Modeling the impacts of policy measures to prevent import of illegal wood and wood products

The impact of using alternative measures to curb EU imports of illegally harvested wood are compared based on the simulation runs of the EFI-GTM global forest sector model. Four policy options are considered: 1) Baseline Scenario – Voluntary Partnership Agreements (VPA) between the EU and six countries, 2) Option 1 – expanded VPAs increased to include 12 countries covering most of the sources of illegally traded wood, 3) Option 3 - border control actions stopping illegal imports from all non-EU countries entering into the EU, 4) Option 4 - all illegal wood coming both from the EU and non-EU countries is eliminated. The Baseline scenario with six VPA partners has the strongest impacts with respect to reduced harvests, increased wood prices and reduced industrial production in the baseline VPA countries, whereas harvests, production and forest sector value added increases in non-VPA countries with a high or moderate risk for illegal logging and in low risk regions like the EU and USA. However, these positive changes are marginal.Under Option 1 all 12 potential VPA countries are expected to suffer from a lowering of harvests and production. The EU, USA and other low and high/moderate risk countries increase their harvests, production and value added. These positive changes are substantially more significant, since the suggested 12 VPA countries cover most of the trade of illegal wood.Under Option 3 & 4 the impacts are rather marginal, since these options do not foresee elimination of illegal logging for high-risk countries under VPA arrangements. These options mostly affect trade with the EU in the short to medium term.