Financial stress: what is it, how can it be measured, and why does it matter?

The U.S. economy is currently experiencing a period of significant financial stress. This stress has contributed to the downturn in the economy by boosting the cost of credit and making businesses, households, and financial institutions highly cautious. To alleviate the financial stress and counteract its effects on the economy, the Federal Reserve has reduced the federal funds rate target substantially and undertaken unprecedented actions to support the functioning of financial markets. There will come a point, however, when the Federal Reserve needs to remove liquidity from the economy and unwind special lending programs to ensure a return to sustainable growth with low inflation. ; In past recoveries, the decision when to tighten policy was based mainly on the strength of business and consumer spending and the degree of upward pressure on prices and wages. An additional element in the current exit strategy will be determining if financial stress is no longer high enough to endanger economic recovery. As financial conditions begin to improve, the various measures of financial stress that the Federal Reserve monitors may give mixed signals. In this situation, policymakers would greatly benefit from having a single, comprehensive index of financial stress. Such an index could also prove valuable further down the road, when the Federal Reserve might again need to decide whether financial stress was serious enough to warrant special attention. ; Hakkio and Keeton present a new index of financial stress--the Kansas City Financial Stress Index (KCFSI). They explain how the components of the KCFSI capture key aspects of financial stress and show that high values of the KCFSI have tended to coincide with known periods of financial stress. They also show that the KCFSI provides valuable information about future economic growth.

Mountain Forests and Sustainable Development: The Potential for Achieving the United Nations\u27 2030 Agenda

The world is facing numerous and severe environmental, social, and economic challenges. To address these, in September 2015 the General Assembly of the United Nations adopted the resolution Transforming our World: The 2030 Agenda for Sustainable Development. The United Nations\u27 17 sustainable development goals (SDGs) and their 169 targets are ambitious, broadly encompassing, and indivisible. They are intended to guide nations and communities toward attaining healthy and peaceful livelihoods free of poverty and hunger. Collectively the goals envision sound and safe environments, where global threats like climate change are successfully combated through both mitigation and adaptation. Agenda 2030 envisages sustainable production patterns with inclusive, effective economies and institutions. It is of specific relevance to mountain communities, where the population is predominantly rural and half of the rural inhabitants experience food insecurity and are often highly dependent on forest resources. Mountain forests also contribute to human welfare well beyond the local community: Through functions such as climate and hydrological services provided at regional and global scales, and harvested commodities traded at multiple economic scales. In this introductory essay we argue that sustainable forest management in mountain areas disproportionately contributes to achieving the SDGs. We discuss (1) the potential of mountain forests to help achieve SDGs in mountainous regions and beyond, (2) the potential of the SDGs to help solve severe socioeconomic and ecological problems in forested mountain areas, and (3) challenges and opportunities associated with implementing the SDGs. We base our argumentation also on the 8 papers presented in this Focus Issue of Mountain Research and Development. Together, they establish a clear connection between sustainable use and protection of mountain forests and vital ecosystem services upon which many regions depend. We discuss challenges of understanding interactions between goals and targets, and highlight the role of science in achieving the SDGs. Finally, we stress the urgent need for establishing a new narrative of socioeconomic transformation to ensure that Agenda 2030 is successful

Enhanced carbon storage through management for old-growth characteristics in northern hardwood-conifer forests

Forest management practices emphasizing stand structural complexity are of interest across the northern forest region of the United States because of their potential to enhance carbon storage. Our research is part of a long-Term study evaluating silvicultural treatments that promote late-successional forest characteristics in northern hardwood-conifer forests. We are testing the hypothesis that aboveground biomass development (carbon storage) is greater in structural complexity enhancement (SCE) treatments when compared to conventional uneven-Aged treatments. Structural complexity enhancement treatments were compared against selection systems (single-Tree and group) modified to retain elevated structure. Manipulations and controls were replicated across 2-ha treatment units at two study areas in Vermont, United States. Data on aboveground biomass pools (live trees, standing dead, and downed wood) were collected pre-And post-Treatment, then again a decade later. Species group-specific allometric equations were used to estimate live and standing dead biomass, and downed log biomass was estimated volumetrically. We used the Forest Vegetation Simulator to project no-Treatment baselines specific to treatment units, allowing measured carbon responses to be normalized against differences in site characteristics affecting tree growth and pre-Treatment stand structure. Results indicate that biomass development and carbon storage 10 yr post-Treatment were greatest in SCE treatments compared to conventional treatments, with the greatest increases in coarse woody material (CWM) pools. Structural complexity enhancement treatments contained 12.67 Mg/ha carbon in CWM compared to 6.62 Mg/ha in conventional treatments and 8.84 Mg/ha in areas with no treatment. Percentage differences between post-Treatment carbon and simulated/projected baseline values indicate that carbon pool values in SCE treatments returned closest to pre-harvest or untreated levels over conventional treatments. Total carbon storage in SCE aboveground pools was 15.90% less than that projected for no-Treatment compared to 44.94% less in conventionally treated areas. Results from classification and regression tree models indicated treatment as the strongest predictor of aboveground C storage followed by site-specific variables, suggesting a strong influence of both on carbon pools. Structural enhancement treatments have the potential to increase carbon storage in managed northern hardwoods. They offer an alternative for sustainable management integrating carbon, associated climate change mitigation benefits, and late-successional forest structure and habitat

Regeneration responses to management for old-growth characteristics in northern hardwood-conifer forests

Successful tree regeneration is essential for sustainable forest management, yet it can be limited by the interaction of harvesting effects and multiple ecological drivers. In northern hardwood forests, for example, there is uncertainty whether low-intensity selection harvesting techniques will result in adequate and desirable regeneration. Our research is part of a long-term study that tests the hypothesis that a silvicultural approach called structural complexity enhancement (SCE) can accelerate the development of late-successional forest structure and functions. Our objective is to understand the regeneration dynamics following three uneven-aged forestry treatments with high levels of retention: single-tree selection, group selection, and SCE. Regeneration density and diversity can be limited by differing treatment effects on or interactions among light availability, competitive environment, substrate, and herbivory. To explore these relationships, manipulations and controls were replicated across 2 ha treatment units at two Vermont sites. Forest inventory data were collected pre-harvest and periodically over 13 years post-harvest. We used mixed effects models with repeated measures to evaluate the effect of treatment on seedling and sapling density and diversity (Shannon-Weiner H\u27). The treatments were all successful in recruiting a sapling class with significantly greater sapling densities compared to the controls. However, undesirable and prolific beech (Fagus americana) sprouting dominates some patches in the understory of all the treatments, creating a high degree of spatial variability in the competitive environment for regeneration. Multivariate analyses suggest that while treatment had a dominant effect, other factors were influential in driving regeneration responses. These results indicate variants of uneven-aged systems that retain or enhance elements of stand structural complexity-including old-growth characteristics-can generally foster abundant regeneration of important late successional tree species depending on site conditions, but they may require beech control where beech sprouting inhibits desired regeneration

Net carbon fluxes at stand and landscape scales from wood bioenergy harvests in the US Northeast

The long-term greenhouse gas emissions implications of wood biomass (\u27bioenergy\u27) harvests are highly uncertain yet of great significance for climate change mitigation and renewable energy policies. Particularly uncertain are the net carbon (C) effects of multiple harvests staggered spatially and temporally across landscapes where bioenergy is only one of many products. We used field data to formulate bioenergy harvest scenarios, applied them to 362 sites from the Forest Inventory and Analysis database, and projected growth and harvests over 160 years using the Forest Vegetation Simulator. We compared the net cumulative C fluxes, relative to a non-bioenergy baseline, between scenarios when various proportions of the landscape are harvested for bioenergy: 0% (non-bioenergy); 25% (BIO25); 50% (BIO50); or 100% (BIO100), with three levels of intensification. We accounted for C stored in aboveground forest pools and wood products, direct and indirect emissions from wood products and bioenergy, and avoided direct and indirect emissions from fossil fuels. At the end of the simulation period, although 82% of stands were projected to maintain net positive C benefit, net flux remained negative (i.e., net emissions) compared to non-bioenergy harvests for the entire 160-year simulation period. BIO25, BIO50, and BIO100 scenarios resulted in average annual emissions of 2.47, 5.02, and 9.83 Mg C ha-1, respectively. Using bioenergy for heating decreased the emissions relative to electricity generation as did removing additional slash from thinnings between regeneration harvests. However, all bioenergy scenarios resulted in increased net emissions compared to the non-bioenergy harvests. Stands with high initial aboveground live biomass may have higher net emissions from bioenergy harvest. Silvicultural practices such as increasing rotation length and structural retention may result in lower C fluxes from bioenergy harvests. Finally, since passive management resulted in the greatest net C storage, we recommend designation of unharvested reserves to offset emissions from harvested stands

Bioenergy harvesting impacts on ecologically important stand structure and habitat characteristics

Demand for forest bioenergy fuel is increasing in the northern forest region of eastern North America and beyond, but ecological impacts, particularly on habitat, of bioenergy harvesting remain poorly explored in the peer-reviewed literature. Here, we evaluated the impacts of bioenergy harvests on stand structure, including several characteristics considered important for biodiversity and habitat functions. We collected stand structure data from 35 recent harvests in northern hardwood-conifer forests, pairing harvested areas with unharvested reference areas. Biometrics generated from field data were analyzed using a multi-tiered nonparametric uni-and multivariate statistical approach. In analyses comparing harvested to reference areas, sites that had been whole-tree harvested demonstrated significant differences (relative negative contrasts, P \u3c 0.05) in snag density, large live-tree density, well-decayed downed coarse woody debris volume, and structural diversity index (H) values, while sites that had not been whole-tree harvested did not exhibit significant differences. Classification and regression tree (CART) analyses suggested that the strongest predictors of structural retention, as indicated by downed woody debris volumes and H index, were silvicultural treatment and equipment type rather than the percentage of harvested volume allocated to bioenergy uses. In general, bioenergy harvesting impacts were highly variable across the study sites, suggesting a need for harvesting guidelines aimed at encouraging retention of ecologically important structural attributes. © 2012 by the Ecological Society of America

Factors contributing to carbon fluxes from bioenergy harvests in the U.S. Northeast: An analysis using field data

With growing interest in wood bioenergy there is uncertainty over greenhouse gas emissions associated with offsetting fossil fuels. Although quantifying postharvest carbon (C) fluxes will require accurate data, relatively few studies have evaluated these using field data from actual bioenergy harvests. We assessed C reductions and net fluxes immediately postharvest from whole-tree harvests (WTH), bioenergy harvests without WTH, and nonbioenergy harvests at 35 sites across the northeastern United States. We compared the aboveground forest C in harvested with paired unharvested sites, and analyzed the C transferred to wood products and C emissions from energy generation from harvested sites, including indirect emissions from harvesting, transporting, and processing. All harvests reduced live tree C; however, only bioenergy harvests using WTH significantly reduced C stored in snags (P \u3c 0.01). On average, WTH sites also decreased downed coarse woody debris C while the other harvest types showed increases, although these results were not statistically significant. Bioenergy harvests using WTH generated fewer wood products and resulted in more emissions released from bioenergy than the other two types of harvests, which resulted in a greater net flux of C (P \u3c 0.01). A Classification and Regression Tree analysis determined that it was not the type of harvest or amount of bioenergy generated, but rather the type of skidding machinery and specifics of silvicultural treatment that had the largest impact on net C flux. Although additional research is needed to determine the impact of bioenergy harvesting over multiple rotations and at landscape scales, we conclude that operational factors often associated with WTH may result in an overall intensification of C fluxes. The intensification of bioenergy harvests, and subsequent C emissions, that result from these operational factors could be reduced if operators select smaller equipment and leave a portion of tree tops on site. Copyright © 2013

Biogenic vs. geologic carbon emissions and forest biomass energy production

In the current debate over the CO2 emissions implications of switching from fossil fuel energy sources to include a substantial amount of woody biomass energy, many scientists and policy makers hold the view that emissions from the two sources should not be equated. Their rationale is that the combustion or decay of woody biomass is simply part of the global cycle of biogenic carbon and does not increase the amount of carbon in circulation. This view is frequently presented as justification to implement policies that encourage the substitution of fossil fuel energy sources with biomass. We present the opinion that this is an inappropriate conceptual basis to assess the atmospheric greenhouse gas (GHG) accounting of woody biomass energy generation. While there are many other environmental, social, and economic reasons to move to woody biomass energy, we argue that the inferred benefits of biogenic emissions over fossil fuel emissions should be reconsidered. © 2011 Blackwell Publishing Ltd

Carbon storage, timber production, and biodiversity: Comparing ecosystem services with multi-criteria decision analysis

Increasingly, land managers seek ways to manage forests for multiple ecosystem services and functions, yet considerable challenges exist in comparing disparate services and balancing trade-offs among them. We applied multi-criteria decision analysis (MCDA) and forest simulation models to simultaneously consider three objectives: (1) storing carbon, (2) producing timber and wood products, and (3) sustaining biodiversity. We used the Forest Vegetation Simulator (FVS) applied to 42 northern hardwood sites to simulate forest development over 100 years and to estimate carbon storage and timber production. We estimated biodiversity implications with occupancy models for 51 terrestrial bird species that were linked to FVS outputs. We simulated four alternative management prescriptions that spanned a range of harvesting intensities and forest structure retention. We found that silvicultural approaches emphasizing less frequent harvesting and greater structural retention could be expected to achieve the greatest net carbon storage but also produce less timber. More intensive prescriptions would enhance biodiversity because positive responses of early successional species exceeded negative responses of late successional species within the heavily forested study area. The combinations of weights assigned to objectives had a large influence on which prescriptions were scored as optimal. Overall, we found that a diversity of silvicultural approaches is likely to be preferable to any single approach, emphasizing the need for landscape-scale management to provide a full range of ecosystem goods and services. Our analytical framework that combined MCDA with forest simulation modeling was a powerful tool in understanding trade-offs among management objectives and how they can be simultaneously accommodated. © 2012 by the Ecological Society of America