CONSERVING TROPICAL FORESTS FOR PEOPLE, THE ENVIRONMENT, AND RESPONSIBLE BUSINESSES

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2 CONSERVING TROPICAL FORESTS FOR PEOPLE, THE ENVIRONMENT, AND RESPONSIBLE BUSINESSES

3 The Benefits TFF Provides People who live in or near tropical forests The local and global environment Businesses that use or produce wood products

4 Tropical Forests are Disappearing earthobservatory.nasa.gov

5 Deforestation in (thousand ha per year) Causes of Deforestation Urban Expansion Infrastructure Mining Subsistence Agriculture Commercial Agriculture 0 Africa Latin America Asia

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

7 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

8 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.

9 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.

10 TFF Training Centers

11 Defining best practices Developed the world s standard for Reduced Impact Logging in tropical forests.

12 Conventional Logging Reduced Impact Logging Improvements Achieved Through Reduced Impact Logging Practices

13 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

14 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

15 Results of ,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

16 MARKETS ARE SHIFTING

17 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

18 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 These households will account for more than 85 percent of incremental spending from 2010 to Boston Consulting Group

19 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 on 11 September, the highest level for months. -- ITTO Market Information Service

20 Middle Class Outside the U.S. Expected to Double By 2020 Approaching 1 Billion Households Worldwide commodity consumption will be impacted Foreign households w/real PPP incomes greater than $20,000 a year (in millions of households) Middle class in developing countries projected to increase 138% by 2020 vs. just 15% in developed countries in Developing countries 200 Developed countries (ex US) Chart provided by American Hardwood Export Council. Source: Global Insight s Global Consumer Markets data as analyzed by OGA

21 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 Developing countries with fastest growing middle class China India Brazil Indonesia Russia Egypt Thailand Mexico Turkey Vietnam Philippines Iran Poland Nigeria levels 2009 Proj gains by Households with real PPP incomes greater than $20,000 (in millions) Chart provided by American Hardwood Export Council Source: Global Insight s Global Consumer Markets data as analyzed by OGA

22 Source: Global Trade Atlas

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

24 Million Board Feet US Hardwood Lumber Exports to China China's Growing Middle US Furniture Manufacturing Shift to China and US Housing Boom US Housing Bust and Worldwide Economic Turmoil Jan - Nov Chart provided by American Hardwood Export Council. Source: Hardwood Market Report 2013

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

26 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

27 Markets are Shifting Imports are shifting from tropical countries

28 Markets are Shifting Fighting trade of illegal timber Japan Goho Wood, 2006 US Lacey Act amendments, 2008 EU Trade Regulations, 2013 Australian law, 2014

29 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

30 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

31 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

32 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 The rapid market growth starting from already thin log inventories in the US will drive demand to imported supplies.

33 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

34 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

35 Thank You! Tropical Forest Foundation 2121 Eisenhower Avenue Suite 200 Alexandria, VA Phone: Fax:

36 THANK YOU!