Assessing the Impact of Climate Change on the American Timber Industry and Proposing Planting Strategies to Allow for Optimal Timber Harvest Moving Forward

Abstract

The study conducted in this paper aims to establish optimal planting strategies for timber stands in North America moving forward as climate change and the occurrence of extreme weather events associated with it continue to increase. The first regression run in this paper indicates a likely increase in damages associated with climate change in recent years and further motivates the second phase of regressions which finds that the harvest of different species of trees is impacted differently depending on the weather event experienced during a given year in a given county. Using the results from this regression, timber producers and consultants can make better informed decisions as to the species of trees they should plant in a certain area to maximize the timber harvest thus increasing the productivity of the North American timber industry. An important thing to note is that establishing a connection between geographic regions within the United States and the increased impact of different types of weather events is not something done in this study but is an important avenue for further research as the combination of results from such a study and the ones in this paper would allow for a more universal set of guidelines for timber planting that takes into account future weather conditions in certain areas along with the species response to these weather events. The final motivation of this paper is to investigate potential increased instances of hedging by timber producers in timber-related financial markets as a result of the occurrence of certain weather events. Some of the regressions seemed to indicate a positive correlation between damages from a given weather event and the prices of certain hedging-related financial instruments in the timber markets, but results were unclear, leaving plenty of opportunity for further research.