Canada's forestry industry expects to be a clear winner as the world looks to transition to a lower-carbon economy, although climate change is posing threats to the sector as well as offering opportunity.
At the Paris climate summit this week, government ministers from tropical countries pledged to reduce deforestation that is contributing some 10 per cent of global greenhouse gas (GHG) emissions that cause climate change. In a speech in Paris this week, Prince Charles urged global retailers to assess their supply chains to ensure they are not contributing to deforestation.
While many tropical countries are losing their forests at an alarming rate, there is not such widespread loss in Canada, which has the world's third-largest forest cover following Russia and Brazil. The federal government is claiming credit for forest management practices that it says will contribute significantly to meeting its commitment to reduce GHG emissions.
In its pre-Paris submission to the United Nations, the former Conservative government pledged that Canada will cut emissions by 30 per cent from 2005 levels by 2030. Improved forestry management practices are expected to account for roughly 10 per cent of that effort or 20 megatonnes annually. The Liberal government says the Conservatives' overall target will serve as a floor, and that it will fashion a new goal in concert with the provinces over the course of the winter.
However, the Canadian position does not take into account the loss of forests from fire or the resulting release of GHGs. Scientists expect climate change to increase the risk of fire as well as the spread of destructive pests.
The forestry sector is already a leader in GHG reductions, cutting emissions by 65 per cent since 1990 with roughly half of that resulting from industry downsizing, Paul Lansbergen, acting president at the Forest Products Association of Canada, said in an interview. Faced with economic stress, companies adopted innovative approaches to use virtually all of the harvested tree, including bark and waste material to generate electricity.
Now, the companies see opportunity in provincial plans to impose carbon pricing, Mr. Lansbergen said. "If they put a price on carbon, it will allow industry as well as the marketplace to internalize the cost of greenhouse gas emissions and that's where our products begin to look very attractive."
That's especially true for wood products, which essentially store carbon dioxide for as long as they remain in use. Producers of wood building materials are increasingly competing with steel and concrete, and tout their material as a renewable resource. However, the industry's advantage would be limited if, as expected, provinces such as Alberta and Ontario essentially exempt energy-intensive industries such as cement from carbon pricing to protect their competitive position.
But no one is accounting for the mounting threat of vast forest fires that release carbon into the atmosphere, said Tim Gray, executive director at Environmental Defence in Toronto. Both industry and government need to take greater efforts to protect forests through mono-culture and ensuring diversity of tree species, avoiding intensive harvesting practices and increasing research efforts, he said.
Canada has more than 160 hectares of certified forests, four times the amount as Russia or the United States.
Editor's note: A Thursday Report on Business article on climate change incorrectly said Canada has more than 160 hectares of certified forests. In fact, it is more than 160 million hectares of certified forests.