Financial Crisis Puts Pressure on World's Forests

[GLT]

UN: Financial Crisis Puts Pressure on World's Forests
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.