European Forest Sector Outlook ToS meeting, Geneva, 23-24 November 2009 Future global trade and market modelling with EFI-GTM Alexander Moiseyev, EFI Birger Solberg, UMB Maarit Kallio, METLA
EFI-GTM model Global Forest Sector Model Partial equilibrium model Several regional agents maximize their profit/welfare under perfect competition Recursive model Dimensions 36 products (6 wood, 4 rec.paper, 26 forest industry products) 60 regions (31 in Europe) 1 3 existing production technologies + new technologies from investments 2
EFI GTM model structure Demand 1 Demand 2 P o Q o Production 1 Production 2 Technology 1 Technology 2 Technology 1 Technology 2 INPUTS (Labor, energy, wood) COSTS (Labor, energy, chemicals, capital, other) CAPACITY Logs Supply 1 TRADE Transportation costs P o H o
A1 versus B2 assumptions GDP growth (A1 & B2 assumptions) GDP elasticities (Lower elasticities for newsprint and graphic paper in EU under B2, but higher for sawnwood) Industrial Wood Supply assumption Russian Logs Export Tariff
A1 Reference Industrial Wood Supply Assumptions in Russia, Asia Developing and Latin America (Source: FAO s 2000 Outlook on Future Supply of wood from Plantations) 0 m c u s n 900 ilio M 800 700 600 500 400 300 200 0 2005 2010 2015 2020 2025 Russia Asia_Developing Latin America
A1 & B2 Industrial Wood Supply Assumptions in EU27, North America and Oceania & Asia Developed 1,500 m c u 1,400 s n 1,300 ilio,200 1, 1,000 900 800 700 600 500 400 300 200 0 2005 2010 2015 2020 2025 EU27 North America Ocean&Japan&Korea
A1 Reference Industrial Wood Supply Assumptions In Developed Countries In Developing Countries & Russia 1,500 m c u 1,400 s n 1,300 ilio,200 1, 1,000 900 800 700 600 500 400 300 200 0 2005 2010 2015 2020 2025 EU27 North America Ocean&Japan&Korea 1500 m c u 1400 s n 1300 ilio 1200 M 1 0 900 800 700 600 500 400 300 200 0 2005 2010 2015 2020 2025 Russia Asia_Developing Latin America
A1 EU27 Newsprint Consumption (GDP elasticity 1) n 18 to s n 16 ilio M 14 12 10 8 6 Consumption A1 Power (Consumption) 4 2 1960 1970 1980 1990 2000 2010 2020
A1 & B2 Newsprint Consumption (GDP elasticity 0,5 for B2) n 18 to s n 16 ilio M 14 12 10 8 6 4 Consumption A1 B2 2 1960 1970 1980 1990 2000 2010 2020
A1, B2 and Negative EU27 Newsprint Consumption n 18 to s n 16 ilio M 14 12 10 8 6 Consumption A1 B2 Negative 4 2 1960 1970 1980 1990 2000 2010 2020
A1 & B2 Paper Consumption (Gpaper elasticity 1,2 for A1 and 0.8 for B2; Other Paper elasticity 1) 180 n to s n 160 ilio 40 120 80 60 40 20 Consumption A1_Demand B2_Demand 0 1960 1970 1980 1990 2000 2010 2020
Historical and projected (EFI-GTM, compared to EFSOS 2020 projection) A1 & B2 Paper Consumption and Production, MT 180 160 140 120 80 60 Production Consumption A1_Demand B2_Demand A1_Production B2_Production EFSOS Base Demand EFSOS Integration Demand EFSOS Conservation Demand 40 20 0 1960 1970 1980 1990 2000 2010 2020
Historical and projected (EFI-GTM, compared to EFSOS 2020 projection) A1 & B2 Industrial Wood Harvest, Mm 3 500 450 400 350 300 250 200 150 Harvest A1 harvest B2 harvest EFSOS Base EFSOS Integration EFSOS Conservation 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
2005 base trade flows of wood and wood based products (round wood equivalent) between EU and other global regions, M m3. Source EFI/WFSE Forest Products Trade Flow Database.
Historical and projected (EFI-GTM) A1 Paper Trade Flow by Region, (MT) 200 180 160 140 120 80 60 40 Other World Trade Europe to: Africa Europe to: CIS north Europe to: Mid East North Am to: Latin Am & Carib CIS north to: Europe East Asia to: East Asia CIS north to: East Asia North Am to: North Am Europe to: East Asia North Am to: East Asia Europe to: Europe 20 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Historical and projected (EFI-GTM) B2 Paper Trade Flow by Region, (MT) 200 200 180 180 160 160 140 140 120 120 80 80 60 60 40 40 Other World Trade Europe to: Africa Europe to: CIS north Europe to: Mid East North Am to: Latin Am & Carib CIS north to: Europe East Asia to: East Asia CIS north to: East Asia North Am to: North Am Europe to: East Asia North Am to: East Asia Europe to: Europe 20 20 0 0 1965 1965 1970 1970 1975 1975 1980 1980 1985 1985 1990 1995 2000 2005 2010 2015 2020 2025
Historical and projected (EFI-GTM) A1 Roundwood Trade Flow by Region, (Mm 3 ) 200 190 180 170 160 150 140 130 120 110 90 80 70 60 50 40 30 20 10 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Other World Trade Africa to: East Asia Africa to: Europe North Am to: North Am Latin Am & Carib to: East Asia Oceania to: East Asia North Am to: East Asia East Asia to: East Asia CIS north to: East Asia CIS north to: Europe Europe to: Europe
Historical and projected (EFI-GTM) B2 Roundwood Trade Flow by Region, (Mm 3 ) 200 190 180 170 160 150 140 130 120 110 90 80 70 60 50 40 30 20 10 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Other World Trade Africa to: East Asia Africa to: Europe North Am to: North Am Latin Am & Carib to: East Asia Oceania to: East Asia North Am to: East Asia East Asia to: East Asia CIS north to: East Asia CIS north to: Europe Europe to: Europe
What type of long-term forecast for wood and wood products do we need? Future is very uncertain (nobody knows what is most likely scenario is going to be) and we need to foresee different type of future and prepare our self for variety of options We need to plan policies to address the most important changes in the future We need to develop methods and models, which allows to analyse various scenarios and to address policy changes expected and needed