Forestry Investments Are Adaptive Asset Class

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New study reveals forestry landscapes in the Northwestern United States have undergone notable transformations in recent years in order to adapt to environmental changes caused by global warming. Reflecting on the news, claims these new findings might be placing forestry investments into a whole new asset class.



Forests are defining a new “active” asset class -- one that will self-adapt to mitigate much of the investment risks. This asset class will actively work alongside project management to ensure its survival. today released an article claiming that forestry investments are shaping into an asset class of their own. The article comes as a response to a recent New York Times feature, which highlights findings from a new forestry study conducted by scientists in North America.

According to, researchers from Oregon State University, The University of Montana and The University of British Columbia conducted a study on forests in the Northwestern United States, where climate conditions have undergone significant changes in the past several decades due to global warming.

The investment website cites the researchers’ report published in the Remote Sensing of Environment journal, which claims that between 1950 and 1975, the weather in the Northwest region was a lot cooler and wetter than between 1999 and 2005. Due to these drastic changes, scientists explain, ecosystems within the next 70 years are expected to go through notable transformations in order to adapt to the new climate conditions.

The article further explains that tree species like the Ponderosa Pine and Lodgepole Pine, which are used to colder and more humid climates, will gradually recede and will be replaced by warmer-loving stands such as Douglas Fir, Grand Fir and Western Hemlock.

Based on the study findings about the dynamic nature of forests, argues in their article that forests are defining a new “active” asset class -- one that will self-adapt to mitigate much of the investment risks. This asset class will actively work alongside project management to ensure its survival by weathering off external damaging factors, such as disease, fires and insect invasions.

The website’s article goes on to claim that, although renewable energy installations also function according to natural environmental patterns, they are not likely to adjust to climate changes over time. This, the article says, is quite simply that we are still far away from living in a sci-fi reality where clean technology has advanced enough to reach a self- adaptive stage. Quite the opposite -- over time, it reaches an amortisation stage, which depreciates the value of the installation in the long run.

Forests’ ability to adapt to climate changes, on the other hand, can make them more valuable than renewable energy over prolonged investment periods, says the timber website. To support its claim, cites the results from a separate study conducted by the Smithsonian Environmental Research Center. The 20-year research observed tree development from a forest in Maryland and found that 90 per cent of the trees in the study sample grew two to four per cent faster than expected. On the average, forest lots were gaining biomass weight of about 2 tons per acre annually – a phenomenon largely contributed to the increasing temperatures in the last two decades, the higher levels of CO2 in the atmosphere and tree growth cycles that have been extended by over a week.

The accelerated timber weight gain observed in these Maryland forests, says, means that investors will enjoy more abundant timber harvests in the future and, subsequently, higher returns on their investment.

To read the full article and to get more information about the forestry investments, visit

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