Abstract
This paper investigates whether shocks (economic effects) to wood fuel production for 18 countries of the European Union (EU) over the period 1961–2012 are temporary or persistent. A variety of time-series and panel data unit root tests are employed. The presence of structural breaks is taken into account when performing those tests. Wood production in approximately 78% of the countries is found to follow a non-stationary process supported by the result that most of the panel unit root tests also point towards a non-stationary process. This indicates that the economic effect will tend to be persistent and suggests that policies affecting wood fuel production, implicitly or explicitly, will have enduring effects. For instance, forest conservation policies will persistently reduce the wood fuel production level.
Highlights
Wood is the oldest source of fuel and remains to date vital for cooking and heating in many societies
The first test allows for two structural breaks in the level while the second tests accounts for breaks in the level and slope
The pair-wise correlation coefficients of ∆Ft between two series are mostly positive and range from0.322 to 0.449. These results indicate the existence of cross-sectional dependence, which can lead to bias panel data unit root tests [36]
Summary
Wood is the oldest source of fuel and remains to date vital for cooking and heating in many societies. The EU has specific energy policies and wood fuel has a critical role to play [1]. Wood-based fuel pellet production had an increasing trend in the EU between 2001 and 2009 [2]. According to the unified bioenergy terminology wood fuel is defined as all types of biofuels derived directly or indirectly from woody biomass [3]. Wood fuel includes biomass derived from silvicultural activities (such as thinning and pruning) and harvesting and logging (such as tops, roots and branches), as well as industrial by-products derived from primary and secondary forest industries that are used as fuel
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