Environmental impacts include the loss or degradation of forests, as illegal logging tends to be associated with poor forest management. This can result in the loss of habitats and biodiversity. For example, illegal logging is threatening the survival of some of the world’s most endangered primates (Mittermeier et al., 2012), including orang-utans in Indonesia (UNEP, 2011) and the Siberian tiger (EIA, 2014). Deforestation and forest degradation also has implications for climate change, as forests have a crucial role in both mitigating against and adapting to climate change. Illegal logging in nine forest producer countries is estimated to have released 190 million tonnes of carbon dioxide into the atmosphere in 2013 (Chatham House, 2015).
Illegal logging can result in the loss of government revenue. Such losses can be significant; it has been estimated that the Indonesian government lost US$7 billion between 2007 and 2011 due to illegal logging and forest sector mismanagement (Human Rights Watch, 2013), while in Mozambique, over US20 million were lost to state revenues in 2012 from unpaid taxes on exports to China (EIA, 2013). Loss of revenue undermines efforts to place the forest sector on a more sustainable footing, as lost revenue cannot be reinvested in the sector. Furthermore, because illegal logging is often unsustainable, future sources of employment and export revenues are not realised.
Illegal logging also distorts global markets and undermines incentives for sustainable forest management, as illegal timber is often cheaper than legal timber. A study published in 2004 estimated that illegal products were depressing world prices by between 7% and 16% (Seneca Creek Associates and Wood Resources International, 2004).
The social impacts of illegal logging are diverse. Illegal logging undermines the rule of law and is often associated with corruption (Goncalves et al., 2012; Transparency International, 2009). It may also entail a lack of recognition of the land and resource use rights of forest communities, or of the rights of other concession-holders. This can have negative impacts on the livelihoods of local people and result in conflict. The revenues from illegal logging may also fund national and regional conflicts, as has been the case in Liberia (Global Witness, 2011) and the Democratic Republic of the Congo (UNEP, 2011).