The Nature Conservancy

Photo courtesy of ©Kevin Arnold for The Nature Conservancy
Making the case for the “forest economy”

The surface temperature of the earth is rising. The Arctic sea ice is receding. Catastrophic storms are becoming commonplace. Governments, NGOs, companies and individuals are trying to mitigate climate change with a variety of approaches to decrease carbon emissions and increase carbon sequestration. So far, our collective efforts have not been enough.

Over the past year, The Nature Conservancy and Bain & Company have worked together to assess how reforestation might help address climate change. The result is a new vision for a forest economy that harnesses the power and scale of markets, and has the potential to increase reforestation at a fast enough rate that it might help slow climate change.

A 1% increase in annual demand for industrial wood products

could drive 20 million hectares of new sustainably managed tree farms

Forestry, and reforestation in particular, has significant potential for both carbon sequestration and reducing emissions. Reforesting at a rate to meet the Paris Agreement goal of limiting temperature increase to 2°C through the end of this century could mitigate up to three billion additional tons of CO2 on an annual basis. In addition, wood-based products can substitute for more carbon-intensive and nonrenewable materials like steel, concrete and even plastic. By 2030, 150 million hectares of net reforestation would contribute one-third of the climate mitigation needed to achieve these goals.

“The Nature Conservancy is grateful to work with Bain & Company’s world-class team as we transform traditional approaches to conservation. We admire Bain’s commitment to working with NGOs to drive social impact, and the lessons we’re learning will carry over to other projects across our organization.”
Mark R. Tercek, CEO, The Nature Conservancy

Most deforestation is the result of economic development—clearing land for cattle, soy, agriculture, palm oil production or other activities that will drive higher financial return in the short term.

Without assigning economic value to forests, there is often no counterforce to protect them. It is imperative, therefore, that market-based drivers be a component of our reforestation approach.

A successful forest economy would require:

  • economic incentives for landowners to let nature grow back, replant natural forests and, in particular, support commercial forests;
  • forests to become more valuable and more competitive with other land uses, like cattle-raising and farming, if there is a good market for wood products;
  • growing demand for sustainable wood-based materials common and ubiquitous across many sectors; and
  • responsible forest management coupling new, often productive, forests with improved forest restoration and greater protection of native forests.
Photo courtesy of ©Robert Clark for The Nature Conservancy.

Native tree saplings are prepared for planting in the Mantiqueira range of Brazil's Atlantic Forest.

Rather than trying to reduce our use, in a forest economy we want to use more sustainably harvested tree products, particularly forms that have a high-value, long-term use and have been sustainably grown. A 1% increase in annual demand for industrial wood products could drive 20 million hectares of new sustainably managed tree farms.

This new demand can come from greater substitution of sustainable wood products, such as:

  • cross-laminated timber (CLT), a high-strength timber product that can substitute for more carbon-intensive concrete and steel in midrise buildings;
  • paper cartons instead of plastic bottles; and
  • paper packaging in place of various plastics used today.

An average eight-story CLT building uses 3,000 cubic meters of wood; a traditional building of similar dimensions could use 6,000 tons of concrete and 1,000 tons of steel. Not only does carbon sequestration take place as the forest matures to provide this wood, but the substitution of wood for concrete and steel drives significant additional benefits.

As the trees grow, they sequester carbon. Then, every time trees are harvested to make CLT, new trees are planted and start the maturation process, sequestering increasingly more carbon on an annual basis before reaching an annual equilibrium at the point of maturation. Long-lived wood products, like CLT used in a building, continue to store the CO2 originally sequestered during the trees’ growth period. In Europe, the use of CLT is already on the rise.

Piedad Reyes Lara marks a code after cutting down a Chico Zapote gum tree harvested for its hardwood quality. The logging community of Noh Bec has adopted reduced-impact logging techniques to selectively harvest specific trees, generating revenue while maintaining a healthy forest. Photo courtesy of ©Erich Schlegel for The Nature Conservancy.

A forest economy requires many groups to adapt. Nonprofits will have to support growth of the sustainable forest economy as a driver of carbon mitigation outcomes, rather than as a threat to the environment. Forestry and other industries must lead on sustainability efforts in order to gain the social license to expand forest production and wood consumption. Government and local authorities must embrace the forest economy as a source of critical benefits for a stable climate future, and put in place policies that help protect native forests and simultaneously encourage the sustainable forest product industry. Finally, consumers must understand and have confidence in the science behind sustainable wood products and make environmentally positive choices.