EU policies related to forest carbon sinks would move wood harvests and wood product related jobs outside EU yet create little climate benefits

Preliminary results of a study titled “Economic Impacts of potential EU forest carbon sink policies on the forest based sector” were presented on September 6th at a workshop in Brussels.  The results show that if countries in the European Economic Area (EEA) would limit their future harvests to comply with the EU forest carbon sink policies, the EEA ‘s roundwood harvest could decrease considerably by 2030 compared to the situation without such policies.   In particular, the study points out that harvests, forest industry production and thereby also employment opportunities would leak from the EEA to the rest of the world.  Jobs would disappear throughout Europe, particularly from the labor-intensive wood products manufacturing and forestry sector.   Wood and wood-based product imports to Europe would increase despite growing European forest resources.

About 80% of the decrease in wood harvests in the EEA countries would be directly replaced by harvests in the rest of the world, reducing forest carbon sinks outside Europe.  Three quarters of the decline in the EEA harvests would shift to South and North America.  Harvests in Russia would also increase considerably.   Harvests and forest industry production outside Europe would grow in response to growing global demand for wood-based products – regardless of the EU policies.

Harvesting in EEA decreses and approximately 80 % of it leaks to the rest of the world

The decline in the EEA production would increase prices of wood-based products globally.  As a consequence, the higher priced wood-based products would be in danger from increasing substitution by other materials such as concrete, metal and plastics.

The impact assessment made in this study is based on a simulation where the future harvests in the EEA were tied to the average harvests during 2000-2012 – a period proposed by the European Parliament’s Environment Committee in July 2017 – for calculating the allowed harvest intensities.   Even if this approach is rather simplified compared to the Commission’s complex and still evolving proposal, it was justified in order to be able to demonstrate the impacts of harvest limitations inside and outside Europe.

The research group also tested the sensitivity of the results with different historical reference periods and with alternative baseline assumptions.  The leakage rates were not sensitive to these assumptions.  A considerable leakage of harvests and forest industry production is projected to take place no matter what historical reference period was chosen.  Additionally, regardless of the actual harvest volumes, about the same percentage (70-80%) would be replaced by harvests outside Europe.  Therefore, the key message from this study is that leakage of harvests to the outside world has to be properly included in any EU climate policy decisions.

The research group will continue its work with more detailed analyses and plans to release the final report for peer review before the end of 2017. Members of the research group are:   Dr. Maarit Kallio (Natural Resources Institute Finland), Professor Birger Solberg (Norwegian University of Life Sciences), Dr.  Liisa Käär (Tapio Ltd) and Professor Risto Päivinen (Tapio Ltd).

Summary of the preliminary study results and the slide presentation from the workshop are available at:  www.tapio.fi/EUcarbon

 

Published: September 10, 2017