The appropriateness of opportunity costs as a
basis for forest maintenance compensation is
often questionable. To be valid as opportunity
costs, the alternative land use against which a
project is compared must be a real option if the
project is not implemented. Opportunity costs
are frequently judged by the market value of
the land. However, if land on the scale of, for
example, Amazonian forests, were offered for
sale, the price of land could be expected to fall.
Market limits would also constrain the expansion
of virtually any crop that might be planted
were an attempt made to put into practice the
implied alternative of conversion to agriculture,
including the green revolution high-input crops
that groups claiming compensation for maintaining
forest sometimes use as the indicator of
opportunity cost. In addition, the soil, climate
and other characteristics of tropical forest areas
are often not appropriate for agriculture of this
type. Also, the human population often does
not have the skills and capital needed to implant
the alternative land use assumed in claiming
opportunity costs. For example, an indigenous
tribe would almost never be able to transform
its forest habitat into fields of green revolution
crops. Compensating such a tribe for the
“opportunity costs” of maintaining the forest
on the basis of what the land could produce
under high-input agriculture (as has sometimes