Private cost-benefits of voluntary forest product certification

Forest certification is intended to be a market-based incentive to promote the sustainability of forest lands and forest management. However, undertaking a certification can be a costly exercise, and the economic benefits may not be immediately clear. The three most important market benefits are potentially market access, improved public image and price premiums. Although forest certification has achieved major progress by enabling certified forest products to penetrate some environmentally sensitive market niches and by maintaining and enhancing the public image of forestry companies, the price premium has proved difficult to realize, especially for commodity products such as pulp and structural lumber. When considering the actual purchasing behaviour of consumers, there is little evidence to verify that the expressed willingness to pay a price premium will materialize in the market place. Considerable uncertainty exists as to why this might be the case, and the presence of too high a premium could drive consumers towards cheaper products derived from unsustainable (or illegal) forestry activities.