Sir Nicholas Stern’s report, compiled for the UK government, says curbing deforestation is a highly effective way of reducing greenhouse gas emissions and urged international collective action on the issue.

Chancellor Gordon Brown has responded by promising new trade links with Brazil, Papua New Guinea and Costa Rica to ensure sustainable forestry.

“Environmental issues are the number one priority for the UK wood industry,” said TTF chief executive John White. “The Stern Review just shows how important the world is going to treat forestry and sustainable forest management.”

Mr White said Sir Nicholas had understood the fundamental issues surrounding deforestation, such as land tenure and economic incentives to ensure people do not slash and burn forests.

The Stern Review says international compensation should be provided to enforce forest protection, pay for the costs of alternative uses of land and administration. Sir Nicholas estimates forest protection in the eight countries responsible for 70% of carbon emissions from land use could cost around US$5bn annually.

Mr White said purchasing certified timber would help reduce carbon emissions.