11—
Investing in Global and International Settings

Introduction

Nonfederal forests of the United States are part of larger biological, economic, and political systems throughout the world. Because they account for two-thirds of the nation's forested area, nonfederal forests will be called upon to play a larger role than other ownership categories in meeting the nation's expected contributions to healthy global economies and environments. Hence, U.S. public and private investments in nation's nonfederal forests will be important contributors to the sustainability of these larger systems. The U.S. government has a responsibility to exercise its leadership, counsel, and, as appropriate, resources to sustain positive contributions from nonfederal forests to the world.

Global Considerations

Over the past two decades, the public has increasingly focused its attention on a variety of global issues, including climate change, ozone conditions, and biological diversity. Nearly all of the global issues involve forests. Furthermore, domestic policy debates over the use and management of forests in the national arena are greatly influenced by debates in the global arena, and domestic and global issues involving forests have often merged. The June 1992 United Nation's Conference on Environment and Development (Rio De Janeiro, Brazil), which was a major event in the emergence of international debate on forestry issues, was notable in this respect. These debates and how the issues are addressed have implications for nonfederal forests.



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--> 11— Investing in Global and International Settings Introduction Nonfederal forests of the United States are part of larger biological, economic, and political systems throughout the world. Because they account for two-thirds of the nation's forested area, nonfederal forests will be called upon to play a larger role than other ownership categories in meeting the nation's expected contributions to healthy global economies and environments. Hence, U.S. public and private investments in nation's nonfederal forests will be important contributors to the sustainability of these larger systems. The U.S. government has a responsibility to exercise its leadership, counsel, and, as appropriate, resources to sustain positive contributions from nonfederal forests to the world. Global Considerations Over the past two decades, the public has increasingly focused its attention on a variety of global issues, including climate change, ozone conditions, and biological diversity. Nearly all of the global issues involve forests. Furthermore, domestic policy debates over the use and management of forests in the national arena are greatly influenced by debates in the global arena, and domestic and global issues involving forests have often merged. The June 1992 United Nation's Conference on Environment and Development (Rio De Janeiro, Brazil), which was a major event in the emergence of international debate on forestry issues, was notable in this respect. These debates and how the issues are addressed have implications for nonfederal forests.

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--> Forests of the United States account for 7 percent of the world's forested area. Moreover, the United States has about 13 percent of the world's temperate forests, and nearly half of the world's coastal temperate rain forest (World Resources Institute 1996). More than half of U.S. forests are privately owned, an amount that accounts for about 40 percent of the world's private forests. In comparison to the rest of the world, the United States has a higher proportion of its forests in a managed condition (one-half versus one-third worldwide). "Managed" implies some degree of control over forests. The majority of those forests are under nonfederal ownership (Brooks 1993). Another important factor globally is the 13 million hectares (10 percent of world plantations) of U.S. forests in plantations, the majority of which are in nonfederal-ownership categories. Nonfederal forests are important in providing environmental services worldwide. Certainly, they are reservoirs of plant and animal genetic material that is of worldwide importance. Examples are the extensive temperate rainforests of the West Coast, rare plant communities in oak savannas of the Midwest, high concentrations of mixed broadleaf species in Southern Appalachia, and rare hardwood-forest ecosystems in the bottomlands of the Southeast. In addition, nonfederal forests provide critical habitat for birds migrating across international boarders; they absorb and buffer pollution discharges originating in various regions of the world; they serve as storage places (or possibly sources of) for carbon, which might otherwise affect global climate adversely; and they contribute to the favorable regulation of climatic changes (United Nations 1992a). Nonfederal forests support international tourism and recreation. Because half of the world's tourism involves nature, even a small portion attributed to nonfederal forests is still significant. Nonfederal forests are important sources of timber products for export. U.S. forest exports reached $17.1 billion in 1992, and the U.S. was the world's second largest exporter of forest products (second only to Canada). The export level has increased by nearly 8 percent annually since 1950 (adjusted for inflation); the increase is largely due to devaluation of the U.S. dollar in 1985, export promotion efforts by government and industry, and elimination or curtailment of trade barriers. The trade deficit in forest products in the United States is modest. In terms of net trade in roundwood equivalents in 1989, the United States imported 55 million cubic meters more than it exported (Brooks 1993). Management experience of nonfederal forests in the United States is useful to other countries as they make decisions about the use and management of their forests. Because of the diversity of the nation's nonfederal forests (spread over half a continent) and the many products and services they provide, combined with the important role of private ownership and the government's use of a variety of policies, nonfederal-forest management in the United States is a source of knowledge and experience for other nations. Many global forestry issues are relevant to nonfederal forests. Actions taken on nonfederal forests affect forests outside the United States, and actions taken

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--> elsewhere in the world affect nonfederal forests in the United States. The implications of these actions are biological (for example, ensuring global biological diversity) and social (for example, international trade) in nature (U.S. Congress 1991, Schmidheiny 1992, Brooks 1993, World Resources Institute 1996). International Accords Environmental Agreements The United States has recognized a number of international agreements that have implications for the use and management of nonfederal forests. Especially notable in that respect are the global consensus on forest principles adopted at the United Nation's Conference on Environment and Development and, subsequently, the criteria for conservation and sustainable management of temperate and boreal forests. The objective of the principles is to contribute to the sustainable development of forests generally and to provide for their multiple uses and functions (see Box 11-1). The consensus agreement is that the "… principles should apply to all types of forests. … in all geographic regions and climatic zones," and that "…. each state in accord with its constitution and or national legislation should pursue the principles at the appropriate level of government" (United Nations 1992b). To implement the forest principles, countries containing a substantial portion of the world's temperate and boreal forests developed criteria for, and indicators of, successful conservation and sustainable management of these forests. The United States is part of the agreement. The majority of U.S. forests are temperate or boreal forests and, therefore, are subject to the criteria and indicators, which address the following: conservation of biological diversity; maintenance of productive capacity of forest ecosystems; maintenance of forest ecosystem health and vitality; conservation and maintenance of soil and water resources; maintenance of forest contribution to global carbon cycles; maintenance and enhancement of long-term multiple socioeconomic benefits to meet societal needs; and the legal, institutional, and economic framework for forest conservation and sustainable management (United Nations 1995). Trade Agreements The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement designed to promote international commerce through the elimination of barriers to trade. GATT supersedes all other trade-related agreements, including the International Tropical Timber Agreement (ITTA) and the North American Free Trade Agreement (NAFTA). Completion of the Uruguay round of GATT negotiations has created the largest, most comprehensive set of trade agreements in history. In many respects, those agreements have implications, although often

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--> Box 11-1 Selected Principles for the Management, Conservation and Sustainable Development of the World's Forests • Forest resources should be sustainably managed to meet the social, economic, ecological, cultural, and spiritual needs of present and future generations. • Timely, reliable and accurate information on forests and forest ecosystems is essential for public understanding and informed decision-making. • Forest management should be integrated with management of adjacent areas so as to maintain ecological balance and sustainable productivity. • Forest policies should recognize and duly support the identity, culture and rights of indigenous people and their communities. • Decisions [about] forest resources should benefit, to the extent practical, from a comprehensive assessment of economic and noneconomic forest values and the environmental costs and benefits. • Scientific research, forest inventories and assessment carried out by national institutions … should be strengthened. • Planted forests as … sources of renewable energy and industrial raw material should be recognized, enhanced and promoted. • Appropriate measures should be undertaken to protect against harmful effects of pollution, including airborne pollution, fires, pests and diseases. • Natural forests constitute a source of goods and services, and their conservation, sustainable management and use should be promoted.   Source: Agenda 21: Programme of Action for Sustainable Development. Rio Declaration on Environment and Development. Statement of Forest Principles. United Nations Conference on Environment and Development, New York, NY. only indirectly, for nonfederal forests (U.S. Department of Agriculture's [USDA] Forest Service 1994). From a timber-production perspective, GATT is expected to increase, for example, U.S. paper and paperboard net exports by $3.5 billion (the equivalent of 9,300 jobs) over a 10-year phase-in period. A large portion of the expansion is expected to come from nonfederal forests. Concern has arisen that if owners of U.S. nonfederal forests sustain their forests and charge prices reflecting their costs, they might be at a disadvantage in international markets. In addition, subsidies used to compensate landowners for meeting higher management and environmental standards might be challenged as a violation of free trade. Trade agreements generally discourage subsidies and in some cases provide for countervailing duties for their continued use (USDA Forest Service 1994). The Uruguay negotiations of GATT also call for tightening of regulations in which export o f unprocessed logs can be banned only in conjunction with restricting exports of processed forestry products. GATT also has implications for the environmental goals for nonfederal forests. These implications are indirect however, because other countries are not

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--> prohibited from distinguishing between unsustainable and sustainable forests, including nonfederal forests. Those countries choosing to do so could impose tariffs, quotas, or bans on timber harvested from nonfederal forests that are considered unsustainable. The lack of those options could interfere with the achievement of the International Tropical Timber Organization's Target 2000 program, which plans to have international tropical-timber trade based entirely on sustainable-forest management by 2000. International Issues Affecting Nonfederal Forests Timber Export World demand for wood and wood products is expected to increase substantially over the next 40 years. U.S. exports of nearly all major forest-product groups are expected to increase through 2040. Lumber is expected to increase by 21 percent; structural and nonstructural panel products, by 36 percent; paper and board exports, by 164 percent; and wood pulp, by 97 percent. However, in size, U.S. increases in exports are a very modest portion of the nation's total production in any one forest-product category. For example, in 2040, exports of lumber are expected to be only 7 percent of U.S. lumber production; panel products, only 4 percent; and paper and board, only 12 percent (Haynes 1995). Previous analyses have suggested that "the United States has many unique opportunities to increase its exports, particularly in paper products [and] … has both the manufacturing capacity and forest resources needed to expand wood production." Furthermore, "… world markets offer the United States an opportunity to sustain a positive balance of trade in forest products" (U.S. Congress 1983). Even though well-positioned to meet a respectable portion of rising world demand for wood and wood products, the United States is hampered by a number of factors. The most severe and least controllable factors are worldwide recessions and the strength of the dollar relative to foreign currencies. Factors that can be more positively influenced are industry behavior, trade barriers (for example, tariffs, quotas, and nontariff impediments), and government domestic policies adopted by choice (for example, prohibition of unprocessed log exports). If the United States is to consider exploiting its comparative advantages in world markets, it must address those factors. Furthermore, efforts to expand the export of forest products will require the engagement of several categories of forest landowners. Given current trends in national-forest polices, expansion efforts will be undertaken essentially by nonfederal-forest owners. Global Climate Change The updated assessment of the Intergovernmental Panel on Climate Change (IPCC 1995) found evidence sufficient to conclude that human activities are

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--> affecting the current global climate and will continue to do so for many decades. The conclusions of the report were endorsed by the U.S. government in July 1996 at the Second Conference of Parties to the Framework Convention on Climate Change in Geneva. These climatic effects, resulting primarily from increased atmospheric carbon dioxide, are expected to generally alter forest composition, location, and productivity and the available supply of timber. Although the extent and nature of these alterations have not been assessed specifically for nonfederal forests, inferences can be made from more general assessments (Joyce 1995, Haynes et al. 1995). For timber supply, expected temperature and precipitation increases will generally increase forest growth (over a 75-year period) by 5 percent to 24 percent. Softwood inventories are expected to increase, thus lowering softwood timber prices if demand remains the same. For trade, lower softwood lumber prices will reduce the advantage of Canadian producers; domestic U.S. harvest (much of which occurs on nonfederal forestland) will replace Canadian harvest of softwood (Haynes et al. 1995). Regional shifts in softwood and hardwood timber production will also occur and have implications for prices received (and investments made in forests) by nonfederal-forest landowners. Climate change also has implications for carbon sequestration. Warmer temperatures could enhance net accumulation of carbon in cooler climates and increase respiratory losses disproportionately in already warm climates. Potential changes in water availability resulting from changing temperature patterns could easily alter the carbon balances of many ecosystems to a greater degree than temperature changes themselves. Trees are generally long-lived organisms; therefore, the potential effects of changing climate, and related implications for carbon sequestration, should be considered as policies and programs are directed toward the use, management and protection of forests, including nonfederal forests. Environmental Concerns The global impact of environmental polices and programs for nonfederal forests has been suggested as a basis for more careful crafting of U.S. forest policies. U.S. forest policies that limit adverse environmental consequences domestically should also consider the consequences on forests in other countries (Bowyer 1992). Concern has been focused specifically on the global consequences of reductions in federal timber harvesting and of regulations on the forestry practices of private owners of nonindustrial forests (Bowyer 1992, Schallau and Goetzl 1992). Issues of this nature might or might not be cause for concern. Full assessments have to be made on the linkage between U.S. forest policies and international environmental impacts; whether international environmental impacts of timber harvesting are significant; whether the international impacts are greater than the domestic environmental impacts; whether other countries are capable of making environmentally acceptable choices in the management and use of their forest resources (Brooks 1993).

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--> Forests as Emission Absorbers Managing worldwide emissions that contribute to global climate problems can have implications for U.S. forests, including nonfederal forests. One approach to emission management is "emission trading," whereby one country agrees to limit emissions below their specified portion of worldwide levels and allow other countries to increase their emission outputs. However, instead of limiting emission levels, countries may choose to provide additional absorption capacity by enlarging their forest areas, which could be nonfederal forests in the United States (Moltke 1990). That approach is acknowledged to be potentially difficult to implement, especially with regard to distribution of emissions among countries. The European community suggests that it is possible to implement and that forests should be used as an element in the emission-absorption equation (Marland 1988, Moltke 1990). If the approach were considered worldwide, including the U.S., nonfederal-forest owners could be expected to play a part in absorption-emission plans, even to the point of being active in programs designed to expand their area for such purposes. Migratory Wildlife Habitat Migratory wildlife do not recognize international boundaries and domestic political boundaries (Flather et al. 1994). Nonfederal forests are important in providing the necessary habitat for the survival of wildlife. Large intact forests serve as migration corridors for the north-south movement, particularly across the United States, Canada, and Mexico borders, of neotropical migrants and large carnivorous mammals and their prey. For example, 250 of the 750 bird species found in the United States and Canada spend their summers in North American forests and winters in Central American forests. Large intact temperate coniferous forests of the United States and Canadian Rockies provide important connections for woodland caribou and large carnivores from source areas in Canada to population sink areas in the United States. Intact forests in the northeastern and southeastern United States provide important nesting habitat for neotropical migrants that winter in Mexico and Central America. Coastal Pacific forests located within the Pacific flyway are important for bird migrations and for maintaining connections between grizzly-bear populations in British Columbia and those in the Northern Cascades of Washington. Similar examples exist in the mid-Atlantic states flyway used by neotropical migratory songbirds and waterfowl. The role of nonfederal forests in providing key habitat linkages is important. Whether existing policies and programs are appropriate, well focused, and adequately financed is open to conjecture. The type of incentives that might be used to encourage owners of nonfederal forests to undertake actions to further the habitat of the internationally migrating species of wildlife are of special concern (Schmidheiny 1992).

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--> Summary of Findings and Recommendations Policies and programs that are consistent with and further U.S.adopted international treaties and agreements concerning the use and management of forests are important to the U.S. position in international activities. To the extent that they are germane, these policies and programs should focus on nonfederal forests. In addition, engaging in international treaties and agreements that enable owners and managers of nonfederal forests to manage sustainable forests for international markets (for example, timber) will alleviate fear of being at a competitive disadvantage because of lower-priced products produced in other countries with unsustainable-forest practices. Public and private policies and programs involving the export of timber and processed wood products should be evaluated, and polices should be encouraged that will enable the United States to build on its comparative advantages and be a strong competitor in world markets for forest products. Forests are an important factor in relation to global climate change; they act as storehouses of carbon, which could have an important impact on future management issues. Scientific understanding of the role of forests, and nonfederal forests in particular, in mitigating the effects of regional and global pollutants is critical for overall assessment of ecosystems throughout the world. Monitoring the effects of global climate change on the composition, location, and productivity of nonfederal forests also should be continued. Finally, migratory wildlife rely on forests for habitat and migration corridors. The U.S. government should participate in international agreements that protect the habits of internationally migrating wildlife and provide owners and managers of nonfederal forests with the incentives necessary for sustainably managing their forests in ways that advance such habitats. Recommendation: Exercise federal leadership, counsel and, as appropriate, resources to sustain positive contributions from U.S. nonfederal forests to the world. This recommendation points to the following specific recommendations: Federal policies and programs for nonfederal forests should be consistent with international environmental and trade agreements to which the United States is a party. The United States should advance scientific understanding of the role of forests, and nonfederal forests in particular, in mitigating global pollutants and climate change. The effects of global climate change on nonfederal forests should continue to be monitored.

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