The supposition on which this study is based is that the policies having most influence on the development of the forest and forest industries (FFI) sector are external to that sector; that is to say, they are primarily concerned with other sectors. This has been shown to be the case for the agricultural sector (Kreuger et al., Eds. 1991), and if it is true for agriculture, why not for the FFI sector? It would suggest that the impact of policies directed specifically at the FFI sector, important though they are in guiding its evolution,is less significant than that of the external ones. It is one of the objectives of the study to test this hypothesis, and if there is evidence to support it, it means that it will be of fundamental importance for the better understanding of trends in the FFI sector, and for the assessment of possible future developments, to consider at the start what policy areas are or may be of significance to the FFI sector and what impact changes in those policies may have on it in the future.
Those responsible for drawing up the scope and contents of ETTS V - the fifth in the series of long-term FAO/ECE European timber trends and prospects studies - certainly were aware of the importance of external policies for the FFI sector (UN-ECE/FAO, 1976 and 1980). Hence their decision to convene a meeting of experts1 in January 1993 to consider how these factors should be covered in ETTS V. This study is a first step in the implementation of the recommendations of the expert meeting and is intended, together with parallel work being undertaken by national experts, to form the basis for a further meeting of experts in June 19942 and, ultimately, the introductory chapter of ETTS V.
Whilst it was originally conceived as a contribution to the preparations for ETTS V, this study is also seen as being of some interest to a much wider readership and for use as a basis for discussion on policy issues affecting the FFI sector. This seems to be the first time that an attempt has been made to assess the impact of a wide range of external policies on the FFI sector, and this study therefore may play a useful pathfinding role.
The January 1993 meeting of experts identified the main policy areas that should be treated. These were subsequently modified slightly as a result of further discussions with the FAO and UN-ECE secretariats, and are the following (not in any particular order of importance):
There is inevitably some overlapping, for example between the environment and most of the other sectors. The list is nevertheless intended to provide a basis for examining and discussing a number of complex issues in a manageable way.
An essential element of ETTS V will be the presentation of projections and forecasts of the long-term outlook for the supply and demand of forest products. These are derived from econometric models which incorporate assumptions for a number of explanatory variables, including population, Gross Domestic Product (GDP), residential investment, and activity in other selected industrial sectors, e.g. furniture, and prices. Many of the factors which would help to explain the evolution of the FFI sector, however, can not be quantified in a way in which they can be incorporated into the models, even where it is clear that they will have a significant impact on the sector. The best that can probably be done, therefore, will be to examine these factors and attempt to assess in broad terms how significant their impact may be on the FFI sector in the future; then to review the ETTS V projections and forecasts in the light of that assessment with a view to pointing out where and under what conditions developments might deviate from those projected.
1 FAO/ECE Preparatory Meeting on the policy context for the long-term outlook study (ETTS V), Geneva, 14– 15 January 1993
(TIM/EFC/WP.2/R.136, paras. 7–9 and annex II).
2 FAO/ECE Meeting on the policy context of ETTS V, Geneva, 13–15 June 1994 (TIM/EFC/WP.2/AC.5/2).
Policies are mostly set and implemented at the national or sub-national, rather than the international, level. An exception to this is the increasing role of the European Communities (EC)3 on behalf of its (at present) twelve member countries. The EC's decisions are, furthermore, becoming more important for non-member countries in Europe and other regions, through its trade relations with them and, for those countries applying or considering application to join, the need to align their policies and legislation with those of the EC. Time and space would not allow individual national policies to be covered in this study, except in a few specific instances. Instead, it will attempt to present the broad policy issues the countries are facing as they move towards the 21st century and their relevance to the FFI sector.
Preparatory work on the study consisted of two main activities: collection and review of relevant literature (see Annotated Bibliography); and interviews with experts in several international organisations, including the Commission of the European Communities, the Food and Agriculture Organization, the Organization for Economic Cooperation and Development, the United Nations Economic Commission for Europe, the United Nations Environment Programme and the World Wide Fund for Nature. The authors wish to put on record their sincere thanks for the encouragement and help they received from a considerable number of experts, who are listed in the Acknowledgements.
With regard to the literature, it quickly became evident that there is an overwhelming quantity available; the problem has been to sift through it to find those aspects which were directly relevant to the FFI sector and more specifically to the supply and demand for wood and its derivatives. Relatively little has been written up to now linking broad policy issues specifically with their impact on the sector. There are exceptions to this: one area where considerable attention has been given to policy linkages with the FFI sector has been the environment, while agriculture and rural development have also been linked with the FFI sector in policy making.
The terms of reference for this study are to:
Gather relevant information and documentation concerning sector policies other than forest policy which influence or can influence forest (including forest industry) development;
Identify interactions between these policies and forest development, including consistency with forest policies; and assess significant influences on the future evolution of the forest and forest industries (FFI) sector;
Identify and explicitly formulate major assumptions for future developments of the policy context within which the prospects for change in the FFI sector should be considered;
Prepare a report presenting the main findings of the overview to be taken into account in preparing the ETTS V scenario for the evolution of the forestry sector. The report is for use as a background document at the FAO/ECE meeting of experts on policy issues, scheduled for June 1994.
To comply with (a), the annotated bibliography contains material collected and to the extent possible reviewed in the course of preparing this study. In addition to a brief note on the contents, each document has been rated in a subjective way according to its relevance to the project: it is evident that some are of more direct significance than others, however important the latter may be in their specific fields. Each document is also cross-referenced to the policy sectors covered in the study, which will make it easier for the reader interested in a particular sector to identify the most relevant sources of information on it.
Regarding (b), Chapter 2 presents the general developments and prospects in the ten policy areas identified at the January 1993 FAO/ECE expert meeting; discusses the policy issues and options faced by governments and other policy makers; and offers some subjective views of the authors on the linkages with and impacts on the sector. Tables 8 A…J in Chapter 3 attempt to bring together in highly summarised form the results of this exercise. In addition, the tables offer a preliminary assessment by the authors of the scale of the impact of possible changes of the identified policy components on the FFI sector, which may go some way towards complying with both (b) and (c) of the terms of reference.
Finding a way adequately to comply with (c) of the terms of reference (“to identify and explicitly formulate major assumptions for future developments…”) has been the hardest part of the exercise. One of the problems is the uncertainty regarding what directions policies will actually take. A good example of this difficulty concerned trade. During nearly all of the time that the study was being prepared, the GATT Uruguay Round was still under negotiation. In the event it was largely successful (but still subject to final ratification), which should lead to a significant liberalisation of international trade with a consequent boost for the world - and European - economy. Had the negotiations failed - and that remained a possibility up to the last stages in February 1994 - their collapse would have brought a serious risk of increased protectionism and of regional trading blocks becoming more inward-looking and defensive.
Rather than take the policy areas in the order identified by the FAO/ECE Meeting of Experts (see page 1), Chapter 2 analyses the most general ones first (demography and social affairs, economy, energy and environment), and then the more specific ones which are up to a point sub-sets of the former. In this way some repetition can be avoided. The order is not meant to imply, however, that the issues taken first are necessarily those that are the most important or have the most impact on the FFI sector.
To translate all the gathered information into a reasonably concise and digestible form, the format chosen has been to treat each policy area in a separate section with three sub-sections:
General description of developments.
Review of the policy issues and options that countries are adopting or considering for the medium-to long-term.
Linkage with the FFI sector and the ways in which it is likely to be affected.
Sub-Sections 1 and 2 are based largely on published material, complemented by the discussions with experts. Sub-Sections 3 have often had to be based on informed judgements of those interviewed and those preparing the study; it is hoped and expected that these sections will receive particularly critical attention.
Regarding sub-sections 3, the impact of a particular policy may be different on different parts of the FFI sector. For example, policies to restrict harvesting for environmental reasons in old growth stands in other regions may reduce the volume of Europe's imports of forest products, but increase the volume of its own roundwood removals and wood processing. Therefore, four parts of the FFI sector are distinguished for the purpose of analysis:
Chart A presents a matrix showing, as a result of preliminary analysis, how important each of the ten external factors appears to be for each of the four parts of the FFI sector. This is a subjective assessment, which was prepared before Chapters 2 and 3 of the study were written, and is therefore likely to need revision in the light of further discussion4.
| Policy area | Impact on | |||
| Forest respurces, forestry and wood supply | Wood-processing industries | international trade in forest products | Markets and demand for forest products | |
| A. Demography and social affairs | ** | *** | ** | *** |
| B. Economy | *** | *** | *** | *** |
| C. Energy | *** | *** | * | *** |
| D. Environment | *** | *** | *** | *** |
| E. Land use, rural and regional development | *** | ** | * | * |
| F. Agriculture | *** | ** | ** | * |
| G. Industry | ** | *** | *** | ** |
| H. Trade | *** | *** | *** | ** |
| I. Construction | ** | *** | ** | *** |
| J. The role of the public sector | *** | *** | *** | ** |
Symbols:
*** = Highly significant impact
** = Some impact
* = Little or no impact
Chapter 3 consists of two distinct parts. The first part synthesises the information taken from Chapter 2 in tabular form in tables 8 A…J, which form in a way the core of the study and provide the link between Chapters 2 and 3. The tables contain, for each of the ten policy areas, columns listing: the objectives of the policies discussed in Chapter 2; the instruments or linkages between those policies and the FFI sector; their possible impact on the FFI sector, and on wood supply and demand in particular; the scale and direction of their impact on wood supply and demand; and the likely timescale involved. This part of the chapter then discusses the results of this synthesis and concludes by identifying what appear to be the areas where changes in direction of policies would have major impacts on the FFI sector in the decade or two following their introduction.
The second part of the chapter offers a proposal for a base scenario, which was intended in the first place as a basis for discussion at the FAO/ECE Meeting on the policy context of ETTS V in June 1994, but which may also serve as a benchmark against which to test the more scientifically-based findings of ETTS V.
It should be kept in mind when reviewing this study, and especially tables 8 A… J, that ETTS V is primarily concerned with the long-term trends in the supply and demand of wood, and that all other functions and services of the forest are treated only in so far as they have or may have an impact on the wood supply function. Especially in considering policy impacts on forest resources, forestry and wood supply, therefore, attention here is centred to the extent possible on wood supply and demand. This is not always easy, given that policies are becoming increasingly oriented towards the non-wood aspects of the sector. This in itself has, of course, important implications also for wood supply and this aspect is picked up wherever possible.
One feature that became increasingly clear during the course of the preparatory work was the degree of complementarity or overlapping between different policy issues. This is particularly the case, for example, between those policies concerned with the environment and virtually all the others, but there are others cases such as sustainable development and energy policies where there are significant cross-sectoral policy linkages. Anyway, this complementarity, or overlapping as the case may be, leads to the conclusion that the extent to which countries are able to achieve a workable integration between different policies is an especially important determining factor for the evolution of the FFI sector.
