The Regional Impacts of Climate Change

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8.3.5. Food and Fiber: Production Forestry

Timber is one of the most valuable agricultural crops produced in North America. The forest products sector in the United States employs some 1.5 million people (1990) nationwide and adds approximately $80 billion to the GDP. Forest products are especially important to the economies of the Pacific NorthWest and the southern United States. Two-thirds of U.S. forestlands (195 million ha) are considered productive enough to potentially support timber management and accessible to harvest. Less than one-third of U.S. timberlands are publically owned; approximately 15% is owned by the timber industry, and 57% is held by other private landowners. Timberland ownership differs greatly by region, with western forests largely on public lands and eastern forests largely in private ownership (OTA, 1993).

In Canada, direct employment in 1996 for the forest sector was 363,000; the sector contributed $16.177 billion to Canada's GDP. In terms of contribution to GDP, the sector is important to British Columbia, Quebec, and New Brunswick. Thirty-five percent of Canadian forestland is considered productive and accessible enough for harvest, though there may be some constraints on harvesting. Ownership is 71% provincial, 23% federal (including territorial land), and 6% private.

See section 8.3.2 for a detailed discussion of the impacts of climate change on forest ecosystems.

Consumers and producers could gain or lose, and the long-term stability of the forest-products market could be jeopardized.

Enhanced forest growth scenarios and extensive forest dieback scenarios have been analyzed with respect to market processes. Under the most severe ecological scenarios-where forest dieback occurs relatively early and there are long-term reductions in timber inventories and harvest-consumer prices would increase; producers would benefit from higher prices, but overall benefits to society would decrease. Under scenarios of more moderate dieback or forest expansion, consumers could benefit from lower prices; producers might benefit or lose, depending on local forest responses to dieback, local demand, and access to national and international markets. Alternative management practices must be carefully considered if benefits are to be gained under moderate forest dieback scenarios. However, the long-term sustainability of forests and any benefits could vary considerably under different scenarios.

Analyses of the economic consequences of climate change have been based on a number of quite different ecological assessments and a variety of economic models, but all are based on the equilibrium FAR scenarios or on sensitivity analyses. One study coupled the FASOM forest sector model-incorporating flexible pricing and forest management-to output from forest gap models over the conterminous United States (Callaway et al., 1995; Adams et al., 1996). The results, with severe forest dieback, indicated consumer price increases of 100-250%, with economic losses of 4-20% of the net value of commercial forests.

A study by Van Kooten and Arthur (1989) concluded that forest productivity could tend to increase in Canada but could increase or decrease in the United States. Consumer prices could decrease (largely as a consequence of increases in Canadian forest growth and harvest). Producers could sustain economic losses, but with exports from Canada to the United States, net changes (consumers plus producers) could be negative for Canadians and positive for the U.S. market.

Timber growth in the conterminous United States in one study generally increased over a 50-year projection period, pushing prices down by 6-35% (Joyce et al., 1995). A study using a global trade model produced similar results, with general increases in global forest productivity (Perez-Garcia et al., 1997).

A study using a different forest-sector model in the United States incorporated management strategies that optimized pre- and post-dieback forest management practices (Sohngen and Mendelsohn, 1997). The value of the market (consumer plus producer surpluses) could increase by 1-11% under scenarios of either enhanced forest growth or moderate forest dieback. The increased flow of green or salvage trees into the market depressed prices, but overall losses to producers were minimized by shifting biomes or altered yield functions. Economically optimal management strategies (such as thinning, salvage logging, and species transplanting), however, might be restricted by social and ecological constraints.

The most intensively managed industry and private forestlands may be least at risk of long-term decline resulting from the impacts of climate change because the relatively high value of these resources is likely to encourage adaptive management strategies (OTA, 1993).

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