Darius M. Adams

Assessing effects of mitigation strategies for global climate change with an intertemporal model of the U.S. forest and agriculture sectors

A model of product and land markets in U.S. forest and agricultural sectors is used to examine the private forest management, land use, and market implications of carbon sequestration policies implemented in a “least social cost” fashion. Results suggest: policy-induced land use changes may generate compensating land use shifts through markets; land use shifts to meet policy targets need not be permanent; implementation of land use and management changes in a smooth or regular fashion over time may not be optimal; and primary forms of adjustment to meet carbon policy targets involve shifting of land from agriculture to forest and more intensive forest management in combinations varying with the policy target.

Assessing socioeconomic impacts of climate change on US forests, wood-product markets, and forest recreation

S cientists have suggested that future climate change wil l s ignif icant ly affect the dis tr ibut ion, condit ion, species composit ion, and productivi ty of forests (Aber et al. 2001, Dale et al. 2001, Hansen et al. 2001, McNulty and Aber 2001). These biological changes wil l set in motion complex regional changes in supplies of wood to sawmills and paper mills, producing effects on market prices. In turn, landowners and consumers will adapt in ways that cause further feedback effects on forests. For some time, social scient is ts have been assessing the manifold implicat ions for social and economic welfare. In particular, they have been examining ways in which price responses to changing supplies cause timber growers, sawmills and pulpmills , producers, and consumers to adapt. This paper reviews this research, focusing on the forest benefits of t imber production and outdoor recreat ion. Analyzing these sectors involves quite different methods and issues because wood products are primarily producer goods that reach consumers through a complex marketing chain, whereas forest-recreation experiences are directly consumed by visitors. As part of the national assessment of climate change, a socioeconomic team (the authors of this art icle) assembled exist ing data and conducted l imited new analyses. In this short summary, many important topics must be left aside. THE EFFECTS OF CLIMATE CHANGE ON

Competitiveness of biomass‐fueled electrical power plants

One way countries like the United States can comply with suggested rollbacks in greenhouse gas emissions is by employing power plants fueled with biomass. We examine the competitiveness of biomass‐based fuel for electrical power as opposed to coal using a mathematical programming structure. We consider fueling power plants from milling residues, whole trees, logging residues, switch grass, or short‐rotation woody crops. We do this using a combined model of the agricultural and forestry sectors. We find that the competitiveness of biomass depends in a key way upon the success of research in developing improved production methods for short‐rotation woody crops without great increases in costs.

Projecting impacts of global climate change on the US forest and agriculture sectors and carbon budgets

Abstract A multiperiod, regional, mathematical programming model is used to evaluate the potential economic impacts of global climatic change scenarios on the US forest and agricultural sectors, including impacts on forest carbon inventories. Four scenarios of the biological response of forests to climate change (reflected by changes in forest growth rates) are drawn from a national assessment of climate change and are based on combinations of global circulation and ecological process models. These scenarios are simulated in tile the forest and agricultural sector model and results are summarized to characterize broad impacts of climate change on the sectors. We find that less cropland is projected to be converted to forests, forest inventories generally increase, and that aggregate economic impacts (across all consumers and producers in the sector) are relatively small. Producers’ income is most at risk, and impacts of global climate change on the two sectors vary over the 100-year projection period. The forest sector is found to have adjustment mechanisms that mitigate climate change impacts, including interregional migration of production, substitution in consumption, and altered stand management.

The 2005 RPA timber assessment update.

This update reports changes in the Nations timber resource since the Analysis of the Timber Situation in the United States was completed in 2003. Prospective trends in demands for and supplies of timber, and the factors that affect these trends are examined. These trends include changes in the U.S. economy, increased salvage of British Columbia beetle-killed timber, and a stronger U.S. dollar. Other prospective trends that might alter the future timber situation are discussed including changes in U.S. timberland area, reductions in southern pine plantation establishment, impacts of climate change on forest productivity, increased restoration thinning on Western public lands, and the impact of programs to increase carbon sequestration through afforestation. Various management implications such as the influence of prices on forest management, concerns about changes in forest area, the emerging open space issue, forests as a set of commons, seeking to find greater compatibility in forest management, and the stewardship agenda are discussed.

Private Investment in Forest Management and the Long-Term Supply of Timber

Timber supply behavior of private forest owners is a major uncertainty in long-term forest product market projections. A model of private supply is developed that explains both harvest and forest management investment decisions. Comparison of two fifty-year projections, one assuming constant management intensity and a second using the harvest-investment model, indicates that projected levels of investment would (a) have little impact on markets prior to the year 2000, (b) stabilize real wood product prices after 2000, (c) eliminate softwood lumber imports by 2030, and (d) expand the dominant role of southern forest regions in wood product markets.

Private forest investment and long-run sustainable harvest volumes

Private timberlands in the United States have the biological potential to provide larger quantities of timber on a sustainable basis than they do today. Most opportunities for increasing growth and harvest lie on nonindustrial private lands in the South. Past studies, based on fixed scenarios of future prices, also suggest that many of these opportunities for intensified management can be undertaken with positive economic returns. Translation of these physical and apparent economic potentials into projections of future management and harvest requires a model of private timber management investment behavior. This study examines the dynamics of investment in private forest management according to a model of timber markets and timber supply in which intertemporal levels of private investment, harvest, and timber prices are all endogenous. The results of this model are used to examine the extent and types of possible future private management investments and how these will affect timber supply. In addition, the sensitivity of these projections to variations in key market and behavioral determinants is examined through simulation of alternative scenarios involving reduced public timber harvest and constraints on planting investment of nonindustrial private owners.The base case illustrates the substantial potential of timberlands for increased growth and harvest. This requires, however, investments in planting well beyond those observed in recent years. Given this, the area in planted forests would almost triple within the next 30 years. Expanded investment would allow immediate increases in timber harvest and sustained increases in timber inventory, with virtually no trend in softwood log prices. Projected increases in plantation area would concentrate timber production on fewer hectares, with more hectares managed passively. Naturally regenerated forests in the future would cover at least three-quarters of the private timberland area, with hardwoods continuing to dominate. Restricting nonindustrial private plantation investment to levels observed in the recent past markedly alters projections for softwoods, thus raising prices and reducing timber harvest relative to the base case across the full projection period. In contrast, reductions in public timber harvest alone result in increased prices and reduced total cut in the near term, but have limited impact on the outlook three-five decades hence, because private investment effectively compensates for public timber harvest reductions.

The Cost of Achieving Old-Growth Forest Structure

Dwindling area of old-growth forest is of concern in many regions of the world. Forest reserves provide one solution. But highly productive timberlands are typically excluded from reserves due to cost. In this study, old-growth forest is defined by structural attributes believed to be important for old-growth-dependent wildlife species. Management practices are allowed that accelerate the development of these attributes while permitting timber harvest. A minimum area of old-growth forest is protected at any time, but the spatial location of old-growth can shift over time. We demonstrate our approach using a case study on private land in western Oregon. (JEL Q23)

Economic Dimensions of Climate Change Impacts on Southern Forests

Global climate change is apt to impact forests and forestry in the United States. Regions in the United States may be differentially affected. Forecasts of climatic change and of the biological response to climate change in trees and forests, however, are still largely hypothetical. Though much research is being done on aspects of climate change and biological response, conclusions are still preliminary.

Data envelopment analysis of technical efficiency and productivity growth in the US Pacific Northwest sawmill industry

This paper uses data envelopment analysis (DEA) to characterize the changing production frontier (technical efficiency, productivity growth, technical and efficiency change, and returns to scale) of the sawmilling industry in the Pacific Northwest (PNW) US using geographical panel data for the period 1968–2002. Unlike past DEA studies, we develop confidence intervals for all estimates using an improved bootstrapping method. The results indicate that the gap between the least and most efficient regions in PNW has grown and the least efficient regions are falling further behind the most efficient regions. For the Oregon regions, the null hypothesis of constant returns to scale (CRS) could not be rejected for any year. For the Washington regions, returns to scale varied year by year, although only two of the five regions showed strong tendencies away from CRS. For PNW as a whole, mean productivity growth was 0.5% per year between 1968 and 1992. Between 1992 and 2002, the regional mean was 1.3%, although with...