Commercial Logging

Commercial logging, simply put, is timber harvested from forests with the intent to sell (as opposed to small-scale logging which is more often for domestic or local use). While not representative of all timber products harvested and traded, in 2014, global industrial production of roundwood (felled wood, prior to being processed for sawnwood, pulp, etc.) totaled 1,837 million cubic meters, with the majority of production from Europe, North America and Asia and the Pacific (amounting for 31%, 28%, and 24% of global annual production respectively). Production of in Latin America and Africa were lower, representing 13% and 4% of global industrial roundwood production in 2014. In North America, commercial logging and large-scale timber extraction began in the mid to late-1800’s, with increases in technology for cutting and processing timber, and transportation networks. Today, much of the world’s demand for timber and timber-based products comes from industrial logging.

Despite its importance for global demand of timber-based products, commercial logging is often perceived as unsustainable, and appears to have particular negative implications for tropical rainforests. Even if selective logging is used to remove only certain trees, most high-value timber species are slow-growing and occur at low densities, needing large continuous areas of intact forest to maintain viable populations, such that sustainable harvest would be economically impractical for logging companies. Also, as long-term harvesting of forest areas is less economically viable, there is increased likelihood of forests being clearcut and converted for commercial agriculture. As seen in the example of the tropics, the particular risks of commercial logging is perhaps less due to the particular logging practices or machinery being used, but instead the economic forces at work which make certain kinds of harvesting or forest management choices (such as large-scale clearcutting or short harvest rotations) more likely.

Commercial logging takes place on land of all ownership types including public lands, public lands granted timber concessions to private stakeholders, small private landowners and corporate landowners and investors. Two of the more complex examples of land ownerships and logging; logging concessions and TIMOs/REITs (timber investment organizations) are discussed in greater detail below.

Logging Concessions: Logging concessions are arrangements where the government or forest department of a country grants harvesting or management rights of publicly owned forests for a contract period (ranging from 2 to 20 years or more), to the highest bidder (generally logging companies).  Logging concessions are prevalent throughout the developing world, where approximately 75 million hectares of forestland are under concession to timber companies in Southeast Asia, portions of the Amazon Basin, and Central and West Africa. The way in which concessions are operated and managed by the concession holder affects how sustainable timber harvest and forest management will be in a country. The World Bank has recommended short-term but renewable contracts to encourage better management of forest concessions, as well as improved monitoring capacity to ensure that concession holders do not violate their contract by allowing for illegal land conversion. Land conversion has been a particular issue in the case of Cambodia, where lack of legal clarity and enforcement, coupled with allocation of “economic land concessions has resulted in the conversion of forestland into commercial agriculture.

Corporate or Institutional forest ownerships, in particular TIMOs (Timber Investment Management Organizations) and REITs (Real Estate Investment Trusts), have become a significant part of forest ownership and transactions in the US, in recent decades. These institutions buy, manage and sell forestland and timber, in the case of TIMOs, and real estate, in the case of REITs, on the behalf of investors. There has been dramatic growth in the acreage managed by TIMOs and REITs in the USA over the last few decades, with 22% annual growth from 1987 to 2003. As of 2007, approximately 5% of all U.S. forestland was controlled by either TIMOs or REITs. Timberland investment also occurs in Canada, South America and New Zealand, and is expected to continue to expand to other countries as well.

It is not yet certain as to the precise impact of these types of forest ownerships, but there are some concerns regarding the long-term health and forest. As TIMOs and REITs are required to manage properties to provide economic returns for investors, this is reflected in the forest management that aims to maximize income from land value or timber harvest. For instance, in the southern United States, studies have found that TIMOs manage timberland similarly to industrial timber production, with plantations of pine, short rotations, and high yield management practices (including chemical or mechanical site preparation prior to planting, genetically improved growing stock, fertilizer application and herbicide application).

In addition to various types of land ownerships and timber harvesting rights for commercial logging, plantation forests are disproportionately important for industrial wood production, providing about 20 percent of global wood supply while occupying only 3.5 percent of the global forest area.  Plantation forests involve the planting or seeding of either exotic or intensively managed native species. The most commonly used tree species for plantations are Pinus spp. and Eucalyptus spp. Plantations are typically characterized by even spacing, even age class, and short harvest rotations. According to the FAO, of the 264 million hectares of forest plantations worldwide, approximately 60% are meant for producing timber and other wood products, and the remainder are intended to provide services such as soil and water conservation. Some studies predict that the area of planted forests will increase to at least 300 million hectares by 2030.

Plantation forests generally aim to intensify timber production, which requires careful selection of species and seed sources, as well as appropriate site selection and preparation methods, and silvicultural techniques (e.g. weeding, fertilizing, pruning, thinning). Some studies have shown that mixed species and mixed age plantations are less vulnerable to disease outbreaks, and that the introduction of understory species may contribute to increases in regional biodiversity. Whether or not intensively managed plantations can reduce pressure on natural forests by providing an alternative source of timber depends largely on local context.


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