Labeling wood.

How timber certification may reduce deforestation.

A series of landmark developments, including satellite photography revealing massive burning of the Amazon and scientific findings confirming a link between deforestation and climate change, has greatly heightened public awareness about the loss of tropical forests in the past decade. The loss now amounts to more than 14 million hectares of tropical forest - equivalent to the entire state of Florida - every year.

As a result, the international tropical timber trade has become a target of public campaigns to curb deforestation, the argument being that consumers can "save" the rainforest if they refuse to buy tropical timber products. In the United Kingdom, for example, more than 30 local authorities have ceased use of tropical hardwoods. Since 1992, approximately 200 city councils in Germany and 51 percent of Dutch municipalities have banned use of tropical timber. And in the United States, a growing number of cities and states (including New York, California, Arizona, and Minneapolis) have banned or are considering prohibiting the use of tropical timber in public construction projects.

Applied indiscriminately to tropical timber, however, such prohibitions could boomerang by making forestry less competitive with agriculture, which causes far more deforestation than cutting trees for timber does. Prohibitions may also undermine the few incentives that fledgling forestry projects have to promote sustainable management. Many such promising projects would quickly wither away without demand and capital from the North. Bans also face an uphill battle to the extent that they conflict with international rules of free trade.

Given these drawbacks, there is a growing movement to use the market to promote tropical timber produced from sustainable sources, through labeling of wood products, rather than ban all tropical timber indiscriminately. The intent is to assure consumers that the wood products they purchase originate from well-managed forests, thereby helping to develop a market for these products, and ultimately to provide sufficient incentives for producers to adopt sustainable forest management practices. The organizations that have undertaken to provide independent certification ("third-party" certifiers) operate on the principle that good forest stewardship must mean more than sustained timber supply; it also means maintaining the health and integrity of the forest ecosystem, and ensuring that all pertinent stakeholders share in the benefits. Stakeholders include both people and wildlife that live in the forest, indigenous cultures that have traditional land use rights, and landowners and loggers that have legitimate economic needs. Most certifiers strive to achieve this balance by requiring adherence to a long term management plan, minimum-impact harvesting methods, efficient utilization of all forest products including non-timber forest products, and third-party audits.

All third-party certifiers also trace and track products throughout the "chain of custody" to ensure that the product originally evaluated and certified has been used at each step in processing, manufacturing, and distribution.

The effect of certification on tropical deforestation has been questioned, however, on the grounds that logging constitutes only a small portion of deforestation in the tropics. According to the United Nations Food and Agriculture Organization (FAO), an estimated 90 percent of all deforestation is done for agricultural purposes, with only 10 percent owing to logging.

Detractors also argue that only 14 percent (about 240 million cubic meters) of the tropical trees cut each year is used for industrial "roundwood" (the logs that get cut into boards for construction or wood products) while the remaining 86 percent (or nearly one-and-a-half billion cubic meters) is used for fuelwood and charcoal. Finally, of the wood harvested, only 28 percent enters international trade in the form of logs, sawnwood, or wood-based panels - the kinds of products to which eco-labeling might apply. Combined, these numbers suggest that international trade accounts for less than 1 percent of tropical deforestation.

This conclusion, however, is misleading - and too quick. It sweeps over what happens in particular countries, and overlooks the role of logging in opening up previously intact forests for other causes of deforestation. In Southeast Asia's dipterocarp forests, for example, logging operations generally penetrate previously inaccessible primary forest, and loggers may remove up to 40 percent of the standing timber volume and leave between 15 and 40 percent of the ground with no forest cover.

Moreover, logging opens large areas of primary forest to penetration and clearing for other uses - including the massively destructive uses of agriculture and cattle ranching. This is true even in South America, where timber volumes are much lower. According to the FAO, deforestation rates are eight times higher in logged over areas than in non-logged areas.

Blanket claims that commercial logging exacts only a small toll on tropical forests may also be based on a misinterpretation of data, as much as what really happens on the ground. The FAO statistics are based on the presumption that deforestation means the complete removal of tree cover. Since most logging in the tropics involves selective cutting that leaves a ragged residual cover, a logged-over area may not be counted as a deforested area. Yet, many such areas are undoubtedly deforested in an ecological sense. Careless logging can destroy or fatally injure residual trees and lead to further forest loss. In Brazil's eastern Amazon, for example, in efforts to extract a mere 2 percent of the trees, over 26 percent of all remaining trees greater than 10 centimeters (four inches) in diameter were destroyed or seriously damaged. In Malaysia, to remove only 3 percent of the trees in a selective harvest of dipterocarps, 48 percent of the remaining trees were destroyed. And the damage continues after the loggers have left, as the remaining trees are more likely to fall in a violent storm than are the trees in an unlogged forest.

Logged-over forests, where leaf litter and woody debris dry out, are also more vulnerable to forest fires. The 1982-83 fire in East Kalimantan, for example, burned 3.5 million hectares of logged-over forest, and spread to an additional 800,000 hectares of unlogged forest.

Statistics can also be misleading in reflecting the portion of logging used for timber, as opposed to the portion either wasted or used for other purposes. To begin with, the figures for timber production represent only that portion of "stemwood" (the tree's trunk) that is actually used, and do not include roughly half of the wood mass of each tree felled that is left behind in the forest to rot. They also do not include wood produced as a by-product of road building, or wood that is cut but not removed from the forest because it has been damaged or because it turns out to be too costly to haul out. In fact, the actual amount of felled timber is much greater than documented.

Then, these figures fail to take into account differences in the relative contribution of industrial production and fuelwood extraction within the tropics. The demand for fuelwood is a problem that afflicts primarily the dry tropics. In Mali and Burkino Faso, for example, fuelwood extraction accounts for about 95 percent of all tree cutting. In the moist tropics, however, cutting of fuelwood is only a serious threat in the immediate vicinity of large cities, and cutting for furniture or veneer is a much bigger threat. In Gabon, for example, the share of wood going to timber is 32 percent; in Congo, it is 36 percent; and in Malaysia, it is a devastating 82 percent.

Furthermore, there are some tropical countries that rely heavily on tropical timber exports, where there can be little doubt that international trade has played an important role in fueling deforestation. In Malaysia, for example, where 15 million hectares (almost 50 percent) of original forests have already been lost, exports in the form of logs, sawnwood, and wood-based panels in 1992 accounted for 45 percent of all timber production.

Finally, and perhaps most significantly, in questioning the potential value of forest products certification by claiming that the timber industry's role in tropical deforestation is small, the critics of certification have ignored the very different situation prevailing in the world's great temperate and boreal forests, in which 75 percent of all logging - some 1.4 billion cubic meters per year - is for production of industrial roundwood. Only 25 percent is used for fuelwood and charcoal production. These forests account for 89 percent of the total global trade in forest products, including 83 percent of the total volume of industrial roundwood. According to a World Wildlife Fund publication the timber trade is undoubtedly the primary cause of forest loss in temperate and boreal countries still possessing substantial old-growth forests. So, demanding that products from such forests be certified is likely to have a significant overall impact in these regions.

Since the US-based Rainforest Alliance's "Smart Wood" Program (the first and largest forestry certification program) certified its first "well-managed" forest in 1990, certification efforts have skyrocketed. By the spring of 1996, nearly 2.4 million hectares of natural forest, an area approximately the size of Belize, had been certified by four third-party certifying organizations. And reflecting the role of temperate forests in international trade, 88 percent of the certified area consists of forests located in the United States, United Kingdom, and Poland. A quick perusal of the world suggests how much unmet potential exists for extending reliable certification into the boreal forests of Russia and Canada.

In addition to third-party certification, national certification initiatives have been proliferating. The Brazilian forestry sector has been developing a methodology to define the origin of raw materials used by the forest industry, which has resulted in what is called a "Certificate of Origin of Forest Raw Material" (CERFLOR). In Indonesia, Lambaga Ekolabel Indonesia (LEI) was formed in 1993 to develop a certification and labeling scheme for Indonesian forest products.

The explosion of certification initiatives can easily lead to confusion in the marketplace over the credibility of certain labels. Conflicts have already arisen as some less scrupulous timber sources establish self-certification schemes that amount to little more than a greenwashing of unsustainable practices. Claims of "sustained yield," "produced from farmed plantations," "we have never used tropical rainforest trees," or "one tree is planted for each one felled," even if true, do not provide assurance of environmental sustainability.

The establishment of the Forest Stewardship Council (FSC) should reduce some of the confusion in the market place created by the abundance of claims. The FSC was established in 1993 to set global standards whereby those organizations certifying the sustainability of a productive forest could themselves be accredited. The FSC was created through a consultative process involving environmentalists, representatives of local peoples, and industry. It has developed and registered an accreditation mark which will soon appear alone or alongside the logos of its accredited certifiers [ILLUSTRATION OMITTED].

To date, the FSC has accredited four third-party certifiers: the Rainforest Alliance Smart Wood Program and Scientific Certification Systems Forest Conservation Program (see illustration), the SGS Forestry Qualifor Programme, and the Soil Association Responsible Forestry Programme. It is working in close cooperation with national governments (such as Switzerland) to accredit their certification schemes.

Other initiatives are simultaneously underway. The International Standards Organization (ISO), a non-profit, industry-supported federation, has supported the development of "environmental management systems" (EMS) guidelines. These EMS standards, known as the 14000 series and scheduled for implementation in 1997, are being developed under the leadership of the Canadian Standards Association.

The ISO 14000 series, in contrast to the FSC's approach which seeks to ascertain whether forests themselves are maintained in a sustainable manner, assesses only a company's internal management processes. The limitations of ISO 14000 certification are that it requires only the existence of environmental management systems, it does not require any specific levels of environmental performance, and it does not guarantee that firms have actually complied with environmental regulations.

The effect that certification will have on changing forest management practices in the near term remains unclear. Today, demand for certified wood currently exceeds the supply in the United States and United Kingdom. The volume of certified timber or industrial roundwood, including sawlogs, veneer logs, and pulpwood (about 1.5 million cubic meters) is less than 0.1 percent of total production of industrial roundwood (about 1.7 billion cubic meters). Thus, consumer action alone - demanding that all wood purchases come from certified sources - is presently unlikely to slow the current rates of deforestation. A greater number of timber producers will need to recognize the potential economic gain associated with certification. This could be accomplished by two mechanisms: forest products from sustainably managed sources could attract a "green premium"; and producers could avoid the loss of market access where certification is required, or could gain market share where consumer awareness is high.

Can timber sales attract a "green premium" - whereby certified timber is sold at a higher price than uncertified timber? Credible surveys say it can. A 1992 Gallup survey of citizens in 24 nations found that 63 percent of citizens in high income nations, 55 percent in middle income nations, and 45 percent in low income nations would be willing to pay higher prices to protect the environment. According to a Purdue University Study conducted in 1992, 68 percent of US households earning $50,000 per year said that they "would be willing to pay more for furniture whose construction materials originated from a sustainably well managed North American forest."

Whether this willingness materializes into actual purchasing decisions remains to be seen. According to Mark Eisen, Manager of Environmental Marketing for the North American retail chain Home Depot, the actual purchasing behavior of consumers at his stores is currently based more on "price-quality" relationships than on environmental considerations. Only when all other criteria are relatively equal will the "greenness" of a product make a difference. If a price premium cannot be expected for sustainable production, the costs (of inspection, external monitoring, chain of custody verification, and foregone export earnings) associated with certification may put certified suppliers at a short-term disadvantage compared to their non-certified competitors.

Nevertheless, long term benefits will accrue as consumer awareness increases and certified producers gain market share in countries developing either laws or voluntary initiatives to exclude non-certified timber. Austria, for example, attempted in 1992 to regulate imports of tropical timber through mandatory labeling of tropical timber products, along with a voluntary "quality mark" for timber from sustainably managed tropical forests. After protests from Malaysia and Indonesia over "legality" under the General Agreement on Tariffs and Trade (GATT), the legislation was amended in 1993 so that labeling would be introduced on a voluntary basis to mark timber from all types of forests.

The "UK 1995 Plus Group," a partnership between the World Wide Fund for Nature-UK and 54 companies in the United Kingdom (including many retailers), has pledged to purchase and sell only certified wood and wood products by December 31, 1999. The group as a whole accounts for 10 percent of the 20 million cubic meters of wood (including roundwood, sawnwood, wood based panels, pulp, paper, and paperboard) imported into the UK (a value of over U.S. $2 billion per year). A similar "North American Buyers Group for Certified Timber" is still being designed by the new York-based Environmental Advantage.

Finally, the International Tropical Timber Organization (ITTO), a commodity organization of the United Nations with 42 industrial and tropical timber-producing member countries, set the year 2000 as a goal beyond which only sustainably produced wood products would be used in international tropical timber trade.

The financial impact is likely to be greatest when consumer demand is high. Retailers are themselves beginning to raise consumer awareness in the United States and Europe. Home Depot, with 340 stores and $15.5 billion in sales, of which 10 percent is comprised of wood and wood products, accounts for 13 percent of the North American retail home building industry. Since 1991, Home Depot has required that its more than 5,000 vendors have their environmental claims for products or packages evaluated by Scientific Certification Systems - one of the FSC's four accredited labels. Of the several hundred products evaluated, approximately 25 are now certified. Colonial Craft, for example, a well-known manufacturer of hardwood moldings, door and window grilles, and picture frames, is aiming to make 50 percent of its total production certified in the next three years, and 100 percent within five years.

Rainforest Alliance has been coneentrating on high visibility products to further raise consumer awareness. Gibson guitars, for example, recently produced its first production-line guitar made entirely of Smart Wood.

Combined, these efforts could be both the carrot and the stick for adoption of sustainable forest management. Right now, their effectiveness may be greatest in temperate and boreal forests - the source of the majority of forest products sold in markets in the European Union and United States. Their effectiveness in the tropics will be most pronounced in those countries - mostly in Africa - that have a large share of their exports destined for Europe and the United States. Congo and Gabon, for example, export 88 percent and 69 percent of their tropical timber, respectively, to the European Union.

For countries like Malaysia, which export most of their timber to Asia or Japan, US and European demand for certified products is likely to be ineffective. In fact, the United States and Europe import only 7.5 percent and 20.1 percent, respectively, of all tropical wood. Over half of all tropical timber products are imported by Japan, South Korea, China, and Singapore. Japan alone imports over 28 percent of the world's tropical timber. And, by far, the largest share (85 percent) of tropical timber is consumed by domestic markets where so far little or no consumer demand for certified timber exists. In those countries - and in most of the world, perhaps - the first need is to increase public awareness of what is at stake in the consumption of wood, beyond its immediate cost to the purchaser.

Cheri Sugal is a staff researcher at the Worldwatch Institute.