CONSERVING TROPICAL FORESTS

FOR PEOPLE, THE ENVIRONMENT, AND

RESPONSIBLE BUSINESSES

The Benefits TFF Provides

• People who live in

or near tropical

forests

• The local and global

environment

• Businesses that use

or produce wood

products

Tropical Forests are Disappearing

©earthobservatory.nasa.gov

Causes of Deforestation

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Africa Latin America Asia

De

fore

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Urban Expansion

Infrastructure

Mining

Subsistence Agriculture

Commercial Agriculture

Worldwide concern was rising in the 1980s regarding the rapid loss of tropical forests

Initiating Change

In 1989, a workshop was organized with experts from industry,

conservation, and science.

• Smithsonian Institute, Dr. Thomas Lovejoy

• World Bank, Dr. Marc Dourojeanni

• UNESCO, Dr. Kuswata Kartawinata

• Princeton University, Dr. Stephen Hubbell

• Government of Nigeria, Dr. Philip R.O. Kio

• World Wildlife Fund, Robert Buschbacher

• Georgia-Pacific Corporation, Walter Jarck

• US Forest Service, Dr. Frank Wadsworth

• Rainforest Alliance, Ivan Ussach

Key Findings of the Workshop

• Tropical forests will be conserved only if they have

economic value

• Blanket bans and embargos tend to depress the value

of hardwoods and the forests

• Funds obtained from products of the tropical forests

must be rechanneled into managing and regenerating

those forests.

The Tropical Forest

Foundation was formed

in 1990

• Continue the discussion and

research

• Educate producers and users

of tropical woods on these

key findings

• Develop relationships among

policy-makers, conservation

and academic organizations,

and industry.

TFF Training Centers

Defining best practices

Developed the world’s

standard for Reduced Impact

Logging in tropical forests.

Conventional Logging Reduced Impact Logging

Improvements Achieved Through

Reduced Impact Logging Practices

Measuring the avoided

emissions resulting

from RIL

•Tropical deforestation

releases 20% of greenhouse

gas emissions worldwide,

roughly equivalent to that

released by the transportation

sector

• Reduced Impact Logging is

mentioned specifically in the

Verified Carbon Standard as a

qualifying emissions reduction

strategy

• Methodology currently in

validation to credit RIL

practitioners for avoided

emissions vs CL

Progress in

Establishing a Training

Program in Peru

•Identified relevant

stakeholders

•Determined the curriculum for

the SFM training center

•Determined the legal, financial

and operational feasibility of

the SFM training center

•Communicated project

outcomes to stakeholders

•Developed a funding proposal

Results of 2013

• 1,408 people were trained in

109 course (22% women)

• 877 people reached through

extension programs

• Over 2.4 million hectares

impacted

• At least 20 concessions

achieved FSC certification

• Presentations made to

International Wood Products

Association, Yale University, CF

Martin & Company Wood

Summit, plus individual

manufacturers

• Participated in 11 events

• Reached an audience

exceeding 100,000 with articles,

blogs, and videos

MARKETS ARE SHIFTING

Tropical Wood Market

Share is Falling

Statistics for 1995 and 2011

• Plywood – 75% to 25%

• Veneer – 38% to 30%

• Roundwood – 20% to 15%

• Sawnwood – 10% to 10%

--Source ITTO Market Information Service

Markets are Shifting

“Families in the emergent, established, and affluent

segments will make up 37 percent of Brazilian

households by 2020, compared with 29 percent in

2010 and just 24 percent in 2000. These households

will account for more than 85 percent of incremental

spending from 2010 to 2020”

-- Boston Consulting Group

Markets are Shifting

Good news on Chinese economy to boost new sol

“The national currency the new sol strengthened

recently buoyed by the turn-around in the Chinese

economy. China is the biggest market for

commodities from Peru. The new sol exchange rate

against the US dollar was 2.7970 on 11 September, the

highest level for months.”

-- ITTO Market Information Service

“Middle Class” Outside the U.S. Expected to Double By

2020 – Approaching 1 Billion Households

Worldwide commodity consumption will be impacted

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1990 1994 1998 2002 2006 2010 2014 2018

Foreign households w/real PPP incomes greater than $20,000 a year (in millions of households)

Developing countries

Developed countries (ex US)

Middle class in developing

countries projected to increase

138% by 2020 vs. just 15% in

developed countries in 2009

Chart provided by American Hardwood Export Council. Source: Global Insight’s Global Consumer Markets data as analyzed by OGA

“Middle Class” in Developing Countries Could Reach 616

Million Households By 2020, Up 138% From 2009 Levels

25% of households in these countries are middle class. By 2020, this could increase to 49%

and the impact on food consumption will be large

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China

India

Brazil

Indonesia

Russia

Egypt

Thailand

Mexico

Turkey

Vietnam

Philippines

Iran

Poland

Nigeria

Households with real PPP incomes greater than $20,000 (in millions)

levels 2009 Proj gains by 2020

Chart provided by American Hardwood Export Council Source: Global Insight’s Global Consumer Markets data as analyzed by OGA

Developing countries with fastest growing “middle class”

Source: Global Trade Atlas

Chart provided by American Hardwood Export Council Source: Global Trade Atlas

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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jan - Nov.2012

Mill

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Fe

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US Hardwood Lumber Exports to China

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0

1

2

1999 - 2006US Furniture Manufacturing

Shift to China and US Housing Boom

2006 - 2009US Housing

Bust and Worldwide Economic

Turmoil

China's Growing Middle

1999 - 2006

2009 - 2012

Chart provided by American Hardwood Export Council. Source: Hardwood Market Report 2013

Chart provided by American Hardwood Export Council Source: FII Ltd drawing on BTS Ltd & Eurostat

Markets are Shifting

Substitution of hardwood plywood products

“Substitutes are making more inroads into applications

previously dominated by hardwood plywood in the

European market.”

-- ITTO Market Information Service

Markets are Shifting

• Imports are shifting

from tropical countries

Markets are Shifting

Fighting trade of illegal

timber

• Japan “Goho” Wood, 2006

• US Lacey Act amendments,

2008

• EU Trade Regulations, 2013

• Australian law, 2014

Markets are Shifting

Laws are impacting flow of tropical woods

• American Hardwood Export Council meeting on

October 4, foreign buyers said they are shifting to

more American woods over tropicals because they

are certain of the legality of American woods

Markets are Shifting

“Making softwoods more durable could cut demand for

unsustainably logged tropical hardwoods.”

-- The Economist, 2009

“Increasing the Durability of Softwoods to Reduce Use

of Tropical Hardwoods”

-- The Dirt, 2009

Markets are Shifting

“…A 2008 pledge by Mayor Michael Bloomberg,

Honorary ASLA, to the United Nations General

Assembly that he would reduce New York’s tropical

hardwood use by 20 percent. Since then, NYC Parks

& Recreation has stopped using tropical wood in

park benches. San Francisco, Santa Monica, and

Baltimore ban the use of tropical hardwoods

completely for municipal projects.”

-- Landscape Architecture Magazine, 2013

Markets are Shifting

• Market reports at the National Hardwood Lumber

Association 2013 Convention show that there is a

growing gap between demand and available supply of

temperate climate hardwoods

• Hardwood Market Report says that US housing starts

will increase by 31% in 2014, 40.6% in 2015. The rapid

market growth starting from already thin log inventories

in the US will drive demand to imported supplies.

Conclusions

• Tropical hardwoods have

had a declining share of the

world markets

• Growth of the middle class in

China, Brazil, and India is

creating opportunities

Conclusions

• Legal restrictions and

inaccurate perceptions

appear to be influencing

demand in US, EU

• The US housing market

offers an opportunity over

the next few years for growth

due to tight supplies and lack

of capacity

Thank You!

• Email:

tff@tropicalforestfoundation.org

• Tropical Forest Foundation

2121 Eisenhower Avenue

Suite 200

Alexandria, VA 22314

• Phone: 703.518.8834

• Fax: 703.518.8974

• www.tropicalforestfoundation.org

THANK YOU!