Policy brief presents forest management policies that help strengthen carbon sinks in the forest sector

To achieve its climate goals, Finland needs to reduce its greenhouse gas emissions, strengthen its carbon sinks and invest in a comprehensive set of policy means. The policy brief prepared in the Hilmari project coordinated by the Natural Resources Institute Finland (Luke) presented a promising package of forest management policies, including a carbon premium, incentives for wood construction, and a land use change fee. If emissions reductions were to be achieved more quickly, the slowly accumulating carbon premium could be replaced by setting diameter limits for regeneration felling.

In the Hilmari project coordinated by Luke, we were engaged in extensive research cooperation with the Finnish Environment Institute (Syke), the University of Lapland and the Finnish Forest Centre. The result was a policy brief which attracted national media  and decision-makers, as well as an extensive study of eight potential steering means to strengthen carbon sequestration in forests or reduce emissions.

The project was part of the nationwide Catch the Carbon program of climate measures. Dozens of forest sector representatives and decision-makers participated in the project’s workshops and interviews. We used various models to assess the mitigating impact and financial costs of the policy means.

We analysed the factors affecting the feasibility of the steering means from the perspective of law and other environmental impact. This was supported by two policy dialogues. We conducted an extensive survey for forest owners to acquire information about their opinions on various policy means and held a closing webinar to discuss the next steps for the recommendations. 

There are 800,000 forest owners in Finland, most of whom obtain a significant part of their income from wood production. Strengthening carbon sinks in forests may call for additional measures that generate costs for forest owners.

New policy means aiming to mitigate the climate change should take into account  the current steering system, the cost-effectiveness of the new measures, social acceptability, legal feasibility and other environmental impact. 

As a policy measure based on mitigation results, the carbon premium would be a cost-effective solution and could be implemented with compensation paid to forest owners based on the amount of carbon sequestered in forests. The carbon premium does not pre-determine any measures, as it permits the selection of the best measures in each situation.

However, the carbon premium would not necessarily reduce forest loss or guide the use of wood-based raw materials towards long-term products. To complement it,  the land use change fee  could be introduced to limit greenhouse gas emissions especially from the clearing of peatland forests into fields. In addition, the amount of carbon sequestered in wooden products can be increased by preferring climate-friendly construction.

However, building the carbon premium system will take time. The climate goals could be achieved more quickly by replacing the carbon premium by diameter limits for regeneration felling in the set of the three recommended policy measures. According to the survey conducted in the project, forest owners have a positive attitude towards diameter limits for felling and extended cycles.

The voluntary carbon premium is largely considered an acceptable measure and could be implemented within the legal framework,” says Jukka Similä, Research Professor at the University of Lapland.