Global View of Forestry Sector and Economic Development
Although separated by great, but diminishing, geographical and cultural distances, the forestry sectors of different countries are linked through international trade and global environmental policies.
To a large extent the future of any country, even a large country such as the United States, depends on world markets. It is therefore critical to understand how these markets work, and how they are affected by economic, demographic and biological change, and by deliberate policy.
Forestry and forests are changing under several drivers such as globalization, climate change, political instability, aging society, new technologies, and bio economy/green economy. Holistic and integrative approaches are needed, such as ecosystem services and corporate social response.
Economic growth, measured by the rate of change in gross domestic product (GDP), is generally associated with growing demand for products and services, including wood products.
According to neo- classical growth theory, economic growth is driven by growth in population (i.e., labor supply), capital and technological change.
Due to diminishing returns to capital, and labor increases, economies will eventually reach a point (steady state) at which no new increase in production factors will create economic growth.
Global Wood Products Industry to 2030
Global forest area is predicted to reverse its historical decline increasing from 4.0 billion ha in 2000 to 4.1 billion ha in 2030.
This trend, however, hides continuing tropical forest loss, with 243 million ha predicted to be lost between 2000 and 2030.
The largest predicted losses of forest area are in Africa and South America, due to slower growth in income per capita in these regions.
Global forest stock is predicted to increase from 452 billion m3 in 2000 to 535 billion m3 in 2030, with most of this increase occurring in the non-tropical countries.
The Global Forest Products Model projections suggest that the value of global consumption of wood products will increase in real terms at 1.9% per annum from US $597 billion in 2002 to US $1,023 billion in 2030.
This reverses the decline in the value of consumption between 1992 and 2002, which occurred due to falling wood product prices and the decline in Russian production. The historical trend of processed products increasing their share of global wood product production and consumption is predicted to continue.
This is due to countries demanding more processed wood products particle board, fibre board, printing and writing paper, and other paper and paperboard as they become wealthier.
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For the forest sector, the principal effect of globalization has been reduced transport costs, which have led to increased forest-product trade and the creation of a truly global market for forest products.
Globalization has reduced the importance of forest resources for the forest industry, and development has been driven predominantly by labor costs, levels of research and technology, and access to capital.
Intensively managed forest plantations are increasingly replacing natural forests as the raw material resource.
These changes eliminate the traditional ties between forest processing and locations with abundant natural forests.
Hence, forest industry functions have become spatially separated, i.e., companies now utilize materials from various sources, and consequently can site manufacturing plants at different locations along the value chain, from the forest to the consumer.
Policies, Regulations and Customer Preferences Linked to Climate Change
Policies aimed at mitigating climate-change can affect forest-product markets in various ways.
One is by encouraging use of wood products instead of other materials that yield more Green House G emissions during the course of their production, subsequent use and disposal.
As an example, public policies promoting the use of energy-efficient, renewable construction materials (e.g., the Code for Sustainable Homes in the UK) could boost global demand for construction timber.
However, the way in which green building standards are formulated will greatly influence the strength of preferences for sustainable wood products over competing materials, based on lifecycle carbon emissions.
In summary, forestry and forests are changing under several drivers such as globalization, climate change, political instability, aging society, new technologies, and bio economy/green economy.
Holistic and integrative approaches are needed, such as ecosystem services and corporate social response.
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