Wood-processing industries contribute to economic and social development by producing a variety of wood products, yet limited information exists on their competitiveness and cost structures in Ethiopia. In this study we examined their competitiveness by using diamond model and cost structures of chipboard, plywood, and sawn wood industries using a survey of 29 large and medium firms and detailed cost analysis of three case studies. We used both qualitative and quantitative data to ensure a comprehensive analysis; quantitative data were examined using descriptive statistics including frequencies, means, and percentages to identify measurable patterns and trends, while qualitative data provided contextual depth and insights into the operational and strategic challenges faced by respondents. Findings revealed that limited support from government was a key constraint to competitiveness, while growing demand for wood products had a positive effect. Cost structures varied by industry type: raw materials were the largest expense for chipboard (43%) and plywood (51%) producers, while overhead costs dominated (76%) for the sawn wood (sawmill) respondent from 2019 to 2024. Profitability improved across all products: chipboard margins rose from 6.9% to 7.1%, plywood from 9.6% to 22.8%, and sawn woods from 3.8% to 13.3%. Enhancing the competitiveness of Ethiopia’s wood-processing sector requires addressing industry-specific challenges and costs.
Tag: cost benefit analysis
Economic incentives for reducing wildfire risk: Taking stock of an emerging field
Increased intensity and frequency of extreme wildfires impose significant societal costs worldwide, affecting not only landowners’ properties but also society at large. Private landowner efforts to self-mitigate wildfire risks may become insufficient, as many benefits accrue as positive externalities to society, thus not entering sufficiently into private cost-benefit calculations. Economic incentives may potentially constitute one way to bridge this gap, by strengthening individual, hierarchy, and community rationalities, based on the Cultural Theory. Here, we review both the scientific and grey literature to establish a dataset of economic incentive mechanisms for increasing wildfire risk-reducing actions. We analyse 80 case studies, report their design, any known outcomes and impacts, and classify them according to our theory. Our findings reveal that, while multiple incentive tools indeed exist, publicly financed subsidies and payments for environmental services (PES) are most prominent. We zoom in on the economic assumptions of two selected subsidy and PES-like programmes, featuring similar benefits yet variable cost scenarios over time. On the other hand, private-sector insurance, wildfire bonds, and product-labelling incentive mechanisms, or liability-related disincentives, all remain nascent in their real-world application. We emphasise the importance of spatially targeted action in high-risk areas and highlight that rigorous impact evaluation of incentive mechanisms remains limited. Scaling-out strategies—replicating initiatives at a similar scale—appear overall more encouraging than scaling-up actions beyond the firescaping. Continued experimentation with well-targeted and cost-effective incentives for wildfire risk mitigation thus remains a promising pathway for pursuing the sought-for wildfire paradigm shift.
Understanding adoption risks of peat-adapted agroforestry options in South Sumatra through decision analysis
Peatlands in South Sumatra, Indonesia, covering 24% of the region, are vital for local livelihoods and ecosystem services. Unsustainable cultivation practices threaten their sustainability through irreversible drying of the peat, increased greenhouse gas emissions and fire risks. Agroforestry practices, when adapted to peatlands, may offer multiple socio-economic and environmental benefits. This study evaluated the economic viability of two rice-based and three rubber-based agroforestry systems, designed by World Agroforestry for cultivated peatlands in South Sumatra, comparing them to monoculture baselines. Using decision analysis and probabilistic modelling, including Monte Carlo simulations, we conducted probabilistic cost-benefits analyses, accounting for risks and uncertainties and incorporating expert knowledge. Our model simulated decision outcomes under two scenarios—with and without considering family labour in the costs—to assess the impact of family labour on the outcomes. We identified key uncertainties affecting model outcomes through sensitivity analysis and value of information calculations. Our results showed that rice-based agroforestry systems require substantial establishment costs, mainly for constructing dikes to enable dryland crop cultivation. Despite these upfront costs, the two designed rice-based agroforestry systems offer the potential for higher net returns compared to rice monoculture, especially when family labour costs are excluded from the calculation. All rubber-based agroforestry systems demonstrate higher net returns in the long term compared to rubber monoculture in both family labour scenarios. Narrowing knowledge gaps related to key variables, such as the discount rate, crop yields, crop prices, risk event probabilities and rice yield losses, is important for supporting the decision-making process for rice-based agroforestry systems.
Who pays for and who benefits from improved timber harvesting practices in the tropics?: lessons learned and information gaps
Although reduced-impact logging (RIL) techniques are well known and generally endorsed by tropical foresters, rates of adoption of RIL by loggers have been less than encouraging. The principal impediment to proper planning of logging operations, training and supervision of forest workers, and the other components of RIL is apparently the belief on the part of loggers that these improvements are costly to implement. Although there are reasons to doubt that many forest managers and forest operators are fully aware of the costs of each component of their timber harvesting operations, it cannot be disputed that there are additional costs of implementing some aspects of RIL for some forest stakeholders over some time periods. It should therefore be useful to all parties concerned to disaggregate RIL into its components and to analyse the costs and benefits of each from different perspectives. For example, if timber harvesting companies only obtain a portion of the benefits of RIL, then from their perspective it may not be appropriate to pay all of the supplementary costs associated with implementing RIL practices. To explore this issue in detail, this paper analyses four components of improved timber harvesting practices (stock and topographic mapping, directional felling, road planning and construction, and skid trail and road closure) on the basis of who pays the costs of implementation and who derives the benefits over both short and long terms. It is hoped that the information generated will assist in efforts at identifying which improved timber harvesting practices may require incentives and which can reasonably be considered the intrinsic responsibility of the timber harvesting company or contractor.
Synergizing Carbon Sequestration and Livelihood Improvement: Lessons from community-based crab silvofishery business model in South Sumatra, Indonesia
Action for climate change mitigation and livelihood improvement must be synergized to ensure its sustainability. A community-based mangrove restoration activity has been piloted in Marga Sungsang Village, Banyuasin regency, South Sumatra, Indonesia since late 2023 and adopted a crab silvofishery as a business model. In the last three decades, mangroves in the village have been degraded mainly due to agricultural expansion, and it often occurs in the frontier of the protected forest area. This paper aims to analyze the potential benefit of the mangrove crab silvofishery model for livelihood an ecosystem. The study was using the Business Model Canvas and Five Livelihood Capital as framework for business model development. According to cost-benefit analysis to the pilot action arena, the NPV for the model is USD 5,080/ha with investment support and USD 2,241/ha without investment, for 4 years period of business. The results shows that the model is profitable and has potential to provide additional income for the community compared to depend on carbon business model that provide negative NPV. Silvofishery contributes to ecosystem rehabilitation and climate change mitigation efforts through monitored and maintained mangrove planting, as well as to avoid disturbance to the protected areas through active roles and presence of community in the frontier. Institutional development and capacity building, including in business literacy, are identified as a key success factor for community-based intervention besides the technical assistance. This local evidence provides a global narrative for combating climate change and livelihood improvement.
From Tree Fellers to Planters: A Systematic Review of Forest Restoration Initiatives Involving Local Populations in Central Africa
Forest restoration is a key strategy in tropical regions for mitigating global warming and improving local livelihoods, yet despite significant international donor investments, its effectiveness in Central Africa remains poorly documented. This study systematically reviewed forest restoration initiatives involving local communities, analyzing 64 publications covering 26 projects, most of which applied agroforestry techniques and relied on exotic species. These efforts were predominantly implemented in the Democratic Republic of Congo (12 initiatives), Cameroon (11), Cameroon & Gabon (1), Rwanda (1), and the Central African Republic (1). Findings reveal that most restoration projects followed pre-established technical approaches without sufficient engagement with local communities, lacked monitoring and data-sharing mechanisms, and rarely incorporated prior consent, land arrangements, or benefit-sharing components. To enhance sustainability, this study recommends fostering genuine partnerships with local people, even if it requires adjusting project objectives, and establishing robust monitoring systems to improve future restoration initiatives. These insights are crucial for guiding donors and policymakers toward more effective, community-centered approaches that ensure long-term success in forest restoration efforts across Central Africa.
Analysis of trade-offs between local, regional and global benefits of land use
In the series of lecture notes so far (Figure 1), we have defined problems of tropical land use that involve forest conversion (#1) and set up a scheme to evaluate categories of land use (#2) on the basis of a range of criteria derived from local (Profitability #8,Sustainability #3), regional (Watershed functions #7) and global (C stocks #4, Biodiversity #5, #6) benefits.
Designing energy-efficient, economically sustainable and environmentally safe cropping system for the rainfed maize–fallow land of the Eastern Himalayas
Achieving a circular economic model in agriculture and meeting the food requirement of the growing population is a global challenge. The task is much more daunting in the Eastern Himalaya where low productive maize–fallow is a predominant production system. To enhance system productivity and energy use efficiency while maintaining environmental sustainability and economic profitability, therefore, energy-efficient, low carbon footprint (CF; CO2-e) and profitable short duration crops must be made an integral part of the maize fallow system. Thus, six cropping systems viz., maize–fallow, maize–French bean, maize–soybean, maize–black gram, maize–green gram, and maize–toria were evaluated for seven consecutive years (2011–2018) to assess their energy requirement and efficiency, carbon footprint (CF; CO2-e), economic returns and eco-efficiency. The results revealed that the maize–French bean system had the highest system productivity (11.4 Mg ha−1), energy productivity (17.9), energy profitability (15.9) and non-renewable energy use efficiency (9.97). The maize–French bean system had also the highest net profit (US$ 3764.5 ha−1) and benefit to cost ratio (2.54). The energy consumed under different inputs/activities across the cropping systems for chemical fertilizers, diesel and machinery ranged from 50.0–62.7%, 17.3–20.8% and 4.6–15.4%, respectively. The maize–fallow system had the highest CF (0.34 kg CO2 e per kg grain) while, the maize–French bean system had the lowest CF (0.19 kg CO2 e per kg grain). The maize–French bean system had also considerably increased eco-efficiency both in terms of energy use (US$ 0.23 MJ−1) and (US$ 1.78 per kg CO2 e) over maize–fallow system. Thus, the study has suggested that maize–French bean system is energy-efficient, economically viable and environmentally safer systems to utilize maize fallow and improve food security, may help in achieving green/circular economy.
No-till and mulching enhance energy use efficiency and reduce carbon footprint of a direct-seeded upland rice production system
Sustainability of conventional agricultural production systems is threatened by triple challenges of energy and environmental crises, deteriorating natural resources bases, and declining farm profitability. Current agricultural management practices (energy-intensive, inefficient external and natural input use, and crop biomass burning) are negatively impacting the ecosystem services which are the principal drivers for food security and human survival. Hence, there is a need to shift from unsustainable production practices to cleaner production systems. Energy use, carbon footprint (CF), and economic sustainability are important indicators of any clean production systems. Thus, a hypothesis was formulated that no-till (NT) cultivation along with mulching can provide an environmentally clean crop production practice that can enhance energy use efficiency, economic profitability, and reduce the CF. Therefore, the present experiment was conducted for four consecutive years (2012–15) to evaluate the energy budget, CF, and economics of NT along with bio-mulching for a cleaner upland rice production system. The experiment comprised of two tillage practices i.e., conventional tillage (CT) and NT in main plots and four bio- mulches in subplots i.e., rice straw mulch (RSM), Gliricidia sepium mulch (GLM), brown manuring mulch (BMM) of cowpea (Vigna unguiculata), and no mulch (NM) as a control. Results revealed that the adoption of NT curtailed energy use by 48.50%, specific energy by 49.63%, CF by 16.48%, and cost of cultivation by 35% in addition to enhancing energy use efficiency and benefit to cost ratio in comparison to CT. It was also observed that mulching, particularly the BMM, boosted the energy use efficiency, economic productivity, net returns, and benefit to cost ratio over NM. The results suggested that NT with BMM is an environmentally clean production technology to enhance the energy use efficiency, besides reducing the CF of direct-seeded upland rice production system in the Eastern Himalayas and similar eco-regions of the world.