Climate-adaptive management in Non-Industrial Private Forest Ownership: Decision-making, Policy Options, and Welfare to Advance the Swedish Bioeconomy

Over 300 000 NIPFOs own about half of all productive forests in Sweden integral to the national bioeconomy. But predominant forest management with even-age monoculture makes them vulnerable to climate disturbances. Adaptive management that enhances biodiversity can mitigate risks but carry economic consequences that are difficult to assess under climate uncertainty. Financial incentives can encourage NIPFOs adaptation and contribute to broader social benefits, yet their net impact on social welfare requires careful evaluation. Using a land expectation value framework, I will construct dynamic economic models to examine (1) forest owners’ adaptation decisions under climate uncertainty and (2) the extent to which financial incentives can reduce trade-offs between expected income losses and social welfare. My model is comprehensive and novel by incorporating uncertainty parameters estimated from empirical sources and capturing the dynamic interaction between forest owners and policymakers as adaptation and incentive levels evolve. My project responds to growing social demands to better align forest production and biodiversity conservation in a rapidly changing climate. Findings will support NIPFOs’ adaptation decisions, the design of incentive mechanisms, and national strategies to advance the bioeconomy.