Each year demand for wood exceeds supply, increasing the pressure to clear areas not previously harvested. One effect of deforestation has been the increase in CO² emissions in the atmosphere, contributing to global warming and impinging upon government policy and action. In developing countries where standards of forest management are lower than those in the developed world, the law of supply and demand has been even more detrimental to the environment. Those in favour of tree cloning argue that it could provide a solution to the problem and benefit the environment. This case by Gabriel Salazar, a graduate student at the University of California at San Diego, under the supervision of Professor Philip M. Parker, the Eli Lilly Chaired Professor of Innovation, Business and Society at INSEAD, examines and debates these important issues.
One company, CellFor, has taken tree growing to the next level using Somatic Embryogenesis (SE) whereby an embryo is split into two or more cloned embryos which are then grown into genetically identical trees. CellFor stores the clones which are planted when timber companies need seedlings. This gives rise to 'high yield plantation' forestry. Seeds cloned from superior trees are pitched to customers as a product that increases yields while using less land. The seeds themselves do not require governmental or NGO approval since they are not genetically modified thus allowing CellFor to circumvent regulatory issues and much of the cost involved.
Proponents suggest that the commercialization of this biotechnology will help increase the long-term profits of the $750 billion-a-year forestry industry, slow the rate of deforestation occurring in developing countries, encourage better management of forest resources and help alleviate the problem of global warming. Yet commercial tree cloning is still in its infancy, the price of cloned seeds is higher than natural seeds, environmental impacts are as yet unknown and the world economy is in a recession.
The question of greatest concern to the timber industry and to CellFor is: Will commercially cloned trees comply with existing forest management and certification rules? What role will forest management play in the forest industry? Moreover, what questions will be raised by governments and supra-national bodies, in particular what will be their role in authorizing cloned seeds to be used in the forest industry at the domestic level? Society in general and the rural poor in particular are also beginning to raise questions about the impact of faster re-growth rates on their daily lives and the implications for sustainable development.
This case aims to provide a succinct overview of current developments in this rapidly developing industry sector. Including a historical industry perspective, comment on potential product development and current industry forecasts, the case raises many questions for students to consider and resolve.