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Report claims forest certification monopoly driving up prices

Packaging Digest

Forest certification is becoming an important tool in balancing resource sustainability and economic viability, but there is growing confusion in the marketplace over certification standards and eco labels. According to a new report by the American Consumer Institute (ACI) Center for Citizen Research, that confusion could be driving up prices by as much as 15 to 20 percent for consumers who are willing to pay more for sustainable wood and paper products but may not actually be getting something that is better for the environment.

The ACI report titled "The Monopolization of Forest Certification: Do Disparate Standards Increase Consumer Costs and Undermine Sustainability?" reveals the consequences of a reliance on an FSC-only approach, with a vast majority of U.S. certified timber coming from other certification programs. Consumers would face price increases of 15 to 20 percent, domestic wood and paper markets could face tens of billions of dollars in losses, and the laudable environmental and sustainability goals the programs were established to achieve would be undermined by a certification monopoly.

This report is released the same week as the U.S. Green Building Council opens the public comment period on its Leadership in Energy and Environmental Design (LEED) green building rating system which recognizes Forest Stewardship Council (FSC) as the one single standard for procurement requirements.

"Misguided policies and organized pressure from environmental activists to elevate one forest certification program over all others are creating confusion in the marketplace. As a result, consumer costs are increasing by as much as 20 percent for some green products that may not be superior. It also puts US foresters at a competitive disadvantage, despite the fact that 40 percent of the world's certified forests are located in North America," says Steve Pociask, president of the American Consumer Institute Center for Citizen Research and one of the authors of the study.

Key report findings include:

• FSC certification seems to be significantly more costly than other standards, thereby raising producer costs and consumer prices in the range of 15 to 20 percent, without ensuring corresponding superior environmental benefits, as well as upsetting the balance between sustainability and economic viability;

• The FSC standard in the U.S. is stricter, and therefore more costly, than standards applied overseas, thereby disadvantaging many U.S. producers and raising retail prices for American consumers; and

• If an FSC standard becomes a regulatory requirement for U.S. forests (through edict or non-market pressures from outside groups), consumer welfare losses would occur in a number of markets, including an annual loss of approximately $10 billion for wood products and $24 billion for paper products markets.

The report was authored by the president of the American Consumer Institute Center for Citizen Research Steve Pociask and Joseph Fuhr, Jr., a professor of economics at Widener University and a senior fellow for the Institute.

The American Consumer Institute Center for Citizen Research is a 501(c )(3) nonprofit educational and research institute.


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