ncx-gitbot
commented
1 year ago NCX response: Leakage is poorly studied across existing IFM projects, especially short-term harvest deferral projects. We agree that leakage is a possible outcome of purposefully delaying a harvest. Based on comments received, we have updated the methodological approach to include a more conservative deduction. We look forward to working with other developers and academic researchers to explore methods of measuring leakage directly in the future.
Commenter Organization: The Lyme Timber Company
Commenter: Jim Hourdequin
2021 Deferred Harvest Methodology Section: Leakage
Comment: Short-term Leakage Maybe 100%, not 10%: The Proposal suggests a fixed, low level of leakage during the first seven years of a project. I don’t understand the basis for this level of leakage. Within a given woodbasket, wood consumption in a given year is generally based on overall market dynamics affecting the installed base of wood consuming mills. These are “fixed cost” businesses where there is a high marginal cost of not consuming wood necessary to achieve their desired level of production. Consequently, over the short-term, I assume that any reductions in harvest by a subset of landowners will be offset by increased harvests (potentially at higher stumpage prices) from other landowners (perhaps landowners who would not otherwise harvest but for the higher stumpage prices). Over the longer-term, higher wood procurement costs resulting from landowner participation in harvest deferral programs may affect decisions of wood consumers to reduce or expand capacity, and this could reduce levels of leakage within the woodbasket. In general, I question the theoretical basis for the proposed leakage equations and suggest that this area requires substantially more study and empirical evidence when applied to short-term harvest deferrals.
Proposed Change: No Proposed Change