Financial Crisis Puts Pressure on World's Forests

Financial Crisis Puts Pressure on World's Forests: UN

ROME, Italy, March 17, 2009 (ENS) - The global economic turmoil has resulted in reduced demand for wood, shrinking investments in forest industries and forest management, finds the United Nations "State of the World's Forests" report released Monday.

Stronger forest management and greater investments in science and technology are needed to handle the dual challenges posed by the financial crisis and climate change, advises the report, which is issued by the UN Food and Agriculture Organization once every two years.

"Adapting forestry institutions to rapid changes in the larger environment is a major challenge," says Jan Heino, assistant director-general of FAO's Forestry Department.

The report expresses concern that the economic downturn could lead governments to water down ambitious green targets or defer key policy decisions related to climate change mitigation and adaptation as they focus on bringing in funds.

Old-growth forest in Finland being clearcut by governmental Metsähallitus for Finnish pulp and paper producer Stora Enso. January 2009. (Photo courtesy Greenpeace Finland)

Initiatives for reducing emissions from deforestation and forest degradation that are dependent on international financial transfers could also face problems.

"Of particular importance is the need to re-invent public sector forestry agencies that have been slow in adapting to changing customer needs," Heino said.

The report warns that contraction of formal economic sectors can open opportunities for expansion of the informal sector and could lead to more illegal logging.

"The most dramatic change will be the rapid increase in the use of wood as a source of energy, particularly in Europe, as a result of policies promoting greater use of renewable energy," the report states.

But there are also opportunities arising from the current crisis.

Increased attention on "green development" could provide a new direction to the development of the forest sector. Planting trees, increased investments in sustainable forest management, and active promotion of wood in green building practices and renewable energy will all become integral parts of "green development," notes the report.

A separate FAO report last week found that 10 million new green jobs can be created by investing in sustainable forest management. "As more jobs are lost due to the current economic downturn, sustainable forest management could become a means of creating millions of green jobs, thus helping to reduce poverty and improve the environment," said Heino.

"Since forests and trees are vital storehouses of carbon, such an investment could also make a major contribution to climate change mitigation and adaptation efforts," said Heino.

Forest resources in Europe are expected to continue their expansion in view of declining land dependence, increasing income, concern for protection of the environment and well developed policy and institutional frameworks.

Europe accounts for about 17 percent of global land area but has one-quarter of the world's forest resources, some one billion hectares, of which 81 percent is in the Russian Federation.

An illegal timber holding site in the Brazilian state of Rondonia. (Photo by Joelle Hernandez)

The Latin American region lost almost 64 million hectares, or seven percent, of its forest area between 1990 and 2005, the report shows, based on statistics from the Global Forest Resources Assessment 2005. The region accounted for more than one-third of annual global forest area loss from 2000 to 2005.

All South American countries registered a net forest loss between 2000 and 2005 except Chile and Uruguay, which had positive trends because of large-scale industrial plantation programs.

The pace of deforestation in Latin America is unlikely to decline in the near future, despite low population density, the report projects. High food and fuel prices will mean continued forest clearance for production of livestock and agricultural crops for food, feed and biofuel.

Although Africa holds only 16 percent of the global forest area, from 2000 to 2005 it lost about four million hectares of forests annually, close to one-third of the area deforested globally. Most forest loss is taking place in countries with a relatively large forest area.

The new report projects that forest loss in Africa is likely to continue at current rate. Rising prices and growing demand food and energy will worsen the situation, especially as increased investments in infrastructure open up new forested areas.

Increasing frequency of droughts, declining water supplies and floods strain coping mechanisms at the local and national levels and undermine efforts to manage African forests sustainably.

In Asia and the Pacific, home to more than half of the world's population with some of the most densely populated countries in the world, demand for wood and wood products is expected to continue to increase in line with the growth in population and income.

Asia and the Pacific had 734 million hectares of forest in 2005, about three million hectares more than in 2000. But the report shows that this increase was largely a result of the high afforestation rate in China, masking significant loss of natural forests in a number of countries.

While the region is a leader in planted forests, Asia and the Pacific will continue to depend on wood from other regions, as land and water constraints will limit the scope for self-sufficiency in wood and wood products.

Mountain pine beetle infestation near Prince George, British Columbia (Photo by Lorraine Maclauchlan, B.C. Ministry of Forests)

The near future of forestry in North America will depend on how quickly the region reverses the recent economic downturn and its impact on the demand for wood and wood products, especially in the United States, notes the report. The forest sector will need to address challenges of climate change, including increasing frequency and severity of forest fires and damage by invasive pest species.

Forest cover in the region is stable. North America accounted for two percent of annual global deforestation from 2000 to 2005, although the rate of loss has been decreasing. Most of the loss was in Mexico, attributed mainly to agricultural expansion and unsustainable logging, while the United States reported a small net gain in forest area for the period.

But the report warns that climate change is threatening forest health. The intensity and frequency of forest fires have increased in both Canada and the United States, fueled by prolonged drought attributed to climate change and successful fire control programs that have inadvertently increased the amount of combustible material.

Climate change is worsening pest infestations. Spreading through western Canada, the mountain pine beetle is expected to kill up to 80 percent of all pine stands in the province of British Columbia. More than 530 million cubic metres of timber had been lost in British Columbia by 2007 and it is predicted that one billion cubic metres will be lost by 2018.

The beetle is native to North America, but its range has spread northward and to higher elevations with milder winters. Temperatures below –40 ºC on several consecutive nights will kill the larvae, but such cold spells have become rare.

The loss of trees is releasing more carbon than that from forest fires in spite of efforts to salvage the timber, which continues to store carbon.

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