Economic impact assessment of a forest pest invasion in Uruguay - Main challenges and opportunities

No study exists detailing the economic impact of diseases and forest pests in Uruguay, despite the growing importance of the forestry sector in the economy. This research is part of a project to assess the economic impact caused by the introduction of the foliar pathogen Teratosphaeria nubilosa in Uruguay, in order to contribute to the consolidation of the forestry sector from the perspective of economic sustainability. The pathogen was accidentally introduced in 2007 and has caused significant defoliation in young plantations of Eucalyptus globulus. The cost-benefit approach was applied at the economy level since this analysis is used to assess the economic efficiency of decisions affecting the use of scarce resources. The project is ongoing and during the application of the method, several challenges and opportunities were identified. The baseline scenario is defined as the situation before the introduction of the disease. Different scenarios were then defined in terms of: (1) the amount of volume of wood that was lost due to the pest, (2) replacement of E. globulus by other species of eucalyptus. Data were collected from available secondary information and interviews with informants and forestry producers. The use of cost-benefit analysis to study the economic impact of a forest pest for the country represents a first step for such studies. The environmental impact and the estimation of externalities caused by forest pests is to be added in future research. The results would be useful for decision makers to determine whether to allocate resources to prevent the introduction of forest pests.