Technical change in forest sector models: the global forest products model approach

Abstract

Technical change is developing rapidly in some parts of the forest sector, especially in the pulp and paper industry where wood fiber is being substituted by waste paper. In forest sector models, the processing of wood and other input into products is frequently represented by activity analysis (input–output). In this context, technical change translates in changes over time of the input–output (I–O) coefficients and of the manufacturing cost (labor, capital, and materials, excluding wood and fiber). In the case of the global forest products model, the I–O coefficients and the manufacturing costs are determined empirically from historical data, while correcting for possible reporting errors. The method consists of goal programming. The objective function is the sum of the weighted absolute value of the deviations from estimated and observed production in each country of interest. The constraints express the relationship between the multiple output (sawnwood, panels, pulp, paper) and input (wood, waste paper, other fiber) and prior knowledge on the limits of the I–O coefficients. The paper presents observed technical changes from 1993 to 2010 and projections to 2030 with their consequences for the global forest sector in terms of prices, production and consumption, value added, and carbon sequestration in forest biomass.

Keywords:

• technical change
• international
• demand
• supply
• cost
• GFPM

Acknowledgments

The preparation of this paper was supported in part by the USDA Forest Service, Southern Research Station, through a cooperative research agreement directed by Jeff Prestemon. We are also grateful for the comments and suggestions of attendees at the Forest Modeling Conference 2013, held in Lillehammer, Norway.