An agent-based model of wood markets: Scenario analysis

Abstract

We present an agent-based model of wood markets. The model covers softwood and hardwood markets for sawlogs, energy wood, and industrial wood. Our study region is a mountainous area in Switzerland that is close to the border, and therefore partially depends on the wood markets of the adjacent countries. The wood markets in this study region are characterized by many small-scale wood suppliers, and a mix of private and public-owned forests. The model was developed to investigate the availability of wood in the study region under different market conditions. We defined several scenarios that are relevant to policy makers and analyzed them with a focus on the two most important assortments of wood in the study region, namely, sawlogs softwood and energy wood softwood. The development of the prices and amounts sold in the scenarios are compared to a business-as-usual scenario. The scenarios were designed to investigate i) the influence of intermediaries, ii) the influence of the profit-orientation of forest owners, iii) the influence of the exchange rate, and iv) the consequences of set-asides in the study region. The presented model has a large potential to support the planning of policy measures as it allows capturing emergent phenomena, and thereby facilitates identifying potential consequences of policy measures planned prior to their implementation. This was demonstrated by discussing the scenario findings with respect to Switzerland's forestry policy objective of increasing the harvested amount of wood to the sustainable potential. We showed that a higher profit-orientation of forest owners would be beneficial for this objective, but also revealed potential conflicts of different economic goals.