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Economics of Forestry Alan Plunket Michael McGinniss Douglas Dubrowski Value of Forests to the Economy > US Endowment for Forestry and Communities, Michael Goergen, James Harding, Carlton Owen, Mark Rey, and Lynn Scarlett, May 29-30 2013 There is a $200 billion U.S. demand for wood and paper products. > UN Forum on Forests April 8-19, 2013, Arun Agrawal, Ben Cashore, Rebecca Hardin, Gill Shepherd, Catherine Benson, Daniel Miller Total contributions of the forest to the US economy are $250 billion http://www.usendowment.org/images/Forest_Sector_Report_-_FINAL_9.5.13.pdf http://www.un.org/esa/forests/pdf/session_documents/unff10/EcoC ontrForests.pdf Regulations’ Impact on the Timber Industry US Endowment for Forestry and Communities, Michael Goergen, James Harding, Carlton Owen, Mark Rey, and Lynn Scarlett, May 29-30 2013 ● Existing regulations impact the economic competitiveness of the U.S. manufacturing sector. It currently costs 20 percent more to make a product in the U.S. than nine major industrial countries including Germany, Japan, Canada, Mexico, and China. Much of that additional non-labor cost is related to regulations. ● The costs of major regulations increased at an average rate of 7.6 percent a year since 1998. In the past 30 years, more than 2,000 regulations were imposed on manufacturers, with the Environmental Protection Agency (EPA) imposing the largest regulatory burden ($117 billion in constant 2010 dollars). The cumulative impact of major regulations between 1993 and 2011 will lower overall manufacturing output by up to 6 percent over the next decade. ● Compounding these regulatory challenges are the various state-based regulations and various inconsistent federal, state, and local tax policies. Connection: Economic Contributions Make it Hard to Establish Good Regulations Because logging and paper products provide significant boosts to GDP, it is not politically wise to impose regulations. This presents a choice to policymakers: the economy or the environment. Politicians don’t want to be accused of kicking people out of a job or slowing economic growth, so effective regulations are avoided for fear of hurting business. This makes defending the forest very difficult. Management Improves the Timber Industry >Bureau of Labor Statistics, May 2013 “In fact, forests under long-term management can be just as productive as traditional agricultural ground, even when compared on a per acre, per year basis. Managed forests typically have a species mix that favors higher valued species such as oak, walnut, maple, ash, cherry, and poplar. Under proper management, the quality of the timber improves, and the timber actually grows faster. Well-planned management activities include selective, improvement harvests and timber stand improvement (TSI).” http://www.bls.gov/oes/current/oes191032.htm Connection: Timber Quality Effective management make the timber industry have better quality products because of the biodiversity that fosters the growth of stronger tree species. Manage public and private forested lands for economic, recreational, and conservation purposes. May inventory the type, amount, and location of standing timber, appraise the timber's worth, negotiate the purchase, and draw up contracts for procurement. May determine how to conserve wildlife habitats, creek beds, water quality, and soil stability, and how best to comply with environmental regulations. May devise plans for planting and growing new trees, monitor trees for healthy growth, and determine optimal harvesting schedules. over 9000 employed $60,000 wage Ecotourism >Cascade Lodge Ecotourism is tourism directed toward exotic, often threatened, natural environments, especially to support conservation efforts and observe wildlife. http://www.cascadelodgemn.com/EcoTourism.php >National Park Service “Food, lodging, tours, whitewater rafting, boating, and many other recreational activities and amenities in more than 100 national parks are managed by private businesses under contract to the National Park Service. The services, provided by more than 600 ‘concessioners,’ gross more than $1 billion every year and provide jobs for more than 25,000 people during peak season.” http://www.nps.gov/aboutus/doingbusinesswithus.htm Ecotourism Continued-The Principles >ecotourism.org ● Minimize physical, social, behavioral, and psychological impacts. ● Provide direct financial benefits for conservation. ● Generate financial benefits for both local people and private industry. ● Design, construct and operate low-impact facilities. Connection: Ecotourism Boosts Economic Output Having more activities in the forest that generate revenue for companies only increases its cumulitive output and the incenitve to protect it. If a forest is very economically important, consumers and the government will never allow it to be destroyed. Source of Wealth Forests are a major source of wealth for Canadians, providing a wide range of economic, social and environmental benefits. In 2013, the Canadian forest industry provided direct employment for 216,500 people in jobs that tend to be highly skilled and well paid. Another 350,000 people are indirectly employed by the sector, in related jobs in areas such as construction, engineering and transportation. Canada has the world’s largest forest product trade balance—C$19.3 billion There are three main forest industry subsectors: ● Solid wood product manufacturing – Firms in this area engage in both primary (such as softwood lumber and structural panels) and secondary (such as millwork and engineered wood products) manufacturing for domestic consumption and export. This subsector accounted for approximately 44% of the forest sector’s contribution to the Canadian economy (as measured by real GDP) in 2013. ● Pulp and paper product manufacturing – Companies in this area produce a wide range of products, covering everything from newsprint and household tissues to dissolving pulp for rayon production. This subsector accounted for approximately 36% of the contribution of the forest sector to the Canadian economy in 2013. Green Economy Green Economy- defined as an economy that results in reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. ● Low Carbon ● Resource Efficient ● Socially Inclusive What do they provide? ● Wood for the lumber industry ● Protection against erosion ● Watershed Protection ● Employment Employment Statistics 1. 2. Over 9000 people employed as Foresters a. Forester- a person in charge of a forest or skilled in planting, managing, or caring for trees Average wage of a forester- $59,900 Industry Employment Percent of Industry Employment Wood Preservation 630 .74 Logging 290 .58 Paper Mills 190 .18 State Government 3180 .14 Wood Engineering and Manufacturing 80 .12 https://www.cbd.int/financial/values/ g-valueforestpearce.pdf “A comprehensive survey of sustainable forestry practice...found [that] sustainable forest management is less profitable than nonsustainable forestry.” Outlook While it seems quality regulation that truly stops the destruction of forest may never come in time, awareness has increased in recent years. If companies do not try to sabotage the effectiveness of regulations and if regulators impose sensible rules, the forest can be preserved. It is likely that, eventually, the government, consumers, and corporations will take this path due to the massive economic benefits to the US and other nations of preserving the forest. Activists should encourage this as much as possible without becoming too crazy with their demands, which could reduce supporters. Overall, the future looks bright for the trees, bushes, and birds that share the forests with countless other species and us humans.