The One Trillion Trees Project and Increasing US Forest Cover

The World Economic Forum launched the One Trillion Trees project in January.  As it noted in a press release (January 22, 2020): \”Nature-based solutions – locking-up carbon in the world’s forests, grasslands and wetlands – can provide up to one-third of the emissions reductions required by 2030 to meet the Paris Agreement targets.\” On one side, I like trees. On the other side, I\’m by nature skeptical.

As a piece of short-form writing, I\’ve long been a fan of George Orwell\’s tribute to trees in his 1946 newspaper essay (\”A Good Word for the Vicar of Bray,\” Tribune, April 26, 1946) where he wrote:

The planting of a tree, especially one of the long-living hardwood trees, is a gift which you can make to posterity at almost no cost and with almost no trouble, and if the tree takes root it will far outlive the visible effect of any of your other actions, good or evil. …

Recently, I spent a day at the cottage where I used to live, and noted with a pleased surprise–to be exact, it was a feeling of having done good unconsciously–the progress of the things I had planted nearly ten years ago … This job lot consisted of six fruit trees, three rose bushes and two gooseberry bushes, all for ten shillings. One of the fruit trees and one of the rose bushes died, but the rest are all flourishing. The sum total is five fruit trees, seven roses and two gooseberry bushes, all for twelve and sixpence. These plants have not entailed much work, and have had nothing spent on them beyond the original amount. They never even received any manure, except what I occasionally collected in a bucket when one of the farm horses happened to have halted outside the gate.

Between them, in nine years, those seven rose bushes will have given what would add up to a hundred or a hundred and fifty months of bloom. The fruit trees, which were mere saplings when I put them in, are now just about getting in their stride. Last week one them, a plum, was a mass of blossom, and the apples looked as if they were going to do fairly well. What had originally been the weakling of the family, a Cox\’s Orange Pippin–it would hardly have been included in the job lot if it had been a good plant–had grown into a sturdy tree with plenty of fruit spurs on it. I maintain that it was a public-spirited action to plant that Cox, for these trees do not fruit quickly and I did not expect to stay there long. …

A thing which I regret, and which I will try to remedy some time, is that I have never in my life planted a walnut. Nobody does plant them nowadays–when you see a walnut it is almost invariably an old tree. If you plant a walnut you are planting it for your grandchildren, and who cares a damn for his grandchildren? … Even an apple tree is liable to live for about 100 years, so that the Cox I planted in 1936 may still be bearing fruit well into the twenty-first century. An oak or a beech may live for hundreds of years and be a pleasure to thousands or tens of thousands of people before it is finally sawn up into timber. I am not suggesting that one can discharge all one\’s obligations towards society by means of a private re-afforestation scheme. Still, it might not be a bad idea, every time you commit an antisocial act, to make a note of it in your diary, and then, at the appropriate season, push an acorn into the ground.

But when a skeptic like me reads that opening comment from the World Economic Forum, my brain spits out questions like: How practical is such an increase? How much land will it take? How much are the benefits likely to be overstated? What would it look like in the United States? In short, I need some outside expert input.

  David Wear has written a short overview \”Tree Planting as Climate Policy\” for Resources for the Future (May 2020, RFF Issue Brief 20-07). Wear offers a thoughtful discussion of US forest patterns in recent decades–and what policies are most likely to increase the number of trees substantially. He also makes a case that they way to get more trees planted may be demand-side policies to find more uses for wood, not supply-side policies to put more acorns in the ground. Wear writes (citations and footnotes omitted):  

In 1950, planted forests were rare in the United States, but they now account for 68 million acres (8 percent) of forests, and tree planting is an integral component of the timber-growing sector. Between 2011 and 2015, roughly 11.4 million acres were planted … Given average planting densities, an annual average of 1 billion to 1.5 billion trees were planted over this period. Most (75 percent) of these trees were planted in the US Southeast, where returns to forestry are high relative to other rural land uses because of good growing conditions, genetically improved trees, and widespread access to markets for timber. At times, planting by noncommercial private landowners has been subsidized through various costshare programs addressing reduced crop production, increased timber supply, or conservation benefits, but the lion’s share, and nearly all planting since 2000, has relied exclusively on private-sector capital. …

Forest investment in the United States has driven an orderly transition of the forest sector from harvests of old-growth forests to a near-exclusive focus on managing second-growth forests. … Remarkably, forest investment fully offset the loss of 17.1 million forested acres to development between 1982 and 2012 by establishing new forests on pasture- and croplands. These land use and forest dynamics resulted in a vast and growing reservoir of land-based carbon sequestered from the atmosphere—US forests capture more than 600 teragrams per year of carbon dioxide equivalents and more than 10 percent of economywide emissions … Near-term prospects for expanding forest area and forest carbon capture seem limited, given these market changes. Indeed, recent projections suggest a slowing of forest carbon sequestration in the United States as forest area peaks and forests age. Parts of the western United States are expected to soon reach a carbon stasis and then become a carbon source …

When it comes to incentives for planting more trees, Wear emphasizes several themes that bear repeating.

First, additional subsidies to plant large numbers of trees are likely to displace the existing private capital that has been planting trees,without much net growth in forest cover.

Policies that grow timber inventories … face the prospect of amplifying downward pressure on timber prices and returns to forest management. Coupled with stable to increasing agricultural prices, the result would likely be a displacement of private investment capital from the forest sector and land switching from forest to agricultural uses.  … This is a classic leakage problem where market forces offset the policy instrument through substitution. … Ultimately, tree-planting initiatives will have limited effects on forest area because they are supply-side interventions in a private market with growing supplies and stagnant prices. They “swim against the current” of expected landowner responses.

Second, Wear acknowledges a bunch of options like more trees in urban areas, suburbs, near riverbanks, park areas, and when re-establishing habitat. But he writes: \”These examples simultaneously provide cobenefits arising from watershed protection, enhanced biodiversity, and human health benefits, but such targeted approaches are unlikely to result in substantial carbon benefits.

Third, if the policy goal is to increase forest cover quite substantially, a more plausible if somewhat counterintuitive option may be to increase demand for wood products. He writes:

Policies that address the demand side of the forest sector are likely to be more effective. Policy-driven demand growth is an alternative approach to increasing carbon sequestration that would raise prices and incentivize forest retention and private investment in tree planting and management. Forest bioenergy has the most potential for policy-determined demand growth, and recent studies show its strong potential for reducing the carbon density of US energy production while expanding forest carbon sequestration (see Faveroet al. 2020). The use of mass timber in commercial construction is another avenue for growing timber demand, while also providing additional long-term carbon storage in wood products. Market fundamentals suggest that demand-side policies would outperform tree-planting programs in affording climate benefits.

Wear\’s comments suggest some issues the Trillion Tree Project will need to face. Overall forestland has been growing in high-income countries, including the United States, for some decades now. There may be situations where preserving habitat will prevent forests from being reduced in size, like preservation of mangrove forests or parts of the Amazon rain forest. But the policy goal here is not just to preserve forests, but to add to them extensively. It may be that if the goal is substantial growth in the size of global forests to increase their function as a carbon sink, thinking about market demand for wood products may be even more important than thinking about preservation and parks.

Spring 2020 Journal of Economic Perspective Available Online

I am now in my 34th year as Managing Editor of the Journal of Economic Perspectives. The JEP is published by the American Economic Association, which decided about a decade ago–to my delight–that the journal would be freely available on-line, from the current issue all the way back to the first issue. You can download it various e-reader formats, too. Here, I\’ll start with the Table of Contents for the just-released Spring 2020 issue, which in the Taylor household is known as issue #132. Below that are abstracts and direct links for all of the papers. I will probably blog more specifically about some of the papers in the next week or two, as well.

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Symposium: One Hundred Years of Women\’s Suffrage
\”Votes for Women: An Economic Perspective on Women\’s Enfranchisement,\” by Carolyn M. Moehling and Melissa A. Thomasson
The ratification of the Nineteenth Amendment in 1920 officially granted voting rights to women across the United States. However, many states extended full or partial suffrage to women before the federal amendment. In this paper, we discuss the history of women\’s enfranchisement using an economic lens. We examine the demand side, discussing the rise of the women\’s movement and its alliances with other social movements, and describe how suffragists put pressure on legislators. On the supply side, we draw from theoretical models of suffrage extension to explain why men shared the right to vote with women. Finally, we review empirical studies that attempt to distinguish between competing explanations. We find that no single theory can explain women\’s suffrage in the United States and note that while the Nineteenth Amendment extended the franchise to women, state-level barriers to voting limited the ability of black women to exercise that right until the Voting Rights Act of 1965.
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\”A Century of the American Woman Voter: Sex Gaps in Political Participation, Preferences, and Partisanship since Women\’s Enfranchisement,\” by Elizabeth U. Cascio and Na\’ama Shenhav
This year marks the centennial of the Nineteenth Amendment, which provided American women a constitutional guarantee to the franchise. We assemble data from a variety of sources to document and explore trends in women\’s political participation, issue preferences, and partisanship since that time. We show that in the early years following enfranchisement, women voted at much lower rates than men and held distinct issue preferences, despite splitting their votes across parties similarly to men. But by the dawn of the twenty-first century, women not only voted more than men, but also voted differently, systematically favoring the Democratic party. We find that the rise in women\’s relative voter turnout largely reflects cross-cohort changes in voter participation and coincided with increasing rates of high school completion. By contrast, women\’s relative shift toward the Democratic party permeates all cohorts and appears to owe more to changes in how parties have defined themselves than to changes in issue preferences. The findings suggest that a confluence of factors have led to the unique place women currently occupy in the American electorate, one where they are arguably capable of exerting more political influence than ever before.
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Symposium: Perspectives on Racial Discrimination

\”Sociological Perspectives on Racial Discrimination,\” by Mario L. Small and Devah Pager
As in economics, racial discrimination has long been a focus of research in sociology. Yet the disciplines traditionally have differed in how they approach the topic. While some studies in recent years show signs of cross-disciplinary influence, exposing more economists to sociological perspectives on racial discrimination would benefit both fields. We offer six propositions from the sociology of racial discrimination that we believe economists should note. We argue that independent of taste and statistical discrimination, economists should study institutional discrimination; that institutional discrimination can take at least two forms, organizational and legal; that in both forms the decisions of a contemporary actor to discriminate can be immaterial; that institutional discrimination is a vehicle through which past discrimination has contemporary consequences; that minor forms of everyday interpersonal discrimination can be highly consequential; and that whether actors perceive they have experienced discrimination deserves attention in its own right.
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\”Race Discrimination: An Economic Perspective,\” by Kevin Lang and Ariella Kahn-Lang Spitzer
We review the empirical literature in economics on discrimination in the labor market and criminal justice system, focusing primarily on discrimination by race. We then discuss theoretical models of taste-based discrimination, particularly models of frictional labor markets and models of statistical discrimination, including recent work on invalid statistical discrimination. We explore and evaluate the evidence for and against these theories. Although there is substantial evidence of the existence of discrimination, little is known about the extent to which disparities are driven by discrimination. Finally, we argue that economists miss the important self-enforcing relationship between disparities and discrimination and the effect of disparities in one domain on discrimination in other domains.
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Symposium: How Taxes Affect Location Choices

\”Evaluating State and Local Business Incentives,\”by Cailin Slattery and Owen Zidar
This essay describes and evaluates state and local business tax incentives in the United States. In 2014, states spent between 5 USD and 216 USD per capita on incentives for firms in the form of firm-specific subsidies and general tax credits, which mostly target investment, job creation, and research and development. States with higher per capita incentives tend to have higher state corporate tax rates. Recipients of firm-specific incentives are usually large establishments in manufacturing, technology, and high-skilled service industries, and the average discretionary subsidy is 178M USD for 1,500 promised jobs. Firms tend to accept subsidy deals from places that are richer, larger, and more urban than the average county, and poor places provide larger incentives and spend more per job. Comparing winning and runner-up locations for each deal, we find that average employment within the three-digit industry of the deal increases by roughly 1,500 jobs. While we find some evidence of direct employment gains from attracting a firm, we do not find strong evidence that firm-specific tax incentives increase broader economic growth at the state and local level.
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\”Taxation and Migration: Evidence and Policy Implications,\” by Henrik Kleven, Camille Landais, Mathilde Muñoz, and Stefanie Stantcheva
In this article, we review a growing empirical literature on the effects of personal taxation on the geographic mobility of people and discuss its policy implications. We start by laying out the empirical challenges that prevented progress in this area and then discuss how recent work has made use of new data sources and quasi-experimental approaches to credibly estimate migration responses. This body of work has shown that certain segments of the labor market, especially high-income workers and professions with little location-specific human capital, may be quite responsive to taxes in their location decisions. When considering the implications for tax policy design, we distinguish between uncoordinated and coordinated tax policy. We highlight the importance of recognizing that mobility elasticities are not exogenous, structural parameters. They can vary greatly depending on the population being analyzed, the size of the tax jurisdiction, the extent of tax policy coordination, and a range of non-tax policies. While migration responses add to the efficiency costs of redistributing income, we caution against over-using the recent evidence of (sizeable) mobility responses to taxes as an argument for less redistribution in a globalized world.
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Symposium: The Departure of Communism

\”The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism,\” by Sascha O. Becker, Lukas Mergele and Ludger Woessmann
German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles.
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\”The Long-Term Effects of Communism in Eastern Europe,\” by Nicola Fuchs-Schündeln and Matthias Schündeln
We analyze the long-term effects of communism on both policies and preferences in Eastern Europe in four areas in which the communist and capitalist doctrines fundamentally differ: government intervention in markets, political freedom, and inequality in incomes and across genders. Macroeconomic indicators related to these areas show convergence of the East to the West. However, residents in the East express less support for democracy and a stronger desire for redistribution, in line with the communist doctrine. Their preferences for the market economy are on average similar to the ones in the West, and their support of female labor force participation is even lower. To establish an effect of communism on preferences, we recur to cohort differences. In all four areas, older cohorts in the East who have lived under communism for a longer time show preferences more in line with communism than younger cohorts, compared to the same cohort gradient in the West.
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Articles

\”The Basic Economics of Internet Infrastructure,\” by Shane Greenstein
The internet\’s structure and operations remain invisible to most economists. What determines the economic value of internet infrastructure and the incentives to improve it? What are the open research questions for the most salient policy issues? This article reviews the basic economics of internet infrastructure, focusing attention on the economic questions motivated by public aspirations for ubiquitous availability and widespread adoption of internet protocols.
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\”The Economics of Tipping,\” by Ofer H. Azar
Tipping involves dozens of billions of dollars annually in the US alone and is a major income source for millions of workers. But beyond its economic importance and various economic implications, tipping is also a unique economic phenomenon in that people pay tips voluntarily without any legal obligation. Tipping demonstrates that psychological and social motivations can be a substantial reason for economic behavior, and that economic models should go beyond a selfish economic agent who has no feelings in order to capture the full range of economic activities. This article discusses some aspects of tipping, with an emphasis on economic issues: the history of tipping, the main reasons for tipping, why tipping could be a welfare-increasing and sustainable social norm, the relationship between tipping and service quality, how tipping represents a struggle over rents, and issues of discrimination and sexual harassment related to tipping.
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\”Recommendations for Further Reading,\” Timothy Taylor
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