Economy

Paper profits

Paper industry booms at expense of economy

Blame the trees?

Drought is still ravaging China’s southwest – and climate change is not the only culprit. Environmentalists and academics say the ‘once-in-a-century drought’ was made much worse because native forests were cut down to make way for commercial tree plantations. Two of the biggest tree-farmers: Indonesia’s Asia Pulp & Paper and Scandinavian giant Stora Enso.

For thousands of years the forest ecosystem played a key role in retaining water and seeding rain clouds over the region. But over the last 10 years a significant part of those forests have been replaced with large single-species tree farms.

“Monsoons and droughts are not unusual, but forests can hold some of that excess water and release it in the dry season,” prominent Chinese environmentalist Ma Jun told the Wall Street Journal. “Right now, that [capability] has been very much weakened.”

The plantations are mainly eucalyptus, a tree used for making paper, or rubber trees. These ‘economic trees’ are an important source of profit for paper companies and taxes for local government.

But the problem is that they’re not sustainable – forest’s ecosystems need a variety of plants and animals to work properly. “[The] fast-growing eucalypts consume far too much water and nutrients [and] hurt biodiversity in the area,” Jin Jianming, chief researcher at the Ministry of Environmental Protection, told Xinhua recently.

And they don’t provide much of the climate-regulating services of a natural forest. The Economy & Nation Weekly commented last week that: “Scholars [seem to] pay more attention to the forest’s services to ecosystems, while forestry researchers pay more attention to the economic performance of forests.”

That may be true since the magazine also observed that: “Guangxi, the region most badly-hit by drought, is also the province with the largest eucalyptus plantation.” Stora Enso has 145,000 acres of Eucalyptus in the province (although on its website Stora points out that the United Nations Development Programme found no environmental issues with its plantation when it assessed it in 2006).

Asia Pulp & Paper has operations throughout China – growing poplar in the north and eucalyptus in the ecologically sensitive south. In 2005, APP’s planned expansion in Yunnan was suspended after an investigation by the State Forestry Administration found that it was involved in illegal logging.

The company insists its business is ecologically sound, but its partnerships with NGOs WWF and the Rainforest Alliance both broke down over concerns about its practices. In recent years APP has even lost customers over the issue, including major paper retailers Staples, Office Depot, and Walmart.

China’s remaining subtropical forests are home to most of the country’s biodiversity, and their ecosystems are so delicate that once gone there is little chance they can be recovered. The country’s leaders are proud of their record on afforestation (see WiC41), but not enough emphasis has been given to forest diversity.

The National Development and Reform Commission (NDRC) have reportedly set a goal of expanding the country’s timber base by 3.7 million acres this year – with nearly half that burden falling on Guangxi.

And forests aren’t the only complex system being subverted. Despite its manufacturing renown, China’s economy is heavily dependant on the services it receives free from nature. The drought has already driven up the price of commodities like tea and flowers and will likely hit the region’s all-important grain harvest. The effects aren’t restricted to agriculture – the Guangzhou Daily recently reported that the NDRC was planning to hike resource prices, including water and electricity.

In that sense the economy’s own ‘ecosystem’ could be careering out of balance. What’s good for the paper makers is less so, for example, for those industries that rely on utilising cheap hydroelectric power from the Southwest. As reported in WiC56, the manufacturing city of Dongguan is suffering from power brownouts – due to the drought’s impact on river levels, which has disrupted the electricity generating capacity of Yunnan’s dams.


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