by Bob Epstein
On June 29, 2005, Bowater Inc., NRDC and the Dogwood Alliance announced an agreement to protect the natural forests of the Cumberland Plateau, which extends through parts of Tennessee, Kentucky, Georgia and Alabama. The agreement is significant not only because Bowater is the largest U.S. supplier of newsprint and the largest private landholder on the Cumberland Plateau, but also because the arrangement was accomplished through “market forces.” This article examines how this agreement came into being and how the market can be used to both transform the paper industry and other industries.
Bowater supplies 18 percent of all U.S. newsprint through 12 larger pulp and paper processing plants that are supported by 1.4 million acres of forest land owned or leased in the U.S. This includes approximately 360,000 acres in the Cumberland Plateau.
The Cumberland Plateau
The 6 million-acre Cumberland Plateau is among the most biologically diverse temperate forests on Earth. Each spring, millions of birds migrating from South America and the Caribbean descend on the plateau. Beneath the treetops live dozens of salamander species, more than anywhere else in the world. More than 200 kinds of fish ply the waters of the Cumberland Plateau region. Many Cumberland species are endemic, meaning they are found nowhere else in the world. The Cumberland Plateau region is also believed to have the highest concentration of caves in North America.
The region is threatened today because of the soaring global demand for paper. Natural Cumberland hardwoods – oak, hickory and red maple – have been cut at an unprecedented rate and replaced with row after row of loblolly pines in vast, single-species plantations incapable of supporting the wildlife or recreational uses native to the region.
Across the South, these tree farms have spread from just 2 million acres in 1953 to 32 million acres in 1999. Tree farms will cover almost 55 million acres over the next quarter-century unless something is done to restore a sensible, sustainable balance to forestry practices in the region.
The Paper Industry
Americans consume about 1,000 pounds of paper per person per year, seven times more than the average used in the rest of the developed world. To feed this demand, the paper industry
The pressure on forests can be lessened by increasing the use of recycled fiber (i.e. post consumer waste paper) and by managing forest lands in a more sustainable way. The best examples of the latter are the procedures defined by the Forest Stewardship Council (FSC). By contrast, the original hardwood forests of the Cumberland Plateau region are being clear cut and then replaced with plantations of fast-growing loblolly pines. This practice not only damages the forest ecosystem, but also backfires economically since the pines are very susceptible to disease from pests like the pine bark beetle.
Four Factors for Market Forces
Although the practices of certain paper mills don’t necessarily violate the law, they still consume huge amounts of natural resources and change forest lands at a pace that is not sustainable and, ultimately, not in the best interests of the paper industry. To use the market itself to encourage change in business practices, four factors need to be in place:
The next section will discuss how all four of these factors were in place, allowing NRDC and its allies to make the case for a major change in Bowater’s sourcing and operations.
The Cumberland Plateau Story
NRDC began its Cumberland Plateau campaign in Fall 2002. The effort included defining a common vision for a sustainable paper industry together with 56 other organizations (see Common Vision), approaching the Dogwood Alliance (an umbrella group of about 70 grassroots religious, student and community activist organizations concerned with protecting the forests of the South) as a local partner, and seeking seed funding from recycling experts and E2 members John and Wendy Neu.
Research in 2003 focused on determining the flow of fibers from forests through paper mills to major customers to determine where the biggest impact could be made on the best land. An industry research firm was hired to determine who the likely customers of the regional paper mills were and where those mills were getting their fiber. The Conservation Biology Institute located intact regions with the best biodiversity.
The University of the South, located on the Cumberland Plateau at Sewanee, developed maps of the forests, helped determine land ownerships, and demonstrated patterns of clear cutting and forest conversion. The Dogwood Alliance and Tennessee Forest Watch, another NRDC partner, identified impacts to local communities. By the end of 2003, it was clear that Bowater Inc. should be the target of the campaign.
In February of 2004, NRDC sent a letter to Bowater identifying the findings of the research and recommending a set of actions Bowater should take. NRDC declared the Cumberland Plateau one of its 12 BioGems. The designation received significant press coverage in the South and BioGems activists sent 30,000 emails, letters, postcards and faxes to Bowater demandin
g that the company halt its destructive forestry practices. The first meeting between Bowater executives, NRDC and the Dogwood Alliance took place in March 2004, at which Bowater denied the claims against them, but was also open to looking at further evidence.
During the next two months, volunteers used GPS devices to locate the exact location of damaged areas, collected satellite images from the past five years showing 65 examples of forest locations on Bowater property which were clear cut and replaced with pine plantations, and visited several of Bowater’s major customers so they could understand that the harvesting of the fiber source for their paper purchases was unnecessarily destroying the Cumberland Plateau BioGem.
In May 2004, this evidence was presented to Bowater. At the end of the meeting, Bowater executives committed to negotiations to figure out what they could change. NRDC discovered that, in a number of cases, Bowater’s expressions of concern about prohibitive cost were based on assumptions that were never actually confirmed by calculation. Once the calculations were done, it was discovered that a lot of NRDC’s requests were cost competitive. On the other hand, Bowater was particularly concerned about the cost of obtaining and processing more recycled fiber. In that case, it turned out that costs for retrofitting were substantial and NRDC had to compromise on the request for a guarantee that Bowater use more recycled fiber. Bowater now uses 24 percent post-consumer recycled fiber.
The following 15 months of negotiations uncovered a variety of cost-saving measures. For example, it was shown that Bowater could reduce spraying from twice per year to once per year. It was also evident that Bowater’s competitors were offering paper products from FSC-certified sources and that market demands were changing. Moreover, Bowater (as with all companies) wanted and needed good relationships with its local communities. Local groups provided ample proof that they also wanted Bowater’s practices to change (See “The Tennessee Tree Massacre“). The region’s residents, who are mostly poor, suffered from physical ailments like headaches, nausea, burning lungs, nosebleeds, skin rashes, liver damage and breathing problems from exposure to the millions of pounds of pesticides, herbicides and fertilizer sprayed onto forests each year. In addition, the chemicals and cutting practices degraded the quantity and quality of the forest’s autumn foliage, eroding the region’s tourism sector.
The Agreement
The commitments Bowater made in the agreement with NRDC and Dogwood Alliance are unprecedented, establishing a model for other forest products companies throughout the southeast United States. The company will end clear cutting and conversion of hardwoods on all of their U.S. landholdings within three years, stop buying after 2007 pine fiber from plantations that have been converted from natural forests, limit the extent and frequency of its aerial chemical applications, formalize a public communication program of chemical use activities, and study and protect ecologically significant forest areas and water resources on lands it owns.
Summary
While a policy framework is the dominant mechanism for allocating business access and use of the environment we all share, the successful agreement with Bowater illustrates the benefit of using market forces. The agreement was possible because there was a significant revenue risk to the corporation, a risk to corporate image, a compelling local concern about the Cumberland Plateau and a manageable cost structure to implement the needed changes.
Our thanks go to the NRDC team: Senior Scientist Dr. Allen Hershkowitz and Resource Specialist Darby Hoover are paper industry and waste management experts (production center and downstream impacts). Senior Scientist Sami Yassa and Senior Resource Specialist Debbie Hammel are forestry industry experts (upstream impacts). NRDC President and Co-founder John Adams provided negotiation skills and connections to local community leaders and politicians.
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Read: A Common Vision for Transforming the Paper Industry: Striving for Environmental and Social Sustainability
Bob Epstein is the co-founder of Environmental Entrepreneurs.
Contact him: bob@bobepstein.to
Reprinted with permission from Environmental Entrepreneurs Update (E2),
E2 is a nationwide community of businesspeople that works with NRDC – it plans to identify and research further market transformation opportunities for companies within the forest and paper industries and eventually in other industries as well.
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