Conservation Tools and Forest Certification

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Conservation Tools and Forest Certification

• B. Bruce Bare
• College of Forest Resources
• University of Washington, Seattle
• November 9, 2000

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OUTLINE

• What is certification?
• General approaches?
• Who sets the guidelines?
• Costs and benefits?
• Relationship to other conservation tools?

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OUTLINE

• What is certification?
• General approaches?
• Who sets the guidelines?
• Costs and benefits?
• Relationship to other conservation tools?

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IN GENERAL?

• A 1990s initiative that encourages landowners to
  practice sustainable forestry and to give
  consumers assurance that forest products come
  from sustainable forests. Includes both forest
  certification and chain-of-custody components.

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WHAT IS CERTIFICATION?

• Process by which a forest owner voluntarily
  requests an inspection of a forest to determine
  if pre-defined management standards are being
  met.
• Process for assessing if a forest is managed
  sustainably.
• A way to communicate environmental information
  about forests to consumers.

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WHAT IS A SUSTAINABLY MANAGED FOREST?

• A forest managed to meet all existing regulations
  such that environmental, social and economic
  factors are balanced to meet the needs of the
  present without compromising the ability of
  future generations to meet their needs.

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WHAT IS A SUSTAINABLY MANAGED FOREST?

• A land stewardship ethic that integrates
  reforestation, growing, and harvesting trees for
  useful products while conserving soil, air, and
  water quality, wildlife and fish habitat and
  aesthetics, and protecting the resource from
  fire, pests, and diseases.
• Protection of lands of special significance.

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A SUSTAINABLY MANAGED FOREST INCLUDES

• Consideration of key values
• biodiversity
• habitat protection and enhancement
• riparian/wet land protection
• protection of productive capacity
• protection of endangered plants and animals
• protection of cultural, spiritual, and historical
  sites

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FOREST CERTIFICATION AND SUSTAINABLE FORESTRY

• Forest certification isnt necessary to guarantee
  sustainability and it may not be sufficient.
• Certification best viewed as 1) important
  policy driver for improving forest management
  standards and practices 2) satisfying buyer
  groups and consumers of forest products.

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OUTLINE

• What is certification?
• General approaches?
• Who sets the guidelines?
• Costs and benefits?
• Relationship to other conservation tools?

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TWO GENERAL APPROACHES?

• Performance-based
• Use criteria, performance measures and indicators
  to monitor performance over time (on-the -ground)
• Management system-based (EMS)
• Generic guidelines and standards (ISO 14001)
• Forestry-specific (SFI, CSA)

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TWO GENERAL APPROACHES

• Systems are evolving to be a mixture of both
  approaches

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OUTLINE

• What is certification?
• General approaches?
• Who sets the guidelines?
• Costs and benefits?
• Relationship to other conservation tools?

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WHO SETS THE GUIDELINES?

• Government
• UNCSD (IPF, IFF, Helsinki and Montreal Processes,
  Santiago Declaration). Help establish criteria
  and indicators.
• Private
• AF PA (SFI , 1994), PEFC (Europe, 1999)
• ATFS (1945), Green Tag (NFA, 1998)
• NGO
• FSC (1993)
• ISO 14001 (1996), CSA (1995)

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WHO DOES THE CERTIFYING?

• First party -- the land owner or firm
• Second party -- an industry or association
• Third party -- an independent certifier
• Rainforest Alliance (SmartWood, FSC)
• Scientific Certification Systems (FSC)
• Voluntary Verification (SFI, PEFC)

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IS CERTIFICATION NECESSARY?

• Many believe that sustainable forestry is already
  being practiced in the developed countries where
  about 75 of the certified forests are now found.
• Demand being driven by large buyer groups who are
  being pressured to sell certified products. Small
  owners may be forced to comply -- non-voluntary.

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IS CERTIFICATION NECESSARY?

• In addition, in states such as Washington, tough
  forest practice regulations guide forestry
  operations on state and private forest land.

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QUESTIONS?

• Should Washington State forest lands be
  certified?
• If so, which certification system to use?
• Must consider the relationship between the
  possible certification systems and the goals,
  objectives, and requirements that guide state
  forest land management.

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LOOK INTO TWO CERTIFICATION SYSTEMS?

• SFI Standard
• FSC Principles and Criteria

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SFIS PRINCIPLES (1-5)

• Practice sustainable forestry
• Engage in responsible practices
• Protect forest health and productivity
• Continually improve forest management practices
• Protect special sites

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FSC PRINCIPLES (1-5)

• Compliance with laws and FSC principles
• Tenure and use rights and responsibilities
• Indigenous peoples rights
• Community relations and workers rights
• Benefits from the forest

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FSC PRINCIPLES (6-10)

• Environmental impact
• Management plan
• Monitoring and assessment
• Maintenance of high conservation value forests
• Plantations

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SFIS OBJECTIVES (1-3)

• Employ an array of scientifically,
  environmentally, and economically sound practices
  in use of forests (4 PM)
• Ensure long-term forest productivity (6 PM)
• Protect water quality by use of riparian
  protection measures (4 PM)

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SFIS OBJECTIVES (4-7)

• Manage wildlife habitat and conserve biodiversity
  (3 PM)
• Manage visual impact of harvest operations (4 PM)
• Manage lands of special significance (1 PM)
• Promote efficient use of resources (1 PM)

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SFIS CORE INDICATORS

• For each performance measure a set of core SFI
  indicators must be satisfied to gain
  certification
• For example, under objective 5 (visual impacts),
  one PM is to use green up requirements to
  schedule clearcuts on adjacent harvest units. A
  core indicator is to have a written green up plan
  or policy.

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SFIS CORE INDICATORS

• Under objective 2 (long term productivity), one
  PM is to use forest chemicals prudently. A core
  indicator is to train all forest workers using
  chemicals and to use trained people as
  supervisors.

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FSC PRINCIPLES

• Under principle 5 (benefits from the forest),
  the rate of harvest shall not exceed levels which
  can not be permanently sustained.
• Under principle 6 (environmental impact),
  ecological functions and values shall be
  maintained intact, enhanced, or restored.

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FSC PRINCIPLES

• Under principle 6 (environmental impact), forest
  conversion to plantations shall not occur except
  in limited areas but not in high conservation
  value forests
• Under principle 9 (high conservation value
  forests), decisions shall always be considered in
  the context of a precautionary approach.

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FSC DEFINITIONS

• High conservation value forest 1)possess
  globally, regionally, or nationally significant
  species, or large landscapes contained within, or
  containing, the management unit where viable
  populations of most if not all naturally
  occurring species exist in natural patterns of
  distribution and abundance.

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FSC DEFINITIONS

• High conservation value forest 2)contain rare,
  threatened or endangered ecosystems, 3)provide
  basic services of nature in critical situations
  (i.e. erosion control), or 4)are fundamental to
  meeting basic needs of local communities.

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FSC DEFINITIONS

• Precautionary approach tool for implementing the
  principle of forest stewardship

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FSC PRINCIPLES

• Under principle 10 (plantations), should promote
  the restoration and conservation of natural
  forests.
• Plantations in areas converted from natural
  forest after November 1994 normally shall not
  qualify for certification.

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AREA CERTIFIED

• FSC
• 19.1 million ha world-wide
• 2.5 million ha in USA (9.0 ha in Sweden)
• .021 million ha in Canada
• SFI
• 27.9 million ha in No. Am. About 68
  independently verified by third party (2001)
• SFI licensees 5.7 million ha in No. Am. Both
  public and private. 1.3 million ha in USA.

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AREA CERTIFIED

• ATFS
• 10.1 million ha in USA
• Green Tag
• 18,000 ha in USA (as of late 1999)
• PEFC
• 23.5 million ha in Europe (15 million ha in
  Finland)

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AREA CERTIFIED

• ISO 14001
• 21 million ha in Canada

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OUTLINE

• What is certification?
• General approaches?
• Who sets the guidelines?
• Costs and benefits?
• Relationship to other conservation tools?

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HOW MUCH DOES IT COST?

• Costs of certification
• Direct cost of initial forest assessment plus
  required annual audit and re-assessment.
• Indirect cost of improved forest management
  practices (i.e., reduced harvest or increased
  expenditures).
• Cost of chain-of-custody audit

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HOW MUCH DOES IT COST?

• Economies of scale indicate that some small land
  owners will be hit harder (percentage-wise) than
  large owners.
• Assessment costs vary widely but may not be high
  -- from a minimum of .50 - 1.50/acre for small
  properties to .10 -.25/acre for larger
  properties.

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HOW MUCH DOES IT COST?

• One study shows
• Increase in COGS due to FSC certification was
  lt10 for 84 of survey respondents. For 50, the
  increase was lt 3. Average was 5-6.

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HOW MUCH DOES IT COST?

• Assume that initial assessment costs are
  0.15/acre for a 2 million acre sustainable
  forest property (i.e., 300,000) on a 50 year
  rotation, and a harvest volume of 35 MBF/acre is
  realized annually for five years, then the
  cost/MBF/acre harvested is about .04/MBF.
  Ignores annual audit cost and harvest reduction
  from surplus inventory.

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HOW LARGE ARE THE BENEFITS?

• The objectives of forest certification are to
• gain (keep) access to markets that desire
  environmentally sensitive products
• promote sustainable forest management
• Producers might gain market share and might
  experience a price premium for certified wood
  products.

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HOW LARGE ARE THE BENEFITS?

• One study shows
• For purchasers of certified wood products the
  average price premium paid was 6-7 with 35
  paying less than 3 and 55 less than 5.

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HOW LARGE ARE THE BENEFITS?

• World-wide, less than 1 of the annual harvest
  currently comes from certified forests. Expected
  to increase in near-term future as more lands are
  certified.
• In general, price premiums for green wood
  products are small or non-existent but market
  share is important in some regions such as
  western Europe.

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HOW LARGE ARE THE BENEFITS?

• However, price premiums probably do exist in
  niche markets.
• Demand is growing presently is being pushed by
  buyer groups and not end-product consumers who
  are generally unaware of the existence of
  certified wood products.

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HOW LARGE ARE THE BENEFITS?

• One way to examine the economics of forest
  certification is to compute the breakeven price
  increase premium to pay for the costs of
  certification.
• See spreadsheet for illustration.

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OUTLINE

• What is certification?
• General approaches?
• Who sets the guidelines?
• Costs and benefits?
• Relationship to other conservation tools?

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RELATIONSHIP TO OTHER CONSERVATION TOOLS?

• Certification, forest land trusts (conservation
  easements), HCPs, and cost-sharing are voluntary
  programs.
• Easements and HCPs generally involve a long time
  commitment by landowner (50 years or permanent).
  Certification and cost-sharing are shorter (5
  years) and more easily cancelled.

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RELATIONSHIP TO OTHER CONSERVATION TOOLS?

• Conservation easements have estate and income tax
  benefits whereas certification has potential for
  market share and price premiums.
• Conservation easements are legal covenants on the
  land, certification is a temporary renewable
  agreement.

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RELATIONSHIP TO OTHER CONSERVATION TOOLS?

• Buyer groups gain assurance conveyed by
  certification.
• HCPs provide incidental take permit not offered
  by other conservation measures.

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RELATIONSHIP TO OTHER CONSERVATION TOOLS?

• Can combine certification with a working
  easement, HCP or cost-share program.
• One advantage of combining certification and a
  working easement is that asset reduction incurred
  to achieve certification might be viewed as a
  charitable deduction (or a lower tax liability
  when passed as an inheritance) if placed under an
  easement.

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RELATIONSHIP TO OTHER CONSERVATION TOOLS?

• Need to consider certification schemes that do
  not penalize landowners who practice active
  plantation management. May provide an incentive
  to keep land in forest production in long term.

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QUESTIONS REVISITED

• Should Washington State forest lands be
  certified?
• If so, which certification system to use?
• Must select a system that promotes the goals,
  objectives, and requirements that guide state
  forest land management.

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THE END TOPICS COVERED

• What is certification?
• General approaches?
• Who sets the guidelines?
• Costs and benefits?
• Relationship to other conservation tools?