What Is a Forest Worth?

In Grade 8 you met a list of reasons why biodiversity matters: food, medicine, balance in nature, ecotourism Grade 8: Importance of biodiversity. Ecologists have a name for all the ways that nature helps people: ecosystem services, the benefits people get from ecosystems, free.

In 2005, more than 1,300 scientists from around the world finished a study of the state of the planet’s ecosystems, the Millennium Ecosystem Assessment. They sorted ecosystem services into four kinds:

Kind	What it means	From a forest in Nepal’s hills
provisioning	things we take from it	timber, firewood, fodder for animals, wild fruit and mushrooms, medicinal plants
regulating	keeping things steady	cleaning water, keeping springs flowing, holding soil on slopes, pollinating crops, storing carbon
supporting	the work the others depend on	recycling nutrients, making soil, homes for living things
cultural	what it means to people	sacred groves and temple forests, walks and picnics, beauty, learning

The first kind is easy to see, because you can carry it home in a doko. The others are easy to miss, because they happen quietly: in the soil, in the water, in the flowers. The picture shows several of them on one hillside.

Watch what happens when heavy monsoon rain falls on a forest.

1. The leaves and branches catch the drops first, and break their force. Much of the water drips or trickles down the trunks gently.
2. On the ground is a thick layer of fallen leaves, the leaf litter, and under it dark, crumbly soil full of rotting leaves (humus), roots, worm burrows and the holes left by dead roots. This soaks up water like a sponge.
3. The water seeps down through the soil slowly, over days and weeks. On the way, the soil strains out mud and many germs, and soil microbes break down some of the dirt.
4. Lower down the slope, it comes out as a spring (a mul), or seeps into a stream, clean, and still flowing long after the rain has stopped.

Now picture the same rain on a hillside where the trees have been cut, the leaf litter raked away and the ground trampled hard by cattle. The drops hit bare soil and splash it loose. The hard ground can’t soak up the water fast enough, so it runs off over the surface, carrying mud with it. The stream below turns brown and floods within hours, and a few weeks after the monsoon the spring dries up, because little water went into the ground to feed it.

Scientists have measured this in Nepal’s middle hills, near Dhulikhel. In a natural broad-leaved forest, water soaked into the surface soil more than ten times faster than on a degraded, heavily grazed pasture nearby (typically 232 mm an hour against 18 mm). From these and their rain records, they estimated that over a monsoon about 21 % of the rain ran off the surface of the pasture, but only about 2.5 % of the rain that fell on the forest (Ghimire and others, 2014 and 2016).

Every year, the monsoon tries to wash Nepal’s hills down into the rivers. What stops it is mostly what covers the ground.

To measure how much soil a slope loses, scientists mark out an erosion plot: a strip of hillside with a low wall around it and a gutter at its bottom end. Everything that washes off the plot runs into the gutter and down into a tank. After each storm they measure the water in the tank, dry out the mud, and weigh it.

In 1992 and 1993, two scientists, Rita Gardner and John Gerrard, ran 15 erosion plots in the Likhu Khola valley, north of Kathmandu, through 912 rainstorms (Gardner and Gerrard, 2001). Their results:

What covered the ground	Soil lost in a year (tonnes per hectare)
natural forest, its floor covered	less than 0.1
grassland, not grazed bare	less than 0.1
sal forest, degraded (litter raked, grazed, cut)	3 to 10
bare ground	more than 15

(A hectare is 100 m × 100 m, 10,000 m², about the size of a football pitch and a half.)

Look at the two kinds of forest. Both had trees. The difference was the ground. In the degraded forest, people had raked up the leaf litter, animals had grazed the plants under the trees and trampled the soil, and the rain fell on bare earth between the trunks. Their results show that what covered the ground, the leaf litter and the low plants, protected the soil more than the trees above it. A forest whose floor has been stripped loses soil almost like bare ground.

How bad is losing 10 tonnes of soil from a hectare? It is easier to picture as a depth. Topsoil has a density of about 1.3 tonnes per cubic meter (a cubic meter of it weighs about 1.3 tonnes).

The soil that leaves the hills doesn’t vanish. It goes into the rivers, and some of it ends up where people don’t want it.

About three in four kinds of food crops grown in the world (mustard, buckwheat, apples, cucumbers, pumpkins, coffee, many beans) give more or better food when animals carry pollen between their flowers (IPBES, 2016). Most of those animals are bees, and many are wild bees that nest in forests, hedges and old walls: in hollow trees and stems, in banks of bare soil, in holes in dead wood. Many of them don’t fly far from home, often only a few hundred meters. So a field next to a forest gets more visitors than a field far from one.

A forest with many kinds of plants and animals usually gives more services, and more reliably, than one with only a few. In Grade 8 you met the three kinds of biodiversity: genetic, species and ecosystem Grade 8: Types of biodiversity. Here is why they matter for services.

Think of the bees. If a field is pollinated by only one kind of bee, a disease that kills that bee, or a cold spring when it stays at home, means a poor harvest. If it is visited by twenty kinds, flying at different times, in different weather, to different parts of the flower, losing one kind matters much less. Ecologists call this the insurance that biodiversity gives. In 41 crops around the world, fields visited by more wild insects set more fruit, even where there were plenty of honey bees; an extra visit by a wild insect raised the harvest about twice as much as an extra visit by a honey bee (Garibaldi and others, 2013).

The same goes for the forest itself. A forest of many kinds of trees, with shrubs, herbs and litter under them, covers the ground at every level, and its fallen leaves rot at different speeds, feeding the soil all year. Many kinds of trees also mean that a pest or a disease that kills one kind leaves the rest standing.

Not every forest is like this. In the 1970s and 80s, many bare hillsides in Nepal, in Sindhupalchok and Kabhrepalanchok and around Kathmandu, were planted with pines, which grow fast on poor soil. They brought back tree cover quickly. But on the hills near Dhulikhel, about 15 % of the monsoon rain still ran off the surface under a pine plantation, against 2.5 % under natural forest (Ghimire and others, 2014), and the pines drank more water than either. A young pine plantation of one kind of tree has few other plants under it, its fallen needles rot slowly and catch fire easily, and few kinds of birds and insects live in it. Where the plantations have been protected for decades, broad-leaved trees have been coming back under the pines.

The forest also recycles. A tree takes nutrients from the soil into its leaves; when the leaves fall and rot, fungi, bacteria and small animals return those nutrients to the soil, for the next plants to use (you can follow this further in Where does a fallen leaf go?). On a hill farm in Nepal, the forest’s nutrients go further: leaves cut for fodder, and fallen leaves raked up as bedding for animals, end up as manure on the fields. That is a real service to the farms. But, as you saw, a forest floor raked bare every year loses its soil, and with the leaves, the nutrients the forest itself would have recycled. Taking a little is a service; taking everything wears the forest out.

Ecosystem services have no price tag, so people often treat them as worth nothing. One way to change that is to work out what they would cost to replace, or what they add to someone’s income, as in the New York and coffee stories. Another is to pay people to keep giving the services: payment for ecosystem services.

• In Kulekhani, from about 2006, part of the royalty paid by the hydropower plant went to a district fund for the villages in the hills above the reservoir, to look after the watershed. Studies found that the villages spent much of the money on roads and electricity rather than on the forest: a reminder that a payment has to be tied to what it is paying for.
• In November 2025, Nepal received 9.4 million US dollars from the World Bank’s Forest Carbon Partnership Facility, for cutting about 1.88 million tonnes of carbon dioxide emissions by protecting and restoring forests in the Terai Arc, the lowland forests of central and western Nepal. The money is shared with community forest user groups and Indigenous peoples there.

Here is a real kind of problem, with made-up names. The town of Deurali gets its drinking water from springs below a hillside forest. For years, the forest has been used hard: trees cut for firewood, the litter raked up, goats and cattle grazed under the trees. Now the springs run brown after every storm and dry up by March. The town council has four ideas:

• A. Fence and guard. Make it a strictly protected forest, with a fence and paid guards. No one may cut, graze or collect anything.
• B. Community forest. Hand the forest to a user group of the families who use it. They make the rules: no grazing in the young forest, fodder and firewood cut in turns, litter raked only from some patches each year, and a forest watcher paid from the group’s own fees.
• C. Pine plantation. Plant fast-growing pines on the bare patches and fence them while they are young.
• D. Filter plant. Leave the forest as it is and build a water treatment plant in the town.

This is an engineering design problem: several possible solutions, none perfect, and you have to choose. Engineers compare solutions using criteria, the things a good solution should do well, and constraints, the limits any solution must stay within. For protecting an ecosystem, the criteria and constraints are of three kinds:

• scientific: will it work? Will it clean the water, hold the soil, keep the living things?
• economic: what will it cost, and who pays?
• social: is it fair? Will the people who live there accept it, or break the rules?

A constraint is a must: if the town can spend at most Rs 50 lakh, any idea that costs more is out, however good it is. A criterion is a “the more the better”, and the ideas are compared by how well they meet each one.

One way to compare is a decision matrix. Give each idea a score from 1 (poor) to 5 (very good) on each criterion, with a reason. Then decide how much each criterion matters to you, its weight, multiply each score by its weight, and add up.

Criterion	A. Fence and guard	B. Community forest	C. Pine plantation	D. Filter plant
clean water, springs that keep flowing	5	4	3	2
soil held on the slope	5	4	3	1
kinds of plants and animals kept	4	4	1	1
low cost to the town	2	4	3	1
fair to the families who use the forest	1	4	2	3

The reasons, in short: A protects the forest best, if the guards can keep everyone out, but guards and fences cost money every year, and the families lose their fodder and firewood overnight, which is unfair and often leads to people breaking the rules. B protects a little less, because people still use the forest, but the users pay for it themselves, and they keep it because it is theirs. C covers bare ground fast, but a pine plantation holds few kinds of living things. D cleans the water, but it is costly to build and run, it doesn’t keep the springs flowing in the dry season or hold the soil, and the forest keeps getting worse.

These are one group’s scores. Yours might be different, and that is fine, as long as you can give a reason for each.

However you set the weights, C and D never come first. Look at the table: B scores at least as well as C and D on every criterion. An idea that another equals or beats on every criterion, and beats on at least one, is dominated: no choice of weights can make it the winner, so it can be dropped before anyone argues about weights. That leaves the real choice between A and B, which each win on different criteria: A on water and soil, B on cost and fairness. That is a trade-off, and the weights decide it.

What happened when Nepal tried them

Nepal has tried each of these ideas, at large scale, so we don’t have to rely only on scores.

Fence and guard. Nepal’s first national parks, from the 1970s, were guarded by the army, and kept local people out. They saved the rhinos and tigers of Chitwan, but people living around the parks lost grazing, firewood and thatch grass, and wild animals raided their crops. There was a lot of anger. Since the 1990s, the land around each park has been made a buffer zone, where a share of the park’s income (30 to 50 % of it under the 1996 rules) goes to the local people, for their own projects, and many buffer-zone forests are run as community forests.

Community forest. From the late 1970s, and especially after the Forest Act of 1993, the government handed forests to their users (Nepal’s efforts in Grade 8). As of 2026, more than 22,000 community forest user groups manage about a third of Nepal’s forest, and the forests have come back across the hills. A study of more than 18,000 of them found they reduced forest loss, and poverty a little too (Oldekop and others, 2019). But they are not perfect: in some groups, the better-off families make the rules, and the poorest, who needed the forest most for grazing and firewood, lose out. (Can a forest come back? looks at the evidence in detail.)

Pine plantations brought tree cover back quickly to bare hills in the 1970s and 80s, and many of them are now turning into mixed forests as broad-leaved trees grow up under them.

Engineering instead of forest. Kathmandu does treat its water, as every city must. But a cleaner catchment means less mud to remove, cheaper treatment and longer-lasting reservoirs. Forests and filters work best together, not as rivals.

Real solutions are often combinations: a community forest, with the most important spring area fenced and planted with broad-leaved trees, and a small filter in the town. Designing like this, taking the best parts of several ideas, is what engineers do after they compare.

• Why do animal numbers rise and fall? What happens to a population when its food, water or home changes, and how to read the graphs that show it.
• Why are there so few tigers? A forest can feed thousands of deer but only a few tigers: following energy and matter through who eats whom.
• Can a forest come back? (Going Further, Grades 9–12) How bare land turns back into forest, and the evidence for and against the story of Nepal’s forests coming back.