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6/3/2014 » 6/6/2014
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Market Access and Forest Stewardship:   How Sustainability Certification and Renewable Biomass Mandates Threaten Nonindustrial Private Forests

 

 

The Economics of Forest Conversion

The environmental goods produced on nonindustrial private forests are not guaranteed, they depend on stewardship practices of forest landowners. This stewardship, in part, depends on the ability of forest landowners to access markets for wood products and to earn enough money to stay in forestry.23

 

Forest Conversion Trends

Conversion has reduced domestic forest coverage and, by consequence, the environmental productivity of private nonindustrial forestland.24“From 1982 to 1997, 10.3 million acres of nonfederal forest land, most of which is private, were converted to developed uses and urban areas.”25 Although conversion has slowed somewhat since the 1900s, the overall trend has remained the same and will likely continue. Forecasting models indicate that 19 million forested acres will be lost to urbanization between 2020 and 2040.26And those not converted to developed uses could face fragmentation, that is, the division and disconnection of previously contiguous forested acres to the detriment of their biological processes.27In fact, the Forest Service predicts 44.2 million acres (more than11 percent) of private forest across the coterminous United States could experience substantial increases in housing density by 2030.28

 

Incentives to Sell

There is no mystery about the economic drivers of forest conversion. According to forest economists

Eric White and Rhonda Mazza, everything boils down to the incentives of the forest landowner:

As the demand for developed land uses increase, so do the incentives to sell land for development. The financial incentive to convert lands now in traditional rural uses (e.g., timber or agricultural production) to developed uses becomes greater as the value of the land in rural uses declines relative to the value of the land for developed uses (such as residential or commercial use). For forest land, decreases in the demand for timber, as a result of changing market conditions in the forest products sectors and other factors, can reduce the value of the land for timber production.29

Put simply, a private forest landowner has an incentive to develop when the land’s developed value grossly exceeds its undeveloped value. Absent a zoning ordinance or conservation easement restricting development, the land’s developed value is determined by its location and amenities, as well as the drivers of housing demand such as population and personal income growth.30

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