Lost Revenues from Forests Top
Five Billion Dollars a Year
Undervaluing the economic worth of forests causes governments around the
world to lose some $5 billion a year in taxes and royalties, according to a
report of the Secretary-General of the United Nations, which was discussed at
the third session of the United Nations Forum on Forests (UNFF). This amount is
equal to more than three times the level of official development assistance for
financing sustainable forest management.
Inadequate tax collection decreases government revenues, poses as a
disguised subsidy to producers and reinforces wasteful logging. The problem
is typically an indication of improper accounting of forest resources and
poor forest valuation. With prices that do not reflect the real value of
the products and malfunctioning market mechanisms, illegal economic
activities flourish and forest cover continues to decline. According to the
Secretary-General's report on the economic aspects of forests, which was
prepared in collaboration with the World Bank, annual losses from illegal
logging exceed $10 billion. The estimated net loss of forests in the 1990s
as a whole was 94 million hectares, an area larger than Venezuela.
"Healthy market practices and responsible forest policies are the best
tools for achieving sustainable forest management," said Mr. Pekka
Patosaari, Coordinator for the Forest Forum, the key intergovernmental body to
facilitate and coordinate implementation of sustainable forest
management worldwide.
In developing countries, with scarce resources and capacity, forest data is
often hard to come by. But even where information on the value of wood
products is available, the report says, the system of collecting revenues
from logging fails to capture the real price of timber. Forests provide
more than wood or non-wood products. They also contribute to conserving
biodiversity, mitigating climate change, protecting watersheds, and
generating employment, as well as having recreational and spiritual value.
Market-based instruments for environmental protection, such as payments for the
capacity of forests to absorb carbon dioxide, are only emerging.
With timely and up-to-date information about the prevalent international
prices for forest products, the report suggests, illegal activities will be
reduced, bringing in more money to government coffers. The information will
also help small-scale producers of non-wood products. An estimated 500
million people, most of them poor, live in or near forests and subsist on
forest products.
Policymakers try to right the wrong
The economic aspect of forests is one of three key issues that will be the
subject of discussion at the third session of the Forest Forum meeting this
year in Geneva, from 26 May to 6 June. The other issues are maintaining
forest cover to meet present and future needs, and forest health and
productivity (See backgrounder for details).
The Forest Forum meets annually to develop and facilitate implementation of
international forest policies, mobilize international cooperation and
strengthen political commitment to sustainable management of all types of
forests. The Forum is the successor of the Intergovernmental Panel on
Forests (IPF) and the Intergovernmental Forum on Forests(IFF), which were
created after the 1992 Earth Summit in Rio de Janeiro, Brazil, to promote
the management, conservation and sustainable development of all types of
forests.
Building on the Forest Principles adopted in Rio, and over 270 proposals
for action adopted by the IPF and IFF, the Forest Forum monitors
implementation and builds consensus on further steps, including
consideration of the parameters of a mandate for the development of a legal
framework on all types of forests. Starting with its first session in 2001, the
Forest Forum has focused on limiting deforestation and forest
degradation, strengthening efforts to rehabilitate and restore forests and
generating more resources for the forestry sector.
Forest Facts
· There are nearly 3.9 billion hectares of forests worldwide. Of the
total forest area, 95 per cent is natural or managed forest and 5 per cent
is forest plantations.
· Natural forests continue to be lost or converted to other land uses
at a high rate. In the 1990s, deforestation worldwide was 14.6 million
hectares per year and an additional 1.5 million hectares were converted to
forest plantations. Most of the forest loss occurred in the tropics.
· During the same period, forested areas increased through
reforestation, afforestation and natural expansion by 6.7 million hectares,
resulting in a net loss of 9.4 million hectares per year over the ten-year
period.
More Information
More information about the Forest Forum, including official documents, can
be found on the official website http://www.un.org/esa/forests
Issued by the United Nations Department of Public Information
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