The impacts of global warming on forestry: an age-structured Ricardian approach[Les effets du réchauffement climatique sur la sylviculture : une approche ricardienne tenant compte de la structure d'âge]

This study extends the Ricardian framework to forestry by accounting for tree growth and harvest dynamics. Indeed, whereas standard Ricardian applications in agriculture assume that farmland prices reflect a perpetual flow of annual profits from the most climate-adapted crops, forestland prices additionally capitalize the age-dependent value of standing timber accumulated over decades. Coupling the Ricardian and Faustmann approaches, we theoretically show that this age dependence is systematically tied to species (and therefore to climate), so that stand age becomes a confounding factor in standard pooled Ricardian regressions. Our theory implies a correction – the age-structured Ricardian approach – that regresses the climate-value relationship across stand-age classes, with the coefficients obtained for the youngest class providing the closest approximation to the true Ricardian effects in the context of forestry. Using geolocated plot-level data from all forestland transactions in France between 2014 and 2023 (over 100,000 plots) matched to forest age at sale (1–219 years), we empirically confirm that standard pooled Ricardian estimates are biased, typically understating the benefits of warmer climates to forestry – in our case, by nearly a factor of two. Consistent with our theory, age-structured coefficients exhibit an inverted U-shape with stand age: capitalization of climate productive effects into forestland prices first strengthens as stands mature and then weakens as slow-growing species increasingly dominate older age classes. Our findings hold under multiple sensitivity analyses and extensions, making clear that ignoring age-related dynamics systematically biases climate estimates in Ricardian applications to forestry.