Comparison of energy-wood and pulpwood thinning systems in young birch stands

In early thinnings, a profitable alternative to pulpwood could be to harvest whole trees as energy-wood. In theoretical analyses, we compared the extractible volumes of energy-wood and pulpwood, and their respective gross values in differently aged stands of early birch thinnings at varying intensities of removal. In a parallel field experiment, we compared the productivity at harvest of either pulpwood or energy-wood, and the profitability when the costs of harvesting and forwarding were included. The theoretical analyses showed that the proportion of the total tree biomass removed as pulpwood increased with increasing thinning intensity and stem size. The biomass volume was 1.5–1.7 times larger than the pulpwood volume for a 13.9 diameter at breast height stand and 2.0–3.5 times larger for a 10.4 diameter at breast height stand. In the field experiment, the harvested volume per hectare of energy-wood was almost twice as high as the harvest of pulpwood. The harvesting productivity (trees Productive harvesting Work Time-hour−1) was 205 in the energy-wood and 120 in the pulpwood treatment. The pulpwood treatment generated a net loss, whereas the energy-wood treatment generated a net income, the average difference being €595 ha−1. We conclude that in birch-dominated early thinning stands, at current market prices, harvesting energy-wood is more profitable than harvesting pulpwood

The Economics of Spruce Budworm Outbreaks in the Lake States: An Overview

Economic effects of spruce budworm outbreaks in the Lake States were examined. The recent outbreak caused spruce and fir mortality on 420 thousand ha (I.OS million acres) of commercial forest land in the Lake States. Two models of Lake States spruce-fir markets were developed. A Static Economic Model established the nature of the Lake States spruce-fir market and a Comparative Static Model examined changes brought about by spruce budworm outbreaks. Outbreaks result in short-run supply shifts which probably decrease total revenue to stumpage owners but do not affect demand. The magnitude of long-run impacts were dependent on developing Lake States markets and forest management techniques. Further research is necessary on the value of short-run losses to stumpage owners so that the costs of forest management can be compared with outbreak losses. Long-run shifts in demand can be facilitated by attracting new industry to the area, developing new markets for the spruce-fir resource, and demonstrating that the spruce-fir resource can provide a continuous fiber source in the future. These shifts would provide the price incentives that land managers require to undertake intensive forest management. Research on the development of new markets for the spruce-fir resource is needed. As markets develop, the long-run impacts become less severe. Technology transfer programs already exist to aid land managers in developing management strategies to increase yields of spruce-fir and minimize outbreak impact

Demand Analysis of Indonesian Pulpwood Using Transcendental Logarithmic Model: a Study of the World and Selected Asian Markets

Indonesia\u27s pulpwood export has shown an increasing trend since 1990s. Along with Brazil, Canada, USA and Chile, Indonesia became one of the top five pulpwood exporter countries in the world. Indonesia\u27s pulpwood was traded mainly to some Asian countries. This paper examines Indonesian pulpwood export demand during the period 1994-2014 using a Transcendental Logarithmic (TL) model with Seemingly Unrelated Regression (SUR) estimation. Export data from the five top exporter countries in four different markets (China, Korea, Japan and the world) were analysed. The important findings are as follow: firstly, logarithmic income and second order logarithmic income significantly influence the Chinese and Korean markets. Secondly, in general, Indonesia\u27s own-prices are elastic and have negative signs (-2.308, -1.06 and -2.04 in the Korean, Japanese and the world markets, respectively). Thirdly, due to its positive sign of crossprice elasticity and also positive signs of income elasticity (1.002, 1.722 and 0.625 in the Chinese, Korean and the world markets, respectively), Indonesian pulpwood could be categorized as a substitute and normal goods. Lastly, regarding to negative and elastic Indonesia\u27s pulpwood own-prices, one possible policy that could be applied by the Government of Indonesia (GoI) is giving a subsidy to reduce pulpwood price by 10%. Subsidy could be implemented by reducing tax and retribution such as property tax (Pajak Bumi dan Bangunan) and local retribution (Retribusi Daerah). By doing so, it would give more benefit in the Korean market compared with other markets. Indonesia\u27s share of demand would increase from 0.28 to 0.31 with high rate of return (>2). On the world markets, Indonesia\u27s share of demand would increase from 0.08 to 0.1 with a return rate of 1.89. This study, therefore, suggests that a subsidy policy should be implemented for pulpwood industry in Indonesia

Timber Supply Model 96: A Global Timber Supply Model with a Pulpwood Component

This study involves an update of our earlier Timber Supply Model, which was fully developed in our book, The Adequacy Of Global Timber Supply by Sedjo and Lyon (1990), published by Resources for the Future. The new version, called Timber Supply Model 1996 (TSM96), uses an economic market supply/demand approach to project an intertemporal time path of the world's price and output level of industrial wood. As did the original TSM, the TSM96 provides projections of the time path of the equilibrium output levels of the several regions into which the world has been subdivided. A major new feature of TSM96 is that industrial wood, treated as homogeneous in the earlier study, has be subdivided into two different wood types — pulpwood and solidwood. The supply of these two commodities is not independent. Rather they can be viewed as joint products in production. The study develops a base-case projection, which gives the authors' best judgment of the timber situation likely to develop over the next few decades. Over that period total industrial wood production increases from about 1.7 billion cubic meters to 2.3 billion cubic meters, an increase of about 35 percent, while global pulpwood production increases from about 700 million cubic meters in 1995 to about 1.325 billion in 2045. Pulpwood price shows a fairly substantial increase throughout the first one-third of the period, a more modest increase over the second third, and a slight decline during the last third. Solidwood prices are almost the inverse of pulpwood, declining over the first third of the decade, increasing slightly over the next third and increasing in the last third of the decade. Over the whole of the 50-year period overall price increases are 30 percent for pulpwood and only about 8 percent for solidwood.

DEMAND ANALYSIS OF INDONESIAN PULPWOOD USING TRANSCENDENTAL LOGARITHMIC MODEL: A STUDY OF THE WORLD AND SELECTED ASIAN MARKETS

Indonesia’s pulpwood export has shown an increasing trend since 1990s. Along with Brazil, Canada, USA and Chile, Indonesia became one of the top five pulpwood exporter countries in the world. Indonesia’s pulpwood was traded mainly to some Asian countries. This paper examines Indonesian pulpwood export demand during the period 1994-2014 using a Transcendental Logarithmic (TL) model with Seemingly Unrelated Regression (SUR) estimation. Export data from the five top exporter countries in four different markets (China, Korea, Japan and the world) were analysed. The important findings are as follow: firstly, logarithmic income and second order logarithmic income significantly influence the Chinese and Korean markets. Secondly, in general, Indonesia’s own-prices are elastic and have negative signs (-2.308, -1.06 and -2.04 in the Korean, Japanese and the world markets, respectively). Thirdly, due to its positive sign of crossprice elasticity and also positive signs of income elasticity (1.002, 1.722 and 0.625 in the Chinese, Korean and the world markets, respectively), Indonesian pulpwood could be categorized as a substitute and normal goods. Lastly, regarding to negative and elastic Indonesia’s pulpwood own-prices, one possible policy that could be applied by the Government of Indonesia (GoI) is giving a subsidy to reduce pulpwood price by 10%. Subsidy could be implemented by reducing tax and retribution such as property tax (Pajak Bumi dan Bangunan) and local retribution (Retribusi Daerah). By doing so, it would give more benefit in the Korean market compared with other markets. Indonesia’s share of demand would increase from 0.28 to 0.31 with high rate of return (>2). On the world markets, Indonesia’s share of demand would increase from 0.08 to 0.1 with a return rate of 1.89. This study, therefore, suggests that a subsidy policy should be implemented for pulpwood industry in Indonesia

Modeling an integrated market for sawlogs, pulpwood and forest bioenergy

Traditionally, most applications in the initial stage of forest supply chain deal with sawlogs to sawmills, pulpwood to pulp or paper mills and forest residues to heating plants. However, in the past decades, soaring prices of fossil fuel, global awareness about CO2 emission and increasing attention to domestic resource security have boosted the development of alternative renewable energy, among which forest bioenergy is the most promising and feasible choice for medium- and large-scale heating and electricity generation. Different subsidies and incentive policies for green energy further promote the utilization of forest bioenergy. As a result, there is a trend that pulpwood may be forwarded to heating plants as complementary forest bioenergy. Though pulpwood is more expensive than forest residues, it is more efficient to transport and has higher energy content. The competition between traditional forest industries and wood-energy facilities, expected to grow in the future, is very sensitive for the forest companies as they are involved in all activities. In this paper, we develop a model that all raw materials in the forest, i.e. sawlogs, pulpwood and forest residues, and byproducts from sawmills, i.e. wood chips and bark, exist in an integrated market where pulpwood can be sent to heating plants as bioenergy. It represents a multi-period multi-commodity network planning problem with multiple sources of supply, i.e. pre-selected harvest areas, and multiple kinds of destination, i.e. sawmills, pulp mills and heating plants. The decisions incorporate purchasing the raw materials in harvest areas, reassigning byproducts from sawmills, transporting those assortments to different points for chipping, storing, wood-processing or wood-fired, and replenishing fossil fuel when necessary. Moreover, different from the classic wood procurement problem, we take the unit purchasing costs of raw materials as variables, on which the corresponding supplies of different assortments linearly depend. With this price mechanism, the popularity of harvest areas can be distinguished. The objective of the problem is to minimize the total cost for the integrated market including the purchasing cost of raw materials. Therefore, the model is a quadratic programming (QP) problem with a quadratic objective function and linear constraints. A large case study in southern Sweden under different scenario assumptions is implemented to simulate the integrated market and to study how price restriction, market regulation, demand fluctuation, policy implementation and exogenous change in price for fossil fuel will influence the entire wood flows. Pair-wise comparisons show that in the integrated market, competition for raw materials between forest bioenergy facilities and traditional forest industries pushes up the purchasing costs of pulpwood. The results also demonstrate that resources can be effectively utilized with the price mechanism in supply market. The overall energy value of forest bioenergy delivered to heating plants is 23% more than the amount in the situation when volume and unit purchasing cost of raw materials are fixed.Forest supply chain; integrated market; bioenergy; wood procurement; wood distribution; quadratic programming

Effects of Increased Demand for Biofuels: A Dynamic Model of the Swedish Forest Sector

In this paper, we estimate the dynamic effects on the forest sector of an increased demand for biofuels. This is done by developing a partial adjustment model of the forest sector that enables short, intermediate, and long run price elasticities to be estimated. It is relevant to study the effects of increased demand for biofuels as the Swedish government has committed to an energy policy that is likely to further increase the use of renewable resources in the Swedish energy system. Four subsectors are included in the model: the forest owners, who supply sawtimber, pulpwood and forest fuels; the sawmills which demand sawtimber; the pulp and paper industry which demands pulpwood; and the energy industry which demands forest fuels. The results show that the short run elasticities are fairly consistent with earlier studies and that sluggish adjustment in the capital stock is important in determining the short and intermediate run responses. Simulation shows that an increase in the demand for forest fuels has a positive effect on the equilibrium price of all the three types of wood, and a negative effect on the equilibrium quantities of sawtimber and pulpwood.Forest economics; Price elasticities; Long run; Energy sector

Building aggregate timber supply models from individual harvest choice

Timber supply has traditionally been modelled using aggregate data. In this paper, we build aggregate supply models for four roundwood products for the US state of North Carolina from a stand-level harvest choice model applied to detailed forest inventory. The simulated elasticities of pulpwood supply are much lower than reported by previous studies. Cross price elasticities indicate a dominant influence of sawtimber markets on pulpwood supply. This approach allows predicting the supply consequences of exogenous factors and supports regular updating of supply models.Timber supply, harvest choice, conditional logit, elasticity, expectations, simulation.,

Damned if you do, Damned if you don't – Reduced Climate Impact vs. Sustainable Forests in Sweden

The main objective of this paper is to analyze the potential goal conflict between two of Sweden’s environmental objectives: Sustainable Forests and Reduced Climate Impact – or, more precisely, the conflict between forest conservation and the supply of wood fuel. To accomplish this, we use a forest sector model that includes the suppliers and major users of roundwood. The econometric results, based on a data set that spans 40 years, show that all the own price elasticities have the expected signs. Among the three forestry products, the supply and (long-term) demand of forest fuel seems to be most sensitive to a price change. In a second step, the estimated model is used to simulate the effect of increased forest conservation -- the Sustainable Forest objective -- on the supply of wood fuel. If oil is used as a substitute, Swedish emissions of greenhouse gases will increase by almost 0.92 percent, which indicates a clear conflict with the Reduced Climate Impact objective.Goal conflict; Wood fuels; Forest sector model; Roundwood markets; Forest conservation

Models Needed to Assist in the Development of a National Fiber Supply Strategy for the 21st Century: Report of a Workshop

This discussion paper reports on a Workshop on Wood Fiber Supply Modeling held October 3-4, 1996 in Washington, DC. The purpose of this discussion paper is to provide an overview of some of the modeling work being done related to timber supply modeling and some of the issues related to the more useful application of wood fiber supply and projections models. This paper includes brief presentations of three commonly used long-term timber projections and forecasting models: the Timber Assessment Market Model (TAMM) of the Forest Service; the Cintrafor Global Trade Model (CGTM) of the University of Washington; and the Timber Supply Model (TSM) of Resources for the Future. Also, issues related to the useful of the models are addressed as well as a discussion of some applications of other timber or fiber projection models. The usefulness of the models are addressed from both a technical perspective and also from the perspective of their usefulness to various model users.