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Cutting down market opportunities

POSTED: July 4, 2013 2:45 p.m.

If you were a tree, what kind of tree would you be? Neither Barbara Walters nor the average Georgian would be aware of this, but if you want to be considered green, you don’t want to be a plantation tree. That’s because trees from plantations — tree farms — are just not "green" enough for some.  

The average Georgian has no idea, either, that the forestry industry employs one in 10 workers in Georgia and generates more than $25 billion in economic activity. Most of that is by the private sector: Of the 24.8 million acres of timberland in Georgia, private owners control 22.2 million acres (91 percent). Individual/family forests dominate private ownership with 13.5 million acres, or 55 percent of the forestland, according to the Georgia Forestry Commission.  

Despite the industry’s success, now is no time for Georgia foresters to rest on their laurels. The growing trend toward "green" construction and the high costs of certification of their product for "green" building could have enormous economic impact on the industry and the state. 

To promote their product in the marketplace, forest owners can use one of three programs to certify responsible management practices: the American Tree Farm System (ATFS), the global Forest Stewardship Council (FSC) or the Sustainable Forestry Initiative (SCI). About 20 percent of Georgia’s forestland is certified; of that, about 45 percent is SFI-certified and 55 percent is ATFS-certified.  

These certification programs are voluntary and well-intended. But only the more stringent FSC standard is recognized by the U.S. Green Building Council and its much-trumpeted LEED rating system. For a project to be LEED-certified, it must earn at least 40 points out of 110. You earn a point for using at least 50 percent FSC-certified wood. Locally-sourced materials, including brick, steel or wood, can earn a project at least two points.  

The bar set is high for forest owners who would like to provide timber for LEED projects. They must commit to restoring or maintaining 10-25 percent of the plantation land as "natural or semi-natural cover," among other requirements. They must agree to limits on how much land they can clear-cut, that they won’t grow genetically modified or "exotic" trees and won’t practice "highly intensive management." They are prohibited from using some herbicides that are, in fact, approved by the U.S. Environmental Protection Agency. There is also a requirement involving worker’s rights and indigenous people’s rights that would largely impact imported lumber. 

Understanding the economic impact of forestry and tree farms in the region, Southeastern leaders are pushing back. Gov. Nathan Deal’s 2012 executive order forbids state government construction projects from seeking LEED certification. Alabama and Mississippi enacted bans; a ban is under consideration in North Carolina; South Carolina prohibits state projects from earning points from FSC wood and Florida legislaton encourages the use of local wood. 

While the certification is voluntary, the dominant role of LEED as a rating system for "sustainable" practices in construction could push Georgia’s forestry industry into a corner, shrinking the marketplace for Georgia’s product or forcing foresters to adopt the costlier FSC standard. In fact, a new study comparing the standards maintains that continuing competition among the certification standards will temper the economic impact on the industry and on the costs. 

The study by EconoSTATS, a George Mason University project, found that "the FSC standards impose significantly higher costs and lead to significantly lower output (in the South the most significant negative economic impacts were associated with designating certain forests as ‘plantations’).  Higher costs and lower output lead to lower economic activity including lost jobs, incomes, and tax revenues."  

"The FSC standards also reduce operational flexibility creating additional economic costs that, while difficult to measure, are no less real," the authors say. 

Even worse: According to the study, FSC’s standards are applied differently around the world, so that the U.S. certification may be more difficult to achieve than, say, FSC-certified wood imported here from Brazil or Russia. A global standard that is applied unevenly is patently unfair to U.S. foresters, who already must operate under stringent state and federal environmental standards.

The ramifications of the FSC certification becoming the dominant standard should be a cause for concern. It may be just a thorn in the side of the South for now, but it could be a two-by-four to the region’s economy unless policy-makers maintain their vigilance.  

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Benita M. Dodd is vice president of the Georgia Public Policy Foundation (www.georgiapolicy.org), an independent think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians.

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