The global financial crisis and the collapse of the housing sector are a big blow for wood industries, but this is not necessarily good news for the world's forests, a new U.N. report said on Monday as the first World Forest Week was marked at the Food and Agriculture Organization, or FAO, in Rome.

A worker prepares bags of charcoal in a rain forest in Madagascar, 90 percent of which was destroyed after decades of logging (2006 file photo)

The United Nations report on the state of the world's forests said 7.3 million hectares of forests have been lost every year between 2000 and 2005.  The report, which is issued every two years, added that the global economic turmoil has resulted in reduced demand for wood, shrinking investments in forest industries and forest management.

It also warned that governments could decide to abandon green policies as they focus on turning around their economies.  The report said initiatives such as those for reducing carbon dioxide emissions and forestation could face problems.

Heads of forest services and other senior government officials are gathered this week at FAO headquarters in Rome.  The Committee on Forestry is focusing discussions on the importance of forests for sustainable development in the hope of reaching a new global agreement on climate change.

The U.N. Special Envoy on Climate Change, Gro Harlem Brundtland addressed the committee this week and warned that global emissions of greenhouse gases must be cut by more than half by 2050 or there will be a climate crisis.

Brundtland said close to 18 percent of global CO2 emissions stem from deforestation and forest degradation in developing countries.  This, she added, is comparable to the total annual carbon dioxide emissions of the United States and China.

She said that while forests were left out of the Kyoto Protocol, they must find their place within the broader solution to the climate challenge.

"If we don't succeed in getting forestry into the equation, we will really not have done what is necessary for a new forward-looking climate agreement in Copenhagen in December," she said.

Brundtland said sustainable forest management is of key importance because 1.6 billion people - 20 percent of the world's population - depend on forest resources for their livelihoods.
 
The FAO report said stronger forest management and greater investment in science and technology is needed to handle the dual challenges posed by the financial crisis and climate change.
 
Leading environmental groups have called on world governments to end deforestation and forest degradation.  They said deforestation rates continue to be shockingly high and urged the FAO Committee on Forestry to stop promoting plantations.  They also are calling on governments to immediately end the conversion of forests into biofuel plantations in their countries.