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The European Forest Sector Outlook Study II

European forest sector policy makers are under increasing pressure.
Expectations of the region’s forests to meet increasing environmental, social and economic demands have never been higher. European forest sector policy makers must grapple with complex, imperfectly understood challenges to meet these demands
when designing forest policies. These policies will have to address challenges such as climate change, protection of biodiversity, space for recreation and leisure, and energy and raw material needs.

Forests and wood play an important role in climate change mitigation and adaptation
strategies. Forests in Europe serve as a carbon sink, mitigating to the extent
possible the effects of climate change. Furthermore, forest management needs to
be increasingly applied to support adaptation to climate change. At the same time,
policies and institutional responses have to adapt to address the consequences of
climate change impacts, such as pests, diseases, storms and forest fires. There is also
a rising demand for the use of wood for energy and raw material inputs. Forest-based
industries continue to demand a reliable supply of raw material inputs. At the same
time, the use of wood for energy is intensifying to meet ambitious renewable energy
targets. However, mobilising enough wood to satisfy this growing need could come
at a significant environmental, financial and institutional cost. Innovation has the
potential to introduce wood-based products with novel uses and applications. Growth
in the use of wood for new industrial needs and renewable energy demands will need
to be balanced with the other functions and uses of forest resources.
At the same time, forest management approaches will need to continuously ensure
that forest ecosystems are able to continue to conserve biodiversity. Forests also
need to be managed in a manner that guarantees the provision of a range of other
environmental and social services, namely supporting and regulating clean air and
water quality while providing the cultural and recreational services important to the
daily life of many citizens.
The European Forest Sector Outlook Study II (EFSOS II) addresses and discusses these
demanding challenges. Through scenario analysis, policy makers are presented with
the long-term consequences of possible policy choices. These choices are assessed
according to their sustainability and recommendations are proposed based on the
trade-offs facing policy makers. Decision makers are encouraged to reflect upon these
analyses and to consider them when taking possible future policy actions.
We would like to express our sincere thanks to the team of forestry, climate change,
competitiveness and trade experts as well as the country correspondents who have
contributed to this comprehensive, new and innovative study.

Executive Summary 9
Policy challenges 9
Methods 9
Conclusions 10
Recommendations 11
1 Introduction 13
1.1 Objectives of the outlook study 13
1.2 Approach and methods 13
1.3 Scope and definitions 14
1.4 Acknowledgements 15
2 Main policy issues and challenges for the forest sector 19
2.1 Introduction 19
2.2 The situation in 2010 19
2.3 Mitigating climate change 21
2.4 Promoting renewable energy 22
2.5 Adapting to climate change and protecting forests 23
2.6 Protecting and enhancing biodiversity 23
2.7 Supplying renewable and competitive forest products to Europe and the world 24
2.8 Achieving and demonstrating sustainability 25
2.9 Developing appropriate policies and institutions 26
3 Scenario analysis: reference future and policy choices 27
3.1 Introduction 27
3.2 Overview of projection methods 27
3.3 Reference scenario 30
3.4 Policy scenarios 41
4 Assessing the sustainability of the outlook for the European forest sector 63
4.1 Introduction 63
4.2 Methodology for assessing sustainability of scenarios 63
4.3 Analysis of the sustainability of the scenarios 65
4.4 Discussion 70
5 Main policy issues and challenges, in the light of the scenario analysis 73
5.1 Introduction 73
5.2 Overview of the scenarios 73
5.3 Mitigating climate change 77
5.4 Supplying renewable energy from wood 79
5.5 Adapting to climate change and protecting forests 82
5.6 Protecting and enhancing biodiversity 87
5.7 Supplying innovative and competitive forest products and services to Europe and the world 89
5.8 Achieving and demonstrating sustainability 91
5.9 Developing appropriate policy responses and institutions 91
6 Conclusions and recommendations 97
6.1 Conclusions 97
6.2 Recommendations 99
7 Annex 103
7.1 Acronyms and Abbreviations 103
7.2 List of 3-letter country codes 104
7.3 Discussion papers 104
7.4 Bibliography 105