Economic crises: Impacts on the forest-based sector and wood-based energy use in Austria

Abstract

In light of the recent economic crisis, the authors have assessed the effects of different types of economic crises' scenarios on the Austrian forest-based sector using a simulation model (FOHOW) written in the System-Dynamics (SD) language. The model addresses the interactions between the general economy and the forest sector, including forestry, forestry-based industries and energy. The simulation period for all of the scenarios ranged from 2006 to 2025. As compared to the past, the development of the sector substantially changes, even in the base scenario. These changes are primarily caused by increased demand for wooden biomass for energy due to the assumed execution of the National Action Plan for Renewable Energy. All crises' scenarios resulted in declining production and lower prices compared to the base scenario, differing only in magnitude. Forestry, sawmill and paper industries perform better in an export crisis than in a local crisis, because decreased exports can, to a certain extent, be compensated for by increasing domestic demand, while the domestic shortfalls are difficult to compensate by raising exports. By contrast, the export-oriented panel industry does better in a local crisis simulation. In general, economic crises only moderately change the assortment composition of timber supply within the forestry industry. The results also show that the sawmill industry plays a vital role in the allocation of wooden biomass in all of the scenarios. When developing policies for forest-based industries, specifically the procurement of wooden raw material, the key role of the sawmill industry must be considered in each case.