Wood and carbon credits trade in the Republic of Srpska

Abstract

The reduction of forest areas globally and the growth of roundwood production are two key characteristics that have marked the wood market over the past twenty years. In 2019, 3.97 billion m3 of roundwood was produced in the world, or 14% more than in 2000. Asia is the leading continent with a share of 30.6% in global roundwood production. It is followed by North and South America with 28.9% and Africa with 19.4%. The share of Europe is 19.2%, and Oceania 1.9%. Observed by countries, the largest producers of roundwood in the world are the United States, India, China, Brazil and the Russian Federation, which in 2019 produced 1.64 billion m3 or 41.3% of total world production. Roundwood production in Europe, including the Russian Federation, had a similar growth trend as globally. In the period 2000– 2019, production increased by 187 million m3 , from 628 million m3 in 2000 to 815 million m3 in 2019. The largest producers of roundwood in Europe, after the Russian Federation, in 2019 were: Germany (76.2 million m3 ), Sweden (75.5 million m3 ), Finland (63.9 million m3 ), France 49.9 million m3 ) and Poland (44.1 million m3 ). The region of Southeast Europe participated with 3.1% in the total production of roundwood in Europe in 2019. In order to preserve forest ecosystems and prevent the placement of illegally felled trees, a global forest certification system has been established. Areas under forests that have been certified, and thus the amount of wood that is placed on the market with some of the certificates, are growing from year to year. According to the United Nations report, the total area under certified forests in the middle of 2019 amounted to 434.5 million ha globally. When it comes to state-owned forests in Republika Srpska, they are certified according to the FSC certification scheme. In 2019, the cut wood mass amounted to 3.07 million m3 and compared to 2000, it was higher by 4%. The average annual growth rate of wood production in the observed period was 0.46%. Forestry and wood processing in Republika Srpska account for about 6.5% of the employed population and participate with the same percentage in the gross national income, which in itself speaks of the importance of this resource for the economy and population of Republika Srpska. The concept that carbon stored in forest ecosystems has its own monetary expression and marketability provides opportunities to generate carbon credits as a relatively new type of goods, giving developing countries (such as Bosnia and Herzegovina) opportunities to achieve multiple economic and financial benefits. Therefore, it is necessary to focus the economic interests of the forestry sector not only on wood assortments, but also on other types of goods, in order to simultaneously direct forestry towards the leading economic trends of green, circular and bioeconomy. Although they are significantly lower in terms of volume and turnover of carbon credits, the trends indicate a great perspective for the development of voluntary markets, especially for project activities within the forestry sector. Simultaneously with the declining trend in regulated markets within the CDM mechanisms, growth is envisaged for voluntary markets in terms of volume, monetary value and number of participants. It is crucial for the Republika Srpska to intensify efforts aimed at the development of human resources, in order to create preconditions for global trends monitoring and identification of optimal opportunities for the forestry sector and other sectors. It is certain that constant changes are expected in future, and in order to be included in this type of market flows, it is necessary to develop effective instruments for a constant monitoring and evaluation of market trends.