Analysis and modeling of timber storage accumulation after severe storm events in Germany

In this study, we explore the determinants of forest enterprises’ timber storage accumulation after severe storm events. The explanatory power of variables reflecting economic, institutional and tree species-related factors is tested via econometric analyses. Timber storage accumulation is assessed conducting a weighted multiple linear regression analysis. In addition, the moderating effect of timber price alterations on timber storage accumulation is tested employing timber price alterations as a moderator variable in a hierarchical regression analysis. The results show a linear positive relation between forest enterprises’ damaged and stored timber quantities. It was found that coniferous timber was stored to a greater extent than non-coniferous timber which can be explained by higher storm damage as well as better suitability for multiyear storage. State forestry stored the highest shares of damaged timber, followed by municipal and private forest enterprises, which can be explained as a countervailing measure. A further central finding of our study is that the timber price drops after storm events act as a moderator variable on the relation between damaged and stored timber quantities. Hence, empirical timber price reactions help to improve estimation accuracy regarding the shares of damaged timber which are stored. Derived from our results, we find timber storage accumulation to be a common practice by forest companies to mitigate revenue losses caused by extreme storm events. As coefficients vary strongly among the analyzed variables’ categories, we consider case-specific storage accumulation estimations to be crucial for improving the accuracy of national wood and timber accounting, but also for a full view on storm-related economic damage in the forest sector. In addition, it is likely that capturing the proportions of timber storage in forests will gain relevance in the future, since forest damage from natural disturbances is expected to increase as a consequence of climate change.     

Non-industrial Private Forest Owners' Risk Preferences

A set of hypotheses was formulated on the basis of available knowledge about non-industrial private forest (NIPF) owners' risk preferences. The empirical material used for testing the hypotheses was gathered in telephone interviews with 130 randomly selected NIPF owners. The results confirm that direct economic risks such as price and cost changes are seen by this group as much more important than indirect economic risks such as biological damage. The forest owners regarded forest holdings as a safer investment than stocks or bank savings. The results on risk attitudes were ambiguous. However, when larger amounts of money were at stake, the forest owners could be considered risk averters and a decrease in absolute and relative risk aversion could be confirmed.     

Integrated methodology to assess windthrow impacts on forest stands under climate change

Storms have a high potential to cause severe ecological and economic losses in forests. We performed a logistic regression analysis to create a storm damage sensitivity index for North Rhine-Westphalia, Germany, based on damage data of the storm event “Kyrill”. Future storm conditions were derived from two regional climate models. We combined these measures to an impact metric, which is embedded in a broader vulnerability framework and quantifies the impacts of winter storms under climate change until 2060. Sensitivity of forest stands to windthrow was mainly driven by a high proportion of coniferous trees, a complex orography and poor quality soils. Both climate models simulated an increase in the frequency of severe storms, whereby differences between regions and models were substantial. Potential impacts will increase although they will vary among regions with the highest impacts in the mountainous regions. Our results emphasise the need for combining storm damage sensitivity with climate change signals in order to develop forest protection measures.     

Why do forest owners fail to heed warnings? Conflicting risk evaluations made by the Swedish forest agency and forest owners

In the aftermath of a hurricane in Sweden that felled some 250 million trees, the Swedish Forest Agency advised forest owners to reduce forest vulnerability by planting different tree species. This paper analyses why forest owners failed to heed the Forest Agency's recommendation, thereby reproducing a forest vulnerable to storms. This paper focuses on the deliberations and risk evaluations of forest owners when deciding which tree species to plant. The analysis identifies three main categories of reasoning that guided the forest owners' decision-making process: short-term economic reasoning caused by the pressing situation they faced; an understanding of windstorms as natural catastrophes that are impossible to influence; and the uncertainties associated with alternative forest management practices. Furthermore, given their risk-averse strategy, their approach to understanding and coping with uncertainty was crucial in determining their responses. This paper concludes that the forest owners primarily employed experience-based, practical and embodied knowledge, implying that abstract risks and theoretical knowledge regarding future developments were not deemed relevant. An additional conclusion is that even if a huge storm felling shows the need to change forest management practice, it does not provide the most favourable social conditions for achieving change.     

How does silviculture affect storm damage in forests of south-western Germany? Results from empirical modeling based on long-term observations

Storms represent the most important disturbance factor in forests of Central Europe. Using data from long-term growth and yield experiments in Baden-Wuerttemberg (south-western Germany), which permit separation of storm damage from other causes of mortality for individual trees, we investigated the influence of soil, site, forest stand, and tree parameters on storm damage, especially focusing on the influence of silvicultural interventions. For this purpose, a four-step modeling approach was applied in order to extract the main risk factors for (1) the general stand-level occurrence of storm damage, (2) the occurrence of total stand damage, and (3) partial storm damage within stands. The estimated stand-level probability of storm damage obtained in step 3 was then offset in order to describe the damage potential for the individual trees within each partially damaged stand (4). Generalized linear mixed models were applied. Our results indicate that tree species and stand height are the most important storm risk factors, also for characterizing the long-term storm risk. Additionally, data on past timber removals and selective thinnings appear more important for explaining storm damage predisposition than for example stand density, soil and site conditions or topographic variables. When quantified with a weighting method (summarizing the relative weight of single predictors or groups of predictors), removals could explain up to 20% of storm risk. The stepwise modeling approach proved an important methodological feature of the analysis, since it enabled consideration of the large number of observations without damage (“zero inflation”) in a statistically correct way. These results form a reliable basis for quantifying forest management’s direct impact on the risk of storm damage.     

The impact of storm damage on small-scale forest enterprises in the south-west of Germany

Storm damage is considered to be one of the most important risk factors for forestry in Central Europe. At the end of 1999 a centennial storm event hit the south-east of Germany and Switzerland, as well as central and western parts of France, and caused great damage. Forests in Baden-Württemberg were severely affected, with 30 M m³ of timber felled due to storm damage, three times the amount of the normal annual cut. Approximately 5.2 M m³ of the wind-thrown timber was in private forests, of which most were located in the central Black Forest. Smaller shares came from other regions of Baden-Württemberg. The economic damages and strategies of the forest owners were analysed in a multi-dimensional approach, using economic data from long-term accountancy networks, in combination with the results of a qualitative opinion poll amongst private forest owners. A storm coefficient was devised as a suitable indicator for the concerns of owners or ownership classes. The predicted operating income of the private forest owners is related to this coefficient. Cash flow simulations suggest that enterprises with a coefficient of more than 100% suffer from a reduction of their economic base. By combining the results derived from the accountancy networks with findings from the opinion poll it was found that the owners took an active decision towards self-processing and were able to save more than 30 M ￡ by choosing this strategy. State support which was provided in a variety of ways is also identified. A range of programs and institutional support measures mitigated the impact of the storm disaster. The effectiveness and acceptance of these measures by forest owners was confirmed by the results of the opinion poll.     

Recorded storm damage in Swedish forests 1901–2000

Severe storm damage has been a recurring problem to the Swedish forestry sector since, at least, the start of the19th century. This short communication presents a regionally resolved time-series of storm damage in Swedish forests during the last century. Data on storm damage have been gathered from the National Board of Forestry, the Regional Forestry Boards and scientific reports.Storm damage in Swedish forests seems to have increased during the century with a peak around the 1980s. In total 110 million m³ forest were destroyed by 77 recorded wind storms, with the severe storms in 1954 and 1969 accounting for 49% of the total damage. Reported damage in southern Sweden was normalised against the area of productive forest with trees older than 40 years, for inter annual comparisons. The geostrophic wind was used to describe the regional wind direction during the storm events. Most damage occurred during NNW to SW winds, and by winds from NNE. Apart from a possible shift in storm intensity and frequency, the increase in storm damaged trees can be attributed to changes in regeneration and thinning regimes, variations in storm damage reporting system, increase in forest cover and various damage to root architecture.     

Assessing natural hazards in forestry for risk management: a review

We address the problem of how to integrate risk assessment into forest management and therefore provide a comprehensive review of recent and past literature on risk analysis and modeling and, moreover, an evaluation and summary on these papers. We provide a general scheme on how to integrate concepts of risk into forest management decisions. After an overview of the risk management process and the main hazards in forests (storm, snow, insects, fire), the paper focuses on the principal methods used to assess risks from these hazards for commercial forestry. We review mechanistic models, empirical models, and expert systems and consider the needs for different spatial scales of risk assessment, from the regional to the single-tree level. In addition to natural hazards and their secondary effects, we deal with economic aspects of risk analysis. Monte Carlo simulations to deal with volatile timber prices and ways to include risk in classical Faustmann approaches are briefly discussed along with the integration of portfolio theory into forest management decision making and attitude toward risk. Special attention is paid to the implications for risk modeling under climate change.     

Storm damage of Douglas-fir unexpectedly high compared to Norway spruce

Context

Since storm damage has a large impact on forest management in Central Europe, we investigated the main storm risk factors for two important conifer species, Douglas-fir (Pseudotsuga menziesii [Mirbel] Franco) and Norway spruce (Picea abies [L.] Karst.).

Aims

We compared general storm damage levels of Douglas-fir and Norway spruce, the latter being known to have high storm risk among European tree species.

Methods

Generalized linear mixed models and boosted regression trees were applied to recorded storm damage of individual trees from long-term experimental plots in southwest Germany. This included two major winter storm events in 1990 and 1999. Over 40 candidate predictors were tested for their explanatory power for storm damage and summarized into predictor categories for further interpretation.

Results

The two most important categories associated with storm damage were timber removals and topographic or site information, explaining between 18 and 54 % of storm damage risk, respectively. Remarkably, general damage levels were not different between Douglas-fir and Norway spruce.

Conclusion

Under current forest management approaches, Douglas-fir may be considered a species with high storm risk in Central Europe, comparable to that of Norway spruce.     

Loss function analysis of private forest owners’ timber price change expectations

Loss function analysis was introduced to timber market price analysis. Methods found in Bayesian statistical decision analysis were applied to expectations of market price changes. These were obtained from a forest owner survey conducted in Finland in 2009. Forecast errors of heterogeneous price expectations of the individual private forest owners were derived with observed price changes in six different timber price regions. The forecast errors were complemented with random number simulations to control for unobserved response heterogeneity. The properties and estimation of generalized loss functions – LIN-EX and flexible loss functions – allowing for asymmetry in individual forecast errors were introduced into the analysis. Estimation results for different price regions implied that forest owners’ perceived costs related to positive forecast errors of negative price changes that took place in 2009 were larger than those related to negative errors. This under-prediction vs. over-prediction asymmetry was large in some price regions. The forest owners exhibited an aversion to losses reflected in price expectations errors in the year 2009. The observed loss aversion means that forest owners were cautious in their selling decisions during periods of declining market prices. This has a negative impact on the recovery of slack timber markets.     

Pricing ecosystem resilience in frequent-fire ponderosa pine forests

Dry forests across the United States have become subject to declining resilience and, consequently, increased vulnerability to catastrophic wildfires. These disturbances cause severe environmental and social damages and may dislodge the forest into a different ecological regime. Forests provide many valuable services, such as the provisioning of timber and the sequestering of carbon that would otherwise contribute to climate change. The high-severity conflagrations that have become regular occurrences in many dry forests impinge the delivery of such benefits, particularly in the event of a regime shift. Sustainable forest management should take these risks into account. This article analyzes the economics of resilience in dry forests with respect to catastrophic fires and ecological thresholds. We illustrate how to price ecosystem resilience for the fire-prone ponderosa pine forests of the western United States. This analysis demonstrates that pricing forest resilience also establishes the economic value of ecological restoration with respect to ecosystem services, thereby operationalizing forest management as an investment in natural capital.     

The value of the flood control service of tropical forests: A case study for Trinidad

To date there have been only few case studies that specify how hydrological processes regulated by forests convey into benefits for society. The objective of this paper is to analyse the relation between forest cover and the reduction of flood risks on Trinidad. Our hypothesis is that the relation between forest cover and flood control is non-linear, in other words that deforestation of a watershed will increase flood risks in a non-linear way. This implies that the per hectare value of the hydrological service is determined in part by the remaining forest cover of the catchment. We find that this varies strongly between watersheds, between 16 and 268 US $ per hectare per year. Our results demonstrate a non-linear relationship between catchment's forest cover and the generation of the flood control service, and indicate that even small levels of deforestation can lead to a significant increase in flood risks in Trinidad.     

Bioenergy from the forest sector: Economic potential and interactions with timber and forest products markets in Norway

Abstract

A partial equilibrium forest sector model which is augmented to include bioenergy was applied to project the use of bioenergy based on forest fuels and forest industry by-products in Norway for three different scenarios of the future prices of electricity and oil. The impacts on forestry and forest industries of the different energy price scenarios were also studied. The advantage of the suggested methodology is that it allows for assessments of the economic potential of bioenergy, taking into account the competition for raw materials, the specific heat demand of various regions, and interregional and international trade. Bioenergy will, according to this study, be fairly competitive in some market segments with the current price levels of electricity and oil, and only a minor increase (decrease) in energy (roundwood) prices would release substantially increased bioenergy production levels. Pulpwood prices of pine and non-coniferous species are projected to increase substantially when assuming increasing energy prices. Except for particleboard mills, production levels of forest industries appeared relatively insensitive to the energy price changes.     

Stochastic simulation of forest fuel sourcing models under risk

Abstract

Climate change effects such as storms and droughts are leading to increased risk of forest damage in central Europe. The aim of this paper was to evaluate forest fuel sourcing models including climate change-induced risks on forest fuel supply. Stochastic risk events, such as storms and bark beetle infestations, were modelled by means of a Monte Carlo simulation, and the economic performance was evaluated for two fuel-sourcing models supplying a single combined heat and power plant (CHP). The first sourcing model depicted a common sourcing model for Austrian CHPs, where only forest chips provided by long- and short-term suppliers were stored. The second sourcing model additionally enabled the storage of salvaged pulpwood to supply forest fuel from the plant's own inventory during shortage periods. Simulation results showed that storing salvage pulpwood as feedstock considerably reduced supply chain risks and resulted in lower procurement costs (1–3% less than normal delivered cost without storing salvaged pulpwood).     

To insure or not to insure? Analysis of foresters' willingness-to-pay for fire and storm insurance

Natural catastrophes in forests have become more damaging in recent years and are expected to further increase according to climate change scenarios. Currently, governmental measures mostly focus on providing financial support, such as direct payments, to forest owners after disasters. However, in the light of more weather extremes, this could lead to a heavier financial burden for national budgets. Therefore, the current financial support system has to be reconsidered with regard to privatizing foresters' risks. Insurance could play a key role, but in many countries forests are rarely insured. In order to explain insurance coverage, we analyzed foresters' preferences regarding fire and storm insurance, which are expressed as their willingness-to-pay (WTP). Therefore, we measured the risk attitude and conducted a discrete choice experiment with 137 German foresters, using various policy and forest enterprise scenarios. Our results show that most foresters have a very low WTP for insurance, and individual risk attitude was not of significant influence. The WTP was higher for fire than for storm insurance, presumably due to liquidity preservation motives. Policy programs involving unconditional support after disaster reduced the WTP. Instead, subsidized insurance premiums increased the WTP and thus, should be considered to establish an efficient insurance market.     

Hurricane Katrina impacts on forest trees of Louisiana's Pearl River basin

Hurricane disturbance has the potential to markedly affect coastal forest structure and ecosystem processes. This study focused on the impacts of Hurricane Katrina in Louisiana's Pearl River basin, which lies just west of Katrina's final landfall at the Louisiana–Mississippi border. Prior to landfall, composition and structure of bottomland hardwood forests in this region were studied with permanent forest inventory plots sampled in 1989, 1998, 2005 and following the storm in 2006. This enabled a direct comparison of forest structure and dynamics before and after the disturbance, including species-specific tree mortality and damage rates, biomass production, and differences among forest types having varied hydrologic regimes. Background tree mortality rate before Hurricane Katrina was 1.9%, while average annual mortality was 20.5% for the census interval including the disturbance. Change in live tree biomass estimated from allometric models demonstrated a shift from an average annual production of 3.5 Mg ha⁻¹ before the disturbance, to an average loss of 77.6 Mg ha⁻¹ from the storm. Damage associated with Hurricane Katrina varied significantly with tree species but not tree size. Flooded cypress-tupelo swamp forests sustained the least damage and frequently flooded bottomland hardwood forests sustained the highest damage. Hurricane disturbance influenced the structure and composition of these coastal forests through species-specific differences in damage and mortality rates, and varied impacts dependent on forest flooding regime.     

Adapting sustainable forest management to climate policy uncertainty: A conceptual framework

Sustainable forest management delivers ecological benefits critical to mitigating climate change impacts and can produce carbon offset credits tradable at the market price, generating additional income to forest landowners. However, due to high uncertainty in the climate policy of the United States, the economic potential of sustainably managing forests for offset credits is uncertain, discouraging landowners from participating in such practices. Also uncertain are the ecological consequences, especially in terms of forest carbon stocks. Here a conceptual framework was proposed which, with a regime-switching process, modeled the price of carbon credits as a proxy of the climate policy. Uncertainty in policy was translated into a limited number of scenarios regarding the timing and magnitude of policy regime switches. This model was then incorporated into a Markov decision process model of forest management, which accounted for multiple forms of risk and uncertainty affecting forest functioning and management. Using linear programming, this framework quantified the economic and ecological potentials of forest carbon management in various policy scenarios and determined optimal harvesting rules adaptive to policy shifts. A simple numerical example was provided to demonstrate the application of this framework.     

Economic analysis of harvesting behavior using the modified Gentan probability theory

In the past studies on the Gentan probability theory, economic factors, such as the price of logs and the interest rate, have not been embedded into the derived stochastic model due to the limitation of the underlying assumptions. This has lead to misleading results of economic analysis for harvesting behavior based on the Gentan probability theory. In this paper, economic analysis of harvesting behavior was conducted by extending the Gentan probability theory. Since the proposed stochastic process can incorporate a nonstationary growth function, economic analysis of harvesting behavior was easily implemented. Experimental analysis of economic factors showed that change in the price of logs, the interest rate and harvest related costs affected the Gentan probability distribution. Although the analysis is still hypothetical, the results imply the potential use of the Gentan probability theory to predict the forest owners' harvesting behavior.     

Assessing risks and uncertainties in forest dynamics under different management scenarios and climate change

Background: Forest management faces a climate induced shift in growth potential and increasing current and emerging new risks. Vulnerability analysis provides decision support based on projections of natural resources taking risks and uncertainties into account. In this paper we(1) characterize differences in forest dynamics under three management scenarios,(2) analyse the effects of the three scenarios on two risk factors, windthrow and drought stress, and(3) quantify the effects and the amount of uncertainty arising from climate projections on height increment and drought stress.Methods: In four regions in northern Germany, we apply three contrasting management scenarios and project forest development under climate change until 2070. Three climate runs(minimum, median, maximum) based on the emission scenario RCP 8.5 control the site-sensitive forest growth functions. The minimum and maximum climate run define the range of prospective climate development.Results: The projections of different management regimes until 2070 show the diverging medium-term effects of thinnings and harvests and long-term effects of species conversion on a regional scale. Examples of windthrow vulnerability and drought stress reveal how adaptation measures depend on the applied management path and the decision-maker's risk attitude. Uncertainty analysis shows the increasing variability of drought risk projections with time. The effect of climate projections on height growth are quantified and uncertainty analysis reveals that height growth of young trees is dominated by the age-trend whereas the climate signal in height increment of older trees is decisive.Conclusions: Drought risk is a serious issue in the eastern regions independent of the applied silvicultural scenario,but adaptation measures are limited as the proportion of the most drought tolerant species Scots pine is already high. Windthrow risk is no serious overall threat in any region, but adequate counter-measures such as species conversion, species mixture or reduction of target diameter can be taken. This simulation study of three silvicultural scenarios and three climate runs spans a decision space of potential forest development to be used for decision making. Which adaptation measures to counteract climate induced risks and uncertainty are to be taken is,however, a matter of individual risk attitude.