Role of Indian Forest Products Industry in Climate Change Mitigation: A Managerial Perspective

Abstract

Climate change is a global environmental problem that has been associated with increasing concentrations of greenhouse gases (GHGs). Forest products definitely play a significant role in mitigating the adverse effects of climate change, by increasing the level of carbon removals from the atmosphere. Different corporate governance systems impact the ability of industries to adopt and transform their activities to meet issues associated with climate change. Until recently, relatively little has been done, to measure the contribution made by forest-based industries to mitigate climate change. This paper focuses on outlining adaptive management strategies that enhance the ability of forests and their products to adapt to climate change and mitigate its effects through increased carbon sequestration and storage. Developing carbon credit markets that motivate true reductions in carbon emissions must address all carbon pools and their GHG emissions. To be effective in this area, the Indian management community must have a voice in defining the markets and policies, to the extent that it is of strategic interest to the future of the companies and the society. The Indian forest-based industry has a reasonable potential to sequester. However, domestic manufacturing is highly fragmented and unorganized, generally inefficiently managed, has low product quality, and lacks standardization. Nonetheless, there are various ways to positively influence the carbon balance; including sink enhancements and increasing the market share of the existing wood products. Globally, forest market is undergoing dramatic changes. The natural advantage in the forestry sector is gradually shifting away from countries with the highest levels of forest resources to countries where trees grow to commercial maturity at the fastest rate and where the cost of converting them into products is the lowest. It is thus obvious that many foreign companies view India as a country with a strong commercial appeal, both as an emerging market and as an economic partner in possible collaboration. These provide a unique link for dealing with climate change through the competitiveness of Indian forest industries and its livelihood impact. The paper advocates a greater use of wood products in all forms, substituting fossil-fuelbased products, thus mitigating carbon emissions. A policy that lowers the cost of wood, for example, could motivate manufacturers and consumers to select wood products. Many companies are facing increasing pressure by governments, shareholders, and other stakeholders to reduce their CO2 emissions. There is a need to develop a framework that conceptualizes a company's CO2 strategy as the focus on one or a combination of several strategic objectives. Companies are looking for improved communication and a clear regulatory policy from the government to provide certainty so that they know where to focus their emission-saving efforts. Improved perception of wood through a better knowledge of its environmental, sanitary, and health properties by creating a ‘wood culture,’ needs social advertising support in the form of CSR activities by Indian corporations.