The EU Green Deal will affect every company operating in the forestry sector, and the area available for timber harvesting is likely to decrease, causing a chain reaction. Therefore, Latvia must have its own scientifically grounded position in order to turn upcoming challenges into advantages.
This was the conclusion reached by speakers and participants at the 6th international conference organised by the Forest Certification Council of Latvia, titled "Sustainable management of natural resources – a fundamental condition for successful socio-economic development during the implementation period of the European Union's new environmental policy". Māris Liopa, Chairman of the Forest Certification Council of Latvia, emphasised that the decisions already made and those planned in relation to the European Green Deal will also apply to Latvia and will affect a great many sectors of the national economy. It is not just Latvia, but other countries with a high proportion of forest and a highly developed forestry sector, that must think about their position and competitiveness in this new world system. "Latvian scientists, and in particular science-based conclusions on what needs to be done in Latvia and how, will be of great importance in this area. This is because what is good and suitable for a southern country where forests are a rarity is not, and cannot be, applicable to Latvia, where forests cover more than half of the country's territory," said M. Liopa. In his view, this confirms that forest issues in the EU cannot be solved according to a single template.
At the conference, questions were raised regarding the responsibility of both Saeima deputies and Members of the European Parliament elected from Latvia to their voters, and the uncritical acceptance of everything that is "recommended, indicated, devised, etc.", especially when there is no socio-economic assessment of the potential consequences of the intended transition. Moreover, if all citizens and all companies are to be subjected to it, it will affect jobs, tax payments, purchasing power – in short – the future.
Still many unknowns
"We are living in a time of change when it is not clear what these changes will result in; there are many questions about what tools will be available and how they should be used to achieve the set goals," notes Arnis Muižnieks, Chairman of the Board of the Latvian Forest Owners' Association.
He acknowledges that the total cost of the Green Deal is estimated at 1 trillion euros, of which the EU budget will allocate 503 billion euros, member states 114 billion, and the private sector, with guarantees from the European Investment Bank, will invest 279 billion euros. In turn, 100 billion euros have been earmarked for the retraining of workers in sectors severely affected by the Green Deal.
"One of the most essential questions is whose competence (the EU's or each individual member state's) forestry policy falls under, because it seems that the European Commission, while preparing documents, is trying to take member state competence under its own control, even though the EU founding treaty contains no references to a common EU forestry policy. The Latvian government must take a firm position and keep forestry policy in Latvia under its own control," points out A. Muižnieks. As a next problem, he mentions the requirement that at least 30% of land and 30% of sea areas must be under strict protection and that at least one-third of EU protected areas, including all EU primary and old-growth forests, need to be protected under the same regime, yet it is unclear how these requirements are to be met.
"In Latvia, protected areas, including the North Vidzeme Biosphere Reserve, account for only 18%, but 30% is required. It is unclear where to get the missing areas, and it is unlikely that any other country in our region will want to take on additional obligations and protect more than what is requested," A. Muižnieks points out regarding another question. The working group of the Ministry of Environmental Protection and Regional Development has prepared several possible solution scenarios regarding the areas where 'nature counters' have found habitats of European importance.
"This means that economic activity does not take place in current specially protected nature areas, while outside these protected areas, new specially protected nature areas could be created, including migration corridors to connect existing protected areas, and management could be carried out in accordance with the protection of natural values. However, since Latvia often relies on the principle that good nature protection means doing nothing, economic activity could be prohibited," A. Muižnieks describes the possible scenarios. He points out that according to rough data, there is just under 35 million m3 of timber in habitats outside protected areas in state forests and 11 million m3 in other forests. In the case of one scenario (prohibited clear-cutting, but selective logging allowed), about 13 million m3 from state forests and 6.5 million m3 from the forests of other owners would not reach the market, while in the case of another scenario (a total ban on tree felling in all areas where habitats of European importance have been found), about 48 million m3 from state forests and nearly 17.5 million m3 from private forests would not reach the market. "But the question remains – are there only three, or are there even more of these potential scenarios, especially since the European Commission has initiated a case against Latvia regarding so-called 'staignāji' (wet woodlands) for not protecting them in accordance with EU requirements," says A. Muižnieks. He notes that the identified wet woodland habitats, for example 8,000 ha, could be accompanied by other habitats covering an area of approximately 36,000 ha, and in total, 120,000 ha of commercial forests would be affected. "Since these habitats have been found in forests that have reached the main felling age, the question of timber flow from these forests is and will remain very topical," points out A. Muižnieks. He also hopes for a reasonable decision regarding the potential of forestry in mitigating climate change, because by promoting a faster turnover of wood, climate risks would be reduced by increasing the volume of CO2 sequestration.
Impact vertically and horizontally
"Every action affects the environment; it must be assessed throughout the entire life cycle of a product," emphasises Dagnis Dubrovskis, Leading Researcher at the Department of Forest Utilisation at the Latvia University of Life Sciences and Technologies. This is exactly why there is a taxonomy based on two principles: contribution and significant harm. The EU taxonomy principles provide for a condition: economic activity must make a significant contribution to achieving at least one environmental objective and must not cause significant harm to the other five, and it must also comply with minimum social safeguards. "The aforementioned 30% of protected nature areas are being marked as assets for compensating for the environmental impact caused by humanity. A carbon credit market is developing, where there are payments for carbon sequestration in land, as well as water quality and nutrient trading, nitrogen emission programmes, payments for the conservation, restoration, and protection of biological diversity, etc.," emphasises D. Dubrovskis.
He reminds us that the Green Deal affects not only the climate package (Fit for 55), but also land use, which would provide for offsetting greenhouse gas emissions with sequestration created by forests (these very same emissions). The Renewable Energy Directive will 'remove' wood biomass (which could be used to create other wood products) from the list of renewable biomass energy. Priorities in forest management will change, as timber extraction is made subordinate to the climate goal and the preservation of biological diversity. By modelling the impact of potentially imposed restrictions from anticipated EU legislation, it has been concluded that a significant reduction in the volume of logging by 3–4 million m3 per year is expected in Latvia (in recent years, the felling volume in Latvia was within the 12–13 million m3 range). This will mean a drop in the value of forest capital by about 30% and a decrease in forest owners' income by 30 to 40%. According to rough estimates, this will affect Latvia's wood product exports, reducing them by about 800 million euros per year (about a third of the 2020 exports – 2.59 billion euros), and will eliminate about 14,000 jobs. D. Dubrovskis admitted that it is not yet clear what the impact on the socio-economic situation in the regions and on tax revenues will be. "Such a socio-economic analysis is necessary, especially if decisions on what to do and how are to be made in the near future," emphasises D. Dubrovskis.
Extent of impact unknown
Jānis Eglīts, Head of the Office of the Minister of Agriculture Kaspars Gerhards, admits that currently a large part of their time is taken up by issues related to Covid-19, but the new policy initiatives of the European Union will have a significant impact in the future. Currently, an EU draft regulation is in the making, which defines the goals to be achieved by each EU member state by 2030. Within nine years, the EU wants to achieve 310 million tonnes of CO2 sequestration in forestry and land use change, as well as reduce nutrient losses and reduce the total use of chemical pesticides by at least 50%.
The 'do nothing' approach is suitable for the desire to increase CO2 sequestration in the short term, but in the long term, time is lost and the long-term goal is not achieved either. Targeted measures for increasing CO2 sequestration in the land use sector have a long-term return, but with a relatively small immediate impact.
J. Eglīts admits that a sharp turn can result in a huge shock. "If the EU has set the deadline for achieving climate neutrality at 2050, but China at 2060 and India at 2070, how can we be sure of their implementation?" rightly asks J. Eglīts. He is concerned about whether individual EU goals are achievable and whether they can be implemented simultaneously, because alongside this, every everyday item will cost significantly more, which will also affect every person's wallet, that is, purchasing power. J. Eglīts admits that the proposed solutions border on a desire to interfere in matters of national competence and to move towards a regulation that sets one management method across the entire EU, ignoring regional and climatic characteristics (differences), for example, between France and Finland. That would be the same as, for example, creating salmon fishing rules by conducting research where such fish species do not exist at all. "It is clear that the proposed EU legislative initiatives will significantly affect land owners in Latvia, but the extent of this impact cannot be determined at this moment," admits J. Eglīts.
A different approach
"Green Deal is translated into Latvian as 'Zaļais kurss' (Green Course), but in other countries, for example, Poland, it is 'Zaļā kārtība' (Green Order), and elsewhere as 'Vienošanās pakts' (Agreement Pact)," draws attention Ivo Vinogradovs, Leading Researcher at the Faculty of Geography and Earth Sciences of the University of Latvia. He emphasises that the Green Deal is a project driven by economists, not by nature conservationists.
Already in the early seventies, the Club of Rome published a report on the limits to growth related to basing economic growth on limited resources. "Since then, research into economic restructuring has begun, and the economic crisis of 1973–1975 marks the beginning of contemporary economic stagnation, even though international growth at the expense of Asia and other regions continued until the crisis of the new century," explains I. Vinogradovs.
He points to another fundamental study on humanity's impact on the world's ecosystems – the so-called Millennium Ecosystem Assessment, where one of the main conclusions is that changes in the ecosystem have contributed to significant gains in human well-being and economic development, but this has been achieved at increasing costs, which manifest as the degradation of many ecosystem services, and if this is not changed, the opportunities for gains that future generations will be able to obtain from ecosystems will decrease. "Perhaps if the crisis of 2007–2010 had not occurred, the economic restructuring project would not have been launched," admits I. Vinogradovs.