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IUFRO The Advocate for Forest Science.
The Unit concentrates on the economic and accounting aspects of management of different types of forest enterprises, specifically small-scale enterprises. The group deals with the economic analyses of forest enterprises, principles and techniques of accounting relevant to forest enterprises, fundaments of decision-making, and the economic and accounting tools for planning, supervising, measuring, controlling, and evaluating the status and performance of forest enterprises.
The Unit includes two subunits dealing with various aspects of managerial economics and accounting:
The main objective of this Unit is to promote the international cooperation in forestry research related to managerial economics and managerial, social, and environmental accounting. This is to be achieved by encouraging the exchange of ideas and the establishment of contacts and collaboration between researchers worldwide, and by promoting the circulation and application of research results.
In the present era of environmentalism, the economic and accounting aspects of forest enterprises have become much more challenging and complex than in the past. The three critical dimensions of these aspects are: (i) multifunctionality of forests; (ii) evolving social, economic, and environmental context; and (iii) uncertainty and risks associated with natural phenomenon.
A major challenge to the researchers of this group is to develop new economic theories and analytical (economic and accounting) tools to analyze multiple functions, in an integrated manner, of forests, such as the production of non wood forest products and services, the preservation of soils, the maintenance of biogeochemical cycles (carbon, nutrients, water), the conservation of biodiversity and the support of social activities. The increased importance of multifunctionality of forests is an outcome of changing social, economic, and environmental preferences in which non-timber and ecological services are rated higher than wood products. The social, economic, and environmental context, in which forest enterprises have to perform, is changing at a rate never encountered before, and therefore, managerial economics and accounting of forestry enterprises have to be responsive to this evolutionary nature of the context. This research group will move the frontiers of managerial economics and accounting in this direction. The third dimension arises from the precedent. Actually, the changes in progress create a form of instability which generates disturbances in the functioning of the ecosystems as in the operation of the social systems. It becomes very difficult to predict the future and considerable decisions must be taken under uncertainty. Globally, because of the uncertainty of future (social, economic, and environmental) context, more flexibility is useful in forest planning and decision-making. This means that non-reversibility of decisions and dynamic nature of long-term objectives of forest management will have to be taken into account. Additionally, forests will always be in transition between situations and any steady state will not be relevant any more. Hence, managerial economics and accounting has to move from the principle of stable equilibrium (steady-state) to the principle of dynamic equilibrium and possibilities of multiple equilibria.
These three dimensions result into various consequences for forest management and forest enterprises. First, some of the non-wood forest products and ecological functions have economic features of public or common goods, and forest enterprises, who provide these goods through forest management, will have to be compensated through non-market mechanisms. Public policies have thus to reconcile social and private objectives. Second, as a consequence of these new ways of management decisions, based on public policies together with private strategies, new planning, analytical, evaluation, and monitoring approaches will be necessary. Third, due to close interactions between social, economic, and environmental context, natural sciences have to be integrated with social sciences. The Unit is contributing to the State of Knowledge on many of these aspects. Some of the Unit’s contributions are available under Publications and References.
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