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					Where Have All the Forests Gone? (from the

By Janet Larsen | Monday, August 26, 2002

Although a growing number of people today realize that illegal logging threatens ecological and
economic stability, such logging still occurs all over the globe. The Earth Policy Institute’s Janet
Larsen zeroes in on the global lumber trade — and its effects on illegal logging in Asia and beyond.
The massive flooding of China's Yangtze River in 1998 was linked to the removal of 85% of the
upper river basin's original tree cover. That one catastrophe propelled China to issue a ban on
logging in the upper reaches of the Yangtze and Yellow Rivers — and to begin a reforestation

Another lumber-trade problem?

China consumes nearly 280 million cubic meters of timber a year, but domestic supply currently
provides only 142 million cubic meters. As production shrinks, China is turning to imports and
illegal logging to make up for the shortfall.

Rarely is deforestation purely a local issue.

The International Tropical Timber Organization forecasts that within the next few years China will
become the world's largest log importer — edging out the United States and eclipsing Japan.
Japan’s massive imports have already destroyed many of the rainforests of the Philippines and
much of Borneo.

57% of the logs brought into China originate in Russia. There, poor law enforcement, corruption
and the abandonment of local timber-processing plants have led people to cut trees illegally for
companies that send raw materials to China for processing. At least one-fifth of Russia's timber
harvest is taken illegally or drastically violates existing legislation.

Burmese accounting problems

To China's south, Burma (Myanmar) holds about half of mainland Southeast Asia's forests. These
contain a variety of tropical hardwood species that are increasingly drawing interest from China.

On paper, Burma supplies less than 10 percent of China's log imports. But industry workers say the
numbers must be at least twice as high.

Worse than agent orange
Burmese log exports to China are growing much faster than the trees — many of which are
hundreds of years old and cannot be replaced. In 1949, tropical forests covered 21% of the country's
land area — but now less than 7% of Burma is forested.

As lumber production shrinks, China is turning to imports and illegal logging to make up for
the shortfall.

In neighboring Laos, where the volume of illegal logging is the equivalent of at least one sixth of
the legal harvest, the army openly cuts forests. Now less than 40% of the country is forested, down
from 70% in 1940.

In Cambodia, over 70% of the timber export volume consists of unreported logs. And Vietnam
could lose all substantial forest cover by 2020 if the current rate of deforestation continues.

Out of Africa

As the growing Asian timber market has exhausted supplies over much of the continent, wood
imports to Asia from Africa have steadily increased. From 1993 to 1999, Europe was the main
importer, taking 40% of central African logs. But since 1996, rising demand from Asia has made
that region the number one importer of African timber.

Forest products are the second-largest export for both Cameroon and Gabon, generating about 20%
and 13% of revenues, respective by export. Between 1990 and 1995, the share of Cameroonian logs
going to Asia soared from 7% to 50%.

Logging without license

Unfortunately, only half the logging companies in Cameroon are licensed. And among these
companies, violations such as felling trees smaller than the legal size and cutting outside concession
boundaries are common.

Burmese log exports to China are growing much faster than the trees

These examples cover only a portion of the global timber market. Uncontrolled deforestation
abounds in other countries. In Brazil, with the world's highest deforestation rate, an estimated 80%
of logging is illegal.

Mexico is losing over 1 million hectares each year. And in Ethiopia, forest cover has plummeted
from around 40 million hectares to 2.7 million in just 40 years — only half of which is natural
forest. Rarely, though, is deforestation purely a local issue.

An important issue
The world's eight largest industrial countries plus the rest of the European Union are large
consumers of timber and timber products from abroad, accounting for almost three-quarters of
world timber imports. Most of this wood comes from countries where illegal tree felling is the

In 2000, the United States alone imported over $450 million worth of timber from Indonesia, which
given Indonesia's illegal logging rate could represent $330 million worth of timber from illegal

International certification

If importing countries were to insist that timber and timber products are certified under
internationally recognized environmental and social standards such as those of the Forest
Stewardship Council, then illegal logging would become more difficult.

In 2000, the United States imported over $450 million worth of timber from Indonesia, which
could represent $330 million worth of timber from illegal sources.

Exporting countries would profit by protecting the integrity of forest ecosystems, and could secure
higher prices for certified wood on international markets.

Russia, for instance, loses $1 billion in export revenues each year because its wood is not certified.
To counteract this unfortunate result, it is now developing a mandatory certification system for
standing forests.

More than just lumber

Certification along with existing international agreements, such as the Convention on International
Trade in Endangered Species of Wild Fauna and Flora, can help to prevent illegal logs from
crossing international borders — if laws and standards are upheld.

In addition, recycling and reduced use of throw-away timber products can lower the demand for
timber that has made illegal logging profitable. As the Chinese government has recognized, the
services that forests provide, such as flood control, can be worth far more than the lumber they

NASA: Tropical Deforestation
Read more about the process of deforestation from the U.S. National Aeronautics and Space

North American Wholesale Lumber Association
Learn more about the North American lumber industry.
Earth Policy Institute
Read more about global environmental issues.

The International Monetary Fund: a major actor in deforestation

For years forest activists have focused their attention --and rightly so-- on the World Bank's role in forest
destruction. Those efforts have to a certain extent been instrumental in the introduction of a number of positive
policy changes within the Bank, which have at least meant an improvement in World Bank lending.

However, efforts to influence an equally or even more important actor in forest loss --the International
Monetary Fund-- have been mostly absent or at least clearly insufficient, while there is ample proof of the
direct link between IMF-imposed policies and deforestation.

Through its Structural Adjustment Programmes (SAPs), the IMF has for years been imposing on Southern
governments the implementation of a number of policies, allegedly aimed at solving those countries' economic
problems. Country after country and year after year, the result has been further impoverishment and
widespread environmental degradation.

Oblivious to the fact that its patients' economic, environmental and social health is not only not improving but,
on the contrary, is clearly worsening, the IMF continues imposing exactly the same medicine: open up trade
barriers, increase exports, cut government spending, promote foreign investment, liberalise, privatise.

It is really hard to believe that IMF economists ignore what's resulting from the implementation of the
institution's policy. It is even harder to believe that its most influential members (the US, Japan, the European
Union) are unable to make it work adequately. But when one looks at the results of those policies, it becomes
clear that the IMF is in fact doing its job very adequately, particularly for Northern-based transnational
companies. Abundant and cheap supplies of countless raw materials are now directly or indirectly in the hands
or transnational corporations and the same is applicably to huge economic assets which used to be state
owned (energy, telecomunications, mines, insurance, banking, etc.) and are now controlled by TNCs.

In the tropical region, IMF-imposed programmes have resulted in deforestation, forest degradation,
widespread social impacts and generalized impoverishment. Forests are being rapidly destroyed to give way
to export-oriented cash crops; large-scale commercial logging is depleting some of the most biodiverse forests
on Earth; mining corporations are destroying environments and local peoples' livelihoods; oil exploitation is
degrading entire ecosystems and local communities' basic resources; hydrolectric dams drown entire forest
areas; export-oriented shrimp farming results in the disappearance of mangroves.

The result is that countries rich in natural resources become socially, economically and environmentally poorer
the more those resources are exploited and exported.

With that track record, the IMF must be considered as one of the major underlying causes of deforestation and
forest degradation. All governments --North and South-- have committed themselves to protect the world's
remaining forests and to address the underlying causes of deforestation. All those governments sit at the IMF.
However, this being a non-democratic institution, at the IMF the number of votes depends on the number of
shares each country holds. This implies that responsibility for the institution's policies and actions regarding
forest destruction lies squarely on the hands of its major shareholders: the US, European Union member
countries and Japan.
Those governments must be made aware --through increased campaigning efforts-- that the world is holding
them responsible for the social and environmental disaster which is resulting from IMF-imposed policies in
tropical countries, which must be urgently and drastically modified. More of the same is simply a recipe for

Source: WRM's bulletin Nº 54, January 2002.

General info on Deforestation

The clearing of tropical forests across the Earth has been occurring on a
large scale basis for many centuries. This process, known as deforestation,
involves the cutting down, burning, and damaging of forests. The loss of
tropical rain forest is more profound than merely destruction of beautiful
areas. If the current rate of deforestation continues, the world's rain forests
will vanish within 100 years-causing unknown effects on global climate
and eliminating the majority of plant and animal species on the planet.

Why Deforestation Happens
Deforestation occurs in many ways. Most of the clearing is done for
agricultural purposes-grazing cattle, planting crops. Poor farmers chop
down a small area (typically a few acres) and burn the tree trunks-a
process called Slash and Burn agriculture. Intensive, or modern,
agriculture occurs on a much larger scale, sometimes deforesting several
square miles at a time. Large cattle pastures often replace rain forest to
grow beef for the world market.

Commercial logging is another common form of deforestation, cutting
trees for sale as timber or pulp. Logging can occur selectively-where only
the economically valuable species are cut-or by clearcutting, where all the
trees are cut. Commercial logging uses heavy machinery, such as
bulldozers, road graders, and log skidders, to remove cut trees and build
roads, which is just as damaging to a forest overall as the chainsaws are to
the individual trees.

The causes of deforestation are very complex. A competitive global
economy drives the need for money in economically challenged tropical
countries. At the national level, governments sell logging concessions to
raise money for projects, to pay international debt, or to develop industry.
For example, Brazil had an international debt of $159 billion in 1995, on
which it must make payments each year. The logging companies seek to
harvest the forest and make profit from the sales of pulp and valuable
hardwoods such as mahogany.

Deforestation by a peasant farmer is often done to raise crops for self-
subsistence, and is driven by the basic human need for food. Most tropical
countries are very poor by U.S. standards, and farming is a basic way of
life for a large part of the population. In Brazil, for example, the average
annual earnings per person is U.S. $5400, compared to $26,980 per person
in the United States (World Bank, 1998). In Bolivia, which holds part of
the Amazon rain forest, the average earnings per person is $800. Farmers
in these countries do not have the money to buy necessities and must raise
crops for food and to sell.

There are other reasons for deforestation, such as to construct towns or
dams which flood large areas. Yet, these latter cases constitute only a very
small part of the total deforestation.

The Rate of Deforestation
The actual rate of deforestation is difficult to determine. Scientists study
the deforestation of tropical forests by analyzing satellite imagery of
forested areas that have been cleared. Figure 2 is a satellite image
illustrating how scientists classify the landscape. Contained within the
image are patches of deforestation in a distinctive "fishbone" of
deforestation along roads. Forest fragments are isolated areas left by
deforestation, where the plants and animals are cut off from the larger
forest area. Regrowth-also called secondary forest-is abandoned farmland
or timber cuts that are growing back to become forest. The majority of the
picture is undisturbed, or "primary," forest, with a network of rivers
draining it.

The Food and Agriculture Organization (FAO) estimates that 53,000
square miles of tropical forests (rain forest and other) were destroyed each
year during the 1980s. Of this, they estimate that 21,000 square miles were
deforested annually in South America, most of this in the Amazon Basin.
Based on these estimates, an area of tropical forest large enough to cover
North Carolina is deforested each year!

The rate of deforestation varies from region to region. Recent research
results showed that in the Brazilian Amazon, the rate of deforestation was
around 6200 square miles per year from 1978-1986, but fell to 4800 square
miles per year from 1986-1993. By 1988, 6% of the Brazilian Amazon had
been cut down (90,000 square miles, an area the size of New England).
However, due to the isolation of fragments and the increase in
forest/clearing boundaries, a total of 16.5% of the forest (230,000 square
miles, an area nearly the size of Texas) was affected by deforestation.
Scientists are currently analyzing rates of deforestation for the current
decade, as well as studying how deforestation changes from year to year.

The much smaller region of Southeast Asia (Cambodia, Indonesia, Laos,
Malaysia, Myanmar, Thailand, and Vietnam) lost nearly as much forest per
year as the Brazilian Amazon from the mid-1970s to the mid-1980s, with
4800 square miles per year converted to agriculture or cut for timber.

Deforestation and the Global Carbon Cycle
Deforestation increases the amount of carbon dioxide (CO2) and other
trace gases in the atmosphere. The plants and soil of tropical forests hold
460-575 billion metric tons of carbon worldwide with each acre of tropical
forest storing about 180 metric tons of carbon. When a forest is cut and
burned to establish cropland and pastures, the carbon that was stored in the
tree trunks (wood is about 50% carbon) joins with oxygen and is released
into the atmosphere as CO2.

The loss of forests has a profound effect on the global carbon cycle. From
1850 to 1990, deforestation worldwide (including the United States)
released 122 billion metric tons of carbon into the atmosphere, with the
current rate being approximately 1.6 billion metric tons per year. In
comparison, fossil fuel burning (coal, oil, and gas) releases about 6 billion
metric tons per year, so it is clear that deforestation makes a significant
contribution to the increasing CO2 in the atmosphere. Releasing CO2 into
the atmosphere enhances the greenhouse effect, and could contribute to an
increase in global temperatures (see Global Warming Fact Sheet, NF-222).
Deforestation and the Hydrologic Cycle
Tropical deforestation also affects the local climate of an area by reducing
the evaporative cooling that takes place from both soil and plant life. As
trees and plants are cleared away, the moist canopy of the tropical rain
forest quickly diminishes. Recent research suggests that about half of the
precipitation that falls in a tropical rain forest is a result of its moist, green
canopy. Evaporation and evapotranspiration processes from the trees and
plants return large quantities of water to the local atmosphere, promoting
the formation of clouds and precipitation. Less evaporation means that
more of the Sun's energy is able to warm the surface and, consequently, the
air above, leading to a rise in temperatures.

Deforestation and Biodiversity
Worldwide, 5 to 80 million species of plants and animals comprise the
"biodiversity" of planet Earth. Tropical rain forests-covering only 7% of
the total dry surface of the Earth-hold over half of all these species. Of the
tens of millions of species believed to be on Earth, scientists have only
given names to about 1.5 million of them, and even fewer of the species
have been studied in depth.

Many of the rain forest plants and animals can only be found in small
areas, because they require a special habitat in which to live. This makes
them very vulnerable to deforestation. If their habitat is destroyed, they
may become extinct. Every day, species are disappearing from the tropical
rain forests as they are cleared. We do not know the exact rate of
extinction, but estimates indicate that up to 137 species disappear
worldwide each day.

The loss of species will have a great impact on the planet. We are losing
species that might show us how to prevent cancer or help us find a cure for
AIDS. Other organisms are losing species they depend upon, and thus face
extinction themselves.

After Deforestation
What happens after a forest is cut is very important in the regeneration of
that forest. Different cutting techniques and uses of the land have diverse
effects on the ground and surviving organisms that make up a rain forest.

In a tropical rain forest, nearly all of the life-sustaining nutrients are found
in the plants and trees, not in the ground as in a northern, or temperate
forest. When the plants and trees are cut down to sow the land, farmers
usually burn the tree trunks to release the nutrients necessary for a fertile
soil. When the rains come, they wash away most of the nutrients, leaving
the soil much less fertile. In as little as 3 years, the ground is no longer
capable of supporting crops.

When the fertility of the ground decreases, farmers seek other areas to
clear and plant, abandoning the nutrient-deficient soil. The area previously
farmed is left to grow back to a rain forest. However, just as the crops did
not grow well because of low nutrients, the forest will grow back just as
slow because of poor nutrients. After the land is abandoned, the forest may
take up to 50 years to grow back.

Another type of farming practiced in rain forests is called shade
agriculture. In this type of farming, many of the original rain forest trees
are left to provide shade for shade-loving crops like coffee or chocolate.
When the farm is abandoned, the forest grows back very quickly, because
much of it was left unharmed in the first place. After this type of farming,
forests can grow back as quickly as 20 years.

Other types of farming can be more devastating for forest regrowth.
Intensive agricultural systems use large quantities of chemicals like
pesticides and fertilizers. These chemicals kill a lot of the living organisms
in the area, seeping into the soil and washing into the surrounding areas.
On banana plantations, pesticides are used on the plants and in the soil to
kill pest animals. However, these pesticides also kill other animals as well,
and weaken ecosystem health. Banana plantations also use irrigation
ditches and underground pipes for water transport, changing the water
balance of the land. After the abandonment of a banana plantation, or other
intensive agricultural system, it can take many centuries for a forest to
A study in Indonesia found that when only 3% of the trees were cut, a
logging operation damaged 49% of the trees in the forest. Yet, even with
that much damage, the rain forest will grow back relatively quickly if left
alone after selective logging, because there are still many trees to provide
seeds and protect young trees from too much sun.

Clearcutting is much more damaging to a tropical rain forest. When the
land is commercially clearcut and all of the trees removed, the bare ground
is left behind with very little regrowth. Unlike when the farmer cleared the
land, there are almost no nutrients left behind because all the tree trunks
were removed. A clearcut forest can require many years to regenerate-in
fact, scientists do not know how long it takes for a clearcut forest to grow

The Future
The deforestation of tropical rain forests is a threat to life worldwide.
Deforestation may have profound effects on global climate and cause the
extinction of thousands of species annually. Stopping deforestation in the
tropics has become an international movement, seeking ways to stop the
loss of rain forests.

Because the loss of rain forests is driven by a complex group of factors, the
solutions are equally complex. Simple solutions that do not address the
nature of world economics and rain forest ecology have little chance of
succeeding. The future requires solutions based on solving the economic
crises of countries holding rain forests, as well as improvement of the
living conditions of the poor people often responsible for deforestation.

Because of growing concern about tropical deforestation, researchers have
sharply increased their efforts to model the factors influencing forest clearing
in recent years. The discussion which follows analyzes the factors found to
affect forest clearing in these models. It should not be taken to imply all
deforestation is inappropriate. How much and which forest ought to be cleared
in each country is a matter for national policy makers to decide. We would also
like to emphasize that inevitably we have been forced to synthesize the
models' most general conclusions regarding tropical deforestation. We have
tried, where possible to make reference to the specific circumstances under
which these conclusions are likely to hold. Even so each particular country and
region is unique and the patterns of deforestation in each country can only be
partially attributed to the variables analyzed in the models


Population affects deforestation through: 1) direct land hunger of rural
families; 2) labor markets; 3) demand for agricultural and forest products; and
4) induced technological change.

Population density and the percentage of land area in forest are strongly
correlated at the national level. However, this correlation often disappears
when other variables are included in the models, telling us that rather than
population explaining forest cover a third set of factors may be simultaneously
affecting both. Population variables and recent deforestation are not as
strongly correlated. Models which use FAO deforestation data to examine the
relation between population and forest cover give spurious results since the
FAO deforestation estimates themselves are partially based on population data.

At the local and regional level, population is endogenous and determined by
infrastructure availability, soil quality, distance to markets, and other factors.
At these levels, population often shows no statistically significant relation to
deforestation once these other variables are taken into account.

Except at the global level of analysis, migration is probably a more relevant
demographic issue related to deforestation than natural population growth.
Many government policies affect migration including infrastructure investment,
colonization policies, subsidies for specific activities, and macro-economic

To the extent people migrate to forested areas because it is economically
attractive for them to do so, population levels in those areas cannot be
considered an independent variable with regard to deforestation. It is more
appropriate to consider population exogenous in areas with limited migration.

Greater population increases labor supply, which tends to lower wages, and
that in turn can lead to higher deforestation. However, many factors can
intervene at each step of this chain, and invalidate this general conclusion.

Few models focus explicitly on the relation between population and the
demand for agricultural and forest products. This aspect is relatively less
important in contexts where per capita income is growing or declining rapidly
or where agricultural and forestry products are strongly tradable. Because of
globalization, the population - demand relation has become less important at
the national and regional levels. New agricultural and forestry export prospects
may lead to rapid deforestation in low population countries where small
domestic markets previously limited deforestation.

If technology becomes more labor intensive as population density increases,
deforestation should increase less than proportionally to rural population

Income / Economic Growth

Higher national per capita income is associated with greater deforestation in
developing countries. It is not clear whether deforestation declines as countries
become richer. Results regarding the impact of rapid economic growth on
deforestation are contradictory. Conclusions regarding this variable should be
made with particular caution since the only available models are based on
global regression analyses with poor data.


No clear conclusion can be made regarding this variable. Some studies find an
association between high external debt and greater deforestation. Others find
no clear connection. They are all based on global regression analysis and poor

Agricultural Prices

Higher agricultural prices stimulate greater forest clearing. They make
agriculture more profitable and finance the clearing of additional land. The
effect is stronger when agricultural output and labor supply are elastic. In the
long-term general equilibrium price adjustments dampen some of the initial
effects, so the net effect on deforestation is likely to be lower.

Policies which seek to improve the terms of trade for agriculture, such as
currency devaluations, trade liberalization, reductions in agricultural export
taxes, agricultural price subsidies, and reduced fiscal spending on non-
agricultural sectors tend to raise prices received by farmers, and hence
increase deforestation. Thus, successful structural adjustment policies (SAPs)
often increase pressure on forests, and policies such as over valued exchange
rates, industrial protectionism, and urban biases in spending can reduce

These conclusions are based mostly on static partial equilibrium analyses. In
more dynamic and general equilibrium models, policies which improve the
terms of trade in favor of agriculture in the short run may reduce urban
demand for food stuffs, making the ultimate impact on deforestation
Pro-export policies designed to increase agricultural and forest product exports
are likely to have stronger deforestation effects than policies that promote
production for the domestic market. This is because an increased supply of
agricultural exports is less likely to put downward pressure on prices, and
dampen the initial effects of the policies. Similarly, pro-agricultural policies are
likely to have stronger deforestation effects in the contexts of globalized
agricultural markets and trade liberalization.

Since different crops / livestock products use distinct technologies, changes in
the relative prices of different agricultural products may affect forest clearing
more than changes in the general profitability of agriculture. This makes it
impossible to predict how specific policies will affect forest clearing without
looking at the changes they generate in prices for specific products and the
pressure supplying each of those products puts on forests.

Off-Farm Employment / Wages

More off-farm employment and higher wages should decrease deforestation
because agriculture and forestry become less profitable. One counter effect is
that wage increases stimulate demand for certain agricultural and forestry
products associated with deforestation.

Higher agricultural wage rates limit the deforestation effects of agricultural
booms because they increase the costs of agricultural production. Thus,
institutional mechanisms, such as unionization and rural minimum wages,
which favor wage increases limit deforestation. Greater off farm employment
can simultaneously reduce deforestation and diminish poverty.

Transportation Infrastructure

Greater access to forests generally leads to more deforestation. This is valid
with regard to roads, forest fragments, coastal countries, and islands. The
simple correlation between roads and deforestation, however, overstates the
real causal relation because roads are partly endogenous. Nevertheless, no
policy designed to reduce inappropriate deforestation can be considered
comprehensive unless it includes clear guidelines regarding this issue.

Land Tenure and Land Markets

Deforestation is greater under open access regimes than when there are full
property rights, and even greater when forest clearing allows people to obtain
additional property rights. Paradoxically, however, making land tenure more
secure in places where property rights were obtained by forest clearing gives
an additional incentive to clear forests.
High land costs, when caused by land taxes or one-time price increases,
discourage deforestation. However, continuously rising land prices, combined
with the possibility of obtaining additional property rights by clearing land,
encourage deforestation for speculative purposes.

Input Prices

Higher input prices reduce deforestation by making agriculture less profitable,
but increase it by provoking substitution from more to less intensive
technologies. The net effect is indeterminate. Studies from Africa suggest the
second effect is slightly larger, implying that high input prices there encourage
deforestation. In this context, the elimination of input price subsidies may lead
to greater forest clearing.

Technological Change

Technological changes, such as new crop varieties, which increase yields
without changing the demand for labor or capital, increase deforestation in the
short run. They may reduce deforestation in the medium run if they lead to
lower prices and that, in turn, discourages bringing new areas into production.
If new technologies are more labor intensive, their short-run effect on
deforestation is indeterminate. Since agriculture becomes more profitable, this
stimulates increases in area, but since each unit of production requires more
labor, and this can bid up wage rates, dampening the initial effect. Another
relevant factor is whether the technological change is only applicable in already
cleared lands or can also be applied to currently forested lands. Where labor
supply is inelastic (as it is likely to be in the short run before migration can
occur) and where the new technology only applies to already cleared land
technological change is likely to reduce deforestation. The empirical evidence
on this issue is weak, but tends to show that technological change has reduced

Agricultural research in export crops is more likely to promote deforestation;
research in non-tradables with inelastic demand less so. Investing in
agricultural research designed to improve production in areas not threatened
by deforestation is more likely to reduce pressure on forests, than supporting
research designed to increase agricultural productivity in forested areas.

Interest rates / discount rates

High interest rates and discount rates reduce investment both in forest clearing
and in forest management. These results, however, are based only on
analytical models, with no empirical evidence.

Timber prices
Increased timber prices reduce land clearing for agriculture if there is not an
open access situation and there are no capacity constraints on logging. In open
access situations, higher timber prices simply reduce the costs of conversion.
Timber trade restrictions shift timber production from high to low cost areas
and to later periods. They don’t necessarily reduce total logging, but at any
given moment they increase the area in forest which has not been logged.
Policies which lower timber prices or increase costs from regulation reduce
logging, but also investment in avoiding encroachment and in forest
management. Having a more elastic labor supply will tend to dampen these
effects. Global regressions give mixed results regarding whether logging is
correlated with deforestation and are based on poor data.

Concession Policies

Concessionaires will only protect already logged forest from encroachment
when they expect to log the entire concession area and the discounted value of
future timber harvests is greater than the cost of managing the forest and
avoiding encroachment. Under certain plausible assumptions there is no simple
direct relation between concession duration and the probability a concession
will be sustainably managed. Like the results regarding interest rates, these
conclusions are based only on analytical models, not empirical evidence.

Environmental factors

Forests tend to be cleared more in drier, flatter, higher fertility areas, with
adequate drainage


Deforestation is usually defined as the loss of forest. FAO defines deforestation
as converting forests to another land use or the long-term (more than 10
years) reduction of tree-canopy cover below the 10 percent threshold.
Depending on how it is estimated, over 15 million ha of natural forest are lost
in the tropics every year. This is more than the area of Nepal or Arkansas in
the United States. To put this in proportion, total global forest cover is 3870
million ha, or 30 percent of the earth's land area; tropical and subtropical
forests represent 56 percent of this total, or 2167 million ha.

The trees may be cut for their wood or pulp, to clear the land for agriculture or
ranching, for housing, mining and other development. If an area of forest is
cleared and houses are built on it, this land is obviously deforested and the
forest is lost. If local people clear the trees and grow crops on the land for a
few years and then move on, that cleared area is also deforested according to
FAO, because it has come under agricultural use. However, if the same area is
logged by clearfelling but the logging company intends to replant it with trees,
this is not considered deforestation. This leads to the odd situation of having a
forest without trees.

Foresters are happy to use the ideas of temporary and permanent clearing.
Environmentalists are concerned about permanent deforestation, while
temporary clearing may be acceptable. Nevertheless, temporary clearing is a
very significant activity. The International Fund for Agricultural Development
( estimated in 2001 that 10 million ha of tropical forest were
temporarily cleared every year for shifting agriculture. This figure is more than
FAO's most recent estimate of the permanent deforestation that happened
every year during the 1990s.

The 10-year time period raises problems, because the only way to say if an
area is truly deforested is to know its fate in 10 year's time. Forest clearing
tends to follow a pattern. Shifting agriculture creates islands of cleared forest,
as does mining, but on a much larger scale. Logging companies work within
the geometric areas defined by their concessions. When a road is cut through a
jungle or a forest, for whatever reason, people arrive in the new areas that are
opened up and may start clearing land for agriculture or logging (legally or
illegally) along the corridor the road creates. Resettlement schemes usually
branch out from a road. All these uses can overlap and change with time so it
is impossible to predict what will happen to a particular area of cleared forest
10 years in the future. That makes it difficult to use a criterion like FAO's in a
consistent way, especially in tropical developing countries with highly dynamic
land use.
Impact of deforestation and degradation

Both deforestation and degradation have many significant impacts on local and
global ecosystems.

Loss of biodiversity

Deforestation permanently destroys the biodiversity that a forest contains, and
a degraded forest many not be able to support species adapted to the
specialized conditions in, for example, a moist tropical forest species. Forests
support many species that are only found within a small geographical range, so
any disruption can result in the loss of a species or the loss of genetic
variability within species, even when the forest surrounding a cleared area
appears to human observers to be identical to the forest that was lost.
The impact of deforestation and degradation on biodiversity extends beyond
the area directly cleared because of the impact of fragmentation of the
formerly continuous forest. The small islands left cannot support viable
populations of forest species. In addition, fire and other disturbances (including
logging) are usually associated with the presence of nearby deforestation, thus
further extending the impact beyond the edges of the clearings.

Loss of water cycling

About half of the rainfall on a large area of forest is water that has been lost by
the trees themselves. The rest comes from clouds blown into the region by
climatic conditions. The rest of the water is being held in the soil or flowing out
of the region in rivers. The Amazon is by far the world’s largest river in terms
of water flow – over eight times larger than the second largest, Africa’s Zaire
River, and seventeen times larger than the Mississippi–Missouri system in
North America. The forest plays a major role in a region’s water cycle and any
significant deforestation will affect the water cycle. Reducing the area of forest
or its density reduces rainfall, which can seriously affect local livelihoods,
agriculture, water flows as well as the health of the forest itself.


Many people depend on forests for their livelihoods, or for support in times of
crisis. Deforestation and degradation processes directly affect the livelihoods of
forest-dependent people.

Greenhouse gas emissions

Storage of carbon, which may in turn reduce global warming caused by the
greenhouse effect, represents a major environmental benefit or service of
forests. Clearing or thinning forests inevitably releases much of the carbon the
wood holds into the atmosphere, usually as carbon dioxide.


Factors driving deforestation and degradation

Humans have used the forest in socially acceptable ways for use for millennia.
They have cut down timber to construct the infrastructure of civilizations and
they have taken wood from forests for fuel. In many parts of the tropics,
farmers have practised shifting cultivation for generations. With the usual long
fallow periods, shifting cultivation treats the land in a sustainable way. That is,
it recycles nutrients, conserves the forest, the soil and water, and encourages
diversification of crops. But the traditional system is being rapidly replaced by
shortened fallow periods in which the forest does not regenerate, the land has
little or no chance to recover, fertility declines, weeds take over and the soil
erodes. The forces behind this change are familiar: logging, population growth,
the arrival of migrants who do not follow sustainable land-use practices and
the need to produce crop after crop in order to remain financially secure.

The problem is not confined to developing countries. In the UK, most of the
ancient oak forests were totally destroyed to provide lumber to construct
warships. In Australia, millions of hectares of eucalyptus forest were eliminated
to provide grazing and agricultural land, and the process is still continuing. In
Tasmania, ancient original-growth forest is still being felled to provide wood

Although there are a number of clear causes of deforestation and degradation,
countries differ greatly in the social factors affecting forests. Macroeconomic
policies, economic crises, infrastructure development and other factors can
inadvertently but dramatically contribute to forest loss and degradation.

In southeast Asia, the profit motive drives most deforestation through
organized and illegal logging, both for lumber and wood pulp, as well as land
clearing for cash crops like coffee and oil palm by smallholders, large private
commercial estates and state-owned plantations. Other causes include ill-
considered granting of concessions to log huge areas of forest. Widespread
corruption in the government, police and military make it almost impossible to
control logging in many countries.

In Latin America, by far most of the cleared forest is converted to pastureland.
In Brazil, much clearing is carried out by owners of large and middle-sized
ranches, whereas the role of small farmers is relatively more important in
other countries of Latin America. The prominence of cattle ranchers in Brazil
means that measures aimed at containing deforestation by, for example,
promoting agroforestry among small farmers, can never achieve this goal. In
Africa, the role of shifting cultivation for deforestation is higher than in the
other two tropical continents. In Central Africa's high forests, logging is also
important to provide access for people that extract bushmeat or convert the
forest. In the drier forests and woodlands, both extraction of fuelwood or
charcoal, agricultural conversion or even over-grazing can be the main threats
to forests.


Preventing deforestation and degradation

Deforestation and degradation continue rapidly in many parts of the world. The
factors that affect forest conditions and changes in the livelihoods of forest-
dependent people are the foundation for developing policies to minimise
negative social and environmental impacts. The most basic problem in
conserving forests is the complexity of the situation. Many of the agencies
dealing with the environmental aspects of forests cannot address the questions
of land rights, tenure, local people's rights, land allocation, subsidies,
corruption, tax laws, resettlement policies, road-building priorities, agrarian
reform and alternative employment.

In some cases, an effective way of preventing deforestation can be to give
local people direct control over the forests they inhabit. Once the people are
sure of their long term rights, they may protect their environment and find
ways to earn an income from the forest for continued use into the future.

Many countries are beginning to give control of forests to regional authorities,
who have a much better idea of the best way to manage their resources than
centralized departments. This trend towards devolution is happening in Asia,
Africa, China and central and south America. In some cases it is decreasing the
rate of damage and increasing the area of forest that is being selectively
logged. In other cases the experience is more negative.

Loggers themselves can contribute to the health of the forest. By avoiding
clear felling forests and using sensible techniques, such as reduced-impact
logging, the forests can still be used to earn an income yet still tolerate log
extraction and survive into the future as a useful resource. However, these
techniques need to be economic to ensure they are adopted by commercial

2.3.3 What is Deforestation?

Deforestation is generally viewed as an greenhouse gas emission. We found over 40
definitions of "deforestation." Definitions are grouped depending on if they are changes in
land cover, land use or both.

Land cover change

(Canada) To clear an area of forests or trees, usually for commercial use of the lumber or
agricultural use of the land.

Land use change

(Italy) A loss of forest area because of change of land use to agricultural lands, barren
lands, buildings, roads, pipelines, etc. Burned forest areas are not considered deforested.

Land cover and use change
(Papua New Guinea) The removal of trees from forestland and subsequent conversion of
land-use from forestry to other such as agriculture. Vitus Ambia, Papua New Guinea Forest

Population and Deforestation!

The world∂s forests are retreating rapidly in response to the expansion of human activities,
driven in large part by population growth. An estimated 59,500 million square miles of
tropical forest‹nearly equivalent in size to the state of Florida‹disappeared each year
during the 1980s,1 and the pace is probably similar in this decade.2 The world∂s tropical
forests have already lost anywhere from one-fifth to one-third of their original size.

Analysts have long argued about whether deforestation results more from landless farmers
clearing trees for subsistence production or from the timber industry∂s logging for profit.
Both activities relate to population growth, although logging for profit is also tightly linked
as well to high levels of per capita wood consumption in wealthier countries. The balance
of recent opinion is that farmland extension and fuelwood collection now contribute more
than commercial logging to deforestation, and this proportion is probably increasing. 3
Some countries, such as Thailand and the Philippines, have restricted logging as their
forested area has shrunk, but it is more difficult to balance the needs of forests with those
of landless farmers.

The amount of forested land in wealthier countries is also responding to changes in
consumption patterns and in economic activity as well as in population size. In some areas
of the eastern United States, for example, tree cover is returning to land that was once
farmland but became unprofitable for agriculture decades ago. Rising demand for paper
and wood products of all types nonetheless is contributing to the loss of forests in western
North America and elsewhere. And air pollution‹including acid rain, ozone smog and heavy
metals‹is also threatening the health of forests in North America and Europe.4 As with
other environmental trends, no single cause explains deforestation. Population growth
increases the scale of a host of human activities that result almost inevitably in the loss of
trees. While newly planted trees can replace those that disappear, reforestation is not
remotely keeping up with the retreat of forests today, nor are regrown and managed
forests likely to harbor the wealth of plant and animal species that natural forest
ecosystems shelter. The pressure of further population growth is likely to challenge all
countries with remaining tropical forest. About 60 percent of the population growth
occurring in this decade is taking place in such countries, and an even higher percentage
of the world∂s projected population will live in them by 2025.5
Modern Impacts - Falling Forests
For survial, for profit, for fashion
As the history of Easter Island demonstrates, the decline of forests is not a
modern phenomenon. What is unique today is the rate and extent of
deforestation globally. Earlier in this century, forests covered around 40
percent of the Earth’s total land area. Today, that forest cover is down to
27 percent - a loss of roughly one third. In developing regions, where
population pressures have forced accelerated clearing of forests for
agriculture and fuelwood, that loss is estimated to be nearer one-half.

The destruction of forests - temperate and boreal, as well as tropical -
poses a number of environmental problems. Forests help regulate the
amount of carbon dioxide (the primary greenhouse gas) in the atmosphere.
As forests are cleared, not only is the Earth’s ability to absorb carbon
reduced, but the carbon retained in the trees is also released into the

Forests also help stabilize local and global weather. Large-scale
deforestation is linked to changes in weather patterns, as well as to soil
erosion and siltation of rivers. Increased flooding in India and Bangladesh
is now believed to be caused by deforestation in the Himalayan Mountains,
where many of the sub-continent’s rivers begin. Recent disastrous floods
in China and Honduras are also linked to deforestation.

The specific reasons for deforestation vary by region, but the underlying
cause is simple - increasing numbers of people, and increasing demand for
wood products. According to an extensive study by the United Nations, 79
percent of total deforestation between 1973 and 1988 was a direct result of
population growth. By far the greatest cause of forest loss was clearing for
agricultural purposes in developing regions. The second greatest cause was
fuelwood harvesting in those regions - especially in Africa, where 90
percent of the population rely on wood products for cooking and heating.

Not all the blame for this problem can be laid on less-developed regions,
however. Even though deforestation rates are greatest in the developing
world, over half the wood harvested is consumed by industrialized
countries. In the developed world - where Temperate and Boreal forests
are falling to logger’s saws at rapid rates - timber harvesting is the primary
cause of deforestation. In Canada, more than 1 million hectares are cut
annually, while in Siberia, the rate may be as high as 4 million hectares
annually - twice the deforestation rate of Brazil. (One hectare equals 2.47

The consumption patterns of industrialized nations - especially the United
States and Canada - drive this harvest. The US alone consumes over one-
third of the world’s total paper supply, the majority of which goes for
packaging and advertising. Huge amounts of wood are also consumed by
the construction industry. Some of this is to build more infrastructure to
support growing populations, and some is in response to growing per
capita consumption. Americans now live in homes almost twice the size of
those they lived in 50 years ago, and occupy two-and-one-half times the
residential space per person. More than 10 million Americans own two or
more homes, and there are more shopping malls than high schools in the

If current population growth and development patterns continue,
deforestation will expand. Over 95 percent of future population growth is
expected to occur in developing regions, where most tropical and
temperate forests are located. Poverty and lack of access to land -
combined with scarcity of health care, education, and infrastructure, which
limit economic options - will force people to clear the forests. Destruction
of temperate and boreal forests in industrialized regions will also continue
if more people live higher consumption lifestyles.

Why Population Growth Matters to the Future of

      In some countries, forests and other vegetation are being burned away at
alarming rates to satisfy the growing demand for agricultural land.

The world's forests provide goods and services essential to human and
planetary well-being. But forests are disappearing faster today than ever
before. Due both to deforestation and human population growth, the current
ratio of forests to human beings is less thn half what it was in 1960. Yet we not
only need more forests, we need forests more than ever before–to protect the
world's remaining plant and animal life, to prevent flooding, to slow human-
induced climate change, and to provide the paper on which education and
communication still depend. More efficient consumption of forest products and
eventual stabilization of human population–a prospect that appears more
promising today as birthrates decline–will be needed to conserve the world's
forests in the coming millennium.

Forest Cover is Decreasing...
Half of the world's original forest cover is gone, a loss that reflects
humanity's intensive use of land since the invention of farming. Of the forest
that remains, less than one-fourth could be considered relatively undisturbed
by human activity. The vast primeval forests of Europe and Asia survive today
only as patchwork remnants of secondary growth, much of it vulnerable to
logging, encroachment by development, pollution, fire and disease.

Forests are currently expanding in much of the industrialized world,
while shrinking in most of the developing world. In just the first five
years of the 1990s, 65 million hectares of forest–an area the size of
Afghanistan– were converted to other uses in developing countries. By
contrast, the industrialized countries gained 9 million hectares of forested land,
an area about the size of Hungary. The pattern of forest loss in developing
countries today differs from past losses in Europe and elsewhere in two key
respects: human populations are much larger than before, and the pace of
deforestation is more rapid. In the last four decades, an area half the size of
the United States has been cleared of tropical forests, while population in
developing countries has doubled to 4.7 billion. Among the most encouraging
trends for the future of forests is the fact that fertility and birthrates are now
declining in developing countries, leading demographers to revise downward
their projections of future population growth.

A new measure of forest resource availability helps illustrate the increasing
scarcity of forests in many countries. The forest-to-people ratio– a simple
division of a country's forest cover by its population–helps quantify the number
of people living with low levels of forest resources both now and in the future.
Using a ratio of 0.1 hectare of forest cover per person (roughly a quarter acre)
as a benchmark reveals that 1.7 billion people now live in 40 countries with
critically low levels of forest cover. Many are vulnerable to scarcities of key
forest products such as timber and paper and risk the collapse of vital forest
services such as control of erosion and flooding in populated areas. In some
countries the forest-to-people ratio declines even though forests expand,
simply because their populations grow more rapidly than their forests. By
2025, based on United Nations data on deforestation and projected population
growth, the number of people living in forest-scarce countries could nearly
triple to 4.6 billion. Many are unlikely to have the options of wealthy countries
to import or use substitutes for forest products and the environmental services
forests provide.

...As Pressures on Forests Increase
Population dynamics are among the primary underlying causes of
forest decline. Poverty, corruption, inequitable access to land and wasteful
consumption practices also influence the decisions of governments,
corporations and individuals to cut and clear forests. The interaction of these
forces is most evident in areas such as South Asia, Central America and sub-
Saharan Africa, where poverty, rapid population growth and weak institutions
contribute to forest loss and severe environmental degradation.

The dominant force in forest loss is growth in the demand for
farmland. Subsistence agriculture is the principal cause of forest loss in Africa,
Asia and much of Latin America. Slash-and-burn farming and other traditional
techniques were sustainable for centuries when population densities were
lower. Today they are a major factor, along with the expansion of commercial
farms and livestock grazing areas, in the permanent conversion of wooded land
to agriculture. The need to increase food production is expected to accelerate
the forest-to-farmland cycle, especially in countries where alternatives for
meeting this demand are limited.

A typical American uses 15 times as much lumber and
paper as a resident of a developing country.
Total wood consumption has tripled during the 20th century. Per capita
consumption has changed little on a global basis–actually decreasing slightly–
but consumption patterns vary widely between countries. A typical American
uses 15 times as much lumber and paper as a resident of a developing
country. Reducing wood consumption in the industrialized world is unlikely to
stop forest loss in developing countries however, since most of the wood
consumed comes from trees in the industrialized countries themselves.
Nevertheless, the consumption model offered to the rest of the world threatens
accelerated forest loss as both populations and economies grow in developing

Commercial logging of tropical forests has doubled since 1960,
accounting for 5 million to 6 million hectares of forest loss each year, an area
nearly the size of Sri Lanka. This is about one third the forest area lost each
year in the developing world. Illegal logging causes a significant, though
unquantified, amount of additional forest loss. Logging's biggest role in
deforestation, however, is more indirect. Logging roads provide pathways deep
into forests that farmers and other settlers then follow, permanently clearing
the land for crops and pasture.
Nearly 3 billion people depend on wood as their main source of energy.
The production of fuelwood and charcoal accounts for over 90 percent of the
wood harvested in Africa, 80 percent in Asia and 70 percent in Latin America.
Population growth is closely linked to rising woodfuel demand. The effects of
woodfuel scarcity are most severe in impoverished areas, where more modern
fuels are inaccessible or unaffordable.

The Human Face of Forest Loss
Women and children are the victims of woodfuel scarcity. The search for
fuel consumes the time, energy and health of women and their children. As
local wood supplies grow scarce, women risk spinal column damage and
uterine prolapse from carrying heavier loads over longer distances. Girls are
often kept home from school to help their mothers gather wood, depriving
them of educational opportunities. Where wood is unavailable, women cook
with inefficient fuels such as animal dung or crop wastes, depriving livestock of
fodder and soils of natural fertilizer. This endangers both the nutritional and
respiratory health of women and their families.

Forest scarcity threatens the use of paper for education, the activity
most likely to improve health and economic well-being. 80 percent of the
world's population lack access to enough affordable paper and reading
materials to meet basic standards for literacy and communication. Reducing
paper consumption could help ensure enough paper for all. These efforts are
undermined, however, by broader inequalities in access to education and
economic opportunity. Closing the "paper gap" between rich and poor nations
ultimately depends on government action to increase spending on education,
health and social services in developing countries. Future population growth
and forest loss will largely determine whether and when this gap can be closed.

Helping People, Sustaining Forests
Population policies based on human development and human rights
offer the greatest hope for the future of forests. This is not an argument
for population "control" but for the social investments that allow couples to
choose when to have children and how many to have. Programs linking
conservation activities with family planning services show promise for
achieving both the sustainable use of forests and greater acceptance of
reproductive health services.

Sustainable wood consumption is essential for the future of forests.
Individuals and institutions alike should promote the ecologically sound and
socially responsible use of forest products. Eco-labeling, or the environmental
certification of wood products, could speed the adoption of more sustainable
forestry practices. Consumer demand for green-certified paper and other wood
products is an important complement to recycling and other efforts to reduce
wood consumption.
The well-being of the world's forests is closely linked to the health and
well-being of women. Investing in education for girls helps them to
contribute to their national economies–and to postpone childbearing until they
are ready for a family. Providing credit and other economic opportunities for
women creates alternatives to early and frequent childbearing. Finally, better
access to quality reproductive health services directly benefits women and their
families. These approaches increase human capacity, providing the greatest
long-term return to societies, individuals and the environment. Moreover, they
are likely to lead to an early peak in world population in the coming century–
quite possibly at levels that can co-exist with forests that teem with human
and non-human life for centuries to come.

World Bank Approves New Forest Policy and Strategy
Increasing livelihoods for poor people while better protecting forests

News Release No:2003/130/S

Contacts: Sergio Jellinek (202) 458-2841
Lynn Brown (202) 458-8175
Kristyn Ebro (540) 840-7897

WASHINGTON, October 31, 2002 - The Board of Executive Directors of the World Bank
today unanimously approved a new forest policy and strategy aimed at increasing the
livelihoods of some 500 million people living in extreme poverty, who depend on forests,
while improving the environmental protection of forests in the developing world.
Bank Management and Board members emphasized the crucial importance of achieving a
balance between environmental protection, and efforts to help poor people manage
resources. The Executive Directors commended the policy for moving strongly in this
The decision follows a broad consultation process over the last four years, which has
involved governments, NGOs, private sector, and other relevant stakeholders to discuss
the best way forward. Implementation of the new strategy will be closely monitored and will
be reviewed by an independent panel in three years.
The revised Forest Strategy covers all forest types and has been built on three equally
important interdependent pillars:
   Protecting vital local and global environmental services and values provided by
   Harnessing the potential of forests to reduce poverty 
   Integrating forests in sustainable economic development
The World Bank is the world’s largest financier of protected forest areas and parks. The
new policy will seek to expand the average of 8 percent of forest areas under protection in
developing countries, and strictly maintain a ban on logging in these critical forests. In
addition, by re-engaging in areas of forests outside the protected areas the new strategy
will work to improve the livelihoods of those who depend on forests most of whom are
poor. In this regard, the strategy puts special emphasis on community forest management
and agro-forestry; while conserving the environment through sustainable practices, and
reducing environmentally destructive logging.
According to Ian Johnson, World Bank Vice-President for Sustainable Development “ the
future of forests and their dependent bio-diversity and human populations is going to be
influenced by how forests outside strict Protected Areas are managed. For the fact is that
however much we push to expand protected areas, few countries in either the developing
or the developed world have been either willing or able to devote more than 10 percent to
20 percent of their forest areas to strict conservation reserves. We have to focus on the
other 80 percent in improving the management of those resources in a sustainable
The Bank will only finance commercial harvesting in areas where strict environmental
assessments, or authoritative scientific surveys have demonstrated that the areas in
question do not contain critical forest areas or other critical natural habitats.
World Bank President James D. Wolfensohn explained that “the old approach of Bank
disengagement from forestry clearly has not worked. The new course of action is centered
on improving the protection of the environment and biodiversity while increasing the
livelihoods of the poor. This is exactly what the international community committed to do
at the Johannesburg Summit on Sustainable Development. The new strategy helps to
implement this commitment. It reflects a vision of responsible growth - economic growth
that is socially responsible and environmentally friendly, and supports the use of
independent certification which will limit environmentally destructive logging. The world
needs its forests and biodiversity for its very existence and The World Bank is pledged to
preserve and defend these essential natural resources.”
In 2000, the Bank’s independent Operations Evaluation Department (OED) completed a
review of the Bank’s performance in the forests sector over the last decade. The review
concluded that the Bank’s 1991 policy and its ban on logging in tropical moist forests had
failed in slowing deforestation, due to the fact that destructive and illegal logging practices
continued to expand in many developing countries and countries in transition.
OED and others recommended that the World Bank needed to modify its strategy,
expanding its policy to explicitly include all forest areas, and refocus the strategy on
poverty reduction and sustainable economic and environmental management, including
good governance.
Globally, forests equivalent to the land area of Greece are lost annually. A critical goal of
the new strategy is to reach the target of the World Bank/ WWF Alliance to bring at least
200 million ha of production forest, which lies outside strictly protected areas, under
sustainable forest management through independent certification. This will minimize
destructive logging activities, which currently decimate forests despite the existence of
logging bans.
Illegal logging results at the present time in losses of between US$10 billion to $15 billion
per year of forest resources. Sustainable forest management of these public lands would
yield valuable official revenues that could support expenditures in education and health;
and at the same time reduce the areas being logged.
The strategy will empower rural people, creating economic opportunities for the poor and
indigenous groups. Special attention will be directed to the welfare of some 60 million
indigenous tribal peoples living in the rainforests of West Africa, Latin America, and
Southeast Asia who have high levels of dependence on forest resources. Impacts will be
reflected in: strengthened tenure rights, improved food security, and spiritual welfare.
Echoing the message of the Johannesburg Summit, the strategy will be implemented
through partnerships with civil society organizations, governments and private sector. Pilot
operations will demonstrate feasible approaches that can then be scaled up to make a
significant social, economic and environmental contribution. Programs and projects will
build on strong country and local community ownership. Priority will be given to work with
local groups, NGOs, and other partners to integrate forest, agro-forestry, and small forest
enterprise activities in rural development strategies and benefit poor people.
The World Bank is addressing the potential impact of adjustment lending on forests in the
framework of its forthcoming revision of Operational Policy on Adjustment Lending. In the
meantime the Bank will carefully screen and mitigate potential impact on forests in
adjustment operations.
The World Bank Group fully intends to extend the new forest policy and strategy to

Why Forests Matter

Forests cover 33 million km2—26 percent of the Earth’s land surface. They fulfill
major economic functions, help maintain the fertility of agricultural land, protect
water sources, and reduce the risks of natural disasters such as landslides and
flooding. The world’s forests are home to at least 80 percent of remaining terrestrial
biodiversity and are a major carbon sink that mitigates climate change.More than
1.6 billion people depend to varying degrees on forests for their livelihoods. About
60 million indigenous people are almost wholly dependent on forests. Some 350
million people who live within or adjacent to dense forests depend on them to a high
degree for subsistence and income. In developing countries, about 1.2 billion
people rely on agroforestry farming systems that help to sustain agricultural
productivity and generate income. Worldwide, forest industries provide employment
for 60 million people. Some 1 billion people worldwide depend on drugs derived
from forest plants for their medicinal needs.

In the 1990s, forests were lost at the rate of 15 million ha to 17 million ha per year,
and in some countries up to 2 percent to 3 percent of forest cover was lost per year.
In some countries in the Asia-Pacific region, forest destruction is responsible for 2
percent to 5 percent per decade of global biodiversity losses, with inestimable
losses to ecosystem stability and human well-being. Deforestation also accounts for
up to 20 percent of the global greenhouse emissions that contribute to global
warming. Mismanagement of woodlands in humid and subhumid tropical countries
significantly contributes to soil losses equivalent to 10 percent of agricultural GDP
per year.

Forests are consistently and seriously undervalued in both economic and social
terms. Nationally and regionally, forests provide important watershed, soil
management, pollination, and pest management functions that usually are not
captured by markets, in addition to timber and non-timber forest products. For many
peoples, forests also are an important part of their cultural and religious heritage
and practice.