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Market Access and Forest Stewardship:   How Sustainability Certification and Renewable Biomass Mandates Threaten Nonindustrial Private Forests

 

Unrealized Price Premiums

Purportedly offsetting these costs are price premiums for certified products and improved marketing opportunities for certified producers. 45 According to the Forest Stewardship Council’s (FSC) website ,

FSC certification offers forest managers rewards for managing their forests the FSC way –following the highest social and environmental criteria there are. In some instances rewards can be in the form of price premiums. But increasingly, FSC certification is rewarded with improved access to environmentally sensitive markets. Also, more and more governments and leading businesses specify FSC certified materials in their purchasing programs. 46

 

Gullison explains that “[c]ertification provides a means by which consumers can reward producers who provide the greatest environmental and social benefits from their production process, either by paying a price premium, or by preferential purchasing.”47

 

Unfortunately, the theorized price premiums have not materialized. The evidence suggests that buyers are unwilling to pay more for certified products,48 or only a very small premium49 for a short lived period.50 Mark Rickenbach explains, “[p]rice premiums were an early allure of forest certification; however, they have yet to emerge on a consistent or widespread basis. Some producers have been able to achieve limited premiums (5 to 10 percent) on some sales. However, at this point there is no assured payoff for the additional cost of becoming certified.”51

 

One explanation for why consumers are not paying a price premium for certified sustainable forest products is that end consumers were not the driving force behind sustainable certification. Instead, environmental organizations such as the Sierra Club, Rainforest Action Network, and the World Wildlife Fund organized buyers groups committed to buying only certified products after a particular date.52 Hansen, et al., explain more precisely that the demand for certified products comes from “large corporations that wish to avoid the risk of damaging their brand image” and from “powerful ENGOs which have a history of influencing corporate behavior through protests and other elements of what they call ‘market mechanisms.’”53

 

Restricted Market Access

The promise of enhanced market access is similarly unfulfilled. Mark Rickenbach predicts “it is highly unlikely that wood from certified small ownerships will ever find its way to shelves of large national or regional chain stores without significantly more FSC-certified acres and chain-of-custody certified mill capacity.”54 The requisite economies of scale and chain of custody procedures make it costly, if not prohibitive, for small producers to individually distinguish their product. Rather, the procurement policies of local saw mills and paper mills are more likely to dictate whether certification is a mandatory requirement or an unavailable option.

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