The Forest Sector Model EFI GTM – a global model for analyzing impacts related to forestry and forest industries Presentation at NORAD/DECEE seminar on natural resource issues in low- and middle income countries April 12, 2011 Birger Solberg Department of Ecology and Natural Resource Management Norwegian University of Life Sciences

UNIVERSITETET FOR MILJØ- OG BIOVITENSKAP (UMB) Institutt for naturforvaltning 2

UNIVERSITETET FOR MILJØ- OG BIOVITENSKAP (UMB) Institutt for naturforvaltning 3

UNIVERSITETET FOR MILJØ- OG BIOVITENSKAP (UMB) Institutt for naturforvaltning 4

UNIVERSITETET FOR MILJØ- OG BIOVITENSKAP (UMB) Main experiences from modelling with EFI- GTM Studies/scenarios analyzed with EFI-GTM model during are: 1) Accelerated forest growth in Europe 2) Investments into plantations in Latin America and Asia 3) Forest conservation in Europe 4) Reduction of illegal logging 5) Wood-Pellets production in the Baltic Area 6) Wood biomass potential supply for bioenergy EEA 7) Forest industry competitiveness in Central and Eastern Europe 1 & 2 analyzed increased supply (1 in Europe and 2 outside of Europe) 3 & 4 analyzed reduced wood supply (3 in EU area and 4 in Russia) 5 & 6 analyzed impact of increased demand for bio-energy and competition between bio-energy and forest industries for wood fiber Study 7 analyzed impacts of higher investments into CEEC forest industries due to investment subsidies.

UNIVERSITETET FOR MILJØ- OG BIOVITENSKAP (UMB) Some main ”lessons learned”  The data-input most problematic are: –Long distance transport costs and international transport costs –Harvesting costs per country –Inclusion of bioenergy production costs/ability to pay for wood biomass –Income demand elasticities for certain products where statistics is insufficient, like OSB, MDF, bioenergy. –Forest stock and growth data outside OECD countries  It takes time to communicate between economists, engineers and model builders/programmers and to learn each others vocabular and way of and solving problems.  ”The perfect is the enemy of the good”. All models are simplifications of reality - one should aim at the ”optimal complexity”. NB: It is the impact of changes which is sought – the uncertainty on that is less than doing single prognosis.

UNIVERSITETET FOR MILJØ- OG BIOVITENSKAP (UMB) Further references: Model description: Kallio, Moiseyev & Solberg, The Global Forest Sector Model EFI-GTM - the model structure. EFI Technical Report Previous applications, e.g.: -Solberg, Moiseyev & Kallio Economic impacts of accelerating forest growth in Europe. Forest Policy and Economics 5(2): Kallio, Moiseyev & Solberg Economic impacts of increased forest conservation in Europe: a forest sector model analysis. Env.Sci. Policy 9. -Moiseyev, A., B. Solberg, B. Michie, A.M.I. Kallio 2010: Modeling the impacts of policy measures to prevent import of illegal wood and wood products. For. Policy and Economics 12(1): Solberg, B., A. Moiseyev, A.M.I. Kallio & A. Toppinen 2010: Forest sector market impacts of changed roundwood export tariffs and investment climate in Russia. For. Policy and Economics 12(7): Kallio, Solberg & Moiseyev Analysing forest sector sustainability. MATISSE Working Papers pdf). biomass availability; impact on FLEGT/Russian timber taxes on forest sector-