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The Economics of Illegal Logging and Associated Trade

Organization for Economic Cooperation and Development | Round Table on Sustainable Development, Paris, January 8-9, 2007

OECD Background Paper
By Arnoldo Contreras-Hermosilla, Richard Doornbosch, and Michael Lodge

The authors discuss various supply- and demand-side strategies for combatting illegal logging, including international trade measures such as a global multilateral licensing scheme for wood products.


Global deforestation continues at an alarming rate. Each year in recent years an area of original forest cover the size of Greece has been lost, threatening irreplaceable biodiversity with extinction and increasing the risk of global warming. Most gains from this destruction of natural capital are modest and short-lived. There are compelling reasons why national governments of forest-rich countries and the international community as a whole must take decisive action to conserve forests and increase investment in sustainable forest management.

This paper outlined the nature, magnitude and consequences of illegal logging in forest-rich producer countries and the programmes on both the supply and demand side being implemented to reduce this problem. A vast amount has been written about this phenomenon. The general consensus is that effective control of illegal logging requires actions that are both complex and need to be carried out by a broad array of actors, including governments of producer and consumer countries, the forest industry and civil society. All expert advice advocates escaping the narrow field of action of the forest sector alone to include actions in other fields of government activity, such as land use policies, customs and police.

While this makes evident sense, simply affirming the complexity of a problem can run the risk that no-one is prepared to assess the overall impact of the totality of interventions. Acknowledging that a problem defies a single solution must not be allowed to be an excuse for a lack of priority setting or a dilution of efforts to remedy the problem. For that reason it is important to stress that actions by producer countries will always be the most effective in tackling forest crime as illegal logging takes place on their territory and stopping it is in their direct interest. Importing countries and the wider global community concerned to preserve the global public good elements of maintaining forest cover should keep this to the fore in developing their responses and assistance strategies.

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