal area Basal area Market Stumpage (years) class dbhl volume/ stems vol/ha per tree per ha value/rn3 value/M3 (cm) tree (m') per ha (i3) (m2) (m2) (DM) (DM) 0-20 1 <10 .. .. .. 2040 2 12.0 0.12 170 20 0.03 5.0 70 5 40-60 3 17.5 0.30 120 35 0.04 4.5 80 10 60-80 4 25.0 0.60 70 45 0.07 5.0 85 18 80-100 5 32.0 1.00 60 60 0.11 6.5 90 30 100-120 6 41.0 1.40 40 55 0.13 5.0 100 45 120-140 7 > 45 1.60 20 30 0.15 3.0 110 65 Total 245 29 1. Diameter at breast height. Source: Slovenia Institute for Forest and Wood Economy, 1993 Environmental Economics Series 9 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia harvested as in the past: while small trees will Even without the FGD on Unit 5, emissions be thinned, cutting will be focused on trees 120- from the Sostanj Thermal Power Plant are 140 years old; harvests will remove only about expected to fall by 45 percent from 1991 levels 72 percent of the period's growth increment and due to the start-up of the FGD on Unit 4 and the volume of standing timber per hectare will to limestone injection on all other Units. steadily rise. Over time, the value of the output will rise commensurate with rising yields, With continued, although reduced, exposure especially in the largest diameter classes. to sulfur dioxide, we assume that tree growth rates are lower and that mortality losses are Figure 3 Volume of Timber Harvest with and without FGD (m3) 7,000 4 6,000 e 5,000 : 4,000 'o 3,000 I 2,000 o 1,000 2006 2016 2026 2036 2046 2056 2066 Year I- Total volume of harvests Aithout FGD - - Total volume of harvests with FGD Figure 4 Nominal (undiscounted) Value of Timber Harvests with and without FGD 200,000 ,, 180,000 X 160,000 140,000 120,0 00 -\- E100,0 00 80,000 , 60,000 a 40,000 20,000 0 2006 2016 2026 2036 2046 2056 2066 Year -*--- Nominal value of harvests without FGD ----- Nominal value of harvests with FGD 10 Environment Department Papers Estimating Timber Values Figure 5 Volume of Tree Standing Stock with and without FGD 40,000 i 35,000 a30,000 i 25,000 a 20,000 tll llll 15,000 1996 2006 2016 2026 2036 2046 2056 2066 Year ; * ~Volume without FGD V olume with FGD l higher than they would be with more stringent From 1996 to 2020, the removal of damaged emissions controls until Unit 5 is shut down in trees means that harvests exceed the annual 2020, and continuing for a few years thereafter. growth increment on all plots currently consid- Therefore, without emissions controls, the total ered damaged so that standing volume in 2020 volume of wood cut greatly exceeds that is below 1996 levels. When emissions cease in expected under the ideal management regime 2020, annual harvests fall to 65 percent of the between 1996 and about 2026. However the annual growth increment to allow the accumu- evidence suggests that mortality losses from lation of biomass. This is below the proportion sulfur oxide emissions are concentrated among of growth increment harvested with the the younger, smaller classes and this is the project, 72 percent. assumption we use here (see Annex Tables Al- A4). This means that the value of the prema- Based on data currently available, the present ture harvests is not as great as the difference in value of timber output from reducing sulfur harvest volume would imply, since small trees oxide emissions is approximately negative 7 are so much less valuable in the marketplace. million German marks, assuming a discount Figure 3 shows the volume of timber harvested rate of 7 percent. This counter-intuitive result and Figure 4 shows the nominal values of the occurs because the total discounted value of the timber harvests under the two scenarios from timber harvested without emissions controls 2006 to 2066. The figures show that harvests exceeds the value with controls until 2020. are higher without emissions controls than Therefore, discounting the stream of revenues with controls until several years after Unit 5 is that will occur with and without the controls closed, and lower thereafter. indicates very little direct forestry benefit from the investment in the FGD: whenever the Under the "no project" scenario, we assume discount rate is greater than the forest growth that silviculture costs are 10 German marks rate (about 2.4 percent per year), the larger higher per hectare per year than they would be timber harvests that occur in the short-term with the project until the time when the power without the FGD are more valuable then the plant closes. This further reduces the value of higher yields that will occur later with the FGD. the early harvests. Environmental Economics Series 11 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia However, without emissions controls, standing recreation are not particularly sensitive to volume per hectare gradually declines until considerable variations in the condition of the emissions cease with the closure of Unit 5 in forest in deciding to spend time there. The 2020, after which the forest begins to recover factors that matter most are how long it takes and the volume of standing stock begins to to travel to the forest and its recreational increase. By 2006, standing volume averages infrastructure. 260 cubic meter per hectare. With emissions controls, standing volume steadily rises to It is equally uncertain that volumes of other about 306 cubic meters per hectare (figure 5). non-marketed forest products decline with Since the analysis of timber benefits under the changes in the volume of standing timber. two scenarios stops in the year 2066, it is Indeed, many of the non-marketed forest necessary to estimate the value of the timber products may well increase with declines in the flows that will occur after that. This value is the standing stock, at least with the initial opening discounted present value of the expected future of the canopy. For example, deer and other timber flow after the year 2066, or what we wildlife prefer newly cut forests to dense, old would expect someone to pay in 1996 for forests. Berries and mushrooms both benefit harvests that will occur after the year 2066. For from light, and often grow more prolifically the forests in the emissions influence area of after trees have been felled. Sostanj, the value of these expected future timber flows after the year 2066 is 1.7 million For this analysis we make the extreme assump- tG-tnberman flows higherwith the project 2066 thaon tion that tourism and recreation and all other German marks higher with the project than non-timber benefits decline in proportion with without it. This adds 1.7 millon German marks the decline in the standing stock per hectare. to the value of the timber benefits generated For example, if the volume of standing stock with the project, for a total of negative 5.4 declines by 25 percent - falling for example million German marks. from 250 cubic meters per hectare to 190 cubic meters per hectare - then the quantity of mushrooms and game and the value of recre- Estimating Non-Timber Values ational visits and all other non-timber benefits also falls by 25 percent. Thus, if the forest In Slovenia, forested lands provide many disappears completely (an extremely unlikely benefits besides timber, including recreation, event), all non-timber benefits will be lost. protection of soils, watersheds, and biodiver- Thus the driving factor is the estimate of the sity, and non-use values. It is not known how values associated with the standing stock with the values of the non-timber benefits might and without reductions in sulfur oxide emis- shift with the further forest degradation due to sions exposures to emissions of sulfur oxides. Studies done in the United Kingdom and the If sulfur oxide emissions continue to damage United States suggest that visitors to forests for the forest, the financial benefits from earlier harvests of damaged trees are countered by the economic costs of lost recreational and tourism 8. The maximum sustainable-yield rotation period is at the point services, watershed and other ecosystem in the tree's life cycle when its mean annual growth increment is values, declines in other non-timber forest at a maximum. However, economic efficiency requires harvesting trees at the time which maximizes the present value of products, and reductons in the feeling of well- the net benefits from the wood. This time occurs when the tree being associated with the knowledge that the volume growth rate just equals the interest rate. At any positive forest is healthy. Based on the values pre- discount rate, optimal economic rotations will be shorter than sented earlier - 100 German marks per hectare rotations where the objective is to maximize sustainable yields. for tourism and recreation, 18 German marks If discount rates are positive, the growth rate of harvested trees must be faster so the trees must be younger; the higher the per hectare for other non-timber forest benefits, discount rate, the shorter the optimal economic rotation. and 40 German marks per hectare for existence 12 Environment Department Papers Comparing Costs and Benefits Table 2 Total Economic Value of Reducing Emissions from Unit 5 at Sostanj Thermal Power Plant, 1996-2066 (present value, 1992 German marks, discount rate=7%) Present value with project Present value without Present value of that reduces SO2 emissions project that reduces difference (net by 90% from Unit 5 Unit 5 Emissions benefit of project) Timber products Timber harvests 145,600,000 152,600,000 (7,000,000) Value of difference in volume of growing stock year 2066 1,700,000 1,700,000 Subtotal 147,300,000 152,600,000 (5,300,000) Other forest products Mushrooms, berries, meat from game, biodiversity, soil conservation 33,800,000 30,400,000 3,400,000 Quasi-public goods Tourism and recreation 187,500,000 169,000,000 18500,000 Pure public goods 75,000,000 67,500,000 7,500,000 Subtotal 296,300,000 266,900,000 29,400,000 TOTAL PRESENT VALUE 443,600,000 419,500,000 24,100,000 and option values - we estimate that a sulfur considered severely damaged. The time oxide emissions reduction project generates horizon is 70 years (from 1996 to 2066). Present 29.4 million German marks in non-timber values are given for a 7 percent discount rate. benefits over a 70-year period from 1996 to 2066 at a 7 percent discount rate. At a 7 percent discount rate, reducing sulfur oxide emissions generates substantial benefits - with a discounted present value of about 24.1 million German marks. This is comprised Comparing Costs and Benefits of of two components: non-timber forest product Reducing Emissions of Sulfur Dioxide benefits of about 29.4 million German marks from Sostanj Thermal Power Plant with emissions controls which are offset by a net reduction of 5.3 million German marks in timber benefits. Total Benefits and Costs However, the FGD costs between 140 and 160 Table 2 presents summary data from both the million German marks -more than 115 flow and the stock components of forest millon German marks highe than tdi impacts~~~~ ~ ~~~ osufroieeisosfothnihon German marks higher than the identif- impacts of sulfur oxide emissions from the able benefits. This is in spite of the fact that we available data. The results are for an area of have chosen values for non-timber goods and availabout 1210 Thetres,ults 0 hefaares consid- services that are on the generous, rather than about 121,400 hectares, 100,700 hectares cni- the lower end of available estimates. ered moderately damaged, and 20,700 hectares Environmental Economics Series 13 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia Annual Benefits and Costs processing capacity. In that case, the benefits from the earlier cutting that would occur The differences between benefits and costs of without emissions controls would be reduced, reducing sulfur oxide emissions using FGD and the associated costs - the lost benefits of technology are clearly seen by comparing the non-timber forest values - would be larger. annual costs of the FGD with the annual benefits it is expected to generate. The annual In addition, the analysis has not included costs of the FGD are about 17.5 milion German watershed impacts or the possibility of a more marks, comprised of 7.5 million German marks generalized systems collapse. The yield, stock of capital costs (150 million German marks and growth estimates, are based on the best depreciated over a useful lifetime of 20 years), available information, but may be subject to and 10 milion per year in operating and revision. And, while we know that Slovenians maintenance costs (including the costs of value their forests highly - and indeed regard electricity, limestone, waste disposal, and their protection as a top national priority - maintenance for the equipment). Annual there is little information on how much people recreational benefits equal about 2.5 million would be willing to pay to prevent further German marks, those of quasi-public goods forest damage from sulfur oxide emissions. equal about 0.5 German marks, and those of Such values could be estimated using a survey- pure public goods total about 1 milion German based hypothetical valuation approach (often marks. Thus the annual value of all non-timber referred to as contingent valuation method or benefits totals about 4 million German marks. CVM), but such survey results were not Therefore, ignoring the financial costs from available for this study. However, the value of reduced early harvesting of trees with the FGD, these potential benefits would have to exceed the project produces annual benefits of about 4 115 million German marks to justify the project million German marks compared to an annual - almost five times the benefits we have been cost of about 17.5 million German marks. Based able to identify so far. on these preliminary results, the investment in an FGD for Unit 5 of Sostanj is not justified. Even if an FGD is not justified on economic grounds, there are other lower-cost measures that could be justified. A full economic analy- sis of the alternatives has not yet been carried Final Caveat out. Some of these were discussed at the beginning of this note and include changing There is some uncertainty about the results, of operating regimes, switching fuels, and chang- course. If timber cutting rates were much ing (over the longer term) the species composi- higher than estimated here due to more exten- tion in the affected area. These options would sive forest damage than currently foreseen, have to be evaluated to see if their expected lumber prices might fall or some portion of the benefits exceed their costs. wood might be wasted because of insufficient 14 Environment Department Papers References Amann, M., S. Nilsson, W. Schopp, and 0. Ferlin, F. 1992. "Some Characteristics of Sallnas. 1994. "Impacts on Forestry and Dieback Phenomena of Norway Spruce and its Economic Benefits of Sulfur Abatement in the Growth Response to the Air Pollution Stress. Sostanj Region of Slovenia" (draft). Interna- "Department of Forestry, Biotechnical Faculty, tional Institute for Applied Systems Analysis, Slovenia. Laxenburg, Austria. Hultkrantz, L. 1992. "National Account of Batic, F., D. Jurc, J. Kalan, M. Kovac, A. Kralj, Timber and Forest Environmental Resources in and V. Mikulic. 1993. "Impact of Polluted Sweden." Environmental and Resource Economics Gases from the Thermal Power Plant in 2 (3): 283-305. Sostanj, Slovenia, on the Forest Environment: A Brief Expertise on the Cause-Consequence Kolar, 1. 1989. "Spruce Dieback in the Forests Relationship in Forest Decline." Slovenia of Saleska Valley." Forest Institute, Nazatje, Institute for Forest and Wood Economy, Slovenia. Ljubljana, Slovenia. Leuschner, W. 1990. Forest Regulation, Harvest Bishop, R. and M. Welsh. 1992. "Existence Scheduling, and Planning Techniques. New York: Values in Benefit-Cost Analysis." Land Econom- John Wiley and Sons. ics 68 (4): 405-417. Neher, P. 1990. Natural Resource Economics: Buongiorno, J. and J. K. Gillis. 1987. Forest Conservation and Exploitation. Cambridge, U. Management and Economics. New York: K.: Cambridge University Press. Macmillan Publishers. Nilsson, S. 1992. Sustainability of European Clutter, J., J. Forston, L. Pienaar, G. Brister, and Forest Resources - A Case Study. International R. Bailey. 1983. Timber Management: A Quanti- Institute for Applied Systems Analysis, tative Approach. New York: John Wiley and Laxenburg, Austria. Sons. Sons. Pearce, D. and J. Warford. 1993. World Without Ferlin, F. 1992. "The Impact of Air Pollution End. New York: Oxford University Press. on Productivity of Mature Norway Spruce - A Smith, D. 1986. The Practice of Silviculture. Method for the Quantification of Endanger- New York: John Wiley and Sons. ment of Physiological Forest Functions." Department of Forestry, Biotechnical Faculty, Willis, K. 1991. "Recreational Value of the Slovenia. Forestry Commission Estate in Great Britain." Scottish Journal ofPolitical Economy 38 (1): 58-75. Environmental Economics Series 15 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia 16 Environment Department Papers Technical Annex The Technical Annex contains tables and distribution of trees in the six age classes is figures showing the details of the analysis. shown for 1996: there are 130 trees in the Tables Al-A4 show the estimated timber yields youngest age class and 18 in the oldest. The with and without the project and Table A5 class volume of trees in the youngest age class, shows the growth functions used in making computed by multiplying the average volume these estimates. Figures Al-A3 and Tables A6- per tree by the number of stems per hectare, is A9 show the volume and value of timber 16 cubic meters per hectare while that of the harvests for the full 121,000 hectares included oldest is 29 cubic meters per hectare. The in the analysis, with and without the project. forest grows according to the equations pre- Figure A4 and Table A10 present the total sented in Table A5. In 2001 the distribution of volume of tree standing stock under the two trees in the six age classes has shifted. New scenarios. Figures A5-A7 display the nominal trees have sprouted and some proportion of (undiscounted) value of recreational benefits, existing trees in each class has moved into the non-timber forest products, and existence next age class. Since this forest has not been values. Tables A11-A13 give the total values, cut, total volume per hectare increases. the average per hectare values, and the cumu- lative net present values for the two scenarios. The forest is managed according to the rules described earlier: any one hectare is harvested How to Read Tables Al-A5 once every ten years (ten percent of the forest area is harvested annually), only about 72 Tables Al-A4 that follow show the current and percent of the volume growth is harvested, projected future structure of a hectare of and, except for trees being thinned, harvests moderately and severely damaged forests in are focused on trees in the oldest age classes. the emission influence area of Sostanj, given for The forester determines the desired number of five year intervals. The tables also show trees per class; all trees in excess of this number projected harvest yields and the net present are cut. As seen in Table Al, in 2006 there are value of the yield. Tables Al and A2 show 207 trees in the youngest age class. The for- these values for moderately and severely ester wants to retain only 180 trees, so cuts 27. damaged forests respectively for the with- The class yield is 3 cubic meters per hectare project scenario, and Tables A3-A4 show similar with a net value of 16 German marks. The values for the wvithout-project scenario. All harvest which occurs in 2006 across all age values are presented on a per-hectare basis. classes yields a total of 35 cubic meters per This is an uneven-aged forest, comprised of six hectare with a net value of 1256 German marks age classes. Average volume per tree and net per hectare. Viewed from the perspective of value per unit of wood corresponding to each 1996, the discounted net present value of the age class are shown below the table headings. harvest is 639 German marks assuming a discount rate of 7 percent. In Table Al - the with-project scenario for moderately damaged forests - The initial The tables describe this 10-year growth and Environmental Economics Series 17 Benefits of Reducing Ernissions of Sulfur Oxides in Sostanj Region of Slovenia cutting cycle for a period of 70 years. The net The net present value calculations for the present values shown are cumulative; the without project scenario (Tables A3 and A4) further into the future the harvest, the smaller include annual silviculture costs of 10 German its incremental discounted net present value. marks per hectare until 2026, 5 German marks (For example, the net present value in 2066 is per hectare until 2031, 2 German marks per only about 14 German marks per hectare more hectare until 2036, and 0 thereafter. These than the value in 2056: 1298 German marks silviculture costs are not shown on the table, versus 1284 German marks.) but are included as costs in the net present value calculations. 18 Enviromnent Department Papers Technical Annex Environmental Economics Series 19 Benefits of Reducing Emissions of Sulfur Oxides in Sostani Region of Slovenia Table Al With-Project Timber Yields, Volume of Standing Stock, and Net Present Values 1996-2066 (per hectare) Moderately Damaged Forest (per hectare over an area of 100,700 hectares) Age Class 1 2 3 4 5 6 Volume/tree (m3) 0.12 0.3 0.6 1 1.4 1.6 German marks per m3 5 10 18 30 45 65 Row totals year 1996 number of stems 130 92 54 48 35 18 377 class volume (m3) 16 28 32 48 49 29 201 year 2001 stock 174 105 65 52 37 18 450 class volume (m3) 21 32 39 52 51 29 223 year 2006 number of stems 207 125 77 57 38 18 523 class volume (m3) 25 38 46 57 54 29 248 desired number 180 105 66 53 37 10 451 class volume (m3) 22 32 40 53 52 16 214 cut 27 20 11 4 1 8 72 yield (m3) 3 6 6 4 2 13 35 German marks/class 16 60 116 115 85 863 1256 net present value 639 year 2011 number of stems 216 126 78 58 39 12 529 class volume (m3) 26 38 47 58 55 19 242 year 2016 number of stems 241 152 92 65 41 13 605 class volume (m3) 29 46 55 65 58 21 274 desired number 190 110 75 59 40 7 481 class volume (m3) 23 33 45 59 56 11 227 cut 51 42 17 6 1 6 124 yield (m3) 6 13 10 6 2 10 47 German marks/class 31 126 185 182 93 641 1257 net present value 963 year2021 number of stems 222 133 87 65 42 9 558 class volume (m3) 27 40 52 65 59 15 258 year 2026 number of stems 242 158 101 73 45 12 631 class volume (m3) 29 48 61 73 64 19 292 desired number 190 115 83 65 44 6 503 class volume (m3) 23 35 50 65 62 10 243 cut 52 43 18 8 1 6 128 yield (m3) 6 13 11 8 2 9 49 German marks/class 31 130 193 230 91 585 1261 net present value 1129 20 Environment Department Papers Technical Annex Table Al (cont'd) Moderately Damaged Forest (per hectare over an area of 100,700 hectares) Age class 1 2 3 4 5 6 Volume/tree (m3) 0.12 0.3 0.6 1 1.4 1.6 German marks per m3 5 10 18 30 45 65 year2031 Row totals number of stems 217 137 94 72 47 9 576 class volume (m3) 26 41 57 72 65 14 275 year2036 number of stems 233 161 109 80 50 12 644 class volume (m3) 28 48 65 80 70 19 310 desired number 190 115 92 71 49 6 523 class volume (m3) 23 35 55 71 69 10 262 cut 43 46 17 9 1 6 121 yield (m3) 5 14 10 9 1 9 48 German marks/class 26 138 179 268 65 585 1261 net present value 1213 year2041 number of stems 211 137 102 79 52 9 590 class volume (m3) 25 41 61 79 72 15 294 year 2046 number of stems 222 160 115 87 55 12 652 class volume (m3) 27 48 69 87 77 20 328 desired number 190 115 98 79 54 6 542 class volume (m3) 23 35 59 79 76 10 280 cut 32 45 17 8 1 6 110 yield (m3) 4 14 10 8 2 10 48 German marks/class 19 135 186 251 83 671 1345 net present value 1259 year 2051 number of stems 206 137 107 87 57 10 604 class volume (m3) 25 41 64 87 80 16 313 year 2056 number of stems 211 159 120 95 61 13 659 class volume (m3) 25 48 72 95 85 21 347 desired number 185 115 105 87 59 6 557 class volume (m3) 22 35 63 87 83 10 299 cut 26 44 15 8 2 7 102 yield (m3) 3 13 9 8 3 12 48 German marks/class 16 132 158 246 129 761 1441 net present value 1284 year 2061 number of stems 196 136 113 95 63 10 613 class volume (m3) 23 41 68 95 88 16 331 year 2066 number of stems 196 156 125 103 67 14 661 class volume (m3) 24 47 75 103 94 23 365 desired number 185 125 110 91 65 6 582 class volume (m3) 22 38 66 91 91 10 317 cut 11 31 15 12 2 8 79 yield (m3) 1 9 9 12 3 13 47 German marks/class 7 93 158 371 115 850 1594 net present value 1298 Value of stock, 2066 111 375 1188 2730 4095 624 9123 PV of stock, 2066 80 Environmental Economics Series 21 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia Table A2 With-Project Timber Yields, Volume of Standing Stock, and Net Present Values 1996-2066 (per hectare) Severely Damaged Forest (per hectare over an area of 20,700 hectares) Age class 1 2 3 4 5 6 Volume/tree (m3) 0.12 0.3 0.6 1 1.4 1.6 German marks per m3 5 10 18 30 45 65 year 1996 Row totals number of stems 112 78 45 41 30 15 321 class volume (m3) 13 23 27 41 42 24 171 year2001 number of stems 149 89 52 42 30 15 377 class volume (m3) 18 27 31 42 42 24 184 year2006 number of stems 179 107 59 43 31 15 433 class volume (m3) 21 32 35 43 43 24 199 desired number 165 90 53 41 31 10 390 class volume (m3) 20 27 32 41 43 16 179 cut 14 17 6 2 0 5 43 yield (m3) 2 5 4 2 0 8 20 German marks/class 8 50 65 67 0 494 684 net present value 348 year 2011 number of stems 195 110 60 43 31 11 450 class volume (m3) 23 33 36 43 44 17 196 year2016 number of stems 217 134 70 46 32 11 510 class volume (m3) 26 40 42 46 44 18 216 desired number 175 105 65 43 31 7 426 class volume (m3) 21 32 39 43 43 11 189 cut 42 29 5 3 1 4 84 yield (m3) 5 9 3 3 1 7 27 German marks/class 25 87 55 81 0 462 710 net present value 531 year2021 number of stems 202 125 73 47 31 8 486 class volume (m3) 24 38 44 47 44 13 209 year 2026 number of stems 221 148 83 51 32 9 545 class volume (m3) 26 44 50 51 45 15 232 desired number 180 110 76 48 31 6 451 class volurre (m3) 22 33 46 48 43 10 201 cut 41 38 7 3 1 3 94 yield (m3) 5 11 4 3 2 5 31 German marks/class 24 114 80 83 81 353 737 net present value 628 22 Environment Department Papers Technical Annex Table A2 (cont.) Severely Damaged Forest (per hectare over an area of 20,700 hectares) Age class 1 2 3 4 5 6 Volume/tree (m3) 0.12 0.3 0.6 1 1.4 1.6 German marks per m3 5 10 18 30 45 65 year2031 Row total stock 203 131 83 52 32 7 509 class volume (m3) 24 39 50 52 45 12 223 year 2036 number of stems 219 153 93 57 34 9 564 class volume (m3) 26 46 56 57 47 14 247 desired number 180 110 85 52 33 6 466 class volume (m3) 22 33 52 52 46 10 214 cut 39 43 8 5 1 3 98 yield (m3) 5 13 5 5 1 4 33 German marks/class 23 129 86 162 44 287 732 net present value 677 year 2041 number of stems 200 131 91 57 34 8 521 class volume (m3) 24 39 55 57 48 12 235 year 2046 number of stems 212 152 100 63 36 9 572 class volume (m3) 25 46 60 63 51 15 259 desired number 185 110 90 59 35 6 485 class volume (m3) 22 33 54 59 49 10 227 cut 27 42 10 4 1 3 87 yield (m3) 3 13 6 4 2 5 32 German marks/class 16 127 103 110 74 319 749 net present value 716 year 2051 number of stems 200 132 95 64 37 8 536 class volume (m3) 24 39 57 64 52 12 249 year 2056 number of stems 209 153 103 69 39 9 583 class volume (m3) 25 46 62 69 55 15 272 desired number 185 110 93 64 39 6 497 class volume (m3) 22 33 56 64 55 10 239 cut 24 43 10 5 0 3 86 yield (m3) 3 13 6 5 0 5 33 German marks/class 14 130 111 149 0 355 759 net present value 723 year2061 number of stems 197 132 98 69 41 8 544 class volume (m3) 24 39 59 69 57 13 261 year2066 number of stems 202 153 105 73 43 10 586 class volume (m3) 24 46 63 73 60 16 283 desired number 185 110 97 69 42 6 509 class volume (m3) 22 33 58 69 59 10 251 cut 17 43 8 4 1 4 77 yield (m3) 2 13 5 4 2 6 32 German marks/class 10 128 91 129 74 416 848 net present value 723 Value of Stock, 2066 ill 330 1048 2070 2646 624 6829 PV of Stock, 2066 60 Environmental Economics Series 23 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia Table A3 Without Project Timber Yields, Volume of Standing Stock, and Net Present Values 1996-2066 (per hectare) Moderately Damaged Forest (per hectare over an area of 100,700 hectares) Age class 1 2 3 4 5 6 Volume/tree 0.12 0.3 0.6 1 1.4 1.6 German marks per m3 5 10 18 30 45 65 year1996 Row totals number of stems 130 92 54 48 35 18 377 class volume (m3) 16 28 32 48 49 29 201 year 2001 number of stems 171 105 63 51 37 18 444 class volume (m3) 20 32 38 51 51 29 221 year 2006 number of stems 202 125 74 55 38 18 512 class volume (m3) 24 37 44 55 54 29 244 desired number 165 85 61 48 36 9 404 class volume (m3) 20 26 37 48 50 14 195 cut 37 40 13 7 2 9 108 yield (m3) 4 12 8 7 3 15 49 German marks/class 22 119 139 196 152 968 1596 net present value 746 year2011 number of stems 204 106 68 52 37 11 478 class volume (m3) 24 32 41 52 52 17 219 year 2016 number of stems 233 132 78 57 39 12 551 class volume (m3) 28 40 47 57 55 20 245 desired number 155 85 65 48 35 6 394 class volume (m3) 19 26 39 48 49 10 190 cut 78 47 13 9 4 6 157 yield (m3) 9 14 8 9 6 10 56 German marks/class 47 141 140 256 271 651 1505 net present value 1102 year2021 number of stems 197 104 71 53 37 8 470 class volume (m3) 24 31 43 53 51 13 215 year 2026 number of stems 228 129 80 58 39 10 544 class volume (m3) 27 39 48 58 54 16 242 desired number 155 78 65 48 37 6 389 class volume (m3) 19 23 39 48 52 10 190 cut 73 51 15 10 2 4 155 yield (m3) 9 15 9 10 3 6 52 German marks/class 44 153 167 294 113 421 1191 net present value 1242 24 Environment Department Papers Technical Annex Table A3 (cont.) Moderately Damaged Forest (per hectare over an area of 100,700 hectares) Age class 1 2 3 4 5 6 Volume/tree (m3) 0.12 0.3 0.6 1 1.4 1.6 German marks per m3 5 10 18 30 45 65 year2031 Row totals number of stems 196 98 70 53 38 8 463 class volume (m3) 24 29 42 53 54 13 214 year 2036 number of stems 227 124 78 58 40 10 536 class volume (m3) 27 37 47 58 56 17 241 desired number 170 90 72 51 40 6 429 class volume (m3) 20 27 43 51 56 10 207 cut 57 34 6 7 0 4 107 yield (m3) 7 10 4 7 0 7 34 German marks/class 34 101 67 197 0 451 850 net present value 1295 year2041 number of stems 205 111 78 57 41 9 501 class volume (m3) 25 33 47 57 58 14 233 year 2046 number of stems 230 137 88 62 43 11 571 class volume (m3) 28 41 53 62 60 17 261 desired number 180 100 80 56 42 7 465 class volume (m3) 22 30 48 56 59 11 226 cut 50 37 8 6 1 4 106 yield (m3) 6 11 5 6 2 6 36 German marks/class 30 110 83 191 70 398 883 net present value 1325 year 2051 number of stems 209 122 87 62 44 10 534 class volume (m3) 25 37 52 62 61 15 253 year2056 number of stems 228 147 97 69 46 12 599 class volume (m3) 27 44 58 69 65 19 282 desired number 190 110 90 64 45 6 505 class volume (m3) 23 33 54 64 63 10 246 cut 38 37 7 5 1 6 94 yield (m3) 5 11 4 5 2 9 36 German marks/class 23 110 77 144 72 613 1040 net present value 1343 year 2061 number of stems 213 133 97 71 48 9 570 class volume (m3) 26 40 58 71 67 14 276 year 2066 number of stems 225 157 108 78 51 12 630 class volume (m3) 27 47 65 78 71 19 307 desired number 190 120 95 72 50 6 533 class volume (m3) 23 36 57 72 70 10 267 cut 35 37 13 6 1 6 97 yield (m3) 4 11 8 6 1 9 39 German marks/class 21 110 140 181 49 600 1101 net present value 1353 Value of stock, 2066 114 360 1026 2160 3150 624 7434 PV of stock, 2066 65 Environmental Economics Series 25 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia Table A4 Without Project Timber Yields, Volume of Standing Stock, and Net Present Values 1996-2066 (per hectare) Severely Damaged Forest (per hectare over an area of 20,700 hectares) Age class 1 2 3 4 5 6 Volume/tree (m3) 0.12 0.3 0.6 1 1.4 1.6 German marks per m3 5 10 18 30 45 65 year 1996 Row totals number of stems 112 78 45 41 30 15 321 class volume (m3) 13 23 27 41 42 24 171 year 2001 number of stems 149 89 52 42 30 15 377 class volume (m3) 18 27 31 42 42 24 184 year 2006 number of stems 179 107 59 43 31 15 433 class volume (m3) 21 32 35 43 43 24 199 desired number 140 75 48 40 31 9 343 class volume (m3) 17 23 29 40 43 14 166 cut 39 32 11 3 0 6 90 yield (m3) 5 10 7 3 0 9 33 German marks/class 23 95 119 97 0 598 932 net present value 409 year 2011 number of stems 176 93 54 41 31 10 404 class volume (m3) 21 28 32 41 43 16 182 year 2016 number of stems 204 115 61 43 31 11 465 class volume (m3) 24 34 37 43 44 17 200 desired number 175 85 43 38 29 7 377 class volume (m3) 21 26 26 38 41 11 162 cut 29 30 18 5 2 4 88 yield (m3) 3 9 11 5 3 6 38 German marks/class 17 89 197 157 140 389 989 net present value 631 year 2021 number of stems 208 108 51 39 29 8 444 class volume (m3) 25 32 31 39 41 13 181 year 2026 number of stems 234 135 62 41 29 9 510 class volume (m3) 28 40 37 41 41 15 202 desired number 180 85 47 38 28 6 384 class volume (m3) 22 26 28 38 39 10 162 cut 54 50 15 3 1 3 126 yield (m3) 7 15 9 3 2 5 40 German marks/class 33 149 159 83 82 320 825 net present value 723 26 Environment Department Papers Technical Annex Table A4 (cont.) Severely Damaged Forest (per hectare over an area of 20,700 hectares) Age class 1 2 3 4 5 6 Volume/tree (m3) 0.12 0.3 0.6 1 1.4 1.6 German marks per m3 5 10 18 30 45 65 year2031 Row totals number of stems 213 109 54 39 28 7 452 class volume (m3) 26 33 33 39 40 12 182 year2036 number of stems 238 136 65 42 29 8 518 class volume (m3) 29 41 39 42 40 13 204 desired number 190 90 60 40 29 6 415 class volume (m3) 23 27 36 40 41 10 176 cut 48 46 5 2 0 2 103 yield (m3) 6 14 3 2 0 4 28 German marks/class 29 139 52 55 0 235 509 net present value 753 year2041 number of stems 218 115 66 43 29 7 480 class volume (m3) 26 35 40 43 41 12 197 year 2046 number of stems 239 143 76 47 30 8 543 class volume (m3) 29 43 46 47 42 13 220 desired number 190 105 73 43 29 6 446 class volume (m3) 23 32 44 43 41 10 191 cut 49 38 3 4 1 2 97 yield (m3) 6 11 2 4 2 4 28 German marks/class 29 114 32 117 72 251 615 net present value 774 year2051 number of stems 215 128 80 48 30 7 508 class volume (m3) 26 38 48 48 42 12 213 year2056 number of stems 232 153 90 53 31 8 567 class volume (m3) 28 46 54 53 44 14 238 desired number 190 110 85 49 30 6 470 class volume (m3) 23 33 51 49 42 10 207 cut 42 43 5 4 1 2 97 yield (m3) 5 13 3 4 2 4 30 German marks/class 25 130 51 118 71 254 649 net present value 785 year 2061 number of stems 211 133 91 55 31 7 528 class volume (m3) 25 40 55 55 44 12 230 year 2066 number of stems 223 156 100 61 33 9 582 class volume (m3) 27 47 60 61 47 14 255 desired number 185 110 90 58 33 6 482 class volume (m3) 22 33 54 58 46 10 223 cut 38 46 10 3 0 3 100 yield (m3) 5 14 6 3 0 4 31 German marks/class 23 138 106 77 0 275 619 net present value 791 Value of stock, 2066 111 330 972 1740 2079 624 5856 PV of stock, 2066 51 Environmental Economics Series 27 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia Table A5 Growth functions The following functions describe the growth of stands of the six age classes that comprise the Norway spruce forests of the area affected by sulfur dioxide emissions from the Sostanj Ther- mal Power Plant in Slovenia. Severely damaged stands grow more slowly than moderately damaged stands, especially in the younger age classes. Ingrowth (new stems) is also reduced in the severely damaged stands. With project Moderately damaged forests (Table Al) cl(l)=.86*cl(l)-.043*cl(2)-.16cl(3)-.29*cl(4)-.48*cl(5)-.54cl(6)+115 cI(2)=.2*cl(1)+.86cl(23) cl(3)=.2*c1(2)+.86*cl(3) cl(4)=.2*cl(3)+.85*cl(4) cl(5)=.17*cl(4)+.81*cl(5) cl(6)=.09*cl(5)+.83*cl(6) Severely damaged forests (Table A2) cl(l)=.86*cl(l)-.043*cl(2)-.16cl(3)-.28*c1(4)-.46*cl(5)-.5cl(6)+96 cl(2)=.2*cI(1)+.86c1(2) cl(3)=.17*cl(2)+.85*cl(3) cl(4)=.16*cl(3)+.84*cl(4) cl(5)=.14*cl(4)+.82*cl(5) cl(6)=.08*cl(5)+.83*cl(6) Without project Moderately damaged forests (Table A3) cl(l)=.86*c1(l)-.043*c1(2)-.16cl(3)-.28*cl(4)-.46*cl(5)-.5cl(6)+110 cl(2)=.2*cl(1)+.86c1(2) cl(3)=.19*cI(2)+.85*cI(3) cl(4)=.19*cl(3)+.84*cl(4) cl(5)=.18*cl(4)+.8*cl(5) cI(6)=.09*cl(5)+.83*cI(6) Severely damaged forests (Table A4) cl(l)=.86*cl(l)-.043*c1(2)-.16c1(3)-.28*cl(4)-.46*cl(5)-.5c1(6)+96 cl(2)=.2*cl(l)+.86c1(2) cl(3)=.17*cl(2)+.85*cl(3) cl(4)=.16*cl(3)+.84*cl(4) cI(5)=.14*cl(4)+.82*cI(5) cl(6)=.08*cl(5)+.83*cl(6) 28 Environrnent Department Papers Technical Annex How to Read Figures A1-A7 and Tables A6-A12 Figures A1-A3 and Tables A6-A9 show the volume and value (nominal and cumulative discounted) of timber harvests for the full 121,000 hectares included in the analysis, with and without the project. Figure A4 and Table A10 present the total volume of tree standing stock under the two scenarios. We obtain the values for the entire forest area by multiplying the per hectare figures, shown in Tables A1-A4, by the total number of hectares in each damage category. The tables also give average per hectare figures. Figures A5-A7 display the nominal (undiscounted) value of recreational benefits, non-timber forest products, and existence values. Since these categories of benefits are assumed to vary in direct proportion with the volume of standing stock, the graphs all have the same shape. The tables below the figures (Tables All-A12) give the total values, the average per hectare values, and the cumulative net present values for the two scenarios. Environmental Economics Series 29 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia Figure Al Volume of Timber Harvests with and without FGD 7,000 6,000 _ .i5,000 W 3,000 i 2,000 * 1,000 0 2006 2016 2026 2036 2046 2056 2066 Year Total volume of harvests without FGD -0- Total volume of harvests with FGD Table A6 Volume of Timber Harvests with and without FGD With FGD Without FGD moderate severe total avg moderate severe total avg per ha per ha 2006 3,502,740 407,632 3,910,372 32 4,916,643 678,461 5,595,104 46 2016 4,729,435 566,370 5,295,805 44 5,617,460 777,451 6,394,911 53 2026 4,899,705 636,998 5,536,703 46 5,240,737 821,192 6,061,929 50 2036 4,859,675 685,123 5,544,798 46 3,443,040 571,205 4,014,245 33 2046 4,850,161 658,471 5,508,632 45 3,597,745 586,832 4,184,577 34 2056 4,816,419 677,477 5,493,897 45 3,601,009 625,498 4,226,507 35 2066 4,773,532 665,243 5,438,774 45 3,962,208 643,590 4,605,798 38 30 Environment Department Papers Technical Annex Figure A2 Nominal (undiscounted) Value of Harvests with and without FGD 200,000 - 180,000 i 160,000 - E140,000 120,000- o80 000o 60,000 - 40,000 , 20,000 - 0 - --- ---- 2006 2016 2026 2036 2046 2056 2066 Year - Nominal value of harvests without FGD --- Nominal value of harvests with FGD Table A7 Nominal (undiscounted) Value of Harvests with and without FGD (German marks) With project Without project moderate severe total avg moderate severe total avg per ha per ha 2006 126,493,141 14,146,241 140,639,383 1,159 160,729,129 19,273,393 180,002,522 1,483,077 2016 126,577,482 14,676,587 141,254,069 1,164 151,559,333 20,446,718 172,006,051 1,417,192 2026 126,998,031 15,236,720 142,234,751 1,172 119,945,775 17,046,136 136,991,912 1,128,704 2036 126,966,944 15,142,225 142,109,169 1,171 85,547,816 10,533,329 96,081,145 791,632 2046 135,387,483 15,492,246 150,879,729 1,243 88,914,557 12,704,534 101,619,090 837,260 2056 145,113,792 15,689,215 160,803,007 1,325 104,686,394 13,421,349 118,107,743 973,113 2066 160,497,335 17,531,458 178,028,793 1,467 110,849,404 12,799,445 123,648,849 1,018,768 Environmental Economics Series 31 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia Figure A3 Cumulative Discounted Present Value of Timber Harvests with and without FGD 160,000 1 140,000 - iE120,000 E100,000 0 80,000 ° 60,000 = 40,000 - 0 20,000 2006 2016 2026 2036 2046 2056 2066 Year - NPV without FGD -u-- NPV with FGD Table A8 Cumulative Discounted Present Value of Timber Harvests with and without FGD With project Without project moderate severe total avg/ moderate severe total avg/ ha ha 2006 64,302,699 7,191,232 71,493,931 589 75,145,895 8,450,657 83,596,552 689 2016 97,012,726 10,983,941 107,996,666 890 110,976,608 13,049,752 124,026,360 1,022 2026 113,696,091 12,985,545 126,681,636 1,044 125,038,144 14,940,974 139,979,118 1,153 2036 122,174,992 13,996,748 136,171,740 1,122 130,415,974 15,575,597 145,991,571 1,203 2046 126,771,094 14,793,429 141,564,523 1,166 133,434,424 16,006,888 149,441,311 1,231 2056 129,275,369 14,947,228 144,222,597 1,188 135,241,030 16,238,504 151,479,534 1,248 2066 130,683,371 14,947,228 145,630,599 1,200 136,213,484 16,350,790 152,564,274 1,257 Note: These present value calculations represent weighted averages over moderately and severely damaged forest areas. The calculations for the without-project scenario include 10 German marks pre hectare per year in silviculture costs. Table A9 Incremental Discounted Present Value of Timber Harvests with and without FGD With project Without project moderate severe total avg/ moderate severe total avg/ ha ha 2006 64,302,699 7,191,232 71,493,931 589 75,145,895 8,450,657 83,596,552 689 2016 32,710,027 3,792,709 36,502,736 301 35,830,713 4,599,095 40,429,808 333 2026 16,683,365 2,001,604 18,684,969 154 14,061,536 1,891,222 15,952,758 131 2036 8,478,901 1,011,204 9,490,104 78 5,377,830 634,623 6,012,453 50 2046 4,596,102 796,681 5,392,783 44 3,018,450 431,290 3,449,740 28 2056 2,504,275 153,799 2,658,074 22 1,806,607 231,617 2,038,223 17 2066 1,408,002 0 1,408,002 12 972,454 112,286 1,084,740 9 32 Envirorunent Department Papers Technical Annex Figure A4 Volume of Tree Standing Stock with and without FGD 40,000 T 35,000 ' 30,000 °25,000 20,000 t - 15,000 _- 1996 2006 2016 2026 2036 2046 2056 2066 Year 1 -- Volume without FGD -C-- Volume with FGD Table A10 Volume of Tree Standing Stock with and without FGD With project Without project moderate severe total avg/ moderate severe total avg/ ha ha 1996 20,280,376 3,531,946 23,812,322 196 20,280,376 3,531,946 23,812,322 196 2006 21,498,810 3,700,646 25,199,456 208 19,605,706 3,429,817 23,035,523 190 2016 22,858,219 3,909,453 26,767,672 221 19,102,221 3,351,255 22,453,476 185 2026 24,499,580 4,159,609 28,659,189 236 19,172,709 3,351,255 22,523,964 186 2036 26,352,405 4,432,506 30,784,911 254 20,864,418 3,638,624 24,503,042 202 2046 28,225,369 4,688,863 32,914,232 271 22,717,243 3,954,936 26,672,179 220 2056 30,098,333 4,945,221 35,043,554 289 24,811,741 4,287,788 29,099,528 240 2066 31,951,158 5,185,039 37,136,197 306 26,926,378 4,610,302 31,536,680 260 Environmental Economics Series 33 Benefits of Reducing Emissions of Sulfur Oxides in Sostanj Region of Slovenia Figure A5 Nominal (undiscounted) Value of Recreational Benefits with and without FGD 20,000 - 18,000 8 16,000 14 ,000 - 12,0001- 10,000+ o8,000+ 6 6000T : 4,000 - 2,0004- 0 1996 2006 2016 2026 2036 2046 2056 2066 Year -0-With FGD --Without FGD Table All Nominal (undiscounted) Value & Cumulative Net Present Value of Recreational Benefits With project Without project total avg cumulative total avg cumulative nominal per ha NPV nominal per ha NPV 1996 12,137,100 100 12,137,100 100 2006 12,844,120 106 93,307,604 11,741,167 97 89,726,704 2016 13,643,437 112 137,485,762 11,444,499 94 128,415,621 2026 14,607,540 120 161,437,822 11,480,426 95 147,858,917 2036 15,691,017 129 174,496,101 12489,159 103 158,188,787 2046 16,776,328 138 181,609,610 13,594,764 112 163,903,153 2056 17,861,640 147 185,467,605 14,831,980 122 167,056,539 2066 18,928,257 156 187,550,708 16,074,192 132 168,806,286 34 Environment Department Papers IRED 26944 11 I 14 DO, 14 30 15 00 15 60 100' 1630 17b00 SLOVEN IA T' x b- deomm - Wos; INVENTORY OF FOREST DECLINE IN THE AREA OF J EMISSION INFLUENCE FROM SOSTANJ K0 \~ ~~~ > 3 ~~~~A U S T R I A Tk Ve A-4n1k b ...-\ < hlrp obt--Co se ceo U ~~- _. \ < hoch f 7 So 8/ugeolOurQ - - -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-- ~~~~~~~~~~~HECTOES '/11 MODERATELY , / + ~~~~~~~~~~~/ < ~~~~~~DAhMAGE IJ 1 )RSETS =100.691 00 h. HECOR M OTED TO MI .jY C ;<, K.e nl 8* \ r C,- t g~~~~~~~~t; ......... . b * OTHER Lf 11 USES 1 871 D0 ho MAItx OTERRLA Je ADSES \ ),87 S0 , < 7 X 5koFe L < | z ' 1-h TOTAL AP[ D IA CONTAINING MODERATELY I s)NI)Ar ROADS ,, HECTORS I SEVERELY I Al 11. I AI'I AL ~~~~~~~~~~~~~~~~~~~~~~~~5 HITI LA % Er5 VOTED TO - YR TOA PA'A CONTAINI NG SEVERELY 46000 -1600' 0 \ oriDAMAGoI ORESTS = 31 32500 h. _ - 11RNAI{ "JAI B8