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Economics Research Institute Study Paper




Utah State University Department of Economics

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We developed a dynamic integrated modeling approach to identify the effect of global warming on the global timber market. The Timber Supply Model 2000, BlOME 3, and Hamburg were used as a suitable economic and ecological model. The TSM 2000 was adopted to model dynamic economic behavior in the global timber market. BlOME 3 was utilized as our steady state ecological model, and Hamburg as our general circulation model. The TSM 200 was developed to consider more important up-to-date components in the global timber market. We estimated dynamic ecological change based on the simulation results of BlOME 3 using Hamburg and the linearality assumptions about change in climate and ecosystem. With the estimates of dynamic ecological change, we modified the TSM 2000 to reflect the dynamic ecological change caused by climate change. After simulating the nonclimate base scenario and the climate change scenario of the TSM 2000, we identified that global warming has a positive effect on the global timber market through an increase of timber productions causing stumpage prices to be lower than they otherwise would have been. In the welfare sense, we also examined that global warming is economically beneficial to society through the global timber market. For sensitivity analyses, we performed these simulation procedures under three different timber demand growth scenarios.