An impact analysis of climate change and adaptation policies on the forestry sector in Quebec. A dynamic macro-micro framework

Quebec’s forests represent 20% of the Canadian forest and 2% of world forests. They play a major role for habitat preservation, supplying goods and services to the population and hence contributing to the economy of this Canadian province. Climate change (CC) will have an impact on forests through increased droughts, warmer summers and winters or infestations such as the pine beetle (British Columbia and New Jersey). In our study we analyze the economic and distributional impact of CC on the forest industry in Quebec. To achieve this, we simulate two productivity changes in the forestry sector and two potential adaptation programs that could be implemented to help the sector cope with CC direct and indirect effects. Our analysis is performed over a 40 year using a recursive dynamic CGE-micro-simulation framework. We show that the economic impacts on the forest industry are relatively substantial but quite small for the rest of the economy. Moreover, the distributional impacts are present and significant but they are weak (below 0.1%).