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Significant economic effects of climate change
on European timber industry
14 February 2013
Issue 317
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Source: Hanewinkel, M.,
Cullmann, D.A.,
Schelhaas, M-J. et al.
(2012) Climate change
may cause severe loss in
the economic value of
European forest land.
Nature Climate Change.
Doi:
10.1038/NCLIMATE1687.
Contact:
[email protected]
Theme(s): Climate
change and energy,
Environmental economics,
Forests
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1.MOdels for AdapTIVE forest
Management (MOTIVE) is
supported by the European
Commission under the Seventh
Framework Programme.
See:www.motive-project.net
2.See:
www.efi.int/portal/completed_pro
jects/efiscen/
The impact of climate change on the distribution of tree species is likely to have
economic implications for the timber industry. A new study has estimated that
climate-induced shifts in range could reduce the value of European forest land for
the timber industry by between 14 and 50% by 2100. At the higher end of this
estimate, this could equate to a potential loss of several hundred billions of euros.
European forests are an important source of ecosystem services and timber production is
one of the services that are more viable to evaluate financially. Expected variations in
temperature and precipitation under climate change are likely to influence the range of most
tree species. For example, species that grow in cold and/or moist environments, such as the
Norway spruce, will be replaced by more drought-adapted species, such as oaks. The spruce
and other similar trees are economically valuable, since they are fast-growing and provide
large amounts of timber. This means their loss has financial implications, such as income
losses to forest owners, reductions in raw materials for the wood products industry and less
carbon sequestration.
The study, conducted under the EU MOTIVE project1, investigated the economic impact of
projected climate change on European forests (excluding Russia) under three
Intergovernmental Panel for Climate Change (IPCC) scenarios: extreme (A1F1), moderate
(A1B) and mild (B2). It modelled the presence or absence of 32 tree species in changing
temperatures and precipitation.
Results suggest that, by 2100, the area occupied by the spruce species group would
decrease by 43 to 60%, depending on the climate change scenario. In comparison, the total
area of land occupied by the oak is expected to double under all three scenarios.
By applying a large scale forest projection model – the European Forest Information Scenario
model (EFISCEN)2 - the study estimated the timber production for seven groups of tree
species. It then transformed this into the value of forest land using land expectation values
per hectare of land (LEVs), which are based on costs and prices for timber. This estimated
that under the moderate climate change scenario (A1B) there would be a loss of more than
€190 billion by 2100, caused by the changes in distribution and amount of tree species. For
more extreme scenarios, economic losses were greater.
The study has several important sources of uncertainty that could both under- and
overestimate the economic losses. Firstly, other impacts, such as increasing storm, drought,
fire and insect risks, have not been accounted for which could cause further adverse effects.
The model is likely to have underestimated the adaptive capacity of tree species and there
are also complex socio-economic drivers that have not been incorporated, such as further
variations in the market values of tree species and forest owners opting for more resilient
non-European species, such as the Douglas fir.
Nevertheless, the research provides an indication of the potential economic losses to the
European timber industry due to climate change and the need for measures that could
counteract these losses. In addition to timber production, there are several other ecosystem
services that are likely to be affected, such as carbon sequestration, water regulation and
prevention of soil erosion. These are not considered in this study but they provide important
economic benefits as well as mitigate climate change. The impact on these services should
also drive the need.