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Is there a commercial case for tropical timber certification?

Author

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  • Varangis, Panayotis N.
  • Crossley, Rachel
  • Braga, C

Abstract

The authors estimate the potential commercial benefits that tropical timber producing countries could enjoy by adopting timber certification schemes. Such benefits are crucial for encouraging the supply of certified timber. Timber certification is a reality: various countries and organizations have launched initiatives for it. The initial response among producing countries was less than positive, but some have come to realize its potential benefits and have begun to adopt timber certification schemes. Tropical timber trade accounts for only a small fraction of tropical timber production, and most of that trade is concentrated among developing countries in Asia and Japan - markets where demand for certified timber is currently weak. Only a small part of the trade reaches the eco-sensitive markets of Europe and the United States, where there is demand for certified timber. Developing countries can benefit commercially from timber certification in two ways: through the "green premium" (consumers' willingness to pay a premium for certified timber" and by averting losses of market share in the tropical timber market from not having timber certified. Based on surveys, on discussions with nongovernmental organizations, on market participants and analysts, and on estimates of price elasticity, the authors develop a scenario for estimating the potential commercial benefits from adopting timber certification. Under this scenario, benefits would not exceed US$500 million a year (roughly 4 percent of all tropical-timber-related revenues earned by developing countries). Timber certification is not expected to provide significant commercial benefits to developing countries in the near future. But timber certification could provide significant rents to individual firms that develop market niche strategies. And producing countries that pursue certification may enjoy longer-term social, economic, and environmental benefits by adopting the better forest management practices required for timber certification.

Suggested Citation

  • Varangis, Panayotis N. & Crossley, Rachel & Braga, C, 1995. "Is there a commercial case for tropical timber certification?," Policy Research Working Paper Series 1479, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1479
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    References listed on IDEAS

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    1. Kollert, Walter & Lagan, Peter, 2007. "Do certified tropical logs fetch a market premium?: A comparative price analysis from Sabah, Malaysia," Forest Policy and Economics, Elsevier, vol. 9(7), pages 862-868, April.
    2. van Soest, D.P. & Jepma, C., 1997. "Certification and tropical deforestation : Micro monitoring without macro conditions?," Other publications TiSEM 08cd0fd1-f5e5-4054-96a7-b, Tilburg University, School of Economics and Management.
    3. Eduard Niesten & Richard Rice, 2004. "Gestion durable des forêts et incitations directes à la conservation de la biodiversité," Revue Tiers Monde, Programme National Persée, vol. 45(177), pages 129-152.
    4. Degnet, Mohammed B. & van der Werf, Edwin & Ingram, Verina & Wesseler, Justus, 2022. "Community perceptions: A comparative analysis of community participation in forest management: FSC-certified and non-certified plantations in Mozambique," Forest Policy and Economics, Elsevier, vol. 143(C).
    5. Hardner, Jared J. & Rice, Richard, 1999. "Rethinking Forest Resource Use Contracts in Latin America," IDB Publications (Working Papers) 2992, Inter-American Development Bank.
    6. van der Loos, Hendrik Z. Adriaan & Kalfagianni, Agni & Biermann, Frank, 2018. "Global aspirations, regional variation? Explaining the global uptake and growth of forestry certification," Journal of Forest Economics, Elsevier, vol. 33(C), pages 41-50.
    7. Markku Simula, 1999. "Trade and Environmental Issues in Forest Production," IDB Publications (Working Papers) 25678, Inter-American Development Bank.
    8. Simula, Markku, 1999. "Trade and Environmental Issues in Forest Production," IDB Publications (Working Papers) 2995, Inter-American Development Bank.
    9. Jared J. Hardner & Richard Rice, 1999. "Rethinking Forest Resource Use Contracts in Latin America," IDB Publications (Working Papers) 25578, Inter-American Development Bank.
    10. Thiele, Rainer & Wiebelt, Manfred, 1996. "Tropenwaldmanagement: Ein Balanceakt zwischen Schutz und Raubbau," Kiel Discussion Papers 282, Kiel Institute for the World Economy (IfW Kiel).
    11. McNichol, Jason, 2000. "Contesting Governance in the Global Marketplace: A Sociological Assessment of British Efforts to Build New Markets for NGO-Certified Sustainable Wood Products," Center for Culture, Organizations and Politics, Working Paper Series qt6kk85053, Center for Culture, Organizations and Politics of theInstitute for Research on Labor and Employment, UC Berkeley.
    12. Daan Soest & Catrinus Jepma, 1997. "Certification of tropical timber and deforestation: Micro monitoring without macro conditions?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 2(2), pages 319-336, June.

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