Role of the Forest Sector in Mitigating Climate Change

December 11, 2018

Posted By Antti Luoma

In October 2018, IPCC released a new global report highlighting the urgency for climate action. The IPCC report concludes that solutions involving forest landscapes and bioenergy will be in key position in mitigating climate change. Indufor, through its long-term practical experience in the natural resources and forest sector, concurs with the IPCC report that forest sector and bioenergy can provide important contributions to climate change mitigation. This blog offers a brief presentation of the potential impacts and benefits of the forest sector in climate change mitigation and demonstrates Indufor’s work that is and has been particularly relevant.

Introduction to IPCC’s report “Summary for Policymakers of IPCC Special Report on Global Warming of 1.5oC”

The summary report for policymakers reveals that drastic and immediate actions are required to limit the global mean surface temperature increase to 1.5oCelsius compared to the pre-industrial era. The existing mitigation commitments under the Paris Agreement are insufficient to limit warming to 1.5oC, which could be reached already in the 2030s. Many of the impacts of climate change are already apparent – from retracting glaciers, droughts and storms impacting livelihoods of small-scale farmers, and degrading coral reefs to forest fires – all of which are becoming increasingly common.

The IPCC report suggests a wide variety of mitigation pathways in order to reach the 1.5°C target, including carbon dioxide removal (CDR) mechanisms. The summary report acknowledges the CDR potential of agriculture, forestry and other land use sector (AFOLU) and the production of bioenergy with carbon capture and storage (BECCS). Additionally, IPCC envisages a considerable shift in investment patterns towards low-carbon energy sources, but a similar push towards investments can be expected to take place in various sustainable forestry activities. The publication of the recent IPCC report and COP 24 gathering in December will further maintain momentum for climate actions.

Forestry and climate change mitigation potential

Forestry, as part of the AFOLU sector, has potentially a major role in global climate change mitigation action. The impact of forestry is two-fold: on one hand, emissions from the forest industry and operations can be reduced, and on the other hand, forests sequester carbon dioxide, which is a key CDR mechanism. This carbon sink also extends outside of the forest – wood products store carbon throughout their lifespan, after which the material can be used, in most cases, for energy. This cascading approach to wood use increases the resource efficiency of the forest sector, including the forest industry.

The three largest potentials from forest sector in terms of CDR and reduction of emissions are:

  • afforestation and reforestation (A/R),
  • substitution of fossil materials with renewable wood products, and
  • BECCS, which deserves a separate blog and will be only briefly mentioned here.

The AFOLU sector remains the largest source of greenhouse gas emissions in many developing countries, mainly due to alarming deforestation and forest degradation rates. Reducing emissions from deforestation and forest degradation (REDD+) mechanism is one of the key frameworks to develop the forest sector and at the same time, reduce emissions in the developing countries. The REDD+ projects often aim at building forest governance, policy, institutions, and monitoring, reporting and verification (MRV) systems, as well as national baselines, to halt deforestation.

In addition, unsustainable firewood harvesting and charcoal production have increased forest degradation in many regions, causing emissions and reducing forest availability, which impacts local livelihoods negatively. Establishment of plantations for energy wood and agroforestry initiatives in degraded areas can increase both carbon sinks and energy availability, while displacing fossil energy sources.

Increasing carbon sinks through afforestation, reforestation and forest management

Forestation, whether reforestation of formerly felled areas or afforestation of degraded areas, provides multiple ecosystem services that generate value to local people and the society. To name a few, the ecosystem services include carbon sinks, maintenance of biodiversity, water regulation, raw materials, and recreational and spiritual values. Some of the services and people’s preferences do conflict. This requires the use of a landscape approach as forests often compete with other land-uses, especially agriculture. IPCC’s 1.5oC model pathway assumes a considerable increase in forest cover by 2050. In afforestation efforts of degraded landscapes, China is the current global leader. However, afforestation efforts of similar scale are required in many other regions too.

Competition between land-use alternatives will increase in the future, but varying needs and synergies can be met at landscape level by natural capital valuation and ecosystem services optimisation. Analysing different ecosystem services, including carbon sequestration, according to common monetary metrics and holistic approach enables better decision-making between different management schemes.

Clarification of land tenure and introduction of good forest management practices and silvicultural activities, e.g. reforestation, reduced impact logging (RIL) and tending of tree saplings and young stands increase the quality and growth rate of forests and consequently their carbon sequestration. Forest certification, FSC and PEFC being the most prominent certification schemes globally, provides verified standards for sustainable forest management.

Displacing fossil-based carbon with renewable wood-based materials and energy

Wood products remain a carbon storage during their entire life-cycle. Moreover, renewable wood and fibre products substitute fossil materials. New fibre-based and engineered wood products have gained attention during the 2010s, but many of them are still at piloting stage. However, the future seems bright, as the understanding of the multiple benefits of wood construction and fibre-based wood products is increasing. Engineered wood products, such as laminated veneer lumber (LVL) and cross laminated timber (CLT) can fix carbon for decades, even centuries. New fibre-based wood products, such as biocomposites can substitute a vast range of products supplied from fossil sources.


Source: Luoma, A. 2018. [Master’s thesis]. Ecosystem services in UPM’s intensively managed plantation landscapes in Uruguay.


Cascading use of wood products increases raw material and energy efficiency. A single tree can be divided to several assortments, such as sawlogs, pulpwood and energy wood, and wood processing produces side streams that can be processed further. As an example, sawing produces side streams, such a wood chips, bark and saw dust, which can be utilized either as energy or as material for other products, for example in the wood-based panels industry. Many wood products can be recycled after use, reducing the need for virgin materials. Benefits from cascading are not limited to resource and energy efficiency – cascading also increases profits and cuts costs in the value chain.

Source: Adopted from WWF. 2016. Mapping study on cascading use of wood products.

Benefits to organizations from reducing emissions

Reducing emissions in the forest sector can benefit various organisations from many sectors. Relative to other sectors, organisations already operating in the forest sector may be able to claim low-carbon environmental benefits or enhance their environmental performance. Meanwhile, organisations outside of the traditional forestry sector may be interested in offsetting their carbon emissions by employing carbon sequestration benefits of the forest sector. They can, for example, finance projects related to A/R or purchase carbon credits through carbon markets or other mechanisms. As climate change mitigation gains momentum, these mechanisms to encourage low-carbon development are likely to grow stronger.

In the long term, mitigating climate change enables organizations to maintain their operational environment and cut their potential future losses or adaptation costs due to changing climate. However, there are short-term benefits too – companies must likely fulfil requirements of new emissions regulations and respond to demands by stakeholders. There is, after all, a general acknowledgement that the current pathway is unsustainable.

Both consumers and financiers demand increasingly for proof of net positive environmental impacts of companies'  operations. Companies that have positive climatic impact by reducing or offsetting emissions in their value chain can have better access to and competitive advantage in educated markets. Furthermore, their image, brand value and licence to operate are more secured.

Investors can perceive companies that are doing little to reduce or offset emissions as financial risks and avoid investing in them, which impacts the availability and cost of capital. On the contrary, projects with positive carbon impacts can benefit from new finance mechanisms and improved finance opportunities. An example of such mechanism is climate bonds. Indufor is an approved verifier of climate bonds in forest sector.

Indufor’s work towards low-carbon economy

Indufor has been developing land tenure, good forest management practices, silviculture, certification, multi-purpose use of forests and forest industry with a wide variety of private and public partners for almost four decades now. During that time, Indufor has supported and in the future will continue to support industrial clients to optimize raw material and side stream use, logistics and sustainable raw material sourcing. Considering innovative new wood products that can substitute fossil fuel-based materials, Indufor is increasingly engaging with clients to study markets, opportunities of commercialization and feasibility of investments to new wood products.

In the developing countries, Indufor is participating in agroforestry and biomass energy projects to both combat climate change and improve the livelihoods of the local societies. Indufor has also participated in many REDD+ and A/R projects around the world, including as an advisor and auditor in large-scale forestation projects in China.

Natural capital and ecosystem services assessment are one of Indufor’s new key service areas and a great personal interest of the writer of this blog. Natural capital and ecosystem service assessment of value-chains and investment schemes provides information of the net impact of different actions and supports decision-making to decrease negative impacts and improve positive impacts to nature and climate. The natural capital assessment enables a holistic approach to compare the material ecosystem services with common monetary metrics.

Indufor is happy to offer services to develop existing business practices towards more efficient and sustainable pathways in low-carbon development.

Indufor's project references and more information about our work can be found on our web page or directly from our staff. For any questions, please do not hesitate to contact the writer of this blog.

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Antti Luoma


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