Economic Impacts of Climatic Change on the Global Forest Sector: An Integrated Ecological/Economic Assessment

WithJohn Perez-Garcia, Linda A. Joyce, C.S. Binkley, A. D. McGuire

Increased atmospheric concentrations of CO2 and any associated climatic changes will affect many aspects of forests, including net primary productivity. Operating through normal timber-supply mechanisms, changes in forest growth will affect forest products markets—production, consumption, prices and trade—throughout the world. These impacts are simulated by linking the climatic change scenarios from the four commonly used general circulation models (GCMs) of climate with a model of global vegetation response (the Terrestrial Ecosystem Model) and a model of global forest products trade (the University of Washington Cintrafor Global Trade Model). The four GCMs produce surprisingly consistent economic results, with expanding net primary productivity of the world’s forests generally hurting timber producing regions and benefiting consumers. The overall net economic impact is positive, with the net present value (computed with a 4% real discount rate) of the benefits to the forest sector ranging from $US1980 10.7 billion to 15.9, depending on the choice of GCM and economic scenario. Uncertainty in the economic models appears to be at least as great as the uncertainty in the GCMs.