By Brent Sohngen and Roger Sedjo
This paper examines potential climate change impacts in North American timber markets. The results indicate that climate change could increase productivity in forests in North America, increase productivity in forests globally, and reduce timber prices. North American consumers generally will gain from the potential changes, but producers could lose welfare. If dieback resulting from additional forest fires, increased pest infestation, or storm damage increases appreciably and has market effects, consumers will gain less and producers will lose more than if climate change simply increases the annual flow of timber products by raising forest productivity. Annual producer welfare losses from climate change in the North American timber sector are estimated to range from $1.4 - $2.1 billion per year on average over the next century, with the higher number resulting from potential large-scale dieback. Within North America, existing studies suggest that producers in northern regions are less susceptible to climate change impacts than producers in southern regions because many climate and ecological models suggest that climate become dryer in the U.S. South.