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Store or export? An economic evaluation of financial compensation to forest sector after windstorm. The case of Hurricane Klaus

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  • Caurla, Sylvain
  • Garcia, Serge
  • Niedzwiedz, Alexandra

Abstract

We assess the economic impacts of the compensation plan implemented in the forest sector after Klaus hurricane in the south-west of France in 2009. We model this plan within the French Forest Sector Model (bio-economic partial equilibrium model), and we compare it with alternative plans assuming alternative distributions between transport and storage subsidies. Our results show that the plan as it was formulated was globally beneficial to the forest sector compared with a scenario without a plan. In addition, we show that, compared with the formulated plan, a storage-oriented alternative plan reduces the fall in price observed after the hurricane, increases storage volume, increases the total gains in surplus of the overall sector but postpones the price rebound after the shock. This is a policy-relevant result in such a context where one major risk is that windfall wood prices drop to zero.

Suggested Citation

  • Caurla, Sylvain & Garcia, Serge & Niedzwiedz, Alexandra, 2015. "Store or export? An economic evaluation of financial compensation to forest sector after windstorm. The case of Hurricane Klaus," Forest Policy and Economics, Elsevier, vol. 61(C), pages 30-38.
    • Handle: RePEc:eee:forpol:v:61:y:2015:i:c:p:30-38
    DOI: 10.1016/j.forpol.2015.06.005
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    References listed on IDEAS

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    1. Alexandre Sauquet & Ahmed Barkaoui & Sylvain Caurla & Philippe Delacote & Serge Garcia & Franck Lecocq, 2011. "Estimating Armington elasticities for sawnwood and application to the French Forest Sector Model," Post-Print halshs-00688822, HAL.
    2. Sauquet, Alexandre & Lecocq, Franck & Delacote, Philippe & Caurla, Sylvain & Barkaoui, Ahmed & Garcia, Serge, 2011. "Estimating Armington elasticities for sawnwood and application to the French Forest Sector Model," Resource and Energy Economics, Elsevier, vol. 33(4), pages 771-781.
    3. Brunette, Marielle & Couture, Stéphane, 2008. "Public compensation for windstorm damage reduces incentives for risk management investments," Forest Policy and Economics, Elsevier, vol. 10(7-8), pages 491-499, October.
    4. Howard Kunreuther & Mark Pauly, 2006. "Rules rather than discretion: Lessons from Hurricane Katrina," Journal of Risk and Uncertainty, Springer, vol. 33(1), pages 101-116, September.
    5. Howard Kunreuther & Mark Pauly, 2006. "Rules Rather Than Discretion: Lessons from Hurricane Katrina," NBER Working Papers 12503, National Bureau of Economic Research, Inc.
    6. Kaplow, Louis, 1991. "Incentives and Government Relief for Risk," Journal of Risk and Uncertainty, Springer, vol. 4(2), pages 167-175, April.
    7. Sylvain Caurla & Franck Lecocq & Philippe Delacote & Ahmed Barkaoui, 2010. "The French Forest Sector Model: version 1.0. Presentation and theorical foundations," Working Papers - Cahiers du LEF 2010-04, Laboratoire d'Economie Forestiere, AgroParisTech-INRA.
    8. Costa, Sandrine & Ibanez, Lisette, 2005. "Can wood storage be profitable? French experience after the windstorms in 1999," Journal of Forest Economics, Elsevier, vol. 11(3), pages 161-176, December.
    9. Holecy, Jan & Hanewinkel, Marc, 2006. "A forest management risk insurance model and its application to coniferous stands in southwest Germany," Forest Policy and Economics, Elsevier, vol. 8(2), pages 161-174, March.
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    Cited by:

    1. Miguel Riviere & Sylvain Caurla & Philippe Delacote, 2020. "Evolving Integrated Models From Narrower Economic Tools : the Example of Forest Sector Models," Post-Print hal-02512330, HAL.
    2. Marielle Brunette & Marc Hanewinkel, 2021. "Assurance financière et assurance naturelle : une application à la forêt," Working Papers of BETA 2021-28, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    3. Jun Zhai & Zhuo Ning, 2022. "Models for the Economic Impacts of Forest Disturbances: A Systematic Review," Land, MDPI, vol. 11(9), pages 1-16, September.

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