A Dynamic Analysis of the Global Timber Market under Global Warming: An Integrated Modeling Approach

Abstract

1. IntroductionScientists and policymakers alike are concerned about global warming caused by the accumulation of carbon dioxide in the atmosphere. A significant number of studies have built comprehensive assessment models of carbon dioxide concentrations in the atmosphere over long time periods; however, most of these are deficient in the sense that they do not develop integrated assessment models that capture economic effects associated with global warming. In this vein, our research, as shown here, contributes to a growing body of literature that attempts to develop dynamic integrated models of ecosystem and economic system interactions that arise from predictions of global warming. We focus on the global timber market as a particular inquiry of global warming.As global wanning forces ecosystems to migrate toward the poles, the distribution of ecosystem types and the productivity of ecosystems will be altered. The transformation and adjustment of ecosystems resulting from climate change also change the environmental conditions under which natural resources, including forest products, are extracted and regenerated. It has been discussed and predicted that changes of forest types occur along two dynamic paths: dieback and regeneration (Shugart et al. 1986; Solomon 1986; King and Neilson 1992). As climate change causes forest types to change along these dynamic paths, the global timber market will adjust as timber availability is altered.In this context, we have developed an integrated modeling approach that identifies the effect of global warming on the global timber market. Most literature that studied this objective have only investigated the effect of global warming on timber markets in limited regions. Binkley (1988) studied the impact of global warming on boreal forests. Joyce et al. (1995), Burton et al. (1998), and Sohngen and Mendelsohn (1998) focused only on the United States. Perez-Garcia et al. (1997) and Sohngen et al. (1997) extended the effect of global warming on the global timber market. Except for Sohngen and Mendelsohn (1998) and Sohngen et al. (1997), these studies use comparative static analysis and compare steady-state equilibria. They consider neither dynamic ecological change nor dynamic economic behavior of the timber market.For our integrated modeling approach, we use the Timber Supply Model (TSM) developed by Sedjo and Lyon (1990) and extend it to include additional global timber market components. BIOME 3 (Haxeltine and Prentice 1996), an equilibrium terrestrial biosphere model based on ecophysiological constraints, resource availability, and competition among plant functional types, is adopted as our steady-state ecological model and Hamburg (Claussen 1996) as our general circulation model (GCM) to investigate the change of climate variables when carbon dioxide is doubled in the atmosphere. Because there are no dynamic ecological models that span the globe, we impose linearity assumptions about ecosystem adjustment to climate change. We do this to derive a predicted time path of relevant ecological changes such as forest dieback hectares and regeneration hectares and to predict the dynamic productivity change. We modify the extended TSM (which is referred to as TSM 2000) to reflect these dynamic ecological changes. Then we simulate a non-climate change base scenario and a climate change scenario using TSM 2000 to predict the effect of global warming on the global timber market. We perform these procedures for three different timber demand scenarios to observe the sensitivity of the conclusions te the level of timber demand, These include normal timber demand growth, high limber demand growth, and very high limber demand growth, First, we specify and formulate TSM 2000, second, we develop our procedures for estimating the relevant dynamic ecological changes caused by global warming, These include dynamic forestland area changes and productivity changes, Third, the simulation results are reported and discussed for each scenario. …