Competition Among Certification Standards Helps Consumers and the Environment

With the recent certification of four of Asia Pulp & Paper’s mills by Indonesia’s SVLK certification system, there is increasing attention on that system and the role it will play in ensuring Indonesian forestry meets environmental standards.The system was created in 2009 in part to satisfy laws against illegal timber harvesting in the EU and United States.

We will examine the system and its implementation at a later date, but for now, two things stand out about these new certifications under SVLK.

First, the system demonstrates the incentives of large forestry companies to engage in responsible forestry. One role certification systems play is to reduce the amount of illegal logging in countries where laws and enforcement can be uneven. By requiring clear chain of custody evidence, buyers can have some assurance they are purchasing legally harvested wood.

Forestry companies, however, also want to reduce illegal logging. Illegal logs tend to increase supply and are sold at lower prices, undercutting the market share of producers that act legally. Where laws and enforcement are lax, certification systems can fill the vacuum. This was one of the original justifications for creating certification systems — provide incentives to be good stewards where local laws and politics don’t.

Used in this way, certification systems are not only good for the environment, they are good for the bottom line.

Many on the left see the fight as being between timber producers and the environment. Done correctly, however, certification systems harmonize the incentives of forestry companies with efforts to stop illegal harvesting.

Second, the creation of SVLK demonstrates the benefit of having multiple certification systems. Some supporters of FSC have tried to make that system the sole arbiter of good forestry. This effort even led to a claim of anti-competitive practices by FSC a few years back. This isn’t surprising. Just as a company would seek to obtain monopoly power, so too do advocates of their favored certification system.

Competition among systems, however, keeps everyone honest and pushes them to improve their brand by increasing the benefits of being certified under that system, scientifically and economically. If competing certification systems want to increase their market share, they will need to focus on serving potential participants rather than simply using lobbying and politics to force participation.

Ultimately the goal of forest certification is to encourage responsible forestry and provide consumers an opportunity to put their wealth where their values are. Increasing the number of certification systems can serve those purposes by harnessing the incentives of forestry companies to oppose competitors that operate illegally.  Ultimately, the environment and consumers benefit when competition forces competing certification systems to continually improve.

Uncertified Conversion: Unintended Consequences of Forest Certification

Nonindustrial private forest landowners provide about half of the nation’s wood and steward nearly 360 million acres of forestland. These lands also provide numerous ecosystem services such as water purification, wildlife habitat, and carbon sequestration.

Forest certification, generally considered a voluntary act to recognize good forest stewardship, may hamper the ability of some of these small private forest owners to manage their land. Timber products flow through a chain of custody from forest owner to processor and through production to create the final product. Certification requirements along that supply chain can restrict market access for non-certified forest owners. Home Depot, for example, sells certified timber products, hence buys from certified processors who must buy from certified forests owners. The cost of certification, however, may outweigh the benefits.

Forest certification can be a costly endeavor for small forest owners. Certification entails the costs of the certification process (auditor visits, travel, report writing, and monitoring) and on the ground expenditures of additional forest planning, infrastructure, and possible reduced harvest.

To date, there are few reported price premiums on certified forest products. As a result, most certification costs are borne by the producer.

Evidence reported by Reed Watson of PERC suggests that increased certification requirements or mandates “will produce the unintended consequence of hastening forest conversion (Forest Landowner March/April 2012).” The small forest land owner that faces restricted timber markets due to certification requirements may find forest conversion more beneficial than certification.

This blog is cross-posted from

Why The Lorax Loves Forestry

This spring, a motion picture version of Dr. Seuss’ The Lorax hit the big screen with a not-so-subtle environmental message about the threat timber harvesting poses to the environment. Forty years after the book was published, the movie doesn’t learn the lessons of the last forty years of forestry — working forests are sustainable forests and poverty is the enemy of sustainability. Here is the piece we published recently outlining why the 2012 version of the Lorax should love forestry and foresters.

“From outside in the fields came a sickening smack of an axe on a tree.
Then we heard the tree fall. The very last Truffula tree of them all.”
–From The Lorax, Dr. Seuss

This spring, a motion picture version of Dr. Seuss’ The Loraxhit the big screen with a not-so-subtle environmental message about the threat timber harvesting poses to the environment. Published in 1971, the book tells the story of a business, led by the “Once-ler,” that cuts down all of the trees in the Truffula forest, destroying wildlife habitat, the air and water in the process.

The Lorax, a friendly, furry creature that “speaks for the trees,” announces what he thinks has caused this catastrophe, scolding the businessman, “Sir, you are crazy with greed.”

Forty years after the book was published, however, a different story has been written in forests across the globe. Rather than being at odds, the Once-ler and the Lorax have found a common interest in making sure forests grow and expand – and many of the world’s forests have benefitted.

In the industrialized world, instead of the scarcity Seuss predicted, forests are plentiful. Last year was the International Year of the Forest, and the United Nations offered some good news. For the last two decades, total land area covered by forest in the Northern Hemisphere –- where forestry is particularly active -– has increased.

Despite the implication that economic growth, or as Seuss has the Once-ler say, “biggering, and biggering, and biggering,” would lead to environmental destruction, the nations where growth has been most steady are the ones enjoying the best environmental outcomes.

Not only are nations in the Northern Hemisphere seeing forestland expand, wood is increasingly recognized as one of the most environmentally friendly building materials.

At the University of Washington, researchers compared the environmental impact of building with either wood, concrete or steel. The hands-down winner for lower energy use, less waste and less water use was wood. While concrete and steel can only be mined once, trees are constantly replacing themselves.

One thing that Seuss got right was that once the Once-ler cut all the trees down, his business went down with them. Foresters understand this.  Destroying a forest by cutting down every last tree makes no sense, and so there are more trees in American forests today than there were just a few decades ago.

Indeed, the economic value of the trees ensures forests are replanted and available for wildlife and future generations. Even companies not planning on harvesting in 60 years recognize that land with 20-year old trees is more valuable than land with no trees at all. Replanting isn’t just good for the environment, it’s good for business.

This is not to say that the world’s forests are forever safe, or to dismiss the impact deforestation has on the environment. The enemy in these areas, however, is more likely to be poverty than industry. Few people realize the most common use for trees across the globe is as firewood to heat a home and cook a meal. These trees are not cut down not by machines, but by people struggling to meet the needs of daily living.

It is true government regulation of forestry is stricter today than it was forty years ago. It is also true, however, that we are still harvesting a significant amount of wood in the Northern Hemisphere, while preserving vast areas for future generations. Sawmills are making the most of every part of the tree, literally using lasers to measure the best way to saw the log. Technology has made effective regulation possible by using every tree wisely and limiting short-term pressures to overharvest.

Forty years after he sprung from the imagination of Dr. Seuss, the Lorax would be happy to see that, far from disappearing, many forests today are thriving. They are there because the real story of the forests has not been about an unending battle between the fictional Lorax and the hard-hearted Once-ler, but of a friendship that understands that both benefit from healthy forests that future generations can enjoy.