We use the total economic value (TEV) concept and various valuation approaches such as cost-based valuation, various types of benefit transfers, and market price. TEV includes direct use, option, indirect use and non-use value categories. The study reveals that TEV is $683.4 million for 2013, which is 0.5 percent of the value added of the region in the same year. General costs and negative externalities associated with the forests amount to $17.1 million, and the resulting net TEV is $666.3 million. The largest portion of the TEV is the indirect use value coming from ecosystem services, including water supply, carbon sequestration and soil erosion control, which amount to $341.4 million. Conventional national accounting either does not take into account these values or only partially includes them in the value-added of other sectors. The second largest component of the TEV, by 46.3 percent, is the direct-use value amounting to $316.6 million and encompassing timber, firewood, NWFP-plants, honey, recreation, fodder for grazing, and hunting. The remaining value types are optional and non-use values which account for 0.9 percent and 2.8 percent of the TEV.
The study unearths that only $ 86.4 million of the direct use value of TEV is accounted for under the forestry sector, and that the economic value of various forest products and services, which is normally unaccounted for or accounted implicitly in non-forest sectors, is seven times that of the forest sector's contribution. This significant under-estimation of the economic value of the forest sector may mislead national and regional policy making related to the sector development. Indeed, for any country following a traditional national accounting system, scaling up forest valuation and accounting efforts will provide important data for natural capital accounting.