Ragnar Jonsson

An integrated modelling framework for the forest-based bioeconomy

This paper describes the conceptual design of a regional modelling framework to assess scenarios for the forest-based bioeconomy. The framework consists of a core set of tools: a partial equilibrium model for the forest sector, a forestry dynamics model for forest growth and harvest and a wood resources balance sheet. The framework can be expanded to include an energy model, a land use model and a forest owner decision model. This partially integrated, multi-disciplinary modelling framework is described, with particular emphasis on the structure of the variables to be exchanged between the framework tools. The data exchange is subject to a series of integrity checks to ensure that the model is computing the correct information in the correct format and order of elements.

Information, Multi-faceted Forest Ownership and Timber Supply

Existing decision support systems (DSS) do not account for forest owner heterogeneity, nor do they explicitly model the reaction of forest owners to policy. Hence, current DSS are suitable for response analysis, but much less useful for policy impact assessment or forecasting. The current study presents a theoretical model of harvesting behavior which provides the basis for a simulation model, Expected Value Asymmetries (EVA), useful for analyzing how timber supply and forest characteristics are affected when forest owners differ as to responsiveness to information, risk aversion, and patience as regards postponement of harvesting revenues. The simulation results clearly indicate that the model is well adapted for considering forest owner heterogeneity when assessing the impact of policy on the inter-temporal development of forest resources and timber market conditions. Finally, it is outlined how EVA could integrate forest owner specific harvesting behavior in an augmented Decision Support System (DSS), thus addressing the inability of DSS operational at pan-European level to model the interaction between policy and forest management decisions.

Does it take prices to make volumes move? A comparison of timber market functioning in Finland and Lithuania

ABSTRACT Forest ownership structure is known to have implications for forest management and the production of forest products and services. The ownership structure, as well as the degree of state regulation of forestry, could thus be expected to affect the functioning of timber markets. Hence, in the presence of strict prescriptions for forest management, the self-regulating mechanisms of timber markets – governed by the economic principle of supply and demand – could be inhibited. Using Finland and Lithuania as contrasting cases, we found empirical evidence for the existence of such a self-regulating mechanism in timber markets that are liberal in terms of state regulation of forest management, but not in those under strict state regulation. The results highlight how price increases (reductions) generally anticipate high (low) sales volumes or at least volume increases (reductions) in the Finnish case, suggesting that timber markets here self-regulate toward the equilibrium. Such patterns were not found in the Lithuanian case. The inability to respond to – and take advantage of – price signals could hamper the economic viability of forest ownership in timber markets constrained by regulation, and thus also impede efforts to mobilize wood to satisfy a foreseen increased demand.