The Economy and Values Research Center has issued a new study on "The Economics of Armenia’s Forest Industry" commissioned by the Eco-Armenia consortium (World Wildlife Fund, AUA Environmental and Conservation Research Center, Armenia Tree Project, and Armenian Forests NGO) with the Organization for Security and Cooperation in Europe. The groundbreaking report was funded by the British Embassy of Armenia and Eco-Armenia and was authored by Manuk Hergnyan, Sevak Hovhannisyan, Sona Grigoryan, and Hovik Sayadyan.
Armenia’s forests cover less than 10 percent of its total land area, so deforestation of already scarce forest resources presents a significant threat since it destroys habitats and biodiversity and results in lost revenue to the government of Armenia. Logging for industrial wood products and fuelwood are key causes of deforestation, according to the report. Much of this logging takes place in violation of the Forest Code and other legislation designed to protect forests. This report documents illegal logging and describes how it is “intertwined” with the wood processing industry and the livelihoods of the population.
Household consumption of fuelwood is driven primarily by poverty and according to the study nine percent of households consumed fuelwood for cooking and heating purposes in 2006. The consumption of fuelwood has been decreasing because of increasing supplies of gas, growing levels of household prosperity, and increasing remoteness of forests. The wood processing industry is comprised of a few hundred small and medium-sized entities engaged in processing, production, trade, and consumption of forest products. The industry is mainly based on illegally harvested timber, and the wide gap in cost between legally procured timber and illegal timber provides significant financial incentives for illegal logging.
A number of solutions are proposed by the 54-page report, including:
1. improved access to gas for rural residents through micro-credits and discounted installation costs
2. exemption of industrial roundwood imports from VAT
3. an export ban on industrial roundwood
4. facilitating "tree farming" within the country
5. promoting recycling and renewable energy
6. enhancing the eco-tourism, NWFP, and forest services sectors
7. implementing forest certification and chain of custody tracking procedures
December 4 update: The Economy and Values Research Center has revised the study and it is available on the ATP web site
here.
