Proposals to reduce forestry activity and increase protected forest areas have become an important part of the European forestry debate. However, according to a new impact assessment, such measures risk leading to lower production, tens of thousands of lost jobs, and higher societal costs – without delivering any climate benefits.
A new national forestry impact analysis shows that a more restrictive Swedish forestry policy would have far-reaching consequences for the economy, employment, and energy supply. The study was conducted by Tomas Thuresson, a forestry PhD and former Head of Silviculture at the Swedish Forest Agency, together with Runar Brännlund, Professor Emeritus of Economics at the Centre for Environmental and Resource Economics (CERE) at Umeå University. The report was commissioned by SCA.
Jonas Mårtensson, Head of Business Area at SCA Forest, notes that the report highlights
both the significant benefits of active forest management and the risks associated with seeking “simple solutions.”
“Actively managed forests generate enormous benefits, both economically and for the climate. The fundamental principle is to harvest mature forests and replace them with new forests that can continue absorbing carbon dioxide. This also forms the basis for renewable products that replace concrete, steel, plastics, and other emission-intensive materials,” says Jonas Mårtensson.
“The entire forestry system, which provides substantial climate benefits, is profitable and creates value. It generates jobs, investments, export revenues, and tax income. To me, the report illustrates how easily one can lose sight of the bigger picture in the pursuit of simple solutions and instead risk damaging a socially beneficial forest industry without actually achieving anything positive,” says Jonas Mårtensson.
The researchers analyzed the effects of several policy proposals currently being discussed within the framework of EU forest policy development, including reduced harvesting, increased conservation set-asides, and so-called “Closer to Nature” forestry, which involves a greater use of continuous-cover forestry methods instead of clear-cutting.
Lower production and fewer jobs
The report concludes that a reduction in harvesting would have a nearly proportional effect on forest raw material production. If harvesting decreases by 15 percent, production and economic value would decline by a similar amount.
The most significant impacts occur under the “Closer to Nature” scenario, in which half of Sweden’s managed forests are converted to continuous-cover forestry methods and a larger share of forest land is set aside for natural development. According to the analysis, harvesting would then decline by 25–30 percent, while the supply of sawlogs would fall by 30–40 percent for several decades. This would result in the loss of between 25,000 and 35,000 jobs and a reduction in value added of up to one-third.
“Restricting Swedish forestry is a costly illusion that in practice leads to leakage to other countries, a weaker economy, fewer jobs, and a reduced climate contribution. To me, it is an obviously expensive and ineffective path that hinders the transition from fossil-based to renewable solutions,” says Tomas Thuresson.
Limited climate benefits according to the analysis
A central question addressed in the report is how reduced forestry activity would affect the climate. The analysis shows that carbon storage in forests may increase in the short term when less timber is harvested. In the longer term, however, forest growth declines, which according to the report’s authors leads to reduced carbon sequestration both in forests and in wood products.
The researchers also argue that the climate benefits of forest products may diminish. When wood is used in buildings, packaging, or energy systems, it can replace materials and energy sources associated with higher fossil emissions. If the supply of Swedish forest raw materials decreases, this so-called substitution effect is weakened.
The report also highlights the risk of carbon leakage. If demand for wood products remains unchanged while production in Sweden declines, production may instead shift to countries with higher emission levels.
“The climate benefits of these measures, when material substitution and carbon leakage are excluded, do not justify the costs. When carbon leakage is also taken into account, one cannot rule out the possibility that the overall climate impact becomes negative,” says Runar Brännlund.
Effects far beyond the forestry sector
According to the report, the consequences would not be limited to the forest industry. Forest biomass currently accounts for nearly 40 percent of Sweden’s energy consumption, and a reduced supply of raw materials could affect the energy system, particularly district heating networks in larger cities.
The analysis also shows that the socioeconomic cost of additional conservation set-asides is substantial and is estimated to be roughly twice the cost of acquiring the land outright.
According to the report’s authors, the focus should therefore be on maximizing the climate benefits of Swedish forests through active management and the continued development of resource-efficient products and materials.
“If the goal is to achieve genuine climate benefits – that is, global emissions reductions rather than merely reductions in national emissions – the focus should be on active Swedish forestry and the continued development of the Swedish forest industry. This would ensure both increased climate benefits and higher employment in Sweden,” says Runar Brännlund.
The full report (in Swedish) is available via the following link.
Photo/SCA - Michael Engman.