Forest management has always revealed the tension between economics and ecology. I first saw it in the late 1970s, when I visited the American Paper Institute to discuss a national recycling policy. Paper made up more than 40% of the solid‑waste stream, yet recovery rates were so low that a friend on the board of Scott Paper told me recycling barely registered against their production scale. Even then, the gap between what the public imagined and what the industry actually did was enormous.
Today, the marketplace is shifting due to both environmental and political developments.
The Illusion of Forest Abundance
Across the United States, tree mortality is rising. Forest quantity is up; forest health is down.
Climate stressors—heat, drought, insects, wildfire—are killing trees faster in many regions than forests can replace them. A 2023 Forest Service inventory shows that most federal forests are now mature or old‑growth. That should be a triumph. Instead, it is a warning: these carbon‑rich, ecologically complex forests are increasingly vulnerable.
Roughly 90–92% of U.S. forest land remains natural or semi‑natural. The remaining 8–10% consists of plantation-style “tree farms,” especially in the Southeast—single‑species, even‑aged, grown like crops. They are efficient and profitable. They are not forests.
Globally, the picture is worse. Research in Nature estimates that humans have removed nearly half the world’s trees, and we still cut down about 15 billion a year. Satellite data shows slight increases in global tree cover, but mostly in northern latitudes. The tropical rainforests that matter most for biodiversity and carbon storage continue to shrink. Gains in temperate zones cannot offset losses in the Amazon, the Congo Basin, or Southeast Asia.
The world has more tree plantations. It has fewer forests.
Biomass: A Climate Policy Loophole
Bioenergy now supplies roughly 9% of global energy, and industrial biomass is its fastest‑growing segment. Wood is the dominant fuel. Europe and Asia are driving demand: the EU and UK burn more than 18 million metric tons of wood pellets each year, and Japan, South Korea, and Taiwan are on track to reach 27 million tons annually by 2030.
This is not firewood. This is industrial‑scale combustion, and the forests of the U.S. Southeast, Canada, and parts of Europe are the feedstock.
The problem is not that forests can’t regrow—they can. The problem is that they don’t regrow on the timelines that climate policy pretends they do. Burning wood releases carbon instantly; regrowth takes decades. Yet many climate frameworks treat biomass as carbon‑neutral the moment it’s burned. The atmosphere does not share this accounting convention.
As pellet demand rises, producers are shifting from sawdust and residues to low‑grade whole trees. That shift changes everything: the carbon math, the ecological footprint, and the long‑term health of forest landscapes. A harvested forest can take 20 to 60 years to re‑sequester the carbon emitted when its biomass is burned. In a decade when the world needs rapid emissions cuts, that lag is not a footnote—it is the whole story.
Meanwhile, nearly 9 million acres of U.S. forest burned last year. Add that to rising harvest pressure from biomass markets, and the idea that forests can simultaneously serve as carbon sinks, wildlife habitat, timber supply, and a global energy source begins to look like magical thinking.
War and the Wood Economy
The conflict in Iran is amplifying these pressures in ways policymakers have barely begun to acknowledge. Instability around the Strait of Hormuz has forced a restructuring of Gulf shipping routes, pushing timber shipments through less efficient ports and adding costly overland trucking. War‑risk insurance premiums and vessel rerouting are tightening global container capacity, driving up freight rates for everything from furniture to structural lumber.
The conflict is also inflating the price of petrochemical‑based adhesives and resins—melamine, formaldehyde, and technical‑grade urea—used in plywood, MDF, and particleboard. Because wood processing is energy‑intensive, sawmills and panel producers are passing these costs downstream, creating volatility across decorative surfaces, laminates, and engineered wood.
Paper and packaging are feeling the strain as well. Rising energy prices and shortages of pulp and chemicals have pushed production costs sharply higher, forcing some European mills to curtail output. Shipping bottlenecks and route closures have delayed waste‑paper and pulp shipments, with carriers adding surcharges of $100 to $400 per container. Packaging prices have surged—up more than 40% in some segments—and volatility has spread into printing and writing grades. There are over a thousand types of paper products.
In the Middle East and North Africa, where construction depends heavily on imported timber, these shocks threaten to delay infrastructure projects and suppress demand. Exporters in the U.S., Canada, and Australia are already diverting shipments toward more stable markets. The global wood economy is being reshuffled in real time.
The New Climate Gatekeepers: Timberland REITs
Timberland REITs are Real Estate Investment Trusts that own and manage forested lands. Timberland REITs—Weyerhaeuser, Rayonier, PotlatchDeltic—now sit at the center of this transformation. Their decisions increasingly determine whether forests function as carbon stores or carbon sources. Biomass demand accelerates harvest cycles, encourages monoculture plantations, and pits carbon markets against pellet markets. The same acre of forest can be monetized for carbon credits, made into paper products, lumber or cut for energy. Climate outcomes depend on which option pays more.
Yet policy has barely begun to grapple with this reality. Timberland REITs are becoming de facto climate actors, but the rules governing biomass carbon accounting remain inconsistent and, in some cases, outdated.
If forests are going to play a meaningful role in the climate transition, three things must change:
– Carbon accounting must reflect real‑world timelines. Immediate emissions and decades‑long regrowth cannot be treated as equivalent.
– Biomass sourcing standards must tighten. Residues and waste wood are one thing; whole‑tree harvesting is another.
– Forest owners must be integrated into climate planning. Timberland is no longer just real estate. It is climate infrastructure.
Forests can help solve the climate crisis—but only if we stop pretending they can do everything at once. The environmental economics of our forests demand honesty: about carbon, about time, and about the limits of a resource we have long taken for granted.
The question is, can we see the trees, the forest, and the products they bring to us?