Climate, Adaptation, and the Value of Forestland: A National Ricardian Analysis of the United States
Summary
Estimates the effects of climate on forestry using county-level net economic returns, finding that climate change will increase forest returns in middle latitudes of eastern U.S. timberland, with 69% of gains attributable to adaptation across forest types.
Abstract
This study estimates an econometric Ricardian model of the effects of climate on forestry using a novel national data set of county-level net economic returns to forestland. Results show that climate change projections to 2050 will increase forest net returns on the middle latitudes of eastern U.S. timberland.
We quantify the value of extensive margin adaptation to climate change by separately estimating climate’s effect on 11 distinct forest types, finding that approximately 69% of the positive climate change effect on eastern U.S. forestland is attributable to adaptation.
Why It Matters
Understanding how climate change affects forest economics is essential for:
- Informing forest management and investment decisions
- Projecting regional shifts in forest productivity and species composition
- Quantifying the economic value of adaptation strategies
- Supporting climate-resilient forest policy
Key Findings
- Climate change projections to 2050 will increase forest net returns in the middle latitudes of eastern U.S. timberland
- Approximately 69% of the positive climate change effect is attributable to adaptation—the ability to shift between forest types as climate changes
- Regional heterogeneity exists in climate impacts, with positive effects concentrated where valuable southern pine species could expand
- The Ricardian approach provides a framework for valuing climate adaptation in forestry
Methodology
We develop a Ricardian framework that links county-level climate variables to net economic returns from forestry across the United States. By estimating separate effects for 11 distinct forest types, we can decompose total climate impacts into:
- Intensive margin effects: Changes in productivity within forest types
- Extensive margin effects: Adaptation through shifts between forest types
Citation
Mihiar, C., & Lewis, D. J. (2021). Climate, Adaptation, and the Value of Forestland: A National Ricardian Analysis of the United States. Land Economics, 97(4), 911-932. https://doi.org/10.3368/le.97.4.011620-0004R1