Impacts of hurricanes on forest markets and economic welfare: The case of hurricane Michael
This paper develops methodologies and identifies data gaps for understanding the impacts of hurricanes on forest product markets. Using the case of Hurricane Michael, we simulate damage to forest growing stock and forest area from alternative damage estimations (inventory and remote sensed). We then consider alternative scenarios for replanting, and the spatial distribution of salvage consumption. Beyond previous analyses we examine both short run and long run market outcomes resulting from the age demographics of standing timber post-hurricane. The simulation framework developed allows for the comparison of welfare and forest carbon consequences. Across scenarios the hurricane causes a welfare increase for pine sawtimber producers ranging from 1.2 to 1.5 times the no-hurricane baseline, and a loss for pine sawtimber consumers ranging from 0.6 to 0.8 times the baseline. Hardwood sawtimber producers gain by equivalent factors of 1.8, and consumers lose half. All scenarios gained forest carbon on the order of 1.2 times the pre-hurricane forest carbon, however, the no-hurricane case exhibited both higher carbon and carbon per unit area after a 40-year simulation.