Climate and forests are intrinsically linked. As a result of climate change, forests are stressed through higher mean annual temperatures, altered precipitation patterns and more frequent and extreme weather events. At the same time, forests play a dual role in climate change. Forests mitigate climate change through uptake of carbon and, when sustainably produced, wood-based biofuels to replace fossil fuels. Land-use conversion and forest degradation, however, cause carbon emissions that contribute to climate change.
Forests remove carbon from the atmosphere (carbon sequestration) and store it as the biomass (wood and peat) that they produce and accumulate (Figure 7). Some carbon also remains stored in wood products through their lifetime, though this varies significantly between product types (on average, solid wood products last longer than paper-based products). The amount of carbon stored in products is estimated to be increasing by about 540 million tons of CO2 per year (NCASI, 2007). Carbon in both forests and products is released back to the atmosphere either through decomposition (slowly), or burning (quickly). Establishing new forests on open land and replanting formerly forested areas can store additional carbon.
Wood-based biofuels recycle to the atmosphere carbon captured through tree growth. Burning wood-based biofuels results in no net effect on atmospheric CO2. Compared to fossil fuels, which transfer carbon from geologic reserves into the atmosphere, wood-based biomass fuels are considered “carbon neutral” when the forests from which the fuels were taken remain as forested areas. There is increasing interest in the use of biomass fuels from forests; however, if carried to the extreme, demand for wood-based fuels could result in negative effects:
Wood-based fuels can substitute for fossil fuels; and when they do, they reduce the amount of carbon that reaches the atmosphere as long as the areas from where they originate remain forested or trees are planted elsewhere to compensate. There has been an increasing interest in using biofuels from the forest to reduce fossil emissions, especially from the transportation sector.

When forests are logged, destroyed or burned at a faster rate than they grow back, they contribute to climate change. In a sustainably managed forest, logging is balanced by re-growth, but when forest land is converted to other uses there can be a significant net contribution to greenhouse gas emissions (Figure 8). An estimated 24% of global carbon dioxide emissions are attributable to landuse changes and forestry activities (Baumert et al., 2005).
Clearing of forests for agriculture is the leading cause of deforestation. In Africa this is typically small-scale subsistence farming, while in South America it is large scale cattle ranching and agricultural production. In Asia the production of palm oil, coffee and timber are the primary drivers of land-use change. Deforestation generally does not occur in northern forests, apart from forest loss due to urban sprawl.
Logging of tropical hardwoods can sometimes be the critical first step causing the deforestation process by providing other users with access roads. However, deforestation is generally not driven by the demand for forest products. Logging, if carried out under a sustainable forest management regime, does not contribute to deforestation.
Sustainably managed forests are approximately carbon neutral. They form a mosaic across the landscape in which the growth of trees over a large area will compensate for the carbon lost through annual logging of a much smaller area. On the other hand, a forest landscape subjected to land-use change or over-harvesting will release more carbon than it takes up. The rate of recapture of atmospheric carbon depends on several factors:

Compared with other products, those produced from sustainably managed forests generally are considered carbon neutral, because the wood contains recycled carbon, i.e., carbon that was taken from the atmosphere (rather than from fossil deposits in the ground). The bottom line is to have more carbon stored and less removal (that will capture more carbon), not less storage and more removals.
When the full supply-chain impacts of wood products are measured, significant sources of carbon dioxide can be identified similar to those associated with production of competing products. Emission sources associated with forest products include: