PORTLAND, Ore. (KOIN) – An Oregon State University study found that wildfires and drought have led to $11.2 billion in damage to privately owned timberland along the west coast — sparking decreased timberland value in Oregon, Washington, and California.
Researchers said this represents about a 10% reduced value of private timberland in the three states and based on recent climate change attribution studies by other scientists, OSU researchers attribute about half of the economic damages to climate change.
“This study shows that climate change is already reducing the value of western forests,” said David Lewis, a natural resource economist at Oregon State University. “This isn’t a hypothetical future effect. These are damages that have already happened because it is riskier to hold assets like timberland.”
The study — which was published in the Journal of Environmental Economics and Management — comes after the White House announced plans in January to create a national strategy to estimate the impacts of climate change on forests, minerals, oceans, and rivers.
During the study, Lewis and postdoctoral student Yuhan Wang analyzed data from more than 9,000 sales of privately-owned timberland that were a minimum of 10 acres from 2004 to 2020 in California, Oregon, and Washington.
The researchers linked the transactions with data on small and large wildfires along with data on drought stress by looking at vapor pressure deficit.
Researchers found that across the three states, recent increases in drought stress have reduced the economic value of timberland by 1% on average while increases in large wildfires have reduced timberland values by an additional 8.7% over the past two decades.
The study furthers that the bulk of large wildfire losses were not due to direct burning of the private land, but increasingly frequent neighboring fires – altering landowners’ expectations of when fires will arrive and increasing the risk of investing in timberland.
“The bulk of the damage is from altered risk expectations in land markets – not direct damage to the existing tree stock on the stand,” Wang said. “That is a key and somewhat surprising finding.”
About one-third of forests that were in the study region are privately owned, while the rest are owned by federal, state, and local governments. However, the authors note most of the harvested timber, and almost all of the timberlands bought and sold, is privately held.
According to the study, drought stress in California accounted for a .2% gain in timberland value and a 13.7% decrease due to large wildfires. Researchers said the drought stress gain is due in part to most of the private timberland being concentrated in the wetter northwestern part of the state.
West of the Cascades in Oregon, drought stress losses were at 1.6%, and large wildfire losses were 7.7%. East of the Cascades saw drought stress drop to 1.1%, and large wildfire loss declining to 6%. Researchers say there is more private timberland west of the Cascades that has been in close proximity to large wildfires in recent years compared to the east side of the Cascades.
In Washington, west of the Cascades, drought stress led to a .2% loss in timberland value, and large wildfires caused a 5% decrease in timberland value, according to the study. Researchers said east of the Cascades, the losses were 3.5% due to drought stress and 8.1% because of large wildfires.
Researchers say their findings show climate change can alter the value of natural capital, impact private investments and could require public intervention to prevent management changes.
“The study helps us understand the effects of historical climate shocks on the economic value of natural capital and also provides insights into the potential benefits of actions to mitigate extreme weather events,” Wang said.