18 October 2023

Conservation together with sustainable forest management will be key on our road to decarbonization

Francisca Libuy, Global Banker of BBVA in Chile

The history of humanity has always been linked to forests. As a source of shelter, food and raw materials, they have played a crucial role in our development as a species. However, centuries of reckless exploitation have degraded much of these ecosystems, leading to a worrying state of deforestation (between 1990 and 2020 alone, 420 million hectares of forests were lost).

It is estimated that stopping this deforestation process and preserving current forests could avoid the emission of 3.6 +/- 2 gigatons of CO2 equivalent per year between 2020 and 2050, also contributing 14% of what is required by 2030 to keep global warming below 1.5°C[1].

In addition to carbon sequestration, forests – including fast-growing tree plantations – foster the control of soil erosion and have a positive impact on the water cycle. They protect freshwater flows, and have a positive influence on climate conditions due to their ability to reduce surface temperature. And there is also the fact that they shelter enormous biodiversity.

We must mention the importance of forests in today's economy, where it is estimated that by 2020 more than half of global GDP was moderately or highly dependent on the ecosystem services provided by forests. Some 33 million people – about 1% of global jobs – are also believed to work directly in the forest sector, both formal and informal. The sector's direct, indirect and induced contribution accounted for more than USD 1.52 trillion to the world GDP in 2015[2].

Forests hold high importance in the global economy; in 2020, more than half of the world's GDP depended on the ecosystem services provided by forests.

In 2021, the World Bank published "The Economic Case for Nature" where it conservatively estimated the economic impact that could be generated by the collapse of certain ecosystem services delivered by nature such as wild pollination, food supply from marine fisheries and wood from native forests. We would be talking about an overwhelming decline in global GDP of USD 2.7 trillion per year by 2030, which would affect middle- and low-income countries the most, with a particularly harsh effect on sub-Saharan Africa and South Asia. This should be especially relevant, since the substantial loss of global natural capital could mean a permanent reduction in the economy's productive potential, which would be "difficult or impossible" to replace with human or productive capital[3].

Despite the strength of the data, our demand for natural resources does not seem to diminish. According to Global Footprint Network, we are consuming the resources of 1.7 planets Earth every year, and according to FAO, it is estimated that the annual consumption of all natural resources combined will more than double from 92 billion tons in 2017 to 190 billion tons in 2060, bringing with it an increase in greenhouse gas emissions. 

So how do we balance the demands of a growing population with an environmentally friendly approach? It seems that as far as the forest industry is concerned, Climate-Smart Forestry is a good starting point. This strategy seeks to increase the climate and ecosystem benefits of forests and sustainable forest management based on three pillars:

  • Reducing and/or eliminating greenhouse gas emissions to mitigate climate change through carbon storage in forest and wood products.
  • Adapt forest management to create resilient forests; and active forest management to sustainably increase productivity
  • Thus provide all the benefits that forests can bring.

In particular, alongside the crucial role that forests play in mitigating the climate change crisis, we must consider the contribution of wood products to storing carbon and especially replacing non-renewable and/or fossil fuel-intensive products such as building materials, chemicals, textiles, packaging and plastics in the transition to a carbon neutral economy.

One of the main obstacles in promoting this strategy is the lack of studies to quantify the benefits of such an approach. According to the 2018 publication "Substitution effects of Wood-based products in climate change mitigation"[1], the focus of the available studies is more on construction, leaving aside industries as relevant as textiles and chemicals, in addition to the marked regionalist bias (North America and the Nordic countries) that prevents a better global geographical representativeness. In this study:    
  • The starting point is to define a substitution factor to measure the net impact on greenhouse gas emissions of the use of wood-based products with respect to their non-renewable/fossil fuel-intensive alternatives.
  • The conclusion is surprising and hopeful. Of the 51 studies reviewed, an average substitution effect of 1.2 kg CO2 equivalent is suggested (i.e., for each kilo of carbon in wood products that replace non-renewable products, an average reduction of 1.2 kg of carbon is generated), and this is without considering the additional benefits that we have already mentioned.

At CMPC they are committed to sustainability in their Nature, Conservation and Biodiversity strategy.

From Latin America we have much to contribute in this regard: An excellent example of responsible use and management in the forestry industry is CMPC. Committed to sustainability based on their Nature, Conservation and Biodiversity Strategy, they seek to protect and expand the more than 400,000 hectares of current conservation, reduce by 25% the industrial use of water per ton produced, and reduce greenhouse gas emissions by 50% by 2030. With more than 98% of their forest assets certified under sustainable management, innovation is another of their key pillars: their packaging business offers sustainable solutions based on natural fibers; they are already present in the construction industry by developing wooden buildings and houses; they have an agreement with Nordic Bioproducts to produce plant-based textile fibers that harness forest industry by-products more cost-efficiently than current alternatives; they are supporting ventures that seek to replace products such as Plumavit and other plastic foams with bio-based alternatives, and even plastic bottles with others made with more than 90% of sustainable fibers. These are just some of the many initiatives that seek to improve our productive relationship with the environment.

Without a doubt, supporting companies with responsible forest management, which also seek to innovate with environmentally friendly solutions and that allow us to replace fossil fuel-intensive products will ensure a continuous and sustainable flow of raw materials derived from wood. These will be crucial in helping us promote our development, and mitigate climate change.