Weather Variability Risks Slow Climate Adaptation : An Empirical Analysis of Forestry

The timing of climate adaptation decisions can have substantial consequences for the assessment of climate damages. Since weather variability can create risks that differ across adaptation choices, such variability has the potential to alter the speed of climate adaptation and the adjustment costs to climate change. This paper estimates the effect of weather variability on the timing of adaptation decisions of forest landowners in the Eastern United States. A discrete-choice model of forest management is estimated and used in a simulation that shows how variability in cold temperatures can significantly slow the rate of adapting from cold-tolerant hardwood forests to cold-sensitive, but highly valuable pine plantations. The range of weather variability in climate projections and across the landscape generates large differences in adaptation timing. Thus, an important source of both adaptation costs and future conservation uncertainty is the economic response of private forest landowners to weather variability