John Perez-Garcia

Impacts of Climate Change on the Global Forest Sector

The path and magnitude of future anthropogenic emissions of carbon dioxide will likely influence changes in climate that may impact the global forest sector. These responses in the global forest sector may have implications for international efforts to stabilize the atmospheric concentration of carbon dioxide. This study takes a step toward including the role of global forest sector in integrated assessments of the global carbon cycle by linking global models of climate dynamics, ecosystem processes and forest economics to assess the potential responses of the global forest sector to different levels of greenhouse gas emissions. We utilize three climate scenarios and two economic scenarios to represent a range of greenhouse gas emissions and economic behavior. At the end of the analysis period (2040), the potential responses in regional forest growing stock simulated by the global ecosystem model range from decreases and increases for the low emissions climate scenario to increases in all regions for the high emissions climate scenario. The changes in vegetation are used to adjust timber supply in the softwood and hardwood sectors of the economic model. In general, the global changes in welfare are positive, but small across all scenarios. At the regional level, the changes in welfare can be large and either negative or positive. Markets and trade in forest products play important roles in whether a region realizes any gains associated with climate change. In general, regions with the lowest wood fiber production cost are able to expand harvests. Trade in forest products leads to lower prices elsewhere. The low-cost regions expand market shares and force higher-cost regions to decrease their harvests. Trade produces different economic gains and losses across the globe even though, globally, economic welfare increases. The results of this study indicate that assumptions within alternative climate scenarios and about trade in forest products are important factors that strongly influence the effects of climate change on the global forest sector.

Temporal uncertainties of integrated ecological/economic assessments at the global and regional scales

Abstract Over the past several years, research using the Center for International Trade in Forest Products (CINTRAFOR) Global Trade Model (CGTM) and the Terrestrial Ecosystem Model (TEM) has estimated the potential effects of climate change on the global forest sector. The process of linking these two models—many model runs with alternative economic, ecological and climate scenarios—provides useful information on (i) the behavior of the economic model under alternative assumptions, (ii) integrated economic/ecological results and (iii) their implication for decision makers. Previous works indicate that assumptions on economic behavior and ecology interactions are important when estimating the economic effects of climate change on the forest sector. This paper estimates the economic effects associated with alternative transient paths of change in climate and CO 2 on the forest sector. The results indicate economic welfare measures change significantly under two alternative assumptions of the path that changes in climate and CO 2 may take. An assumption of a pseudo-transient constant rate of change to reach an equilibrium endpoint produces larger global welfare changes over the time period than a “true” transient change in climate by an average US

China's role in the global forest sector: how will the US recovery and a diminished Chinese demand influence global wood markets?

2 billion over the period 1994–2040. In addition, regional and market segment impacts are not uniformly distributed and should also be considered when programmatic needs are identified.

Valuing forestlands with stochastic timber and carbon prices

Over the last decade, while the size of Chinas economy more than doubled, China has simultaneously become a major producer and exporter of forest products. Although Chinas domestic supply of wood is significantly constrained both by a limited natural supply and by conservation-oriented policies, the country is increasingly regarded as the worlds “wood workshop.” Furthermore, China is the largest driver of demand for the trade in tropical logs and is becoming a significant driver of demand for trade in coniferous logs. In this paper, we describe a spatial equilibrium model adapted to study forest sector markets and policies that affect them. We present the model and the result of two alternative future scenarios. The first scenario analyzes the impact on global forest products markets of a US recovery in wood markets. The second scenario examines the effect on global forest products markets of decelerating growth in Chinese demand for wood products. Through these two scenarios, the modeling output sheds light on the role Chinas wood products markets have on resource supply and trade around the world. The trade model shows substantial potential changes in global prices, production, and trade activity associated with the recovery in domestic demand in the USA.

An Assessment of Carbon Pools, Storage, and Wood Products Market Substitution Using Life-Cycle Analysis Results

We calculate expected bare land values, assuming forestry is the highest and best land use, using a real options methodology with stochastic mean-reverting timber and carbon prices. Land values relect the contribution of both timber as well as carbon stored in three separate pools—the forest, harvested wood products, and emissions avoided by using wood versus carbon-intensive substitute materials. Land values reflect one of three sequestration scenarios that vary the percentages of carbon sequestered in the three pools relative to the carbon sequestered in the forest just prior to the harvest activity. At harvest time, the value of the carbon sequestered in the three pools determines if the forest owner retains income gained from the sale of carbon credits, or must purchase credits to offset emissions associated with the harvest activity. A case study involving a hypothetical western Washington Douglas-fir stand suggests that carbon sequestration may be a significant income contribution for forest owners if the three carbon pools are recognized as credible offsets. However, the income contribution is sensitive to the amount of credit realized for carbon sequestered in each of the pools. The analysis demonstrates the significance of including carbon sequestered in the three separate pools when designing carbon offset policies.