Impact of climate change on timber markets and global
carbon sequestration
Brent SohngenDepartment of Agricultural, Environmental &
Development Economics,University Fellow, [email protected]
Outline of Presentation
• Methods for assessment
• Results for markets
• Implications for carbon
• Implications for sequestration policyThanks to: US EPA Climate Change Division; US DOE; Fulbright Foundation; Ohio Agricultural Research and Development Center; Ohio State University Climate Water and Carbon Initiative
How are impacts measured?
Adaptation of Forests and People to Climate Change. 2009. Alexander Buck, Pia Katila and Risto Seppälä. (eds.). IUFRO World Series Volume 22. Helsinki. 224 p.
Ecosystem Impacts• Productivity changes (IPCC, 2007)
– CO2 fertilization (e.g., Norby et al., 2006).– Warming in colder climates.– Precipitation gains where water is limited.
• Some current evidence that historical climate change and CO2 change have increased productivity to date (e.g., Myneni et al., 1997; Boisvenue and Running, 2006; McMahon et al., 2010).
• Potential limits to productivity gains: Net impacts– Species composition, age structure, seasonal and daily
precipitation and temperature patterns, etc.– Drying and forest fire effects
Ecosystems only…• Losses ultimately weigh down gains: Ecosystems turn from
carbon sink to source within the next several decades, due to fire and other disturbance
IPCC (2007) WG 2, Chapter 4, Figure 4.2
EmissionGlobal
US
Bachelet et al. (2008)
Need to integrate…
Adaptation of Forests and People to Climate Change. 2009. Alexander Buck, Pia Katila and Risto Seppälä. (eds.). IUFRO World Series Volume 22. Helsinki. 224 p.
Summary: Timber market results to date
Region Output Producer Returns2000–2050 2050–2100
North America -4% to +10% +12 to +16% DecreasesEurope -4% to +5% +2 to +13% DecreasesRussia +2 to +6% +7 to +18% DecreasesSouth America +10 to +20% +20 to +50% IncreasesAus./New Zealand -3 to +12% -10 to +30% Decr. & Incr.Africa +5 to +14% +17 to +31% IncreasesChina +10 to +11% +26 to +29% IncreasesSE Asia +4 to +10% +14 to +30% Increases
Alig et al. (2002), Irland et al. (2001), Joyce et al. (1995, 2001), Perez-Garcia et al. (1997, 2002), Sohngen et al. (2001), Sohngen and Mendelsohn (1998, 1999), Sohngen and Sedjo (2005); 2 Karjalainen et al. (2003), Nabuurs et al. (2002), Perez-Garcia et al. (2002), Sohngen et al. (2001) ; Lelyakin et al. (1997),
Adaptation of Forests and People to Climate Change. 2009. Alexander Buck, Pia Katila and Risto Seppälä. (eds.). IUFRO World Series Volume 22. Helsinki. 224 p.
Updated Analysis
• Climate Change: • A2, A1b scenarios• CSIRO, Hadley, MIROC models
• Ecological Analysis: DGVM• MC1 model (MAPPS and Century Model)
• Economic Analysis:• Global Land Use Model (Sohngen and
Mendelsohn, 2007)
Approach to Economic Analysis
• Ecosystem Model (DGVM) provides information on Shift in range for timber species Natural disturbance losses (% stock burned) Net primary productivity, net ecosystem productivity, and
net biological productivity
• Data provided by DGVM 0.5 degree grid cells for globe. Annually to 2100.
Assess two scenarios
• Scenario 1: – Use changes in total ecosystem carbon to perturb forest
yields. – Allow ecosystems to expand proportionally if type is
expanding. Contract if type is contracting.
• Scenario 2: – Use changes in NPP to perturb forest yields– Incorporate proportion burned as a direct loss of stock.– Allow ecosystems to expand proportionally if type is
expanding. Contract if type is contracting.
Adaptations Incorporated• Manage existing stock by
– changing rotations– Salvage
• Replant new species if growing and economic conditions warrant
• Manage future stock by – Changing rotations– Changing management & investments
0
20
40
60
80
100
120
140
160
180
200
$/m
3
HADA2
HADA1B
MIROCA1B
Base
CSIROA2
CSIROA1B
MIROCA2
0
20
40
60
80
100
120
140
160
180
200
2005 2025 2045 2065 2085 2105
$/m
3
Base
CSIROA2
HADA2
MIROCA2
CSIROA1B
HADA1B
MIROCA1B
Results: Prices
• Price range = -2% to +3%
• Hadley mostly higher;• Miroc mostly lower
• Price range = -7% to +2%
• Hadley & Miroc have mostly lower prices (7% max)
Scenario 1 Scenario 2
Effect of Adaptation on Forest Carbon and Forest Area
• Ecological Scenario • Ecology + Economics
80
85
90
95
100
105
110
115
120
2005 2025 2045 2065 2085
Inde
x (20
05 =
100
)
CSIROA1B
CSIROA2
MIROCA2
MIROCA1B
HADLEYA1B
HADLEYA2
80
90
100
110
120
130
140
150
160
170
180
2005 2025 2045 2065 2085
Inde
x (20
05 =
100
)
MIROCA2
CSIROA2
MIROCA1B
HADLEYA2
CSIROA1B
HADLEYA1B
80
85
90
95
100
105
110
115
120
2005 2025 2045 2065 2085
Inde
x (20
05 =
100
)
MIROCA2
HADLEYA2
MIROCA1B
CSIROA2
HADLEYA1B
CSIROA1B
80
90
100
110
120
130
140
150
160
170
180
2005 2025 2045 2065 2085
Inde
x (20
05 =
100
)
MIROCA2
HADLEYA2
MIROCA1B
CSIROA2
HADLEYA1B
CSIROA1B
Total Carbon Total Carbon
Forest Area Forest Area
Management enhances the carbon on hectares in forest.
Tons C/ha, Hadley A1B Scenario Average Carbon Change(2000-2100)
Ecological:A1B: -23.3 TgC/yrA2: -78.1 TgC/yr
Economic:A1B: 38.6 TgC/yrA2: 246.0 TgC/yr
0
10
20
30
40
50
60
70
80
90
2005 2015 2025 2035 2045 2055 2065 2075 2085 2095
tons
C p
er h
ecta
re
HADLEYA1B Ecology
HADLEYA1B Economic/Yield Only
HADLEYA1B Economic/Dieback
Output rises in tropics
80
85
90
95
100
105
110
115
120
2005 2025 2045 2065 2085 2105
Inde
x (ba
selin
e =
100)
Temperate Output Changes (Scenario 2)
MIROCA2
HADLEYA1B
HADLEYA2
CSIROA2
CSIROA1B
MIROCA1B
80
90
100
110
120
130
140
2005 2025 2045 2065 2085 2105
Inde
x (ba
selin
e =
100)
Tropical Output Changes (Scenario 2)
MIROCA2
HADLEYA1B
HADLEYA2
CSIROA2
CSIROA1B
MIROCA1B
Effect on Carbon Sequestration Costs?
• Lowers costs, particularly in near-term• Over the longer run, the extent of the gain
depends on the scenario– Scenario 1: lower gains.
0
50
100
150
200
250
2010 2030 2050 2070 2090
$ pe
r ton
C
0
50
100
150
200
250
2005 2025 2045 2065 2085
Carb
on G
ain
(Pg
C)
S1: A2 Avg S1: A1B Avg
S2: A2 Avg S2: A1B Avg
No CC
Conclusions
• Effects on prices are relatively modest• Economic analysis substantially changes the
projected carbon emission path from ecosystems.
• Management mitigates most of the losses that are predicted to occur in ecosystems
• Output shifts towards tropics• Climate change lowers costs of carbon
sequestration.
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