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Innovation in forest tree genetics: A comparative economic analysis in the European context

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  • Fugeray-Scarbel, Aline
  • Irz, Xavier
  • Lemarié, Stéphane

Abstract

In the context of global environmental change, European forests are expected to fulfil a broad range of functions, including the supply of raw materials to the bioeconomy, biodiversity preservation, and the provision of ecological services. Given fast progress in applied genetics, the selection and diffusion of genetically improved forest reproductive material (FRM) has a role to play towards the achievement of some of those goals. We therefore investigate European forest tree breeding conceived as an innovative activity on the basis of four case studies (eucalyptus in Portugal, maritime pine in France, and Norway spruce in Sweden and Finland), using a conceptual framework combining the innovation system approach and the economics of innovation. The genetic progress achieved for each of those species has been steady since the beginning of tree breeding activities. Despite that, we identify both systemic issues and market failures that hinder FRM genetic innovation and make the prospects of a forest tree breeding revolution unlikely. While the innovation systems in the studied countries are structurally sound, we identify several functional deficiencies. We also identify incentive problems limiting both supply and demand of genetically improved FRM. On the demand side, forest owners value improved FRM only moderately because of long lags between plantation and harvest, imperfect knowledge of the potential gains from adoption of genetically improved FRM, and risk aversion. On the supply side, returns to investments in genetic improvement are heavily constrained by the slowness of the breeding process, capacity constraints related to FRM production, limited demand-pull and regulatory uncertainty. Those incentive problems are partially overcome in situations where the industry is vertically integrated, from FRM production to wood processing, as observed in the case of eucalyptus in Portugal or Norway spruce in Sweden. In the other cases, public support for breeding programmes is paramount.

Suggested Citation

  • Fugeray-Scarbel, Aline & Irz, Xavier & Lemarié, Stéphane, 2023. "Innovation in forest tree genetics: A comparative economic analysis in the European context," Forest Policy and Economics, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:forpol:v:155:y:2023:i:c:s1389934123001259
    DOI: 10.1016/j.forpol.2023.103030
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    References listed on IDEAS

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