Impacts of international trade on carbon flows of forest industry in Finland

Finland is a forested country with a large export oriented forest industry. In addition to domestic forest extraction, roundwood is imported, thus displacing the environmental impacts of harvests. In this paper, we analyse the international carbon flows of forest industries in Finland from a consumption-based perspective. Quantitative analyses are available on trade embedded emissions of CO2 from fossil fuel combustion, and here we address in a similar way the impact of trade on the carbon budget of the forest products sector in Finland. Carbon flows through the forest industry system increased substantially between 1991 and 2005. We show that the annual carbon balance related to forests and forest industry system in Finland functioned as a sink in 1991, whereas in 2005 the system was a sink on a national level, but not on a global level. Through calculating the carbon content in traded forest industry products and emissions embodied in forest industry activities, we further show that the direct impacts of the forest industry in Finland are only a minor fraction of the total CO2 emissions related to Finnish production. Nearly all of the emissions were caused due to production of exports. Yet, direct carbon dioxide emissions of the industrial production are reported to Finland in the production based inventories.