Maarit Kallio

Climate change mitigation through increased wood use in the European construction sector—towards an integrated modelling framework

Using wood as a building material affects the carbon balance through several mechanisms. This paper describes a modelling approach that integrates a wood product substitution model, a global partial equilibrium model, a regional forest model and a stand-level model. Three different scenarios were compared with a business-as-usual scenario over a 23-year period (2008–2030). Two scenarios assumed an additional one million apartment flats per year will be built of wood instead of non-wood materials by 2030. These scenarios had little effect on markets and forest management and reduced annual carbon emissions by 0.2–0.5% of the total 1990 European GHG emissions. However, the scenarios are associated with high specific CO2 emission reductions per unit of wood used. The third scenario, an extreme assumption that all European countries will consume 1-m3 sawn wood per capita by 2030, had large effects on carbon emission, volumes and trade flows. The price changes of this scenario, however, also affected forest management in ways that greatly deviated from the partial equilibrium model projections. Our results suggest that increased wood construction will have a minor impact on forest management and forest carbon stocks. To analyse larger perturbations on the demand side, a market equilibrium model seems crucial. However, for that analytical system to work properly, the market and forest regional models must be better synchronized than here, in particular regarding assumptions on timber supply behaviour. Also, bioenergy as a commodity in market and forest models needs to be considered to study new market developments; those modules are currently missing.

The future development of the use of wood in Russia and its potential impacts on the EU forest sector

Abstract Several uncertainties are associated with the future development in Russia. The aim of this study is to analyse the effects of some of them on the forest sectors in Russia and the European Union. In particular, we examine the impacts of increasing prices set on atmospheric CO2 emissions and the changing investment climate in Russia on the use of forests in the EU and Russia as well as on the export of forest products from Russia to the EU. In the analysis, we use a numerical forest sector model, EUFASOM. The results suggest that a more intensive utilisation of the vast forest resources in Russia call for rapid improvements in the investment climate. Otherwise, the growth of pulp and paper production in Russia would mainly be directed at satisfying the domestic demand. It is hard to penetrate the EU markets which are suffering from excess capacity and a slow demand growth. Russias importance as a supplier of energy wood to the EU is likely to increase, unless for instance export tariffs or tighter climate policies in Russia hinder such a development. The results demonstrate large differences in the harvesting and use of wood in the EU and Russia across the alternative future scenarios.

Nonparametric Methods for Evaluating Economic Efficiency and Imperfect Competition

This article unifies and extends ideas from nonparametric production analysis and DEA for testing organizational efficiency. We show how the admissible price set can be restricted to account for prior information on prices. These restrictions may relate prices to input and output quantities in order to test noncompetitive behavior of the evaluated decision making unit. While the resulting efficiency tests cannot always be cast into linear programming problems, we discuss various solution strategies for the tests. Thereby we consider the question when does local optimality of the result guarantee global optimality. We also show how the decision makers preferences, for example ranking information, can be adopted into DEA models in a simple manner. Finally, the approach with price restrictions is illustrated with an application to test noncompetitive behavior of the pulp and paper industries in Finland.