A new study reveals significant gaps in how investments are allocated in the governance of Norwegian forests. Several essential forest ecosystem services remain underfunded or neglected.

Economic instruments like subsidies and tax reliefs are widely used to promote forest ecosystem services. However, such instruments typically target services traded in markets, such as timber and hunting licenses. Non-market services like habitat provision and climate regulation are declining worldwide.

With Norway as a case, researchers have mapped economic instruments used in Norwegian forest governance and examined how they promote or constrain forests' capacity to provide different ecosystem services (see facts below).

Data was collected from a review of policy documents and fiscal budgets, compared with data on trends and condition of ecosystem services from Norwegian forests.

Facts: Ecosystem Services - The Benefits of Nature
Forests play a vital role in supporting people and societies by delivering a wide range of ecosystem services—the benefits we receive from nature:
Provisioning services are the tangible goods forests supply, such as timber, food, and clean water.
Regulating services act as nature’s life-support systems, including carbon storage, water purification, soil formation and nutrient cycling.
Supporting services are the fundamental processes that make life possible, such as habitat provision for species.
Cultural services represent the non-material benefits of nature—recreation, a sense of place, and spiritual or cultural values that enrich human life.
Together, these services illustrate how forests are not just sources of raw materials, but also the foundation of human well-being, biodiversity, and resilience in the face of environmental change. When ecosystems are degraded, these services decline, compromising society’s life support systems.

Focus on Marketable Goods

The study reveals that ecosystem services traded in markets attract the majority of investments in Norwegian forests, with timber alone generating almost 600 million euros annually. Hunting licenses contribute an additional 70 million euros per year, while government funding and tax relief schemes that promote timber production amount to an additional 38 million euros per year.

“In contrast, ecosystem services that are harder to quantify and that do typically not enter market exchanges receive a fraction of investments compared to timber”, says Elisabeth Veivåg Helseth, head author and researcher at The Norwegian Institute for Nature Research (NINA).

An exception is the government expenditure to promote habitat protection through ‘voluntary forest conservation’, amounting to 43 million euros per year.

A Call for a More Balanced Approach

The continuous promotion of timber production, both through markets and public spending, constrains forests' capacity to supply several regulating, cultural, and supporting services. For example, industrial forestry practices are often associated with clear-felling and infrastructure development, which negatively affect the long-term capacity of forests to provide essential services like nutrient cycling, regulation of extreme events, and habitat.

The study also found no economic instruments directly targeting cultural ecosystem services aimed at revitalizing local, cultural relationships between people and forests.

This disparity suggests that Norwegian forest governance remains heavily focused on provisioning ecosystem services, with limited investment in cultural, regulating, and supporting services.

“To achieve a sustainable and balanced forest governance model in Norway, we recommend reallocating funds from overemphasized provisioning services like timber production towards those ecosystem services that are in decline”, says Helseth.

Sustainability Transformation in Future Forest Governance

By viewing Norwegian forest governance through the four sustainability pathways developed by IPBES (see facts below), the study discusses the relationship between forest investments and overall societal goals and values.

Results indicate that economic instruments applied in Norwegian forest governance primarily align with a green economy pathway, increasing timber production and carbon sequestration to promote an envisioned ‘bioeconomy’.

Although the ‘voluntary forest conservation’ scheme align with a nature protection pathway by enhancing habitat for biodiversity, few of the assessed economic instruments align with policy measures associated with either a degrowth pathway (such as reducing production and consumption) or an earth stewardship pathway (such as promoting traditional knowledge and human-forest relationships).

“Based on our study, we underline that a true sustainability transformation will require more than shifting financial investments. It calls for policies that recognize the full range of forest values, biodiversity, cultural values, and the regulation of ecosystem function, ensuring that future governance goes beyond timber to reflect society’s broader goals”, Helseth concludes.

Facts: IPBES’ Sustainability Pathways
In the IPBES Values Assessment (2022), four diverging sustainability pathways were presented. They illustrate different understandings of how societies can live well while safeguarding nature:
1. Green economy / Green growth
Focuses on continued economic growth, but with a shift toward renewable energy, green technology, and more sustainable industries.
2. Degrowth
Challenges the idea that endless growth is sustainable. Emphasizes reducing consumption and production, especially in wealthy countries, to stay within planetary boundaries
3. Nature Protection
Prioritizes strict conservation of biodiversity and large areas of nature. Calls for expanding protected areas, reducing human impacts, and leaving more space for ecosystems to thrive.
4. Earth Stewardship
Emphasizes repairing and strengthening the relationship between humans and nature. Focuses on local stewardship, traditional knowledge, and community rights.