The economic implications of illegal logging for the New Zealand forest sector

Authors: James A. Turner, Andres Katz, Joseph Buongiorno
Publication: New Zealand Journal of Forestry, Volume N.Z.J.For. 2008, Issue N.Z.J.For. 53(2) 2008, pp 20-25, Aug 2008
Publisher: New Zealand Institute of Forestry

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Abstract: Illegal logging has a detrimental effect on sustainable forest management and wood products trade. These effects extend beyond the countries in which illegal logging occurs. In 2007 the Ministry of Agriculture and Forestry commissioned a study of the impact of eliminating illegal logging on the competitiveness of New Zealand wood products in domestic and foreign markets. This paper presents a summary of results from that study. Significant increases are predicted in the price and production of wood products in all countries that do not have suspicious harvests, particularly the United States, Canada, Finland, Sweden and Germany. Wood supply would decrease in countries with suspicious harvests, particularly Russia, China, Indonesia, Malaysia and Brazil. New Zealand’s exports, particularly of logs, would be stimulated by higher prices and increased demand for radiata pine in foreign markets. Without illegal logging, log prices would be 11% higher in New Zealand, and harvests and log exports 1% higher. This in turn would increase returns to forest lands by 7.6% by 2020. Overall the New Zealand forest industry would gain NZ$264 million per year in increased revenue. This is similar to the estimated benefit to New Zealand of global tariffs on all wood products being eliminated.

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