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Department of Agricultural, Environmental, and Development Economics


The Forest Sector, Climate Change, and the Global Carbon Cycle-Environmental and Economic Implications

By Brent Sohngen, Ralph Alig, and Birger Solberg

This paper assesses recent research on climate change, the forest sector, and the global carbon cycle in order to provide a synthesis of recent research results that investigate how climate change may affect the global forest sector. There is evidence that climate change is already affecting forests, but it is likely to have small market impacts in the near term (to 2020). These impacts could grow in the medium term (2020-2060) if climate mitigation is not undertaken. Estimates suggest that 1/7th to 2/3rds of the world temperate and boreal forests could undergo some type of change in the middle part of the century. The long run impacts (beyond 2060) are difficult to project because they depend on multiple uncertain factors, such as demand growth in forestry and agriculture (e.g.,land use), the role that climate change mitigation plays (e.g., by potentially expanding forest area), technological development, and regional climate change impacts on ecosystems. Despite the uncertainty, most economic models suggest that market adaptation can limit the most damaging effects in timber markets. Understanding these important interactions between forests, climate change, and carbon flux remains an important research topic, not only for economists and ecologists separately, but more importantly for the sciences to work together.

Publication type: 
Working paper
Date published: 
Monday, January 1, 2007