There's a lot of uncertainty when a new industry starts up, and especially when the inputs used by this industry can take between ten and fifty years to mature. That's exactly what's happening with the new pallet industry and it's use of Southern U.S. hardwood and pine forests.
Right now, most of this new industry is driven by renewable energy policies in the European Union. Pellets are manufactured in the South from low-valued wood such as pull-timber or residues, which is then shipped to ports in Europe where they are burned to make electricity.
Our study shows that producing pellets for export will raise prices for timber, even though pellets will be a small part of Southern timber production. 
These price increases could be a good thing if you are a forest landowner or a bad thing if you are a neighboring pulp mill. Pellet production will probably have the biggest effects on local wood markets where a single wood pellet plant can use as much timber as an existing pulp mill. 
We know that increased prices can lead to more land in forests and thus increase the carbon sequestered in forests, but it's also that an increase in harvests could change the character of some of our forest land.