A Forest Sector Prototype Model - The Simplified Model Structure

This paper concentrates on a verbal and graphical description of the main elements and their linkages, of a prototype model which has been developed within IIASA's Forest Sector Project. This description creates the base for a computer model. The model consists of two forest sectors--one for the national forest sector which is being studied and one for competing forest sectors. Each forest sector covers all activities from timber growth to the consumption of end products as well as economic, technological, biological, and human aspects. The sector is built up by eight submodels or modules concerning 1) demand, 2) product market, 3) forest industry, 4) roundwood market, 5) forest management, 6) inventory of standing volume, 7) regulation of the forest sector, and 0) construction sector. In the product market, price and actual demand for forest industrial products (pulp, sawnwood, and panels) are defined depending on domestic demand and supply as well as import and export opportunities. The same is done in the roundwood market module but for roundwood. Supply of forest industry products is defined in the forest industry module as well as demand for wood raw material. Supply of wood raw material is calculated in the forest management module. The inventory module keeps track of the biological possibilities for supplying roundwood. Investments in new industrial capacity and harvesting capacity can be regulated through the regulation module. The capital sector module defines investment costs and efficiency (output/input ratio). The feedback mechanisms between modules is important in the model structure, as well as inside individual modules. Exogenous variables are GDP, size of population, prices of substitutes, exchange rate, prices of input factors, and technological development