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[FLM MARCH / APRIL 2012 ]Unintended ConsequencesPage1
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Unintended Consequences

How Sustainability Certification and Renewable Biomass Mandates Threaten Nonindustrial Private Forests.

BY: Reed Watson and Brennan Jorgensen

The Robert Burns poem “to a Mouse” is a good reminder that our best-laid plans often go awry. So is the history of environmental and agricultural policy in this country. Nonetheless, it’s surprising to consider how sustainability certification and renewable biomass mandates—two measures intended to promote environmentally sensitive forest stewardship—could actually accelerate the decline of of nonindustrial private forests.

T he issue is one of market access. Sustainability certification is increasingly required to access forest product markets. However, for the small forest landowners, the costs of certification often outweigh the benefits. This catch-22 restricts market access and creates an incentive for some forest landowners to sell.

 

In a similar manner, the Energy Independence and Security Act closes off an important market for some private forest landowners. Specifically, the law defines “renewable biomass” in a way that excludes fuels from naturally regenerating forests, regardless of how they were grown or gathered.

 

If these market restrictions have a net negative impact on the economic opportunities of forest landowners, and the evidence suggests they will, they will produce the unintended consequence of hastening forest conversion.

 

Certification Costs and Benefits

Forest certification is a voluntary process in which a professional forester gives written assurance that the forest management practices of a particular manager or group complies with some specified sustainability standard. The purported aim of forest certification is to connect buyers and sellers of sustainably produced forest products.

 

In the United States, the predominant certification systems are the Forest Stewardship Council (FSC), Sustainable Forestry Initiative (SFI), and the American Tree Farm System. The total acreage certified under SFI and American Tree Farm exceeds the total certified under FSC, yet wood products retailers more commonly require FSC certification.According to the FSC’s website, more and more businesses and government agencies are specifying FSC certified materials in their purchasing programs; and FSC certification is the only standard approved by the United States 

 

 

Green Building Council Leadership in Energy and Environmental Design (LEED) accreditation program.

Under each system, sustainability certification entails direct and indirect costs to these forest owners. Direct costs are the cost of the auditor’s site visit, travel, report writing, and the certifying organization’s oversight. Direct costs for FSC certification could exceed $5,000 annually, an amount which prices out many small forestland owners.

 

Indirect costs are the costs incurred to meet the sustainable forestry standards. These can include the development or enhancement of a forest management plan, investment in infrastructure and machinery in order to be able to harvest more efficiently with lower impacts, establishing chain of custody procedures, and the opportunity costs of harvesting less timber. Indirect costs vary significantly from one forest owner to the next and can easily exceed direct certification costs.

 

Purportedly offsetting certification costs are price premiums for certified products, increased access to environmentally sensitive markets, and improved marketing opportunities for certified producers. Unfortunately, these theorized price premiums have not materialized. The evidence suggests that buyers are unwilling to pay more for certified products, or only a very small premium for a short lived period.

 

 

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