Presentation Title Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Forest Ecosystems: Tools to address climate change impacts and adaptation Brent Sohngen Department of Agricultural, Environmental & Development Economics, The views expressed are those of the presenter and should not be attributed to either UNDP or USAID. Furthermore, it is strongly recommended that both the PowerPoint slides and the videos of the presentation of content included herein are viewed in conjunction in order that statements appearing in the PowerPoint slides are not interpreted out of context.

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Model for measuring economic effects in forestry Adaptation of Forests and People to Climate Change Alexander Buck, Pia Katila and Risto Seppälä. (eds.). IUFRO World Series Volume 22. Helsinki. 224 p.

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Ecosystem impacts that affect forestry Productivity changes –Will forests grow faster or slower with climate change? Where will the changes occur? –CO 2 fertilization (e.g., Norby et al., 2006). –Warmer and wetter increases growth; while warmer and drier slows growth. –Some current evidence that historical climate change and CO2 change have increased productivity to date (e.g., Myneni et al., 1997; Boisvenue and Running, 2006; McMahon et al., 2010).

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Disturbance –Forest fires increase and reduce standing stock (Westerling et al., 2006; Marlon et al., 2012) –Tropical regions potentially experience increases in emissions Species/biome shifts –Prasad and Iverson; Woodall et al. (2009) Ecosystem impacts that affect forestry

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action How do ecosystem models work? Total C = 50Total C = 65 Per hectare basis: TotalC t = TotalC t-1 + NPP t-1 – decomp t-1 - disturbance t-1 For all hectares, adjust for forest area. Focus on measuring changes in carbon stock as a function of various ecological processes affecting carbon Time

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Ecosystem measurement: DGVM

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action DGVM Output MC1 model (MAPPS and Century Model) –Bachelet et al. Spatial Intertemporal Differs by climate scenario –A2, A1b scenarios –CSIRO, Hadley, MIROC models

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Shift in potential forest area Example for single climate scenario MIROC A1b 2005

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action MIROC A1b 2095 Shift in potential forest area Example for single climate scenario

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Shift in total carbon MIROC A1b 2005

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Shift in total carbon MIROC A1b 2095

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Ecosystem Adaptation: Net Primary Productivity (% change relative to 2005) A1B A2

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action A1b A2 Ecosystem Adaptation: Area Change (% change relative to 2005)

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action A1bA2 Ecosystem Adaptation: % burned per year

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Ecosystem Adaptation: Total carbon change (% change relative to 2005) A1bA2

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Variation across climate models

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Incorporating humans: Economic modeling Adaptation of Forests and People to Climate Change Alexander Buck, Pia Katila and Risto Seppälä. (eds.). IUFRO World Series Volume 22. Helsinki. 224 p.

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Economic models of forests Must: –Manage stocks of trees (harvesting/replanting) –Respond to land use change (conversion/regenerate) –Account for prices (either endogenously or exogenously) Many important trends influencing forests already underway –Increasing use of non-indigenous short-rotation species. –Growing demand in developing world, particularly Asia. –Demand rising both for traditional forestry and energy. –Rising opportunity costs for land leading to land use change. –Efforts to protect forests from land use change. Climate change adds perturbations to this complex management picture.

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Ecosystem measurement: DGVM

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Integrating ecosystem impacts into forestry models Productivity: shift the yield of forests over time in response to climate change Shift occurs slowly

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Integrating ecosystem impacts into forestry models Disturbance: Stock is lost instantaneously through fires, or other non-human disturbance. Increasing evidence these changes occur worldwide. VaVa VCaVCa

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Global Forest and Land Use Model Maximize PV of CS minus costs –Single global demand –250 ecosystem and management types differentiated by costs. –Land rents account for competition with other uses (rising land rents induce land use change). Climate Scenarios –Adjust yield function –Adjust equation of motion –Impose constraints on available land area.

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Adaptations Incorporated Manage existing stock by –changing rotations (e.g., harvest early if dieback occurring) –salvage Adjust where species grow: –Replant new species if growing and economic conditions (e.g., prices) warrant. Manage future stock by –Changing rotations –Changing management & investments

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Analysis Climate Change: A2, A1b scenarios CSIRO, Hadley, MIROC models Ecological Analysis: DGVM MC1 model (MAPPS and Century Model) Economic Analysis: Global Land Use Model

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Economic Results: Prices Change in price range = -7% to +2% Hadley & Miroc have mostly lower prices (7% max)

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Economic Results: Forest area Relative to baseline

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Economic results Change in output relative to baseline

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Example: China Why do economic and ecological results diverge? Effective yield increase more modest than NPP gains projected by ecosystem model

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Example: China Markets only use some of the new land available.

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Example: China Dieback is increasing…

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Example: China Output changes most in NE (down) and South (up)

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Economic results: welfare (million US$/yr)

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Annual Producer Welfare Comparison of A1b and A2 averages

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Annual producer effects Range across climate scenarios

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Economic model estimates of carbon flux

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Challenges for conservation Shifting biomes –Large potential effects across the range of ecosystems Declining forestland area –Particularly in tropics Changing productivity and disturbance

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Shifts in potential forest area MIROC A1b 2005

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action MIROC A1b 2095 Shifts in potential forest area

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Implications for Conservation Harris et al., 2008

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action China: Change in forest area and carbon MIROC A1b Forest Area Forest Carbon

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action SE Asia change in forest area and carbon MIROCA1b Forest Area Forest Carbon

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Issues to consider Costs of maintaining existing ecosystems –Harvest, replant, etc. –Opportunity costs (other uses) important. Costs of establishing new forests –Length of time to establish a new forest Protected area management –When to give up?

Capacity Building Programme on the Economics of Adaptation Supporting National/Sub-National Adaptation Planning and Action Conclusions Climate change has relatively modest impacts on global forest prices and outputs. –Although large changes in forest management occur and regional effects are large. Output falls in most of Asia, albeit modestly in most areas. –Lower prices lower investments. Large range across ecosystem scenarios Carbon flux is positive in initial periods. Large implications for conservation based on protected areas.