New Report Exposes Monopolization of Forest Certification

Timber!  We do know that as a tree falling in the forest does harm to all it in its way, so too can a monopoly harm those around it.  Despite the damage it may inflict on others, those who possess vested interests in the monopoly aren’t deterred. An American Consumer Institute (ACI) report, “The Monopolization of Forest Certification: Do Disparate Standards Increase Consumer Costs and Undermine Sustainability?,” released yesterday provides information about one specific monopoly and provides explicit examples of government favoritism masked by regulations and obscure policies.

For starters, defining just what “forest certification” is may be helpful.  It “takes place when landowners meet the established benchmarks of one of several organizations, thereby earning the right to put that organization’s eco-label on its products.”  Additionally, “there are more than 50 certification programs in the world, with the US most reliant on standards set by the American Tree Farm System.”  Among the others is the Forest Stewardship Council (FSC), which as the Taxpayers Protection Alliance explained in a piece for Real Clear Policy, “is partial to environmentalists and hostile to taxpayers and job creators. It is based in Germany and 90 percent of its certified forests are overseas.”

Given the FSC’s bias towards environmentalists, it’s no wonder then that these same environmentalists want to force the U.S. into adhering entirely to the FSC.  Although government regulations are often characterized as being necessary to protect consumers and industries, they often end up leaving both groups out in the cold. This is exactly what we’re seeing with the debate about proposed standards of forest certification. As the ACI report demonstrates, the effects on the U.S. timber industry would be great.  According to ACI, “if the US adopts a monopoly standard, three-quarters of our nation’s certified lands could be excluded from the market. That exclusion could mean a significant reduction in domestic production, the loss of American jobs, and sending US dollars overseas.”  This means U.S. companies would face a competitive disadvantage, to say the least.

The Union of Concerned Scientists and other environmental groups notorious for pushing an extreme leftist agenda, try to sell their plan by claiming that a single forest certification system will make things easier for all producers and consumers involved.  The trouble with this argument is that FCS is not applied equally and although they claim it is a uniform standard, it is far from it. In his recent piece, “The True Costs of Green Labeling,” Stephen Pociask proved this point by explaining, “US landowners face the strictest FSC standards in the world, while in more environmentally risky countries, such as Russia, landowners are allowed to game the system.”  The “standard” and its different requirements for U.S. producers contribute to what is an already hefty competitive disadvantage that gives foreign companies a significant leg up.

As the ACI study reveals, applying an FCS mandate would strike a blow to free trade and tremendously impede America’s ability to create products domestically.  Additionally, this policy would kill many manufacturing jobs and these job losses would extend far beyond a single industry.  At the same time, the supposed environmental benefits FCS supporters contend, in reality, will likely never come to fruition.  In fact, it’s very likely that an FCS mandate will cause harm to the environment because it shifts much of the manufacturing production to countries with little to no pollution-curing regulations.

When left uninterrupted such a free-market system allows companies to exist and thrive on level playing field.  However, this harmony can be easily upset and when it is, most of the time the fingers of blame can be pointed at the government.  The amount a company must spend to meet and comply with extensive regulations is money the company cannot spend on hiring new employees or investing in new technologies.