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Value Chain Alliances
Building alliances for climate smart forest value chains and economies
CSFEP is working with partners to explore the feasibility of climate smart forest value chain alliances and making them operational in three geographies—a region in Brazil, a region in India, and the Pacific Northwest of the USA.
A climate smart forest value chain alliance is a voluntary collaboration of stakeholders that is committed to coordinate production and value-adding activities that enhance the sink, storage, and substitution effects in forests, forest products, building materials, and buildings. They involve value chain actors from sourcing of raw materials on forest lands (e.g., forest managers) to wood processing (e.g., sawmill owners, engineered wood processors) to intermediaries in the building sector such as design and engineering companies (e.g., architects, design studios) and construction firms to end users such as private and commercial real estate developers, as well as finance providers and government actors shaping the policy and market conditions of supply and demand.
An alliance can pursue various objectives including a narrow focus on specific value chain challenges. For example, members of an alliance can aim at improving forest management and sourcing practices, using climate smart production technologies, increasing traceability of inputs, or improving the reporting on carbon dioxide sequestration, storage, and substitution effect throughout the value chain. Alternatively, an alliance can pursue broader objectives that seek to improve the policy and market conditions for a climate smart forest economy in the supply and demand areas.
ENTRY POINTS, LOCAL CONTEXTS, AND FOCUS OPPORTUNITIES
The entry points for markets to establish climate smart forest value chains varies greatly across the chosen geographies. Both Brazil and India have no track record yet of building with wood at large scale. In addition, because of their size and many forest products grown in the two countries, further subregional and commodity specific exploration is required to make any alliance relevant and manageable. In the Pacific Northwest of the USA, the demand and supply for climate smart wood, and associated business and policy environment have more matured, and voluntary collaboration of stakeholders to advance aspects of a climate smart forest economy is under way.
The exploration of value chain alliances in the three regions has been based on the following assumptions and observations:
Brazil: Linking landscape restoration to market demand
A new value chain alliance could motivate and provide support to early movers in the construction sector and influence Brazil’s traditional aesthetics of construction buildings in cities. Brazil is facing a growing housing deficit in the millions, most of it needed by low-income families. Hybrid wood buildings and mass timber technology can change the economic calculus permitting to redesign underutilized spaces in central areas of cities for affordable housing and other uses and become part of broader strategies to reduce the carbon footprint of urban areas. Experience to reforest degraded lands with native species, sustainable forestry, and agroecosystems is maturing in Brazil, and evidence for certified and low-impact forestry operations is growing.
India: Market demand for wood from urban & rural areas
India has committed to restore 26 million hectares of land, which can be achieved by protection and restoration through interventions like agroforestry, riverbank plantations, linear plantations, and enhanced urban green spaces. India’s recent elimination of its 25-year prohibition to use timber in construction represents an opening to decarbonize the country’s construction sector and meet the growing housing needs of millions through hybrid wood buildings and mass timber technology. Furthermore, easing in the issuing of transit permits creates an opportunity for enhancing livelihoods through tree-based products and using timber for long-lived wood products and other uses.
Pacific NW: Responding to changes in demand and policy
Factors favorable for climate smart value chains include tremendously productive natural forests that can sustainably supply economically viable products over the long-term. The Pacific NW, USA has increased manufacturing opportunities for engineered wood, and there is growing market interest in climate smart wood, which has been augmented by political interest and support. Public and private institutions have strong capacity to plan, monitor, and enforce laws and standards. Members of the Climate Smart Wood Group envision a new forest economy in the Pacific Northwest that shifts to forest management practices that emphasize and incentivize carbon storage, resilience, biodiversity, and other ecosystem services.
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