The global market for wood and other forest products is changing quickly. The industry long has struggled to address the problem of illegal logging, which damages diverse and valuable forests and creates economic losses of up to $10 billion a year. In some wood-producing countries, illegal logging accounts for 50-90 percent of total production.

But recent developments indicate that we may be turning a corner: Illegal logging rates worldwide have declined by about 20 percent since 2008.

This topic was on everyone’s minds at the recent Forest Legality Alliance meeting in May in Washington, D.C. This meeting brought together nearly 100 members and experts representing a wide array of companies, trade associations, NGOs and governments involved in the harvest, manufacturing and trade of legally produced forest products.

Three major themes came up in our conversations, indicating that a shift may be happening in the global forest trade:

1. Legality requirements are now mainstream

The 2008 amendments to the U.S. Lacey Act constituted the first ban on trading illegally sourced wood products. In the last six months, two major economies have begun to implement their own similar requirements. Australia’s Illegal Logging Prohibition Act (ILPA) was passed in November, while the European Union Timber Regulation (EUTR) -- first published in 2010 -- entered into force March 3 in the 27 EU member states. Together, these three laws send a strong market signal that major consumers of wood products require legal production and trade. Other major importing economies, including China and Japan, are also considering stronger measures to promote the use of only legally harvested materials.

2. Proactive companies are taking control of their supply chains

Bob Taylor, founder of Taylor Guitars, and Luisa Willshir of Madinter, a Madrid-based distributor of tonewoods for musical instruments, both shared their experiences at the meeting. Taylor and Madinter embarked on a joint venture in late 2011 to buy Crelicam, an ebony mill near Yaoundé in Cameroon. Bob discussed Crelicam’s new business policies -- which included immediately ceasing bribe-paying, doubling workers’ salaries, complying with U.S. labor laws in Cameroon, and changing the way ebony is marketed, sold and used in guitars.

Instead of using only the traditional jet-black ebony, which is relatively rare, Taylor Guitars has begun to use the much more abundant variegated ebony. This move promotes sustainability of the resource while giving Taylor much more confidence in the legality of its supply. Other companies may be beginning to follow suit.

3. Cities are taking action

International trade mechanisms to require legality -- such as the Lacey Act, the EUTR and the Australian ILPA -- do not yet apply to domestic trade. Much of the harvest in forested countries is used in domestic wood sectors including construction, pulp and paper, and flooring. The Brazilian state of São Paulo, for example, uses far more wood from the Brazilian Amazon than the United States does.

In order to address the issue of illegal logging in the region, São Paulo runs a procurement program called “São Paulo, Friend of the Amazon” that requires legally produced timber. Other large cities in Latin America, including Mexico City and Bogotá, Colombia, are expressing interest in adapting similar public procurement policies. As megacities and an environmentally conscious middle class emerge around the world, this could be an exciting way to address illegal logging that cannot be tackled by international trade requirements.

Despite the progress made, illegal logging remains a major problem. While the growing support for legally sourced hardwoods is encouraging, it’s important that more cities, countries and companies join the global leaders that already have emerged. Their involvement can help ensure a better future for the world’s forests and people.

For more information, including tools to help companies address new legality requirements, visit the Forest Legality Alliance website.

This article originally appeared at the World Resources Institute's WRI Insights site and is reprinted with permission.

Image credit: CC license by GollyGforce/Flickr