Comparative global timber investment costs, returns, and applications, 2020

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Frederick Cubbage
Rafael Rubilar
Patricio Mac Donagh
Bruno Kanieski Da Silva
Adriana Bussoni
Virginia Morales
Gustavo Balmelli
Vitor Afonso Hoeflich
Roger Lord
Carmelo Hernández
Pu Zhang
Ha Tran Thi Thu
Richard Yao
Peter Hall
Jaana Korhonen
Luis Díaz-Balteiro
Roque Rodríguez-Soalleiro
Robert Davis
Rafał Chudy
Rafael De La Torre
Gabriel Lopera
Somvang Phimmavong
Sebastián Garzón
Ana Cubas-Baez


timber investments, benchmarking, internal rates of return, capital budgeting, planted forests, carbon mitigation


We estimated stand level timber investment returns for a range of 16 countries and 47 planted species/management regimes in 2020, using capital budgeting criteria, at a real discount rate of 8%, without land costs. Plantation management financial returns were estimated for the principal plantation countries in the Americas—Brazil, Argentina, Uruguay, Chile, Colombia, Ecuador, Paraguay, Mexico, and the United States—as well as for China, Vietnam, Laos, Spain, New Zealand, Finland, and Poland. South American, New Zealand, and Spain plantation growth rates and their concomitant investment returns were generally greater, with the exception of some pulpwood regimes, with real Internal Rates of Return (IRRs) of more than 11%. Southeast Asia had the highest timber prices and highest calculated stand-level IRRs in the world, at more than 20%. Temperate forest plantations in the U.S. and Europe returned less, from 3% to 7%, but those countries have less financial risk, better timber markets, and more infrastructure. These timberland benchmarking research efforts can be used by the private sector for considering timber investments in different countries and regions in the world, or by government and nongovernment organizations to estimate their management costs and returns, or for providing government incentives for the provision of ecosystem services such as forest carbon storage.

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