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Econometric analysis of forest conservation: the Finnish experience

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  • Linden, Mikael
  • Uusivuori, Jussi

Abstract

This paper examines the dynamic effects of forest conservation measures. Both short-term and long-term impacts on timber markets are studied using a Finnish example. Forest conservation is interpreted as an exogenous negative shock in the standing timber growth owned by private forest owners, and its effects are retrieved through an impulse response analysis based on a dynamic demand–supply and timber stock model. The results show that timber markets are influenced by forest conservation. The conservation of forest assets reduces traded quantities and increases timber prices. These effects are of the same relative magnitude, thus leaving the annual timber-selling income of private forest owners unchanged. The results suggest that some of the negative short-run impacts of conservation on commercial timber stock will be compensated in the long run by intensified use of the remaining stock. This may to some extent reduce the ecological usefulness of the conservation policies. While the timber markets converge in the long run towards a new post-conservation state the short-term interruptions suggest that caution should be used in establishing set-asides in privately owned forestland.

Suggested Citation

  • Linden, Mikael & Uusivuori, Jussi, 2002. "Econometric analysis of forest conservation: the Finnish experience," Environment and Development Economics, Cambridge University Press, vol. 7(2), pages 281-297, May.
    • Handle: RePEc:cup:endeec:v:7:y:2002:i:02:p:281-297_00
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    Cited by:

    1. Mathieu, Valentin & Roda, Jean-Marc, 2023. "A meta-analysis on wood trade flow modeling concepts," Forest Policy and Economics, Elsevier, vol. 149(C).
    2. Mälkönen, Ville, 2006. "Optimal forest conservation: The role of green-image demand and investments," Journal of Forest Economics, Elsevier, vol. 12(1), pages 51-73, March.
    3. Fuchs, Jasper M. & v. Bodelschwingh, Hilmar & Lange, Alexander & Paul, Carola & Husmann, Kai, 2022. "Quantifying the consequences of disturbances on wood revenues with Impulse Response Functions," Forest Policy and Economics, Elsevier, vol. 140(C).
    4. Geijer, Erik & Bostedt, Göran & Brännlund, Runar, 2011. "Damned if you do, damned if you do not--Reduced Climate Impact vs. Sustainable Forests in Sweden," Resource and Energy Economics, Elsevier, vol. 33(1), pages 94-106, January.
    5. Leppanen, Jussi & Linden, Mika & Uusivuori, Jussi & Pajuoja, Heikki, 2005. "The private cost and timber market implications of increasing strict forest conservation in Finland," Forest Policy and Economics, Elsevier, vol. 7(1), pages 71-83, January.

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