It is necessary to properly evaluate public functions that forests perform and to refund its contributions to the intermediate and mountainous areas that own and manage forests resources. Focusing on the external economic effects caused by the forests resource management, this paper discusses how to evaluate public functions of forests and institutionalization of the decoupling system.
Firstly, this study suggests that public functions that forests perform should be distinguished into the external economic effects yielded from the natural ecological system and those from the forests resource management.
Secondly, the study proposes that the decoupling system should be designed based both on carbon dioxide absorption effects and on fossil fuel substitution effects. This is because a) it is possible to quantitatively evaluate the external economic effects that the forests resource management would bring about; b) the international emission trade system of carbon dioxide has already been launched; and c) an expected amount of revenue from the decoupling system could be large enough to promote development in the intermediate and mountainous areas.