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Illegal Logging in Indonesia: Environmental, Economic, & Social Costs Outlined in a New Report

Jake Schmidt

Posted May 4, 2010

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Illegal logging has a huge impact on the loss of tropical forests in the key countries that account for the vast majority of deforestation (as I discussed here).  These forests are being lost at the rate of two football fields a minute and contribute the same amount of global warming pollution as all of the world’s transportation emissions, so stopping forest loss is critical to our efforts to address global warming.  And no country is as important in these efforts as Indonesia (Brazil and Indonesia are the two largest deforesting countries). 

A new report from labor and environmental organizations – the Blue Green Alliance, NRDC, United Steel Workers, Sierra Club, and Rainforest Action Network – looks at the environmental, economic, and social cost of the loss of Indonesia’s rainforests from illegal logging. 

Here are some snippets from the report.

Indonesia’s forests are large and are being lost at alarming rates.  Indonesia’s forests cover approximately 463,300 square miles, slightly smaller than the forests of Brazil and the Democratic Republic of Congo.  Indonesia’s forests are being lost at significant rates, which results in Indonesia’s global warming pollution ranked as 5th largest in the world (accounting for about 5% of the world’s emissions).  Between 1990 and 2005, approximately 108,110 square miles of Indonesian forest disappeared (an area larger than the State of Colorado), 77% of which were virgin forest (see graph for a visual of this loss).

Illegal logging is a major contributor to the loss of Indonesia’s forests.  A 2007 United Nations Environment Program report estimated that 73-88% of timber logged in Indonesia is illegally sourced.  More recent estimates place the figure at a lower, but still troubling rate of 40-55%.  And this illegal logging is not only costing the environment, but also the Indonesian people.  It is costing the Indonesian government an estimated $2 billion per year due to corruption, uncollected taxes, unacknowledged subsidies, and general poor management of resources.

Consumer appetite for pulp, paper, furniture, and palm oil (which is used for biofuels and in commodities such as margarine, toothpaste, chocolate, and soap), in nations such as the U.S., the European Union, Japan, China, and India are fueling the loss of Indonesia’s deforestation.  For example in 2007, 45% of Indonesia's wood exports went to the US, Europe, and China.*

We can and must take steps to address this loss.  Luckily the Indonesian government seems focused on addressing this issue to an extent that hasn’t been witnessed in the past.  As a part of the Copenhagen Accord, they committed to cut their global warming pollution by 26% by 2020 from business-as-usual levels (as we tracked here) – much of which will need to be achieved from reduced deforestation as it accounts for 80% of Indonesia’s emissions.  So there is some political momentum within Indonesia and we need to assist/nudge that momentum by utilizing all of the tools at our disposal.  Here are the ones that the report identified:

  • The Indonesian government must enforce existing forestry and anti-corruption laws and improve transparency and public access to information.
  • Trade in products created from illegal logging should be addressed as a trade subsidy and remedied through trade laws.
  • Trade and investment agreements should end demand for and trade in wood products that are illegally and or unsustainably sourced.
  • Adequate funding must be appropriated to the U.S. Department of Agriculture to enforce the Lacey Act.
  • Pulp and paper must be included in the Lacey Act import declaration requirement schedule so importers are held fully responsible for the materials they import.
  • Developed and developing countries must flesh out and implement REDD schemes with robust multi-level monitoring, reporting and verification systems, safeguards for community rights and tenure, and governance reforms that ensure lasting, sustainable growth with tangible benefits for local communities.  (Key provisions towards this aim were included in the House passed climate bill as I discussed here and hopefully included in the Senate bill as I discussed here).

Since deforestation is a significant contributor to global warming emissions we must take action to ensure that incentives for destruction of the world’s tropical forests are eliminated.  And we must aid the Indonesian government and its people in addressing this challenge, using every tool in our toolbox.  After all, addressing this challenge is in the U.S. interest as America’s farmers and ranchers recently pointed out (as I discussed here), and as labor has just pointed out.


* Source: Data from the United Nations Commodity Trade Statistics Database, available at:

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Johan HadererMay 6 2010 03:51 AM

You are using illegal logging and deforestation synonymously - which is wrong. Most of the cases you mention within your article refers to forest clearing and not illegal logging; the difference? a hughe one:
Illegal logging means you chop down trees because your only intention is to make profit by selling the wood. When doing Forest clearing you chop down the trees because you want to use the land for oil palms, sugar cane, cattle ranching, timber plantations. The cut wood might be an additional incentive but is not the main source and force for forest clearing.
But - both forest clearing and/or illegal logging can be sources for deforestation.
Why to differ? Of course, because all those programs combating illegal logging are targeting wood trade - this is the reason why all those programs trageting on illegal logging can not target deforestation...

Johan Haderer,

Jake SchmidtMay 6 2010 04:01 PM

Thanks for the comments Johan. I'm not sure where you think I missed the distinction. We've drawn upon public estimates of the amount of illegal logging and have cited them accordingly in the report.

You say: Illegal logging means you chop down trees because your only intention is to make profit by selling the wood. When doing Forest clearing you chop down the trees because you want to use the land for oil palms, sugar cane, cattle ranching, timber plantations.

While that is definitely true in some circumstances I don't think you can draw such a fine line. From documented cases (and academic literature) we know that there is often not a fine line between cutting down the wood for timber sales and cutting it down to create land for ag/palm/etc. In some cases there may be a fine line, but in many cases there is a relationship -- cutting down the wood only to sell the wood isn't profitable, cutting down the wood only for the palm/cattle/etc and not selling the wood isn't profitable. So often it is the combination of selling the wood coupled with the opportunities to use the land which make the activity profitable.

Programs that target illegal wood trade won't by themselves stop deforestation, but they are key tool that must be utilized.

Johan HadererMay 7 2010 12:40 AM

Jake, this "fine line" isn't drawn by me - it is done by generally accepted scientific work:
a) statistics published back in 2007 by UNFCC (
b) Reports by Blaser/Robledo and Grieg-Gran (Eliasch Report)

You can draw the "fine line" by answering the following question: would forest land have been cleared even if logging of trees wouldn't have been commercial interesting: all cases anwered with yes is clearing of land (which equals to more than 90% of all global deforestation cases), all cases answered with no is illegal logging (which equals to less than 10% of all global deforestation cases).

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