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Modeling some long-term implications of CO 2 fertilization for global forests and forest industries

Modeling some long-term implications of CO 2 fertilization for global forests and forest industries Background: This paper explored the long-term, ceteris-paribus effects of potential CO fertilization on the global forest sector. Based on the findings of Norby et al. (PNAS 2005, 102(50)) about forest response to elevated [CO ]. Methods: Forest productivity was increased in the Global Forest Products Model (GFPM) in proportion to the rising [CO ] projected in the IPCC scenario A1B, A2, and B2. Projections of the forest area and forest stock and of the production, consumption, prices, and trade of products ranging from fuelwood to paper and paperboard were obtained with the GFPM for each scenario, with and without CO fertilization beginning in 2011 and up to 2065. Results: CO2 fertilization increased wood supply, leading to lower wood prices which in turn induced modest lower prices of end products and higher global consumption. However, production and value added in industries decreased in some regions due to the relative competitive advantages and to the varying regional effects of CO fertilization. Conclusion: The main effect of CO fertilization was to raise the level of the world forest stock in 2065 by 9 to 10 % for scenarios A2 and B2 and by 20 % for scenario A1B. The rise in forest stock induced by fertilization was in part counteracted by its stimulation of the wood supply which resulted in lower wood prices and increased harvests. Keywords: CO fertilization, Climate change, Prices, Supply, Demand, International trade Background On the other hand, forests also act as carbon sinks The CO content of the atmosphere has been rising stead- accumulating carbon in trees through photosynthesis. ily, from a global average of approximately 340 ppm (parts This later role means that forests can be part of a nega- per million) in 1980 to 400 ppm in 2013 (NOAA-ESRL tive feedback working against atmospheric CO accumu- 2015). The [CO ] is expected to increase faster in the next lation. In this process, net primary productivity (NPP) century. According to the International Panel on Climate can be stimulated by the increase in atmospheric CO . Change, atmospheric [CO ] could reach 600 to 900 ppm This phenomenon, referred to as “CO fertilization”,has 2 2 in 2100, depending on varying scenarios concerning eco- been incorporated into vegetation models to predict its nomic and demographic growth, and mitigation policies consequences for climate change and carbon dynamics (IPCC 2013). This rise in [CO ] has consequences for (Thompson et al. 2004). Another consequence of CO 2 2 climate change as it influences directly global temperature fertilization is its impact on forest stock and thus on levels (IPCC 2012, Zickfeld et al. 2012). In this context, wood supply and forest industries which is addressed in forests are a potential source of CO emissions especially this study. due to deforestation (Woodwell et al. 1983). The general issue of climate change and forestry has received wide attention (see Kirilenko and Sedjo 2007 for a review). Several studies have used projections of Correspondence: jbuongio@wisc.edu biological consequences of climate change in economic Department of Forest and Wildlife Ecology, University of Wisconsin-Madison, Madison, WI, USA © 2015 Buongiorno. Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. Buongiorno Forest Ecosystems (2015) 2:29 Page 2 of 13 forest sector models, for countries (McCarl et al. 2000), Methods regions (Solberg et al. 2003), or the world (Perez-Garcia Theory et al. 2002, Sohngen and Sedjo 2005). Some studies The market equilibrium principles that underlie the assume higher growth of forests due to elevated CO analysis are illustrated in Fig. 1. It describes the de- concentrations, higher temperatures and longer growing mand, supply, trade, and prices for one commodity, seasons (Nabuurs et al. 2002). Faster growth in turn wood, with and without CO fertilization of forests, in leads to increased timber inventories and supply, and a world divided in two regions, at a particular point in hence lower timber prices (Sohngen and Mendelsohn time. Without CO fertilization Region 1, with de- 1998, Perez-Garcia et al. 2002, Solberg et al. 2003, Sohn- mand schedule D1 and supply schedule S1, is a net ex- gen and Sedjo 2005); although this may be limited by porter and Region 2, with demand schedule D2 and the propagation of pests, diseases, and invasive species supply schedule S2 is a net importer. In Fig. 1, the (Sohngen and Sedjo 2005). transport cost is ignored, and as a result the price, P,is In view of the difficulty of determining the effect of the same in Region 1 and Region 2. In the exporting multi-factor climate change on forests this study con- Region 1 the price P is higher than the autarky price centrated on the partial, ceteris-paribus, effect of CO at the intersection of D1 and S1 that would prevail fertilization alone. Specifically, it used the findings of without trade, while in the importing Region 2 it is Norby et al. (2005) to predict their long-term conse- lower. With CO fertilization the forest stock in- quences for the forest sector, other things being held creases in both regions and as a result the supply constant including other parameters of climate change schedules shift to the right to S ’ and S ’.Conse- 1 2 such as temperature and precipitation. Special attention quently, the price decreases from P to P’. Other things was given to the possibility that the impact could vary being equal, the demand is unchanged by the CO considerably depending on the context; that is on differ- fertilization. However, in accord with the lower price, ent scenarios concerning world economic, demographic the quantities consumed increase from C to C ’ in re- 1 1 growth, and policy. gion 1 and from C to C ’ in region 1. The lower price 2 2 The next section of the paper describes the theory, also induces lower production but with the assump- models, and data used to in the study. This is followed by tion of Fig. 1 this is more than compensated by the the results for the main countries and regions, by product supply shifts so that the quantity produced also in- group, consumption, production and prices, forest stock, creases from Q to Q ’ in region 1 and Q to Q ’ in re- 1 1 2 2 and value added in forest industries. The conclusion sum- gion 2. For trade, in this Figure, the result of the CO marizes the main results, and their limitations and poten- fertilization is a slight decrease in exports from region tial improvements. 1 and correspondingly lower imports in region 2. Fig. 1 Theoretical effects of supply shifts induced by CO fertilization of forest stock on the production, consumption, trade, and price of wood in two trading regions. Dotted lines refer to the situation without CO fertilization and the solid lines with CO fertilization 2 2 Buongiorno Forest Ecosystems (2015) 2:29 Page 3 of 13 However, the magnitude and even the direction of and pulpwood), fuelwood, and other industrial round- change may differ depending on the demand and supply wood. The supply shifts of waste paper and other fiber curves and on the magnitude of the shifts. For example, pulp depend on GDP growth. in response to CO fertilization, production may de- The changes in national forest area depend on the crease in a region if the price effect (movement along level of income per capita, according to a Kuznet’s curve the supply curve) exceeds the effect of the supply shift. (Koop and Tole 1999, Buongiorno 2014). For each coun- Also, net trade may increase if the differential in CO try, the curve is calibrated so that in the base year the fertilization change the comparative advantage of a re- observed rate of forest area change is equal to the pre- gion relative to the other. Thus, in a multi-region, multi- dicted, given the income per capita. The national forest products situation, the adjustment of the global equilib- stock evolves over time according to a growth-drain rium due to CO fertilization is hard to predict from equation: purely theoretical considerations, and requires a more I ¼ I þ G −S ð1Þ −1 −1 −1 elaborate model of the forest sector. Global forest products model (GFPM) where I is the forest stock at the beginning of the The GFPM adapted for this study calculates every year a current period, S is the harvest during the previous −1 global equilibrium across countries and products, linked period and G is the change of forest stock, without −1 dynamically to past equilibria. The static phase refers to harvest, during the previous period, such that: the calculation of the equilibrium in a given year. The dynamic phase simulates the change in equilibrium con- G ¼ g þ g 1 þ g I ð2Þ −1 −1 a u u ditions from year to year. More details concerning the formulation and the computer implementation are avail- Where g is the forest area growth rate, and g is the a u able in Buongiorno and Zhu (2014a). The current model periodic rate of forest growth on a given area without deals with 180 countries, forest area and stock, and 14 harvest. In this application g * is the relative change of the wood products. periodic rate of forest growth due to CO fertilization. In the static phase, the spatial global economic equilib- The periodic rate of forest growth, g , is inversely related rium in a given year is obtained by solving a quadratic to the stock per unit area (Buongiorno 2014). For each programming problem in which the objective function is country this relationship is calibrated so that in the base the social surplus in the global forest sector in a given year the observed g is equal to the predicted given the year, which competitive markets maximize (Samuelson stock per unit area. Equation (1) then gives the periodic 1952, Takayama and Judge 1971). This surplus is equal rate of change of forest stock net of harvest, which deter- to the value of the products to consumers (area under mines the shift of the wood supply curves. all the demand curves), minus the cost of supplying the Other dynamic elements include the changes in the in- raw materials (area under their supply curves), minus put–output coefficients, for example to reflect increasing the transformation cost from raw materials, such as in- use of recycled paper in paper manufacturing, and the dustrial roundwood to sawnwood, and minus the trans- changes in manufacturing cost (Buongiorno and Zhu, port cost between countries including trade taxes. The 2014b). main constraints define the material balance for each country and product: The quantity imported plus the Model calibration domestic supply and the manufactured quantity must The input–output (I-O) coefficients and manufacturing equal the domestic demand plus the quantity used in costs of the GFPM used in this study were determined manufacturing other products and exports. Upon solu- simultaneously by a calibration procedure based on tion of this quadratic problem the shadow prices of the FAOSTAT data from 2010 to 2012 (Buongiorno and material balance constraints give the market-clearing Zhu 2014b). Each I-O coefficient in a year and country prices for each commodity and country. is the ratio of the amount of input used in making a The dynamic phase of the GFPM describes the changes product to the amount of output. The GFPM calibration in the condition of the global equilibrium from one period procedure estimates the I-O coefficients while adjusting to the next. The demand equations shift over time as a the production of the input or output if needed based function of the GDP periodic growth rate, and the lagged on prior knowledge of manufacturing processes. To- consumption growth rate, in accord with adaptive expec- gether with data on local prices the procedure also gives tations or imperfect foresight (Johnston, 1984 p. 348). The estimates of the manufacturing costs. With input–out- shifts of roundwood supply are determined by the rate of put coefficients and manufacturing costs determined in change of forest stock (endogenous, see below). There is this way for all other countries, and the end-product de- one equation of this type for industrial roundwood (logs mand and wood supply equations positioned with the Buongiorno Forest Ecosystems (2015) 2:29 Page 4 of 13 price and quantity in each country, the solution of the IPCC scenarios global equilibrium closely replicates the base-year input Three global scenarios, A1B, A2, and B2 were used in data, in terms of production, consumption, net trade the projections from 2011 to 2065. The scenarios are (exports minus imports), and prices. based on the IPPC scenarios (Nakicenovic et al., 2000), The parameters of the dynamic demand equations extended and modified for the purpose of the United leading to the elasticities were estimated with panel States Forest Service 2010 RPA Assessment (USDA For- country-year data from 1992 to 2012, using the fixed- est Service 2012). Each scenario results from a separate effects method (Wooldridge 2002, p. 265), with the re- IPCC “storyline” about future global social, economic, sults shown in Table 1. The environmental Kuznets technical and policy developments. The storylines also curve for forest area change, and the equation of the reflect different interaction between developing and in- growth rate of forest stock were both estimated with dustrialized countries. data from FAO(2010) as in Buongiorno (2014). The elas- Scenario A1B, which assumes continuing globalization, ticities of fuelwood and industrial roundwood supply leads to high income growth and low population growth, with price and growing stock were from Turner et al. and thus the highest income per capita by the year 2065. (2006). The freight cost between countries was estimated Scenario A2 assumes a slowdown of globalization, and as the difference between unit value of imports and ex- the rise of more regional interests. This leads to lower ports. Data on import tariff duties came from the World income growth than scenario A1B, and higher popula- Trade Organization data base (WTO 2013). tion growth, and thus lower income per capita. Scenario The solution for each year equilibrium is computed B2 has economic and demographic assumptions between with an interior point solver (BPMPD, Mészáros 1999). scenarios A1B and A2. The GFPM input and output for calibration and simula- For the GFPM simulations, the three main exogenous tion is facilitated by Excel spreadsheets and graphics. A variables taken from these scenarios were the growth of recent version of the complete software, its documenta- GDP and population, and the growth of atmospheric tion, and a pre-calibrated data set are available freely for [CO ]. GDP growth from the IPCC was available only by academic research (Buongiorno and Zhu, 2014a). region. National GDP growth was deducted from the regional growth in such a way that the regional growth remained the same as in the IPCC and the growth of individual countries converged towards this average Table 1 Parameters of demand equations for end products regional growth rate (Buongiorno et al. 2012, p. 117). Variable Table 2 shows the resulting annual growth rates of GDP ln(C ) ln(Y) ln(P) −1 for each scenario, for selected world regions and Fuelwood 0.78 0.10 −0.10 countries. (0.03) (0.03) Other industrial roundwood 0.78 −0.05 −0.10 CO fertilization and forest growth Norby et al. (2005) find that “the response of net pri- (0.02) (0.02) mary productivity (NPP) to elevated CO is highly con- Sawnwood 0.56 0.14 −0.10 served across a broad range of productivity, with a (0.02) (0.02) (0.02) median response of 23 ± 2 %. They define “elevated Plywood & veneer 0.56 0.24 −0.20 CO ” as ~ 550 ppm of atmospheric [CO ], which is 2 2 (0.02) (0.02) (0.02) approximately 180 ppm above the atmospheric [CO ]in Particleboard 0.60 0.22 −0.28 2005. Thus, on average NPP increases by 0.13 % per ppm increase in atmospheric [CO ]. Here, it was as- (0.02) (0.03) (0.03) 2 sumed that the percent increase in NPP was equal to the Fiberboard 0.54 0.55 −0.26 percent increase in the growth of forest stock in the (0.02) (0.04) (0.03) absence of harvest. Newsprint 0.53 0.11 −0.17 Figure 2 shows the implication of this assumption for (0.02) (0.02) (0.02) the growth rate of forest stock, given the predicted evo- Printing and writing paper 0.52 0.31 −0.26 lution of atmospheric [CO ] in each IPCC scenario (Table 3). The highest impact was for scenario A2 in (0.02) (0.02) (0.03) which the growth rate was 32 % higher in 2070 than in Other paper and paperboard 0.60 0.23 −0.09 2006. The lowest was for scenario B2 (19 %). The effect (0.02) (0.02) (0.02) of scenario A1B was almost the same as that of A2 up to Notes: C = annual consumption lagged one year,Y = Gross domestic −1 2050 but somewhat lower in 2070 (29 %). Accordingly, product, P = price Standard errors in parentheses. Elasticity constrained to −0.10 in the GFPM the endogenous forest growth rate, g ,in u Buongiorno Forest Ecosystems (2015) 2:29 Page 5 of 13 Table 2 Projected annual percent GDP growth rate in selected world regions and countries, by scenario Scenario A1B Scenario A2 Scenario B2 2011–2030 2030–2065 2011–2030 2030–2065 2011–2030 2011–2065 AFRICA 7.1 5.4 3.4 4.1 5.0 5.9 Egypt 7.2 5.1 3.8 4.4 4.6 5.2 Nigeria 8.9 6.1 5.0 4.7 7.0 7.0 South Africa 4.1 3.1 0.6 1.7 3.2 3.6 N/C AMERICA 2.6 2.3 1.9 1.8 1.7 1.4 Canada 2.2 1.9 1.7 1.3 1.6 0.8 Mexico 5.2 3.2 1.8 2.1 2.5 3.1 USA 2.3 2.1 1.9 1.8 1.6 1.1 SOUTH AMERICA 5.3 3.3 2.0 2.5 2.7 3.4 Argentina 4.7 2.8 1.4 1.9 2.0 2.7 Brazil 5.2 3.2 1.8 2.2 2.4 3.0 Chile 4.9 2.9 2.1 2.5 3.0 3.6 ASIA 5.5 3.8 2.5 2.4 3.7 2.8 China 7.4 3.8 3.9 3.2 5.6 2.8 India 8.8 5.1 4.2 3.2 6.8 4.0 Indonesia 8.2 4.5 3.9 2.8 5.7 2.9 Japan 1.4 1.2 0.9 0.6 0.6 0.1 Korea, Rep. 4.9 1.7 0.8 −0.1 2.9 0.3 Malaysia 6.5 2.7 2.7 1.4 4.5 1.5 OCEANIA 2.9 2.1 2.2 1.6 2.2 0.9 Australia 2.6 1.9 2.1 1.6 2.0 0.8 New Zealand 2.6 2.0 2.3 1.8 2.4 1.1 EUROPE 2.3 2.0 1.2 1.1 1.3 1.3 EU-28 1.9 1.7 1.2 1.0 1.1 0.9 Austria 1.4 1.2 0.9 0.5 0.9 0.4 Finland 1.3 1.1 0.9 0.5 0.9 0.5 France 1.9 1.6 1.4 1.0 1.1 0.6 Germany 1.5 1.3 1.0 0.7 0.8 0.3 Italy 1.3 1.2 0.8 0.5 0.6 0.2 Spain 1.7 1.6 1.3 0.9 1.1 0.6 Sweden 1.3 1.1 0.8 0.5 1.1 0.6 United Kingdom 2.0 1.7 1.5 1.1 1.3 0.8 Russian Fed. 5.7 3.2 1.1 2.9 2.9 3.0 WORLD 3.9 3.2 1.9 2.0 2.4 2.4 Source: Adapted from Buongiorno et al. (2012) equation (2) changed over time by the relative fraction 2065. In accord with theoretical expectations, the price g * shown in Fig. 2. of all products was lower with CO fertilization. The u 2 fertilization effect varied substantially with the scenario. Results and discussion Under the A1B scenario, the price of fuelwood and Price effects industrial roundwood was 19 % lower in 2065 due to Table 4 shows the world prices, defined by the unit CO fertilization. The price of sawwood was 9 % lower, value of imports, in 2011 and projected with the GFPM and the price of wood-based panels was 3 % to 6 % in 2065 with scenarios A1B, A2 and B2, with or without lower. The price of mechanical and chemical pulp was the cumulative effect of CO fertilization from 2011 to 4 % and 6 % lower, respectively. The price of paper and 2 Buongiorno Forest Ecosystems (2015) 2:29 Page 6 of 13 (production + imports-exports) was higher in 2065 in all regions than without fertilization, under all three scenar- ios. The largest effect of CO fertilization occurred with scenario A1B, under which world consumption of fuel- wood was 8 % higher in 2065, while it was 5 % to 6 % higher under scenarios A2 and B2 (Table 5). The effect on fuelwood consumption was most noticeable in developing countries, reaching 13 % in Africa under scenario A1B. The smallest relative impact was in Europe and the EU- 28: 2 % with scenario A1B and 1 % with A2 and B2. The regional effect of CO fertilization on fuelwood production tended to mirror the effect on consumption, except for the EU-28 where production was somewhat lower than consumption with CO fertilization under all scenarios. In that case, the movement down the supply Fig. 2 Effects of CO fertilization on the growth rate of forest stock, curve due to the lower world price (Table 4) exceeded according to IPCC scenarios A1B, A2, and B2 the shift of the supply curve due to CO fertilization from 2011 to 2065, and resulted in lower production, paperboard was 3 % to 6 % lower depending on the which together with the higher consumption suggested a product. deterioration of net trade. For scenario A2 the price reductions were less than for scenario A1B, and similar to the effects under sce- Industrial roundwood consumption, production, and nario B2. For scenarios A2 and B2, CO fertilization trade decreased the price of fuelwood in 2065 by 12 % to 13 % Industrial roundwood includes logs, pulpwood, and other and the price of industrial roundwood by 9 % to 11 %. industrial roundwood (FAO 2014, p. xx). The supply of The price of sawnwood was 4 % to 5 % lower, and the industrial roundwood is, like that of fuelwood, directly price of wood-based panels was 1 % to 3 % lower. The affected by the shift due to CO fertilization. However, price of wood pulp decreased by 2 % to 4 % with CO while the demand for fuelwood, an end product, depends fertilization, and the price of paper and paperboard ultimately only on GDP and fuelwood price, the demand decreased by 1 % to 3 % depending on the product. for industrial roundwood is more involved. Since indus- trial roundwood is an input in the manufacture of sawn- Fuelwood consumption, production, and trade wood, wood-based panels, and wood pulp, its demand In accord with the lower world prices induced by the CO depends on the price of these end products, and on the fertilization from 2011 to 2065, fuelwood consumption price of industrial roundwood, the price of other inputs and the techniques of production. Table 3 Past and projected atmospheric CO saturation (ppm), Globally, the positive supply shift of industrial round- by IPCC scenario wood due to CO fertilization more than matched the IPCC scenario movement down the supply curve due to the price re- Year A1B A2 B2 duction. Consequently, the GFPM-projected world con- 1970 325 325 325 sumption and production of industrial roundwood was 2 % to 4 % higher, depending on the scenario, with the 1980 337 337 337 assumption of CO fertilization than without it 1990 353 353 353 (Table 6). 2000 369 369 369 However, the complex derived demand for industrial 2006 382 382 380 roundwood, coupled with the shifts of industrial round- 2010 391 390 388 wood supply induced by the CO fertilization led to 2020 420 417 408 varying regional effects. Consumption of industrial roundwood tended to be higher with CO fertilization 2030 454 451 429 than without it, except in North/Central America and 2040 491 490 453 Asia. Under scenario A1B in particular, industrial 2050 532 532 478 roundwood consumption was 10 % lower in N/C 2060 572 580 504 America, while it was 19 % higher in South America 2070 611 635 531 and 10 % higher in Europe and the EU-28. With this Source: IPCC(2013) scenario, production was 18 % higher in Asia in 2065, Buongiorno Forest Ecosystems (2015) 2:29 Page 7 of 13 Table 4 World prices of forest products in 2011 and projected in 2065 under scenarios A1B, A2 and B2, with and without CO fertilization from 2011 to 2065 2065, A1B 2065, A2 2065, B2 Product Unit 2011 without with without with without with Fuelwood $/m3 63 61 49 48 42 51 45 Industrial roundwood " 101 135 110 99 88 106 97 Sawnwood " 259 324 295 277 264 287 275 Veneer & plywood " 573 999 963 933 912 949 935 Particleboard " 285 552 518 500 487 514 502 Fiberboard " 433 915 883 864 850 876 865 Mechanical pulp $/t 509 942 901 850 817 879 847 Chemical pulp " 642 1036 978 949 924 967 946 Other fiber pulp " 1309 3848 3812 2240 2243 2247 2242 Waste paper " 187 563 524 417 402 499 488 Newsprint " 632 774 731 651 635 705 687 Printing & writing paper " 974 1128 1088 1016 1002 1063 1054 Other paper & paperboard " 986 1586 1538 1452 1431 1512 1496 while consumption hardly changed, so that the CO Sawnwood and panels consumption, production, and fertilization improved markedly Asia’s trade balance of trade industrial roundwood. The regional pattern of the In the GFPM, sawnwood and wood-based panels (veneer effects was similar for scenarios A2 and B2, but the and plywood, particleboard, fiberboard (FAO 2014)), are magnitudes in both cases were much less than for end products. Their demand depends on GDP, the prod- scenario A1B. uct price, and lagged consumption. As indicated above, Table 5 Projected differences in fuelwood production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 3 3 3 (10 m ) (%) (10 m ) (%) (10 m t) (%) Production Africa 226040 12.5 120717 9.6 165382 9.8 N/C America 6881 2.8 2444 1.2 3299 1.5 South America 10385 2.7 2559 0.9 5076 1.6 Asia 101055 5.4 28268 2.1 46643 3.0 Oceania 626 2.9 173 1.0 170 1.0 Europe 5794 2.4 2662 1.4 2940 1.4 EU-28 286 0.2 −1596 −1.3 −1622 −1.3 World 350782 7.7 156824 4.8 223509 5.6 Consumption Africa 226040 12.5 120723 9.6 165382 9.8 N/C America 7017 2.8 2545 1.3 3438 1.6 South America 10385 2.7 2560 0.9 5076 1.6 Asia 101038 5.4 28249 2.1 46390 3.0 Oceania 627 2.9 173 1.0 170 1.0 Europe 5676 2.5 2574 1.4 3053 1.5 EU-28 2976 2.2 1432 1.2 1568 1.3 World 350782 7.7 156824 4.8 223509 5.6 Buongiorno Forest Ecosystems (2015) 2:29 Page 8 of 13 Table 6 Projected differences in industrial roundwood production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 3 3 3 (10 m ) (%) (10 m ) (%) (10 m t) (%) Production Africa 13273 15.3 4243 5.7 8616 10.9 N/C America −65327 −7.6 −30586 −4.9 −52688 −7.7 South America 14684 5.0 1960 0.8 9435 3.7 Asia 89435 18.4 29302 7.0 33633 7.7 Oceania −1619 −2.3 −908 −1.7 −933 −1.7 Europe 63229 6.9 35641 4.7 47494 6.0 EU-28 26916 4.3 11573 2.1 16048 2.8 World 113674 4.2 39653 1.8 45558 2.0 Consumption Africa 14266 19.5 4416 7.2 5790 7.8 N/C America −58038 −10.4 −6150 −1.9 −14861 −4.3 South America 59850 19.1 3505 1.2 9556 3.0 Asia −2504 −0.3 −3330 −0.7 −2851 −0.5 Oceania 1838 5.5 723 2.4 371 1.2 Europe 98263 10.0 40488 4.1 47553 4.8 EU-28 78223 9.6 21018 2.6 22946 2.8 World 113674 4.2 39653 1.8 45558 2.0 the price of all products in 2065 was lower with CO and (positively) on the price of paper and paperboard. fertilization from 2011 to 2065. Consequently, the con- Meanwhile, the supply of wood pulp is a positive func- sumption of all end products was higher (Table 7). In tion of the price of wood pulp and a negative function of particular, under scenario A1B the world consumption the price of industrial roundwood (an input in making of wood-based panels was 1.2 % higher in 2065 with wood pulp). The CO fertilization reduces the price of CO fertilization, with the highest relative changes in the industrial roundwood, and in the process stimulates the range of 2 % to 2.5 % in Africa and South America. The demand for wood pulp. As shown in Table 8, under relative increases in consumption were about half that scenario A1B, the world wood pulp consumption (and magnitude under scenarios A2 and B2. the matching production) in 2065 was approximately Meanwhile, the production of sawnwood and panels 2 % higher with the CO fertilization than without it. varied much more across regions. For example, under The effect was approximately half that much under sce- scenario A1B, while production of sawnwood and panels narios A2 and B2. was 21 % to 24 % in Africa and South America with CO There was a strong difference in the effect across re- fertilization, it was 25 % lower in N/C America. However, gions. For example, under scenario A1B, the wood pulp the regional distribution of production varied markedly consumption in Europe was nearly 9 % higher with CO between scenarios. In particular, while the production of fertilization, and the production was double this amount, E-28 countries was 4 % higher with CO fertilization implying an improvement in net trade. Meanwhile, under scenario A1B and their trade balance improved as a production in N/C America was about 5 % lower with result, their production decreased slightly with scenarios CO fertilization under A1B, while consumption was un- A2 and B2, implying a slight worsening of net trade. changed, so that net trade deteriorated. The direction of the effects was similar under scenarios A2 and B2, but Wood pulp consumption production and trade the magnitude was smaller. The production and consumption of wood pulp (mech- anical + chemical + semi-chemical pulp (FAO 2014) are Paper and paperboard consumption production and determined by its demand and supply. Wood pulp is an trade input in the manufacture of paper and paperboard, so The products in the paper and paperboard group: news- that its demand depends (negatively) on its own price, print + printing and writing paper + other paper and Buongiorno Forest Ecosystems (2015) 2:29 Page 9 of 13 Table 7 Projected differences in sawnwood and wood-based panels production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 3 3 3 (10 m ) (%) (10 m ) (%) (10 m t) (%) Production Africa 5270 21.1 1063 5.9 1890 7.9 N/C America −33242 −24.6 278 0.4 −4815 −6.9 South America 29406 23.9 1205 1.0 3836 2.9 Asia −15345 −2.7 −6718 −2.0 −6952 −1.8 Oceania 359 3.4 332 3.6 114 1.3 Europe 30584 5.6 9805 1.9 13121 2.5 EU-28 19050 4.0 −1702 −0.4 −99 0.0 World 17033 1.2 5965 0.6 7193 0.6 Consumption Africa 1180 2.3 464 1.3 718 1.6 N/C America 2429 1.1 957 0.5 765 0.4 South America 1881 2.0 442 0.7 854 1.1 Asia 8014 1.1 2790 0.5 3446 0.6 Oceania 175 1.0 74 0.5 59 0.4 Europe 3355 1.2 1239 0.5 1353 0.6 EU-28 2428 1.2 970 0.6 1053 0.6 World 17033 1.2 5966 0.6 7194 0.6 Table 8 Projected differences in wood pulp production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 (10 t) (%) (10 t) (%) (10 t) (%) Production Africa 391 9.2 136 4.7 177 4.3 N/C America −7545 −4.9 −3085 −3.5 −3928 −3.9 South America −299 −1.7 163 1.6 240 2.0 Asia 1379 4.1 274 1.3 421 1.8 Oceania 20 0.6 31 1.1 34 1.3 Europe 11016 19.2 4016 8.0 4459 8.2 EU-28 11306 28.8 4511 11.6 4502 11.1 World 4961 1.8 1534 0.9 1401 0.7 Consumption Africa 231 4.8 44 1.6 17 0.4 N/C America −15 0.0 193 0.4 30 0.1 South America −635 −3.4 −25 −0.2 17 0.1 Asia 182 0.2 −180 −0.3 −217 −0.3 Oceania 21 0.6 2 0.1 19 0.7 Europe 5177 8.8 1500 3.4 1536 3.1 EU-28 4758 10.8 1512 4.2 1478 3.8 World 4962 1.8 1534 0.9 1401 0.7 Buongiorno Forest Ecosystems (2015) 2:29 Page 10 of 13 paperboard (FAO 2014) are treated as end products in minus the cost of the wood and fiber input used by the in- the GFPM. As for fuelwood, and sawnwood and wood- dustries (industrial roundwood, wood pulp, other fiber based panels the national demand is a function of GDP, pulp, and waste paper). The effects of the CO fertilization price, and lagged consumption. Consequently, CO from 2011 to 2065 on the input cost, value of the output fertilization influences paper and paperboard consump- andthe resulting value addedare summarizedinTable 10 tion through the price effect only. As the relative price by region and scenario. The largest impacts occurred under reduction induced by CO fertilization was smallest for scenario A1B according to which the CO fertilization de- 2 2 paper and paper and paperboard, the effects on con- creased the cost of the world industry inputs in 2065 by sumption were correspondingly small (Table 9). The lar- nearly $ 94x10 or 7%.The reductionininput cost oc- gest effects, under scenario A1B implied only a 0.5 % to curred in all regions, and was largest in Asia (−$42 x10 ). 0.8 % higher consumption depending on the region. Although thequantityofinputs, for example of industrial Under the other two scenarios, consumption was prac- roundwood, increased in several regions (Table 6), their tically the same with or without CO fertilization. lower world prices (Table 4) still led to a reduction in total There were however larger regional impacts on produc- input cost. tion due to the differences in production cost brought The value of the industries outputs was also lower in about by the different regional shifts of industrial round- several regions (Table 10) as the higher consumption of wood supply. In particular, under scenario A1B, paper and end products (e.g. sawnwood and panels) did not compen- paperboard production was nearly 4 % lower in South sate for the reduced prices. Under scenario A1B, output America with CO fertilization than without it, implying a value in 2065 was nearly 8 % lower in N/C America with deterioration of net trade, while in Europe, production CO fertilization, and nearly 4 % lower in Asia. At world was nearly 3 % higher, with a corresponding increase of level, the reduction in output value came close to the re- net trade. duction in input cost, leaving only a modest increase of value added ($7.6x10 , or less than 1 %). The effects were Value added in forest industries similar in direction for scenarios A2 and B2, but smaller For the purpose of this paper, value added is defined as the in magnitude so that at world level the CO fertilization value of the totaloutputofforestindustries(sawnwood, had hardly an impact on value added, although the re- wood-based panels, wood pulp, paper and paperboard) gional differences were more substantial. Table 9 Projected differences in paper and paperboard production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 (10 t) (%) (10 t) (%) (10 t) (%) Production Africa 194 1.2 123 1.3 8 0.1 N/C America −270 −0.1 341 0.3 60 0.0 South America −1682 −3.8 −84 −0.3 14 0.0 Asia 3118 0.5 −536 −0.1 −985 −0.2 Oceania 42 0.5 7 0.1 30 0.5 Europe 5740 2.8 1735 1.0 2164 1.2 EU-28 5370 3.0 1826 1.2 2173 1.4 World 7143 0.7 1586 0.2 1291 0.2 Consumption Africa 266 0.8 46 0.2 65 0.2 N/C America 831 0.5 319 0.2 205 0.2 South America 229 0.5 43 0.1 76 0.2 Asia 4884 0.8 882 0.2 675 0.1 Oceania 49 0.6 19 0.3 12 0.2 Europe 882 0.5 277 0.2 258 0.2 EU-28 718 0.5 232 0.2 223 0.2 World 7142 0.7 1586 0.2 1291 0.2 Buongiorno Forest Ecosystems (2015) 2:29 Page 11 of 13 Table 10 Projected differences in wood and fiber input cost, output value and value added in forest industries in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 6 6 6 (10 $) (%) (10 $) (%) (10 $) (%) Input cost Africa −407 −1.8 −280 −2.3 −414 −2.3 N/C America −29185 −12.9 −5853 −5.5 −6632 −5.1 South America −4483 −5.6 −3476 −7.2 −2493 −4.2 Asia −41990 −6.4 −12017 −3.8 −11212 −3.1 Oceania −926 −8.5 −380 −5.0 −339 −4.4 Europe −16533 −6.0 −8339 −4.4 −5037 −2.3 EU-28 −13738 −5.9 −7769 −4.8 −5394 −3.0 World −93524 −7.3 −30343 −4.5 −26127 −3.3 Output value Africa 853 2.3 79 0.4 396 1.2 N/C America −41032 −7.8 −8293 −3.0 −11767 −3.6 South America 2790 1.9 −1746 −1.7 533 0.4 Asia −48040 −3.7 −16356 −2.1 −14277 −1.6 Oceania −716 −3.2 −211 −1.2 −138 −0.8 Europe 243 0.0 −1690 −0.4 1469 0.3 EU-28 217 0.0 −1965 −0.5 1178 0.3 World −85901 −3.2 −28217 −1.7 −23784 −1.3 Value added Africa 1260 8.8 359 4.1 809 5.7 N/C America −11846 −4.0 −2440 −1.4 −5135 −2.6 South America 7273 10.4 1730 3.1 3026 4.9 Asia −6050 −0.9 −4339 −0.9 −3064 −0.6 Oceania 210 1.9 169 1.7 202 2.3 Europe 16775 5.3 6649 2.5 6506 2.3 EU-28 13955 5.2 5804 2.4 6571 2.6 World 7623 0.6 2126 0.2 2344 0.2 Forest stock observed above. The largest effects of the CO CO fertilization tended to increase the forest stock, but fertilization on the level of forest stock in 2065were as observed above a rise in stock shifted the wood sup- under scenario A1B. This was in part due to the high ply to the right, increasing wood harvest and thus level of atmospheric [CO ] and also to the rise in forest decreasing the forest stock. These opposite tendencies area, and thus young growing forests, induced by the were further affected by the price decrease induced by higher GDP per capita growth assumed in scenario A1B. the increase in wood supply, which stimulated the de- For this scenario, the forest stock was 20 % higher in mand for wood products and thus the derived demand 2065 with CO fertilization than without it. The largest for wood input and the attendant harvest. Table 11 sum- relative impacts were in Africa and Asia. Under scenar- marizes the results of the GFPM simulation of these ios A2 and B2 the effect of CO fertilization were simi- complex interactions for the forest stock in different re- lar, globally (9 % to 10 %) and by region, with the largest gions and for the three scenarios. relative impact still in Africa. For all scenarios and regions the growing stock was higher in 2065 with CO fertilization than without it. Conclusions Thus, the added growth due to CO fertilization more The objective of this paper was to explore the long-term, than compensated for the cumulative effects of the in- ceteris-paribus effects of a potential CO fertilization on creased fuelwood and industrial roundwood harvests the global forest sector. Based on the findings of Norby et Buongiorno Forest Ecosystems (2015) 2:29 Page 12 of 13 Table 11 Projected differences in growing stock in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 6 3 6 3 6 3 (10 m ) (%) (10 m ) (%) (10 m ) (%) Africa 26212 34 % 13527 19 % 16089 21 % N/C America 11414 11 % 6003 5 % 3233 3 % South America 30998 19 % 9051 6 % 16872 10 % Asia 20304 27 % 9977 10 % 9238 10 % Oceania 1953 14 % 850 6 % 715 5 % Europe 25818 19 % 15689 11 % 15537 11 % EU-28 4972 14 % 3120 7 % 2857 7 % World 116698 20 % 55097 9 % 61685 10 % al. (2005) about forest response to elevated CO concen- they also suggest that the NPP enhancement due to CO 2 2 tration it was assumed that the effect of CO fertilization fertilization may be much larger in tropical than boreal on forest growth would be conserved across a broad range forests. of productivity, with an average stimulation of 23 % for a A review of several studies by the Center for the Study 180 ppm increase of atmospheric [CO ]. of Carbon Dioxide and Global Change (2014) does con- This increased productivity was applied to national clude that “CO fertilization effects strongly increased forest growth rates in the Global Forest Products Model recent Net Primary Production trends in regional totals”. in proportion to the rising levels of [CO ] projected by But, much work is still needed to quantify this effect apart the International Panel for Climate Change scenarios from or in conjunction with changes in temperature and A1B, A2, and B2. In addition to different [CO ] levels precipitation (Zickfeld et al. 2012). In addition, the the three scenarios projected different growth rates of methods used in this study require good estimates of gross domestic product and population, which influence current forest growth rates in different countries. This will the future demand for forest products, and the evolution mean further improvement of the global forest inventory of forest area. Projections of the forest area and forest and harvest statistics, which are currently subject to stock, and of the production, consumption, prices, and substantial errors due to infrequent and unequal sampling, trade of different products (ranging from fuelwood to and differences in definitions and classifications (FAO paper and paperboard) were obtained with the GFPM 2010). for each scenario, with and without the assumption of Keeping these caveats in mind, the present study CO fertilization beginning in 2011 and up to 2065. showed that the impact of CO fertilization would depend 2 2 The results suggested that CO fertilization would very much on the economic and demographic context in raise the level of the world forest stock by 9 to 10 % for which it occurred, but in all cases the impact on the global scenarios A2 and B2 and by 20 % for scenario A1B. The value added in the forest sector would be modest. On the change in forest stock was in part counteracted by the other hand, CO forest fertilization per se might have stimulation of the wood supply which resulted in lower substantial effects on the long-term level of forest stock, wood prices and increased wood harvest. The lower and less on the harvest. There would thus be a net positive wood prices in turn led to lower prices of end products effect of CO fertilization on the amount of carbon stored and increased global consumption. However, production in forests, a clearly beneficial effect for overall climate decreased in some regions due to the relative competi- change. tive advantages and to the varying regional effects of Competing interests CO fertilization. The author declares that he has no competing interests. These findings rely on strong assumptions; in particular that CO fertilization can be summarized over very differ- Author’s information ent forest types by the simplenumber suggested in Norby Professor Emeritus, University of Wisconsin-Madison, USA, and Foreign Member, French Academy of Agriculture, Paris, France. et al. (2005). Although the homogeneity of response that they observed is striking, and over a wide range of sites, Acknowledgments they all are within the temperate zone. It is uncertain that The research leading to this paper was supported in part by a joint venture they can be applied to other ecological zones. Hickler et al. agreement with the USDA Forest Service Southern Research Station in cooperation with project leader Jeff Prestemon. (2008) use a dynamic vegetation model which does repro- duce the data of Norby et al. (2005), and conclude that the Received: 30 June 2015 Accepted: 14 October 2015 data “might also be representative of forests globally”.But, Buongiorno Forest Ecosystems (2015) 2:29 Page 13 of 13 References Thompson SL, Govindasamy B, Mirin A, Caldeira K, Delire C, Milovich J, Wickett M, Buongiorno J (2014) Global modeling to predict timber production and prices: Erickson D (2004) Quantifying the effects of CO2-fertilized vegetation on future the GFPM approach. Forestry 88:291–303 global climate and carbon dynamics. Geophysical Research Letters 31(3). Buongiorno J, Zhu S, Raunikar R, Prestemon JP (2012) Outlook to 2060 for world Turner J, Buongiorno J, Zhu S (2006) An economic model of international wood forest and forest industries: a technical document supporting the Forest supply, forest stock and forest area change. Scandinavian J Forest Res 21:73–86 Service 210 RPA assessment. 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Norby RJ, DeLucia EH, Gielen B, Calfapietra C, Giardina CP, King JS, Ledford J, McCarthy HR, Moore DJP, Ceulemans R, De Angelis P, Finzi AC, Karnovsy DF, Kubiske ME, Lukac M, Pregitzer KS, Scarascia-Mugnozza GE, Schlesinger WH, Oren R (2005) Forest response to elevated CO2 is conserved across a broad range of productivity. Proc Natl Acad Sci U S A 102:18052–18056 NOAA-ESRL (2015) Annual mean carbon dioxide data. ftp://aftp.cmdl.noaa.gov/ products/trends/co2/co2_annmean_gl.txt Accessed 17 Jan 2015. Perez-Garcia J, Joyce LA, McGuire AD, Xiao X (2002) Impacts of climate change Submit your manuscript to a on the global forest sector. Clim Change 54:439–461 journal and benefi t from: Samuelson PA (1952) Spatial price equilibrium with linear programming. Am Econ Rev 42:283–303 7 Convenient online submission Sohngen B, Mendelsohn R (1998) Valuing the impact of large-scale ecological 7 Rigorous peer review change in a market: The effect of climate change on U.S. timber. Am Econ Rev 88(4):689–710 7 Immediate publication on acceptance Sohngen B, Sedjo R (2005) Impacts of climate change on forest product 7 Open access: articles freely available online markets: Implications for North American producers. The Forestry Chron 7 High visibility within the fi eld 81(5):689–674 7 Retaining the copyright to your article Solberg B, Moiseyev A, Kallio AMI (2003) Economic impacts of accelerating forest growth in Europe. Forest Policy Econ 5:157–171 Takayama T, Judge G (1971) Spatial and temporal price and allocation models. Submit your next manuscript at 7 springeropen.com North-Holland Publishing Company, Amsterdam. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png "Forest Ecosystems" Springer Journals

Modeling some long-term implications of CO 2 fertilization for global forests and forest industries

Buongiorno, Joseph
"Forest Ecosystems" , Volume 2 (1): 13 – Dec 1, 2015
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2015 Buongiorno.
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Abstract

Background: This paper explored the long-term, ceteris-paribus effects of potential CO fertilization on the global forest sector. Based on the findings of Norby et al. (PNAS 2005, 102(50)) about forest response to elevated [CO ]. Methods: Forest productivity was increased in the Global Forest Products Model (GFPM) in proportion to the rising [CO ] projected in the IPCC scenario A1B, A2, and B2. Projections of the forest area and forest stock and of the production, consumption, prices, and trade of products ranging from fuelwood to paper and paperboard were obtained with the GFPM for each scenario, with and without CO fertilization beginning in 2011 and up to 2065. Results: CO2 fertilization increased wood supply, leading to lower wood prices which in turn induced modest lower prices of end products and higher global consumption. However, production and value added in industries decreased in some regions due to the relative competitive advantages and to the varying regional effects of CO fertilization. Conclusion: The main effect of CO fertilization was to raise the level of the world forest stock in 2065 by 9 to 10 % for scenarios A2 and B2 and by 20 % for scenario A1B. The rise in forest stock induced by fertilization was in part counteracted by its stimulation of the wood supply which resulted in lower wood prices and increased harvests. Keywords: CO fertilization, Climate change, Prices, Supply, Demand, International trade Background On the other hand, forests also act as carbon sinks The CO content of the atmosphere has been rising stead- accumulating carbon in trees through photosynthesis. ily, from a global average of approximately 340 ppm (parts This later role means that forests can be part of a nega- per million) in 1980 to 400 ppm in 2013 (NOAA-ESRL tive feedback working against atmospheric CO accumu- 2015). The [CO ] is expected to increase faster in the next lation. In this process, net primary productivity (NPP) century. According to the International Panel on Climate can be stimulated by the increase in atmospheric CO . Change, atmospheric [CO ] could reach 600 to 900 ppm This phenomenon, referred to as “CO fertilization”,has 2 2 in 2100, depending on varying scenarios concerning eco- been incorporated into vegetation models to predict its nomic and demographic growth, and mitigation policies consequences for climate change and carbon dynamics (IPCC 2013). This rise in [CO ] has consequences for (Thompson et al. 2004). Another consequence of CO 2 2 climate change as it influences directly global temperature fertilization is its impact on forest stock and thus on levels (IPCC 2012, Zickfeld et al. 2012). In this context, wood supply and forest industries which is addressed in forests are a potential source of CO emissions especially this study. due to deforestation (Woodwell et al. 1983). The general issue of climate change and forestry has received wide attention (see Kirilenko and Sedjo 2007 for a review). Several studies have used projections of Correspondence: jbuongio@wisc.edu biological consequences of climate change in economic Department of Forest and Wildlife Ecology, University of Wisconsin-Madison, Madison, WI, USA © 2015 Buongiorno. Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. Buongiorno Forest Ecosystems (2015) 2:29 Page 2 of 13 forest sector models, for countries (McCarl et al. 2000), Methods regions (Solberg et al. 2003), or the world (Perez-Garcia Theory et al. 2002, Sohngen and Sedjo 2005). Some studies The market equilibrium principles that underlie the assume higher growth of forests due to elevated CO analysis are illustrated in Fig. 1. It describes the de- concentrations, higher temperatures and longer growing mand, supply, trade, and prices for one commodity, seasons (Nabuurs et al. 2002). Faster growth in turn wood, with and without CO fertilization of forests, in leads to increased timber inventories and supply, and a world divided in two regions, at a particular point in hence lower timber prices (Sohngen and Mendelsohn time. Without CO fertilization Region 1, with de- 1998, Perez-Garcia et al. 2002, Solberg et al. 2003, Sohn- mand schedule D1 and supply schedule S1, is a net ex- gen and Sedjo 2005); although this may be limited by porter and Region 2, with demand schedule D2 and the propagation of pests, diseases, and invasive species supply schedule S2 is a net importer. In Fig. 1, the (Sohngen and Sedjo 2005). transport cost is ignored, and as a result the price, P,is In view of the difficulty of determining the effect of the same in Region 1 and Region 2. In the exporting multi-factor climate change on forests this study con- Region 1 the price P is higher than the autarky price centrated on the partial, ceteris-paribus, effect of CO at the intersection of D1 and S1 that would prevail fertilization alone. Specifically, it used the findings of without trade, while in the importing Region 2 it is Norby et al. (2005) to predict their long-term conse- lower. With CO fertilization the forest stock in- quences for the forest sector, other things being held creases in both regions and as a result the supply constant including other parameters of climate change schedules shift to the right to S ’ and S ’.Conse- 1 2 such as temperature and precipitation. Special attention quently, the price decreases from P to P’. Other things was given to the possibility that the impact could vary being equal, the demand is unchanged by the CO considerably depending on the context; that is on differ- fertilization. However, in accord with the lower price, ent scenarios concerning world economic, demographic the quantities consumed increase from C to C ’ in re- 1 1 growth, and policy. gion 1 and from C to C ’ in region 1. The lower price 2 2 The next section of the paper describes the theory, also induces lower production but with the assump- models, and data used to in the study. This is followed by tion of Fig. 1 this is more than compensated by the the results for the main countries and regions, by product supply shifts so that the quantity produced also in- group, consumption, production and prices, forest stock, creases from Q to Q ’ in region 1 and Q to Q ’ in re- 1 1 2 2 and value added in forest industries. The conclusion sum- gion 2. For trade, in this Figure, the result of the CO marizes the main results, and their limitations and poten- fertilization is a slight decrease in exports from region tial improvements. 1 and correspondingly lower imports in region 2. Fig. 1 Theoretical effects of supply shifts induced by CO fertilization of forest stock on the production, consumption, trade, and price of wood in two trading regions. Dotted lines refer to the situation without CO fertilization and the solid lines with CO fertilization 2 2 Buongiorno Forest Ecosystems (2015) 2:29 Page 3 of 13 However, the magnitude and even the direction of and pulpwood), fuelwood, and other industrial round- change may differ depending on the demand and supply wood. The supply shifts of waste paper and other fiber curves and on the magnitude of the shifts. For example, pulp depend on GDP growth. in response to CO fertilization, production may de- The changes in national forest area depend on the crease in a region if the price effect (movement along level of income per capita, according to a Kuznet’s curve the supply curve) exceeds the effect of the supply shift. (Koop and Tole 1999, Buongiorno 2014). For each coun- Also, net trade may increase if the differential in CO try, the curve is calibrated so that in the base year the fertilization change the comparative advantage of a re- observed rate of forest area change is equal to the pre- gion relative to the other. Thus, in a multi-region, multi- dicted, given the income per capita. The national forest products situation, the adjustment of the global equilib- stock evolves over time according to a growth-drain rium due to CO fertilization is hard to predict from equation: purely theoretical considerations, and requires a more I ¼ I þ G −S ð1Þ −1 −1 −1 elaborate model of the forest sector. Global forest products model (GFPM) where I is the forest stock at the beginning of the The GFPM adapted for this study calculates every year a current period, S is the harvest during the previous −1 global equilibrium across countries and products, linked period and G is the change of forest stock, without −1 dynamically to past equilibria. The static phase refers to harvest, during the previous period, such that: the calculation of the equilibrium in a given year. The dynamic phase simulates the change in equilibrium con- G ¼ g þ g 1 þ g I ð2Þ −1 −1 a u u ditions from year to year. More details concerning the formulation and the computer implementation are avail- Where g is the forest area growth rate, and g is the a u able in Buongiorno and Zhu (2014a). The current model periodic rate of forest growth on a given area without deals with 180 countries, forest area and stock, and 14 harvest. In this application g * is the relative change of the wood products. periodic rate of forest growth due to CO fertilization. In the static phase, the spatial global economic equilib- The periodic rate of forest growth, g , is inversely related rium in a given year is obtained by solving a quadratic to the stock per unit area (Buongiorno 2014). For each programming problem in which the objective function is country this relationship is calibrated so that in the base the social surplus in the global forest sector in a given year the observed g is equal to the predicted given the year, which competitive markets maximize (Samuelson stock per unit area. Equation (1) then gives the periodic 1952, Takayama and Judge 1971). This surplus is equal rate of change of forest stock net of harvest, which deter- to the value of the products to consumers (area under mines the shift of the wood supply curves. all the demand curves), minus the cost of supplying the Other dynamic elements include the changes in the in- raw materials (area under their supply curves), minus put–output coefficients, for example to reflect increasing the transformation cost from raw materials, such as in- use of recycled paper in paper manufacturing, and the dustrial roundwood to sawnwood, and minus the trans- changes in manufacturing cost (Buongiorno and Zhu, port cost between countries including trade taxes. The 2014b). main constraints define the material balance for each country and product: The quantity imported plus the Model calibration domestic supply and the manufactured quantity must The input–output (I-O) coefficients and manufacturing equal the domestic demand plus the quantity used in costs of the GFPM used in this study were determined manufacturing other products and exports. Upon solu- simultaneously by a calibration procedure based on tion of this quadratic problem the shadow prices of the FAOSTAT data from 2010 to 2012 (Buongiorno and material balance constraints give the market-clearing Zhu 2014b). Each I-O coefficient in a year and country prices for each commodity and country. is the ratio of the amount of input used in making a The dynamic phase of the GFPM describes the changes product to the amount of output. The GFPM calibration in the condition of the global equilibrium from one period procedure estimates the I-O coefficients while adjusting to the next. The demand equations shift over time as a the production of the input or output if needed based function of the GDP periodic growth rate, and the lagged on prior knowledge of manufacturing processes. To- consumption growth rate, in accord with adaptive expec- gether with data on local prices the procedure also gives tations or imperfect foresight (Johnston, 1984 p. 348). The estimates of the manufacturing costs. With input–out- shifts of roundwood supply are determined by the rate of put coefficients and manufacturing costs determined in change of forest stock (endogenous, see below). There is this way for all other countries, and the end-product de- one equation of this type for industrial roundwood (logs mand and wood supply equations positioned with the Buongiorno Forest Ecosystems (2015) 2:29 Page 4 of 13 price and quantity in each country, the solution of the IPCC scenarios global equilibrium closely replicates the base-year input Three global scenarios, A1B, A2, and B2 were used in data, in terms of production, consumption, net trade the projections from 2011 to 2065. The scenarios are (exports minus imports), and prices. based on the IPPC scenarios (Nakicenovic et al., 2000), The parameters of the dynamic demand equations extended and modified for the purpose of the United leading to the elasticities were estimated with panel States Forest Service 2010 RPA Assessment (USDA For- country-year data from 1992 to 2012, using the fixed- est Service 2012). Each scenario results from a separate effects method (Wooldridge 2002, p. 265), with the re- IPCC “storyline” about future global social, economic, sults shown in Table 1. The environmental Kuznets technical and policy developments. The storylines also curve for forest area change, and the equation of the reflect different interaction between developing and in- growth rate of forest stock were both estimated with dustrialized countries. data from FAO(2010) as in Buongiorno (2014). The elas- Scenario A1B, which assumes continuing globalization, ticities of fuelwood and industrial roundwood supply leads to high income growth and low population growth, with price and growing stock were from Turner et al. and thus the highest income per capita by the year 2065. (2006). The freight cost between countries was estimated Scenario A2 assumes a slowdown of globalization, and as the difference between unit value of imports and ex- the rise of more regional interests. This leads to lower ports. Data on import tariff duties came from the World income growth than scenario A1B, and higher popula- Trade Organization data base (WTO 2013). tion growth, and thus lower income per capita. Scenario The solution for each year equilibrium is computed B2 has economic and demographic assumptions between with an interior point solver (BPMPD, Mészáros 1999). scenarios A1B and A2. The GFPM input and output for calibration and simula- For the GFPM simulations, the three main exogenous tion is facilitated by Excel spreadsheets and graphics. A variables taken from these scenarios were the growth of recent version of the complete software, its documenta- GDP and population, and the growth of atmospheric tion, and a pre-calibrated data set are available freely for [CO ]. GDP growth from the IPCC was available only by academic research (Buongiorno and Zhu, 2014a). region. National GDP growth was deducted from the regional growth in such a way that the regional growth remained the same as in the IPCC and the growth of individual countries converged towards this average Table 1 Parameters of demand equations for end products regional growth rate (Buongiorno et al. 2012, p. 117). Variable Table 2 shows the resulting annual growth rates of GDP ln(C ) ln(Y) ln(P) −1 for each scenario, for selected world regions and Fuelwood 0.78 0.10 −0.10 countries. (0.03) (0.03) Other industrial roundwood 0.78 −0.05 −0.10 CO fertilization and forest growth Norby et al. (2005) find that “the response of net pri- (0.02) (0.02) mary productivity (NPP) to elevated CO is highly con- Sawnwood 0.56 0.14 −0.10 served across a broad range of productivity, with a (0.02) (0.02) (0.02) median response of 23 ± 2 %. They define “elevated Plywood & veneer 0.56 0.24 −0.20 CO ” as ~ 550 ppm of atmospheric [CO ], which is 2 2 (0.02) (0.02) (0.02) approximately 180 ppm above the atmospheric [CO ]in Particleboard 0.60 0.22 −0.28 2005. Thus, on average NPP increases by 0.13 % per ppm increase in atmospheric [CO ]. Here, it was as- (0.02) (0.03) (0.03) 2 sumed that the percent increase in NPP was equal to the Fiberboard 0.54 0.55 −0.26 percent increase in the growth of forest stock in the (0.02) (0.04) (0.03) absence of harvest. Newsprint 0.53 0.11 −0.17 Figure 2 shows the implication of this assumption for (0.02) (0.02) (0.02) the growth rate of forest stock, given the predicted evo- Printing and writing paper 0.52 0.31 −0.26 lution of atmospheric [CO ] in each IPCC scenario (Table 3). The highest impact was for scenario A2 in (0.02) (0.02) (0.03) which the growth rate was 32 % higher in 2070 than in Other paper and paperboard 0.60 0.23 −0.09 2006. The lowest was for scenario B2 (19 %). The effect (0.02) (0.02) (0.02) of scenario A1B was almost the same as that of A2 up to Notes: C = annual consumption lagged one year,Y = Gross domestic −1 2050 but somewhat lower in 2070 (29 %). Accordingly, product, P = price Standard errors in parentheses. Elasticity constrained to −0.10 in the GFPM the endogenous forest growth rate, g ,in u Buongiorno Forest Ecosystems (2015) 2:29 Page 5 of 13 Table 2 Projected annual percent GDP growth rate in selected world regions and countries, by scenario Scenario A1B Scenario A2 Scenario B2 2011–2030 2030–2065 2011–2030 2030–2065 2011–2030 2011–2065 AFRICA 7.1 5.4 3.4 4.1 5.0 5.9 Egypt 7.2 5.1 3.8 4.4 4.6 5.2 Nigeria 8.9 6.1 5.0 4.7 7.0 7.0 South Africa 4.1 3.1 0.6 1.7 3.2 3.6 N/C AMERICA 2.6 2.3 1.9 1.8 1.7 1.4 Canada 2.2 1.9 1.7 1.3 1.6 0.8 Mexico 5.2 3.2 1.8 2.1 2.5 3.1 USA 2.3 2.1 1.9 1.8 1.6 1.1 SOUTH AMERICA 5.3 3.3 2.0 2.5 2.7 3.4 Argentina 4.7 2.8 1.4 1.9 2.0 2.7 Brazil 5.2 3.2 1.8 2.2 2.4 3.0 Chile 4.9 2.9 2.1 2.5 3.0 3.6 ASIA 5.5 3.8 2.5 2.4 3.7 2.8 China 7.4 3.8 3.9 3.2 5.6 2.8 India 8.8 5.1 4.2 3.2 6.8 4.0 Indonesia 8.2 4.5 3.9 2.8 5.7 2.9 Japan 1.4 1.2 0.9 0.6 0.6 0.1 Korea, Rep. 4.9 1.7 0.8 −0.1 2.9 0.3 Malaysia 6.5 2.7 2.7 1.4 4.5 1.5 OCEANIA 2.9 2.1 2.2 1.6 2.2 0.9 Australia 2.6 1.9 2.1 1.6 2.0 0.8 New Zealand 2.6 2.0 2.3 1.8 2.4 1.1 EUROPE 2.3 2.0 1.2 1.1 1.3 1.3 EU-28 1.9 1.7 1.2 1.0 1.1 0.9 Austria 1.4 1.2 0.9 0.5 0.9 0.4 Finland 1.3 1.1 0.9 0.5 0.9 0.5 France 1.9 1.6 1.4 1.0 1.1 0.6 Germany 1.5 1.3 1.0 0.7 0.8 0.3 Italy 1.3 1.2 0.8 0.5 0.6 0.2 Spain 1.7 1.6 1.3 0.9 1.1 0.6 Sweden 1.3 1.1 0.8 0.5 1.1 0.6 United Kingdom 2.0 1.7 1.5 1.1 1.3 0.8 Russian Fed. 5.7 3.2 1.1 2.9 2.9 3.0 WORLD 3.9 3.2 1.9 2.0 2.4 2.4 Source: Adapted from Buongiorno et al. (2012) equation (2) changed over time by the relative fraction 2065. In accord with theoretical expectations, the price g * shown in Fig. 2. of all products was lower with CO fertilization. The u 2 fertilization effect varied substantially with the scenario. Results and discussion Under the A1B scenario, the price of fuelwood and Price effects industrial roundwood was 19 % lower in 2065 due to Table 4 shows the world prices, defined by the unit CO fertilization. The price of sawwood was 9 % lower, value of imports, in 2011 and projected with the GFPM and the price of wood-based panels was 3 % to 6 % in 2065 with scenarios A1B, A2 and B2, with or without lower. The price of mechanical and chemical pulp was the cumulative effect of CO fertilization from 2011 to 4 % and 6 % lower, respectively. The price of paper and 2 Buongiorno Forest Ecosystems (2015) 2:29 Page 6 of 13 (production + imports-exports) was higher in 2065 in all regions than without fertilization, under all three scenar- ios. The largest effect of CO fertilization occurred with scenario A1B, under which world consumption of fuel- wood was 8 % higher in 2065, while it was 5 % to 6 % higher under scenarios A2 and B2 (Table 5). The effect on fuelwood consumption was most noticeable in developing countries, reaching 13 % in Africa under scenario A1B. The smallest relative impact was in Europe and the EU- 28: 2 % with scenario A1B and 1 % with A2 and B2. The regional effect of CO fertilization on fuelwood production tended to mirror the effect on consumption, except for the EU-28 where production was somewhat lower than consumption with CO fertilization under all scenarios. In that case, the movement down the supply Fig. 2 Effects of CO fertilization on the growth rate of forest stock, curve due to the lower world price (Table 4) exceeded according to IPCC scenarios A1B, A2, and B2 the shift of the supply curve due to CO fertilization from 2011 to 2065, and resulted in lower production, paperboard was 3 % to 6 % lower depending on the which together with the higher consumption suggested a product. deterioration of net trade. For scenario A2 the price reductions were less than for scenario A1B, and similar to the effects under sce- Industrial roundwood consumption, production, and nario B2. For scenarios A2 and B2, CO fertilization trade decreased the price of fuelwood in 2065 by 12 % to 13 % Industrial roundwood includes logs, pulpwood, and other and the price of industrial roundwood by 9 % to 11 %. industrial roundwood (FAO 2014, p. xx). The supply of The price of sawnwood was 4 % to 5 % lower, and the industrial roundwood is, like that of fuelwood, directly price of wood-based panels was 1 % to 3 % lower. The affected by the shift due to CO fertilization. However, price of wood pulp decreased by 2 % to 4 % with CO while the demand for fuelwood, an end product, depends fertilization, and the price of paper and paperboard ultimately only on GDP and fuelwood price, the demand decreased by 1 % to 3 % depending on the product. for industrial roundwood is more involved. Since indus- trial roundwood is an input in the manufacture of sawn- Fuelwood consumption, production, and trade wood, wood-based panels, and wood pulp, its demand In accord with the lower world prices induced by the CO depends on the price of these end products, and on the fertilization from 2011 to 2065, fuelwood consumption price of industrial roundwood, the price of other inputs and the techniques of production. Table 3 Past and projected atmospheric CO saturation (ppm), Globally, the positive supply shift of industrial round- by IPCC scenario wood due to CO fertilization more than matched the IPCC scenario movement down the supply curve due to the price re- Year A1B A2 B2 duction. Consequently, the GFPM-projected world con- 1970 325 325 325 sumption and production of industrial roundwood was 2 % to 4 % higher, depending on the scenario, with the 1980 337 337 337 assumption of CO fertilization than without it 1990 353 353 353 (Table 6). 2000 369 369 369 However, the complex derived demand for industrial 2006 382 382 380 roundwood, coupled with the shifts of industrial round- 2010 391 390 388 wood supply induced by the CO fertilization led to 2020 420 417 408 varying regional effects. Consumption of industrial roundwood tended to be higher with CO fertilization 2030 454 451 429 than without it, except in North/Central America and 2040 491 490 453 Asia. Under scenario A1B in particular, industrial 2050 532 532 478 roundwood consumption was 10 % lower in N/C 2060 572 580 504 America, while it was 19 % higher in South America 2070 611 635 531 and 10 % higher in Europe and the EU-28. With this Source: IPCC(2013) scenario, production was 18 % higher in Asia in 2065, Buongiorno Forest Ecosystems (2015) 2:29 Page 7 of 13 Table 4 World prices of forest products in 2011 and projected in 2065 under scenarios A1B, A2 and B2, with and without CO fertilization from 2011 to 2065 2065, A1B 2065, A2 2065, B2 Product Unit 2011 without with without with without with Fuelwood $/m3 63 61 49 48 42 51 45 Industrial roundwood " 101 135 110 99 88 106 97 Sawnwood " 259 324 295 277 264 287 275 Veneer & plywood " 573 999 963 933 912 949 935 Particleboard " 285 552 518 500 487 514 502 Fiberboard " 433 915 883 864 850 876 865 Mechanical pulp $/t 509 942 901 850 817 879 847 Chemical pulp " 642 1036 978 949 924 967 946 Other fiber pulp " 1309 3848 3812 2240 2243 2247 2242 Waste paper " 187 563 524 417 402 499 488 Newsprint " 632 774 731 651 635 705 687 Printing & writing paper " 974 1128 1088 1016 1002 1063 1054 Other paper & paperboard " 986 1586 1538 1452 1431 1512 1496 while consumption hardly changed, so that the CO Sawnwood and panels consumption, production, and fertilization improved markedly Asia’s trade balance of trade industrial roundwood. The regional pattern of the In the GFPM, sawnwood and wood-based panels (veneer effects was similar for scenarios A2 and B2, but the and plywood, particleboard, fiberboard (FAO 2014)), are magnitudes in both cases were much less than for end products. Their demand depends on GDP, the prod- scenario A1B. uct price, and lagged consumption. As indicated above, Table 5 Projected differences in fuelwood production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 3 3 3 (10 m ) (%) (10 m ) (%) (10 m t) (%) Production Africa 226040 12.5 120717 9.6 165382 9.8 N/C America 6881 2.8 2444 1.2 3299 1.5 South America 10385 2.7 2559 0.9 5076 1.6 Asia 101055 5.4 28268 2.1 46643 3.0 Oceania 626 2.9 173 1.0 170 1.0 Europe 5794 2.4 2662 1.4 2940 1.4 EU-28 286 0.2 −1596 −1.3 −1622 −1.3 World 350782 7.7 156824 4.8 223509 5.6 Consumption Africa 226040 12.5 120723 9.6 165382 9.8 N/C America 7017 2.8 2545 1.3 3438 1.6 South America 10385 2.7 2560 0.9 5076 1.6 Asia 101038 5.4 28249 2.1 46390 3.0 Oceania 627 2.9 173 1.0 170 1.0 Europe 5676 2.5 2574 1.4 3053 1.5 EU-28 2976 2.2 1432 1.2 1568 1.3 World 350782 7.7 156824 4.8 223509 5.6 Buongiorno Forest Ecosystems (2015) 2:29 Page 8 of 13 Table 6 Projected differences in industrial roundwood production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 3 3 3 (10 m ) (%) (10 m ) (%) (10 m t) (%) Production Africa 13273 15.3 4243 5.7 8616 10.9 N/C America −65327 −7.6 −30586 −4.9 −52688 −7.7 South America 14684 5.0 1960 0.8 9435 3.7 Asia 89435 18.4 29302 7.0 33633 7.7 Oceania −1619 −2.3 −908 −1.7 −933 −1.7 Europe 63229 6.9 35641 4.7 47494 6.0 EU-28 26916 4.3 11573 2.1 16048 2.8 World 113674 4.2 39653 1.8 45558 2.0 Consumption Africa 14266 19.5 4416 7.2 5790 7.8 N/C America −58038 −10.4 −6150 −1.9 −14861 −4.3 South America 59850 19.1 3505 1.2 9556 3.0 Asia −2504 −0.3 −3330 −0.7 −2851 −0.5 Oceania 1838 5.5 723 2.4 371 1.2 Europe 98263 10.0 40488 4.1 47553 4.8 EU-28 78223 9.6 21018 2.6 22946 2.8 World 113674 4.2 39653 1.8 45558 2.0 the price of all products in 2065 was lower with CO and (positively) on the price of paper and paperboard. fertilization from 2011 to 2065. Consequently, the con- Meanwhile, the supply of wood pulp is a positive func- sumption of all end products was higher (Table 7). In tion of the price of wood pulp and a negative function of particular, under scenario A1B the world consumption the price of industrial roundwood (an input in making of wood-based panels was 1.2 % higher in 2065 with wood pulp). The CO fertilization reduces the price of CO fertilization, with the highest relative changes in the industrial roundwood, and in the process stimulates the range of 2 % to 2.5 % in Africa and South America. The demand for wood pulp. As shown in Table 8, under relative increases in consumption were about half that scenario A1B, the world wood pulp consumption (and magnitude under scenarios A2 and B2. the matching production) in 2065 was approximately Meanwhile, the production of sawnwood and panels 2 % higher with the CO fertilization than without it. varied much more across regions. For example, under The effect was approximately half that much under sce- scenario A1B, while production of sawnwood and panels narios A2 and B2. was 21 % to 24 % in Africa and South America with CO There was a strong difference in the effect across re- fertilization, it was 25 % lower in N/C America. However, gions. For example, under scenario A1B, the wood pulp the regional distribution of production varied markedly consumption in Europe was nearly 9 % higher with CO between scenarios. In particular, while the production of fertilization, and the production was double this amount, E-28 countries was 4 % higher with CO fertilization implying an improvement in net trade. Meanwhile, under scenario A1B and their trade balance improved as a production in N/C America was about 5 % lower with result, their production decreased slightly with scenarios CO fertilization under A1B, while consumption was un- A2 and B2, implying a slight worsening of net trade. changed, so that net trade deteriorated. The direction of the effects was similar under scenarios A2 and B2, but Wood pulp consumption production and trade the magnitude was smaller. The production and consumption of wood pulp (mech- anical + chemical + semi-chemical pulp (FAO 2014) are Paper and paperboard consumption production and determined by its demand and supply. Wood pulp is an trade input in the manufacture of paper and paperboard, so The products in the paper and paperboard group: news- that its demand depends (negatively) on its own price, print + printing and writing paper + other paper and Buongiorno Forest Ecosystems (2015) 2:29 Page 9 of 13 Table 7 Projected differences in sawnwood and wood-based panels production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 3 3 3 (10 m ) (%) (10 m ) (%) (10 m t) (%) Production Africa 5270 21.1 1063 5.9 1890 7.9 N/C America −33242 −24.6 278 0.4 −4815 −6.9 South America 29406 23.9 1205 1.0 3836 2.9 Asia −15345 −2.7 −6718 −2.0 −6952 −1.8 Oceania 359 3.4 332 3.6 114 1.3 Europe 30584 5.6 9805 1.9 13121 2.5 EU-28 19050 4.0 −1702 −0.4 −99 0.0 World 17033 1.2 5965 0.6 7193 0.6 Consumption Africa 1180 2.3 464 1.3 718 1.6 N/C America 2429 1.1 957 0.5 765 0.4 South America 1881 2.0 442 0.7 854 1.1 Asia 8014 1.1 2790 0.5 3446 0.6 Oceania 175 1.0 74 0.5 59 0.4 Europe 3355 1.2 1239 0.5 1353 0.6 EU-28 2428 1.2 970 0.6 1053 0.6 World 17033 1.2 5966 0.6 7194 0.6 Table 8 Projected differences in wood pulp production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 (10 t) (%) (10 t) (%) (10 t) (%) Production Africa 391 9.2 136 4.7 177 4.3 N/C America −7545 −4.9 −3085 −3.5 −3928 −3.9 South America −299 −1.7 163 1.6 240 2.0 Asia 1379 4.1 274 1.3 421 1.8 Oceania 20 0.6 31 1.1 34 1.3 Europe 11016 19.2 4016 8.0 4459 8.2 EU-28 11306 28.8 4511 11.6 4502 11.1 World 4961 1.8 1534 0.9 1401 0.7 Consumption Africa 231 4.8 44 1.6 17 0.4 N/C America −15 0.0 193 0.4 30 0.1 South America −635 −3.4 −25 −0.2 17 0.1 Asia 182 0.2 −180 −0.3 −217 −0.3 Oceania 21 0.6 2 0.1 19 0.7 Europe 5177 8.8 1500 3.4 1536 3.1 EU-28 4758 10.8 1512 4.2 1478 3.8 World 4962 1.8 1534 0.9 1401 0.7 Buongiorno Forest Ecosystems (2015) 2:29 Page 10 of 13 paperboard (FAO 2014) are treated as end products in minus the cost of the wood and fiber input used by the in- the GFPM. As for fuelwood, and sawnwood and wood- dustries (industrial roundwood, wood pulp, other fiber based panels the national demand is a function of GDP, pulp, and waste paper). The effects of the CO fertilization price, and lagged consumption. Consequently, CO from 2011 to 2065 on the input cost, value of the output fertilization influences paper and paperboard consump- andthe resulting value addedare summarizedinTable 10 tion through the price effect only. As the relative price by region and scenario. The largest impacts occurred under reduction induced by CO fertilization was smallest for scenario A1B according to which the CO fertilization de- 2 2 paper and paper and paperboard, the effects on con- creased the cost of the world industry inputs in 2065 by sumption were correspondingly small (Table 9). The lar- nearly $ 94x10 or 7%.The reductionininput cost oc- gest effects, under scenario A1B implied only a 0.5 % to curred in all regions, and was largest in Asia (−$42 x10 ). 0.8 % higher consumption depending on the region. Although thequantityofinputs, for example of industrial Under the other two scenarios, consumption was prac- roundwood, increased in several regions (Table 6), their tically the same with or without CO fertilization. lower world prices (Table 4) still led to a reduction in total There were however larger regional impacts on produc- input cost. tion due to the differences in production cost brought The value of the industries outputs was also lower in about by the different regional shifts of industrial round- several regions (Table 10) as the higher consumption of wood supply. In particular, under scenario A1B, paper and end products (e.g. sawnwood and panels) did not compen- paperboard production was nearly 4 % lower in South sate for the reduced prices. Under scenario A1B, output America with CO fertilization than without it, implying a value in 2065 was nearly 8 % lower in N/C America with deterioration of net trade, while in Europe, production CO fertilization, and nearly 4 % lower in Asia. At world was nearly 3 % higher, with a corresponding increase of level, the reduction in output value came close to the re- net trade. duction in input cost, leaving only a modest increase of value added ($7.6x10 , or less than 1 %). The effects were Value added in forest industries similar in direction for scenarios A2 and B2, but smaller For the purpose of this paper, value added is defined as the in magnitude so that at world level the CO fertilization value of the totaloutputofforestindustries(sawnwood, had hardly an impact on value added, although the re- wood-based panels, wood pulp, paper and paperboard) gional differences were more substantial. Table 9 Projected differences in paper and paperboard production and consumption in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 3 3 3 (10 t) (%) (10 t) (%) (10 t) (%) Production Africa 194 1.2 123 1.3 8 0.1 N/C America −270 −0.1 341 0.3 60 0.0 South America −1682 −3.8 −84 −0.3 14 0.0 Asia 3118 0.5 −536 −0.1 −985 −0.2 Oceania 42 0.5 7 0.1 30 0.5 Europe 5740 2.8 1735 1.0 2164 1.2 EU-28 5370 3.0 1826 1.2 2173 1.4 World 7143 0.7 1586 0.2 1291 0.2 Consumption Africa 266 0.8 46 0.2 65 0.2 N/C America 831 0.5 319 0.2 205 0.2 South America 229 0.5 43 0.1 76 0.2 Asia 4884 0.8 882 0.2 675 0.1 Oceania 49 0.6 19 0.3 12 0.2 Europe 882 0.5 277 0.2 258 0.2 EU-28 718 0.5 232 0.2 223 0.2 World 7142 0.7 1586 0.2 1291 0.2 Buongiorno Forest Ecosystems (2015) 2:29 Page 11 of 13 Table 10 Projected differences in wood and fiber input cost, output value and value added in forest industries in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 6 6 6 (10 $) (%) (10 $) (%) (10 $) (%) Input cost Africa −407 −1.8 −280 −2.3 −414 −2.3 N/C America −29185 −12.9 −5853 −5.5 −6632 −5.1 South America −4483 −5.6 −3476 −7.2 −2493 −4.2 Asia −41990 −6.4 −12017 −3.8 −11212 −3.1 Oceania −926 −8.5 −380 −5.0 −339 −4.4 Europe −16533 −6.0 −8339 −4.4 −5037 −2.3 EU-28 −13738 −5.9 −7769 −4.8 −5394 −3.0 World −93524 −7.3 −30343 −4.5 −26127 −3.3 Output value Africa 853 2.3 79 0.4 396 1.2 N/C America −41032 −7.8 −8293 −3.0 −11767 −3.6 South America 2790 1.9 −1746 −1.7 533 0.4 Asia −48040 −3.7 −16356 −2.1 −14277 −1.6 Oceania −716 −3.2 −211 −1.2 −138 −0.8 Europe 243 0.0 −1690 −0.4 1469 0.3 EU-28 217 0.0 −1965 −0.5 1178 0.3 World −85901 −3.2 −28217 −1.7 −23784 −1.3 Value added Africa 1260 8.8 359 4.1 809 5.7 N/C America −11846 −4.0 −2440 −1.4 −5135 −2.6 South America 7273 10.4 1730 3.1 3026 4.9 Asia −6050 −0.9 −4339 −0.9 −3064 −0.6 Oceania 210 1.9 169 1.7 202 2.3 Europe 16775 5.3 6649 2.5 6506 2.3 EU-28 13955 5.2 5804 2.4 6571 2.6 World 7623 0.6 2126 0.2 2344 0.2 Forest stock observed above. The largest effects of the CO CO fertilization tended to increase the forest stock, but fertilization on the level of forest stock in 2065were as observed above a rise in stock shifted the wood sup- under scenario A1B. This was in part due to the high ply to the right, increasing wood harvest and thus level of atmospheric [CO ] and also to the rise in forest decreasing the forest stock. These opposite tendencies area, and thus young growing forests, induced by the were further affected by the price decrease induced by higher GDP per capita growth assumed in scenario A1B. the increase in wood supply, which stimulated the de- For this scenario, the forest stock was 20 % higher in mand for wood products and thus the derived demand 2065 with CO fertilization than without it. The largest for wood input and the attendant harvest. Table 11 sum- relative impacts were in Africa and Asia. Under scenar- marizes the results of the GFPM simulation of these ios A2 and B2 the effect of CO fertilization were simi- complex interactions for the forest stock in different re- lar, globally (9 % to 10 %) and by region, with the largest gions and for the three scenarios. relative impact still in Africa. For all scenarios and regions the growing stock was higher in 2065 with CO fertilization than without it. Conclusions Thus, the added growth due to CO fertilization more The objective of this paper was to explore the long-term, than compensated for the cumulative effects of the in- ceteris-paribus effects of a potential CO fertilization on creased fuelwood and industrial roundwood harvests the global forest sector. Based on the findings of Norby et Buongiorno Forest Ecosystems (2015) 2:29 Page 12 of 13 Table 11 Projected differences in growing stock in 2065 due to CO fertilization from 2011 to 2065, by region and scenario Scenario A1B Scenario A2 Scenario B2 6 3 6 3 6 3 (10 m ) (%) (10 m ) (%) (10 m ) (%) Africa 26212 34 % 13527 19 % 16089 21 % N/C America 11414 11 % 6003 5 % 3233 3 % South America 30998 19 % 9051 6 % 16872 10 % Asia 20304 27 % 9977 10 % 9238 10 % Oceania 1953 14 % 850 6 % 715 5 % Europe 25818 19 % 15689 11 % 15537 11 % EU-28 4972 14 % 3120 7 % 2857 7 % World 116698 20 % 55097 9 % 61685 10 % al. (2005) about forest response to elevated CO concen- they also suggest that the NPP enhancement due to CO 2 2 tration it was assumed that the effect of CO fertilization fertilization may be much larger in tropical than boreal on forest growth would be conserved across a broad range forests. of productivity, with an average stimulation of 23 % for a A review of several studies by the Center for the Study 180 ppm increase of atmospheric [CO ]. of Carbon Dioxide and Global Change (2014) does con- This increased productivity was applied to national clude that “CO fertilization effects strongly increased forest growth rates in the Global Forest Products Model recent Net Primary Production trends in regional totals”. in proportion to the rising levels of [CO ] projected by But, much work is still needed to quantify this effect apart the International Panel for Climate Change scenarios from or in conjunction with changes in temperature and A1B, A2, and B2. In addition to different [CO ] levels precipitation (Zickfeld et al. 2012). In addition, the the three scenarios projected different growth rates of methods used in this study require good estimates of gross domestic product and population, which influence current forest growth rates in different countries. This will the future demand for forest products, and the evolution mean further improvement of the global forest inventory of forest area. Projections of the forest area and forest and harvest statistics, which are currently subject to stock, and of the production, consumption, prices, and substantial errors due to infrequent and unequal sampling, trade of different products (ranging from fuelwood to and differences in definitions and classifications (FAO paper and paperboard) were obtained with the GFPM 2010). for each scenario, with and without the assumption of Keeping these caveats in mind, the present study CO fertilization beginning in 2011 and up to 2065. showed that the impact of CO fertilization would depend 2 2 The results suggested that CO fertilization would very much on the economic and demographic context in raise the level of the world forest stock by 9 to 10 % for which it occurred, but in all cases the impact on the global scenarios A2 and B2 and by 20 % for scenario A1B. The value added in the forest sector would be modest. On the change in forest stock was in part counteracted by the other hand, CO forest fertilization per se might have stimulation of the wood supply which resulted in lower substantial effects on the long-term level of forest stock, wood prices and increased wood harvest. The lower and less on the harvest. There would thus be a net positive wood prices in turn led to lower prices of end products effect of CO fertilization on the amount of carbon stored and increased global consumption. However, production in forests, a clearly beneficial effect for overall climate decreased in some regions due to the relative competi- change. tive advantages and to the varying regional effects of Competing interests CO fertilization. The author declares that he has no competing interests. These findings rely on strong assumptions; in particular that CO fertilization can be summarized over very differ- Author’s information ent forest types by the simplenumber suggested in Norby Professor Emeritus, University of Wisconsin-Madison, USA, and Foreign Member, French Academy of Agriculture, Paris, France. et al. (2005). Although the homogeneity of response that they observed is striking, and over a wide range of sites, Acknowledgments they all are within the temperate zone. It is uncertain that The research leading to this paper was supported in part by a joint venture they can be applied to other ecological zones. Hickler et al. agreement with the USDA Forest Service Southern Research Station in cooperation with project leader Jeff Prestemon. (2008) use a dynamic vegetation model which does repro- duce the data of Norby et al. 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Journal

"Forest Ecosystems" – Springer Journals

Published: Dec 1, 2015

Keywords: Ecology; Ecosystems; Forestry

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