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The Kyoto Protocol (KP) requires signatories to reduce CO-equivalent emissions by an average of 5.2% from 1990 levels by the commitment period 2008–2012. This constitutes only a small proportion of global greenhouse gas emissions. Importantly, countries can attain a significant portion of their targets by sequestering carbon in terrestrial ecosystems in lieu of emission reductions. Since carbon sink activities lead to ephemeral carbon storage, forest management and other activities that enhance carbon sinks enable countries to buy time as they develop emission reduction technologies. Although many countries are interested in sink activities because of their presumed low cost, the analysis in this paper suggests otherwise. While potentially a significant proportion of required CO emission reductions can be addressed using carbon sinks, it turns out that, once the opportunity cost of land and the ephemeral nature of sinks are taken into account, costs of carbon uptake could be substantial. Carbon uptake via forest activities varies substantially depending on location (tropical, Great Plains, etc.), activity (forest conservation, tree planting, management, etc.), and the assumptions and methods upon which the cost estimates are based. Once one eliminates forestry projects that should be pursued because of their biodiversity and other non-market benefits, or because of their commercial profitability, there remain few projects that can be justified purely on the grounds that they provide carbon uptake benefits.

The paper explores the structure and impact of the international regime that governs forest management. We pay special attention to three components of the regime: (1) regional and international m trade agreements and multilateral environmental agreements; (2) international criteria and indicator processes; and (3) international forest certification systems. The first two components represent subsystems that are molded and enforced by governments, while the third component represents largely a private regulatory system enforced by market behaviour. We show how these three components interact with each other and with the domestic regulatory system within Canada to directly affect sustainable forest management (SFM). We examine how international agreements and processes have introduced environmental issues into domestic policy-making, and assess whether there has been any conflict between a the economic and environmental objectives of these agreements. We show that market access concerns have been and continue to be the primary drivers of changes in the regime even as rules designed to facilitate trade have been strengthened through limiting the discretion of countries to enact trade barriers. We conclude with some observations on what insights the Canadian experience offers to the larger debate about the impact of environmental outcomes on trade.

Economic theory has limitations when guiding normative decisions over long periods of time, but empirical estimates suggest that forest owners regularly make decisions based on short-term assessments that lead to long-term sustainability. Ciriacy-Wantrup’s 1952 definition of conservation — shifting resource use toward the future — is an interesting rule that leads from the short-term to the longterm. This rule is applied in a case study of America’s Forest Inventory and Analysis program using the Montr&’eal Process criteria and indicators. The results provide a basis for discussing how to deal with ambiguity in our understanding of the future and guiding policy analysis.

In spite of the intensive global dialogue about the spirit and substance of Sustainable Forest Management (SFM) during recent years, there is little agreement on the scope and definition of SFM among the different stakeholders. Criteria and Indicators, and Forest Certification processes have provided primacy for stakeholders, and they substantially influence the way the forest resources are managed, through their claims for benefits and related tactics. Most often they are competitors and their interests are in conflict, as a result they tend to view each others with suspicion and get involved in power struggles. Synergies are, however, developed in situations where there are no ‘better’ alternatives to cooperative action or where clear policy incentives foster and nurture development of such synergies. The understanding, and appreciation of SFM by stakeholders are conditioned by the extent to which their claims are satisfied; this decides the success or otherwise of SFM implementation. Asia presents a wide spectrum of forestry situations and stakeholder roles. This paper discusses four cases drawn from four different countries, to illustrate stakeholder influences, to identify relevant issues and to draw indicative lessons in SFM.

The four countries — India, Indonesia, Malaysia and Papua New Guinea (PNG) represent various stages in the forestry “development” scale. Their forest resource endowment and problems of management are considerably different. Based on historical background, their institutional frameworks also vary. Similarly, the four cases reviewed illustrate different management needs and focus. The Out-grower Farms of Clonal Trees of ITC Paperboard and Specialty Paper Division in India is a case of partnership between a large private sector corporation and farmers to establish pulpwood plantations in private farmlands. PT. Sari Bumi Kusuma in Indonesia is the case of a well-managed private logging concession, which has been in operation since 1978 and has recently been renewed for a further period of 70 years. Matang Mangrove Forest of Perak State, Malaysia is a case of integrated mangrove management for wood and non-wood products, with a 100 year history of SFM. Vanimo Forest Products Ltd in PNG is a 20 year non-renewable concession in a customarily owned forest, due to expire in 2010. These cases and the situation in the respective countries highlight that major constraint to SFM is not lack of technology, but the institutional factors, which militate against the application of the best available technology. These institutional factors appear in the form of short-term perceptions and time preferences of the investors and other stakeholders. Due to the long time horizon involved, technology-based models of SFM, often, face implementation problems, and plans are vitiated by intervening developments in political, economic and social arenas. To address such situations, long-term, policy-based commitment of the stakeholder community is crucial.

This Chapter synthesizes the contents of this volume, and provides an overview of a new paradigm of economics, to which I assign the term Post-Newtonian Economics. To put the synthesis in perspective, first some causes of the current status of Newtonian or neo-classical economics are discussed. Second, direct and indirect correspondences between the different concepts discussed in the thirteen Chapters, Chapters 2 to 14, of this volume and Kant’s basic principles of the economics of sustainable forest management are established. Finally, the basic differences between Newtonian and Post-Newtonian economics are discussed.