Forest Certification Monopoly is a Bad Deal for Consumers

Today, the American Consumer Institute (ACI) released its latest ConsumerGram, “Forest Certification Monopoly WouldKill Jobs and Cost Consumers.”  The report highlights studies from both ACI and other experts who warn against the negative economic consequences of monopolizing forest certification.  Doing so would cost tens of billions of dollars and hundreds of thousands of jobs, while harming the environment.

As previous research from ACI found, a Forest Stewardship Council (FSC) monopoly of forest certification could lead to $10 billion in annual consumer welfare losses for domestic wood products markets and $24 billion annually for paper markets.  A recent study from EconoSTATS examined state-specific data and determined that an FSC monopoly could lead to over 31,000 job losses in Oregon, and another 10,000 in Arkansas.  When extrapolated nationwide, as ACI did for this ConsumerGram, the result is even more troubling: approximately 785,000 U.S. jobs could be jeopardized under an FSC monopoly.

A common-sense approach is needed to create a level playing field and avoid an FSC monopoly:  promote competition among all credible certification programs. 

However, especially in more recent years, environmental activists have pressured businesses and landowners to certify their products and land exclusively by FSC.  These activists ignore the fact that FSC does not necessarily yield superior environmental outcomes.  In fact, the program implements dozens of standards around the world, as opposed to the uniform standards of credible programs like the Sustainable Forestry Initiative (SFI) and American Tree Farm System (ATFS).  For instance, FSC enforces lenient standards in nations like Brazil and Russia while mandating stricter and more costly standards in the Pacific Northwest region of the U.S. 

This means that consumers are drawn to buy wood products with an FSC eco-label that may come from environmentally risky regions that do not meet U.S. standards.  Since 90% of FSC’s land is located outside the U.S., American consumers who buy FSC-certified products may not actually be paying for something that is better for the environment. 

A win, win, win for consumers, the environment, and the economy is to promote competition among all credible certification programs.

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