“How can we ensure the provision of numerous forest ecosystem services (FES)? This question has become increasingly urgent in light of the ongoing climate and biodiversity crises. The lack of adequate provisions of FES, such as carbon sequestration and biodiversity protection, is often seen as a market failure that requires addressing through various policy instruments, including Payments for Ecosystem Services (PES). However, the applicability of PES is limited, and a comprehensive range of political instruments and governance approaches should be explored to secure FES.

Recent international research projects and publications have examined this question, and their findings are summarized in the attached document. This study investigates key challenges and identifies policy options to address them and ensure the provision of FES. The challenges can be summarized as follows:

-Meeting new market and social demands for FES
-Addressing conflicting goals, improving political integration, and fostering innovation support for FES
-Enhancing information availability about FES and their demand
-Recognizing the diverse nature of forests and the social significance of different FES

The research results from selected European projects, along with available data for Austria, are utilized to illustrate these challenges. As an overview, the figure below shows a more comprehensive compilation of challenges and solutions for the sustainable provision of FES (Hernandez-Morcillo et al., 2020).

Policy options and governance approaches are discussed, considering different mechanisms of action. Based on Winkel et al. (2022), the following strategies are outlined:

Information and monitoring of FES supply and demand
-Political integration
-Financial incentives for FES
-Public participation, cooperation, and social innovation

The results show that Austrian forest enterprises are increasingly opening up new business areas in the various aspects of forest ecosystem services (WÖDL) (Figure below). New areas of innovation can be found, for example, in the fields of bioenergy, non-wood products, recreational services, forest education, or nature conservation, even if not all of these areas are served voluntarily but rather due to growing user pressure (e.g., MTB) or political priorities (nature conservation).

These strategies can complement each other and be combined as they employ different mechanisms and follow distinct action logics. The first strategy emphasizes the importance of information for informed decision-making and fostering innovation. The second strategy focuses on establishing appropriate legal frameworks and coordination. The third strategy promotes financial incentives and their effective application to support FES. Lastly, the fourth strategy emphasizes public participation, partnerships, and dialogue among stakeholders.

You can find the full report here, provided by the Nobel partners Gerhard Weiss and Helga Pülzl in collaboration with Alice Ludvig, Ivana Zivojinovic, Stephanie Linser, and George Winkel, which is funded by the Austrian Federal Ministry of Agriculture, Forestry, Regions, and Water Management.”