The increased threat of wildfires and potential damages to timberlands from drought, fire and smoke will reduce timber prices in Oregon, Washington and California in the coming decades, according to Oregon’s 2025 climate assessment. It comes as wildfires and drought have caused $11.2 billion in damages to privately owned timberland in Oregon, Washington and California in the last 20 years, a 2023 Oregon State University study showed – resulting in a 10% reduction in the value of private timberland in the three states.
“The threat of future wildfire risks are expected to continue driving down costs as timberland owners and buyers anticipate increased risks due to climate change,” Oregon State University rural economics expert David Lewis told KOIN 6 News: “Risk of damage to forests from wildfire has increased in the past two decades, and that translates to timberland buyers willing to pay less for timberland.”
“When the risk of wildfire increases, then future timber harvest revenues become less certain for buyers and owners of forest land, and that’s why they’re willing to pay less, which explains the negative effect we find of wildfires on timberland prices.”
The 2025 Oregon Climate Assessment predicts that Oregon’s wildfire risks will dramatically increase in the coming decades as the state’s average temperatures are forecast to rise by at least 5 degrees by 2074 and 7.6 degrees by 2100. The changing climate is expected to bring more winter rain, severe ice storms, flooding, less mountain snow, less summer rain, drought, increased wildfire risk, crop failure and severe environmental impacts.
While wildfires present obvious hazards for the region, smoke damage alone could reduce Oregon’s per-annum gross domestic product by at least $1 billion, or about one-third of 1%, according to Oregon’s latest climate assessment:
“Estimates illustrate that a major smoke event similar to those that Oregon residents have experienced in recent years is expected to lead to localized and industry-specific economic losses in the state,” the climate assessment report states. “The Oregon industries most susceptible to economic losses due to wildfire smoke events represent approximately 40% of total employment, 31% of labour income, and 33% of total economic output per year for the state.”