#(!04%2 -ODELING#LIMATE#HANGE)MPACTSONTHE&OREST3ECTOR *OHN2-ILLS2ALPH!LIGAND2ICHARD7(AYNES53$!&OREST3ERVICE 0ACIlC.ORTHWEST2ESEARCH3TATION $ARIUS-!DAMS/REGON3TATE5NIVERSITY )NTRODUCTION 4HE FOREST SECTOR HAS HAD A RELATIVELY LONG HISTORY OF APPLYINGSECTORIALMODELSTOESTIMATETHEEFFECTSOFATMO SPHERIC ISSUES SUCH AS ACID RAIN SEE (AYNES AND!DAMS (AYNESAND+AISERCLIMATECHANGE#ALLAWAY ETAL*OYCEETAL-ILLSAND(AYNES!LIGET AL0EREZ'ARCIAETAL3OHNGENAND-ENDELSOHN AND THE FORESTRY IMPACTS OF REDUCED ATMOSPHERIC OZONE "ENTLY AND (ORST 4HE MODELS OF THE FOREST SECTORVARYINSCOPEANDCOMPLEXITYBUTSHAREANUMBEROF COMMONFEATURESANDDATABASES4HREEASPECTSINCOMMON AMONGTHEMSTANDOUT&IRSTTHESPATIALEQUILIBRIUMMARKET FRAMEWORKlRSTUSEDBY(AYNESANDEXPANDEDBY !DAMS AND (AYNES HAS PROVIDED A STRUCTURE AND FRAMEWORKFORMANYOFTHESEEFFORTS3ECONDTHE4!-- !4,!3 MODEL !DAMS AND (AYNES -ILLS AND +IN CAIDITSELFHASPROVIDEDBOTHRELATIVELYCOMPLETEDATA SETS AND ESTIMATED RELATIONSHIPS FOR ECONOMIC PROCESSES THATAREROBUSTANDCANBEAGGREGATEDBOTHINMARKETLEVELS ANDACROSSSPATIALMARKETS4HETHIRDASPECTISTHERICHAND UNIQUEFORESTINVENTORYDATASETSTHATAREAVAILABLEFORTHE 5NITED 3TATES 4HIS DATA SET DESIGNED FOR ASSESSING TIM BERLANDCONDITIONSANDTRENDSPROVIDESANESSENTIALCOM PONENT TO THE DEVELOPMENT OF AGGREGATE TIMBER RESOURCE MODELSTHATAREINTEGRALPARTSOFMOSTFORESTSECTORMODELS )TALLOWSFOREXPLICITTREATMENTSOFCHANGESINNETGROWTH LANDUSEANDFORESTTYPECHANGES 4HE PURPOSE OF THIS CHAPTER IS TO ASSESS BROADLY OUR ABILITY TO MODEL CLIMATE CHANGE IMPACTS ON THE FOREST SECTOR USING TWO OF THE THREE FOREST SECTOR MODELS THAT ARE AVAILABLE IN THE PUBLIC DOMAIN THE 4IMBER !SSESS MENT -ARKET -ODEL 4!--!DAMS AND (AYNES .ORTH !MERICA 0ULP AND 0APER -ODEL .!0!0 )NCE !GGREGATE 4IMBERLAND !SSESSMENT 3YSTEM !4,!3 -ILLS AND +INCAID AND &OREST AND !GRI CULTURE3ECTOR/PTIMIZATION-ODEL&!3/-!DAMSETAL A !LIG ET AL ! THIRD MODEL IS THE #).42! &/2'LOBAL4RADE-ODEL#'4-)TISTHEAPPLICATIONOF RESEARCHSTARTEDATTHE)NTERNATIONAL)NSTITUTEOF!PPLIED !FORESTSECTORMODELINGENERALCOMBINESACTIVITIESRELATED TOTHEUSEOFWOODFORESTGROWTHANDHARVESTTHEMANUFACTURE OFPULPPAPERANDSOLIDWOODPRODUCTSANDINTERNATIONALTRADE ANDINTERMEDIATEANDlNALCONSUMPTIONOFTHESEPRODUCTS+ALLIO ETAL (EREAFTERCALLED4!--!4,!3 53$!&OREST3ERVICE'EN4ECH2EP2-23n'42n 3YSTEMS !NALYSIS ))!3! AND CONTINUING WORK AT THE 5NIVERSITYOF7ASHINGTON+ALLIOETAL#ARDELLICHIO ET AL )T HAS BEEN USED BY RESEARCHERS AT THE 5NIVERSITYOF7ASHINGTONTOEXAMINEBROADSCALEGLOBAL CLIMATECHANGEISSUES0EREZ'ARCIAETAL )NADDITIONTOTHE4!--!4,!3AND&!3/-APPLICA TIONSTHATWILLBEDISCUSSEDINSUBSEQUENTSECTIONSSOMEOF THE ALREADY LISTED REFERENCES REPRESENT SUBSTANTIAL EFFORTS &OR EXAMPLE *OYCE ET AL FOR .ORTH !MERICA AND 0EREZ'ARCIAETALFORTHEWORLDEXAMINEDTHEEFFECTS OFCLIMATECHANGEONTHEWORLDSFORESTPRODUCTSECONOMY USINGTHETERRESTRIALECOSYSTEMMODEL-ELILLOETAL TOLINKECOLOGICALCHANGETOACTUALVEGETATION4HEGENERAL RESULTSSHOWTHATASPRIMARYPRODUCTIONINCREASESTIMBER BECOMES MORE ABUNDANT PRICES FALL AND CONSUMPTION INCREASES-AJORTIMBERPRODUCERSSUCHASTHE5NITED3TATES AND#ANADARECEIVEDSMALLPOSITIVEECONOMICGAINSFROM FORESTRYCHANGES4HISWORKALSOINDICATESTHEDIFFERENCES AMONGTHOSEPARTICULARCLIMATESCENARIOSTENDTOBESMALL EXCEPTINSOUTHEAST!SIAAND/CEANIAFORHARDWOODSAND THE NORTHERN REGIONS FOR SOFTWOODS "OTH STUDIES SHOW THATPRODUCTIONSHIFTSANDCHANGESINTRADEPATTERNSTEND TO DAMPEN THE EFFECTS OF CLIMATE CHANGE IN THE FOREST SECTOR 3EVERAL STUDIES USED VARIATIONS OF THE 4!-- !4,!3 MODEL STRUCTURE &OR EXAMPLE #ALLAWAY ET AL SHOWEDTHATUNDERACLIMATEOFDOUBLEDATMOSPHERIC CARBONDIOXIDEHARVESTSCOULDBESHIFTEDOVERTIMEALONG WITH CHANGES IN TREE PLANTING INVESTMENT AS PART OF THE DYNAMICADJUSTMENTOFMARKETSANDCAPITALSTOCKS(AYNES ETALFOCUSEDONVARIOUSMITIGATIONSTRATEGIESTHATARE OFTENSUGGESTEDFORUSINGFORESTSFORCARBONSEQUESTRATION 3OHNGEN AND -ENDELSOHNS MODEL USING A SPATIAL EQUILIBRIUMSTRUCTUREREDUCEDFROMSOMEOFTHERELATION SHIPS IN 4!--!4,!3 FOCUSED MORE ON THE DYNAMIC ADJUSTMENTPATHWAYTHANTHESEEARLIERSTUDIES4HEYFOUND THATMARKETSWILLMITIGATEANDEVENREVERSE#/mUXESIN CONTRASTTONATURALRESPONSEMODELS&INALLY"URTONETAL USEDAVARIANTOF&!3/-TOLOOKATTHREESCENARIOS OFEXTREMEGROWTHRATECHANGEINDUCEDBYGLOBALCLIMATE CHANGEANDFOUNDTHATIMPACTSAREFELTMORESTRONGLYBY PRODUCERSTHANCONSUMERSANDMOREBYSOUTHERNPRODUC ERSTHANPRODUCERSINOTHERREGIONS 3EVERAL UNIQUE GAPS OR OPPORTUNITIES ARE APPARENT FROM THIS ARRAY OF APPLICATIONS OF DIFFERENT APPROACHES TO FOREST SECTOR MODELING &IRST MOST OF THESE SYSTEMS DEPENDONFORESTINVENTORYRESOURCEMODELSTOPROVIDE EXOGENOUSVARIABLESINSTUMPAGESUPPLYRELATIONS4HESE RESOURCE MODELS ARE INVARIABLY BASED ON ACTUAL OR CUR RENTFORESTVEGETATIONTYPESANDEXTENTSTHATREmECTEXTEN -ILLS!LIG(AYNESAND!DAMS SIVE HUMAN MODIlCATIONS )NTEGRATING ECONOMIC AND ECOLOGICAL MODELS REQUIRES SOME MEANS TO RELATE ACTUAL VEGETATION TO THE PROJECTED CHANGES IN POTENTIAL VEGETA TION THAT RESULT FROM PROCESSBASED ECOLOGICAL MODELS 3EVERALOFTHEAPPLICATIONSABOVEUSEDTHETERRESTRIALECO SYSTEM MODEL -ELILLIO ET AL AS ONE SUCH LINKING DEVICE3ECONDMOSTOFTHEMODELSDESCRIBEDABOVEHAVE NOTADDRESSEDINDETAILTHEREALLOCATIONOFLANDBETWEEN FORESTANDAGRICULTURALSECTORSIFPRODUCTIVITYISIMPACTED BY GLOBAL CLIMATE CHANGE ,ANDOWNERS CONTINUALLY CON SIDER SHIFTS IN LAND USE BETWEEN AGRICULTURAL CROPS AND FORESTANDSHIFTSWITHINFORESTLANDAMONGDIFFERENTINTEN SITIESOFLANDMANAGEMENTSOMEOFWHICHINVOLVESHIFT ING FROM LOWER VALUE TO HIGHER VALUE TREE SPECIES )N ADDITION THERE IS THE CONCERN ABOUT LAND CONVERSION TO DEVELOPEDUSES!THIRDSETOFOPPORTUNITIESINVOLVECON SIDERATIONOFTHEPROPENSITYFORPERSISTENTCHANGEINTHE LEVELS AND TYPES OF HUMAN DEMANDS FOR VARIOUS FOREST GOODSANDSERVICES -ODELING#LIMATE#HANGE)MPACTSONTHE&OREST3ECTOR DEMAND FUNCTIONS FOR ALL END PRODUCTS WITH SEPARATE DEMAND FUNCTIONS FOR 53 DOMESTIC DEMAND #ANADIAN DOMESTIC DEMAND AND DEMAND FROM VARIOUS TRADING REGIONSFOREXPORTFROMTHE5NITED3TATESAND#ANADA !4,!3-ILLSAND+INCAIDISUSEDASANINVEN TORYPROJECTIONSYSTEMANDESTIMATESOFAVAILABLETIMBER INVENTORY ARE USED IN THE TIMBER SUPPLY RELATIONS FOR EACHREGIONANDOWNER!4,!3WASDEVELOPEDTOMODEL TIMBERINVENTORIESATSUBREGIONALREGIONALANDNATIONAL SCALES USING TIMBERLAND INVENTORY DATA COLLECTED BY THE VARIOUS53$!&OREST3ERVICE&OREST)NVENTORYAND!NALY SIS5NITS&)!4HEDATAARESTRATIlEDANDAGGREGATEDBY SPECIESGROUPFORESTTYPESITEPRODUCTIVITYANDEXPECTED MANAGEMENT CLASS 'ROWTH AND YIELD MODELS ARE ESTI MATEDREPRESENTINGABROADMIXOFCONDITIONSANDMAN AGEMENTINTENTIONS)NEACHSIMULATIONPERIODINVENTORY CHANGEISTHERESULTOFGROWTHAREACHANGEANDHARVEST 4HEAREAADJUSTMENTISDERIVEDFROMPROJECTIONSBYAREA MODELSSEE!LIG!LIGETAL &ORESTAND!GRICULTURE3ECTOR/PTIMIZATION -ODEL&!3/- #OMPARISONOF-ODEL3TRUCTURES 4HE4IMBER!SSESSMENT-ARKET-ODEL 4!-- 4HE4!--SYSTEMISONEOFTHEBESTKNOWNEXAMPLES OFWHATARETERMEDFORESTSECTORMODELS3INCEITSINCEP TION IN THE LATE S THIS SYSTEM OF MODELS HAS UNDER GONE A NUMBER OF EXTENSIONS AND REVISIONS DESIGNED TO IMPROVE THE REALISM OF ITS PROJECTIONS AND THE UTILITY OF ITSOUTPUTTORESOURCEANALYSTSANDPOLICYMAKERS$ETAILS ABOUT 4!-- PROJECTIONS AND UNDERLYING ASSUMPTIONS ARE DESCRIBED IN DETAIL IN THE 53$!&OREST 3ERVICE 20! 4IMBER !SSESSMENT (AYNES AND 20! 4IMBER!SSESSMENT5PDATE(AYNESETAL4!-- ISABIOECONOMICMODELTHATPROVIDESANINTEGRATEDSTRUC TURE FOR CONSIDERING THE BEHAVIOR OF REGIONAL PRICES CONSUMPTION AND PRODUCTION IN BOTH STUMPAGE AND SOLIDWOODPRODUCTMARKETSANDINCORPORATESABILATERALLY LINKEDMODELOFTIMBERRESOURCESANDTIMBERSUPPLY)N ITSCURRENTFORMITINCLUDESTHE.ORTH!MERICAN0ULPAND 0APER-ODEL.!0!0FORPAPERPRODUCTSAND!4,!3TO MODELTIMBERRESOURCES .!0!0 SEE )NCE USES LINEAR PROGRAMMING TO SOLVEFORMARKETEQUILIBRIUMINSPATIALLYSPECIlCMARKETS )TINCLUDESREGIONALSUPPLYFUNCTIONSFORPULPWOODAND RECOVEREDPAPERRECYCLINGANDADETAILEDREPRESENTATION OFPRODUCTIONCAPACITYANDSUPPLYFORALLPRINCIPALGRADES OF MARKET PULP PAPER AND PAPERBOARD IN lVE .ORTH !MERICAN PRODUCTION REGIONS 4HE MODEL ALSO INCLUDES 4HE&ORESTAND!GRICULTURE3ECTOR/PTIMIZATION-ODEL &!3/-WASORIGINALLYDEVELOPEDFORTHE53%NVIRON MENTAL0ROTECTION!GENCYTOESTIMATETHEMARKETIMPACTS OF CARBON SEQUESTRATION OPTIONS FOR BOTH THE AGRICULTURE AND FOREST SECTORS !LIG ET AL 5NLIKE 4!-- &!3/-ISAPRICEENDOGENOUSQUASISPATIALMULTIPERIOD EQUILIBRIUMMODEL)TSOBJECTIVEFUNCTIONMAXIMIZESTHE DISCOUNTEDECONOMICWELFAREOFPRODUCERSANDCONSUM ERS SURPLUSES IN THE 53 AGRICULTURE AND FOREST SECTORS OVERAlNITETIMEHORIZON&!3/-OPERATESONADECADAL TIMESTEPWITHPROJECTIONSMADEFORDECADESHOWEVER POLICYANALYSISISLIMITEDTORESULTSFORTHEYEARPERIOD FROM TO &!3/- EMPLOYS A SINGLE NATIONAL DEMANDREGIONFORFORESTPRODUCTSWHICHTREATSONLYTHE LOG MARKET PORTION OF THE SECTOR 4HE NINE 53 TIMBER SUPPLYREGIONSARESIMILARTO4!--REGIONSEXCEPTFOR COMBININGTHE.ORTHERNAND3OUTHERN2OCKY-OUNTAIN REGIONSANDSEPARATINGTHEh#ORN"ELTvANDh,AKE3TATESv PORTIONSOFTHE.ORTH#ENTRALREGIONBECAUSEOFTHEIRAGRI CULTURALIMPORTANCE0RIVATETIMBERLANDIN&!3/-REPRE SENTSAREAGGREGATIONOFTHE!4,!3MODELTHESTRATAARE DIFFERENTIATED BY CLASS OF OWNERSHIP FOREST INDUSTRY ANDNONINDUSTRIALFORESTTYPEFOURCLASSESDESCRIBING SPECIESCOMPOSITIONEITHERSOFTWOODSORHARDWOODSIN THE CURRENT AND PRECEDING ROTATION SITE PRODUCTIVITY THREE LEVELS OF POTENTIAL FOR WOOD VOLUME GROWTH MANAGEMENTINTENSITYFOURDISCRETETIMBERMANAGEMENT REGIMESSUITABILITYFORTRANSFERTOORFROMAGRICULTURAL USEFOURLANDSUITABILITYCLASSESFORCROPORPASTUREPLUS AhFORESTONLYvCLASSTHATCANNOTSHIFTUSEANDYEAR AGECLASSTEN 53$!&OREST3ERVICE'EN4ECH2EP2-23n'42n -ODELING#LIMATE#HANGE)MPACTSONTHE&OREST3ECTOR -ILLS!LIG(AYNESAND!DAMS Interface constraints: - Bare land (after harvest) - Total limit on amount of convertible forest land - Total limit on amount of convertible agricultural land Forest sector model (TAMM-based) * Public timberland * - Exogenous timber harvest levels * Forest industry timberland* (FORONLY) Agricultural sector model Agricultural land * Other private timberland * CROPFOR FORONLY land Convertible land - region - softwoods and hardwoods - productivity classes - timber management - intensity class Convertible cropland + Agriculture-only land FORECROP (3 conversion cost classes) PASTFOR Convertible pastureland FORPAST (3 conversion cost classes) Exogenous land transfers Urban, developed, and special uses &IGURE,INKAGEOFFORESTRYANDAGRICULTURESECTORSIN&!3/- %NDOGENOUSVARIABLESINCLUDETIMBERHARVESTSAND LOGPRICESFORNINE53REGIONSTWOSPECIESGROUPSAND THREECLASSESOFPRODUCTSSAWTIMBERPULPWOODANDFUEL WOOD TIMBER MANAGEMENT INVESTMENT ACTIVITY FOR TWOPRIVATEOWNERGROUPSFORESTINDUSTRYANDOTHERPRI VATEAGRICULTURALPRICESANDPRODUCTIONINREGIONS FORPRIMARYANDSECONDARYCOMMODITIESANDTHE AMOUNTS OF LAND USED IN AND TRANSFERRED BETWEEN THE TWOSECTORS!LLEXOGENOUSFORESTRYELEMENTSOFTHEMODEL AREHELDCONSTANTAFTERTHElFTHDECADE4HEMODELVALUES TERMINAL INVENTORIES AT THE END OF THE lNITE PROJECTION PERIODINBOTHSECTORSASSUMINGPERPETUALSTEADYSTATE MANAGEMENT FOLLOWING THE TERMINAL YEAR OF THE EXPLICIT TIMEHORIZON!DAMSETALA 4HE AGRICULTURE SECTOR IN &!3/- IS ADAPTED FROM THE !GRICULTURAL3ECTOR-ODEL!3-AGGREGATEDTOREGIONS MATCHINGTHOSEINTHEFORESTRYSECTOR!3-ISASPATIALPRICE ENDOGENOUSAGRICULTURALSECTORMODEL#HANGETAL WITHCONSTANTELASTICITYCURVESUSEDTOREPRESENTDOMESTIC CONSUMPTION AND EXPORT DEMANDS AS WELL AS INPUT AND IMPORT SUPPLIES !3- WAS ORIGINALLY CONSTRUCTED AS AN ESSENTIALLY TIMELESS LONGRUN EQUILIBRIUM MODEL 4O LINK !3-WITHTHEDECADECYCLESIN&!3/-ANDTHEFORESTSECTOR WHERE MARKET INTERVENTIONS MAY TAKE SEVERAL DECADES TO PLAY OUT THE MODEL WAS CONVERTED TO AN ANNUAL FORMAT 5PDATINGBETWEENDECADESWASACCOMPLISHEDUSINGPRO JECTED GROWTH RATES IN CROP YIELDS DOMESTIC DEMAND EXPORTSIMPORTSANDCROPLANDAVAILABILITY /NEREALSTRENGTHOF&!3/-ISTHELINKSBETWEENLAND INVENTORIESINTHEAGRICULTURALANDFORESTSECTORSlG 3UITABLELANDCANMOVEATANYTIMEBETWEENAGRICULTURAL ANDFORESTUSESBASEDONCONSIDERATIONSOFINTERTEMPO RALPROlTABILITYANDSUBJECTTOTHEAVAILABILITYOFRESOURCES AND THE SPECIlC PROVISIONS OF PARTICULAR POLICIES 4HE PLANNINGPROBLEMSIMULATEDIN&!3/-ALLOWSLANDOWN ERSTOFORESEETHEPROlTABILITYCONSEQUENCESOFALLTHEPOS 4HE!GRICULTURAL3ECTOR-ODEL!3-ISDESCRIBEDBY-C#ARL " # #HANG * !TWOOD .AYDA 7 IN h4HE 53 !GRICULTURE 3ECTOR -ODELv /N lLE WITH THE 3OCIAL AND %CONOMICS 6ALUES 0ROGRAM&ORESTRY3CIENCES,ABORATORY0ACIlC.ORTHWEST3TA TION37*EFFERSON7AY#ORVALLIS/2 2ISING RELATIVE PRICES FOR URBAN AND DEVELOPED USES AT THE TOP OF THE ECONOMIC HIERARCHY OF LAND USE PROMPT EXOGENOUS SHIFTSOFFORESTANDAGRICULTURALLANDTOURBANDEVELOPEDUSESBY REGIONEACHPERIODALONGWITHSOMETIMBERLANDRECLASSIlEDTO RESERVEDUSES!LIGETAL!LIGAND7EAR 53$!&OREST3ERVICE'EN4ECH2EP2-23n'42n -ILLS!LIG(AYNESAND!DAMS -ODELING#LIMATE#HANGE)MPACTSONTHE&OREST3ECTOR 4ABLE#OMPONENTPARTSOFCONTEMPORARYFORESTSECTORMODELS -ODELCOMPONENT 4YPEOFVARIABLE 0ROCESSMODELFUNCTION 0RODUCTDEMAND 0RODUCTSUPPLY 3TUMPAGEDEMAND 3TUMPAGESUPPLY ,ANDUSECHANGES 0RICESMACROECONOMICVARIABLES #OSTSCAPACITYLEVELS #ONVERSIONFACTORS 0RICESINVENTORYATTRIBUTES ,ANDPRICESLANDTYPES .EWPRODUCTDIFFUSION #APACITYADJUSTMENT -ATERIALSBALANCERELATIONSHIPS 2ESOURCEPROJECTIONSYSTEM!4,!3 !REACHANGEPROJECTIONSYSTEM SIBLEAGRICULTURALANDFORESTUSESOFTHEIRLANDOVERTIME 4HROUGHTHELANDTYPECLASSESHECTARESOFNONINDUSTRIAL PRIVATE TIMBERLAND THAT COULD BE CONVERTED TO CROPLAND ANDPASTURELANDANDALSOAGRICULTURALLANDTHATCOULDBE SHIFTED INTO FORESTRY CAN BE IDENTIlED %STIMATES OF THE AREA OF CONVERTIBLE FORESTLAND ARE FROM 53$!ESTIMATES OFFORESTLANDWITHMEDIUMORHIGHPOTENTIALFORCONVER SIONTOCROPORPASTUREUSEAREAESTIMATESFORCONVERTIBLE AGRICULTURALLANDAREDRAWNFROM-OULTONAND2ICHARDS STUDYOFLANDSUITABLEFORTREEPLANTING 4!--AND&!3/-#OMPARISON 4HE 4!-- AND &!3/- MODELS COMPLEMENT EACH OTHERANDTHEYARERELATEDINSEVERALIMPORTANTWAYS!LIG AND !DAMS "OTH MODELS CONTAIN REPRESENTATIONS FORTHEVARIOUSCOMPONENTPARTSOFCONTEMPORARYFOREST SECTOR MODELS SEE TABLE !S DISCUSSED IN THIS CHAP TERTHESEREPRESENTATIONSVARYBETWEENTHETWOMODELS %XTERNALLY THE MODELS HAVE SOME COMMON LINKS BUT INTERNALLYTHEMODELSOFFERDIFFERENTSOLUTIONMECHANISMS )N BRIEF BOTH MODELS EMBODY THE FOUR KEY COMPONENTS OFTIMBERSUPPLYMODELINGSYSTEMSIDENTIlEDBY!LIGET ALLANDALLOCATIONGROWTHANDYIELDPROJECTIONS HARVESTmOWSANDFORESTMANAGEMENTINVESTMENT )NTERMSOFSOMEOFTHEMODELCOMPONENTSILLUSTRATED IN TABLE THERE ARE DIFFERENCES BETWEEN 4!-- AND &!3/- 4!-- DEALS RELATIVELY EXPLICITLY WITH THE lRST FOUR MODEL COMPONENTS BY TREATING LAND USE CHANGES ASANEXOGENOUSPROCESS&!3/-FOCUSESONTHESTUMP AGEMARKETESPECIALLYTHELASTTWOCOMPONENTSRELYING ON4!--!4,!3FORPRODUCTMARKETDETAILTHATISCOL LAPSEDTOASETOFDERIVEDDEMANDRELATIONSHIPSFORLOGS AGGREGATED AT THE NATIONAL LEVEL )N THE CASE OF BOTH MODELS THE APPROACH TO ESTIMATING DEMAND CONSIDERS DEMOGRAPHIC AND ECONOMIC VARIABLES INCLUDING POPU LATION GROWTH HOUSING STARTS HOUSEHOLD FORMATION AND SIZE AND TECHNOLOGY IMPROVEMENTSALL OF WHICH ARE DERIVEDFROMOTHERMODELSANDECONOMICFORECASTS !NIMPORTANTDISTINCTIONISTHESOLUTIONALGORITHMUSED TOSIMULATEMARKETBEHAVIOR4HESOLUTIONOF4!--REP RESENTSASPATIALEQUILIBRIUMINTHEMARKETSMODELEDFOR EACHYEAROFTHEPROJECTIONPERIOD!SPATIALEQUILIBRIUM MODELSOLVESFOREQUILIBRIUMBETWEENPRICEANDQUANTITY SIMULTANEOUSLY IN MULTIPLE SPATIALLY DISTINCT MARKETS AT TWO DIFFERENT MARKET LEVELS 4HESE SOLUTIONS REPRESENT PRODUCTION CONSUMPTION AND PRICE TIME PATHS THAT ARE ESTIMATES OF OUTCOMES OF CONTEMPORANEOUS INTERACTIONS INFREELYCOMPETITIVEMARKETS&!3/-SOLVESFOREQUILIB RIUM IN THE STUMPAGELOG MARKET RECOGNIZING SPATIALLY DISTINCT TIMBER SUPPLY REGIONS )T DIFFERS FROM 4!-- IN THAT IT ALSO SOLVES FOR THE INTERTEMPORAL EQUILIBRIUM 4HAT IS LANDOWNERS MAKE INVESTMENT DECISIONS GUIDED BYEXACTKNOWLEDGEOFFUTUREPRICESANDHARVESTLEVELS )N TERMS OF THE RESOURCE SITUATION BOTH 4!-- AND &!3/- SHARE THE SAME BASE INVENTORY AND PROVIDE EXPLICIT TREATMENT OF ACTUAL VEGETATION ATTRIBUTES FOR MILLIONHECTARESOF53PRIVATETIMBERLANDS5SINGACTUAL TYPES FACILITATES ANALYZING THE COMBINATION OF BIOPHYS ICAL ECOLOGICAL AND SOCIOECONOMIC FORCES THAT INmUENCE THEAMOUNTOFLANDALLOCATEDTOMAJORLANDUSESANDFOREST COVERTYPESINTHE5NITED3TATES )NBOTHMODELSTHETIMBERLANDBASEISADJUSTEDOVERTIME FORTHEMOVEMENTOFLANDBETWEENFORESTTIMBERPRODUC TION AND NONFOREST INCLUDING AGRICULTURAL URBAN AND RESERVED USES )N 4!-- LAND ALLOCATION IS EXOGENOUS PROVIDEDBYMODELSOFLANDUSECHANGESTHATASSUMELAND OWNERS ARE PRESENT VALUE QUASIRENT MAXIMIZERS IN ALLO CATING LAND TO ALTERNATIVE USES EG!LIG %XAMPLES ARE USUALLY CAST IN THE CONTEXT OF TWO PRIMARY COMPETING USES BUT IN MOST CASES METHODS CAN BE READILY EXTENDED TOMULTIPLEUSES3YSTEMSOFEQUATIONSDESCRIBETHEMAJOR LAND USES !LIG )N &!3/- THIS FORESTRYAGRICULTURE LANDUSEMARGINISENDOGENOUS)NBOTHMODELSWHENTIM BERLAND SHIFTS TO A NONFOREST USE A PORTION OF THE TIMBER VOLUMEISOFTENHARVESTEDANDCOUNTEDINTHECURRENTAGGRE GATECUTFROMTHESTRATUM4HISREmECTSTHEPROCESSOFLAND CLEARINGORVOLUMEREDUCTIONASSOCIATEDWITHMOSTLANDUSE CHANGESINTHEPRIVATESECTOR!LIGETAL 4HEINVESTMENTSAREASSOCIATEDWITHVARIOUSTIMBERMAN AGEMENTPRACTICES4HEYIELDREGIMESDERIVEDFORTHE!4,!3 MODELAREUSEDINBOTHMODELS3OMEOFTHESEAREEMPIRI CALLYBASEDBASEDINPARTONTHEREGIONAL&)!SURVEYPLOTS 0OWELL ET AL WHILE OTHERS ARE PRODUCTS OF SPECIlC STANDMODELS!SSIGNMENTOFAREASTOMANAGEMENTINTENSITY CLASSES -)#S ARE BASED ON DATA DERIVED FROM lELD MEA SUREMENTSANDJUDGMENTSOF53$!&OREST3ERVICEINVENTORY 53$!&OREST3ERVICE'EN4ECH2EP2-23n'42n -ODELING#LIMATE#HANGE)MPACTSONTHE&OREST3ECTOR ANALYSTSANDEXPERTSININDUSTRYANDOTHERGROUPS!-)# ISDElNEDBYACOMBINATIONOFSILVICULTURALACTIVITIESINCLUD INGBUTNOTLIMITEDTOIMPROVEDREGENERATIONSTOCKINGCON TROLCOMMERCIALTHINNINGANDFERTILIZATION,ANDCANSHIFT AMONG-)#SOVERTIMETOREmECTCHANGESINTIMBERMANAGE MENTINVESTMENT4HISINVESTMENTISTREATEDASEXOGENOUS IN4!--!4,!3WHEREASCHEDULEOFMANAGEMENTTREAT MENTSISDEVELOPEDFORALLPRIVATELANDSCONSIDEREDINTHE !4,!3PROJECTION4HISSCHEDULEISBASEDONCURRENTEXPEC TATIONS BUT IS NOT SENSITIVE TO ENDOGENOUS PRICE CHANGES OR PROJECTED MARKET ELEMENTS THOUGH IT MAY BE CHANGED THROUGHCONSIDERATIONSOFMODELOUTCOMES)N&!3/-THE INVESTMENTACTIONSAREPARTOFTHESOLUTION4HEEXTENTAND TIMINGOFTHE-)#SHIFTSREPRESENTANOPTIMALSOLUTIONBASED ONTHEhPERFECTKNOWLEDGEvOFFUTUREMARKETS 2ESULTS "OTH 4!-- AND &!3/- HAVE BEEN USED IN THE CON TEXTOFSCENARIOPLANNINGTOEXAMINEAWIDERANGEOFALTER NATIVE SCENARIOS RELATED TO THE ROLE OF FORESTRY IN CLIMATE CHANGE)NTHISSECTIONWEDESCRIBEGENERALIZEDRESULTSFOR SEVERAL OF THESE SCENARIOS 4!-- WAS USED TO EXAMINE THEEFFECTOFINCREASEDATMOSPHERICCARBONDIOXIDEONTHE TIMBERSITUATIONINTHE5NITED3TATESANDITHASALSOBEEN USEDTOEXAMINETHEUSEOFVARIOUSFORESTPOLICIESTOMIT IGATE GLOBAL CLIMATE CHANGE BUT THAT WORK IS DISCUSSED ELSEWHERESEE#HAPTERAND(AYNESETAL &!3/-HASBEENUSEDTOEXAMINESEVERALALTERNATIVE FUTURES OF INCREASED FOREST CARBON SEQUESTRATION 4HE &!3/-RESULTSABOUTMITIGATIONOPTIONSARESUMMARIZED IN#HAPTER #LIMATE#HANGEAND&OREST0RODUCTIVITY 4!-4!--!4,!3HASBEENRUNFORSCENARIOSWHEREFOREST PRODUCTIVITYWASSENSITIVETOCLIMATECHANGEFORDETAILS SEE *OYCE 4HE NATURE OF THE PROSPECTIVE CLIMATE CHANGEWASADOUBLINGOFATMOSPHERICCARBONDIOXIDEBY THEYEAR!BIOGEOCHEMISTRYMODEL4%-WASUSED INCONJUNCTIONWITHGENERALCIRCULATIONMODELS'#-STO PROJECTCHANGESINFORESTNETPRIMARYPRODUCTIVITY.00 ! KEY ASSUMPTION WAS THAT CHANGES IN ANNUAL .00 OF POTENTIALVEGETATIONWEREPROPORTIONALTOANNUALCHANGES INTHERATEOFPROJECTEDFORESTGROWTH4HESECHANGESWERE APPLIEDTOTHEFORESTTYPESIN!4,!3EFFECTIVELYLINKINGA BIOGEOCHEMISTRYMODELTOAFORESTSECTORMODEL 2ESULTSFROMTHEBASELINEPROJECTIONSOFTHE20! 4IMBER!SSESSMENT(AYNESETALWERECOMPARED 53$!&OREST3ERVICE'EN4ECH2EP2-23n'42n -ILLS!LIG(AYNESAND!DAMS WITH THREE SCENARIOS DEPICTING A MAXIMUM MEAN AND MINIMUM SET OF CHANGES IN .00 7ITH THE EXCEPTION OF A NEGATIVE IMPACT ON 3OUTHERN HARDWOODS IN THE MINI MUMPROJECTIONSTHECHANGEIN.00WASPOSITIVEFORALL FORESTTYPESINALLREGIONS)NTOTALTHEPROJECTEDINCREASES IN .00 FAR OUTWEIGHED DECLINES 4HIS SET OF SCENARIOS INCREASEDFORESTGROWTHOVERALLREGIONSWHICHLEDTOA ANDPERCENTINCREASEININVENTORYONPRIVATELANDS TOBILLIONCUBICFEETABOVETHEBASE7HERETHE20! BASELINEPROJECTIONSSHOWEDDECLINESTHECLIMATECHANGE SCENARIOSSHOWINCREASES /NEFUNDAMENTALRESULTFROMTHE4!--!4,!3SIM ULATIONSHASBEENTOSHOWHOWINCREASESINGROWTHEVEN TUALLY IMPACTS LEVELS OF HARVEST 'ROWTH ACCUMULATES AS INVENTORY VOLUME LEADING TO INCREASES IN THE TIMBER AVAILABLE FOR HARVEST THERE IS A MARKET PRICE RESPONSE AND THERE IS AN INCREASE IN THE HARVEST "UT NOT ONLY IS THIS INCREASE IN HARVEST A LAGGED RESPONSE THE MAGNI TUDEOFTHEINCREASEINDICATESARELATIVELYSMALLCONSUMER RESPONSETOLOWERLUMBERPRICES$EMANDFORSOLIDWOOD PRODUCTS IS DERIVED FROM CONSUMPTION OF HOUSES OTHER TYPES OF BUILDINGS AND A WIDE RANGE OF CONSUMER AND INDUSTRIALPRODUCTS$EMANDFORPAPERISPRIMARILYINmU ENCEDBYOVERALLECONOMICGROWTH)NBOTHCASESDOWN WARD CHANGES IN WOOD PRICES OR lBER IN THE CASE OF PAPER REPRESENT ONLY A SMALL PROPORTION OF TOTAL PRO DUCTIONCOSTS4HISISASIGNIlCANTRESULTANDITISCONSIS TENTWITHWORKREFERENCEDEARLIERTHATSTUDIEDTHEMARKET IMPACTSOFACIDRAINANDATMOSPHERICOZONE4HESEAPPLI CATIONSILLUSTRATEDTWOIMPORTANTFEATURESOF4!--lRST THEEXPLICITTEMPORALSTRUCTUREDETAILEDTHERELATIVELYLONG LAGBETWEENCHANGESINNETGROWTHANDEVENTUALCHANGES INHARVESTSANDATTENDANTECONOMICIMPACTSANDSECOND 4!--S EXPLICIT TREATMENT OF BOTH STUMPAGE AND PROD UCT MARKETS ALLOWS FOR EMPIRICAL ESTIMATION OF PRODUCER ANDCONSUMERSURPLUSMEASURESTHATFOLLOWTHEUSUALECO NOMICCONVENTIONSFORBOTHPRODUCTANDFACTORMARKETS 4!--!4,!3HASALSOHELPEDSHAPEPERCEPTIONSTHAT WITHACHANGEINAVAILABLESUPPLIESOFHARVESTABLEINVEN TORIESTHEREISASHIFTOFHARVESTBOTHAMONGANDWITHIN REGIONSASPRODUCTPRODUCTIONADJUSTSTOTAKEADVANTAGE OFLOWERCOSTRAWMATERIALSINSOMEREGIONS3HIFTSOCCUR BETWEENlBERTYPESANDBETWEENOWNERSHIPCLASSES5NDER THE4%-SCENARIOSTHEREISAHIGHEROVERALLSUPPLYOFSOFT WOODS AND LOWER PRICES (ARVEST THEN SHIFTS TOWARD THE INDUSTRY OWNERSHIP )N MOST REGIONS CAPACITY INCREASES AND THE HARVEST EXPANDS FASTER ON INDUSTRY LAND THAN IT DOES ON NONINDUSTRIAL TIMBERLANDS )N THE 0ACIlC #OAST THENONINDUSTRIALHARVESTDECLINESUNDERALLTHREESCENAR IOS-ANYOFTHESECHANGESARESTIMULATEDBYCHANGESIN STUMPAGE PRICES WHICH RELATIVE TO SOFTWOOD SAWTIMBER STUMPAGE PRICES IN THE 20!BASE PROJECTION THAT FOLLOW AN UPWARD SLOPING PATH TO THESE NEW PROJECTIONS SHOWALEVELINGOFPRICESBYANDTHENPRICESBEGINTO DECLINEANDBYDROPBELOWLEVELSPREDICTEDFOR -ILLS!LIG(AYNESAND!DAMS 4HISPASTWORKALSOSHOWEDTHEIMPORTANCEOFTRADE INTHATWITHOUTACHANGEINMARKETDEMANDORACHANGE IN#ANADIANINVENTORIESDOMESTICHARVESTREPLACES#ANA DIANHARVEST)MPORTSOF#ANADIANLUMBERDECREASEBOTH INTOTALVOLUMEANDASAPERCENTOFTHEMARKET#HEAPER 53 RAW MATERIAL HAS BOTH INCREASED LUMBER CONSUMP TION AND MADE THE #ANADIAN LUMBER LESS COMPETITIVE 7ITHOUTEXPLICITLYMODELING#ANADASRESOURCESECTORIT ISDIFlCULTTOSAYHOWACHANGEIN#ANADIANPRODUCTIVITY WOULDAFFECTTHELEVELOF53IMPORTS #LIMATE#HANGEAND&OREST0RODUCTIVITY &!3/4HE &!3/- FRAMEWORK HAS BEEN USED AS A PLATFORM FOR INVESTIGATING IMPLICATIONS OF INCREASED FOREST CARBON SEQUESTRATION!LIGETAL!DAMSETAL CONSTRAINTS ON AVAILABLE FUNDS FOR FOREST INVESTMENT BY PRIVATEOWNERS!LIGETAL!DAMSETALBIO MASS ANALYSES AND NATURAL RESOURCE POLICIES !LIG ET AL )NVESTIGATINGTHESENSITIVITYOF&!3/-PROJECTIONS TOARANGEOFDIFFERENTASSUMPTIONSOFFERSAUNIQUEPER SPECTIVEPARTICULARLYWHEREPOLICYMAKERSARECONCERNED WITHLINKAGESBETWEENFORESTRYANDAGRICULTUREANDWITH BOTH ECONOMIC AND ENVIRONMENTAL CONSEQUENCES OF DIF FERENTPOLICYALTERNATIVESEGINFORMATIONONFUTURENON TIMBERRESOURCECONDITIONSSUCHASWILDLIFEHABITAT!LIG ETAL 4HE&!3/-MODELWASAPPLIEDTOEXAMINETHEDIMEN SIONSOFECONOMICIMPACTSDUETOHYPOTHETICALBIOLOGICAL RESPONSES TO GLOBAL CLIMATE CHANGE "URTON ET AL 4HISEXPLORATORYSTUDYCONSIDEREDEIGHTPOSSIBLESCENAR IOSFORGLOBALCLIMATECHANGEEFFECTS4HEYWEREDESIGNED AS AN ATTEMPT TO DIMENSION THE POTENTIAL IMPACT OF CLI MATE CHANGE 4HE lRST FOUR CLIMATEBIOLOGICAL RESPONSE SCENARIOSEVALUATETHEEFFECTSOFACROSSTHEBOARDCHANGES IN TREE GROWTH RATES OR YIELD FOR EACH DECADE 4HE lRST SCENARIOPOSTULATESANINCREASEOFPERCENTINTREEGROWTH RATES EVERYWHERE IN THE 5NITED 3TATES 4HE SECOND POS TULATES AN ACROSSTHEBOARD DECREASE IN GROWTH RATES OF PERCENT 4WO SCENARIOS CONSIDER NATIONAL GROWTH RATE CHANGESOFPLUSPERCENTANDMINUSPERCENT )NADDITIONTWOSCENARIOSEXPLORETHEDIFFERENTEFFECTS FROM INCREASED WARMING AT DIFFERENT LATITUDES IN THE 5NITED3TATES4HEWARMINGCOUPLEDWITHASLIGHTDECLINE INPRECIPITATIONMAYNEGATIVELYIMPACTTIMBERYIELDSIN THE SOUTHERN 5NITED 3TATES !T THE SAME TIME YIELDS IN THENORTHERN5NITED3TATESMAYRISE4HEREFOREAPAIROF SOUTHERNDECLINESCENARIOSWERECONSTRUCTED/NEPOSTU LATESAPERCENTDECLINEINYIELDINTHE3OUTHAPERCENT INCREASEINTHE.ORTHANDNOCHANGEINOTHERREGIONS! SECONDSOUTHERNDECLINESCENARIOEXPLORESTHEIMPACTOFA PERCENTDECREASEINTHE3OUTHAPERCENTINCREASEIN THE.ORTHANDNOCHANGEINOTHERREGIONS4HEBASELINE -ODELING#LIMATE#HANGE)MPACTSONTHE&OREST3ECTOR CASEISSIMILARTOTHATDESCRIBEDBY(AYNESETALFOR THE20!!SSESSMENT5PDATE -C#ARL ET AL HAVE SINCE DEVELOPED RESPONSE FUNCTIONSTHATREPRESENTAWIDERANGEOFSCENARIOSFORTHE BIOLOGICALRESPONSEOFFORESTSTOCLIMATECHANGERANGING FROM SMALL TO LARGE CHANGES IN FOREST GROWTH RATES 4HE RESPONSEFUNCTIONSAREUSEDTOCHARACTERIZEBROADIMPACTS OFCLIMATECHANGEONTHEFORESTSECTOR!GGREGATEIMPACTS ACROSSALLCONSUMERSANDPRODUCERSINSOCIETYARERELA TIVELYSMALLBUTTHATPRODUCERSINCOMEANDFUTUREWELFARE nYEARSINTHEFUTUREAREMOSTATRISK 4HE &!3/- MODEL PROJECTED CHARACTERISTICS OF FOREST PRODUCTS PRODUCTION PRICE LEVELS TIMBER MANAGEMENT CHANGES LAND TRANSFERS AND ECONOMIC WELFARE EFFECTS 4HERESULTSOFTHEEXPLORATORYSTUDYINDICATETHATMARKET RESPONSESTOCLIMATECHANGEWILLVARYBYREGION)FYIELDS INCREASENATIONALLYTHE.ORTHCANPRODUCERELATIVELYMORE FORESTPRODUCTS)FYIELDSDECREASENATIONALLYTHE3OUTHCAN PRODUCERELATIVELYMORE)FYIELDSINTHE3OUTHDECREASE WHILE THEY RISE IN THE .ORTH PRODUCTION OF FOREST PROD UCTS IS PROJECTED TO SHIFT AWAY FROM THE 3OUTH )F STAND ESTABLISHMENTCOSTSRISEINTHE3OUTHPRODUCTIONMAYALSO SHIFTAWAYFROMTHE3OUTH #HANGES IN TIMBER PRODUCER AND CONSUMER PRICES UNDERTHECLIMATECHANGESCENARIOSRELATIVETOTHEBASESCE NARIOAREFAIRLYSMALLINMAGNITUDE7HENSOUTHERNCOSTS OF TIMBER PRODUCTION RISE TIMBER PRICE LEVELS INCREASE MORESUBSTANTIALLYTHANINOTHERSCENARIOS 4HE ECONOMIC WELFARE IMPACT OF THE GLOBAL CLIMATE CHANGE SCENARIOS IS SMALLLESS THAN A PERCENT CHANGE FROMTHEBASESCENARIOACROSSALLEIGHTHYPOTHETICALCASES )NGENERALWHENYIELDSRISECONSUMERSGAIN7HENYIELDS FALLORCOSTSRISEPRODUCERSGAIN)N&!3/-ANYCHANGE INFUTURECONDITIONSISOPTIMALLYANTICIPATEDFROMANET SOCIALWELFAREVIEWPOINTANDINVESTMENTISFREELYmEXIBLE TOVARYOVERTIME!REPRESENTATIONOFhREALWORLDvBEHAV IORWOULDDOUBTLESSBESOMEWHATLESSADAPTABLERECOG NIZINGLIMITATIONSOFTHEDECISIONMAKER4HESTRUCTUREOF THEPRESENTMODELHASBEENMODIlEDTOEXAMINESOMEOF THESEQUESTIONSOFhSTICKINESSvINPRODUCTANDCAPITALMAR KETS!LIGETAL!DAMSETALINCLUDINGLIMITS ON INVESTMENT BORROWING OR CAPITAL BUDGETS INCREASING MARGINAL COSTS OF BORROWING AND UNCERTAINTY REGARDING FUTURE MARKET CONDITIONS 4HE &!3/- RESULTS IN THE INVESTMENTS CASE ARE CLOSER TO THOSE PROJECTED BY THE 4!-- MODEL FOR COMPARABLE SCENARIOS 5SE OF BOTH THE 4!-- AND &!3/- MODELS REVEALS THE DIFFERENCES BETWEEN LIKELY FUTURE PATHS FOR THE FOREST SECTOR IF HISTORICAL RELATIONSHIPS BETWEEN KEY VARIABLES CONTINUE VERSUSPRODUCTIONPOSSIBILITIESANDOPTIMALRESPONSES TO EXTERNAL EVENTS EG CLIMATE CHANGE AND POLICIES &!3/- ASSUMES PERFECT FORESIGHT AND OPTIMAL ADJUST 'LOBALCHANGEMITIGATIONANALYSESUSINGTHE&!3/-MODEL AREDISCUSSEDINCHAPTEROFTHISREPORT 53$!&OREST3ERVICE'EN4ECH2EP2-23n'42n Mills, Alig, Haynes, and Adams 1982 = 100 Modeling Climate Change Impacts on the Forest Sector Figure 4.2—Softwood lumber price index under different views of the future including one prospective view of climate change. (The CEA projection represents the results from an alternative macro economic forecast developed by the Council of Economic Advisers in 1994.) Source: Haynes et al. 1995. ments in the unfettered case. As such it shows a greater shift to pine plantations, and as timber prices fall, an increase in land moving from forest to agriculture and a decrease of investment in pine plantations. With FASOM having all four key timber supply modeling elements as endogenous components, a different set of projected adjustments (both temporally and across regions) are possible than with TAMM. A range of adjustments is discussed in Chapter 8, where analyses of global change mitigation strategies using the FASOM model are reviewed. Model Uncertainties These two forest sector models are useful in developing a portfolio of possible impacts of human uses (in a commodity sense) on forests under climate change. USDA Forest Service Gen. Tech. Rep. RMRS–GTR–59. 2000. Such factors are not normally considered with most climate change simulation models. They show how and the extent that climate-change influences on U.S. timberlands will be mitigated by market feedbacks between the natural resource base and the production and consumption of forest products. This helps place the issue in context. As shown in figure 4.2, the prospective impacts on the U.S. forest sector of one view of global climate change is overshadowed in the near term by other contemporary policy concerns such as habitat conservation strategies that involve reductions of timber harvest on federal timberlands in the west (e.g. Adams et al. 1996b). This raises questions about the timing of the often cited prospective catastrophic ecological declines associated with climate change and the accompanying specter of economic dislocation within the U.S. forest sector. This scenario needs to be examined in light of the extent and speed of changes induced by price signals from timber markets. That is, to what extent will the expectations of lower prices in the future associated with climate-change reduce land management actions taken in the next decade? 75 -ILLS!LIG(AYNESAND!DAMS ,IKE ALL VIEWS OF THE FUTURE THOSE DISCUSSED IN THIS CHAPTERAREHIGHLYDEPENDENTONTHEUNDERLYINGASSUMP TIONS INCLUDING MODEL FORM !N IDEAL SYSTEM CAN VARY WITHTHEPOLICYANALYSISNEEDSBUTATRULYIDEALSYSTEMIS NOTPOSSIBLEBECAUSEOFLIMITEDRESOURCESANDDATAGAPS 0ROJECTIONS OF TIMBER MARKETS REQUIRE ASSUMPTIONS CON CERNINGFUTUREPRODUCTDEMANDWHICHISLARGELYBASED ON PROJECTED POPULATION AND EMPLOYMENT CAPACITY WHICH IS DEPENDENT ON mEXIBILITY IN LOCATION OF PRODUC TIONANDPROlTABILITYANDAVAILABLETIMBERINVENTORY WHICHISDEPENDENTONAREAINTIMBERLANDANDMINIMUM STANDARDS FOR TREE SIZE AGE BY OWNER AND lBER TYPE #HALLENGESALSOARISERELATEDTOTHESCALEOFTHEANALYSIS &OR EXAMPLE THE TIMBER INVENTORY MODELING ASSUMES A BROADRANGEOFHABITATSANDSPECIESCANBEAGGREGATEDINTO FORESTTYPESACROSSLARGEREGIONS!TTHISLEVELTHECHANGES IN INVENTORY DID NOT RECOGNIZE THE POTENTIAL RESPONSES THAT MIGHT BE ASSOCIATED WITH INDIVIDUALS IN THE SYSTEM ORHOWADAPTIVEFORESTMANAGEMENTREGIMESMIGHTAFFECT THOSE INDIVIDUALS !SSUMPTIONS ARE MADE IN AVERAGING OVER THE RANGE OF VARIABILITY IN ECOLOGICAL RELATIONSHIPS ASSOCIATED WITH TEMPERATURE CHANGES RAINFALL PATTERNS NUTRIENTCYCLINGANDTHRESHOLDSINGROWTHORSITECARRY INGCAPACITYRELATEDTOTHEABILITYOFECOSYSTEMSTOADAPT TOCHANGE!DDITIONALLYCHANGINGVEGETATIONPATTERNSARE ASSUMEDNOTTOINmUENCECLIMATICCONDITIONS 4HOUGHTHESEMODELSACCOUNTEDFORHARVESTANDIMPOR TATION OF WOOD PRODUCTS FROM #ANADA THEY DID NOT ACCOUNTFORCLIMATEINDUCEDCHANGESIN#ANADIANINVEN TORIES-ELILLOETALFOUNDTHATTHEHIGHERLATITUDE FORESTSEXPERIENCEDINCREASESINPRODUCTIVITYATLEASTEQUAL TOTHOSEOFTHE.ORTHERN5NITED3TATES4HISRESULTWOULD LIKELYLEADTOAPOSSIBLYHIGHERIMPORTLEVELTHANPREVI OUSLYCONSIDERED /THER ASSUMPTIONS NEED TO ADDRESS THE CONTEXT SUR ROUNDING FOREST SECTOR ISSUES &OR EXAMPLE WORLDWIDE ASSESSMENTSOFHUMANINmUENCESHOULDINCORPORATEDIF FERENCES IN LIKELY USE OF FOREST RESOURCES 3PECIlCALLY DEVELOPING COUNTRIES TEND TO VIEW FORESTS AS A SOURCE OF FOOD AND FUEL WHEREAS IN .ORTH !MERICA FORESTS ARE VIEWED AS A SOURCE OF INDUSTRIAL WOOD PRODUCTS AND A RANGEOFAMENITIES &INALLY 53 PRODUCT MARKETS HAVE GROWN PERCENT PERCENTPERYEAROVERTHEPASTFOURDECADESWHILEAT THESAMETIMEFORESTRESOURCESHAVEGROWNPERCENT)N THE NEXT lVE DECADES WE EXPECT SLOWING IN THE GROWTH OF CONSUMPTION AND IN FOREST RESOURCES (AYNES ET AL 0ROSPECTIVE CHANGES IN PRICES SIGNAL CHANGES IN TASTES INDUSTRY LOCATION AND INCENTIVES TO LANDOWNERS ALL OF WHICH ACT TO MITIGATE POTENTIAL IMPACTS OF CLIMATE CHANGE4WOIMPORTANTCONCEPTSTOCONSIDERWHENDEVEL OPING ASSESSMENTS OF FORESTS WITH RESPECT TO CLIMATE CHANGE ARE INCLUDE EFFECTS OF HUMANS AS THE MOST ADAPTABLE COMPONENT OF THE SYSTEM AND MAKE CLEAR DISTINCTIONSBETWEENSCIENCEANDPOLICYORPOLITICS -ODELING#LIMATE#HANGE)MPACTSONTHE&OREST3ECTOR /NGOING7ORK 4HEREHAVEALSOBEENEFFORTSTOBROADENTHEEXAMINA TIONOFTHETIMBERSECTORUNDERCLIMATECHANGEBYLINKING 4!-- WITH A BIOGEOGRAPHY MODEL KNOWN AS -APPED !TMOSPHERE0LANT3OIL 3YSTEM -!033 .EILSON 3EE #HAPTER FOR A MORE COMPREHENSIVE DESCRIPTION OFBIOGEOGRAPHYMODELSAND-!0334ODATEWETOOK A LINKAGE APPROACH OPPOSITE THAT USED WITH 4%- 4HE !4,!3TIMBERLANDINVENTORIESWERETRANSLATEDANDTHEN REAGGREGATEDINTOTHEPHYSIOGNOMICVEGETATIONTYPESPRO JECTEDBY-!0334HISALLOWED!4,!3TOSIMULATESIMUL TANEOUSCHANGESINCOVERTYPEANDFORESTPRODUCTIVITYIN TERMSOF-!033 $IFlCULTIESAROSEWHENWEATTEMPTEDTOMATCHTHE20! 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