Lundhede, T., Strange, N., Termansen, M., Jacobsen, J.B., Vedel, S.E. and Thorsen, B.J. 2019, IFRO Reports, No. 284

Setting aside forest land is a cost effective way to preserve biodiversity in Danish forests in the long‐run (Højgård et al, 2016). In May 2016 the Danish Government launched a program to set aside forest land for biodiversity protection (Ministry of Environment and Food of Denmark, Naturpakken, 2016). The selected mechanism was to abolish forestry operations on selected state and privately owned land. In 2018 almost 14,000 hectares of state‐owned forest land were selected under this program. The designated areas were identified with the aim to select high‐biodiversity value areas in the most cost‐effective way. The designation involves a 10 years transition period for deciduous forests and 50 years in case of coniferous forests. During these transition periods economic valuable timber resources can be extracted, but after the transition all harvesting is prohibited.

Private land owners will also be offered the possibility to set aside forest areas for biodiversity conservation purposes. Designations on private land will be based on voluntary commitments. Private land owners will receive compensation for their forgone income. Since 2017 a support grant scheme has been implemented to compensate private forest owners. It is expected, that up to 3,300 hectares of private land will be set aside.

A compensation for setting aside forest is essentially a purchase of harvesting rights from private forest owners. In 2018, Thorsen et al (2018) described how these rights can be offered to the government using a mechanism similar to a reversed auction. The present report builds on this work and thus should be read in conjunction with Thorsen et al (2018). Both reports address the implementation of auction mechanisms, with specific attention to designs and procedures that may enhance efficiency of public procurement for biodiversity protection.

Lundhede, T., Strange, N., Termansen, M., Jacobsen, J.B., Vedel, S.E. and Thorsen, B.J., Using Data Envelopment Analysis on Auction Data for Biodiversity Conservation. IFRO Reports, No. 284. University of Copenhagen, Department of Food and Resource Economics