A Preliminary Model of Production, Consumption and International Trade in Forest Products

Dykstra, D.P. & Kallio, M.J. (1984). A Preliminary Model of Production, Consumption and International Trade in Forest Products. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-84-014

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Abstract

The preliminary version of IIASA's model of production, consumption, and trade in forest products is discussed. The model involves six regions (Northern Europe, Western Europe, USA, Canada, Japan, and the rest of the World) and nine products (sawlogs, pulpwood, sawnwood, panels, pulp, newsprint, other printing and writing paper, packaging paper and board, and recycled paper). The primary purpose of this version is to analyze sensitivity of the model with respect to various parameters and to learn to understand the model behavior in general.

We first review the formulation of the spatial equilibrium model, and then discuss the equilibrium conditions in detail. Subsequent sections describe the preliminary data and two sets of numerical demonstrations. The first set deals with the situation in 1980. A base scenario for model validation is discussed first. Stability of the model with respect to price elasticity parameters for demand is shown. The effect of a change in currency exchange rate is demonstrated. The second set of runs simulates the situation around the year 2000. For the base scenario, we update wood resources, production capacity, and demand for each region. This scenario is compared with high- and zero-growth demand scenarios. The effect of tariffs and changes in timber supply are demonstrated.

Finally, we wish to stress that this preliminary model employs very tentative data. Therefore, one should draw conclusions from the demonstration scenarios with special care.

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