When forest disturbances hit wood value chains: simulating tipping points in roundwood markets

Increasing forest disturbances caused by climate change will present challenges for the resilience of wood value chains. In recent decades, Europe has experienced a rise in forest disturbances, including storms, droughts, and bark beetle infestations, which have a significant impact on harvesting practices and lead to reduced roundwood prices. This presents significant challenges for forest owners. A lack of profitability may lead to reduced motivation to manage forests resulting in forest management abandonment. The combination of increasing forest disturbances and forest management abandonment may lead to market fluctuations and potential tipping points. In this study, we investigate the reversing feedback mechanisms of climate change-induced forest disturbances in the context of resilience of the Austrian wood value chain. We use a System Dynamics forest sector model (FOHOW) to explore the occurrence of tipping points in wood value chains. The results indicate that the resilience of wood value chains is endangered when forest disturbance events fluctuate and forest owners are likely to abandon management. In case of a tipping point, the wood value chain faces consequences that involve structural market changes like reduced roundwood and product production as well as reduced profitability for forest owners and industry. This would likely lead to environmental and social consequences along wood value chains, e.g., increasing greenhouse gas emissions or a shift in working conditions. Nevertheless, the resilience of wood value chains can be manipulated to strengthen value chain resilience by adopting climate-fit forestry, improving flexibility of forest owners and adapting circular economy approaches to make use of secondary raw material sources.