Saturday, April 7, 2012

Economic Policies and the BC Forest Sector

Economic policies should encourage sustainable forest management. The Montreal Process, the international agreement on sustainable forest management outlines the following:

"7.3.a Investment and taxation policies and a regulatory environment which recognize the long-term nature of investments and permit the flow of capital in and out of the forest sector in response to market signals, non-market economic valuations, and public policy decisions in order to meet long-term demands for forest products and services;
7.3.b Non-discriminatory trade policies for forest products."

There is enough in the above to keep a whole band of economists or politicians in debate for decades.  
Perhaps the best place to start is to look at the emerging outcomes of forest and economic policies in BC:

  1. BC is vulnerable to export taxes or tariffs on softwood lumber exports to USA owing to the non market sale of public timber
  2. There is a major crunch or decline in timber supply in the interior of BC as salvage of timber from the mountain pine beetle epidemic nears it end. Government and forest industry have blamed the epidemic on climate change but lenient economic policies that encouraged forest industry to harvest species other than pine and fire control led to huge areas of old pine forests that were very susceptible to beetle attack.
  3. The coastal forest industry is suffering in a difficult period of transition to second growth harvest occasioned by rapid depletion of old growth. 
Economic policies external to the forest sector may also have negative effects. The rising value of the Canadian Dollar brought in part by the intention to proceed with rapid exploitation of the Alberta Tar sands will have negative effects on forest product exports.

Economic and forest policies are not producing the desired outcomes for sustainable forest management. The focus of BC's economic and forest policies for the past six or seven decades has been the facilitation of forest corporations efforts to convert trees from public forests into dollars. Lots of dollars were made, but forests and forest dependent communities are now suffering.

Public forests were originally envisioned as a means to encourage free enterprise in wood products manufacture. Rather than have timber companies owning the forest, public timber was supposed to be available on an open market to encourage entrepreneurs and diversification of wood products. British Columbia managed to combine the worst aspects of the public and private sectors in its forest and economic policies. Timber from BC's public forests were allocated to a few forest corporations at administered prices. Competition and diversification were impeded and wood exports became vulnerable to export tariffs. Both corporations and government extracted dollars from the forest. The forests were not subject to business like management. Forest corporations were reluctant to spend on forest management because they did not own the public forests. Government revenues from the forest ended up in general government revenue. Money returned to the forest had to be authorized by government budget and then dispensed through centralized government agencies. This was an uncertain an inefficient way to see to the needs of forest stewardship necessary to ensure sustainable production.

BC's forest and economic policies need a major overhaul. In today's world of neo-conservative ideas the first solution to be proposed will be the privatization of BC's public forests. Private interests have already exploited the best of BC's timber and they will eagerly purchase the debilitated forests for a song. 

Can public forests be managed in a business manner and ensure sustainability? The local forest trust model shows most promise. Local forest trusts would be run at a local scale with an elected board and professional managers on a business basis. Income from the free market sale of timber, non timber and nature based economic enterprises would be used to cover the costs of forest stewardship. Local forest trusts would be accountable to a BC Forest Trust Assembly comprised of elected and professional delegates from local forest trusts. It is a free enterprise arrangement accountable to local people and will serve communities better than politicians in Victoria who have treated the public forests like a pork barrel or overpaid corporate executives equally bent on extracting dollars from the forest.

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