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Increasing Forest Conservation in Norway: Consequences for Timber and Forest Products Markets

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  • Torjus Bolkesjø
  • Erik Trømborg
  • Birger Solberg

Abstract

This paper analyses the impacts on timber and forest products markets of increasing forest conservation in Norway. A partial equilibrium forest sector model is applied to analyse effects on roundwood and forest products prices, quantities and trade of four alternative conservation extents. These alternatives are based on a recent biological analysis of the conservation needs in order to protect biodiversity in Norway. Roundwood prices are projected to increase moderately when conservation increases domestically only, since the Norwegian forest industry substitutes imported fibre for domestic. The impacts on roundwood prices are more substantial if also Norway’s forest products trading partners increase the forest conservation. If forest owners voluntarily conserve forests subject to an economic compensation (which currently is the most likely policy in Norway), the model results imply that forest owners on average are better off with increased conservation. Domestic sawnwood production is projected to reduce when assuming increasing forest conservation, while the production level in the pulp and paper industry is almost unaffected in the short-run. Finally, increasing demand for forest products as a result of “environmental good-will” may increase roundwood prices and harvest levels in unaffected forest areas significantly. Copyright Springer 2005

Suggested Citation

  • Torjus Bolkesjø & Erik Trømborg & Birger Solberg, 2005. "Increasing Forest Conservation in Norway: Consequences for Timber and Forest Products Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(1), pages 95-115, May.
    • Handle: RePEc:kap:enreec:v:31:y:2005:i:1:p:95-115
    DOI: 10.1007/s10640-004-8248-0
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    References listed on IDEAS

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    1. 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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    Cited by:

    1. 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.
    2. Sirgmets, Risto & Kaimre, Paavo & Padari, Allar, 2011. "Economic impact of enlarging the area of protected forests in Estonia," Forest Policy and Economics, Elsevier, vol. 13(3), pages 155-158, March.
    3. Kallio, A. Maarit I. & Hänninen, Riitta & Vainikainen, Nina & Luque, Sandra, 2008. "Biodiversity value and the optimal location of forest conservation sites in Southern Finland," Ecological Economics, Elsevier, vol. 67(2), pages 232-243, September.
    4. Latta, Gregory S. & Sjølie, Hanne K. & Solberg, Birger, 2013. "A review of recent developments and applications of partial equilibrium models of the forest sector," Journal of Forest Economics, Elsevier, vol. 19(4), pages 350-360.

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