ABSTRACT
This chapter examines economic analysis of climate change impacts in the forest sector. It begins with a discussion of the potential effects of climate change on ecosystem and then discusses how those impacts can be introduced into an economic model. One critical issue in economic modeling identified in the paper is that the way in which ecosystem impacts are introduced into the economic model could have important implications for the results. Thus, models that incorporate dieback directly will estimate different impacts than those that incorporate dieback through changes in growth and yield. Given the importance of potential dieback in climate change impacts, this difference in modeling can have implications for measuring climate change adaptation and damages. To illustrate how these modeling choices can affect results, the chapter presents a simple numerical example of climate change impacts. The study then presents a literature review discussing the results of climate change impact studies to date. It concludes with a discussion about potential research topics that could and should be addressed with future research.
