Forest sector investment in the United States - trends and implications of capital investment and annual expenditure

Main Article Content

Jaana Korhonen
Gregory Frey https://orcid.org/0000-0003-0538-0199

Keywords

annual expenditure, capital investment, Montreal Process reporting, private investment, public investment, sustainable forest management, USA

Abstract

Investment is essential to ensure that forests are properly restored, protected, and managed to meet the various needs of society, including a wide range of public and private organizations. This article offers an overview of capital investment and annual expenditures related to forests in the United States, encompassing both the public and private sectors. In 2020, the total capital investment and annual expenditure were $242 billion (in 2020 dollars). Our findings indicate that private investment is surpassing public investment. However, there were differences in the types of investments made between the private and public sectors and differences in investment and annual expenditure levels can be observed in different geographical contexts. We also elaborated on potential sustainability impacts and identified knowledge gaps that present opportunities for future research.

Abstract 148 | View Full Text Downloads 0 Download PDF Downloads 122

References

Bipartisan Infrastructure Law. 2021. Pub. L. No. 117-58, 135 Stat. 1535 (2021).

Begemann A, Dolriis C, Winkel G. 2023. Rich forests, rich people? Sustainable finance and its links to forests. Journal of Environmental Management, 326, 116808. https://doi.org/10.1016/j.jenvman.2022.116808

Bruck S, Chizmar S, Parajuli R, Frey G, Lamica A, Sills EO. Framework for understanding the impacts of the COVID-19 pandemic on the timber supply chain in the Southern United States. Under review.

Butler BJ. 2016. Legal, institutional, and policy framework for forest conservation and sustainable management. Future forests of the northern United States. Gen. Tech. Rep. NRS-151. Newtown Square, PA: US Department of Agriculture, Forest Service, Northern Research Station, 243-269.

Chudy RP, Cubbage FW. 2020. Research trends: Forest investments as a financial asset class. Forest policy and economics, 119, 102273.
https://doi.org/10.1016/j.forpol.2020.102273

Cubbage F, Rubilar R, Mac Donagh P, Da Silva BK, Bussoni A, Morales V, ... Cubas-Baez A. 2022. Comparative global timber investment costs, returns, and applications, 2020. Journal of Forest Business Research, 1(1), 90-121. https://doi.org/10.62320/jfbr.v1i1.16

Duden AS, Verweij PA, Faaij APC, Abt RC, Junginger M, van der Hilst F. 2023. Spatially-explicit assessment of carbon stocks in the landscape in the southern US under different scenarios of industrial wood pellet demand. Journal of Environmental Management, 342, 118148.
https://doi.org/10.1016/j.jenvman.2023.118148

FAOSTAT. 2023. Forestry production and trade database. Available at: https://www.fao.org/faostat/en/#data/FO [last accessed 09/25/2023]

Forisk Consulting. 2022. Wood Bioenergy US Database.

Frey GE, Kallayanamitra C, Wilkens P, James NA. 2021. Payments for forest-based ecosystem services in the United States: magnitudes and trends. Ecosystem Services, 52, 101377. https://doi.org/10.1016/j.ecoser.2021.101377

Frey GE, Kallayanamitra C, Wilkens P, James NA. 2022. Defining and measuring forest dependence in the United States: operationalization and sensitivity analysis. Forests, 13(4), 577. https://doi.org/10.3390/f13040577

Hale J. 2021. Sustainable funds U.S. landscape report: more funds, more flows, and impressive returns in 2020. Morningstar.

Hurmekoski E, Jonsson R, Korhonen J, Jänis J, Mäkinen M, Leskinen P, Hetemäki L. 2018. Diversification of the forest industries: role of new wood-based products. Canadian Journal of Forest Research, 48(12), 1417-1432. https://doi.org/10.1139/cjfr-2018-0116

McGinley KA, Guldin RW, Cubbage FW. 2019. Forest sector research and development capacity. Journal of Forestry, 117(5), 443-461.
https://doi.org/10.1093/jofore/fvz030

Mei B. 2023. Carbon offset as another driver of timberland investment returns in the United States. Journal of Forest Business Research, 2(1), 1-19. https://doi.org/10.62320/jfbr.v2i1.20

Montréal Process Liaison Office. 2015. The Montréal Process criteria and indicators for the conservation and sustainable management of temperate and boreal forests. Fifth Edition. 2015. Available online: https://www.montrealprocess.org/documents/publications/techreports/MontrealProcessSeptember2015.pdf [last accessed 02/2023].

National Park Service (NPS). 2023. Budget justifications 2002 - 2023. Available at Budget (U.S. National Park Service) (nps.gov). [Last accessed 02/2023].

National Association of State Foresters. 2022. State forests in numbers. Data acquired through personal communication.

Oswalt SN, Smith WB, Miles PD, Pugh SA. 2019. Forest resources of the United States, 2017. General Technical Report-US Department of Agriculture, Forest Service. Forest Service. https://doi.org/10.2737/WO-GTR-97

Panwar R, Ober H, Pinkse J. 2023. The uncomfortable relationship between business and biodiversity: Advancing research on business strategies for biodiversity protection. Business Strategy and the Environment, 32(5), 2554-2566. https://doi.org/10.1002/bse.3139

Riddle A. 2021. COVID-19 and the U.S. timber industry. Congressional Research Service Report R46636. Congressional Research Service. 25 p. Accessed September 25, 2023. https://crsreports.congress.gov/product/pdf/R/R46636.

Skog K, Bergstrom J, Hill E, Cordell K. 2010. Criterion 6, Indicator 34: value of capital investment and annual expenditure in forest management, wood and non-wood product industries, forest-based environmental services, recreation, and tourism. Research Note-Forest Products Laboratory, USDA Forest Service, (FPL-RN-0320). https://doi.org/10.2737/FPL-RN-320

Townsend B. 2020. From SRI to ESG: The origins of socially responsible and sustainable investing. The Journal of Impact and ESG Investing, 1(1), 10-25. https://doi.org/10.3905/jesg.2020.1.1.010

USDA Forest Service. 2006-2021. Fiscal year 2006-2022: President's budget, budget justification. Washington, DC: U.S. Department of Agriculture, Forest Service. Different years available at Budget & Performance | US Forest Service (usda.gov) http://www.fs.fed.us/publications/ [last accessed 02/2023].

United States Census Bureau. 2023a. Annual capital expenditure survey (ACES) (1996-2021). ACES Tables available at: ACES Tables (census.gov) [Last accessed 02/2023]

United States Census Bureau. 2023b. Annual survey of manufactures: summary statistics for industry groups and industries in the U.S.: 2018 - 2020. Database available at https://data.census.gov/all. [last accessed 02/2023].

United States Census Bureau. 2023c. Annual survey of manufactures: annual survey of manufactures: geographic area statistics: statistics for all manufacturing by state 2013-2016. Database available at https://data.census.gov/all. [last accessed 02/2023].

United States Census Bureau. 2023d. Economic Census statistics 2012 and 2017. Database available at https://data.census.gov/all. [last accessed 02/2023].

United State Bureau of Labor Statistics (USBLS). 2023. Data finder: https://beta.bls.gov/dataQuery/find?st=0&r=20&more=0 [Last accessed 09/2023].

Visser L, Latta G, Pokharel R, Hoefnagels R, Junginger M. 2022. Exploring the limits to sustainable pellet production for international markets: The impact of increasing pellet production in the US Southeast on feedstock use, production cost and carbon sequestration in forest areas. GCB Bioenergy, 14(8), 896-917. https://doi.org/10.1111/gcbb.12946

West TA, Salekin S, Melia N, Wakelin SJ, Yao RT, Meason D. 2021. Diversification of forestry portfolios for climate change and market risk mitigation. Journal of Environmental Management, 289, 112482. https://doi.org/10.1016/j.jenvman.2021.112482

World Bank. 2023. Gross Domestic Product deflator. https://data.worldbank.org/indicator/NY.GDP.DEFL.ZS [last accessed 11/2022].

Zhang N, Mei B, Li Y. 2023. A review of the financial performance of lumber futures and some prospects. Forest Policy and Economics, 157, 103095. https://doi.org/10.1016/j.forpol.2023.103095

Most read articles by the same author(s)