RESULTS OF THE RESEARCH OF LITERATURE SOURCES AND POLICY

POLICIES AND SCIENTIFIC INFORMATION BY ORGANISATION

United Nations (UN)

1.1.1 United Nations Conference on Environment and

Development (UNCED) and its follow-up http://www.un.org/esa/sustdev/index.html

The Rio Declaration on Environment and Development, Agenda 21 and the Statement of principles for the

Sustainable Management of Forests were adopted by more than 178 Governments at the United Nations

Conference on Environment and Development (UNCED) held in Rio de Janeiro, Brazil, 3 to 14 June 1992.

The Commission on Sustainable Development (CSD), established in December 1992, plays a crucial role in monitoring and reporting on the implementation of agreements from the United Nations Conference on Environment and Development (UNCED) at various levels Notably, the tenth session of the CSD served as the primary organizing body for the World Summit on Sustainable Development, which took place in Johannesburg, South Africa, from August 26 to September 4, 2002.

 Rio Declaration on Environment and Development http://www.un.org/documents/ga/conf151/aconf15126-1annex1.htm

The Rio Declaration, building upon the principles established at the 1972 Stockholm Conference on the Human Environment, aims to foster a fair global partnership by enhancing cooperation among nations, sectors, and communities It articulates 27 principles of sustainable development that prioritize the interests of all stakeholders while safeguarding the integrity of the global environmental and developmental framework.

 Agenda 21 http://www.un.org/esa/sustdev/agenda21.htm

Agenda 21 is a comprehensive plan of action to be taken globally, nationally and locally by organizations of theUnited Nations System, Governments, and Major Groups in every area in which humans impact the environment

The 1992 UN Conference on Environment and Development in Rio de Janeiro highlighted the critical role of forests in sustainable development and environmental conservation, establishing sustainable forest management as a key guiding principle endorsed by all participating nations.

• Non-legally binding authoritative statement of principles for a global consensus on the management, conservation and sustainable development of all types of forests;

• Chapter 11 Combating deforestation of Agenda 21

• Conventions on Biological Diversity on Desertification and on Climate Change as well as their Protocols and Work Programmes (e.g the Kyoto Protocol).

The document outlines a non-legally binding set of authoritative principles aimed at achieving global consensus on the management, conservation, and sustainable development of forests worldwide It emphasizes the importance of collaborative efforts to ensure the sustainability of all forest types For further details, refer to the full text available at the United Nations website.

Annex III of the UNCED Report addresses the critical role of forests in environmental and development issues, emphasizing their importance for sustainable socio-economic development It highlights the need for effective management, conservation, and sustainable development of both natural and planted forests across various geographical regions and climates The guiding principles aim to ensure that forests serve their multiple functions and uses, urging states to implement these principles in accordance with their national legislation and constitutional frameworks.

 Agenda 21, Chapter 11 Combating deforestation http://www.unep.org/Documents/Default.asp?DocumentIDR

The four main principles of chapter 11 on combating deforestation are:

1 Sustaining the multiple roles and functions of all types of forests, forestlands and woodlands;

2 Enhancing the protection, sustainable management and conservation of all forests, and the greening of degraded areas, through rehabilitation, afforestation, and reforestation;

3 Promoting efficient utilization and assessment to recover the full valuation of the goods and services provided by forests, forestlands and woodlands;

4 Establishing and/or strengthening capacities for the planning, assessment and systematic observation of forests and related programmes, projects and activities, including commercial trade and processes.

World Summit on Sustainable Development http://www.johannesburgsummit.org/index.html

The Johannesburg Summit united thousands of participants, including heads of State, national delegates, and leaders from NGOs and businesses, to address critical global challenges The focus was on enhancing quality of life and conserving natural resources in an increasingly populated world facing rising demands for food, water, shelter, sanitation, energy, health services, and economic security.

The Summit emphasized the urgent need to expedite the implementation of the IPF/IFF proposals for action by nations and the Collaborative Partnership on Forests It also called for enhanced reporting efforts to the United Nations Forum on Forests, aiming to assess progress by 2005.

1.1.2 United Nations Forum on Forests (UNFF) http://www.un.org/esa/sustdev/forests.htm

The United Nations Forum on Forests (UNFF) serves as the successor to the Intergovernmental Panel on Forests (IPF) and the Intergovernmental Forum on Forests (IFF) To fulfill its primary goal, the UNFF has established key functions aimed at promoting sustainable forest management and enhancing international cooperation on forest-related issues.

• To facilitate implementation of forest-related agreements and foster a common understanding on sustainable forest management;

The objective is to foster ongoing policy development and dialogue among governments and international organizations, including key stakeholders identified in Agenda 21 This approach aims to address forest-related issues and emerging concerns in a holistic, comprehensive, and integrated manner.

• To enhance cooperation as well as policy and programme coordination on forest-related issues

• To foster international cooperation and

• To monitor, assess and report on progress of the above functions and objectives

• To strengthen political commitment to the management , conservation and sustainable development of all types of forests

 The IPF and IFF Proposals for Action, Main Actors and Degree of Action, Secretariat of the United Nations

Forum on Forests, March 2001 http://www.un.org/esa/sustdev/unffdocs/ipf-iff-proposalsforaction.pdf

This document consolidates all action proposals from the Intergovernmental Panel on Forests (IPF) and the Intergovernmental Forum on Forests (IFF) for easy reference, highlighting the key stakeholders responsible for their implementation.

Around 300 IPF/IFF proposals address various forest-related challenges, focusing on decision-making and policy tools like national forest programs and indicators They emphasize the importance of information sharing, public participation, and integrating scientific and traditional forest-related knowledge Key issues include managing forest resources, tackling deforestation and degradation, enhancing forest health and productivity, and ensuring forest conservation Additionally, the proposals highlight the need for international cooperation and capacity building, particularly concerning financial resources, international trade, and the transfer of environmentally sound technologies.

The five main types of proposals for action are:

• No consensus, which needs further discussion.

The IPF/IFF proposals for action target five key stakeholders: countries, intergovernmental organizations, the Interagency Task Force on Forests (ITFF) / Collaborative Partnership on Forests (CPF), the private sector, and other significant groups such as non-governmental organizations These proposals serve as a framework for these actors to enhance the development, implementation, and coordination of both national and international policies focused on sustainable forest management.

1.1.3 United Nations Environment Programme (UNEP) http://www.unep.org/

The United Nations Environment Programme (UNEP) leads global efforts to protect the environment, fostering partnerships that inspire nations and communities to enhance their quality of life while safeguarding the needs of future generations UNEP plays a crucial role in preserving biological diversity and promoting sustainable forest management through key initiatives like the Convention on Biological Diversity, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), the Convention to Combat Desertification (UNCCD), and the Framework Convention on Climate Change (UNFCCC).

 UN Convention on Biological Diversity http://www.biodiv.org/convention/articles.asp

The Convention on Biological Diversity, adopted at the Rio Summit, represents a crucial agreement among most governments globally It outlines commitments to preserve the planet's ecological foundations while pursuing economic growth The Convention focuses on three primary objectives: conserving biological diversity, ensuring the sustainable use of its components, and promoting fair and equitable sharing of benefits derived from genetic resources.

Word Trade Organization (WTO)

http://www.wto.org/english/tratop_e/envir_e/envir_e.htm

Discussions within the WTO frequently focus on two key themes: the interplay between trade liberalization and environmental sustainability, and the connection between trade rules established by WTO members and environmental protection policies, as well as international environmental agreements.

In April 1994, during the Marrakech meeting, Ministers approved a Decision on Trade and Environment, which led to the creation of a Committee on Trade and Environment (CTE) within the WTO This committee's work plan includes three key items that are particularly pertinent to forestry discussions.

 Environmental benefits of removing trade restrictions and distortions;

 Eco-labeling and certification, which is also looked at by the Committee on Technical Barriers to Trade (TBT);

 Certain elements of the Agreement on Trade-Related Intellectual Property Rights (TRIPS).

The WTO Secretariat's study highlights a positive correlation between the elimination of trade restrictions and enhanced environmental quality, particularly in sectors like forestry It emphasizes that certification and labeling of forest products complement effective forest management policies The Committee on Trade and Environment (CTE) acknowledges that well-designed eco-labeling programs can serve as powerful environmental policy tools, promoting consumer awareness However, the demand for certified or labeled forest products remains limited and concentrated within a narrow market segment, indicating that the certification of sustainable forest management in relation to Technical Barriers to Trade has had minimal impact.

 Trade and Environment, Họkan Nordstửn and Scott Vaughan, WTO Secretariat in October 1999 http://www.wto.org/english/tratop_e/envir_e/stud99_e.htm

This article provides a comprehensive analysis of the "race-to-the-bottom" debate, highlighting how trade liberalization necessitates enhanced environmental cooperation among nations The conclusion emphasizes that as countries pursue freer trade, they must also prioritize collaborative efforts to address environmental challenges.

Some of the main findings of the report include the following:

Environmental issues primarily stem from polluting production methods, specific consumption patterns, and waste disposal practices While trade itself is not usually the main cause of environmental degradation, it does contribute to pollution, particularly through the transportation of goods.

• Environmental degradation occurs because producers and consumers are not always required to pay for the costs of their actions;

• Environmental degradation is sometimes accentuated by policy failures, including subsidies to polluting and resource-degrading activities — such as subsidies to agriculture, fishing and energy;

• Trade would clearly raise welfare if proper environmental policies were in place;

• Trade barriers generally make for poor environmental policy;

• Not all environmental standards should necessarily be harmonized across countries;

• The competitiveness effects of environmental regulations are minor for most industries;

• A good environmental profile is often more of an asset for a firm than a liability in the international market- place, notwithstanding somewhat higher production costs;

• Little evidence bears out the claim that polluting industries tend to migrate from developed to developing countries to reduce environmental compliance costs;

• Yet, environmental measures are sometime defeated because of concerns about competitiveness, suggesting a need for improved international cooperation on environmental issues;

Economic growth fueled by trade can contribute to addressing environmental degradation; however, it alone is inadequate for enhancing environmental quality To truly improve environmental standards, increased incomes must be effectively translated into stronger environmental policies and practices.

• Not all kinds of economic growth are equally benign for the environment;

• Public accountability and good governance are essential to good environmental policy, including at the international level;

• Effective international co-operation is essential to protect the environment, especially in respect of regional and global environmental challenges

• The co-operative model of the WTO, based on legal rights and obligations, could potentially serve as a model for a new global architecture of environmental co-operation

 Intergovernmental Policy Deliberation on Forests: Trade and Environment, Communication from the

Intergovernmental Forum on Forests (IFF)Secretariat, WTO, Committee on Trade and Environment, 12 October 2000 http://www.wto.org/english/tratop_e/envir_e/cte_docs_update_e.htm

This communication aims to summarize the processes of the Intergovernmental Panel on Forests (IPF) from 1995 to 1997 and the Intergovernmental Forum on Forests (IFF) from 1997 to 2000, focusing on their policy discussions regarding trade and the environment Additionally, it highlights recent developments following the final IFF session in February 2000, which are anticipated to lead to the creation of a permanent entity within the UN framework, known as the United Nations Forum on Forests (UNFF).

 Klabbers, J., Forest Certification and the WTO, EFI Discussion Paper 7, European Forest Institute, Joensuu,

Ministerial Conferences on the Protection of Forests in Europe (MCPFE) 15

(MCPFE) http://www.mcpfe.net/index.html

The Ministerial Conferences on the Protection of Forests in Europe (MCPFE) is a significant initiative promoting cooperation among 40 European countries and the European Community to ensure the protection and sustainable management of forests Aligned with Agenda 21 and the non-legally binding "Forest Principles" from UNCED, the MCPFE addresses the unique conditions of European forests Its resolutions outline key strategies for the protection, conservation, and sustainable development of these forests, incorporating objectives from the Convention on Biological Diversity.

The Pan-European Process involves a series of political conferences and follow-up mechanisms, where signatory states and the European Community oversee the implementation of decisions at both national and regional levels This collaborative effort is marked by a dynamic approach and strong political commitment, fostering ongoing dialogue and cooperation between the conferences.

The First Ministerial Conference on the Protection of Forests in Europe was held in 1990 in Strasbourg, initiated by France and Finland to address the pressing issue of dying forests This landmark event marked the first ministerial-level discussions on cross-border protection of European forests During the conference, forestry ministers and representatives from the European Community signed six resolutions, committing to technical and scientific cooperation along with unified measures for the safeguarding of Europe’s forests.

S1: European network of permanent sample plots for the monitoring of forest ecosystems

S2: Conservation of forest genetic resources

S3: Decentralized European data bank on forest fires

S4: Adapting the management of mountainous forests to new environmental conditions

S5: Expansion of the EUROSILVA Network of research on tree physiology

S6: European network for research into forest ecosystems

The Second Ministerial Conference in Helsinki, held in 1993, aimed to advance the implementation of the forest-related outcomes from the UNCED This conference fostered an international dialogue on forestry, engaging not only governmental representatives and ministries but also the private sector, the international forest community, and environmental NGOs.

In a historic agreement, thirty-seven states and the European Community established a common definition of Sustainable Forest Management, emphasizing the responsible stewardship of forests to preserve biodiversity, productivity, and ecological functions for current and future generations This resolution highlights the importance of fostering cooperation with transitioning economies and developing strategies to address the potential impacts of climate change on the forest sector.

H1: General guidelines for the sustainable management of forests in Europe

H2: General guidelines for the conservation of the biodiversity of European forests

H3: Forestry cooperation with countries with economies in transition

H4: Strategies for a process of long-term adaptation of forests in Europe to climate change

European countries are committed to strengthening forestry partnerships by fostering broader associations with various nations and organizations for mutual benefit The Pan-European Process on the Protection of Forests in Europe actively collaborates with international and regional initiatives, including NGOs, to address shared concerns regarding sustainable forest management and the conservation of forests.

The socio-economic aspects of forestry gained prominence during the subsequent processes, culminating in the Lisbon Conference, which broadened the discussion to encompass the intricate relationship between forests and society.

During the Third Ministerial Conference in Lisbon in 1998, thirty-six states and the European Community signed two resolutions and a general declaration The General Declaration highlights the need to enhance collaboration between the forest sector and society The first resolution focuses on the socio-economic dimensions of sustainable forest management, while the second Lisbon resolution addresses pan-European criteria and indicators, along with operational guidelines.

L1: People, Forests and Forestry: enhancement of the socio-economic aspects of sustainable forest management

The first Lisbon resolution emphasizes the enhancement of human resources through increased public dialogue and improved education and training for forestry workers and managers, while also promoting women's involvement in forest-related activities It highlights the importance of maximizing the use of wood and non-wood products, alongside forest services like recreational activities, by exploring new opportunities and techniques This initiative is to be integrated with rural development efforts and collaborative strategies across sectors such as agriculture, tourism, environment, energy, and industry.

L2: Pan-European criteria, indicators and operational level guidelines for sustainable forest management

The second Lisbon resolution established pan-European criteria and indicators, along with operational level guidelines, to enhance sustainable forest management across Europe These criteria and indicators serve as essential tools for assessing and reporting progress in this area, while the operational guidelines offer a practical framework for sub-national implementation, promoting voluntary adherence to sustainable practices in forestry.

Collaboration with the Ministerial Process "Environment for Europe" has been initiated through the approval of a comprehensive pan-European Work Programme aimed at conserving and enhancing biological and landscape diversity.

 The Role of Forests and Forestry in Rural Development - Implications for Forest Policy, results of the

International Seminar, 5-7 July 2000, Vienna/Austria A

The article presents key insights from a workshop focused on rural development policies, emphasizing concepts and principles related to forestry's role in enhancing rural development It highlights the findings of four working groups that evaluated the strengths and weaknesses of integrating forest policy into rural development, outlined essential principles for practical application, and provided recommendations for measuring and improving forestry's contributions to rural communities.

 Sustainable Forest Management Certification - Framework Conditions, System Designs and Impact Assessment, Ewald Rametsteiner

This article summarizes the findings of the EU-FAIR Research Project, which focused on the certification of forest management as a key policy tool for promoting multifunctional sustainable forest management Conducted under the EU's 4th Framework Programme, the study examines the existing framework conditions, evaluates different certification programs, assesses their demand and acceptance, and investigates the potential impacts of sustainable forest management certification.

 Declarations and resolutions of the Ministerial Conferences on the Protection of Forests in Strasbourg

The publication presents all General Declarations and Resolutions adopted at the three Ministerial Conferences on the Protection of forests in Europe in one comprehensive document.

 Follow-up Reports on the Ministerial Conferences on the Protection of Forests in Europe, Volume II,

Sustainable Forest Management in Europe - Special Report on the Follow-up on the implementation of Resolutions H1 and H2 of the Helsinki Ministerial Conference

This publication provides a detailed overview of the efforts made by signatory states and the European Community in implementing Resolution H1, which focuses on the sustainable management of forests in Europe, and Resolution H2, aimed at conserving the biodiversity of European forests, at both national and international levels.

 MCPFE Classification of Protected and Protective Forest Areas in Europe, as agreed at the Third Expert

Level Meeting on the Follow-up of the Lisbon Conference 25 – 26 September 2000, Vienna/Austria

The MCPFE classification of protected and protective forest areas in Europe emerged from the joint “Work-Programme on the Conservation and Enhancement of Biological and Landscape Diversity in Forest Ecosystems 1997 – 2000.” This classification is grounded in the analysis of national data collected during the TBFRA 2 inquiry in 2000, aiming to create a comprehensive overview of protected forest areas (PFAs) across Europe By aligning with other international classification systems for protected areas, this framework serves as a vital resource for advancing MCPFE's efforts in forest conservation.

International Tropical Timber Organization (ITTO)

http://www.itto.or.jp/Index.html

The ITTO aims to establish a comprehensive framework for its member countries regarding the global timber economy It promotes dialogue, consultation, and international cooperation on matters concerning the trade and use of tropical timber, as well as the sustainable management of its resources.

 Baharuddin, H G and Simula, M., Certification schemes for all timber and timber products, International

 Ghazali, B H and Simula, M., Certification schemes for all timber and timber products, International Tropical

Organisation for Economic Co-operation and Development (OECD)

(OECD) http://www.oecd.org/oecd/pages/home/

The OECD is instrumental in promoting good governance in both public service and corporate sectors by analyzing emerging issues and recommending effective policies for policymakers Renowned for its comprehensive country surveys and reviews, the OECD develops internationally recognized instruments and guidelines that facilitate multilateral agreements essential for countries to advance in a globalized economy.

 Forestry, Agriculture and the Environment, OECD, Paris, 1995.

European Union

http://www.europa.eu.int/

The Treaties establishing the European Union do not include a comprehensive common forestry policy, leaving forest management outside EU jurisdiction Consequently, the principle of subsidiarity dictates that individual Member States are responsible for the effective management of their forests, as the EU lacks a unified approach to forestry.

The management, conservation, and sustainable development of forests are crucial aspects of current EU policies related to agriculture, rural development, environmental protection, trade, and energy These forest-related issues are addressed through voluntary cooperation among Member States, particularly within agricultural and environmental regulations that directly or indirectly affect the forest sector Collectively, the Community rules and various strategies regarding forests are often referred to as the EU's forest policy.

The bases for action under the terms of the Treaty are as follows:

Forests play a vital role in rural areas, serving multiple functions that are crucial for integrated rural development policies They significantly contribute to income and employment while also providing important ecological and social benefits.

Forests and their biodiversity play a crucial role in Europe's natural environment, necessitating their protection and conservation through various Community policies Key initiatives include the EU biodiversity strategy, the Natura 2000 network, and the implementation of the climate change convention, all aimed at safeguarding these vital ecosystems.

The Internal Market regulations govern forest products, specifically wood, cork, and resins, ensuring compliance with EU competition laws concerning state aids, mergers, and cartels.

The primary responsibility for forest-related issues within the Commission lies with the forests and environment unit of the Agriculture DG, while the forestry industry unit of the Enterprise DG oversees matters pertaining to the forest industry Additionally, the Environment DG addresses concerns related to nature protection, biodiversity, and climate change.

The forestry industry involves various committees and working groups that play a crucial role in its governance Key participants include officials from Member States who engage in the Council ad hoc Working Group on Forests, led by a Council representative, and the Standing Forestry Committee (SFC), which operates under the Agriculture DG and is chaired by a Commission representative Additionally, the sector includes the Advisory Committee on Forestry and Cork, as well as the Advisory Committee on Community Policy Regarding Forestry and Forest-based Industries These advisory committees consist of diverse members, such as forest owners, industry representatives, employees, and consumers, ensuring a comprehensive approach to forestry policy.

Many of the forest-related measures financed by the Community are connected to agricultural policy The Agenda

The 2000 reform, completed in 1999, significantly impacts the forest sector through Agenda 2000, an action program designed to strengthen Community policies This program outlines the financial framework for the European Union from 2000 to 2006, anticipating future EU enlargement Following Agenda 2000, approximately 20 legislative proposals were introduced, addressing various aspects of rural and structural policy.

1.6.1 DG Agriculture http://www.europa.eu.int/comm/agriculture/index_en.htm

 CAP Reform: Rural Development http://www.europa.eu.int/comm/agriculture/rur/publi/index_en.htm

This article outlines the key components of the new EU rural development policy, detailing the financing and programming organization of its measures Governed by Regulation (EC) 1257/1999, enacted on May 17, 1999, the policy provides support for rural development through the European Agricultural Guidance and Guarantee Fund A significant aspect of this policy is the fourth rural development measure, which emphasizes forestry support as part of a broader strategy aimed at protecting, sustainably managing, and developing forests across the EU.

 Support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF),

Council Regulation No 1257/1999 http://www.europa.eu.int/comm/agriculture/rur/publi/index_en.htm

This is the full text of regulation from Official Journal of the European Communities Chapter VIII, Art 29 - 32 provide for action of environmental forestry and biodiversity.

 Mountainous Areas and Rural Development http://www.europa.eu.int/comm/agriculture/rur/publi/info_en.pdf

The support for forestry in mountain regions is crucial for enhancing its multifunctional role, which aids in the sustainable development of these areas Financial assistance is offered to private landowners, associations, and local authorities for activities such as afforestation and investments aimed at boosting the economic, ecological, and social benefits of forests This includes promoting new market opportunities, preventing risks like erosion and avalanches, and restoring forest productivity affected by natural disasters These initiatives ensure sustainable forest management and bolster local socio-economic activities, ultimately providing greater benefits to society by reinforcing the protective and ecological roles of mountainous forests.

Agriculture and Environment http://www.europa.eu.int/comm/agriculture/envir/index_en.htm

 Agriculture, Environment, Rural Development: Facts and Figures – A Challenge for Agriculture (July

1999) http://www.europa.eu.int/comm/agriculture/envir/report/en/index.htm

This publication is the result of close cooperation between EUROSTAT, the Agriculture DG and the Environment

DG focuses on the functional connections between agriculture and the environment, emphasizing the importance of available statistical data This publication includes multiple chapters, with two specifically dedicated to the forestry sector.

• Forestry measures under CAP, Veronique Sondag, Eurostat

The CAP reform includes measures aimed at encouraging the afforestation of agricultural land, as outlined in regulation (EEC) n°2080/92, which established a Community aid scheme for forestry initiatives in agriculture This regulation facilitated the afforestation of 519,350 hectares of agricultural land from 1993 to 1997 across the region.

In the EU, afforestation efforts primarily targeted agricultural regions that were consistently covered in grass, focusing mainly on the planting of broadleaf species To support this initiative, financial premiums were provided to offset income losses, alongside investment aid and assistance for enhancing woodland quality.

The 1995 Community survey revealed that there were 7.3 million farms within the Community, with 27% (approximately 2 million) having woodland, notably 95% in Finland, 76% in Austria, and 72% in Sweden The total woodland area on farms across the EU 15 reached 23.5 million hectares, accounting for 18% of the overall wooded area This chapter features numerous tables and graphics illustrating the implementation of forestry measures in EU member states.

• Agriculture and climate change, Alessandra Sensi (Eurostat)

This chapter highlights the connections between agricultural practices and climate change, emphasizing that agriculture is a significant contributor to methane (CH4) and nitrous oxide (N2O) emissions Conversely, converting agricultural land to forests presents a substantial opportunity to sequester CO2 from the atmosphere Young trees, in particular, have a remarkable capacity to absorb CO2 over time, making forests a key solution for carbon dioxide mitigation.

 Community aid scheme for forestry measures in agriculture, Regulation (EEC) No 2080/92

Other organizations

1.7.1 International Institute for Sustainable Development (IISD) http://www.iisd.org/

The International Institute for Sustainable Development (IISD) plays a vital role in international negotiations for sustainable forest management by enhancing transparency and clarity in discussions across various platforms, including the UN Forum on Forests (UNFF) and the World Commission on Forests and Sustainable Development (WCFSD) IISD also engages in dialogues regarding criteria and indicators for sustainable forest management, alongside supporting numerous civil society initiatives Additionally, IISD serves as the secretariat for the World Commission on Forests and Sustainable Development, further solidifying its commitment to sustainable forestry practices.

 Socio-economic issues in the international forest policy dialogue, Karl Hansen, November, 1995 http://www.iisd.org/forests/equityf3.htm

The IISD working paper on socio-economic context of the international forest policy introduces the principal events in international forest dialogue and provides comment on them.

 Countdown, Briefing Series on substantive issues in the international forest policy dialogue http://www.iisd.org/forests/countdown/default.htm

The complete series of reports is now available, covering a range of topics including International Reforms (August 1997), Economic Reforms (February 1997), Indigenous Issues (February 1997), Land Use Planning (February 1997), Participation (February 1997), Valuation and Finance (February 1997), as well as Criteria & Indicators and Certification (September 1996), and the Underlying Causes of Forest Degradation (March 1996).

1.7.2 World Commission on Forests and Sustainable

Development (WCFSD) http://www.iisd.org/wcfsd/default.htm

After the Earth Summit in 1992, it was recognized that addressing forest degradation would require more political solutions than technical ones In response, the Inter Action Council, comprising around 30 former heads of Government and State, chose to create an independent commission to tackle this issue.

• Increase awareness of the dual function of world forests in preserving the natural environment and contributing to economic development;

• Broaden the consensus on the data, science and policy aspects of forest conservation and management;

• Build confidence between North and South on forest matters with emphasis on international co-operation

The WCFSD plans to hold regional hearings in line with the Brundtland Commission's principles, engaging various stakeholder groups to gather insights The goal is to implement policy reforms that harmonize economic and environmental goals for the sustainable management of global forests.

 Final Report of the WCFSD, Washington, U.S.A., April 19, 1999 http://www.iisd.org/wcfsd/finalreport.htm

1 Stop the destruction of the earth's forests: their material products and ecological services are severely threatened

2 Use the world's rich forest resources to improve life for poor people and for the benefit of forest-dependent communities

3 Put the public interest first and involve people in decisions about forest use

4 Establish the correct value of forests, to reflect their full ecological and social values, and to stop harmful subsidies

5 Apply sustainable forest management approaches so we may use forests without abusing them

6 Develop new measures of forest capital so we know whether the situation is improving or worsening

7 Plan for the use and protection of whole landscapes, not the forest in isolation

8 Make better use of knowledge about forests, and greatly expand this information base

9 Accelerate research and training so sustainable forest management can become a reality quickly

10 Take bold political decisions and develop new civil society institutions to improve governance and accountability regarding forest use.

1.7.3 European Forest Institute (EFI) http://www.efi.fi/

EFI is a member-driven international association that fosters a vast research network across Europe and beyond Its mission focuses on promoting, conducting, and collaborating in forestry and forest products research at the pan-European level EFI aims to disseminate research findings to relevant stakeholders, particularly in policy formulation and implementation, to support the conservation and sustainable management of forests in Europe.

Research Reports http://www.efi.fi/publications/Research_Reports/

 Forests and the Global Carbon Cycle in the Past, Present and Future, Melvin Cannell, 1995

This report provides an in-depth summary of Dr Melvin Cannell's lecture at the First Conference of the European Forest Institute in Joensuu, Finland, from September 1-3, 1994 Titled 'Forests and the Global Carbon Cycle in the Past, Present and Future,' the report addresses a critical issue in forestry today and offers a thorough and timely overview of the existing knowledge in this vital area.

 Long-term Trends and Prospects in World Supply and Demand for Wood and Implications for Sustainable Forest Management , Birger Solberg (editor), authors: Brooks, D., Pajuoja, H., Peck, T J., Solberg, S and

The project report provides an in-depth analysis of long-term trends in both non-industrial and industrial wood supply and demand, highlighting the key factors that influence these trends The primary objective of the project was to thoroughly examine these dynamics to better understand the wood market.

• Factors affecting long term trends of non-industrial and industrial supply and demand for wood;

• Long term trends in non-industrial and industrial supply and demand for wood;

• Implications for forest management arising from this perspective.

The report comprises five papers, with the first paper providing a synthesis of the subsequent four, which explore their respective topics in greater detail.

• An overview of factors affecting the long-term trends of non-industrial and industrial wood supply and demand

• Long-term trends and prospects in world supply and demand for wood

• Extending to the longer term future - a qualitative review

• Implications for sustainable forest management

 Policies for Sustainable Forestry in Belarus, Russia and Ukraine, Max Krott, Ilpo Tikkanen, Anatoly Petrov,

Yuri Tunytsya, Boris Zheliba, Volker Sasse, Irina Rykounina and Taras Tunytsya, 2000

This article provides a comprehensive analysis of the transition process impacting the forest sector in specific countries, focusing on key factors that influence sustainable development It outlines strategies aimed at enhancing sustainability and fostering a market economy within the forest sector The proposed strategies include optimizing forestry practices within closed production units, reorienting forest planning, and improving labor management, along with securing resources for forestry from both state and market sources.

This article offers valuable insights into the political dynamics and informal strategies shaping the forestry sector, enhancing current economic market models It highlights the political processes that influence the transition to a market economy, providing essential information for both economists and foresters This understanding is crucial for navigating the complexities involved in developing a sustainable market economy through transition.

Working Papers http://www.efi.fi/publications/Working_Papers/

 A review of approaches to forestry research on structure, succession and biodiversity of undisturbed and semi-natural forests and woodlands in Europe, Andreas Schuck, Jari Parviainen and Winfried Bücking, 1994

This study aims to highlight biodiversity indicators in undisturbed forests and link them to effective forest management practices It summarizes key information on the history of forest reserves, research initiatives, and definitions related to forest ecosystems and protected areas Additionally, it outlines the ongoing project focused on establishing a network of forest reserves and conservation areas across Europe The study also offers recommendations for more in-depth research and literature reviews that are crucial for understanding these topics.

Proceedings http://www.efi.fi/publications/Proceedings/

 Environmental Impacts of Forestry and Forest Industry, Birger Solberg and Leena Roihuvuo (editors),

Proceedings of the International Seminar, organized by the Finnish-French Society and Technology and the European Forest Institute, Joensuu, Finland, September 5-8, 1994

The seminar brought together forestry science experts and forest enterprise representatives from France, Russia, and Finland to address key issues in the field The presentations were organized into thematic sessions covering topics such as forest management, biodiversity, and the economic effects of enhanced paper recycling.

 Assessment of Biodiversity for Improved Forest Management, Peter Bachmann, Kullervo Kuusela and Janne

Uuttera (editors), Proceedings of the International Workshop, Koli, Finland, 12-17 June 1995

The workshop emphasized the assessment methods for biodiversity to enhance forest management Despite being shaped by past management practices, forests remain vital for biological diversity within cultivated landscapes, especially when utilizing near-natural or nature-compatible methods Interestingly, some artificial forest management strategies have also led to unique biodiversity forms Preserving biodiversity is now a critical responsibility in forest utilization, extending beyond just establishing conservation areas Actions must align with existing natural conditions and historical forest development, while also considering the relevant spatial levels.

 Life-Cycle Analysis - a Challenge for Forestry and Forest Industry, Arno Frühwald and Birger Solberg

(editors), Proceedings of the International Workshop, organised by the European Forest Institute and the Federal Research Centre for Forestry and Forest Products, Hamburg, Germany, 3-5 May 1995.

The workshop focused on the achievements and challenges of Life Cycle Analysis (LCA) in forestry and the forest products industry, highlighting its role in environmental assessment through projects on eco-balancing, environmental declarations, and eco-labeling While LCA is recognized as a valuable tool for addressing environmental issues related to goods and services, its methodology remains underdeveloped The workshop emphasized the need for international collaboration to enhance LCA methodologies in forestry and the forest industry, recommending the establishment of an international group and follow-up workshops to advance this field.

 Regional Development Based on Forest Resources - Theories and Practices, Pentti Hyttinen, Ari Mononen and Pọivi Pelli (editors), Proceedings of the International Seminar, Joensuu, Finland, 14-15 December 1995

The seminar effectively highlighted the significance of the forest sector in Europe's border regions, while also introducing key theories and methodologies essential for examining its impact on regional development.

 Forest Industries Towards the Third Millennium - Economic and Environmental Challenges, Birger

Solberg, Matti Palo and Pentti Hyttinen (editors), Proceedings of the International Seminar, Joensuu, Finland, 18-

Other bibliography

 Burdin, N., Forest and forest products sector of Russia: status and prospects of trade in forest products, Personal communication, Professor N Burdin, Moscow, 2000.

Elliott's 1999 thesis, "Forest Certification: an Analysis from a Policy Network Perspective," presented at the Department of Rural Engineering at EPFL, explores the complexities of forest certification within a policy network framework The research aims to contribute to the understanding of sustainable forest management and the role of certification in promoting environmental stewardship This work is significant for policymakers and stakeholders in the forestry sector, highlighting the interplay between certification processes and ecological policies.

 Granholm, H., Vọhọnen, T and Sahlberg, S (eds), Intergovernmental Seminar on Criteria and Indicators for

Sustainable Forest Management: Background Document, Ministry of Agriculture and Forestry of Finland,

 Hummel, F C (ed), Forest policy: a Contribution to Resource Development, The Hague, Boston and Lancaster,

Martinus Nijhoff/Dr W Junk Publishers, 1984.

 Humphreys, D., Forest politics: the evolution of international cooperation, Earthscan Publications, London,

 Jacques, R., Global Demand for Forest Products to the year 2010, Industry, Economics and Programs Branch,

Canadian Forest Service, Natural Resources Canada, Ottawa, Ontario, 1996.

 Kauppi, P and Solberg, B., “Forests and climate change – Ecological and economic challenges”, in Palo, M. and Unsivuori, J (eds), World Forests, Society and Environment, Kluwer Academic Publishers, Dordrecht, London and Boston, 1999.

 Palo, M and Uusivuori, J (eds), World Forests, Society and Environment, Kluwer Academic Publishers,

 Peck, T J., “Europe and the international trade in tropical timber”, Materie Prime, No 4, Bologne, 1989.

 Peck, T J., “The International Timber Trade”, Woodhead Publishing Limited, Cambridge, England, 2001.

 Rice, T., Ozonga, S., Marijnissen, C and Gregory, M., Trade Liberalisation and its Impact on Forests: an

Overview of the most Relevant Issues, Fern/WRM, Moreton-in-Marsh, 2000.

 Sachs, J., “A new map of the world”, The Economist, June 24 th -30 th 2000, Vol 355 No 8176, 2000.

 Solberg, B., “Economic aspects of forestry and climate change”, in Commonwealth Forestry Review Vol 73(3),

 Viana, V M., Ervin, J., Donovan, R Z., Elliott, C and Gholz, H (eds), Certification of Forest Products:

Issues and Perspectives, Island Press, Washington D.C and Covelo, California, 1996.

POLICY AND SCIENTIFIC INFORMATION BY SCENARIO AREA

Biodiversity

2.1.1 More emphasis on nature conservation and promotion of biological diversity of forests ecosystems

Forest ecosystems maintain greater naturalness and species diversity compared to agricultural systems A key role of forests is to preserve biodiversity, making its protection essential in forestry practices at both national and global scales.

With respect to the fact that particular species, communities and ecosystems do not take national boundaries into account, international collaboration both at regional and global levels is inevitable.

The elements of biological diversity are:

• Local and regional diversity of flora and fauna (species diversity);

• Genetic diversity within each species, securing their ability of adaptation and evolutionary development;

• Local and regional diversity of ecosystems;

• The occurrence of ecological processes (natural and semi-natural forest dynamics) within ecosystems;

• Ecological networks and interactions between different ecosystems;

• Ecological interactions of ecosystems associations (e.g forests) and outer environment (climate, surrounding landscape)

Forest biodiversity is crucial for the ecological value of forest goods, encompassing ecosystem, species, and gene levels, and extends beyond mere option and existence values To effectively manage biodiversity, a deep understanding of forest ecosystem functions is essential Consequently, precise assessments are needed to identify the types and extents of forests required to sustain biodiversity, whether through sustainable management practices or forest protection.

1 Palo, M., Uusivuori, J., (eds), Word Forests, Society and Environment, Word Forests, Volume I, Kluwer Academic

The European Union is home to a remarkable diversity of natural habitats, supporting 150 mammal species, 520 bird species, 180 reptile and amphibian species, 150 fish species, 10,000 plant species, and over 100,000 invertebrate species This impressive biodiversity highlights Europe's rich natural heritage, characterized by varied life forms, stunning landscapes, and a high quality of life The ecological features of these habitats span numerous vegetation zones, including the sub-Mediterranean region, Arctic belt, coastal plains, and alpine zones.

The European Union boasts a forest area of 130 million hectares, representing approximately 36% of its total land area Of this, around 87 million hectares are classified as exploitable forests, managed for both wood production and non-wood goods and services Notably, 36.3% of the assessed forests in Europe are deemed "healthy," exhibiting no loss of needles and leaves, while 41% are in varying conditions.

"warning stage" and 20% of all trees are rated "damaged", since they show more than 25% defoliation 2

The Central and Eastern European Countries (CEECs) encompass a geographical area of 1,183,946 km², with 389,600 km² covered by forests, predominantly managed and largely man-made over the past 300 years Unlike Western Europe, which experienced significant deforestation by the end of the Middle Ages, CEECs have maintained a continuous forest presence, resulting in a high degree of semi-natural status This low-intensity management has allowed these forests to serve as vital habitats for various species, including bears, wolves, lynxes, wildcats, beavers, moose, and numerous birds of prey, many of which have vanished from Western Europe.

Approximately 90% of the forest area in the EU and accession countries is categorized as "semi-natural," with only 6% designated as plantations The average percentage of forest that remains undisturbed by human activity is typically between 0% and 1%, primarily found in Sweden and Finland, which together account for 5.5 million hectares In countries outside the Nordic region, these undisturbed forest remnants are generally small but possess significant ecological value Since 1986, European forests have experienced a steady decline in condition.

Since 1995, major causes of forest damage have included extreme weather, insects, fungi, and air pollution, with damage levels stabilizing at a high rate Recent years have shown improvements in regions such as the Mountainous North, Temperate Boreal, and Subatlantic areas The EU and accession countries have experienced an average annual increase of approximately 0.5 million hectares of forest, with Mediterranean countries leading in absolute area growth However, increased afforestation may negatively impact biodiversity, depending on the structure, composition of the new forests, and the management practices employed.

The Russian Federation covers one-eighth of the world's land area, primarily encompassing non-tropical Eurasia Its diverse landscapes span eight natural zones, ranging from arctic deserts and tundra to taiga, broad-leaved forests, and steppe regions The country is home to over 11,000 vascular plant species, with 461 listed as endangered by the Red Data Book, and an estimated 2,000 to 3,000 more at risk Additionally, Russia hosts 320 mammal species (64 endangered), approximately 730 bird species (109 endangered), 75 reptiles (11 endangered), and about 30 amphibian species (4 endangered).

270 fresh-water fish (9 endangered) species may be found in Russia This constitutes about 8% of global vascular plant flora, 7% of the mammal fauna and almost 8% of the bird fauna.

Despite a rich history of economic development, Northern Eurasia, particularly Siberia and the Far East, remains largely undisturbed The challenges of industrial and agricultural expansion in these areas have hindered significant growth and development.

2 2000 Report on the forest condition in Europe, UNECE, EU, 1999.

3 Conservation and Sustainable Management of Forests in Central and Eastern European Countries, 1999.

In 2002, the EU reported significant environmental signals indicating that permafrost regions, characterized by cold climates and challenging agricultural conditions, are facing severe biodiversity declines The most drastic losses in biological and landscape diversity have been observed in Northern Caucasia, the Volga Region, Central European Russia, and Southern Siberia, while other areas have mainly experienced localized human impacts Notably, approximately 90% of tundra areas, 70-75% of taiga forests, and 20-30% of Asian steppes have remained largely untouched and close to their natural state.

Full participation from forest owners and relevant authorities is crucial in both the decision-making process for establishing protected areas and their ongoing management, as biodiversity conservation relies heavily on the continuation of human activities within these regions Additionally, implementing an effective information policy regarding any management restrictions is essential.

The Ministerial Conferences on the Protection of Forests in Europe (MCPFE) establish key resolutions aimed at the protection, conservation, and sustainable development of European forests These guidelines serve to fulfill nature protection objectives, aligning with the goals outlined in the Convention on Biological Diversity.

At the 1993 Second Ministerial Conference in Helsinki, European forestry ministers endorsed the UNCED Forest Principles, marking a significant advancement in sustainable forest management They adopted Resolution H2, which outlines the "General Guidelines for the Conservation of the Biodiversity of European Forests." These guidelines reflect the political commitment of the signatory states to establish a policy framework aimed at sustainably managing European forests while conserving and enhancing their biological diversity to meet diverse demands for goods and services.

In addition, at the Third Ministerial Conference, held in Lisbon in 1998, a co-operation with the Ministerial Process

"Environment for Europe" has been established by endorsing a pan-European "Work-Programme on the

Conservation and Enhancement of Biological and Landscape Diversity in Forest Ecosystems 1997-2000" 7 European Union

The European Union is actively establishing protected areas through the NATURA 2000 ecological network, which includes Special Protection Areas (SPAs) from the Birds Directive and Special Conservation Areas (SCAs) from the Habitat Directive These measures aim to maintain or restore natural habitats and species of wild fauna and flora that are of Community interest, while also considering economic, social, and cultural needs, as well as regional and local characteristics.

5 The State Committee of the Russian Federation for Environment Protection 1997

6 Third Ministerial Conference on the Protection of Forests in Europe, Annex 2 of the Resolution L2, Lisbon/Portugal , 2-4 June 1998.

7 http://www.mcpfe.net/index.html

The Habitats Directive plays a crucial role in safeguarding Europe's forests by identifying "Natural Habitat Types of Community interest" that necessitate the establishment of Special Areas of Conservation (SAC) for their protection, as outlined in its Annex.

Globalization and innovation

2.2.1 Impact of globalization on the competitiveness of the

The forest-based and related industries (FBI) are a vital industrial sector in the ECE region, facing significant developments that present both substantial opportunities and challenges to their competitiveness.

Forestry commercial activities play a significant role in the open economy, with timber production driven mainly by market dynamics The European forest industry operates in a global context, highlighting the necessity for alignment with international trade obligations in any regulatory measures.

In particular, the WTO provisions on international trade, including trade and environment issues, apply to the trade of all forest products with third countries.

The forest products industry has been slow to engage in the trends of concentration and globalization that are shaping the corporate landscape In their strategies for expansion and globalization, forest industries have utilized not only traditional mergers and acquisitions but also various forms of corporate alliances A notable example is UPM-Kymmene, a Finnish company with a diverse global production portfolio, which articulates its strategic objectives clearly.

• Improved access to emerging and fast-growing markets;

• Expanding market shares in core business areas;

• Domestic wood suppliers are already efficiently used (Henriksen 1998) 28

Characteristics of the EU forest-based industries

The EU forest-based industries encompass a range of sectors, including woodworking, pulp and paper production, and printing and publishing This diverse industry features a mix of global, regional, and local companies, with a significant presence of small to medium-sized enterprises alongside multinational corporations The production value of these industries reaches nearly 300 billion ECU, accounting for 10% of the EU's total manufacturing output Additionally, these industries provide direct employment for approximately 2.2 million individuals across the EU.

The European Union (EU) stands as the largest trader and the second-largest consumer of forest products globally, maintaining a positive trade balance Despite this, the EU is primarily a net importer of raw materials, particularly roundwood sourced mainly from Central and Eastern European Countries (CEECs) and the Commonwealth of Independent States (CIS), along with wood pulps from North and South America and other regions Notably, the EU excels as an exporter in certain sectors, particularly for high-value-added forest products.

28 Palo, M., Uusivuori, J., (eds) Word Forests, Society and Environment, Word Forests, Volume I, Kluwer Academic

Publishers, Dordrecht, The Netherlands, 1999. industries depend in certain areas on a fragmented forest resource, which, with other disadvantages, are tending to make EU wood less competitive than that from elsewhere 29

Forest and related industry, timber suppliers, governments, financial institutions

Implication for the forestry sector

The forest products sector is increasingly shaped by globalization, characterized by economies of scale, the swift movement of capital, and the removal of trade barriers Key impacts include mergers and acquisitions among companies, the rise of multinational buyers like large European and American DIY chains, and the establishment of global markets for products such as fiber, pulp, newsprint, sawnwood, and panels Additionally, export-oriented plantations in regions with favorable growing conditions and productive species have seen significant success, as highlighted in the FAO's publication, ‘State of the World’s Forests’.

The publication 'Forests 2001' has intensified competition in markets that were once primarily domestic and small scale, driving innovation in products and marketing strategies This shift has also prompted changes in industrial approaches, including the outsourcing of production processes in certain cases.

The competitiveness of the Forest-Based Industry (FBI) hinges on continuous access to diverse, high-quality wood fiber at competitive prices Wood fiber costs significantly impact the overall cost structure of various forest products As different sub-sectors vie for raw materials, the competition within the FBI is increasingly influenced by both technical and economic factors.

Since 1980, FBI production has seen a remarkable rise, with sawn timber increasing by 9% and fibreboard by 150% Additionally, the use of recycled fibers has grown significantly, and EU forests now provide over 90% of the roundwood demand.

(234 million m 3 ) of the European industry, thus playing a strategic role in the total wood fiber procurement.

FBI sectors are actively seeking cost reductions through enhanced technologies and improved efficiencies With raw material costs posing a challenge for the European FBI, there is a strong incentive to source more affordable raw materials This shift is intensifying competition for low-cost wood fiber.

To remain competitive in the future, the EU forest-based industries must ensure a reliable supply of low-cost wood fiber, including pulpwood and industrial wood residues This requires a focus on continuous specialization, quality improvement, and innovation, all supported by dedicated research and development efforts.

In response to the 2001 economic downturn, the UNECE Timber Committee emphasized the necessity of innovating new products and creating new markets to satisfy consumer demands It highlighted the critical role of the forest products industry in collaborating internationally to advocate for the environmental benefits of sustainably produced wood.

29 Forestry strategy for the European Union, 1998.

30 Report of the fifty-ninth Timber Committee session, Geneva, 2001.

31 Forestry strategy for the European Union,1998.

32 Report of the fifty-ninth Timber Committee session, Geneva, 2001.

Impact of implementation of a common currency in Europe

The ongoing economic integration in Europe is significantly transforming the political and economic landscape for the region's forest sectors The adoption of a common currency is facilitating intraregional trade and enhancing economic ties among member countries This shift towards a single currency will lead to increased foreign trade transactions in the forest industry, ultimately lowering trade costs and minimizing wood price disparities across nations Additionally, a unified exchange system is expected to foster a more accessible capital market within the EU, creating diverse financing opportunities that could support the establishment of new small-sized forest industry enterprises.

Large international forest companies are increasingly considering new currency zones in their investment strategies to mitigate risks associated with exchange rate fluctuations To safeguard against these risks, European firms are now compelled to expand their operational bases beyond Europe, driving a shift towards more globalized investment policies.

2.2.2 Intensified innovations and changes in competitiveness of wood products

Globalization has heightened competition for EU firms, which currently face a negative technology balance compared to the increasingly positive figures of the United States and Japan This landscape means that the stakes for innovation have never been higher, with significant rewards for success and swift consequences for failure However, EU companies have the potential to achieve substantial gains, as evidenced by their success in the mobile telephone sector.

Main stakeholders: Forest industry, governments, universities and research institutes, information services

Integration of the former planned economies to the global market

2.3.1 Strengthening policies to develop market framework in countries with economies in transition (CITs)

The dissolution of the Soviet Union and Yugoslavia, along with the political transformations in former socialist nations of Central and Eastern Europe, significantly altered the global political landscape Throughout the 1990s, many countries transitioned from planned economies to market-oriented systems and shifted from authoritarian rule to democratic governance While these changes are ultimately positive for achieving sustainable forest management worldwide, they often lead to political instability and social unrest that can negatively impact natural environments in the short term.

Central-Eastern Europe is experiencing significant political and economic transformations that are impacting legal, structural, environmental, and social conditions These changes align with a shift in international environmental and forest policy, emphasizing the importance of non-wood forest functions and a broader interpretation of sustainable forest management This approach prioritizes the conservation of biodiversity alongside sustainable development Forestry is recognized as a crucial tool for enhancing human welfare, addressing rural development challenges, and mitigating environmental issues like atmospheric pollution and the disrupted carbon cycle Transition countries must not only reform their political systems but also establish a new legal framework and develop capacities in research, education, planning, and public relations related to forest management Adjusting the entire economic system to market conditions is particularly challenging in forestry due to its long-term nature It is essential to avoid short-term interests that could undermine progress in forestry and to protect the achievements already attained.

The privatization of enterprises in the CIS transformed managers into owners of former state enterprises, allowing them to operate as before This shift resulted in the new economic elite maintaining monopolistic relationships with the government, further entrenching market monopolies The financial markets remain fragile, exacerbated by the 1998 banking crisis, which led to widespread bank bankruptcies and intensified monopolistic trends Consequently, the government has the power to determine which businesses survive in this environment.

35 Palo, M., Uusivuori, J., (eds), Word Forests, Society and Environment, Word Forests, Volume I, Kluwer Academic Publishers, Dordrecht, The Netherlands, 1999.

36 Forest Policy in the Countries with Economies in Transition - Ready for the European Union? Proceedings of the

International Conference, Czech University of Agriculture, August 1997.

Despite the economic boom driven by rising oil prices and currency devaluation, restructuring in Russia remains elusive The country continues to grapple with a virtual economy characterized by artificial pricing and barter trade High transaction costs associated with legal trade sustain the prevalence of the gray market, hindering progress towards a more stable economic framework.

Land and natural resources in Russia remain primarily state-owned, despite the initiation of land reforms that allowed for land transferability and the establishment of family farms However, these reforms have not led to increased agricultural productivity, largely due to inadequate infrastructure for family farms and state support favoring joint stock companies, which are remnants of former state or collective farms Regional disparities exist, influenced by the varying interests of local authorities, while legislative chaos hinders the creation of a cohesive land law system The absence of a political consensus has stalled the passage of a new federal land code, resulting in ongoing disputes between regional and federal authorities over natural resource ownership Even amidst reorganization efforts, state management of natural resources, particularly in forest management, continues to reflect outdated institutional practices despite the privatization of forest enterprises.

CITs governments, the EU and international financial institutions, forestry companies in CITs and countries outside this region wishing to invest in CITs forestry

Sustainability and a market economy are key objectives for the forestry transition in all CITs, necessitating a re-evaluation of the roles of the state and market While the collapse of the socialist state has diminished central planning, a purely laissez-faire approach to forest sector issues is not advisable Successful sustainable forest management cases demonstrate that effective and coordinated state policies across forestry, agriculture, environment, industries, energy, fiscal matters, and foreign trade are essential Ideally, a proactive state should act as a catalyst, facilitating and enhancing the operations of private market players.

Reports on the operation of developed frameworks in transition countries often focus primarily on institutional organization, lacking insights into the balance of forestry policies with other societal sectors The influence of various external developments on the forest sector is significant, yet underreported Additionally, there is a notable absence of discussion regarding the implementation of criteria and indicators within these reports.

To enhance development in the forest sector and facilitate legislative reforms, many CITs governments have opted to establish a national forest policy, with a key focus on private forestry The main policy recommendations include separating law enforcement and support for private forestry from State forest management, easing restrictions on private forest utilization, improving the service orientation of public administration, and prioritizing capacity building for forest owners.

37 Russian Property Rights in Transition, IIASA, S Nysten-Haarala, March 2001

38 Palo, M., Uusivuori, J., (eds), Word Forests, Society and Environment, Word Forests, Volume I, Kluwer Academic

39 Future Challenges to Ensure Sustainable Forest Management, IIASA, 2001.

In the CIS, strategies emphasize the role of state forest enterprises in managing forests sustainably, as strong forestry institutions outperform other state entities focused on limited economic or ecological interests The involvement of various institutions in Belarus, Russia, and Ukraine complicates the optimization of forestry due to complex financing and decision-making processes New models have been proposed to integrate financing and management within closed units, alongside strategies for improving technical infrastructure and enhancing the environmental importance of forestry Despite market economy advancements, the forestry planning system remains largely unchanged, highlighting the need for statewide planning Additionally, discussions on labor management and resource allocation are crucial, with specific transitional solutions such as portfolio economy and barter proposed to address the needs of individuals and institutions until a fully developed market economy is achieved.

Implication for the forestry sector

Over the past decade, the forest sectors in transition countries have encountered numerous challenges, including the collapse of domestic markets for forest products and difficulties in creating effective pricing systems that reflect true forest value Additionally, outdated institutions and legislation, conflicts between central and local governments, and issues of corruption have hindered progress The privatization of forest industries has often lacked sufficient reinvestment, while governmental budgets for forest management have dwindled Furthermore, the restitution of forest land to private owners has frequently prioritized short-term profits over sustainability, leading to an unclear balance between private and public interests.

To ensure a sustainable forest sector and effective forest management in transition countries, it is essential to develop economically viable industries This involves considering all factors that impact the competitive standing of these forest sectors A self-enforcing policy revision process is necessary to address these challenges effectively.

The economic viability of forest sectors in transition countries is closely linked to their institutional frameworks, but external developments also play a significant role Notably, the collapse of domestic markets for forest products has resulted in a decline of approximately 80 million m³ of roundwood equivalents To restore economic viability, it is crucial to revitalize domestic consumption Additionally, increased competition from plantations in the Southern Hemisphere poses further challenges to the forest sectors in these countries.

The UN (2001) document on forest policies and institutions identifies some of the economic viability issues hampering sustainable forest management:

• Declining timber prices and forest profits;

• The environmental and social values are not valued at the market place;

• Forestry has a marginal role in the national economic planning;

40 Forest Policy in the Countries with Economies in Transition - Ready for the European Union? Proceedings of the

International Conference, Czech University of Agriculture, August 1997.

• The transition process in the forest sector is determined by more general transition related factors in the transition countries;

The Institutional problems of the Russian Forest Sector are present at all levels in the society affecting the forest sector, such as at the:

Constitutional Level: Contradictions and inconsistencies in legislation; unspecified, unclear property rights; draconian tax code; and political instability.

The collective-choice level is influenced by artificially low timber prices and high interest rates, which penalize forest enterprises lacking sufficient working capital during production gaps This situation has led to an increase in barter transactions, alongside a rise in corruption and criminal activities Additionally, there is a notable shift towards a virtual economy, compounded by a lack of investment in secondary wood industries.

The operational level faces significant challenges, including a rise in illegal harvesting, which contributes to the degradation and devastation of forests High transaction costs and a lack of funding for forest management operations hinder effective oversight, while many forest enterprises operate at a loss, leading to timber shortages.

Competitiveness of the CITs forestry sector

A recent study examining the forest-based and related industries in Central and Eastern European countries, including Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia, highlights the significance of these sectors in the region's economic landscape.

Regional and rural development

2.4.1 Incentives for social/environmental benefits from forestry and wood products use

Forests serve multiple essential functions beyond their traditional role as a source of timber and raw materials like resin, cork, mushrooms, and berries They provide significant social benefits, particularly as recreational spaces that enhance leisure time Environmentally, forests play a crucial role in biodiversity preservation, climate regulation, and protection of water and soil, with additional protective functions in mountainous regions, such as avalanche control and erosion prevention In recent years, the importance of forests in carbon dioxide fixation has increased, highlighting their multifunctionality This means that forests can simultaneously support soil protection, biodiversity, recreation, and selective timber harvesting without compromising their ecological integrity Sustainably managed forests deliver vital services to both nature and society, with key stakeholders including governments, forest industry owners, landowners, and the public.

The European Parliament and Commission are currently examining the optimal framework for addressing forest sector issues at the union level Key concerns in the coming years include the extent of afforestation subsidies in the EU, which may be tied to the EU's commitments to carbon fixation under the Kyoto Protocol However, the effectiveness of these subsidies has been limited so far, primarily due to resistance from rural communities in certain member states towards afforestation initiatives.

The Regulation (EC) 1257/1999 of 17 May 1999 concerning support for rural development by European

The Agricultural Guidance and Guarantee Fund oversees various initiatives under the new EU rural development policy, specifically targeting forestry measures These measures are integral to the EU's forestry strategy, which focuses on the protection, sustainable management, and development of forests across Europe.

Implication for the forestry sector

Regulation (EC) 1257/1999, enacted on May 17, 1999, emphasizes support for rural development through the European Agricultural Guidance and Guarantee Fund, specifically targeting forest management Financial aid is accessible for woodlands owned by individuals, associations, or local authorities, encompassing various supportive measures.

53 Forestry strategy for the European Union, 1998.

54 Palo, M., Uusivuori, J., (eds), Word Forests, Society and Environment, Word Forests, Volume I, Kluwer Academic

55 CAP Reform: Rural Development , DG Agriculture, 2000.

• Investments in forests to improve their economic, ecological or social value;

• Investments designed to improve and rationalize the production, processing and marketing of forestry products, and the use of wood as a raw material;

• Promotion of new outlets for processing and marketing forestry products;

• Restore the forest production following damage by natural disasters and fire and introducing appropriate preventive measures;

• Maintaining and improving the ecological stability of forests.

In addition support may be granted for the afforestation of agricultural land This support may cover:

• An annual payment per hectare planted, intended to cover management costs over a period not exceeding 5 years;

An annual compensation payment of 725 €/ha is available for farmers or associations, while private individuals receive 185 €/ha, aimed at offsetting losses from forestation efforts over a maximum period of 20 years.

For the forestation of agricultural land owned by public authorities, the aid only covers plantation costs 56

Maximum amounts for forests measures are:

Maximum annual premium for compensating losses due to reforestation:

For producers and producer groups 725 €/ha

For all other legal persons 185 €/ha

56 CAP Reform: Rural Development , DG Agriculture, 2000.

2.4.2 Changes in agricultural, rural and regional development policies

A significant portion of the European Union's territory comprises rural areas, prompting a strong focus on rural development policies Forestry is increasingly acknowledged as a vital component of this development, although opinions vary on its optimal contribution These differing views stem from diverse interpretations of rurality and rural development, as well as evolving perceptions of forestry's role Historically, the emphasis was on forests' primary production functions to boost rural economies, but there is now a shift towards recognizing their ecological and amenity services.

Rural development in Europe is significantly influenced by the European Agricultural Policy, leading to the afforestation of large ex-agricultural lands This shift not only focuses on timber production but also promotes the use of forests for conservation, recreation, and enhancing landscape amenities To effectively manage these changes, a deeper understanding of both the socio-political and technical aspects of farm forestry is essential.

In 1992, flanking measures were introduced alongside the CAP reform to support environmental aid, early retirement, and forestry initiatives A key aspect of this reform was the temporary set-aside policy, which allowed for the reallocation of farmland to afforestation or non-food production This led to the establishment of Council Regulation (EEC) No 2080/92 on June 30, 1992, which created a Community aid scheme specifically for forestry measures within the agricultural sector.

Afforestation of agricultural land has a long history, supported by various EU initiatives since the 1980s Notably, the implementation of Regulation (EEC) No 2080/92 revitalized these efforts by introducing a premium that compensates farmers for income loss, providing them with a stable annual income for up to 20 years.

The forest-based industries play a crucial role in regional development, especially when supported by effective planning practices Even local industries must consider global market trends and technological advancements to remain competitive, particularly in open-border economies where small enterprises may struggle against international competition In Western countries, where labor costs are high, caution is advised when promoting small-scale mechanical industries and value-added production due to limited competitive advantages and low market growth Conversely, the pulp and paper industries present better opportunities, driven by higher market growth, although they require significant investments, often exceeding half a billion dollars, to achieve the necessary economies of scale for global competitiveness.

57 Forestry and rural development in Europe: an exploration of socio-political discourses, Forestry Policy and Economics, September 2001.

58 Forestry in the Context of Rural Development: Future Research Needs, EFI, 1996

59 Report to Parliament and the Council on the application of Regulation (EEC) No 2080/92 instituting a Community aid scheme for forestry measures in agriculture, 1999.

60 Regional Development Based on Forest Resources - Theories and Practices, EFI, 1995

The EU rural development policy serves as the "second pillar" of the Common Agricultural Policy, emphasizing the significance of rural areas in conjunction with market measures and the competitiveness of European agriculture Notably, rural regions make up 80% of the EU's territory, highlighting their vital role in the overall agricultural landscape.

The legal basis for the new rural development policy is provided by the Council Regulation (EC) 1257/1999 of 17

May 1999 concerning support for rural development by European Agricultural Guidance and Guarantee Fund

The Commission Regulation (EC) No 1750/1999, established on July 23, 1999, outlines the detailed rules for implementing the EAGGF's rural development support, while the Commission Regulation (EC) No 2603/1999, enacted in December 1999, sets forth the transition guidelines for the rural development support as mandated by Council Regulation No 1257/1999.

The rural development policy is based on the following principles:

• The multifuncionality of agriculture, i.e its varied role over and above the production of foodstuffs This implies the recognition and encouragement of the services provided by farmers;

• A multisectoral and integrated approach to the rural economy in order to diversify activities, create new sources of income and employment, and protect the rural heritage;

• Flexible aids for rural development, based on subsidiarity, decentralization partnerships, and through consultation at regional and local levels;

• Transparency in drawing up and managing programmes based on simplified and more accessible legislation.

To enhance the integration of various intervention types and promote harmonious development across all European rural regions, the policy focuses on fostering balanced growth.

• Strengthens the agricultural and forestry sector,

• Improves the competitiveness of rural areas,

• Preserves the environment and rural heritage 61

Regulation (EEC) n° 2080/92 establishes a Community scheme to support forestry measures in agriculture, aimed at promoting the reafforestation of agricultural land From 1993 to 1997, this initiative successfully facilitated the afforestation of 519,350 hectares of agricultural land across the region.

The European Union's reforestation efforts focused primarily on agricultural lands that are consistently maintained as grasslands, utilizing mainly broadleaf species to promote sustainable long-term growth To offset income loss, the initiative included financial premiums, alongside investment support and funding for the enhancement of woodland areas.

Energy and environment

2.5.1 Promotion of renewable energy sources

The escalating demand for energy in society has surpassed the natural balance, leading to increased carbon dioxide emissions and concerns over the "greenhouse effect" and climate imbalance Utilizing biomass for energy generation can significantly mitigate climate change, as sustainably produced biofuels do not contribute to net CO2 emissions; the CO2 released during biofuel combustion is reabsorbed by growing biomass Consequently, the reduction in CO2 emissions from fossil fuel combustion is directly proportional to the amount of fossil fuel replaced by biofuels The future of biofuel usage will largely hinge on advancements in technologies that enable efficient biofuel utilization, such as wood product gasification.

Biomass is a diverse and abundant resource that encompasses woody biomass, wood industry residues, energy crops, agricultural residues, agro-food byproducts, manures, and organic waste from municipal solid waste and sewage sludge It offers versatile energy solutions, capable of generating electricity, heat, or transport fuel, and can be stored efficiently and cost-effectively Biomass production facilities can vary in scale from small units to multi-megawatt plants Utilizing biomass not only harnesses a significant renewable energy source but also contributes to environmental and climate improvement.

Establishing new biomass plantations can enhance long-term carbon sequestration, especially when they replace land uses with lower sequestration rates While forests managed for biofuels, particularly short-rotation coppice, generally have a lower average carbon density compared to untouched forests or long-rotation plantations, they still sequester more carbon than most non-forest land uses However, if natural forests are converted to short-rotation coppice for biofuel production, the positive impact of substituting fossil fuels may be negated due to the emissions associated with forest conversion.

Biofuels contribute 14% to the global primary energy supply, with developing countries relying on them for one-third of their total energy needs Transitioning from biofuels to fossil fuels would release an additional 1.1 Gt of carbon annually In the European Union, biomass constitutes approximately 3% of total inland energy consumption, but in newer EU Member States like Austria, Finland, and Sweden, it represents 12%, 23%, and 18% of their primary energy supply, respectively.

70 State of the World’s Forests 2001, FAO, 2001.

71 Energy for the Future: Renewable Sources of Energy, Communication from the Commission COM(97)599 final

72 State of the World’s Forests 2001, FAO, 2001.

74 Energy for the Future: Renewable Sources of Energy, Communication from the Commission COM(97)599 final

Main stakeholders: Governments, forest plantations owners

Renewable energy sources in the European Union are underutilized, despite their abundance and significant economic potential Currently, they contribute less than 6% to the EU's total gross inland energy consumption, highlighting the need for increased investment and development in this sector.

The White Paper titled “An Energy Policy for the European Union” projects that renewable energy sources will account for 12% of total energy by 2010, up from less than 6% currently This significant increase is expected to boost the utilization of biomass, alongside hydropower, wind, and solar energy It emphasizes the importance of forests as a key energy resource, advocating for the use of short rotation plantations and the exploitation of forest residues and low-quality wood.

The European Commission's White Paper, titled “Energy for the Future: Renewable Sources of Energy,” outlines a strategic plan aimed at doubling the proportion of renewable energies in the total energy consumption of the EU.

By 2010, the European Union aims to double the share of renewable energy from 6% to 12%, guided by a comprehensive Action Plan This plan outlines key initiatives, including regulatory and fiscal measures to enhance the internal market, bolster Community policies that promote renewable energy adoption, and strengthen cooperation among Member States Additionally, it emphasizes support measures to encourage investment and improve information dissemination within the renewable energy sector.

By 2010, the use of biomass could potentially triple to reach 44.8 Mtoe, contingent upon the implementation of effective measures This increase would contribute an estimated 90 Mtoe of bioenergy, representing 8.5% of the projected energy consumption for that year The additional bioenergy would primarily come from agricultural and forest residues, waste streams, and the cultivation of new energy crops.

Projected additional bioenergy use in the EU by 2010:

Under the scenario presented 90 Mtoe

Biogas exploitation (livestock production, sewage treatment, landfills) 15 Mtoe

Agricultural and Forest Residues 30 Mtoe

75 Energy for the Future: Renewable Sources of Energy, Communication from the Commission COM(97)599 final

The Action Plan to Enhance Energy Efficiency in the European Community proposes key policies and measures aimed at improving energy generation It introduces three main mechanisms designed to boost energy efficiency across the region.

• Measures to enhance the integration of energy efficiency into other Community non-energy policy and programme areas, such as regional and urban policy, taxation and tariff policy, etc;

• Measures for re-focusing and reinforcing existing successful Community energy-efficiency measures;

• New common and coordinated policies and measures.

Taxation and tariff policies play a crucial role in enhancing energy efficiency The Commission's proposal to broaden the minimum tax base for energy products exemplifies this approach, allowing for a minimum tax base and potential exemptions for energy efficiency investments Additionally, measures taken by Member States are vital in this context and will be encouraged to further promote energy efficiency Well-structured tariffs for energy supply and distribution can significantly enhance efficient end-use, and these will also be advocated for.

The European Forestry Strategy highlights the importance of community support for utilizing wood as an energy source, particularly in the context of the Commission's proposal on Rural Development It emphasizes the need to consider various factors when assessing the potential for increasing energy crops derived from forestry.

The potential of wood-based biomass as an energy source should be carefully evaluated, as the availability of forest resources varies significantly in distribution and type across the EU This variability complicates the accurate assessment of their true energy potential, making it essential to consider localized data rather than relying solely on general theoretical estimates.

Currently, wood is often a pricier raw material for energy production compared to alternative sources To tackle this issue, adjusting tax policies may be a viable solution Any modifications to tax systems at the Member State or EU level should consider the demand for wood products and the industry's need for sustainable wood resources.

Short rotation forestry for energy production can help mitigate the increase of atmospheric carbon dioxide levels; however, it is essential to monitor and manage its implementation to avoid negative environmental impacts.

Implication for the forestry sector