This paper looks at forests as sources of local environmental services (e.g. nutrient recycling and soil formation). It is through the fall in supply of these services that forest communities bear the external costs that are not included in the price of timber and other forest products. Local environmental services are taken into account in forest management decisions by local communities and form a basis for setting up local forest management systems. In arguing for the establishment of forest communities' property rights over forests, the paper supports the establishment of markets for regional and global environmental services provided by forests.
Economic and Political Weekly 36(30): 2835-2845