"Half the forests that once covered the earth are gone, and deforestation has been accelerating in the last 30 years," says Janet Abramovitz, author of Taking a Stand: Cultivating a New Relationship With the World's Forests. "When forests disappear, we lose more than just timber," says Abramovitz, pointing to the role of forests in climate regulation, erosion and flood control, habitat and watershed protection, and supplying non-wood forest products. Intact forests provide these and other significant economic benefits on an on-going basis. International trade in non-wood forest products alone is worth over $11 billion a year, not counting the even greater local value of these products and the millions of jobs created.

As forests have been shrinking, the pressures on them have grown more intense. In the last 35 years, wood consumption has doubled, and paper use has more than tripled. Each year at least another 16 million hectares of natural forest are razed-an area the size of Washington State.

"In the face of these mounting pressures, we need to scale up efforts that are already underway to preserve the health of forests and provide economic benefits-efforts such as eliminating waste in production and consumption, expanding recycling, reforming forest-destroying subsidies, and restoring the carbon storage role of forests under the Climate Change Convention."

Recent forest fires in Indonesia and Brazil illustrate the global impact of local forest loss and the potent combination of forces fueling their destruction. The world's forests now lose more carbon to the atmosphere than they absorb-a recent shift. In fact, up to one quarter of all the carbon added to the atmosphere by human activities now comes from cutting and burning forests. The Indonesian forest fires in 1997 pumped more greenhouse gases into the atmosphere in a few months than all of Europe's industrial activity did in a year.

Governments worldwide actively encourage forest exploitation and conversion. "Subsidies for below-cost logging, processing, road building, and infrastructure are so large that governments are essentially paying private interests to take the timber and convert the land to other uses," says Abramovitz. "Taxpayers don't even know they're footing the bill for these revenue-losers." Indonesia's give-away timber concessions cost the government $2.5 billion in lost revenues in 1990 alone. In the United States, timber sales from national forests lost over $1 billion from 1992 to 1994. In British Columbia, liquidation of all old growth forest is explicit government policy.

Corruption is another major contributor to forest destruction. In Indonesia, President Suharto diverted money from the nation's reforestation fund to build a paper factory for his personal friend and "timber king" Bob Hasan (recently appointed Minister of Industry and Trade). A recent audit by the International Monetary Fund found no money in the fund to fight the devastating fires because the money had been diverted to prop up the president's son's failing car company. In Cambodia, the prime ministers and military illegally control the forests and timber trade. Profits bypass the treasury and fund their factions in the civil war.

Since 1960, legal trade in forest products has tripled $142 billion in 1995, but substantial amounts of illegal trade go unreported. Brazil, now the world's fourth largest timber producer, estimates that 80 percent of logging in the Amazon is illegal. In Russia, it is estimated that as many as 12 million hectares are illegally logged each year, compared to only 2 million hectares of legal logging by official estimates.

Rising demand for forest products fuels the booming trade, with the developed world leading the way. The less than one-fifth of the world's population who live in Europe, the U.S., and Japan, consume over one-half of the world's timber, and more than two-thirds of its paper. Japan consumes almost as much paper as China, a country with nearly ten times as many people. In the next fifteen years, global demand for paper is expected to grow by half again. Prior to the economic crisis, demand in Asia had been growing faster than anywhere else: consumption of wood panels, like plywood, was growing at almost six percent a year-more than three times the world average-and paper consumption at over twice the world average.

Having depleted their domestic forests, many Asian timber companies are moving elsewhere, snatching up timber concessions from cash-poor countries for pennies per hectare. The amount of Amazon forest under concession to Asian companies quadrupled in 1996 alone to more than 12 million hectares. One Malaysian company controls over 60 percent of the timber concessions in Papua New Guinea.

More and more wood is going into disposable products like paper, shipping pallets, and chopsticks. Forty percent of harvested wood is used to make paper and almost half of that is used for packaging material like cardboard boxes. Nearly one fifth of all lumber in the U.S. is used to make shipping pallets, most of which are discarded after a few trips.

Faced with the accelerating destruction of forests, governments, businesses and consumers have been developing new relationships with forests, finding innovative ways to meet demand for forest products while still preserving the long-term values of intact forests. "People are waking up to the need for change," said Abramovitz. "The next challenge is to scale up these initiatives fast enough to prevent irreversible damage to the world's forests."

The report points to opportunities for waste reduction at every level of production and consumption. For example, paper recycling is one way of reducing the need for virgin timber. Today, more than one third of the fiber used to make new paper comes from recovered waste paper, up from less than one quarter in 1970. Worldwide, over 40 percent of paper is now recovered and recycled. Germany recovers 67 percent of its paper, Japan 52 percent, and the U.S. 45 percent.

Reducing paper consumption is an essential step. If everyone consumed as much paper today as the average U.S. citizen (341 kilograms per year), the world would be using nearly seven times as much paper-a level the world's forests cannot sustain. (The global average is 50 kilograms per person per year.)

On the front end of the cycle, some timber companies are developing less destructive methods for harvesting and processing wood. A study in Brazil found that only one third of each log was turned into usable lumber; the rest wasted. Yet, with better training, equipment maintenance, and forest management (such as better mapping and tree felling), only one third as much forest land would be needed to produce the same amount of timber.

Consumers are beginning to demand products from sustainably managed forests, using their purchasing power to support companies that adopt better management practices. The Forest Stewardship Council has developed a set of adaptable principles and criteria for certifying products from well-managed forests. More than 6.3 million hectares in 20 nations have already been certified. Many large retailers, like Home Depot in the U.S. and B&Q in the United Kingdom, are selling these products.

Some governments are beginning to change policies to better protect their forests. Key shifts include: eliminating market-distorting subsidies, halting road building in forests, strengthening the enforcement of domestic and international forest laws, improving the monitoring of forest health, and devoting more resources to forest management. The U.S. Forest Service recently announced an 18-month moratorium on road building in roadless areas in National Forests. (There are currently over 600,000 kilometers of taxpayer-funded roads in the U.S. National Forests-almost two and a half times the length of the Interstate highway system or enough to circle the globe 15 times.)

International lenders and donors can also play a role by ensuring that their lending encourages positive reforms and sustainable practices, rather than corruption and deforestation. The World Bank, for example, has announced that it will help nations meet the goals of expanding the area under sustainable forest management, and putting at least 10 percent of each type of forest into protected areas. The IMF and World Bank are pushing much needed reforms as part of the Indonesian bailout, such as dismantling the plywood cartel and requiring greater accountability in governance and finance. Paradoxically, the lenders may undermine their goals by encouraging the expansion of palm oil plantations, a primary cause of the devastating fires.

Some potential incentives for restoring forests' role in absorbing carbon emerged during negotiations for the Kyoto Protocol to the Climate Change Convention, but several loopholes could diminish their potential. Timber-producing nations want to have carbon released during timber harvest excluded from the tally of their greenhouse gas emissions, yet get credit for the carbon absorbed by replanting. Also up in the air is whether nations will get credit for maintaining intact forests. When governments meet later this year in Buenos Aires to finalize the agreement, they will have the opportunity to establish incentives for sound climate and forest management.

"By scaling up the efforts already underway, we can begin to turn away from today's destructive relationship and move towards managing our forests so that all of their benefits and services, from timber and jobs to flood control and climate regulation, are available for generations to come," says Abramovitz.